Manor Care's earnings rise in quarter Company's profit, before restructuring charge, was $30.8 million

Services

July 10, 1998|By M. William Salganik | M. William Salganik,SUN STAFF

Manor Care Inc., the Gaithersburg operator of nursing homes and assisted living units, posted $30.8 million in earnings yesterday for the quarter that ended May 31, before a one-time, after-tax restructuring charge of $8.1 million.

That was up 17 percent from earnings of $26.4 million, exclusive of one-time charges, in the 1997 quarter.

Earnings in the most recent quarter, the fourth quarter of Manor Care's fiscal year, amount to 48 cents a share, in line with analysts' estimates.

Factoring in restructuring charges, net income was $22.7 million, or 36 cents a share vs. $19.4 million, or 31 cents, in the year-ago quarter.

Revenue for the quarter was $344.3 million, up 1.7 percent from $338.4 million in the corresponding quarter a year earlier.

"A record quarter on top of a record quarter -- it's a nice performance," said George F. Shipp, an analyst and senior vice-president in the Norfolk, Va. office of Scott & Stringfellow.

Manor Care stock hit a 52-week high of $42.375 yesterday before closing at $41.4375, up 31.25 cents. A month ago, just before it announced a plan to merge with Health Care and Retirement Corp. of Toledo, Ohio, the stock was at $31 a share. The new company will be called HCR Manor Care and will be based in Toledo.

The rise in the past month marks approval for the merger, expected to be completed by year-end, said Andrew Gitkin, an analyst with Salomon Smith Barney in New York. Also, Gitkin said, "Investors were relieved they weren't doing a split-up of the company" into a health operating company and a real estate developer. Plans for such a split were dropped when the HCR deal was concluded.

The restructuring costs included some related to planning for the split. Also included was severance for elimination of about 120 jobs in April and May. The layoffs reduced headquarters employment to about 700.

For the fiscal year, Manor Care reported net income, before a variety of one-time charges and accounting changes, of $110.3 million, up 16 percent from $94.7 million the previous fiscal year. That represented $1.73 a share vs. $1.50 the previous year.

Revenue for the year was $1.36 billion, up 5.0 percent from $1.29 billion.

Pub Date: 7/10/98

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