Cano Well being Proclaims Closing of $150 Million Time period Mortgage Facility with Diameter Capital Companions and Rubicon Founders

Proclaims Preliminary Fourth Quarter 2022 Abstract Monetary Outcomes

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

Lenders within the 2023 Time period Mortgage have been Diameter Capital Companions, Rubicon Founders and their respective associates and managed funds.

The 2023 Time period Mortgage bears curiosity at 14% every 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 Time period Mortgage, on the Firm’s election, and, thereafter, 13% every year, payable quarterly in money. The 2023 Time period Mortgage ranks pari passu in proper of cost and lien precedence with indebtedness underneath the Firm’s current senior credit score services.

In reference to the 2023 Time period Mortgage, the Firm issued to the lenders warrants to buy as much as roughly 29.5 million shares of the Firm’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 worth of $0.01 per share. The Firm has agreed to register the shares of Class A typical inventory underlying the warrants with the U.S. Securities and Trade Fee (“SEC”).

Cano Well being intends to make use of proceeds from the transaction for normal company functions, together with the reimbursement of quantities excellent underneath its current revolving credit score facility, and to pay transaction charges and bills associated to the 2023 Time period Mortgage.

“We’re happy to companion with skilled traders like Diameter and Rubicon who acknowledge the worth of our platform,” mentioned Dr. Marlow Hernandez, Chairman and Chief Government Officer of Cano Well being. “With the completion of this financing, we stay centered on optimizing our current capability to proceed to unlock the embedded profitability inside our medical facilities. As well as, the Firm will proceed to overview our operations with the target of additional enhancing liquidity, bettering margins, and maximizing long-term shareholder worth.”

Jonathan Lewinsohn and Scott Goodwin, co-founders and Managing Companions of Diameter Capital Companions, mentioned “As an current lender to Cano Well being, we’re happy to exhibit our conviction within the Firm. Cano Well being operates in some of the thrilling areas of healthcare companies, and we consider that the present capital infusion will assist the Firm notice its distinctive potential.”

“Our partnership with Cano Well being meets our mission of advancing value-based main look after underserved populations. We’re happy to help Cano Well being in persevering with to fulfill its objectives of bettering affected person well being and outcomes within the communities it serves,” mentioned Adam Boehler, Managing Associate of Rubicon Founders.

JPMorgan Chase Financial institution, N.A. served as sole lead arranger and sole bookrunner in reference to the 2023 Time period Mortgage and Goodwin Procter LLP served as authorized advisor to Cano Well being in reference to the 2023 Time period Mortgage and warrants.

Preliminary Unaudited Fourth Quarter 2022 Abstract Outcomes
Cano Well being at present reported membership and preliminary estimated unaudited complete income, internet loss, and Adjusted EBITDA¹ for its fourth quarter ended December 31, 2022.

Complete 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, internet loss, and Adjusted EBITDA for the fourth quarter of 2022 are estimated to be roughly $680 million, $(302) million², and $36 million, respectively. Complete income and Adjusted EBITDA are throughout the vary implied by prior full yr steering.

The Firm is scheduled to launch its ultimate monetary outcomes for the fourth quarter and full yr 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 Japanese Time to overview the Firm’s enterprise and monetary outcomes.

The Firm has not but accomplished its quarter and year-end monetary shut processes for the quarter and yr ended December 31, 2022. The preliminary monetary outcomes introduced herein haven’t been audited and are primarily based on info at present out there to the Firm. Accordingly, such outcomes are topic to revision because of the Firm’s completion of its regular quarter and year-end accounting closing procedures, together with customary opinions and approvals, completion by the Firm’s impartial registered public accounting agency of its audit of such monetary statements, asset recoverability accounting evaluation, the execution of its inner controls over monetary reporting, ultimate changes and different developments arising between now and the time that our monetary outcomes for the three months and yr ended December 31, 2022 are finalized. As such, the Firm’s precise outcomes could materially fluctuate from the preliminary outcomes introduced on this press launch. As well as, the Firm’s estimated monetary efficiency for the fourth quarter of 2022 isn’t a complete assertion of the Firm’s monetary outcomes for the three months ended December 31, 2022, and doesn’t current all info essential for an understanding of the Firm’s monetary situation and outcomes of operations as of and for the three months and/or fiscal yr 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 straight comparable GAAP monetary measure is offered within the Reconciliation of Non-GAAP Adjusted EBITDA desk included on this press launch. An evidence of this measure and the way it’s calculated can be included underneath the heading “Non-GAAP Monetary Measures.”
(2) Consists of $323 million non-cash goodwill impairment.}

Ahead-Wanting Statements
This press launch accommodates forward-looking statements throughout the that means of Part 27A of the Securities Act of 1933, as amended, and Part 21E of the Securities Trade Act of 1934, as amended. Ahead-looking statements relate to future occasions and contain recognized and unknown dangers, uncertainties and different elements that are, in some circumstances, 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 yr, our enterprise methods, our projected prices, prospects and plans, and different elements of our operations or

working outcomes. These forward-looking statements usually could be recognized by phrases equivalent to “will,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates” or different phrases or phrases of comparable import, together with, with out limitation, the Firm’s (i) expectation to make use of proceeds from the transaction for normal company functions, together with the reimbursement of quantities excellent underneath its current revolving credit score facility, and to pay transaction charges and bills associated to the 2023 Time period Mortgage, and that this capital infusion will assist the Firm notice 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 overview its operations with the target of additional enhancing liquidity, bettering margins, and maximizing long-term shareholder worth; and (iv) plans to proceed fulfilling its objectives of bettering affected person well being and outcomes within the communities it serves. It’s 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 influence they may have on our outcomes of operations and monetary situation. Necessary dangers and uncertainties that might trigger our precise outcomes and monetary situation to vary materially from these indicated in forward-looking statements embody, amongst others, modifications in market or trade situations, regulatory setting, aggressive situations, and receptivity to our companies; modifications 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 price 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 influence 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 impartial physicians. The Firm can also expertise delays or difficulties in, and/or surprising or lower than anticipated outcomes from (i) utilizing the proceeds from the 2023 Time period Mortgage transaction for normal company functions, repaying quantities excellent underneath its current revolving credit score settlement, and/or to pay associated transaction charges, equivalent to on account of unanticipated calls for on its out there sources of money; (ii) its concentrate on optimizing its current capability to proceed to unlock embedded profitability inside its medical facilities, equivalent to on account of elevated competitors within the provision of well being care companies, growing prices, tightness within the labor market or lower than anticipated sources of, or entry to, liquidity; (iii) its efforts to overview its operations with the target of additional enhancing liquidity, bettering margins, and maximizing long-term shareholder worth, equivalent to on account of tightness within the credit score or M&A markets, larger rates of interest, and/or a better inflationary setting, which may adversely have an effect on the Firm’s means to enhance its liquidity, money circulation and/or long-term shareholder worth; and/or (iv) its plans to proceed fulfilling its objectives of bettering affected person well being and outcomes within the communities it serves, equivalent to on account of , equivalent to on account of larger than anticipated medical prices or the unfold of different pandemics. For an in depth dialogue of the dangers and uncertainties that might trigger our precise outcomes to vary materially from these expressed or implied by the forward-looking statements, please check with our filings with the SEC. Elements aside from these listed above may additionally trigger the Firm’s outcomes to vary materially from anticipated outcomes. All info offered on this press launch is as of the date hereof, and we undertake no responsibility to replace or revise this info until required by legislation.

Non-GAAP Monetary Measures
This press launch accommodates 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 ideas (“GAAP”). EBITDA is outlined as internet revenue (loss) earlier than curiosity, revenue taxes, depreciation and amortization. Adjusted EBITDA is outlined as EBITDA, adjusted so as to add again the impact of sure bills, equivalent to 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 improvement payroll prices), restructuring and different expenses, truthful worth changes in contingent consideration, loss on extinguishment of debt and modifications in truthful worth of warrant liabilities. The Firm’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 Firm’s enterprise operations, monetary efficiency and general liquidity; (ii) facilitate administration’s inner comparisons of the Firm’s historic working efficiency of its enterprise operations; (iii) facilitate administration’s exterior comparisons of the outcomes of its general enterprise to the historic working efficiency of different corporations which will have completely different capital buildings and debt ranges; (iv) overview and assess the working efficiency of the Firm’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 consider these non-GAAP monetary measures present a further instrument for our administration and traders to make use of in evaluating our monetary situation, ongoing working efficiency and tendencies and in evaluating our monetary measures with different comparable corporations. Administration believes that the non-GAAP monetary measures present helpful info to traders and larger transparency concerning the efficiency, from administration’s perspective, of the Firm’s general enterprise as a result of such measures get rid of the consequences of sure expenses that aren’t straight attributable to the Firm’s underlying working efficiency. Moreover, administration believes that offering the non-GAAP monetary measures enhances the comparability for traders in assessing the Firm’s monetary reporting.

The non-GAAP monetary measures shouldn’t be thought-about in isolation or as an alternative choice to their respective most straight comparable As Reported monetary measures ready in accordance with GAAP, equivalent to internet revenue/loss. These non-GAAP monetary measures are topic to inherent limitations as they replicate the train of judgments by administration about which expense, revenue and different objects are excluded or included in figuring out these non-GAAP monetary measures. As well as, different corporations could outline such non-GAAP measures in a different way or could use different measures to judge their efficiency, all of which may cut back the usefulness of our non-GAAP monetary measures as instruments for comparability. Additionally, whereas EBITDA and Adjusted EBITDA, as used on this launch, are outlined in a different way than Adjusted EBITDA for the Firm’s credit score agreements and indentures, sure monetary covenants in its borrowing preparations are tied to comparable monetary measures. These non-GAAP monetary measures ought to be learn together with the Firm’s monetary statements and associated footnotes filed with the SEC.

A reconciliation of these measures to their most straight comparable GAAP measures is offered underneath the heading “Reconciliation of Non-GAAP Measures.” 

The Firm has not reconciled its expectations as to non-GAAP measures in future intervals to their most straight comparable GAAP measure as a result of sure prices and bills are outdoors of its management or can’t be moderately predicted. Accordingly, reconciliation isn’t out there with out unreasonable effort, though you will need to word that these elements might be materials to the Firm’s outcomes computed in accordance with GAAP.

Different
This press launch doesn’t represent a suggestion to promote or the solicitation of a suggestion to purchase any safety and shall not represent a suggestion, solicitation, or sale of any safety in any jurisdiction by which such providing, solicitation or sale can be illegal.

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

SOURCE Cano Well being, Inc.