SEC Filing | ManpowerGroup Inc.

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10-Q

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, 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 August 4, 2021
Common Stock, $.01 par value		54,232,871

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)	6
	Consolidated Statements of Cash Flows	7
	Consolidated Statements of Shareholders' Equity	8-9
	Notes to Consolidated Financial Statements	10-24
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25-39
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	40
Item 5	Other Information	40
Item 6	Exhibits	41

SIGNATURES		42

PART I - FINANCIAL INFORMATION

Item 1 – Financial Statements (unaudited)

ManpowerGroup Inc.

Consolidated Balance Sheets (Unaudited)

(in millions)

ASSETS


	June 30, 2021		December 31, 2020
Cash and cash equivalents	$	1,461.4	$	1,567.1
Accounts receivable, less allowance for doubtful accounts of $125.4 and $128.1, respectively		5,203.3		4,912.4
Prepaid expenses and other assets		165.0		186.9
Total current assets		6,829.7		6,666.4

Other Assets:
Goodwill		1,219.1		1,225.8
Intangible assets, less accumulated amortization of $432.3 and $425.4, respectively		237.4		248.6
Operating lease right-of-use assets		367.2		400.7
Other assets		686.0		651.6
Total other assets		2,509.7		2,526.7

Property and Equipment:
Land, buildings, leasehold improvements and equipment		606.4		614.7
Less: accumulated depreciation and amortization		483.4		479.6
Net property and equipment		123.0		135.1
Total assets	$	9,462.4	$	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


	June 30, 2021			December 31, 2020
Current Liabilities:
Accounts payable	$	2,849.3		$	2,527.4
Employee compensation payable		229.8			231.8
Accrued liabilities		577.6			602.1
Accrued payroll taxes and insurance		744.1			752.0
Value added taxes payable		526.3			551.1
Short-term borrowings and current maturities of long-term debt		23.1			20.4
Total current liabilities		4,950.2			4,684.8

Other Liabilities:
Long-term debt		1,070.2			1,103.5
Long-term operating lease liability		272.6			305.1
Other long-term liabilities		772.7			781.2
Total other liabilities		2,115.5			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 117,750,836 and 117,555,991 shares, respectively		1.2			1.2
Capital in excess of par value		3,423.1			3,402.5
Retained earnings		3,494.1			3,388.8
Accumulated other comprehensive loss		(422.3	)		(397.3	)
Treasury stock at cost, 63,518,754 and 61,990,021 shares, respectively		(4,109.0	)		(3,954.2	)
Total ManpowerGroup shareholders’ equity		2,387.1			2,441.0
Noncontrolling interests		9.6			12.6
Total shareholders’ equity		2,396.7			2,453.6
Total liabilities and shareholders’ equity	$	9,462.4		$	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					Six Months Ended
	June 30,					June 30,
	2021		2020			2021		2020
Revenues from services	$	5,277.1	$	3,742.2		$	10,201.5	$	8,361.3
Cost of services		4,417.0		3,165.5			8,573.3		7,060.6
Gross profit		860.1		576.7			1,628.2		1,300.7
Selling and administrative expenses, excluding goodwill impairment charge		690.2		559.9			1,359.9		1,246.2
Goodwill impairment charge		-		66.8			-		66.8
Selling and administrative expenses		690.2		626.7			1,359.9		1,313.0
Operating profit (loss)		169.9		(50.0	)		268.3		(12.3	)
Interest and other expenses, net		2.8		5.8			8.2		26.3
Earnings (loss) before income taxes		167.1		(55.8	)		260.1		(38.6	)
Provision for income taxes		55.5		8.6			86.5		24.1
Net earnings (loss)		111.6	$	(64.4	)	$	173.6	$	(62.7	)
Net earnings (loss) per share – basic	$	2.05	$	(1.11	)	$	3.17	$	(1.07	)
Net earnings (loss) per share – diluted	$	2.02	$	(1.11	)	$	3.13	$	(1.07	)
Weighted average shares – basic		54.5		58.2			54.8		58.5
Weighted average shares – diluted		55.4		58.2			55.5		58.5

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						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Net earnings (loss)	$	111.6		$	(64.4	)	$	173.6		$	(62.7	)
Other comprehensive income (loss):
Foreign currency translation adjustments		28.3			37.3			(68.2	)		(47.6	)
Translation adjustments on derivative instruments, net of income taxes of $(4.2), $(5.3), $10.2 and $0.1, respectively		(14.2	)		(9.3	)		35.4			1.4
Translation adjustments of long-term intercompany loans		0.6			(1.9	)		6.2			(0.4	)
Defined benefit pension plans and retiree health care plan, net of income taxes of $2.3, $(0.1), $2.6 and $7.6, respectively		0.8			0.6			1.6			1.9
Pension settlement related to a U.S. plan, net of income taxes of $3.9 for 2020		—			—			—			6.6
Total other comprehensive income (loss)		15.5			26.7			(25.0	)		(38.1	)
Comprehensive income (loss)	$	127.1		$	(37.7	)	$	148.6		$	(100.8	)

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,
	2021			2020
Cash Flows from Operating Activities:
Net earnings (loss)	$	173.6		$	(62.7	)
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization		34.4			37.0
Non-cash goodwill and other impairment charges		—			71.3
Non-cash operating lease right-of-use assets impairment		—			8.2
Deferred income taxes		(13.3	)		(7.9	)
Provision for doubtful accounts		9.2			10.9
Share-based compensation		16.9			11.5
Changes in operating assets and liabilities, excluding the impact of acquisitions:
Accounts receivable		(381.7	)		988.3
Other assets		(6.3	)		(27.2	)
Other liabilities		362.6			(433.3	)
Cash provided by operating activities		195.4			596.1

Cash Flows from Investing Activities:
Capital expenditures		(24.6	)		(18.9	)
Acquisition of businesses, net of cash acquired		(7.1	)		—
Proceeds from the sale of property and equipment		0.9			0.8
Cash used in investing activities		(30.8	)		(18.1	)

Cash Flows from Financing Activities:
Net change in short-term borrowings		3.1			(17.8	)
Proceeds from long-term debt		0.3			1.1
Repayments of long-term debt		(2.2	)		(0.1	)
Payments of contingent consideration for acquisitions		(6.2	)		(1.7	)
Proceeds from share-based awards		4.2			6.8
Payments to noncontrolling interest		—			(0.8	)
Other share-based award transactions		(4.6	)		(6.6	)
Repurchases of common stock		(150.1	)		(63.8	)
Dividends paid		(68.3	)		(63.2	)
Cash used in financing activities		(223.8	)		(146.1	)

Effect of exchange rate changes on cash		(46.5	)		(19.1	)
Change in cash and cash equivalents		(105.7	)		412.8

Cash and cash equivalents, beginning of period		1,567.1			1,025.8
Cash and cash equivalents, end of period	$	1,461.4		$	1,438.6

Supplemental Cash Flow Information:
Interest Paid	$	20.4		$	21.2
Income taxes paid, net	$	82.7		$	59.5
Non-cash operating activity: Right-of-use assets obtained in exchange for new operating lease liabilities	$	15.2		$	26.0

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