Announces Preliminary Fourth Quarter 2022 Summary Financial Results

MIAMI, Feb. 27, 2023 /PRNewswire/ — Cano Health, Inc. (“Cano Health” or the “Company”) (NYSE: CANO), a number one value-based major care supplier and inhabitants well being firm, at the moment introduced that on February 24, 2023, it consummated the closing of a $150 million senior secured time period mortgage (the “2023 Term Loan”), maturing November 23, 2027. 

Lenders within the 2023 Term Loan have been Diameter Capital Partners, Rubicon Founders and their respective associates and managed funds.

The 2023 Term Loan bears curiosity at 14% each year within the first two years after preliminary funding, payable quarterly in money or in-kind as an addition to the principal steadiness of the 2023 Term Loan, on the Company’s election, and, thereafter, 13% each year, payable quarterly in money. The 2023 Term Loan ranks pari passu in proper of cost and lien precedence with indebtedness below the Company’s current senior credit score services.

In reference to the 2023 Term Loan, the Company issued to the lenders warrants to buy as much as roughly 29.5 million shares of the Company’s Class A typical inventory, or as much as 5.5% of professional forma totally diluted shares excellent, exercisable till February 24, 2028, at an train value of $0.01 per share. The Company has agreed to register the shares of Class A typical inventory underlying the warrants with the U.S. Securities and Exchange Commission (“SEC”).

Cano Health intends to make use of proceeds from the transaction for common company functions, together with the reimbursement of quantities excellent below its current revolving credit score facility, and to pay transaction charges and bills associated to the 2023 Term Loan.

“We are pleased to partner with experienced investors like Diameter and Rubicon who recognize the value of our platform,” stated Dr. Marlow Hernandez, Chairman and Chief Executive Officer of Cano Health. “With the completion of this financing, we remain focused on optimizing our existing capacity to continue to unlock the embedded profitability within our medical centers. In addition, the Company will continue to review our operations with the objective of further enhancing liquidity, improving margins, and maximizing long-term shareholder value.”

Jonathan Lewinsohn and Scott Goodwin, co-founders and Managing Partners of Diameter Capital Partners, stated “As an existing lender to Cano Health, we are pleased to demonstrate our conviction in the Company. Cano Health operates in one of the most exciting areas of healthcare services, and we believe that the current capital infusion will help the Company realize its unique potential.”

“Our partnership with Cano Health meets our mission of advancing value-based primary care for underserved populations. We are pleased to support Cano Health in continuing to fulfill its goals of improving patient health and outcomes in the communities it serves,” stated Adam Boehler, Managing Partner of Rubicon Founders.

JPMorgan Chase Bank, N.A. served as sole lead arranger and sole bookrunner in reference to the 2023 Term Loan and Goodwin Procter LLP served as authorized advisor to Cano Health in reference to the 2023 Term Loan and warrants.

Preliminary Unaudited Fourth Quarter 2022 Summary Results
Cano Health at the moment reported membership and preliminary estimated unaudited complete income, web loss, and Adjusted EBITDA¹ for its fourth quarter ended December 31, 2022.

Total membership on the finish of the fourth quarter 2022 is estimated to be roughly 310,000, larger than the earlier steering of 300,000 to 305,000 members. Preliminary unaudited complete income, web loss, and Adjusted EBITDA for the fourth quarter of 2022 are estimated to be roughly $680 million, $(302) million², and $36 million, respectively. Total income and Adjusted EBITDA are throughout the vary implied by prior full 12 months steering.

The Company is scheduled to launch its last monetary outcomes for the fourth quarter and full 12 months ended December 31, 2022 after the market closes on Wednesday, March 1, 2023, and host a convention name the identical day at 5:00 PM Eastern Time to assessment the Company’s enterprise and monetary outcomes.

The Company has not but accomplished its quarter and year-end monetary shut processes for the quarter and 12 months ended December 31, 2022. The preliminary monetary outcomes introduced herein haven’t been audited and are based mostly on info at the moment accessible to the Company. Accordingly, such outcomes are topic to revision on account of the Company’s completion of its regular quarter and year-end accounting closing procedures, together with customary evaluations and approvals, completion by the Company’s unbiased registered public accounting agency of its audit of such monetary statements, asset recoverability accounting evaluation, the execution of its inside controls over monetary reporting, last changes and different developments arising between now and the time that our monetary outcomes for the three months and 12 months ended December 31, 2022 are finalized. As such, the Company’s precise outcomes might materially fluctuate from the preliminary outcomes introduced on this press launch. In addition, the Company’s estimated monetary efficiency for the fourth quarter of 2022 shouldn’t be a complete assertion of the Company’s monetary outcomes for the three months ended December 31, 2022, and doesn’t current all info needed for an understanding of the Company’s monetary situation and outcomes of operations as of and for the three months and/or fiscal 12 months ended December 31, 2022.

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(1) Adjusted EBITDA is a non-GAAP monetary measure. A reconciliation of this non-GAAP monetary measure to its most immediately comparable GAAP monetary measure is supplied within the Reconciliation of Non-GAAP Adjusted EBITDA desk included on this press launch. An rationalization of this measure and the way it’s calculated can be included below the heading “Non-GAAP Financial Measures.”
(2) Includes $323 million non-cash goodwill impairment.}

Forward-Looking Statements
This press launch incorporates forward-looking statements throughout the that means 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 occasions and contain recognized and unknown dangers, uncertainties and different components that are, in some instances, past our management and will materially have an effect on precise outcomes, efficiency or achievements. Such forward-looking assertion embody, with out limitation, our anticipated outcomes of operations, together with our monetary steering for the 2022 fiscal 12 months, our enterprise methods, our projected prices, prospects and plans, and different points of our operations or

working outcomes. These forward-looking statements usually may be recognized by phrases resembling “will,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates” or different phrases or phrases of comparable import, together with, with out limitation, the Company’s (i) expectation to make use of proceeds from the transaction for common company functions, together with the reimbursement of quantities excellent below its current revolving credit score facility, and to pay transaction charges and bills associated to the 2023 Term Loan, and that this capital infusion will assist the Company understand its distinctive potential; (ii) plans to optimize its current capability to proceed to unlock embedded profitability inside its medical facilities; (iii) plans and expectations with respect to persevering with to assessment its operations with the target of additional enhancing liquidity, enhancing margins, and maximizing long-term shareholder worth; and (iv) plans to proceed fulfilling its targets of enhancing affected person well being and outcomes within the communities it serves. It is unsure whether or not any of the occasions anticipated by the forward-looking statements will transpire or happen, or if any of them do, what impression they may have on our outcomes of operations and monetary situation. Important dangers and uncertainties that would trigger our precise outcomes and monetary situation to vary materially from these indicated in forward-looking statements embody, amongst others, adjustments in market or trade situations, regulatory setting, aggressive situations, and receptivity to our providers; adjustments in our technique, future operations, prospects and plans; developments and uncertainties associated to the Direct Contracting Entity program; our means to understand anticipated monetary outcomes, together with with respect to affected person membership, complete income and earnings; our means to foretell and management our medical value ratio; our means to develop market share in current markets or enter into new markets and proceed our development; our means to combine our acquisitions and obtain desired synergies; our means to keep up {our relationships} with well being plans and different key payors; the impression of COVID-19 on our enterprise and outcomes of operations; our future capital necessities and sources and makes use of of money, together with funds to fulfill our liquidity wants; and our means to recruit and retain certified group members and unbiased physicians. The Company might also expertise delays or difficulties in, and/or sudden or lower than anticipated outcomes from (i) utilizing the proceeds from the 2023 Term Loan transaction for common company functions, repaying quantities excellent below its current revolving credit score settlement, and/or to pay associated transaction charges, resembling as a result of unanticipated calls for on its accessible sources of money; (ii) its deal with optimizing its current capability to proceed to unlock embedded profitability inside its medical facilities, resembling as a result of elevated competitors within the provision of well being care providers, growing prices, tightness within the labor market or lower than anticipated sources of, or entry to, liquidity; (iii) its efforts to assessment its operations with the target of additional enhancing liquidity, enhancing margins, and maximizing long-term shareholder worth, resembling as a result of tightness within the credit score or M&A markets, larger rates of interest, and/or the next inflationary setting, which may adversely have an effect on the Company’s means to enhance its liquidity, money circulation and/or long-term shareholder worth; and/or (iv) its plans to proceed fulfilling its targets of enhancing affected person well being and outcomes within the communities it serves, resembling as a result of , resembling as a result of larger than anticipated medical prices or the unfold of different pandemics. For an in depth dialogue of the dangers and uncertainties that would trigger our precise outcomes to vary materially from these expressed or implied by the forward-looking statements, please discuss with our filings with the SEC. Factors aside from these listed above may additionally trigger the Company’s outcomes to vary materially from anticipated outcomes. All info supplied on this press launch is as of the date hereof, and we undertake no obligation to replace or revise this info except required by regulation.

Non-GAAP Financial Measures
This press launch incorporates sure non-GAAP monetary measures as outlined by the SEC guidelines. EBITDA and Adjusted EBITDA haven’t been ready in accordance with United States usually accepted accounting rules (“GAAP”). EBITDA is outlined as web earnings (loss) earlier than curiosity, earnings taxes, depreciation and amortization. Adjusted EBITDA is outlined as EBITDA, adjusted so as to add again the impact of sure bills, resembling stock-based compensation expense, non-cash goodwill impairment loss, de novo losses (consisting of prices related to the ramp up of latest medical facilities and losses incurred for the 12 months after the opening of a brand new facility), transaction prices (consisting of transaction prices and company growth payroll prices), restructuring and different fees, truthful worth changes in contingent consideration, loss on extinguishment of debt and adjustments in truthful worth of warrant liabilities. The Company’s administration makes use of the non-GAAP monetary measures as working efficiency measures and as an integral a part of its reporting and planning processes and to, amongst different issues: (i) monitor and consider the efficiency of the Company’s enterprise operations, monetary efficiency and total liquidity; (ii) facilitate administration’s inside comparisons of the Company’s historic working efficiency of its enterprise operations; (iii) facilitate administration’s exterior comparisons of the outcomes of its total enterprise to the historic working efficiency of different corporations which will have totally different capital constructions and debt ranges; (iv) assessment and assess the working efficiency of the Company’s administration group and, along with different operational targets, as a measure in evaluating worker compensation, together with bonuses and different incentive compensation; (v) analyze and consider monetary and strategic planning selections relating to future working investments; and (vi) plan for and put together future annual working budgets and decide acceptable ranges of working investments. We imagine these non-GAAP monetary measures present an extra device for our administration and buyers to make use of in evaluating our monetary situation, ongoing working efficiency and tendencies and in evaluating our monetary measures with different related corporations. Management believes that the non-GAAP monetary measures present helpful info to buyers and larger transparency concerning the efficiency, from administration’s perspective, of the Company’s total enterprise as a result of such measures remove the results of sure fees that aren’t immediately attributable to the Company’s underlying working efficiency. Additionally, administration believes that offering the non-GAAP monetary measures enhances the comparability for buyers in assessing the Company’s monetary reporting.

The non-GAAP monetary measures shouldn’t be thought of in isolation or as an alternative to their respective most immediately comparable As Reported monetary measures ready in accordance with GAAP, resembling web earnings/loss. These non-GAAP monetary measures are topic to inherent limitations as they mirror the train of judgments by administration about which expense, earnings and different objects are excluded or included in figuring out these non-GAAP monetary measures. In addition, different corporations might outline such non-GAAP measures otherwise or might use different measures to judge their efficiency, all of which may scale back the usefulness of our non-GAAP monetary measures as instruments for comparability. Also, whereas EBITDA and Adjusted EBITDA, as used on this launch, are outlined otherwise than Adjusted EBITDA for the Company’s credit score agreements and indentures, sure monetary covenants in its borrowing preparations are tied to related monetary measures. These non-GAAP monetary measures must be learn at the side of the Company’s monetary statements and associated footnotes filed with the SEC.

A reconciliation of these measures to their most immediately comparable GAAP measures is obtainable below the heading “Reconciliation of Non-GAAP Measures.” 

The Company has not reconciled its expectations as to non-GAAP measures in future durations to their most immediately comparable GAAP measure as a result of sure prices and bills are exterior of its management or can’t be moderately predicted. Accordingly, reconciliation shouldn’t be accessible with out unreasonable effort, though it is very important word that these components might be materials to the Company’s outcomes computed in accordance with GAAP.

Other
This press launch doesn’t represent a proposal to promote or the solicitation of a proposal to purchase any safety and shall not represent a proposal, solicitation, or sale of any safety in any jurisdiction through which such providing, solicitation or sale could be illegal.

About Cano Health 
Cano Health (NYSE: CANO) is a high-touch, technology-powered healthcare firm delivering personalised, value-based major care to roughly 300,000 members. With its headquarters in Miami, Florida, Cano Health is reworking healthcare by delivering major care that measurably improves the well being, wellness, and high quality of lifetime of its sufferers and the communities it serves. Founded in 2009, Cano Health has greater than 4,000 staff, and operates major care medical facilities and helps affiliated suppliers in 9 states and Puerto Rico. For extra info, go to canohealth.com or investors.canohealth.com.

SOURCE Cano Health, Inc.