Manpower Reports 3rd Quarter 2003 Results
MILWAUKEE, Wis., Oct. 16 /PRNewswire-FirstCall/ -- Manpower Inc. (NYSE: MAN) today reported that net income for the three months ended September 30, 2003 increased 8.0 percent to $43.8 million, or 56 cents per diluted share, from $40.5 million, or 52 cents per diluted share, a year earlier. Revenues for the third quarter totaled $3.2 billion, an increase of 11.0 percent from the year-earlier period. Systemwide sales were $3.5 billion. Results for the third 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 49 cents on a 1.8 percent revenue increase.
Jeffrey A. Joerres, Manpower Chairman and CEO, said: "Once again we were able to deliver a solid quarter despite the persistently difficult economic environment. We entered the third quarter anticipating a year-over-year deceleration across the network. In fact, most regions were flat to slightly positive. The result of the better performances in France and Europe accounted for the increase from anticipated earnings.
"This quarter, more than any other in 2003, we sensed stronger signals for a meaningful recovery. However, clearly we are unable to call an end to the current labor market challenges," stated Joerres. "Most importantly, while the staffing market in general is experiencing pricing pressure, our new and existing customers have recognized Manpower's value which contributed to the successful third quarter.
"As we look ahead to the fourth quarter, we are assuming no dramatic movements in any of the major geographies in which we operate. Therefore, we anticipate the fourth quarter earnings per share will be between 49 and 53 cents or $1.61 and $1.65 for 2003. We anticipate a 7 cent favorable impact from currency in the quarter."
Net income for the nine months ended September 30, 2003 totaled $87.8 million or $1.12 per diluted share, an increase of 20.2 percent from $73.1 million, or 94 cents per diluted share in 2002. Revenues for the nine-month period were $8.9 billion, an increase of 14.4% from the prior year. Systemwide sales were $9.8 billion. On a constant currency basis, earnings per diluted share for the nine-month period were 92 cents on a 2.0 percent revenue increase.
In conjunction with its third quarter earnings release, Manpower will broadcast its conference call live over the Internet on October 16, 2003 at 8:00 a.m. CDT (9:00 a.m. EDT). Interested parties are invited to listen by logging on to http://investor.manpower.com.
The systemwide sales and constant currency amounts included in this press release are further explained on the attached Results of Operations. Supplemental financial information referenced in the conference call can be found at http://investor.manpower.com.
Manpower Inc. is a world leader in the staffing industry, providing workforce management services and solutions to customers through 4,000 offices in 63 countries. The firm annually provides employment to 2 million people worldwide and is an industry leader in employee assessment and training. Manpower also provides a range of staffing solutions and engagement and consulting services worldwide under the subsidiary brands of Brook Street, Elan, The Empower Group and Jefferson Wells. More information on Manpower Inc. can be found at the Company's Web site, http://www.manpower.com.
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, and such other factors as may be described from time to time in the Company's SEC filings.
Manpower Inc.
Results of Operations
(In millions, except per share data)
Three Months Ended September 30
% Variance
Amount Constant
2003 2002 Reported Currency
(Unaudited)
Systemwide sales (a) $3,510.3 $3,183.5 10.3%
Revenue from services 3,203.2 2,885.9 11.0% 1.8%
Cost of services 2,653.6 2,373.6 11.8%
Gross profit 549.6 512.3 7.3% -1.4%
Selling and administrative expenses 470.8 435.1 8.2% 0.0%
Operating profit 78.8 77.2 2.0% -9.3%
Interest and other expenses 9.4 11.3 -17.5%
Earnings before income taxes 69.4 65.9 5.4%
Provision for income taxes 25.6 25.4 1.2%
Net earnings $43.8 $40.5 8.0% -5.0%
Net earnings per share - basic $0.56 $0.53 5.7%
Net earnings per share - diluted $0.56 $0.52 7.7% -5.8%
Weighted average shares - basic 77.7 76.6 1.4%
Weighted average shares - diluted 78.8 77.4 1.8%
(a) Systemwide sales represents revenue from our branch offices plus the
sales activity of locations operating under a franchise agreement
with us. Systemwide sales is calculated as follows:
Revenue from services $3,203.2 $2,885.9
Less: Franchise fees 6.9 6.7
Add: Franchise sales 314.0 304.3
Systemwide sales $3,510.3 $3,183.5
Manpower Inc.
Operating Unit Results
(In millions)
Three Months Ended September 30
% Variance
Amount Constant
2003 2002 Reported Currency
(Unaudited)
Revenues from services:
United States (a) $500.6 $512.8 -2.4% -2.4%
France 1,279.1 1,103.3 15.9% 1.3%
EMEA 993.1 906.6 9.5% 0.1%
Other Operations 430.4 363.2 18.5% 13.6%
$3,203.2 $2,885.9 11.0% 1.8%
Operating Unit Profit:
United States $11.0 $12.4 -11.7% -11.7%
France 51.3 40.6 26.4% 10.4%
EMEA 17.3 28.5 -39.2% -44.5%
Other Operations 7.6 2.7 177.5% 152.6%
87.2 84.2
Corporate expenses 8.4 7.0
Amortization of other intangible
assets -- --
Operating profit 78.8 77.2 2.0% -9.3%
Interest and other expenses (b) 9.4 11.3
Earnings before income taxes $69.4 $65.9
(a) Systemwide sales in the United States represents revenue from our
branch offices plus the sales activity of locations operating under a
franchise agreement with us. Systemwide sales in the United States
is calculated as follows:
Revenue from services $500.6 $512.8
Less: Franchise fees 5.6 5.6
Add: Franchise sales 261.4 276.5
Systemwide sales $756.4 $783.7
(b) The components of interest and other expense (income) were:
Interest expense $10.6 $11.5
Interest income (1.5) (1.9)
Foreign exchange loss (gain) 0.6 (0.1)
Miscellaneous, net (0.3) 1.8
$9.4 $11.3
Manpower Inc.
Results of Operations
(In millions, except per share data)
Nine Months Ended September 30
% Variance
Amount Constant
2003 2002 Reported Currency
(Unaudited)
Systemwide sales (a) $9,751.3 $8,615.6 13.2%
Revenue from services 8,895.3 7,772.8 14.4% 2.0%
Cost of services 7,358.2 6,378.1 15.4%
Gross profit 1,537.1 1,394.7 10.2% -1.7%
Selling and administrative expenses 1,368.3 1,247.0 9.7% -1.5%
Operating profit 168.8 147.7 14.3% -2.9%
Interest and other expenses 27.2 28.9 -6.0%
Earnings before income taxes 141.6 118.8 19.2%
Provision for income taxes 53.8 45.7 17.7%
Net earnings $87.8 $73.1 20.2% -1.2%
Net earnings per share - basic $1.13 $0.96 17.7%
Net earnings per share - diluted $1.12 $0.94 19.1% -2.1%
Weighted average shares - basic 77.5 76.2 1.7%
Weighted average shares - diluted 78.4 77.6 1.0%
(a) Systemwide sales represents revenue from our branch offices plus the
sales activity of locations operating under a franchise agreement
with us. Systemwide sales is calculated as follows:
Revenue from services $8,895.3 $7,772.8
Less: Franchise fees 18.8 19.0
Add: Franchise sales 874.8 861.8
Systemwide sales $9,751.3 $8,615.6
Manpower Inc.
Operating Unit Results
(In millions)
Nine Months Ended September 30
% Variance
Amount Constant
2003 2002 Reported Currency
(Unaudited)
Revenues from services:
United States (a) $1,448.0 $1,416.4 2.2% 2.2%
France 3,405.7 2,813.7 21.0% 1.1%
EMEA 2,830.7 2,500.9 13.2% -1.3%
Other Operations 1,210.9 1,041.8 16.2% 12.0%
$8,895.3 $7,772.8 14.4% 2.0%
Operating Unit Profit:
United States $24.0 $15.8 52.2% 52.2%
France 120.1 95.5 25.8% 5.4%
EMEA 34.7 56.2 -38.2% -45.7%
Other Operations 16.5 2.5 528.6% 462.3%
195.3 170.0
Corporate expenses 26.5 22.2
Amortization of other intangible
assets -- 0.1
Operating profit 168.8 147.7 14.3% -2.9%
Interest and other expenses (b) 27.2 28.9
Earnings before income taxes $141.6 $118.8
(a) Systemwide sales in the United States represents revenue from our
branch offices plus the sales activity of locations operating under a
franchise agreement with us. Systemwide sales in the United States is
calculated as follows:
Revenue from services $1,448.0 $1,416.4
Less: Franchise fees 15.7 16.0
Add: Franchise sales 739.4 761.7
Systemwide sales $2,171.7 $2,162.1
(b) The components of interest and other expense (income) were:
Interest expense $31.0 $31.9
Interest income (6.0) (6.6)
Foreign exchange gains (0.9) (0.8)
Miscellaneous, net 3.1 4.4
$27.2 $28.9
Manpower Inc.
Consolidated Balance Sheets
(In millions)
Sept. 30 Dec. 31
2003 2002
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $287.5 $284.0
Accounts receivable, net 2,576.3 2,214.2
Prepaid expenses and other assets 76.7 76.0
Future income tax benefits 81.0 79.1
Total current assets 3,021.5 2,653.3
Other assets:
Goodwill and other intangible
assets, net 563.1 545.7
Investments in licensees 64.8 60.5
Other assets 312.4 253.4
Total other assets 940.3 859.6
Property and equipment:
Land, buildings, leasehold
improvements and equipment 582.0 533.4
Less: accumulated depreciation and
amortization 396.6 344.6
Net property and equipment 185.4 188.8
Total assets $4,147.2 $3,701.7
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $524.3 $447.0
Employee compensation payable 115.3 96.2
Accrued liabilities 372.3 295.7
Accrued payroll taxes and insurance 420.4 391.6
Value added taxes payable 391.7 309.0
Short-term borrowings and current
maturities of long-term debt 14.2 22.8
Total current liabilities 1,838.2 1,562.3
Other liabilities:
Long-term debt 788.0 799.0
Other long-term liabilities 339.7 340.5
Total other liabilities 1,127.7 1,139.5
Shareholders' equity:
Common stock 0.9 0.9
Capital in excess of par value 1,714.9 1,696.2
Accumulated deficit (209.7) (289.7)
Accumulated other comprehensive
income (loss) (41.0) (123.7)
Treasury stock, at cost (283.8) (283.8)
Total shareholders' equity 1,181.3 999.9
Total liabilities and
shareholders' equity $4,147.2 $3,701.7
Manpower Inc.
Consolidated Statements of Cash Flows
(In millions)
Nine Months Ended
September 30
2003 2002
(Unaudited)
Cash Flows from Operating Activities:
Net earnings $87.8 $73.1
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization 46.5 48.9
Amortization of discount on
convertible debentures 5.6 5.5
Deferred income taxes 1.8 3.0
Provision for doubtful accounts 14.4 15.2
Changes in operating assets and
liabilities:
Accounts receivable (186.4) (172.8)
Other assets (23.4) 26.2
Other liabilities 149.4 71.0
Cash provided by operating
activities 95.7 70.1
Cash Flows from Investing Activities:
Capital expenditures (38.9) (40.2)
Acquisitions of business, net of
cash acquired (3.6) (31.2)
Proceeds from the sale of property
and equipment 2.2 2.2
Cash used by investing
activities (40.3) (69.2)
Cash Flows from Financing Activities:
Net repayments of short-term
facilities and long-term debt (80.7) (19.7)
Proceeds from stock option and
purchase plans 18.7 30.4
Repurchase of common stock - (30.7)
Dividends paid (7.8) (7.6)
Cash used by financing
activities (69.8) (27.6)
Effect of exchange rate changes on
cash 17.9 17.5
Change in cash and cash equivalents 3.5 (9.2)
Cash and cash equivalents, beginning
of period 284.0 245.8
Cash and cash equivalents, end of
period $287.5 $236.6
CONTACT:
Mike Van Handel
Chief Financial Officer, of Manpower Inc.
414-906-6305
Web site: http://www.manpower.com