Manor Care's profit climbs by 15% 3a share in quarter, before one-time charges, on 10% rise in revenue

Health care

October 03, 1997|By Bill Atkinson | Bill Atkinson,SUN STAFF

Manor Care Inc.'s profit before one-time special charges jumped 15 percent to $23.6 million in its fiscal first quarter, the company said yesterday.

The Gaithersburg-based health care concern reported earning 37 cents a share from continuing health care real estate operations and discontinued health care services operations, compared with earnings of $20.3 million, or 32 cents a share, in the corresponding period a year earlier.

Manor Care's stock slipped 56 cents a share to $32.69 yesterday.

Revenue rose 10 percent in the quarter to $274.1 million, compared with $250.2 million in the year-earlier period. Operating income was up 12 percent to $65.8 million.

Profit from continuing health care real estate operations was $22.8 million in the quarter, or 36 cents a share, up 20 percent from the corresponding time a year earlier.

It also reported profit of about $800,000, or a penny a share, from discontinued health care service operations.

After "unusual items," Manor Care's earnings in the quarter were $19.9 million, or 31 cents a share.

The charges, which totaled $3.7 million, were due in part to pTC Vitalink Pharmacy Services Inc., the company's 51 percent owned institutional pharmacy subsidiary, which said in August that it would take a $1.9 million after-tax charge in the quarter for severance and related expenses in connection with the resignation of the company's chief executive officer and the consolidation of corporate operations in Naperville, Ill.

Home Health Inc., in which Manor Care holds a controlling interest, added $13 million to its Medicare receivables reserves, the company said.

Last month, Manor Care, which runs 206 health care facilities in 29 states, said it would separate its health care services and health care real estate operations into two public companies.

Stewart Bainum Jr., chairman and chief executive of Manor Care, said the restructuring will help the companies raise capital cheaply to fund future expansion, and "accelerate our investment in the private pay segment of the rapidly growing assisted living industry."

Under the plan, ManorCare Health Services will own and operate Manor Care's assisted living business and lease and operate its skilled nursing facilities. ManorCare Health will also own Manor Care's institutional pharmacy and home health business.

Manor Care, which will be renamed Manor Care Realty, will operate as a health care real estate company.

Pub Date: 10/03/97

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