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ManpowerGroup's CEO Discusses Q2 2012 Results - Earnings Conference Call

Mike Van Handel

Okay, thanks, Jeff. I'll begin today with some overall comments on the quarter followed by a discussion of each of our operating segments and then a review of our cash flow and balance sheet. Lastly, I'll comment on our outlook of the third quarter.

As Jeff mentioned, our operational performance in the quarter was in line with expectations and the midpoint of our guidance. However, there are a number of unique items included in the reported results which I will try and unpack to give you a clear view of our underlying performance.

Revenue in the quarter was down 1% in constant currency, right at the midpoint of our guidance range of flat to minus 2%. Our operating profit margin, excluding non-recurring items, came in at 2.4% also in line with expectations at the midpoint of our guidance range.

While we delivered on our operating profit margin, our gross margin fell short of expectations but we're able to compensate for that with productivity improvements and expense reductions. I'll comment on both of these elements in just a bit.

Our reported earnings per share were $0.51 which includes reorganization cost of $0.17 and legal cost of $0.08, which gets you to an adjusted earnings per share of $0.76, which is at the higher end of our guidance range.

Of the $18.7 million reorganization charge, $10.4 million relates to the final phase of the reorganization plan announced in the fourth quarter for Right Management. This plan included realigning our management structure to more effectively deliver service to our clients and reducing our office cost by combing our office footprint for the professional business in certain markets.

Under this reorganization plan, Right was able to continue to deliver their market leading services in a more efficient and effective way while maintaining a strong presence in each of its markets.

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