Manor Care reports profit of $19.3 million for quarter Net before special charges was $27.8 million, or 4per share, for a 16% gain

Health care

January 07, 1998|By M. William Salganik | M. William Salganik,SUN STAFF

Manor Care Inc. reported a profit yesterday of $27.8 million before one-time charges in its fiscal second quarter -- up 16 percent from the same quarter the previous year.

The Gaithersburg-based provider of nursing and assisted-care facilities said earnings equaled 44 cents a share, up from 38 cents a year earlier and in line with analyst estimates.

Revenue for the quarter, which ended Nov. 30, was $280.3 million, up 8 percent from the previous year.

Net income for the quarter, after the special charges, was $19.3 million.

Debt retired

The one-time charges included a $3.2 million penalty for early retirement of debt, which will save the company on interest payments; another $3.2 million for a change in how the company accounts for retraining and other "re-engineering" costs; and $2.1 million to account for bad debt and add to Medicare receivables reserves for its home health subsidiary.

For the same quarter in fiscal 1996, net income was $32.4 million, but that included $8.4 million from its lodging division, which the company has since spun off as Choice Hotels International Inc.

In September, Manor Care announced plans for another spinoff. It plans to form two companies, ManorCare Health Services, which will own and operate assisted-living facilities and lease and operate nursing homes, and Manor Care Realty, which will build the facilities and own the nursing homes.

In preparation for the division, Manor Care also reported income yesterday for the two segments separately: income of $25.4 million, or 40 cents a share, before one-time charges, from the real estate segment; and $2.5 million, or 4 cents a share, before one-time charges, for health services.

March completion

Kimberly Holland, manager of investor relations, said yesterday that Manor Care hopes to complete that transaction in early March, if regulatory approvals proceed as expected.

Current stockholders will receive one share in each of the new companies for each current share they own.

Manor Care stock closed yesterday at $34.25, down 50 cents.

Pub Date: 1/07/98

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