Draws a sharp contrast between the Board and
management's clear long-term stockholder value creation plan and
the former directors' short-term, self-interested agenda
Urges stockholders to vote on the WHITE
proxy card "FOR" re-election of the Company's directors and
the proposed reverse stock split
MIAMI, May 31, 2023
/PRNewswire/ -- Cano Health, Inc. ("Cano Health" or the "Company"),
a leading value-based primary care provider and population health
company, today announced that it has published an investor
presentation to its investor relations website in connection with
its upcoming Annual Stockholders' Meeting (the "Annual Meeting"),
scheduled for June 15, 2023. The
presentation is also being filed with the U.S. Securities and
Exchange Commission.
Highlights of the presentation include:
Cano Health's Strong Foundation and Opportunity for Long-Term
Value Creation
Cano Health is transforming healthcare by delivering better
outcomes at lower cost for patients, who are predominantly from
underserved populations. As the Company continues to advance this
mission, it expects to capture a significant share of a
$1.7 trillion total addressable
market for value-based healthcare services. Cano Health is well
positioned to capitalize on this opportunity through its highly
differentiated Medicare Advantage-focused business model,
including:
- Established scale with a growing membership base that currently
stands at approximately 390,000 across 9 states and Puerto Rico;
- Leading clinical outcomes, with 25% fewer hospital
admissions1, 69% fewer ER visits2, and a 60%
lower mortality rate3 relative to 2021 Medicare
fee-for-service benchmarks4; and
- 5 consecutive quarters of positive Adjusted EBITDA.
Cano Health's Clear Path to Sustainable Profitability
Cano Health believes that it is meaningfully undervalued
relative to peers based on its Medicare membership base, recent
earnings performance of core operations, and cash burn per net new
member5. The Company's Board and management are taking
immediate and decisive action to realize the full potential of the
platform and close the gap between intrinsic value and current
market value.
This plan consists of sharpening the Company's focus on Medicare
Advantage including conducting a process to divest non-core assets;
unlocking embedded medical center profitability; streamlining
operations; strengthening cash flows; and optimizing Cano Health's
management team and governance. Cano Health is confident in its
ability to achieve this plan for the following reasons:
- The Company continues to benefit from a growing and highly
profitable Florida market with a
path to unlock tremendous embedded value in high-growth,
non-Florida markets.
- A vintage analysis of Cano Health's 60 de novo medical centers
demonstrates a significant inflection point in average member
growth and profitability between years one and three of those
centers' openings, as well as average Adjusted EBITDA6
profitability of approximately $4
million by Year 4. We believe that the maturation of de novo
and existing medical centers presents a significant Adjusted EBITDA
opportunity over time.
- The appointment of Mark Kent as
Chief Strategy Officer has already enabled the Company to
consolidate functions and increase internal cooperation amongst
essential areas. Further, the Company recently appointed
Frederick Green as its Interim Chief
Legal Officer to work with the Board and the Company's management
team to implement and maintain best-in-class corporate governance
practices, support execution of the stockholder value creation
strategy, and identify a permanent successor for his position.
Cano Health's Highly Qualified and Independent Board
The Company's current Board has the right mix of skills and
experience to oversee the Company's action plan, strengthen
governance practices, and create value for all
stockholders:
- The two independent directors standing for re-election, Dr.
Alan Muney and Kim Rivera, bring to the Board significant
healthcare experience and demonstrated track records of driving
stockholder value. For example:
-
- While Dr. Muney served as Chief Medical Officer at Oxford
Health Plans and Cigna, both companies outperformed the S&P 500
by 224% and 189%, respectively.7
- During Ms. Rivera's tenure as Chief Legal Officer at DaVita and
HP, both companies outperformed the S&P 500 by 53% and 76%,
respectively, and Thomson Reuters has outperformed the S&P 500
by 57%8 during her time on the Board of Directors.
- Over the past several months, the Board has implemented
necessary and ongoing governance improvements, including the recent
separation of the Chairman and CEO positions as well as a review
and enhancement of certain company policies and procedures.
The Former Directors' Self-Interested, Disruptive, and
Misleading Campaign
Rather than work constructively with the Board to realize the
full potential of the business, the former directors resigned to
launch a highly disruptive campaign intended to further their own
short-term interests. They have expressed no plan for long-term
value creation and their interests are not aligned with those of
all stockholders:
- The former directors have publicly stated their singular
objective is to dismantle Cano Health's platform and sell it for
parts—it is difficult to see how public agitation to sell an
attractively positioned company while its stock price is
undervalued would be in the best interests of all
stockholders.
- Throughout their campaign, they have intentionally distorted
the facts, spread false and misleading claims, and selectively
criticized past decisions that they themselves architected,
advocated, and approved—including authoring public company by-laws
they now claim not to be stockholder friendly, and championing
multiple acquisitions within weeks of most of the current directors
first joining the Board.
Cano Health is at a pivotal moment in its
trajectory. Now is not the time to disrupt the Board and
management's value creation plan.
Cano Health urges stockholders to vote on the
WHITE proxy card "FOR" re-election of the Company's two highly
qualified, independent directors and the proposed reverse stock
split.
Your vote is important,
please vote
your shares today by telephone or
internet.
If you have any questions
or need assistance with
voting your WHITE proxy
card please call
1407 Broadway, 27th Floor
New York, NY 10018
proxy@mackenziepartners.com
(212) 929-5500 Or TOLL-FREE (800) 322-2885
About Cano Health
Cano Health (NYSE: CANO) is a high-touch, technology-powered
healthcare company delivering personalized, value-based primary
care to approximately 390,000 members. With its headquarters in
Miami, Florida, Cano Health is
transforming healthcare by delivering primary care that measurably
improves the health, wellness, and quality of life of its patients
and the communities it serves. Founded in 2009, Cano Health has
more than 4,000 employees, and operates primary care medical
centers and supports affiliated providers in nine states and
Puerto Rico. For more information,
visit canohealth.com or investors.canohealth.com.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements relate to future events and involve
known and unknown risks, uncertainties and other factors which are,
in some cases, beyond our control and could materially affect
actual results, performance or achievements. These forward-looking
statements generally can be identified by phrases such as "will,"
"expects," "anticipates," "foresees," "forecasts," "estimates" or
other words or phrases of similar import, including, without
limitation, (i) our belief that we have a strong foundation for
value creation, a clear path for sustainable profitability and an
experienced and Independent Board committed to taking necessary
action, as well as a clear strategy to drive value creation for
all stockholders and our expected benefits from implementing
our business strategies and plans, such as improving our cost
structure, improving our operating cash flow, simplifying and
optimizing our business model, optimizing our management and
governance, improving and accelerating our earnings trajectory,
achieving long-term sustainable growth and profitability, and
building long-term value; (ii) based on the historic performance of
our more established medical centers, our plans to unlock
substantial embedded profitability as our medical centers continue
to mature; (iii) our belief that with a track record of
industry-leading clinical outcomes and patient engagement, we are
uniquely positioned to capture additional share of a compelling
market opportunity and help patients live longer and healthier
lives; (iv) our plans to accelerate our path to positive free cash
flow to reduce long-term debt and leverage ratios, as part of our
long-term capital management strategy; (v) our plans to pursue the
divestiture of certain non-core assets to strengthen our focus on
our high-performing Medicare Advantage business; (vi) our financial
guidance for 2023; (vii) our plans to implement the reverse stock
split; (viii) our belief that we have sufficient total liquidity
and are well positioned to fund our strategic plan; (ix) our belief
that Cano Health is uniquely positioned to capture share of a
$1.7 trillion total addressable
market; (x) our belief that we are meaningfully undervalued and
poised to accelerate results in coming quarters to close the gap
between our intrinsic value versus market value; and (xi) our
belief that the maturation of our de novo and existing medical
centers presents a significant Adjusted EBITDA opportunity over
time. These forward-looking statements are based on information
available to us at the time of this release and our current
expectations, forecasts and assumptions, and involve a number of
judgments, risks and uncertainties. We derive many of our
forward-looking statements from our operating budgets and
forecasts, which are based on many detailed assumptions. While we
believe that our assumptions are reasonable, we caution that it is
very difficult to predict the impact of known or unknown factors,
and it is impossible for us to anticipate all factors that could
affect our actual results. It is uncertain whether any of the
events anticipated by our forward-looking statements will transpire
or occur, or if any of them do, what impact they will have on our
results of operations and financial condition. Important risks and
uncertainties that could cause our actual results and financial
condition to differ materially from those indicated in our
forward-looking statements include, among others, changes in market
or industry conditions, changes in the regulatory environment,
competitive conditions, and/or consumer receptivity to our
services; changes in our strategy, future operations, prospects and
plans; developments and uncertainties related to the Direct
Contracting Entity program; our ability to realize expected
financial results, including with respect to patient membership,
total revenue and earnings; our ability to predict and control our
medical cost ratio; our ability to grow market share in existing
markets and continue our growth; our ability to integrate our
acquisitions and achieve desired synergies; our ability to maintain
our relationships with health plans and other key payors; our
future capital requirements and sources and uses of cash, including
funds to satisfy our liquidity needs; our ability to attract and
retain members of management and our Board of Directors; and/or our
ability to recruit and retain qualified team members and
independent physicians. Actual results may also differ
materially from such forward-looking statements for a number of
other reasons, including those set forth in our filings with the
SEC, including, without limitation, the risk factors identified in
our Annual Report on Form 10-K for the fiscal year ended
December 31, 2022, filed with the SEC
on March 15, 2023, as amended by our
Annual Report on Form 10-K/A, filed with the SEC on April 7, 2023 (the "2022 Form 10-K"), as well as
our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K
that we have filed or expect to file with the SEC during 2023
(which may be viewed on the SEC's website at http://www.sec.gov or
on our website at https://investors.canohealth.com/), as well as
reasons including, without limitation, delays or difficulties in,
and/or unexpected or less than anticipated results from our efforts
to: (i) improve our cost structure, improve our operating cash
flow, simplify and optimize our business model, optimize our
management and governance, improve and accelerate our earnings
trajectory, achieve long-term sustainable growth and profitability,
build long-term value and/or achieve our revenue and/or Adjusted
EBITDA targets and/or long-term margin target, such as due to
higher interest rates, higher than expected costs and/or greater
than anticipated competitive factors; (ii) unlock substantial
embedded profitability from our medical centers, such as due to
lower than expected patient utilization rates and/or higher than
expected operating costs; (iii) capture additional market share,
such as due to higher than expected competition for our patients
services; (iv) achieve free cash flow and/or reduce our long-term
debt and leverage ratios, whether due to unexpected demands on our
cash resources and/or lower than expected revenues; (v) evaluate
and/or consummate any asset dispositions, such as due to tightness
in the credit markets and/or M&A markets; (vi) achieve our
financial guidance for 2023, such as due to a broad recessionary
economic environment or less than anticipated utilization of our
medical centers; (vii) our delays or other developments that may
result in our not consummating the reverse stock split; (viii) less
than anticipated liquidity; (ix) capture more share of the
addressable market, such as due to greater than anticipated levels
of competition or regulatory burdens; (x) accelerate our results
and deliver stockholder value, such as due to management
distraction caused by the dissident directors; and/or (xi) derive
the Adjusted EBITDA opportunities from our de novo medical centers,
such as due to lower than expected patient utilization and/or
higher than expected medical costs or other overhead costs. For a
detailed discussion of the risks and uncertainties that could cause
our actual results to differ materially from those expressed or
implied by the forward-looking statements, please refer to our risk
factor disclosure included in our filings with the SEC, including,
without limitation, our 2022 Form 10-K. Investors should evaluate
all forward-looking statements made in this release in the context
of these risks and uncertainties. Factors other than those listed
above could also cause our results to differ materially from
expected results. Forward-looking statements speak only as of the
date they are made and, except as required by law, we undertake no
obligation or duty to publicly update or revise any forward-looking
statement, whether to reflect actual results of operations; changes
in financial condition; changes in general U.S. or international
economic, industry conditions; changes in estimates, expectations
or assumptions; or other circumstances, conditions, developments or
events arising after the issuance of this release. Additionally,
the business and financial materials and any other statement or
disclosure on or made available through our websites or other
websites referenced herein shall not be incorporated by reference
into this release.
Non-GAAP Financial Measures
This release uses certain non-GAAP measures such as Adjusted
EBITDA, whose most directly comparable GAAP measure is net loss.
These non-GAAP measures are not substitutes for their most directly
comparable GAAP measures. Such financial information may not have
been audited, reviewed or verified by any independent accounting
firm. The inclusion of such financial information in this release
or any related discussion should not be regarded as a
representation or warranty by the Company or any of its
representatives as to the accuracy or completeness of such
information's portrayal of the Company's financial condition or
results of operations and should not be relied upon in the absence
of reviewing the Company's GAAP results, such as those presented in
its Form 10-Ks and Form 10-Qs. The principal limitation of these
non-GAAP financial measures is that they exclude certain expenses
and income that are required by GAAP to be recorded in the
Company's financial statements. In addition, they are subject to
inherent limitations as they reflect the exercise of judgment by
management about which expense and income are excluded or included
in determining these non-GAAP financial measures. We believe that
these non-GAAP measures provide useful supplemental information in
evaluating the performance of our business and provide greater
understanding with respect to the results of our operations. We
also believe that these non-GAAP financial measures facilitate
company-to-company operating performance comparisons by backing out
interest expense, taxes, amortization, depreciation, certain
non-recurring charges unrelated to operating performance and
certain other adjustments. The Company's management uses the
non-GAAP financial measures as operating performance measures and
as an integral part of its reporting and planning processes and to,
among other things: (i) monitor and evaluate the performance of the
Company's business operations, financial performance and overall
liquidity; (ii) facilitate management's internal comparisons of the
Company's historical operating performance of its business
operations; (iii) facilitate management's external comparisons of
the results of its overall business to the historical operating
performance of other companies that may have different capital
structures and debt levels; (iv) review and assess the operating
performance of the Company's management team and, together with
other operational objectives, as a measure in evaluating employee
compensation, including bonuses and other incentive compensation;
(v) analyze and evaluate financial and strategic planning decisions
regarding future operating investments; and (vi) plan for and
prepare future annual operating budgets and determine appropriate
levels of operating investments. We believe these non-GAAP
financial measures provide an additional tool, when used in
combination with GAAP measures, for our management and investors to
use in evaluating ongoing operating results and trends and in
comparing our financial measures with other similar companies.
Management believes that the non-GAAP financial measures provide
useful information to investors about the performance of the
Company's overall business because such measures eliminate the
effects of certain charges that are not directly attributable to
the Company's underlying operating performance. Additionally,
management believes that providing the non-GAAP financial measures
enhances the comparability for investors in assessing the Company's
financial reporting. We do not consider these non-GAAP measures in
isolation or as an alternative to financial measures determined in
accordance with GAAP. Accordingly, the Company believes that the
presentation of the non-GAAP measures, when used in conjunction
with GAAP financial measures, are useful financial analytical
measures that are used by management, as described above, and
therefore can assist investors in assessing the Company's financial
condition, operating performance and underlying strength. The
non-GAAP financial measures should not be considered in isolation
or as a substitute for their respective most directly comparable As
Reported financial measures prepared in accordance with GAAP, such
as net income/loss, operating income/loss, diluted earnings/loss
per share or net cash provided by (used in) operating activities.
Other companies may define such non-GAAP measures differently.
These non-GAAP financial measures should be read in conjunction
with the Company's financial statements and related footnotes filed
with the SEC. Pursuant to the applicable exemption under Regulation
G and Item 10(e)(1)(i)(B) of the SEC's Regulation S-K, we have
not reconciled our expectations as to Adjusted EBITDA for future
periods to net loss, its most directly comparable GAAP measure
because the Company cannot predict with a reasonable degree of
certainty and without unreasonable efforts certain reconciling
items, such as certain costs and expenses that are inherently
uncertain and depend on various factors, some of which are outside
of the Company's control. For these reasons, management is unable
to assess the probable significance of the unavailable information,
which could materially impact the computation of forward-looking
GAAP net loss. You should review our financial statements filed
with the SEC, and not rely on any single financial measure to
evaluate our business.
Important Additional Information and Where to Find It
Cano Health, Inc. has filed a definitive proxy (the "Definitive
Proxy Statement") statement containing a form of WHITE proxy card
with the U.S. Securities and Exchange Commission (the "SEC") in
connection with the solicitation of proxies for the Company's 2023
annual meeting of shareholders (the "2023 Annual Meeting").
STOCKHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT
(INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER
RELEVANT DOCUMENTS THAT THE COMPANY HAS FILED WITH THE SEC
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE
THEY CONTAIN IMPORTANT INFORMATION. Shareholders will be able to
obtain, free of charge, copies of the Definitive Proxy Statement,
any amendments or supplements thereto and any other documents
(including the proxy card) filed by the Company with the SEC in
connection with the 2023 Annual Meeting at the SEC's website
(http://www.sec.gov) or at the Company's website
(https://investors.canohealth.com) or by contacting Mackenzie
Partners, Inc. by phone at (800) 322-2885 (toll free) or (212)
929-5500 (collect) or by email at proxy@mackenziepartners.com.
Certain Information Regarding Participants
The Company, its directors and certain of its executive officers
and other employees may be deemed to be participants in the
solicitation of proxies from stockholders in connection with the
2023 Annual Meeting. Additional information regarding the identity
of these potential participants, none of whom, other than Dr.
Marlow Hernandez, Dr. Richard Aguilar, Angel
Morales and Solomon D.
Trujillo, own in excess of 1% of the Company's shares, and
their direct or indirect interests, by security holdings or
otherwise, will be set forth in the Definitive Proxy Statement and
other materials to be filed with the SEC in connection with the
2023 Annual Meeting. Information relating to the foregoing can also
be found in the Company's Definitive Proxy Statement, filed with
the SEC on May 19, 2023. To the
extent holdings of the Company's securities by such potential
participants (or the identity of such participants) have changed
since the information printed in the Definitive Proxy Statement,
such information has been or will be reflected on Statements of
Change in Ownership on Forms 3 and 4 filed with the SEC. You may
obtain free copies of these documents using the sources indicated
above.
Media Contact
Kekst CNC
Anntal Silver / Nick Capuano
anntal.silver@kekstcnc.com / nicholas.capuano@kekstcnc.com
Investor Contact
Cano Health IR
investors@canohealth.com
1 Based on Cano Health's average hospital admissions
per thousand MA medical center and affiliate model members in 2021,
compared to the 2021 Medicare FFS Benchmark.
2 Based on Cano Health's average ER visits per thousand
MA medical center and affiliate model members in 2021, compared to
the 2021 Medicare FFS Benchmark.
3 Based on Cano Health's MA medical center member
mortality rate per thousand MA members in 2021, as compared to the
2021 Medicare FFS Benchmark.
4 2021 Medicare Fee-for-Service (FFS) Benchmarks were
based on Avalere Health's analysis of Medicare FFS claims data for
calendar year 2021 accessed through a Research Data Use Agreement
with the Centers for Medicare and Medicaid Services (CMS). The
benchmarks are weighted to mirror Cano Health's mix of
Non-Dual/Dual Medicare Advantage members.
5 Cash burn per net new member calculated as 2022 net
cash used in operating activities, PP&E, and M&A spend,
divided by total net new member growth in 2022, respectively.
6 Adjusted EBITDA is a non-GAAP financial measure.
Please refer to "Non-GAAP Financial Measures" above.
7 Oxford was acquired by United Healthcare in 2004, and
Dr. Muney stayed on as Chief Medical Officer of the Northeast
region until 2008.
8 As of May 23, 2023.
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SOURCE Cano Health, Inc.