Manpower Reports 1st Quarter 2010 Results

Manpower Inc.

Results of Operations

(In millions, except per share data)

Three Months Ended March 31

% Variance

Amount

Constant

2010

2009

Reported

Currency

(Unaudited)

Revenues from services (a) (b)

$ 4,099.3

$ 3,643.0

12.5%

5.1%

Cost of services

3,397.8

2,977.3

14.1%

6.6%

 Gross profit

701.5

665.7

5.4%

-1.4%

Selling and administrative expenses

668.9

664.3

0.7%

-5.5%

 Operating profit

32.6

1.4

N/A

N/A

Interest and other expenses

12.9

11.9

8.7%

 Earnings (loss) before income taxes

19.7

(10.5)

N/A

N/A

Provision for income taxes

16.9

(8.7)

N/A

 Net earnings (loss)

$        2.8

$      (1.8)

N/A

N/A

Net earnings (loss) per share - basic

$      0.04

$    (0.02)

N/A

Net earnings (loss) per share - diluted

$      0.04

$    (0.02)

N/A

N/A

Weighted average shares - basic

78.6

78.1

0.6%

Weighted average shares - diluted

79.9

78.1

2.2%

(a)  Revenues from services include fees received from our franchise offices of $4.6 million and $5.1 million for the three months ended March 31, 2010 and 2009, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $193.9 million and $158.9 million for the three months ended March 31, 2010 and 2009, respectively.

(b)  Our 2009 results have been restated as disclosed in Note 16 to the Consolidated Financial Statements included in our 2009 Annual Report to Shareholders.

Manpower Inc.

Operating Unit Results

(In millions)

Three Months Ended March 31

% Variance

Amount

Constant

2010

2009

Reported

Currency

(Unaudited)

Revenues from Services:

 Americas:

     United States  (a)

$    442.1

$    373.8

18.3%

18.3%

     Other Americas

294.5

219.2

34.4%

22.8%

736.6

593.0

24.2%

19.9%

 France

1,107.5

956.9

15.7%

9.3%

 EMEA:

     Italy

234.2

220.4

6.3%

0.4%

     Other EMEA (b)

1,379.6

1,258.8

9.6%

0.4%

1,613.8

1,479.2

9.1%

0.4%

 Asia Pacific

497.5

425.2

17.0%

5.3%

 Right Management

103.3

136.0

-24.0%

-27.9%

 Jefferson Wells

40.6

52.7

-22.9%

-22.9%

$ 4,099.3

$ 3,643.0

12.5%

5.1%

Operating Unit (Loss) Profit:

 Americas:

     United States  (a)

$      (8.4)

$    (14.5)

N/A

N/A

     Other Americas

9.6

4.8

101.0%

87.1%

1.2

(9.7)

N/A

N/A

 France

0.2

1.0

-83.9%

-69.7%

 EMEA:

     Italy

6.8

1.4

386.1%

362.9%

     Other EMEA (b)

16.8

(3.4)

N/A

N/A

23.6

(2.0)

N/A

N/A

 Asia Pacific

12.5

12.1

3.6%

-9.3%

 Right Management

12.5

29.1

-56.9%

-58.1%

 Jefferson Wells

(4.7)

(7.5)

N/A

N/A

45.3

23.0

Corporate expenses

(26.4)

(21.6)

Reclassification of French business tax

13.7

-

   Operating profit

32.6

1.4

N/A

N/A

Interest and other expenses (c)

(12.9)

(11.9)

   Earnings (loss) before income taxes

$      19.7

$    (10.5)

(a)  In the United States, revenues from services include fees received from our franchise offices of $2.5 million and $2.0 million for the three months ended March 31, 2010 and 2009, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $132.2 million and $94.9 million for the three months ended March 31, 2010 and 2009, respectively.

(b)  Our 2009 results have been restated as disclosed in Note 16 to the Consolidated Financial Statements included in our 2009 Annual Report to Shareholders.

(c)  The components of interest and other expenses were:

2010

2009

       Interest expense

$      11.1

$      13.1

       Interest income

(1.6)

(4.4)

       Foreign exchange losses

1.9

0.5

       Miscellaneous expenses, net

1.5

2.7

$      12.9

$      11.9

Manpower Inc.

Consolidated Balance Sheets

(In millions)

Mar. 31

Dec. 31

2010

2009

(Unaudited)

ASSETS

Current assets:

 Cash and cash equivalents

$    943.8

$ 1,014.6

 Accounts receivable, net

3,075.7

3,070.8

 Prepaid expenses and other assets

202.4

179.6

 Future income tax benefits

55.7

67.4

     Total current assets

4,277.6

4,332.4

Other assets:

 Goodwill and other intangible assets, net

1,334.9

1,357.5

 Other assets

339.9

347.5

     Total other assets

1,674.8

1,705.0

Property and equipment:

 Land, buildings, leasehold improvements and equipment

666.2

703.6

 Less:  accumulated depreciation and amortization

503.6

527.2

   Net property and equipment

162.6

176.4

       Total assets

$ 6,115.0

$ 6,213.8

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

 Accounts payable

$ 1,008.7

$    944.4

 Employee compensation payable

159.4

187.8

 Accrued liabilities

465.8

465.9

 Accrued payroll taxes and insurance

515.4

572.0

 Value added taxes payable

401.2

391.2

 Short-term borrowings and current

   maturities of long-term debt

42.2

41.7

     Total current liabilities

2,592.7

2,603.0

Other liabilities:

 Long-term debt

675.5

715.6

 Other long-term liabilities

360.2

358.7

     Total other liabilities

1,035.7

1,074.3

Shareholders' equity:

 Common stock

1.0

1.0

 Capital in excess of par value

2,555.5

2,544.2

 Retained earnings

1,112.4

1,109.6

 Accumulated other comprehensive income

43.9

106.9

 Treasury stock, at cost

(1,226.2)

(1,225.2)

     Total shareholders' equity

2,486.6

2,536.5

       Total liabilities and shareholders' equity

$ 6,115.0

$ 6,213.8

Manpower Inc.

Consolidated Statements of Cash Flows

(In millions)

Three Months Ended

Mar. 31

2010

2009

(Unaudited)

Cash Flows from Operating Activities:

 Net earnings (loss)

$      2.8

$      (1.8)

 Adjustments to reconcile net earnings (loss) to net

   cash provided by operating activities:

     Depreciation and amortization

21.4

23.2

     Deferred income taxes

(9.5)

2.0

     Provision for doubtful accounts

4.1

6.6

     Share-based compensation

5.5

4.1

     Excess tax benefit on exercise of stock options

(0.1)

(0.1)

 Changes in operating assets and liabilities, excluding

   the impact of acquisitions:

     Accounts receivable

(127.1)

572.3

     Other assets

(35.6)

(41.5)

     Other liabilities

95.5

(315.0)

           Cash (used in) provided by operating activities

(43.0)

249.8

Cash Flows from Investing Activities:

 Capital expenditures

(7.8)

(8.9)

 Acquisitions of businesses, net of cash acquired

(0.1)

(10.6)

 Proceeds from the sale of property and equipment

0.3

1.0

           Cash used in investing activities

(7.6)

(18.5)

Cash Flows from Financing Activities:

 Net change in short-term borrowings

0.2

(17.0)

 Proceeds from long-term debt

1.5

77.6

 Repayments of long-term debt

(0.7)

(116.1)

 Proceeds from share-based awards

4.9

4.7

 Excess tax benefit on exercise of stock options

0.1

0.1

           Cash provided by (used in) financing activities

6.0

(50.7)

Effect of exchange rate changes on cash

(26.2)

(53.6)

Change in cash and cash equivalents

(70.8)

127.0

Cash and cash equivalents, beginning of period

1,014.6

874.0

Cash and cash equivalents, end of period

$  943.8

$ 1,001.0