Manpower Reports 3rd Quarter 2005 Results
Manpower Reports 3rd Quarter 2005 Results
October 19, 2005 at 12:00 AM EDT
Jeffrey A. Joerres, Manpower Chairman and Chief Executive Officer, said, "Our strong results in the third quarter can be attributed to several Manpower geographies and business units throughout the world relentlessly pursuing our strategies in their markets." Joerres added, "The U.S., Germany, Italy, Japan and Sweden are among the markets that clearly demonstrated our ability to produce solid profit growth as a company. Additionally, our Jefferson Wells and Elan brands both produced solid, sustainable results in the quarter.
"We are anticipating the fourth quarter of 2005 diluted earnings per share to be in the range of 82 to 86 cents, which includes an estimated negative currency impact of 5 cents," Joerres stated.
Earnings per diluted share for the nine months ended September 30, 2005 were $1.88 compared to $1.86 per diluted share in 2004. Net income was $171.0 million compared to $176.1 million the prior year. Revenues for the nine-month period were $12.0 billion, an increase of 10 percent from the prior year. On a constant currency basis, earnings per diluted share for the nine- month period were $1.84 on an 8 percent improvement in revenues.
In addition to the previously discussed income tax adjustment of 8 cents per diluted share, the prior year nine-month results also include a first quarter non-operating gain of $14.2 million ($10.2 million net of income taxes), or 11 cents per diluted share.
In conjunction with its third quarter earnings release, Manpower will broadcast its conference call live over the Internet on October 19, 2005 at 8:00 a.m. CDT (9:00 a.m. EDT). Interested parties are invited to listen to the webcast and view the presentation by logging on to http://investor.manpower.com .
Supplemental financial information referenced in the conference call can be found at http://investor.manpower.com .
About Manpower Inc.
Manpower Inc. (NYSE: MAN - News) is a world leader in the employment services industry, offering customers a continuum of services to meet their needs throughout the employment and business cycle. The company specializes in permanent, temporary and contract recruitment; employee assessment; training; career transition; organizational consulting; and professional financial services. Manpower's worldwide network of 4,300 offices in 72 countries and territories enables the company to meet the needs of its 400,000 customers per year, including small and medium size enterprises in all industry sectors, as well as the world's largest multinational corporations. The focus of Manpower's work is on raising productivity through improved quality, efficiency and cost-reduction, enabling customers to concentrate on their core business activities. In addition to the Manpower brand, the company operates under the brand names of Right Management Consultants, Jefferson Wells and Elan. More information on Manpower Inc. is available at http://www.manpower.com .
Forward-Looking Statements
This news release contains statements, including earning projections, that are forward-looking in nature and, accordingly, are subject to risks and uncertainties regarding the Company's expected future results. The Company's actual results may differ materially from those described or contemplated in the forward-looking statements. Factors that may cause the Company's actual results to differ materially from those contained in the forward-looking statements can be found in the Company's reports filed with the SEC, including the information under the heading 'Forward-Looking Statements' in its Annual Report on Form 10-K for the year ended December 31, 2004, which information is incorporated herein by reference.
Manpower Inc.
Results of Operations
(In millions, except per share data)
Three Months Ended September 30
% Variance
Amount Constant
2005 2004 Reported Currency
(Unaudited)
Revenues from services (a) $4,144.8 $3,900.8 6.3% 6.1%
Cost of services 3,388.2 3,172.7 6.8%
Gross profit 756.6 728.1 3.9% 3.7%
Selling and administrative expenses 624.6 601.2 3.9% 3.7%
Operating profit 132.0 126.9 4.1% 3.8%
Interest and other expense 11.9 9.1 30.3%
Earnings before income taxes 120.1 117.8 2.1%
Provision for income taxes 43.8 34.4 27.5%
Net earnings $76.3 $83.4 -8.5% -8.7%
Net earnings per share - basic $0.88 $0.93 -5.4%
Net earnings per share - diluted (b) $0.87 $0.87 - -
Weighted average shares - basic 87.0 90.0 -3.4%
Weighted average shares - diluted (b) 88.2 97.2 -9.2%
(a) Revenues from services include fees received from our franchise
offices of $9.6 million and $8.9 million for the three months ended
September 30, 2005 and 2004, respectively. These fees are primarily
based on revenues generated by the franchise offices, which were
$396.6 million and $397.0 million for the three months ended
September 30, 2005 and 2004, respectively.
(b) Prior year figures have been restated to reflect the impact of
applying the "if-converted" method to our convertible debentures.
Manpower Inc.
Operating Unit Results
(In millions)
Three Months Ended September 30
% Variance
Amount Constant
2005 2004 Reported Currency
(Unaudited)
Revenues from Services:
United States (a) $531.5 $531.8 - -
France 1,494.6 1,402.0 6.6% 6.9%
EMEA 1,385.5 1,305.4 6.1% 6.7%
Jefferson Wells 103.9 110.6 -6.1% -6.1%
Right 96.0 102.5 -6.4% -6.9%
Other Operations 533.3 448.5 18.9% 15.1%
$4,144.8 $3,900.8 6.3% 6.1%
Operating Unit Profit:
United States $22.6 $15.6 44.7% 44.7%
France 50.2 55.6 -9.7% -9.3%
EMEA 46.6 33.9 37.4% 38.0%
Jefferson Wells 11.5 25.1 -54.2% -54.2%
Right 2.1 3.2 -35.2% -39.8%
Other Operations 16.6 10.8 55.2% 49.5%
149.6 144.2
Corporate expenses 14.3 14.0
Amortization of intangible assets 3.3 3.3
Operating profit 132.0 126.9 4.1% 3.8%
Interest and other expense (b) 11.9 9.1
Earnings before income taxes $120.1 $117.8
(a) In the United States, revenues from services include fees received
from the related franchise offices of $6.7 million and $6.3 million
for the three months ended September 30, 2005 and 2004, respectively.
These fees are primarily based on revenues generated by the franchise
offices, which were $310.7 million and $318.4 million for the three
months ended September 30, 2005 and 2004, respectively.
(b) The components of interest and other expense (income) were:
Interest expense $12.5 $10.9
Interest income (2.0) (2.2)
Foreign exchange gains (0.2) (0.4)
Miscellaneous expenses, net 1.6 0.8
$11.9 $9.1
Manpower Inc.
Results of Operations
(In millions, except per share data)
Nine Months Ended September 30
% Variance
Amount Constant
2005 2004 Reported Currency
(Unaudited)
Revenues from services (a) $11,957.2 $10,857.3 10.1% 7.6%
Cost of services 9,779.4 8,833.4 10.7%
Gross profit 2,177.8 2,023.9 7.6% 5.3%
Selling and administrative expenses 1,873.6 1,745.6 7.3% 5.0%
Operating profit 304.2 278.3 9.3% 6.9%
Interest and other expenses 34.9 17.4 100.7%
Earnings before income taxes 269.3 260.9 3.2%
Provision for income taxes 98.3 84.8 15.9%
Net earnings $171.0 $176.1 -2.9% -4.7%
Net earnings per share - basic $1.93 $1.99 -3.0%
Net earnings per share - diluted (b) $1.88 $1.86 1.1% -1.1%
Weighted average shares - basic 88.4 88.5 -0.1%
Weighted average shares - diluted (b) 91.7 96.4 -4.9%
(a) Revenues from services include fees received from our franchise
offices of $26.7 million and $25.0 million for the nine months ended
September 30, 2005 and 2004, respectively. These fees are primarily
based on revenues generated by the franchise offices, which were
$1,122.1 million and $1,068.9 million for the nine months ended
September 30, 2005 and 2004, respectively.
(b) Prior year figures have been restated to reflect the impact of
applying the "if-converted" method to our convertible debentures.
Manpower Inc.
Operating Unit Results
(In millions)
Nine Months Ended September 30
% Variance
Amount Constant
2005 2004 Reported Currency
(Unaudited)
Revenues from Services:
United States (a) $1,514.1 $1,523.7 -0.6% -0.6%
France 4,150.4 3,816.8 8.7% 5.8%
EMEA 4,137.7 3,648.5 13.4% 10.6%
Jefferson Wells 290.1 237.7 22.0% 22.0%
Right 308.5 324.2 -4.9% -6.7%
Other Operations 1,556.4 1,306.4 19.1% 15.3%
$11,957.2 $10,857.3 10.1% 7.6%
Operating Unit Profit:
United States $45.5 $32.5 39.8% 39.8%
France 119.2 123.8 -3.7% -6.0%
EMEA 100.0 73.8 35.5% 33.0%
Jefferson Wells 28.9 38.2 -24.4% -24.4%
Right 21.2 24.9 -14.8% -17.3%
Other Operations 42.3 35.7 18.6% 14.5%
357.1 328.9
Corporate expenses 43.1 41.6
Amortization of intangible assets 9.8 9.0
Operating profit 304.2 278.3 9.3% 6.9%
Interest and other expenses (b) 34.9 17.4
Earnings before income taxes $269.3 $260.9
(a) In the United States, revenues from services include fees received
from the related franchise offices of $18.4 million and $18.3 million
for the nine months ended September 30, 2005 and 2004, respectively.
These fees are primarily based on revenues generated by the franchise
offices, which were $885.1 million and $871.1 million for the nine
months ended September 30, 2005 and 2004, respectively.
(b) The components of interest and other expense (income) were:
Interest expense $34.8 $34.0
Interest income (6.4) (6.2)
Foreign exchange gains - (0.1)
Miscellaneous expense
(income), net 6.5 (10.3)
$34.9 $17.4
Manpower Inc.
Consolidated Balance Sheets
(In millions)
Sep. 30 Dec. 31
2005 2004
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $431.7 $531.8
Accounts receivable, net 3,214.4 3,227.8
Prepaid expenses and other assets 98.0 161.4
Future income tax benefits 104.5 96.5
Total current assets 3,848.6 4,017.5
Other assets:
Goodwill and other intangible
assets, net 1,265.8 1,297.0
Other assets 301.5 305.5
Total other assets 1,567.3 1,602.5
Property and equipment:
Land, buildings, leasehold
improvements and equipment 641.7 669.8
Less: accumulated depreciation and
amortization 443.8 446.7
Net property and equipment 197.9 223.1
Total assets $5,613.8 $5,843.1
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $707.8 $687.1
Employee compensation payable 156.4 156.0
Accrued liabilities 536.0 505.7
Accrued payroll taxes and insurance 539.6 569.6
Value added taxes payable 444.6 457.8
Short-term borrowings and current
maturities of long-term debt 274.2 225.7
Total current liabilities 2,658.6 2,601.9
Other liabilities:
Long-term debt 481.3 676.1
Other long-term liabilities 364.7 391.1
Total other liabilities 846.0 1,067.2
Shareholders' equity:
Common stock 1.0 1.0
Capital in excess of par value 2,334.6 2,296.4
Retained earnings 204.4 51.0
Accumulated other comprehensive income 15.1 109.4
Treasury stock, at cost (445.9) (283.8)
Total shareholders' equity 2,109.2 2,174.0
Total liabilities and
shareholders' equity $5,613.8 $5,843.1
Manpower Inc.
Consolidated Statements of Cash Flows
(In millions)
Nine Months Ended
September 30
2005 2004
(Unaudited)
Cash Flows from Operating Activities:
Net earnings $171.0 $176.1
Adjustments to reconcile net
earnings to net cash provided by operating
activities:
Depreciation and amortization 67.7 62.6
Amortization of discount on
convertible debentures 1.9 5.8
Deferred income taxes (10.2) (11.6)
Provision for doubtful accounts 16.9 20.1
Other non-operating gains - (14.2)
Changes in operating assets and
liabilities excluding the impact
of acquisitions:
Accounts receivable (307.1) (409.7)
Other assets (30.2) 14.6
Other liabilities 263.8 218.4
Cash provided by
operating activities 173.8 62.1
Cash Flows from Investing Activities:
Capital expenditures (55.9) (42.7)
Acquisitions of businesses, net of
cash acquired (3.5) (113.8)
Proceeds from sale of an equity interest - 29.8
Proceeds from the sale of property
and equipment 4.5 4.8
Cash used by investing
activities (54.9) (121.9)
Cash Flows from Financing Activities:
Net borrowings of short-term
facilities and long-term debt 181.0 5.3
Cash paid to settle convertible
debentures (206.6) -
Proceeds from settlement of swap
agreements 50.7 -
Proceeds from stock option and
purchase plans 18.9 55.4
Repurchases of common stock (203.5) -
Dividends paid (17.6) (9.1)
Cash (used) provided by
financing activities (177.1) 51.6
Effect of exchange rate changes on cash (41.9) (3.2)
Change in cash and cash equivalents (100.1) (11.4)
Cash and cash equivalents, beginning
of period 531.8 426.2
Cash and cash equivalents, end of period $431.7 $414.8
Source: Manpower Inc.