SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly period
ended:
June 30, 2000
or
[ ] Transition Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition period
from: ______to______
Commission file number: 1-10686
MANPOWER INC.
(Exact name of registrant as specified in its charter)
Wisconsin 39-1672779
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
5301 N. Ironwood Road
Milwaukee, Wisconsin 53217
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (414) 961-1000
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
Shares
Outstanding
Class at June 30, 2000
Common Stock, $.01 par value 75,803,257
<PAGE>
MANPOWER INC. AND SUBSIDIARIES
INDEX
Page
Number
PART I FINANCIAL INFORMATION
Item 1 Financial Statements (unaudited)
Consolidated Balance Sheets 3 - 4
Consolidated Statements of Operations 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7 - 10
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 11 - 14
Item 3 Quantitative and Qualitative Disclosures About
Market Risk 14
PART II OTHER INFORMATION AND SIGNATURES
Item 4 Submission of Matters to a Vote of Security Holders 15
Item 6 Exhibits and Reports on Form 8-K 15
Signatures 16
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
MANPOWER INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in millions)
ASSETS
June 30, December 31,
2000 1999
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 144.5 $ 241.7
Accounts receivable, less allowance for
doubtful accounts of $53.0 and $47.1,
respectively 2,121.7 1,897.6
Prepaid expenses and other assets 61.7 66.0
Future income tax benefits 55.2 52.0
-------- --------
Total current assets 2,383.1 2,257.3
OTHER ASSETS:
Investments in licensees 37.6 37.0
Intangible assets, less accumulated
amortization of $21.4 and $16.3,
respectively 214.1 89.4
Other assets 169.1 152.6
-------- --------
Total other assets 420.8 279.0
PROPERTY AND EQUIPMENT:
Land, buildings, leasehold improvements
and equipment 429.4 416.1
Less: accumulated depreciation and
amortization 249.6 233.7
-------- --------
Net property and equipment 179.8 182.4
-------- --------
Total assets $2,983.7 $2,718.7
======== ========
The accompanying notes to consolidated financial statements
are an integral part of these balance sheets.
<PAGE>
MANPOWER INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in millions, except share data)
LIABILITIES AND SHAREHOLDERS' EQUITY
June 30, December 31,
2000 1999
(Unaudited)
CURRENT LIABILITIES:
Accounts payable $ 471.2 $ 388.0
Employee compensation payable 71.8 71.9
Accrued liabilities 193.5 180.2
Accrued payroll taxes and insurance 334.9 340.9
Value added taxes payable 307.8 305.6
Short-term borrowings and current
maturities of long-term debt 134.1 131.5
-------- --------
Total current liabilities 1,513.3 1,418.1
OTHER LIABILITIES:
Long-term debt 513.9 357.5
Other long-term liabilities 302.5 292.5
-------- --------
Total other liabilities 816.4 650.0
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value, authorized
25,000,000 shares, none issued - -
Common stock, $.01 par value, authorized
125,000,000 shares, issued 84,573,557 and
84,272,460 shares, respectively 0.8 0.8
Capital in excess of par value 1,628.0 1,621.4
Accumulated deficit (597.0) (653.0)
Accumulated other comprehensive income (loss) (133.5) (88.8)
Treasury stock at cost, 8,770,300 and
8,286,400 shares, respectively (244.3) (229.8)
-------- --------
Total shareholders' equity 654.0 650.6
Total liabilities and shareholders' -------- --------
equity $2,983.7 $2,718.7
======== ========
The accompanying notes to consolidated financial statements
are an integral part of these balance sheets.
<PAGE>
MANPOWER INC. AND SUBSIDIARIES
Consolidated Statements of Operations (Unaudited)
(in millions, except per share data)
3 Months Ended 6 Months Ended
June 30, June 30,
2000 1999 2000 1999
Revenues from services $2,714.1 $2,327.6 $5,282.4 $4,502.8
Cost of services 2,236.3 1,922.9 4,358.6 3,717.8
-------- -------- -------- --------
Gross profit 477.8 404.7 923.8 785.0
Selling and administrative expenses 408.1 377.3 803.6 720.8
-------- -------- -------- --------
Operating profit 69.7 27.4 120.2 64.2
Interest and other expense 10.7 5.0 21.5 9.9
-------- -------- -------- --------
Earnings before income taxes 59.0 22.4 98.7 54.3
Provision for income taxes 21.0 (9.4) 35.1 1.9
-------- -------- -------- --------
Net earnings $ 38.0 $ 31.8 $ 63.6 $ 52.4
======== ======== ======== ========
Net earnings per share $ 0.50 $ 0.41 $ 0.84 $ 0.67
======== ======== ======== ========
Net earnings per share - diluted $ 0.49 $ 0.40 $ 0.82 $ 0.66
======== ======== ======== ========
Weighted average common shares 76.0 77.8 76.0 78.4
======== ======== ======== ========
Weighted average common shares -
diluted 77.1 78.5 77.2 79.2
======== ======== ======== ========
The accompanying notes to consolidated financial statements
are an integral part of these statements.
Supplemental Systemwide Information (Unaudited)
(in millions)
3 Months Ended 6 Months Ended
June 30, June 30,
2000 1999 2000 1999
Systemwide Sales $3,121.9 $2,756.1 $6,097.4 $5,318.5
Systemwide information represents the total of Company-owned
branches and franchises.
<PAGE>
MANPOWER INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(in millions)
6 Months Ended
June 30,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 63.6 $ 52.4
Adjustments to reconcile net earnings to net cash
Provided by operating activities:
Depreciation and amortization 35.4 33.2
Deferred income taxes (3.9) -
Provision for doubtful accounts 12.3 6.5
Changes in operating assets and liabilities:
Accounts receivable (283.5) (125.8)
Other assets (3.5) (33.8)
Other liabilities 154.7 83.7
-------- --------
Cash (used) provided by operating activities (24.9) 16.2
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (33.8) (38.7)
Proceeds from the sale of property and equipment 3.0 10.2
Acquisitions of businesses, net of cash acquired (157.5) (2.5)
-------- --------
Cash used by investing activities (188.3) (31.0)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in payable to banks (5.8) (33.2)
Proceeds from long-term debt 273.0 61.2
Repayment of long-term debt (105.9) (4.8)
Proceeds from stock option and purchase plans 6.6 5.0
Repurchase of common stock (14.5) (58.2)
Dividends paid (7.6) (7.8)
-------- --------
Cash provided (used) by financing activities 145.8 (37.8)
-------- --------
Effect of exchange rate changes on cash (29.8) (11.1)
-------- --------
Net change in cash and cash equivalents (97.2) (63.7)
Cash and cash equivalents, beginning of period 241.7 180.5
-------- --------
Cash and cash equivalents, end of period $144.5 $116.8
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 7.8 $ 7.6
======== ========
Income taxes paid $ 28.6 $ 37.8
======== ========
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE>
MANPOWER INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
For the Six Months Ended June 30, 2000 and 1999
(in millions, except per share data)
(1) Basis of Presentation
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to the rules and regulations of the Securities and
Exchange Commission, although the Company believes that the
disclosures are adequate to make the information presented not
misleading. These consolidated financial statements should be
read in conjunction with the consolidated financial statements
included in the Company's 1999 Annual Report to Shareholders.
The information furnished reflects all adjustments that, in the
opinion of management, are necessary for a fair statement of the
results of operations for the periods presented. Such
adjustments are of a normal recurring nature.
Certain amounts in the 1999 consolidated financial statements
have been reclassified to be consistent with the current year
presentation.
(2) Acquisitions
During January 2000, the Company acquired Elan Group Limited
("Elan"), a European specialty IT staffing company with
significant operations in the U.K. and several other countries
throughout the world. As of June 30, 2000, the total
consideration paid for Elan was approximately $116.2. In
addition, there is approximately $30.0 in deferred consideration
expected to be paid during 2001. This transaction was accounted
for as a purchase and the excess of the purchase price over the
fair value of net assets acquired was recorded as intangible
assets.
Throughout the first six months of 2000, the Company also
acquired and invested in several companies throughout the world.
The total consideration paid for such transactions was $46.6 as
of June 30, 2000, the majority of which was recorded as
intangible assets.
(3) Income Taxes
The Company provided for income taxes during the first six months
of 2000 at a rate of 35.5%, which is equal to the estimated
annual effective tax rate based on the currently available
information. This rate is higher than the U.S. Federal statutory
rate due to foreign tax rate differences and U.S. state income
taxes.
During the quarter ended June 30, 1999, the Company had a one-
time tax benefit of $15.7 in connection with the dissolution of a
non-operating subsidiary.
(4) Debt
Interest Rate Swaps
During June 2000, the Company entered into various interest rate
swap agreements in order to fix its interest costs on a portion
of its Euro and Yen denominated variable rate borrowings. The
Euro interest rate swap agreements have a notional value of Euro
100.0 ($95.7), a weighted average fixed rate of 6.1% and expire
in 2010. The Yen interest rate swap agreement has a notional
value of Yen 4,000.0 ($38.0), a fixed rate of 1.2% and expires in
2003. These swap agreements have had an immaterial impact on the
<PAGE>
recorded interest expense during 2000. As of June 30, 2000, the
weighted average variable interest rate under the revolving
credit agreement was 3.1%.
Euro Notes
On March 7, 2000, the Company issued Euro 150.0 in unsecured
notes, due March 2005, with an effective interest rate of 6.3%.
Net proceeds of $143.1 from the issuance were used to repay
amounts under the Company's unsecured revolving credit agreement.
(5) Earnings Per Share
The calculations of net earnings per share and net earnings per
share - diluted are as follows:
3 Months Ended 6 Months Ended
June 30, June 30,
2000 1999 2000 1999
Net earnings per share:
Net earnings available to
common shareholders $ 38.0 $ 31.8 $ 63.6 $ 52.4
Weighted average common shares
outstanding 76.0 77.8 76.0 78.4
------ ------ ------ ------
$ 0.50 $ 0.41 $ 0.84 $ 0.67
====== ====== ====== ======
Net earnings per share - diluted:
Net earnings available to
common shareholders $ 38.0 $ 31.8 $ 63.6 $ 52.4
Weighted average common
shares outstanding 76.0 77.8 76.0 78.4
Effect of dilutive stock options 1.1 0.7 1.2 0.8
------ ------ ------ ------
77.1 78.5 77.2 79.2
------ ------ ------ ------
$ 0.49 $ 0.40 $ 0.82 $ 0.66
====== ====== ====== ======
(6) Retirement Plans
On February 29, 2000, the Company froze all benefits in each of
its U.S. defined benefit pension plans. The Company also offered
a voluntary early retirement package and certain other benefits
to eligible employees. These benefits are expected to be paid
from the respective defined benefit pension plans. In addition,
the Company will no longer provide medical and dental benefits
under its U.S. retiree health care plan to newly retired
employees who, as of January 1, 2000, were under the age of 45 or
had less than five years of service. The net impact of these
plan changes were not material to the consolidated financial
statements.
<PAGE>
(7) Shareholders' Equity
Total comprehensive income (loss) consists of net earnings and
foreign currency translation adjustments and is as follows:
3 Months Ended 6 Months Ended
June 30, June 30,
2000 1999 2000 1999
Net earnings $ 38.0 $ 31.8 $ 63.6 $ 52.4
Foreign currency translation
adjustments (19.0) (20.9) (44.7) (62.2)
------- ------- ------- -------
Total comprehensive income (loss) $ 19.0 $ 10.9 $ 18.9 $ (9.8)
======= ======= ======= =======
On April 17, 2000, the Company's Board of Directors declared a
cash dividend of $0.10 per share which was paid on June 14, 2000
to shareholders of record on June 2, 2000.
(8) Interest and Other Expense
Interest and other expense consists of the following:
3 Months Ended 6 Months Ended
June 30, June 30,
2000 1999 2000 1999
Interest expense $ 7.9 $ 3.9 $15.8 $ 7.8
Interest income (1.7) (1.9) (3.7) (4.1)
Foreign exchange losses (gains) 0.2 (0.1) 1.3 0.9
Loss on sale of accounts receivable 2.1 2.3 5.2 4.6
Miscellaneous, net 2.2 0.8 2.9 0.7
----- ----- ----- -----
Total $10.7 $ 5.0 $21.5 $ 9.9
===== ===== ===== =====
<PAGE>
(9) Segment Information
Segment information is as follows:
3 Months Ended 6 Months Ended
June 30, June 30,
2000 1999 2000 1999
Revenues from services:
United States (a) $ 609.6 $ 560.1 $1,173.5 $1,075.9
France 1,021.0 893.3 1,934.6 1,721.4
United Kingdom 347.2 264.7 712.2 537.5
Other Europe 459.8 397.1 919.3 758.1
Other Countries 276.5 212.4 542.8 409.9
-------- -------- -------- --------
$2,714.1 $2,327.6 $5,282.4 $4,502.8
======== ======== ======== ========
Operating Unit Profit:
United States $ 23.0 $ 21.0 $ 38.5 $ 34.3
France 31.5 21.3 52.3 34.7
United Kingdom 9.6 7.5 17.6 14.3
Other Europe 17.8 15.3 32.5 25.4
Other Countries 1.5 1.2 5.1 3.7
-------- -------- -------- --------
83.4 66.3 146.0 112.4
Corporate expenses 10.4 9.2 18.9 16.9
Amortization of intangible assets 3.3 1.7 6.9 3.3
Non-recurring expenses (b) - 28.0 - 28.0
Interest and other expense 10.7 5.0 21.5 9.9
-------- -------- -------- --------
Earnings before income taxes $ 59.0 $ 22.4 $ 98.7 $ 54.3
======== ======== ======== ========
(a) Total systemwide sales in the United States, which
includes sales of Company-owned branches and franchises,
were $965.3 and $930.5 for the three months ended June 30,
2000 and 1999, respectively, and $1,887.3 and $1,780.9 for
the six months ended June 30, 2000 and 1999, respectively.
(b) Represents non-recurring items ($16.4 after tax) in the
second quarter of 1999 related to employee severances,
retirement costs and other associated realignment costs.
<PAGE>
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
Operating Results - Three Months Ended June 30, 2000 and 1999
Revenues increased 16.6% to $2,714.1 million for the second
quarter of 2000. Revenues were unfavorably impacted by changes
in currency exchange rates during the second quarter of 2000 due
to the strengthening of the U.S. Dollar, as compared to the
second quarter of 1999, relative to the currencies in most of the
Company's non-U.S. markets. At constant exchange rates, the
increase in revenues would have been 24.8%. Volume, as measured
by billable hours of branch operations, increased 17.1% in the
quarter. All of the Company's major markets experienced revenue
increases, as measured in their local currencies, including the
United States (8.8%), France (29.3%) and the United Kingdom
(37.6%). The revenue increase in the United Kingdom was
favorably impacted by the Elan acquisition (see Note 2 to the
consolidated financial statements). The Company's Other Europe
and Other Countries segments reported constant currency revenue
increases of 28.3% and 25.9%, respectively.
Gross profit, which represents revenues less payroll and related
expenses of temporary workers, increased as a percent of revenues
to 17.6% in the second quarter of 2000 from 17.4% in the second
quarter of 1999. This increase is primarily due to increased
margins in France as a result of enhanced pricing.
Selling and administrative expenses were 15.0% of revenues in the
second quarter of 2000, which is equal to the second quarter of
1999 excluding the non-recurring items incurred during that
period. This expense level was maintained despite an increase in
France's business tax (taxe professionnelle) and continued
investments in new or expanding markets.
Interest and other expense was $10.7 million in the second
quarter of 2000 compared to $5.0 million in the second quarter of
1999. This increase is primarily due to an increase in interest
expense related to the higher borrowing levels needed to finance
the acquisitions made throughout 2000, the continued investments
in new or expanding markets and the share repurchase program.
The Company provided for income taxes during the second quarter
of 2000 at a rate of 35.5%, which is equal to the estimated
annual effective tax rate based on the currently available
information. This rate is higher than the U.S. Federal statutory
rate due to foreign tax rate differences and U.S. state income
taxes. During the three month period ended June 30, 1999, the
Company had a one-time tax benefit of $15.7 million in connection
with the dissolution of a non-operating subsidiary.
On a diluted basis, net earnings per share was $0.49 in the
second quarter of 2000 compared to $0.40 in the second quarter of
1999. The net earnings per share, on a diluted basis, for the
second quarter of 2000 was negatively impacted by $0.06 due to
changes in exchange rates. Excluding the non-recurring items and
one-time income tax gain in the second quarter of 1999, net
earnings per share on a diluted basis would have been $0.41. The
diluted weighted average shares decreased by 1.7% for the quarter
due to the effect of the Company's treasury stock purchases,
which was partially offset by an increased number of dilutive
stock options because of the higher average share price during
the second quarter of 2000 compared to the second quarter of
1999.
Operating Results - Six Months Ended June 30, 2000 and 1999
Revenues increased 17.3% to $5,282.4 million for the first six
months of 2000. Revenues were unfavorably impacted by changes in
currency exchange rates during the first six months of 1999 due
to the strengthening of the U.S. Dollar, as compared to the first
six months of 1999, relative to the currencies in most of the
Company's non-U.S. markets. At constant exchange rates, the
increase in revenues would have been 25.3%. Volume, as measured
by billable hours of branch operations, increased 16.9% in the
first six month period of 2000 compared to 1999. All of the
Company's major markets experienced revenue increases, as
measured in their local currencies, including the United States
(9.1%), France (27.5%) and the United Kingdom (36.9%). The
revenue increase in the United Kingdom was favorably impacted by
the Elan acquisition (see Note 2 to the consolidated financial
statements). The Company's
<PAGE>
Other Europe and Other Countries
segments reported constant currency revenue increases of 34.3%
and 27.1%, respectively.
Gross profit, which represents revenues less payroll and related
expenses of temporary workers, increased as a percent of revenues
to 17.5% in the first six months of 2000 from 17.4% for the same
period in 1999. This increase is primarily due to increased
margins in France as a result of enhanced pricing.
Selling and administrative expenses were 15.2% of revenues in the
first six months of 2000 compared to 15.4% for the same period in
1999 excluding the non-recurring items incurred during that
period. This expense level was maintained despite an increase in
France's business tax (taxe professionnelle) and continued
investments in new or expanding markets.
Interest and other expense was $21.5 million in the first six
months of 2000 compared to $9.9 million during the same period in
1999. This increase is primarily due to an increase in interest
expense related to the higher borrowing levels needed to finance
the acquisitions made throughout 2000, the continued investments
in new or expanding markets and the share repurchase program.
The Company provided for income taxes during the first six months
of 2000 at a rate of 35.5%, which is equal to the estimated
annual effective tax rate based on the currently available
information. This rate is higher than the U.S. Federal statutory
rate due to foreign tax rate differences and U.S. state income
taxes. During the six month period ended June 30, 1999, the
Company had a one-time tax benefit of $15.7 million in connection
with the dissolution of a non-operating subsidiary.
On a diluted basis, net earnings per share was $0.82 for the
first six months of 2000 compared to $0.66 for the same period in
1999. The net earnings per share, on a diluted basis, for the
first six months of 2000 was negatively impacted by $0.11 due to
changes in exchange rates. Excluding the non-recurring items
and one-time income tax gain in the first six months of 1999, net
earnings per share on a diluted basis would have been $0.67. The
diluted weighted average shares decreased by 2.5% for the first
six months of 2000 due to the Company's treasury stock purchases,
which was partially offset by an increased number of dilutive
stock options because of the higher average share price during
the first six months quarter of 2000 compared to the first six
months of 1999.
Liquidity and Capital Resources
Cash used by operating activities was $24.9 million in the first
six months of 2000 compared to cash provided by operating
activities of $16.2 million in the first six months of 1999.
This change reflects the change in working capital requirements
between periods offset by the increased earnings in the first six
months of 2000. Cash provided by operating activities before the
changes in working capital requirements was $107.4 million in the
first six months of 2000 compared to $92.1 million in the first
six months of 1999. Cash used by changes in working capital was
$132.3 million and $75.9 million in the first six months of 2000
and 1999, respectively.
Capital expenditures were $33.8 million in the first six months
of 2000 compared to $38.7 million during the first six months of
1999. These expenditures were primarily comprised of purchases
of computer equipment, office furniture and other costs related
to office openings and refurbishments.
During January 2000, the Company acquired Elan Group Limited
("Elan"), a European specialty IT staffing company with
significant operations in the U.K. and several other countries
throughout the world. As of June 30, 2000, the total
consideration paid for Elan was approximately $116.2 million. In
addition, there is approximately $30.0 million in deferred
consideration expected to be paid during 2001.
During the first six months of 2000, the Company also acquired
and invested in several companies throughout the world. The
total consideration paid for such transactions was $46.6 million
as of June 30, 2000, the majority of which was recorded as
intangible assets.
<PAGE>
Net cash provided from additional borrowings was $161.3 million
and $23.2 million in the first six months of 2000 and 1999,
respectively. The additional borrowings in 2000 were primarily
used to fund the acquisitions and investments made throughout
2000, to support the working capital growth and to repurchase the
Company's common stock. The Company repurchased 483,900 shares
at a cost of $14.5 million during the first six months of 2000.
The additional borrowings in 1999 were primarily used to support
the working capital growth and to repurchase the Company's common
stock.
Accounts receivable increased to $2,121.7 million at June 30,
2000 from $1,897.6 million at December 31, 1999. This
increase is partially due to a $100.0 million reduction in the
amount advanced under the Company's U.S. Receivable Facility from
December 31, 1999 to June 30, 2000. The remaining increase is
due to the growth in many of the Company's foreign markets and
the impact of recent acquisitions, offset by the impact of
changes in exchange rates. At constant currency, the June 30,
2000 receivable balance would have been $94.4 million higher.
As of June 30, 2000, the Company had borrowings of $151.4 million
and letters of credit of $59.0 million outstanding under its
$415.0 million U.S. revolving credit facility, and borrowings of
$7.0 million outstanding under its U.S. commercial paper program.
The commercial paper borrowings have been classified as long-term
debt due to the availability to refinance them on a long-term
basis under the revolving credit facility.
During June 2000, the Company entered into various interest rate
swap agreements in order to fix its interest costs on a portion
of its Euro and Yen denominated variable rate borrowings. The
Euro interest rate swap agreements have a notional value of Euro
100.0 million ($95.7 million), a weighted average fixed rate of
6.1% and expire in 2010. The Yen interest rate swap agreement
has a notional value of Yen 4.0 billion ($38.0 million), a fixed
rate of 1.2% and expires in 2003. These swap agreements have had
an immaterial impact on the recorded interest expense during
2000. As of June 30, 2000, the weighted average variable
interest rate under the revolving credit agreement was 3.1%.
On March 7, 2000, the Company issued Euro 150.0 million in
unsecured notes, due March 2005, with an effective interest rate
of 6.3%. Net proceeds of $143.1 million from the issuance were
used to repay amounts under the Company's unsecured revolving
credit facility.
The Company and some of its foreign subsidiaries maintain
separate lines of credit with foreign financial institutions to
meet short-term working capital needs. As of June 30, 2000, such
lines totaled
$167.7 million, of which $39.3 million was unused.
The Euro
On January 1, 1999, eleven of the fifteen member countries of the
European Union (the "participating countries") established fixed
conversion rates between their existing sovereign currencies (the
"legacy currencies") and the Euro and have agreed to adopt the
Euro as their common legal currency. The legacy currencies will
remain legal tender in the participating countries as
denominations of the Euro between January 1, 1999 and January 1,
2002 (the "transition period"). During the transition period,
public and private parties may pay for goods and services using
either the Euro or the participating country's legacy currency.
Beginning on January 1, 2002, Euro-denominated bills and coins
will be issued and legacy currencies will be withdrawn from
circulation.
The Company has significant operations in many of the
participating countries and is currently assessing the impact of
the Euro on its business operations. Since the Company's labor
costs and prices are generally determined on a local basis, the
near-term impact of the Euro is expected to be primarily related
to making internal information systems modifications to meet
customer invoicing and financial reporting requirements. Such
modifications relate to converting currency values and to
operating in a dual currency environment during the transition
period. Modifications of internal information systems will occur
throughout the transition period and will be coordinated with
other system-related upgrades and enhancements.
<PAGE>
On a long-term basis, the Company believes that the introduction
of the Euro may cause a greater level of price harmonization
between participating countries, notwithstanding certain country-
specific costs. In addition, the Company expects to begin paying
permanent employees and temporary workers in the participating
countries in Euro during 2001.
The Company will account for all related system modification
costs in accordance with its existing policy and does not expect
such costs to be material to the Company's consolidated financial
statements.
Forward-Looking Statements
Certain information included or incorporated by reference in this
filing and identified by use of the words "expects," "believes,"
"plans" or the like constitutes forward-looking statements, as
such term is defined in Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. In
addition, any information included or incorporated by reference
in future filings by the Company with the Securities and Exchange
Commission, as well as information contained in written material,
releases and oral statements issued by or on behalf of the
Company may include forward-looking statements. All statements
which address operating performance, events or developments that
the Company expects or anticipates will occur or future financial
performance are forward-looking statements.
These forward-looking statements speak only as of the date on
which they are made. They rely on a number of assumptions
concerning future events and are subject to a number of risks and
uncertainties, many of which are outside of the Company's
control, that could cause actual results to differ materially
from such statements. These risks and uncertainties include, but
are not limited to:
* material changes in the demand from larger customers,
including customers with which the Company has national or global
arrangements
* availability of temporary workers or workers with the skills
required by customers
* increases in the wages paid to temporary workers
* competitive market pressures, including pricing pressures
and the expansion into new markets or service lines
* ability to successfully invest in and implement information
systems
* unanticipated technological changes, including obsolescence
or impairment of information systems
* changes in customer attitudes toward the use of staffing
services
* government, tax or regulatory policies adverse to the
employment services industry
* general economic conditions in international markets
* interest rate and exchange rate fluctuations
* difficulties related to acquisitions, including integrating
the acquired companies and achieving the expected benefits
The Company disclaims any obligation to update publicly or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
The Company's 1999 annual report on Form 10-K contains certain
disclosures about market risks affecting the Company. There have
been no material changes to the information provided which would
require additional disclosures as of the date of this filing.
<PAGE>
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
On April 17, 2000, at the Company's Annual Meeting of
Shareholders (the "Annual Meeting") the shareholders of the
Company voted to: (1) Elect three directors to serve until 2003
as Class I directors, (2) approve the performance-based incentive
compensation arrangement for the Company's President and Chief
Executive Officer and (3) ratify the appointment of Arthur
Andersen LLP as the Company's independent auditors for 2000. In
addition, Messrs. J. Ira Harris, Terry A. Hueneke, Newton N.
Minow and Gilbert Palay continued as Class II directors (term
expiring 2001), and Messrs. Dudley J. Godfrey, Jr. and Marvin B.
Goodman continued as Class III directors (term expiring 2002).
The results of the proposals voted upon at the Annual Meeting are
as follows:
Broker
For Against Withheld Abstain Non-Vote
1. a) Election of
Dennis Stevenson 53,315,815 - 10,894,092 - -
b) Election of
John R. Walter 62,047,636 - 2,162,271 - -
c) Election of
Jeffery A. Joerres 62,063,129 - 2,146,778 - -
2. Approval of
performance-based
incentive compensation
arrangement for the
Company's President and
Chief Executive Officer 63,225,359 824,445 - 160,103 -
3. Ratification of
Arthur Andersen LLP as
independent auditors 64,154,307 26,827 - 28,773 -
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed one current report on Form 8-K dated
April 18, 2000 with respect to Item 5 - Other Events.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
MANPOWER INC.
----------------
(Registrant)
Date: August 11, 2000 /s/ Michael J. Van Handel
---------------------------
Michael J. Van Handel
Senior Vice President, Chief
Financial Officer and Secretary
(Signing on behalf of the
Registrant and as the Principal
Financial Officer and Principal
Accounting Officer)
