Firm's focus is growth, CEO tells shareholders

5/10/2006

Manor Care Inc., the nation's largest nursing-home operator, has "a lot of opportunities to continue to focus on growth," Paul Ormond, chairman and chief executive officer, told about 75 shareholders yesterday at the firm's annual meeting in the auditorium at One SeaGate.

In an interview, he said he is looking for acquisitions but also hopes to add to the company internally through expansions of many of its more than 500 nursing homes, assisted-living projects, and home health care offices in 32 states. Last year, Manor Care, with 60,000 employees, had $3.4 billion in revenue.

The company has four nursing homes under construction and 34 being expanded, he said.

But the CEO said he is mainly interested in acquisitions "in the tens of millions of dollars especially in the hospice and rehab side of the business."

After the 15-minute meeting, Mr. Ormond said one reason the firm's stock has been hitting 52-week highs is that analysts and investors recognize it is coping with Medicare-reimbursement cuts.

The downtown Toledo firm changed its mix of patients toward higher-paying short-term rehabilitation, he said. Its occupancy rate is at a 10-year high, he added.

Its stock closed yesterday at $45.06 a share, just below its 52-week high of $45.75.

Meanwhile, the company issued a federal layoff notice this week that it will idle 102 workers in its Heartland Information Services medical-transcription unit. Seven employees are in Toledo. A company spokesman said the cuts will occur in early July.

The firm had announced it would be getting out of that five-year-old business and took a $7 million accounting charge in the first quarter.

"I worked my heart out for this company," said Mary Kirkpatrick, of Rockford, Mich., who got a layoff notice. "How many more jobs are [we] going to lose to India or China?"

However, Mr. Ormond said the firm's transcription business started in India, and the company tried to bring it to the United States but it wasn't profitable.