SEC Filing | ManpowerGroup Inc.

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man-10q_20210331.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:

March 31, 2021

☐	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 May 5, 2021
Common Stock, $.01 par value		54,525,722

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 (Loss)	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statements of Shareholders' Equity	7
	Notes to Consolidated Financial Statements	8-20
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21-30
Item 3	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4	Controls and Procedures	30

PART II	OTHER INFORMATION
Item 1A	Risk Factors	31
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 5	Other Information	32
Item 6	Exhibits	33

SIGNATURES		34

PART I - FINANCIAL INFORMATION

Item 1 – Financial Statements (unaudited)

ManpowerGroup Inc.

Consolidated Balance Sheets (Unaudited)

(in millions)

ASSETS


	March 31, 2021		December 31, 2020

Cash and cash equivalents	$	1,522.7	$	1,567.1
Accounts receivable, less allowance for doubtful accounts of $124.1 and $128.1, respectively		4,892.7		4,912.4
Prepaid expenses and other assets		208.9		186.9
Total current assets		6,624.3		6,666.4

Other Assets:
Goodwill		1,215.0		1,225.8
Intangible assets, less accumulated amortization of $427.0 and $425.4, respectively		240.4		248.6
Operating lease right-of-use assets		378.2		400.7
Other assets		660.0		651.6
Total other assets		2,493.6		2,526.7

Property and Equipment:
Land, buildings, leasehold improvements and equipment		599.0		614.7
Less: accumulated depreciation and amortization		472.4		479.6
Net property and equipment		126.6		135.1
Total assets	$	9,244.5	$	9,328.2

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


	March 31, 2021			December 31, 2020
Current Liabilities:
Accounts payable	$	2,723.5		$	2,527.4
Employee compensation payable		205.7			231.8
Accrued liabilities		590.4			602.1
Accrued payroll taxes and insurance		692.1			752.0
Value added taxes payable		513.6			551.1
Short-term borrowings and current maturities of long-term debt		25.1			20.4
Total current liabilities		4,750.4			4,684.8

Other Liabilities:
Long-term debt		1,057.5			1,103.5
Long-term operating lease liability		285.3			305.1
Other long-term liabilities		773.9			781.2
Total other liabilities		2,116.7			2,189.8

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 117,725,183 and 117,555,991 shares, respectively		1.2			1.2
Capital in excess of par value		3,411.0			3,402.5
Retained earnings		3,450.8			3,388.8
Accumulated other comprehensive loss		(437.8	)		(397.3	)
Treasury stock at cost, 63,086,793 and 61,990,021 shares, respectively		(4,058.9	)		(3,954.2	)
Total ManpowerGroup shareholders’ equity		2,366.3			2,441.0
Noncontrolling interests		11.1			12.6
Total shareholders’ equity		2,377.4			2,453.6
Total liabilities and shareholders’ equity	$	9,244.5		$	9,328.2

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
	March 31,
	2021		2020
Revenues from services	$	4,924.4	$	4,619.1
Cost of services		4,156.3		3,895.1
Gross profit		768.1		724.0
Selling and administrative expenses		669.7		686.3
Operating profit		98.4		37.7
Interest and other expenses, net		5.4		20.5
Earnings before income taxes		93.0		17.2
Provision for income taxes		31.0		15.5
Net earnings		62.0	$	1.7
Net earnings per share – basic	$	1.12	$	0.03
Net earnings per share – diluted	$	1.11	$	0.03
Weighted average shares – basic		55.1		58.7
Weighted average shares – diluted		55.7		59.0

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

ManpowerGroup Inc.

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(in millions)

	Three Months Ended
	March 31,
	2021			2020
Net earnings	$	62.0		$	1.7
Other comprehensive income (loss):
Foreign currency translation adjustments		(96.5	)		(84.9	)
Translation adjustments on derivative instruments, net of income taxes of $14.4 and $5.4, respectively		49.6			10.7
Translation adjustments of long-term intercompany loans		5.6			1.5
Defined benefit pension plans and retiree health care plan, net of income taxes of $0.3 and $7.7, respectively		0.8			1.3
Pension settlement related to a U.S. plan, net of income taxes of $(3.9) for 2020		—			6.6
Total other comprehensive loss		(40.5	)		(64.8	)
Comprehensive income (loss)	$	21.5		$	(63.1	)

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

ManpowerGroup Inc.

Consolidated Statements of Cash Flows (Unaudited)

(in millions)

	Three Months Ended
	March 31,
	2021			2020
Cash Flows from Operating Activities:
Net earnings	$	62.0		$	1.7
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		17.9			18.6
Non-cash operating lease right-of-use assets impairment		-			8.2
Deferred income taxes		(10.6	)		(5.0	)
Provision for doubtful accounts		5.2			5.2
Share-based compensation		7.5			4.6
Changes in operating assets and liabilities, excluding the impact of acquisitions:
Accounts receivable		(94.5	)		378.3
Other assets		(39.5	)		-
Other liabilities		192.9			(230.6	)
Cash provided by operating activities		140.9			181.0

Cash Flows from Investing Activities:
Capital expenditures		(12.7	)		(9.1	)
Acquisition of businesses, net of cash acquired		(7.1	)		-
Proceeds from the sale of investments, property and equipment		0.7			0.8
Cash used in investing activities		(19.1	)		(8.3	)

Cash Flows from Financing Activities:
Net change in short-term borrowings		4.9			(9.6	)
Proceeds from long-term debt		0.1			0.3
Repayments of long-term debt		(2.2	)		(0.1	)
Payments of contingent consideration for acquisitions		(5.8	)		-
Proceeds from share-based awards		1.7			10.0
Other share-based award transactions		(4.6	)		(6.5	)
Repurchases of common stock		(100.1	)		(63.8	)
Cash used in financing activities		(106.0	)		(69.7	)

Effect of exchange rate changes on cash		(60.2	)		(29.3	)
Change in cash and cash equivalents		(44.4	)		73.7

Cash and cash equivalents, beginning of period		1,567.1			1,025.8
Cash and cash equivalents, end of period	$	1,522.7		$	1,099.5

Supplemental Cash Flow Information:
Interest Paid	$	4.8		$	6.0
Income taxes paid, net	$	19.8		$	19.8
Non-cash operating activity: Right-of-use assets obtained in exchange for new operating lease liabilities	$	11.0		$	15.3

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

ManpowerGroup Inc.

Consolidated Statements of Shareholders' Equity (Unaudited)

(in millions, except share and per share data)

	ManpowerGroup Shareholders
	Common Stock
	Shares Issued		Par Value		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non- Controlling Interests			Total
Balance, December 31, 2020		117,555,991	$	1.2	$	3,402.5	$	3,388.8	$	(397.3	)	$	(3,954.2	)	$	12.6		$	2,453.6
Net earnings								62.0											62.0
Other comprehensive loss										(40.5	)								(40.5	)
Issuances under equity plans		169,192				1.0							(4.6	)					(3.6	)
Share-based compensation expense						7.5													7.5
Repurchases of common stock													(100.1	)					(100.1	)
Noncontrolling interest transactions																(1.5	)		(1.5	)
Balance, March 31, 2021		117,725,183	$	1.2	$	3,411.0	$	3,450.8	$	(437.8	)	$	(4,058.9	)	$	11.1		$	2,377.4

	ManpowerGroup Shareholders
	Common Stock
	Shares Issued		Par Value		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non- Controlling Interests		Total
Balance, December 31, 2019		117,190,883	$	1.2	$	3,370.6	$	3,494.1	$	(441.0	)	$	(3,681.9	)	$	18.5	$	2,761.5
Net earnings								1.7										1.7
Other comprehensive loss										(64.8	)							(64.8	)
Issuances under equity plans		293,298				5.9							(6.4	)				(0.5	)
Share-based compensation expense						4.6