MIAMI, Sept. 26, 2023 /PRNewswire/ -- Cano Health,
Inc. ("Cano Health") (NYSE: CANO) today announced that it sold
substantially all of the assets associated with the operation of
Cano Health's senior-focused primary care centers in Texas and Nevada to CenterWell Senior Primary Care
("CenterWell"). The total value of the transaction to Cano Health
is approximately $66.7 million,
consisting of approximately $35.4
million in cash paid at closing (of which approximately
$1.9 million was withheld for
satisfaction of potential indemnification claims), plus the release
of certain liabilities owed by Cano Health. As of August 1, 2023, the primary care centers in
Texas and Nevada cared for approximately
15,200 members.
"We are excited to be taking one of our many planned steps in
our previously-announced strategy to gain greater efficiency by
refining our footprint and focusing on improving our operational
and medical cost performance across our Florida market," said Mark Kent, Chief Executive Officer of Cano
Health. "The net cash proceeds from this sale strengthen our
balance sheet, allowing us to continue executing on our plan and
supporting our mission of providing market-leading primary care. We
appreciate CenterWell recognizing the value that Cano Health
created in Texas and Nevada and look forward to them continuing to
deliver high quality care for our patients there."
Cano Health expects that the net cash proceeds from this
transaction will enable it to remain in compliance with the
covenants under its debt instruments at the end of Q3 2023,
including the financial maintenance covenant under the Credit
Suisse credit agreement. Following the transaction, Cano Health has
available liquidity consisting of approximately $109 million of unrestricted cash. Cano Health
intends to use approximately $80
million of such cash to repay a portion of its $120 million revolving credit facility by the end
of Q3 2023. This will enable Cano Health to remain below the
$42 million threshold drawn amount
and thus avoid being required to comply with the financial
maintenance covenant under its Credit Suisse credit agreement for
the testing period ending September 30,
2023. The remaining balance will be available for general
corporate purposes. The $80 million
of planned repayments under the revolving credit facility will
remain available for future borrowings.
About Cano Health
Cano Health (NYSE: CANO) is a high-touch, technology-powered
healthcare company delivering personalized, value-based primary
care to approximately 380,000 members. Founded in 2009, 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 through its primary
care medical centers and supporting affiliated providers. For more
information, visit canohealth.com or investors.canohealth.com.
Forward-Looking Statements: This press
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 Cano Health's 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," "believes," "foresees,"
"forecasts," "plans," "intends," "estimates" or other words or
phrases of similar import, including, without limitation, (i) Cano
Health's plans to execute its strategy to gain greater efficiency
by refining its footprint and focusing on improving its operational
and medical cost performance across its Florida market; (ii) Cano Health's expectation
that the net cash proceeds from this sale strengthen its balance
sheet, allowing it to continue executing on its plan and supporting
its mission of providing market-leading primary care; (iii) Cano
Health's expectation that the net cash proceeds will enable it to
remain in compliance with the covenants under its debt instruments
at the end of Q3 2023, including the financial maintenance covenant
under its Credit Suisse credit agreement; (iv) Cano Health's
expectation that CenterWell will continue to deliver high quality
care for Cano Health's patients; and (v) Cano Health's intent to
use approximately $80 million of its
available liquidity to repay by the end of the 3rd
quarter 2023 a portion of its $120
million revolving credit facility to remain below the
$42 million threshold drawn amount
and its plan to use the remaining balance of such cash for general
corporate purposes, as well as Cano Health's belief that such
amounts will remain available for future borrowings. It is
uncertain whether any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of
them do, what impact they will have on Cano Health's results of
operations and financial condition. Important risks and
uncertainties that could cause Cano Health's actual results and
financial condition to differ materially from those indicated in
forward-looking statements include, among others, changes in market
or industry conditions, the regulatory environment, competitive
conditions, and/or consumer receptivity to Cano Health's services;
changes in Cano Health's strategy, future operations, prospects and
plans; developments and uncertainties related to the Direct
Contracting Entity program; Cano Health's ability to realize
expected financial results; Cano Health's ability to predict and
control its medical cost ratio; Cano Health's ability to integrate
its acquisitions and achieve the desired synergies; Cano Health's
ability to maintain its relationships with health plans and other
key payors; Cano Health's future capital requirements and Cano
Health's sources and uses of cash, including funds to satisfy its
liquidity needs; Cano Health's ability to attract and retain
members of management and its Board of Directors; and/or Cano
Health's 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 Cano Health's filings with the SEC,
including, without limitation, in Cano Health's Annual Report on
Form 10-K for the fiscal year ended December
31, 2022, filed with the SEC on March
15, 2023 (the "2022 Form 10-K"), as well as Cano Health's
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that
Cano Health has filed or will file with the SEC during 2023 (which
may be viewed on the SEC's website at http://www.sec.gov or on Cano
Health's website at http://www.investors.canohealth.com/ir-home),
as well as reasons including, without limitation, (i) Cano Health's
experiencing delays or difficulties in, and/or unexpected or less
than anticipated results from executing its strategy to gain
greater efficiency by refining its footprint and focusing on
improving its operational and medical cost performance across its
Florida market, such as due to
less than anticipated liquidity and/or higher than anticipated
costs; (ii) difficulties and/or delays in using the net cash
proceeds to strengthen Cano Health's balance sheet, accelerate Cano
Health's plan to achieve embedded profitability, and/or support
Cano Health's mission of providing market-leading primary care;
(iii) Cano Health's inability to use the net cash proceeds to
remain in compliance with the covenants under its debt instruments,
including the financial maintenance covenant under Cano Health's
Credit Suisse credit agreement, such as due to unexpected changes
in Cano Health's liquidity and/or profitability or unanticipated
demands on Cano Health's available sources of cash, tightness in
the credit or M&A markets, higher interest rates, less than
anticipated cost reductions from Cano Health's restructuring
activities and/or a sustained higher inflationary environment; (iv)
unexpected changes in the quality of care in the affected primary
care centers; and/or (v) less than expected liquidity causing Cano
Health to face difficulties and/or delays in repaying the expected
amounts of its revolving credit facility, which under certain
circumstances could require Cano Health to seek a waiver from its
lenders regarding the financial maintenance covenant and/or cure
any such noncompliance via an equity or debt contribution as
outlined in the applicable credit agreements and/or less than
expected availability of future borrowings under the revolving
credit facility. For a detailed discussion of other risks and
uncertainties that could cause Cano Health's actual results to
differ materially from those expressed or implied by Cano Health's
forward-looking statements, please refer to Cano Health's filings
with the SEC, including, without limitation, Cano Health's 2022
Form 10-K. Factors other than those listed above could also cause
Cano Health's 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, Cano Health undertakes 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 press release.
Additionally, the business and financial materials and any other
statement or disclosure on or made available through Cano Health's
websites or other websites referenced herein shall not be
incorporated by reference into this release.
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SOURCE Cano Health, Inc.
