Cano Health's directors standing for
re-election bring world-class backgrounds and relevant expertise to
effectively oversee the Company's action plan
ISS and Glass Lewis recommend stockholders
vote "FOR" the Company's proposed reverse stock split
MIAMI, June 7, 2023
/PRNewswire/ -- Cano Health, Inc. ("Cano Health" or the "Company"),
a leading value-based primary care provider and population health
company, today issued the following statement commenting on the
reports issued by Institutional Shareholder Services ("ISS") and
Glass Lewis regarding the Company's June 15,
2023 Annual Stockholders' Meeting:
The Company appreciates ISS and Glass Lewis' agreement that the
proposed reverse stock split is in the best interests of
stockholders, and their recommendation to vote "FOR" the proposed
reverse stock split. However, the Company strongly disagrees with
the recommendations to withhold votes from Dr. Alan Muney and Kim
Rivera. In fact, since the former directors (Elliot Cooperstone, Lewis Gold, and Barry
Sternlicht) are opposing the very same reverse stock split
that both ISS and Glass Lewis support, the proxy advisors have
validated our central point, namely that the former directors will
stop at nothing—including opposing an appropriate capitalization
transaction that they themselves previously supported—to advance
their basic, self-serving, short-term agenda. Given this
fundamental hypocrisy from the former directors, we fail to see how
ISS or Glass Lewis can conclude that the former directors have any
credibility in terms of acting as a voice for stockholders'
concerns.
Glass Lewis refused to meet with us and their commentary makes
clear that they simply do not understand our business, the steps we
are taking to create value for ALL of our stockholders, and the
destructive actions of the former directors. ISS' analysis
similarly fails to recognize several critical points that
stockholders should understand:
- ISS and Glass Lewis do not understand Cano Health's
business: The proxy advisors fail to appreciate that our
business requires several years to scale medical centers and
realize embedded profitability. 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
EBITDA profitability of approximately $4
million by Year 4. Cano Health has been a publicly traded
company for less than two years, which is simply insufficient time
to evaluate the success of the Company's recent growth strategy,
especially when comparing to highly selective, and irrelevant,
total shareholder return metrics. Given ISS' own recognition of the
unique factors contributing to the Company's rapid stock price
decline in late 2022 and subsequent convergence with the
performance of other healthcare SPACs, their conclusion that change
is warranted on a TSR basis makes no sense.
- Cano Health's highly qualified Board is deeply focused on
executing a comprehensive plan for long-term growth and
profitability: Leveraging our platform's proven and
differentiated capabilities and building on our leading clinical
outcomes, Cano Health is well positioned to take advantage of the
tremendous market opportunity in front of us and unlock significant
value for stockholders over the long term. Specifically, we are
taking steps to fill existing capacity and achieve the full
potential presented by the maturation of de novo and existing
medical centers, which presents a significant Adjusted EBITDA
opportunity over time. Our plan is already showing encouraging
signs of progress, which we expect will advance in the coming
quarters and enable us to bridge the gap between our intrinsic
value and our market value.
- ISS and Glass Lewis disregard the outsized influence of the
former directors prior to, during, and following the de-SPAC
transaction. ISS and Glass Lewis' critiques of our performance
and governance crucially ignore that the former directors bear
shared responsibility for all performance- and governance-related
matters. In particular, had Glass Lewis reviewed our materials more
carefully and engaged with the Company to understand the full
adverse effects of the former directors on the Company, they would
realize the former directors:
-
- Long advocated their ultimate goal to sell the Company: The
former directors have publicly stated their desire to dismantle and
sell Cano Health for parts—at a time when we believe the Company is
significantly undervalued.
- Made no effort to work constructively with the Board: Rather
than focus on an alternate value creation path to a fire sale, the
former directors while on the Board created an environment that for
months made it virtually impossible for the Board to conduct
business or engage in a constructive dialogue. Before they
resigned, they waged a monthslong internal campaign deliberately
designed to drive their short-term agenda and support their planned
activist campaign. They then resigned and commenced a vitriolic,
destructive campaign against the Board and management, instead of
trying to work with the Board to enhance value for all
stockholders.
- Carried highly influential roles on the Board: Elliot Cooperstone served as chairman of the
Board until the completion of the de-SPAC transaction. Lewis Gold was a member of the Audit Committee
and Compensation Committee. Barry
Sternlicht was a member of the Nominating and Corporate
Governance Committee as well as chairman of SPAC sponsor JAWS
Acquisition Corp., enabling him to play a key role in developing
the public company by-laws and Board composition.
- Cano Health's Board is taking necessary action to enhance
governance. The Board has stated clearly and repeatedly that it
recognizes there is work to be done to further enhance Cano
Health's governance policies and practices and we are taking
aggressive action to do just that. Consistent with this commitment,
we have:
-
- Separated our Chairman and CEO roles as soon as practicable
given the previous obstructive behavior by the former directors
which made it impossible to take such action sooner;
- Adopted updated compliance policies, including those related to
our code of conduct, conflicts of interest, and related party
transactions; and
- Appointed an Interim Chief Legal Officer, Frederick Green, who among other
responsibilities will work closely with the Board and management
team to implement and maintain best-in-class corporate governance
policies and support the execution of our value creation
strategy.
We are disappointed that ISS and Glass Lewis have given merit to
highly disruptive public commentary perpetuated by the former
director group—who are aggressively pursuing a narrow short-term
agenda long on misleading attacks and short on any actionable ideas
for long-term value creation. These former directors remain
singularly focused on dismantling the Company and selling it for
parts, at a time when we believe the stock is significantly
undervalued. We believe stockholders will agree that unlocking the
long-term value embedded in our transformative model is the right
path forward.
Cano Health's two world-class independent directors standing
for re-election, Dr. Alan Muney and
Kim Rivera, possess significant
public company executive leadership experience, extensive
healthcare expertise, and demonstrated track records of driving
stockholder value.
Our nominees are not beholden to anyone except the stockholders
of Cano Health and are committed to continuing to implement a plan
of action that is already demonstrating progress toward delivering
increased value for stockholders.
- Dr. Muney has decades of experience as a physician, medical
operations leader, and business executive. He brings unique insight
on operations, quality of care, payor relationships, and growth and
profitability strategy; as well as a track record of successfully
implementing innovative solutions to optimize delivery of quality
care with lower costs, at scale. While Dr. Muney served as Chief
Medical Officer at Oxford Health Plans and Cigna, both companies
outperformed the S&P 500 by 224%1 and 189%,
respectively.
- Ms. Rivera has significant leadership experience at multiple
Fortune 500 companies in the healthcare and technology sectors. She
brings broad legal acumen and knowledge of strategic planning
processes, management of the legal function of a complex, regulated
company, corporate governance, and compliance. 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%2
during her time on its Board of Directors.
We urge stockholders to follow the Board's recommendation and
vote "FOR" all the proposals on the WHITE proxy card, including the
re-election of Dr. Muney and Ms. Rivera and the Company's proposed
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 plans to execute a comprehensive plan for
long-term growth and profitability and our belief that unlocking
the long-term value embedded in our transformative model is the
right path forward; (ii) our belief that we can address the gap
between Cano Health's intrinsic value and current market value;
(iii) our belief that we are positioned to take advantage of the
tremendous market opportunity in front of us and unlock significant
value for stockholders over the long term; (iv) our plans to take
steps to fill existing capacity and achieve the full potential
presented by the maturation of de novo and existing medical
centers, which presents a significant Adjusted EBITDA opportunity
over time and our belief that our progress in this regard will
accelerate in the coming quarters and enable us to bridge the gap
between our intrinsic value and our market value; (v) our plans to
pursue the divestiture of certain non-core assets to sharpen our
focus on our high-performing Medicare Advantage business; (vi) our
plans to implement the reverse stock split; and (vii) our plans to
implement and maintain best-in-class corporate governance policies
and support the execution of our value creation strategy. 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
http://www.investors.canohealth.com/ir-home), as well as reasons
including, without limitation, delays or difficulties in, and/or
unexpected or less than anticipated results from our efforts to:
(i) achieve growth, improve our cost structure, improve our
operating cash flow and/or drive value, such as due to higher
interest rates, higher than expected costs and/or greater than
anticipated competitive factors and/or due to a broad recessionary
economic environment, less than anticipated utilization of our
medical centers and/or access to less than anticipated sources of
liquidity; (ii) address the gap between Cano Health's intrinsic
value and current market value, 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
profitability and/or strengthen our cash flows, 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) delays or other developments that may result in our
not consummating the reverse stock split; and/or (vii) difficulties
or delays in enhancing our governance processes. 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.
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 SEC in connection with the solicitation of proxies for the
Company's 2023 annual meeting of stockholders (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. Stockholders 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
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1
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Oxford was acquired by
United Healthcare in 2004; Dr. Muney stayed on as Chief Medical
Officer of the Northeast region until 2008.
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2
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Calculated through
5/23/23.
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SOURCE Cano Health, Inc.