Making money from new acquisitions and higher occupancy in its health-care facilities, Manor Care Inc. reported yesterday a 16.1 percent increase in fourth-quarter net income, capping a year in which profit grew by more than 20 percent.
The Silver Spring-based health-care and lodging company said quarterly profits were $26.4 million, or 42 cents a share. Revenue for the fourth quarter rose 14.4 percent, from $309.7 million to $354.2 million.
For the year that ended May 31, profit grew 20.6 percent, to $94.5 million, or $1.51 a share. Revenue increased 13.7 percent, to $1.32 billion.
"On the health care side, the big story has been the new facilities we've been bringing on in the past year," said Leigh C. Comas, assistant treasurer. "They include four new skilled nursing and 11 assisted-living facilities. And we continue to have strong results in our existing facilities."
"On the lodging side, we've had a general lodging industry recovery in the past year," she said, adding that Manor Care acquired 18 hotels. She said better times in the industry could make it more difficult for Manor Care to carry out its strategy of buying distressed properties and turning them around.
Manor Care runs 180 health care facilities, with 24,000 beds, in 28 states. Its lodging business owns, franchises or manages more than 3,400 hotels under several brand names: Quality, Comfort, Clarion, Econo Lodge, Sleep, Rodeway and Friendship Inns.
Scott Mackesy, a vice president of Dean Witter Reynolds, said Manor Care had "another very good year," reporting earnings "exactly in line with what I was looking for."
He singled out Manor Care's success at expanding subacute services at its long-term care facilities. Insurers increasingly favor subacute care as a less expensive alternative to hospital care and are willing to pay rates higher than nursing homes ordinarily receive.
Ms. Comas said subacute care accounts for 28 percent of Manor Care's health care revenue, a 2 percent increase from last year. She also said the company expects to accelerate acquisition of health-care facilities.
Manor Care's stock closed yesterday at $30.625, down 75 cents, on the New York Stock Exchange.