Manpower Reports 4th Quarter and Full-Year 2003 Results
MILWAUKEE, WI, Jan. 29 /PRNewswire-FirstCall/ -- Manpower Inc. (NYSE: MAN) today reported that net income for the three months ended December 31, 2003 increased 24.6 percent to $49.9 million, or 63 cents per diluted share, from $40.1 million, or 52 cents per diluted share, a year earlier. Revenues for the fourth quarter totaled $3.3 billion, an increase of 15.9 percent from the year-earlier period.
Results for the fourth quarter were positively affected by relatively stronger foreign currencies compared to the prior year period. On a constant currency basis, earnings per diluted share for the quarter were 53 cents on a 2.8 percent revenue increase. Results were also favorably impacted by a net 8 cents as a result of a reduction in our estimated liability related to government payroll tax subsidies, partially offset by office closure costs.
Jeffrey A. Joerres, Manpower Chairman and Chief Executive Officer, said, "Throughout the fourth quarter of 2003 we continued to see positive signs. In several markets throughout the world the demand for our services is gradually improving, but more importantly, our infrastructure investments and execution of our strategies are clearly accelerating our performance.
"Manpower France continues to perform very well. Germany, Canada, Japan, and Mexico also contributed nicely to the success of the quarter and full year. The U.S. market is more positive, though employers remain hesitant and reluctant to hire. On a full year basis, 2003 was unpredictable and difficult, and the Manpower team across the world responded superbly.
"We are anticipating the first quarter of 2004 fully diluted earnings per share to fall in the range of 23 to 27 cents. This includes an estimated positive currency impact of 4 cents and earnings accretion from the recently completed acquisition of Right Management Consultants of 3 cents."
Net income for the year ended December 31, 2003 totaled $137.7 million or $1.74 per diluted share, up 21.7 percent from $113.2 million, or $1.46 per diluted share in 2002. Revenues for the year were $12.2 billion, an increase of 14.8 percent from the prior year. On a constant currency basis, earnings per diluted share for the year were $1.45 on a revenue increase of 2.2 percent.
In conjunction with its fourth quarter earnings release, Manpower will broadcast its conference call live over the Internet on January 29 at 8:00 a.m. CST (9:00 a.m. EST). Interested parties are invited to listen 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) 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 and organizational consulting services. Manpower's worldwide network of 4,300 offices in 66 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, Elan, Brook Street and Empower. More information on Manpower Inc. is available at 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 statement can be found in the Company's reports filed with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2002, which information is incorporated herein by reference.
Manpower Inc.
Results of Operations
(In millions, except per share data)
Three Months Ended December 31
% Variance
Amount Constant
2003 2002 Reported Currency
(Unaudited)
Revenues from services (a) $3,289.2 $2,838.1 15.9% 2.8%
Cost of services 2,689.5 2,322.4 15.8%
Gross profit 599.7 515.7 16.3% 3.3%
Selling and administrative
expenses 510.6 428.6 19.1% 6.6%
Operating profit 89.1 87.1 2.4% -12.8%
Interest and other expenses 8.6 17.9 -52.2%
Earnings before income taxes 80.5 69.2 16.4%
Provision for income taxes 30.6 29.1 5.2%
Net earnings $49.9 $40.1 24.6% 6.1%
Net earnings per share - basic $0.64 $0.52 23.1%
Net earnings per share - diluted $0.63 $0.52 21.2% 1.9%
Weighted average shares - basic 78.2 76.9 1.7%
Weighted average shares - diluted 79.8 77.6 2.9%
(a) Revenues from services include fees received from our franchise
offices of $7.7 million and $7.6 million for the three months ended
December 31, 2003 and 2002, respectively. These fees are primarily
based on revenues generated by the franchise offices, which were
$339.6 million and $317.9 million for the three months ended
December 31, 2003 and 2002, respectively.
Manpower Inc.
Operating Unit Results
(In millions)
Three Months Ended December 31
% Variance
Amount Constant
2003 2002 Reported Currency
(Unaudited)
Revenues from services:
United States (a) $497.8 $495.0 0.6% 0.6%
France 1,233.1 1,034.5 19.2% 0.2%
EMEA 1,089.5 934.0 16.7% 2.5%
Other Operations 468.8 374.6 25.1% 13.7%
$3,289.2 $2,838.1 15.9% 2.8%
Operating Unit Profit:
United States $9.7 $13.4 -28.1% -28.1%
France 63.9 48.1 32.9% 11.3%
EMEA 17.0 26.8 -36.7% -44.9%
Other Operations 11.4 4.1 187.5% 173.0%
102.0 92.4
Corporate expenses 12.9 5.3
Operating profit 89.1 87.1 2.4% -12.8%
Interest and other expenses (b) 8.6 17.9
Earnings before income taxes $80.5 $69.2
(a) In the United States, revenues from services include fees received
from the related franchise offices of $6.2 million and $5.8 million
for the three months ended December 31, 2003 and 2002, respectively.
These fees are primarily based on revenues generated by the franchise
offices, which were $286.8 million and $254.2 million for the three
months ended December 31, 2003 and 2002, respectively.
(b) The components of interest and other expense (income) were:
Interest expense $10.4 $10.5
Interest income (2.0) (2.4)
Foreign exchange gains (0.4) (1.0)
Miscellaneous, net 0.6 10.8
$8.6 $17.9
Manpower Inc.
Results of Operations
(In millions, except per share data)
Year Ended December 31
% Variance
Amount Constant
2003 2002 Reported Currency
Revenues from services (a) $12,184.5 $10,610.9 14.8% 2.2%
Cost of services 10,047.7 8,700.5 15.5%
Gross profit 2,136.8 1,910.4 11.9% -0.3%
Selling and administrative
expenses 1,878.9 1,675.6 12.1% 0.6%
Operating profit 257.9 234.8 9.9% -6.6%
Interest and other expenses 35.8 46.8 -23.6%
Earnings before income taxes 222.1 188.0 18.2%
Provision for income taxes 84.4 74.8 12.8%
Net earnings $137.7 $113.2 21.7% 1.4%
Net earnings per share - basic $1.77 $1.48 19.6%
Net earnings per share - diluted $1.74 $1.46 19.2% -0.7%
Weighted average shares - basic 77.7 76.4 1.7%
Weighted average shares - diluted 79.3 77.7 2.0%
(a) Revenues from services include fees received from our franchise
offices of $26.5 million and $25.8 million for the year ended
December 31, 2003 and 2002, respectively. These fees are primarily
based on revenues generated by the franchise offices (unaudited),
which were $1,214.4 million and $1,179.8 million for the year ended
December 31, 2003 and 2002, respectively.
Manpower Inc.
Operating Unit Results
(In millions)
Year Ended December 31
% Variance
Amount Constant
2003 2002 Reported Currency
Revenues from services:
United States (a) $1,945.8 $1,911.4 1.8% 1.8%
France 4,638.8 3,848.2 20.5% 0.9%
EMEA 3,920.2 3,434.9 14.1% -0.3%
Other Operations 1,679.7 1,416.4 18.6% 12.4%
$12,184.5 $10,610.9 14.8% 2.2%
Operating Unit Profit:
United States $33.7 $29.2 15.2% 15.2%
France 184.0 143.6 28.2% 7.4%
EMEA 51.7 83.0 -37.7% -45.4%
Other Operations 27.9 6.6 324.1% 288.8%
297.3 262.4
Corporate expenses 39.4 27.5
Amortization of other intangible
assets - 0.1
Operating profit 257.9 234.8 9.9% -6.6%
Interest and other expenses (b) 35.8 46.8
Earnings before income taxes $222.1 $188.0
(a) In the United States, revenues from services include fees received
from the related franchise offices of $21.9 million and $21.7 million
for the year ended December 31, 2003 and 2002, respectively. These
fees are primarily based on revenues generated by the franchise
offices (unaudited), which were $1,026.2 million and $1,015.8 million
for the year ended December 31, 2003 and 2002, respectively.
(b) The components of interest and other expense (income) were:
Interest expense $41.4 $42.4
Interest income (8.0) (9.0)
Foreign exchange gains (1.3) (1.8)
Miscellaneous, net 3.7 15.2
$35.8 $46.8
Manpower Inc.
Consolidated Balance Sheets
(In millions)
Dec. 31 Dec. 31
2003 2002
ASSETS
Current assets:
Cash and cash equivalents $426.2 $284.0
Accounts receivable, net 2,609.4 2,214.2
Prepaid expenses and other assets 100.1 76.0
Future income tax benefits 101.4 79.1
Total current assets 3,237.1 2,653.3
Other assets:
Goodwill and other intangible assets, net 573.8 545.7
Investments in licensees 66.2 60.5
Other assets 320.7 253.4
Total other assets 960.7 859.6
Property and equipment:
Land, buildings, leasehold
improvements and equipment 606.3 533.4
Less: accumulated depreciation and
amortization 419.2 344.6
Net property and equipment 187.1 188.8
Total assets $4,384.9 $3,701.7
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $555.4 $447.0
Employee compensation payable 105.6 96.2
Accrued liabilities 360.0 295.7
Accrued payroll taxes and insurance 476.6 391.6
Value added taxes payable 368.2 309.0
Short-term borrowings and current
maturities of long-term debt 12.1 22.8
Total current liabilities 1,877.9 1,562.3
Other liabilities:
Long-term debt 829.6 799.0
Other long-term liabilities 367.1 340.5
Total other liabilities 1,196.7 1,139.5
Shareholders' equity:
Common stock 0.9 0.9
Capital in excess of par value 1,732.5 1,696.2
Accumulated deficit (167.6) (289.7)
Accumulated other comprehensive income (loss) 28.3 (123.7)
Treasury stock, at cost (283.8) (283.8)
Total shareholders' equity 1,310.3 999.9
Total liabilities and
shareholders' equity $4,384.9 $3,701.7
Manpower Inc.
Consolidated Statements of Cash Flows
(In millions)
Year Ended
December 31
2003 2002
Cash Flows from Operating Activities:
Net earnings $137.7 $113.2
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization 64.4 65.4
Amortization of discount on
convertible debentures 7.6 7.3
Deferred income taxes (1.4) (0.2)
Provision for doubtful accounts 16.7 18.2
Changes in operating assets and
liabilities:
Accounts receivable (71.1) (54.4)
Other assets (37.4) 41.6
Other liabilities 106.9 36.8
Cash provided by operating
activities 223.4 227.9
Cash Flows from Investing Activities:
Capital expenditures (55.5) (58.5)
Acquisitions of business, net of cash acquired (6.7) (33.5)
Proceeds from the sale of property
and equipment 6.0 5.3
Cash used by investing activities (56.2) (86.7)
Cash Flows from Financing Activities:
Net repayments of short-term
facilities and long-term debt (84.5) (115.0)
Proceeds from stock option and purchase plans 35.6 29.4
Repurchase of common stock - (30.7)
Dividends paid (15.6) (15.3)
Cash used by financing activities (64.5) (131.6)
Effect of exchange rate changes on cash 39.5 28.6
Change in cash and cash equivalents 142.2 38.2
Cash and cash equivalents, beginning of period 284.0 245.8
Cash and cash equivalents, end of period $426.2 $284.0