SEC Filing | ManpowerGroup Inc.

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man-10q_20200630.htm

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended:

June 30, 2020

☐	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

MANPOWERGROUP INC.

(Exact name of registrant as specified in its charter)


	Wisconsin	39-1672779
	(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

	100 Manpower Place
	Milwaukee, Wisconsin	53212
	(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (414) 961-1000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Common Stock, $.01 par value	MAN	New York Stock Exchange

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 ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ 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 August 5, 2020
Common Stock, $.01 par value		58,071,017

ManpowerGroup Inc.

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 Comprehensive Income	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statements of Shareholders' Equity	7
	Notes to Consolidated Financial Statements	8-22
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23-38
Item 3	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4	Controls and Procedures	39

PART II	OTHER INFORMATION
Item 1A	Risk Factors	40
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 5	Other Information	41
Item 6	Exhibits	42

SIGNATURES		43

PART I - FINANCIAL INFORMATION

Item 1 – Financial Statements (unaudited)

ManpowerGroup Inc.

Consolidated Balance Sheets (Unaudited)

(in millions)

ASSETS


	June 30, 2020		December 31, 2019

Cash and cash equivalents	$	1,438.6	$	1,025.8
Accounts receivable, less allowance for doubtful accounts of $117.7 and $113.5, respectively		4,224.6		5,273.1
Prepaid expenses and other assets		229.5		185.6
Total current assets		5,892.7		6,484.5

Other Assets:
Goodwill		1,178.2		1,260.1
Intangible assets, less accumulated amortization of $401.6 and $389.4, respectively		255.1		268.6
Operating lease right-of-use asset		409.1		448.5
Other assets		588.1		618.8
Total other assets		2,430.5		2,596.0

Property and Equipment:
Land, buildings, leasehold improvements and equipment		593.9		605.5
Less: accumulated depreciation and amortization		457.5		462.2
Net property and equipment		136.4		143.3
Total assets	$	8,459.6	$	9,223.8

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

ManpowerGroup Inc.

Consolidated Balance Sheets (Unaudited)

(in millions, except share and per share data)

LIABILITIES AND SHAREHOLDERS’ EQUITY


	June 30, 2020			December 31, 2019
Current Liabilities:
Accounts payable	$	2,243.5		$	2,474.9
Employee compensation payable		161.7			206.4
Accrued liabilities		499.6			545.4
Accrued payroll taxes and insurance		572.8			649.7
Value added taxes payable		419.5			504.0
Short-term borrowings and current maturities of long-term debt		40.5			61.0
Total current liabilities		3,937.6			4,441.4

Other Liabilities:
Long-term debt		1,014.3			1,012.4
Long-term operating lease liability		308.5			336.7
Other long-term liabilities		656.4			671.8
Total other liabilities		1,979.2			2,020.9

Shareholders’ Equity:
ManpowerGroup 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 117,499,079 and 117,190,883 shares, respectively		1.2			1.2
Capital in excess of par value		3,388.0			3,370.6
Retained earnings		3,368.2			3,494.1
Accumulated other comprehensive loss		(479.1	)		(441.0	)
Treasury stock at cost, 59,446,363 and 58,517,128 shares, respectively		(3,752.3	)		(3,681.9	)
Total ManpowerGroup shareholders’ equity		2,526.0			2,743.0
Noncontrolling interests		16.8			18.5
Total shareholders’ equity		2,542.8			2,761.5
Total liabilities and shareholders’ equity	$	8,459.6		$	9,223.8

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

ManpowerGroup Inc.

Consolidated Statements of Operations (Unaudited)

(in millions, except per share data)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
Revenues from services	$	3,742.2		$	5,373.1		$	8,361.3		$	10,418.0
Cost of services		3,165.5			4,502.7			7,060.6			8,742.8
Gross profit		576.7			870.4			1,300.7			1,675.2
Selling and administrative expenses, excluding goodwill impairment charges		559.9			675.6			1,246.2			1,374.9
Goodwill impairment charges		66.8			64.0			66.8			64.0
Selling and administrative expenses		626.7			739.6			1,313.0			1,438.9
Operating (loss) profit		(50.0	)		130.8			(12.3	)		236.3
Interest and other expenses (income), net		5.8			(70.2	)		26.3			(58.3	)
(Loss) earnings before income taxes		(55.8	)		201.0			(38.6	)		294.6
Provision for income taxes		8.6			73.7			24.1			113.8
Net (loss) earnings		(64.4	)	$	127.3		$	(62.7	)	$	180.8
Net (loss) earnings per share – basic	$	(1.11	)	$	2.12		$	(1.07	)	$	3.00
Net (loss) earnings per share – diluted	$	(1.11	)	$	2.11		$	(1.07	)	$	2.98
Weighted average shares – basic		58.2			60.0			58.5			60.3
Weighted average shares – diluted		58.2			60.4			58.5			60.7

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

ManpowerGroup Inc.

Consolidated Statements of Comprehensive (Loss) Income (Unaudited)

(in millions)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
Net (loss) earnings	$	(64.4	)	$	127.3		$	(62.7	)	$	180.8
Other comprehensive income (loss):
Foreign currency translation adjustments		37.3			32.9			(47.6	)		2.3
Reclassification of currency translation adjustment to income related to disposition of partially held equity interest		—			(32.5	)		—			(32.5	)
Translation adjustments on derivative instruments, net of income taxes of $(5.3), $(3.1), $0.1 and $2.0, respectively		(9.3	)		(11.1	)		1.4			6.3
Translation adjustments of long-term intercompany loans		(1.9	)		(4.2	)		(0.4	)		6.8
Defined benefit pension plans and retiree health care plan, net of income taxes of $(0.1), $0.0, $7.6 and $0.1, respectively		0.6			0.2			1.9			0.4
Pension settlement related to a U.S. plan, net of income taxes of $(3.9)		—			—			6.6			—
Total other comprehensive income (loss)		26.7			(14.7	)		(38.1	)		(16.7	)
Comprehensive (loss) income	$	(37.7	)	$	112.6		$	(100.8	)	$	164.1

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

ManpowerGroup Inc.

Consolidated Statements of Cash Flows (Unaudited)

(in millions)

	Six Months Ended
	June 30,
	2020			2019
Cash Flows from Operating Activities:
Net (loss) earnings	$	(62.7	)	$	180.8
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities:
Depreciation and amortization		37.0			39.0
Noncash gain on disposition of previously held equity interest		-			(80.4	)
Noncash goodwill and other impairment charges		71.3			64.0
Deferred income taxes		(7.9	)		13.7
Provision for doubtful accounts		10.9			11.5
Share-based compensation		11.5			12.9
Changes in operating assets and liabilities, excluding the impact of acquisitions:
Accounts receivable		988.3			(120.9	)
Other assets		(27.2	)		81.3
Other liabilities		(425.1	)		75.2
Cash provided by operating activities		596.1			277.1

Cash Flows from Investing Activities:
Capital expenditures		(18.9	)		(24.0	)
Acquisition of businesses, net of cash acquired		-			114.7
Proceeds from the sale of subsidiaries, investments, property and equipment		0.8			8.0
Cash (used in) provided by investing activities		(18.1	)		98.7

Cash Flows from Financing Activities:
Net change in short-term borrowings		(17.8	)		(3.0	)
Proceeds from long-term debt		1.1			7.6
Repayments of long-term debt		(0.1	)		(0.1	)
Payments of contingent consideration for acquisitions		(1.7	)		(22.8	)
Proceeds from share-based awards and sale of subsidiaries		6.8			5.5
Payments to noncontrolling interest		(0.8	)		(2.1	)
Other share-based award transactions		(6.6	)		(7.3	)
Repurchases of common stock		(63.8	)		(101.0	)
Dividends paid		(63.2	)		(65.2	)
Cash used in financing activities		(146.1	)		(188.4	)

Effect of exchange rate changes on cash		(19.1	)		(8.9	)
Change in cash and cash equivalents		412.8			178.5
		-
Cash and cash equivalents, beginning of period		1,025.8			591.9
Cash and cash equivalents, end of period	$	1,438.6		$	770.4

Supplemental Cash Flow Information: