United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
or
Commission file number:
(Exact name of registrant as specified in its charter)
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Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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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.
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).
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.
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Accelerated filer |
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Non-accelerated filer |
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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.
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Shares Outstanding |
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at May 1, 2024 |
Common Stock, $.01 par value |
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ManpowerGroup Inc.
INDEX
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Page Number |
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3-4 |
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5 |
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5 |
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6 |
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7 |
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8-20 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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21-32 |
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33 |
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33 |
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34 |
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34 |
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34 |
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35 |
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36 |
2
PART I - FINANCIAL INFORMATION
Item 1 – Financial Statements (unaudited)
ManpowerGroup Inc.
Consolidated Balance Sheets (Unaudited)
(in millions)
ASSETS
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March 31, |
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December 31, |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, less allowance for expected credit losses of |
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Prepaid expenses and other assets |
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Total current assets |
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Other Assets: |
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Goodwill |
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Intangible assets, less accumulated amortization of |
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Operating lease right-of-use assets |
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Other assets |
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Total other assets |
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Property and Equipment: |
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Land, buildings, leasehold improvements and equipment |
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Less: accumulated depreciation and amortization |
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Net property and equipment |
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Total assets |
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$ |
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$ |
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The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
3
ManpowerGroup Inc.
Consolidated Balance Sheets (Unaudited)
(in millions, except share and per share data)
LIABILITIES AND SHAREHOLDERS’ EQUITY
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March 31, |
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December 31, |
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Current Liabilities: |
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Accounts payable |
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Employee compensation payable |
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Accrued liabilities |
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Accrued payroll taxes and insurance |
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Value added taxes payable |
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Short-term borrowings and current maturities of long-term debt |
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Total current liabilities |
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Other Liabilities: |
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Long-term debt |
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Long-term operating lease liability |
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Other long-term liabilities |
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Total other liabilities |
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Shareholders’ Equity: |
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ManpowerGroup shareholders' equity |
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Preferred stock, $ |
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Common stock, $ |
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Capital in excess of par value |
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Retained earnings |
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Accumulated other comprehensive loss |
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Treasury stock at cost, |
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Total ManpowerGroup shareholders’ equity |
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Noncontrolling interests |
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Total shareholders’ equity |
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Total liabilities and shareholders’ equity |
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$ |
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$ |
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The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
4
ManpowerGroup Inc.
Consolidated Statements of Operations (Unaudited)
(in millions, except per share data)
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Three Months Ended |
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March 31, |
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2024 |
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2023 |
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Revenues from services |
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$ |
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$ |
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Cost of services |
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Gross profit |
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Selling and administrative expenses |
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Operating profit |
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Interest and other expenses, net |
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Earnings before income taxes |
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Provision for income taxes |
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Net earnings |
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$ |
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$ |
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Net earnings per share – basic |
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$ |
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$ |
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Net earnings per share – diluted |
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$ |
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$ |
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Weighted average shares – basic |
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Weighted average shares – diluted |
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The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
ManpowerGroup Inc.
Consolidated Statements of Comprehensive Income (Unaudited)
(in millions)
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Three Months Ended |
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March 31, |
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2024 |
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2023 |
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Net earnings |
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$ |
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$ |
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Other comprehensive income (loss): |
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Foreign currency translation |
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Translation adjustments of long-term intercompany loans |
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Adjustments on derivative instruments, net of income taxes of $ |
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Unrealized adjustment on interest rate swap |
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Defined benefit pension plans and retiree health care plan, net of income taxes of $( |
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Total other comprehensive (loss) income |
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Comprehensive income |
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$ |
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$ |
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The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
5
ManpowerGroup Inc.
Consolidated Statements of Cash Flows (Unaudited)
(in millions)
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Three Months Ended |
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March 31, |
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2024 |
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2023 |
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Cash Flows from Operating Activities: |
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Net earnings |
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$ |
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$ |
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Adjustments to reconcile net earnings to net cash provided by operating activities: |
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Depreciation and amortization |
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Deferred income taxes |
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Provision for expected credit losses |
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Share-based compensation |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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Other assets |
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( |
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Other liabilities |
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Cash provided by operating activities |
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Cash Flows from Investing Activities: |
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Capital expenditures |
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Net proceeds from the sale of property and equipment |
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Cash used in investing activities |
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Cash Flows from Financing Activities: |
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Net change in short-term borrowings |
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Proceeds from long-term debt |
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Repayments of long-term debt |
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( |
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Payments of contingent consideration for acquisitions |
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( |
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Proceeds from share-based awards |
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Other share-based award transactions |
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( |
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Repurchases of common stock |
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( |
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Cash used in financing activities |
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Effect of exchange rate changes on cash |
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Change in cash and cash equivalents |
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Cash and cash equivalents, beginning of period |
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Cash and cash equivalents, end of period |
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$ |
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$ |
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Supplemental Cash Flow Information: |
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Interest paid |
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$ |
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$ |
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Income taxes paid, net |
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$ |
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$ |
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Non-cash operating activity: |
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$ |
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$ |
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The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
6
ManpowerGroup Inc.
(in millions, except share and per share data)
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ManpowerGroup Shareholders |
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Common Stock |
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Shares |
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Par |
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Capital in |
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Retained |
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Accumulated |
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Treasury |
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Non- |
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Total |
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Balance, December 31, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Net earnings |
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Other comprehensive loss |
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Issuances under equity plans |
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Share-based compensation expense |
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Repurchases of common stock, including excise tax |
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Noncontrolling interest transactions |
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Balance, March 31, 2024 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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ManpowerGroup Shareholders |
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Common Stock |
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Shares |
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Par |
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Capital in |
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Retained |
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Accumulated |
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Treasury |
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Non- |
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Total |
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Balance, December 31, 2022 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Net earnings |
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Other comprehensive gain |
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Issuances under equity plans |
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Share-based compensation expense |
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Repurchases of common stock, including excise tax |
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Noncontrolling interest transactions |
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Balance, March 31, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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7
Notes to Consolidated Financial Statements (Unaudited)
For the three months ended March 31, 2024 and 2023
(in millions, except share and per share data)
(1) Basis of Presentation and Accounting Policies
Basis of Presentation
Certain information and footnote disclosures normally included in the financial statements prepared in accordance with United States Generally Accepted Accounting Principles ("GAAP") have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although we believe 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 our 2023 Annual Report on Form 10-K.
The information furnished reflects all adjustments that, in the opinion of management, were necessary for a fair statement of the Consolidated Financial Statements for the periods presented. Such adjustments were of a normal recurring nature, unless otherwise disclosed.
Allowance for Expected Credit Losses
We have an allowance for expected credit losses recorded as an estimate of the accounts receivable that may not be collected. This allowance is calculated on an entity-by-entity basis with consideration of historical write-off experience, age of receivables, market conditions, and a specific review for expected credit losses. Items that affect this balance mainly include provision for expected credit loss and the write-off of accounts receivable balances.
A rollforward of our allowance for expected credit losses is shown below:
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Three Months Ended |
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Balance, December 31, 2023 |
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$ |
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Provision charged to earnings |
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Write-offs |
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( |
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Currency impact and other |
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Balance, March 31, 2024 |
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$ |
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Leases
We determine whether a contract is or contains a lease at contract inception. Right-of-use (“ROU”) assets and long-term lease liabilities are presented as separate line items on our Consolidated Balance Sheets. Current operating lease liabilities are included in accrued liabilities on our Consolidated Balance Sheets.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. As the rate implicit in the lease is not readily determinable in most of our leases, we use our incremental borrowing rate. We determine our incremental borrowing rate at the commencement date using our unsecured borrowing rate, adjusted for collateralization, lease term, economic environment, currency and other factors. ROU assets are recognized at commencement date at the value of the related lease liabilities, adjusted for any prepayments, lease incentives received, and initial direct costs incurred. Our lease terms include options to renew or not terminate the lease when it is reasonably certain that we will exercise that option.
Lease expenses for operating leases are recognized on a straight-line basis over the lease term and recorded in selling and administrative expenses on the Consolidated Statements of Operations.
8
Goodwill Impairment
In accordance with the accounting guidance on goodwill, we perform an annual impairment test of goodwill at our reporting unit level during the third quarter, or more frequently if events or circumstances change that would more likely than not reduce the fair value of our reporting units below their carrying value.
We evaluate the recoverability of goodwill utilizing an income approach that estimates the fair value of the future discounted cash flows to which the goodwill relates. This approach reflects management’s internal outlook of the reporting units, which is believed to be the best determination of value due to management’s insight and experience with the reporting units. Significant assumptions used in our goodwill impairment tests include: expected future revenue growth rates, operating unit profit margins, working capital levels, discount rates, and a terminal value multiple.
Management closely monitors the results of all the reporting units and comparisons to the key assumptions used in our fair value estimate at the time of our annual impairment test, in addition to operational initiatives and macroeconomic conditions, which may impact the results of the reporting units. All of our reporting units' fair values exceeded their respective carrying values by
(2) Recent Accounting Standards
Accounting Standards Effective as of January 1, 2024
In March 2020, the FASB issued new
Recently Issued Accounting Standards
In November 2023, the FASB issued new
In December 2023, the FASB issued a final standard on improvements to income tax disclosures. The guidance requires that public entities on an annual basis disclose disaggregated information about the rate reconciliation as well as income taxes paid. The new standard is effective for our 2025 annual disclosures and will be adopted prospectively. We are currently assessing the impact of the adoption of this guidance on our financial statement disclosures.
(3) Revenue Recognition
For certain client contracts where we recognize revenues over time, we recognize the amount that we have the right to invoice, which corresponds directly to the value provided to the client of our performance to date.
We do not disclose the amount of unsatisfied performance obligations for client contracts with an original expected length of one year or less and those client contracts for which we recognize revenues at the amount to which we have the right to invoice for services performed. We have other contracts with revenues expected to be recognized subsequent to March 31, 2024, related to remaining performance obligations, which are not material.
We record accounts receivable when our right to consideration becomes unconditional. Contract assets primarily relate to our rights to consideration for services provided that they are conditional on satisfaction of future performance obligations. We record contract liabilities (deferred revenue) when payments are made or due prior to the related performance obligations being satisfied. The current portion of our contract liabilities is included in accrued liabilities in our Consolidated Balance Sheets. We do not have any material contract assets or long-term contract liabilities.
Our deferred revenue was $
9
In the following table, revenue is disaggregated by service types for each of our reportable segments. See Note 2 to the Consolidated Financial Statements in our 2023 Annual Report on Form 10-K for descriptions of revenue service types.
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Three Months Ended March 31, |
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2024 |
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2023(a) |
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||||||||||||||||||||||||||||||||||
|
|
Staffing |
|
|
Outcome- |
|
|
Permanent |
|
|
Other |
|
|
Total |
|
|
Staffing |
|
|
Outcome- |
|
|
Permanent |
|
|
Other |
|
|
Total |
|
||||||||||
Americas: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||||
Other Americas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Southern Europe: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
France |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Italy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Southern Europe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Northern Europe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
APME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany Eliminations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
||||||||||
(a) Effective January 1, 2024, our segment reporting was realigned to include our Puerto Rico business within Other Americas. Accordingly, United States, is now adjusted to exclude Puerto Rico. All previously reported results have been restated to conform to the current year presentation.
In the following table, revenue is disaggregated by timing of revenue recognition for each of our reportable segments:
|
|
Three Months Ended March 31, |
|
|||||||||||||||||||||
|
|
2024 |
|
|
2023(a) |
|
||||||||||||||||||
|
|
Services |
|
|
Services |
|
|
Total |
|
|
Services |
|
|
Services |
|
|
Total |
|
||||||
Americas: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Other Americas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Southern Europe: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
France |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Italy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other Southern Europe |
|
|
|
|
|
|
|
|
|
|||||||||||||||