EX-99.1 2 dex991.htm PRESS RELEASE DATED JANUARY 27, 2006 Press Release dated January 27, 2006

Exhibit 99.1

 

[MANPOWER logo]

 

FOR IMMEDIATE RELEASE       Contact:
       

Mike Van Handel

       

Chief Financial Officer

       

(414) 906-6305

 

Manpower Reports 4th Quarter and Full-Year 2005 Results

 

MILWAUKEE, WI, USA, January 27, 2006 – Manpower Inc. (NYSE: MAN) today reported that net earnings per diluted share for the three months ended December 31, 2005 increased 38% to $1.01 from 73 cents in the prior year period. Net earnings in the quarter increased to $89.1 million from $69.6 million a year earlier. Revenues for the fourth quarter totaled $4.1 billion, an increase of one percent from the year-earlier period.

 

Results for the fourth quarter were negatively affected by relatively weaker foreign currencies compared to the prior year period. On a constant currency basis, net earnings per diluted share for the quarter were $1.07 on an 8 percent improvement in revenues. The fourth quarter was positively impacted by a lower income tax rate as a result of tax planning that was completed during the quarter.

 

Jeffrey A. Joerres, Manpower Chairman and Chief Executive Officer, said, “The Manpower team across the world delivered another solid quarter to cap off a solid year. We had outstanding performances in several geographies, including the U.S., the Nordics, Italy, Australia and Elan, our European IT staffing company.”

 

Net earnings per diluted share for the year ended December 31, 2005 were $2.87, an increase of 11% from $2.59 per diluted share in 2004. Net earnings were $260.1 million compared to $245.7 million in the prior year. Revenues for the year were $16.1 billion, an increase of 8 percent from the prior year. On a constant currency basis, net earnings per diluted share for the year were $2.89 on an 8 percent improvement in revenues.

 

Joerres stated, “We continue to make substantial progress on the strategic front with the expansion of our specialty businesses and the depth of Manpower offerings that are helping our clients win in their respective markets.

 

“The momentum that has been established in 2005 positions us well to take advantage of the positive market trends we are currently experiencing.

 

- MORE -


“We are anticipating the first quarter of 2006 diluted net earnings per share to be in the range of 36 to 39 cents. This includes an estimated negative currency impact of 3 cents and the impact of expensing stock options of 3 cents per diluted share.”

 

Included in the 2004 results was a first quarter non-operating gains of $14.2 million ($10.2 million net of income taxes), or 11 cents per diluted share and a third quarter favorable adjustment to the income tax provision of $8.0 million or 8 cents per diluted share.

 

In conjunction with its fourth quarter earnings release, Manpower will broadcast its conference call live over the Internet on January 27, 2006 at 7:30 a.m. CST (8:30 a.m. EST). 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) 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 4,400 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 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 December 31

 
               % Variance

 
     2005

   2004

   Amount
Reported


    Constant
Currency


 
     (Unaudited)  

Revenues from services (a)

   $ 4,123.2    $ 4,072.7    1.2 %   7.9 %

Cost of services

     3,352.4      3,308.5    1.3 %      
    

  

            

Gross profit

     770.8      764.2    0.9 %   7.1 %

Selling and administrative expenses

     638.5      646.7    -1.3 %   4.6 %
    

  

            

Operating profit

     132.3      117.5    12.6 %   20.5 %

Interest and other expense

     6.9      8.9    -22.0 %      
    

  

            

Earnings before income taxes

     125.4      108.6    15.4 %      

Provision for income taxes

     36.3      39.0    -7.0 %      
    

  

            

Net earnings

   $ 89.1    $ 69.6    27.9 %   41.0 %
    

  

            

Net earnings per share - basic

   $ 1.02    $ 0.77    32.5 %      
    

  

            

Net earnings per share - diluted

   $ 1.01    $ 0.73    38.4 %   46.6 %
    

  

            

Weighted average shares - basic

     87.2      90.1    -3.3 %      
    

  

            

Weighted average shares - diluted

     88.5      97.5    -9.2 %      
    

  

            

 

(a) Revenues from services include fees received from our franchise offices of $9.1 million and $9.5 million for the three months ended December 31, 2005 and 2004, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $388.6 million and $418.2 million for the three months ended December 31, 2005 and 2004, respectively.


Manpower Inc.

Operating Unit Results

(In millions)

 

     Three Months Ended December 31

 
                % Variance

 
     2005

   2004

    Amount
Reported


    Constant
Currency


 
     (Unaudited)  

Revenues from Services:

                           

United States (a)

   $ 534.2    $ 517.4     3.2 %   3.2 %

France

     1,381.6      1,409.9     -2.0 %   6.9 %

EMEA

     1,467.1      1,435.8     2.2 %   10.9 %

Jefferson Wells

     96.1      102.9     -6.5 %   -6.5 %

Right

     97.4      106.9     -8.9 %   -5.4 %

Other Operations

     546.8      499.8     9.4 %   12.3 %
    

  


           
     $ 4,123.2    $ 4,072.7     1.2 %   7.9 %
    

  


           

Operating Unit Profit:

                           

United States

   $ 23.2    $ 16.8     38.4 %   38.4 %

France

     47.3      55.0     -14.1 %   -6.2 %

EMEA

     53.9      41.3     30.4 %   42.9 %

Jefferson Wells

     4.4      13.2     -66.5 %   -66.5 %

Right

     3.3      (0.4 )   N/A     N/A  

Other Operations

     19.4      10.3     87.1 %   91.3 %
    

  


           
       151.5      136.2              

Corporate expenses

     15.9      15.4              

Amortization of intangible assets

     3.3      3.3              
    

  


           

Operating profit

     132.3      117.5     12.6 %   20.5 %

Interest and other expense (b)

     6.9      8.9              
    

  


           

Earnings before income taxes

   $ 125.4    $ 108.6              
    

  


           

 

(a) In the United States, revenues from services include fees received from the related franchise offices of $6.5 million and $6.7 million for the three months ended December 31, 2005 and 2004, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $311.8 million and $310.4 million for the three months ended December 31, 2005 and 2004, respectively.

 

(b) The components of interest and other expense (income) were:

 

Interest expense

   $ 11.9     $ 11.4  

Interest income

     (3.4 )     (3.2 )

Foreign exchange gains

     —         (1.5 )

Miscellaneous (income) expense, net

     (1.6 )     2.2  
    


 


     $ 6.9     $ 8.9  
    


 



Manpower Inc.

Results of Operations

(In millions, except per share data)

 

     Year Ended December 31

 
               % Variance

 
     2005

   2004

   Amount
Reported


    Constant
Currency


 
     (Unaudited)  

Revenues from services (a)

   $ 16,080.4    $ 14,930.0    7.7 %   7.7 %

Cost of services

     13,131.8      12,141.9    8.2 %      
    

  

            

Gross profit

     2,948.6      2,788.1    5.8 %   5.7 %

Selling and administrative expenses

     2,512.1      2,392.3    5.0 %   4.9 %
    

  

            

Operating profit

     436.5      395.8    10.3 %   10.9 %

Interest and other expenses

     41.8      26.3    59.2 %      
    

  

            

Earnings before income taxes

     394.7      369.5    6.8 %      

Provision for income taxes

     134.6      123.8    8.7 %      
    

  

            

Net earnings

   $ 260.1    $ 245.7    5.9 %   7.9 %
    

  

            

Net earnings per share - basic

   $ 2.95    $ 2.76    6.9 %      
    

  

            

Net earnings per share - diluted

   $ 2.87    $ 2.59    10.8 %   11.6 %
    

  

            

Weighted average shares - basic

     88.1      88.9    -0.9 %      
    

  

            

Weighted average shares - diluted

     91.1      96.8    -5.8 %      
    

  

            

 

(a) Revenues from services include fees received from our franchise offices of $35.8 million and $34.5 million for the year ended December 31, 2005 and 2004, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $1,510.7 million and $1,487.1 million for the year ended December 31, 2005 and 2004, respectively.


Manpower Inc.

Operating Unit Results

(In millions)

 

     Year Ended December 31

 
               % Variance

 
     2005

   2004

   Amount
Reported


    Constant
Currency


 
     (Unaudited)  

Revenues from Services:

                          

United States (a)

   $ 2,048.3    $ 2,041.1    0.4 %   0.4 %

France

     5,532.0      5,226.7    5.8 %   6.1 %

EMEA

     5,604.8      5,084.3    10.2 %   10.7 %

Jefferson Wells

     386.2      340.6    13.4 %   13.4 %

Right

     405.9      431.1    -5.9 %   -6.4 %

Other Operations

     2,103.2      1,806.2    16.4 %   14.5 %
    

  

            
     $ 16,080.4    $ 14,930.0    7.7 %   7.7 %
    

  

            

Operating Unit Profit:

                          

United States

   $ 68.7    $ 49.3    39.3 %   39.3 %

France

     166.5      178.8    -6.9 %   -6.1 %

EMEA

     153.9      115.1    33.7 %   36.6 %

Jefferson Wells

     33.3      51.4    -35.2 %   -35.2 %

Right

     24.5      24.5    0.0 %   -4.7 %

Other Operations

     61.7      46.0    34.1 %   31.8 %
    

  

            
       508.6      465.1             

Corporate expenses

     59.0      57.0             

Amortization of intangible assets

     13.1      12.3             
    

  

            

Operating profit

     436.5      395.8    10.3 %   10.9 %

Interest and other expenses (b)

     41.8      26.3             
    

  

            

Earnings before income taxes

   $ 394.7    $ 369.5             
    

  

            

 

(a) In the United States, revenues from services include fees received from the related franchise offices of $24.9 million and $25.0 million for the year ended December 31, 2005 and 2004, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $1,196.9 million and $1,181.5 million for the year ended December 31, 2005 and 2004, respectively.

 

(b) The components of interest and other expense (income) were:

 

Interest expense

   $ 46.7     $ 45.4  

Interest income

     (9.8 )     (9.4 )

Foreign exchange gains

     —         (1.6 )

Miscellaneous expense (income), net

     4.9       (8.1 )
    


 


     $ 41.8     $ 26.3  
    


 



Manpower Inc.

Consolidated Balance Sheets

(In millions)

 

     Dec. 31
2005


    Dec. 31
2004


 
     (Unaudited)  

ASSETS

                

Current assets:

                

Cash and cash equivalents

   $ 454.9     $ 531.8  

Accounts receivable, net

     3,208.2       3,227.8  

Prepaid expenses and other assets

     107.5       161.4  

Future income tax benefits

     72.6       96.5  
    


 


Total current assets

     3,843.2       4,017.5  

Other assets:

                

Goodwill and other intangible assets, net

     1,256.5       1,297.0  

Other assets

     271.4       305.5  
    


 


Total other assets

     1,527.9       1,602.5  

Property and equipment:

                

Land, buildings, leasehold improvements and equipment

     642.4       669.8  

Less: accumulated depreciation and amortization

     446.0       446.7  
    


 


Net property and equipment

     196.4       223.1  
    


 


Total assets

   $ 5,567.5     $ 5,843.1  
    


 


LIABILITIES AND SHAREHOLDERS’ EQUITY

                

Current liabilities:

                

Accounts payable

   $ 685.4     $ 687.1  

Employee compensation payable

     150.6       156.0  

Accrued liabilities

     435.4       505.7  

Accrued payroll taxes and insurance

     607.2       569.6  

Value added taxes payable

     441.9       457.8  

Short-term borrowings and current maturities of long-term debt

     260.0       225.7  
    


 


Total current liabilities

     2,580.5       2,601.9  

Other liabilities:

                

Long-term debt

     475.0       676.1  

Other long-term liabilities

     365.4       391.1  
    


 


Total other liabilities

     840.4       1,067.2  

Shareholders’ equity:

                

Common stock

     1.0       1.0  

Capital in excess of par value

     2,346.7       2,296.4  

Retained earnings

     269.9       51.0  

Accumulated other comprehensive income

     (11.0 )     109.4  

Treasury stock, at cost

     (460.0 )     (283.8 )
    


 


Total shareholders’ equity

     2,146.6       2,174.0  
    


 


Total liabilities and shareholders’ equity

   $ 5,567.5     $ 5,843.1  
    


 



Manpower Inc.

Consolidated Statements of Cash Flows

(In millions)

 

     Year Ended
December 31


 
     2005

    2004

 
     (Unaudited)  

Cash Flows from Operating Activities:

                

Net earnings

   $ 260.1     $ 245.7  

Adjustments to reconcile net earnings to net cash provided by operating activities:

                

Depreciation and amortization

     92.9       86.5  

Amortization of discount on convertible debentures

     1.9       7.8  

Deferred income taxes

     50.0       (8.8 )

Provision for doubtful accounts

     22.9       27.3  

Other non-operating gains

     (2.6 )     (14.2 )

Changes in operating assets and liabilities excluding the impact of acquisitions:

                

Accounts receivable

     (350.4 )     (363.9 )

Other assets

     (47.0 )     41.5  

Other liabilities

     244.6       165.5  
    


 


Cash provided by operating activities

     272.4       187.4  
    


 


Cash Flows from Investing Activities:

                

Capital expenditures

     (77.6 )     (67.9 )

Acquisitions of businesses, net of cash acquired

     (12.9 )     (117.3 )

Proceeds from sale of an equity interest

     —         29.8  

Proceeds from the sale of property and equipment

     4.8       5.6  
    


 


Cash used by investing activities

     (85.7 )     (149.8 )
    


 


Cash Flows from Financing Activities:

                

Net borrowings of short-term facilities and long-term debt

     169.5       5.7  

Cash paid to settle convertible debentures

     (206.6 )     —    

Proceeds from settlement of swap agreements

     50.7       —    

Proceeds from stock option and purchase plans

     29.7       60.0  

Repurchases of common stock

     (217.6 )     —    

Dividends paid

     (41.2 )     (27.1 )
    


 


Cash (used) provided by financing activities

     (215.5 )     38.6  
    


 


Effect of exchange rate changes on cash

     (48.1 )     29.4  
    


 


Change in cash and cash equivalents

     (76.9 )     105.6  

Cash and cash equivalents, beginning of period

     531.8       426.2  
    


 


Cash and cash equivalents, end of period

   $ 454.9     $ 531.8