Board and management are evolving governance
practices and executing an action plan to drive long-term
sustainable growth and value creation for ALL stockholders
In contrast, former directors are intent on
conducting a disruptive, misleading, and disingenuous campaign
aimed only at serving their own short-term interests
MIAMI, June 8, 2023
/PRNewswire/ -- Cano Health, Inc. ("Cano Health" or the "Company"),
a leading value-based primary care provider and population health
company, today sent a letter to stockholders in connection with its
June 15, 2023 Annual Meeting. The
Company's Board of Directors unanimously recommended that
stockholders vote the WHITE Proxy Card "FOR" the re-election of its
highly qualified, independent directors and the proposed reverse
stock split.
The full text of the letter follows:
Dear Fellow Stockholders,
Your Board and management team are executing a decisive
action plan focused on operating Cano Health's business more
effectively, growing the business more sustainably, and increasing
operating cash flows to fully realize Cano Health's potential and
drive long-term value for ALL stockholders.
As you consider casting your vote for this year's Annual
Meeting, it is critical to remember that:
- We are confident that by executing our plan, which is already
showing early signs of progress, we can address the gap between
Cano Health's intrinsic value and current market value.
- As part of our plan, we are committed to continuing to evolve
our governance practices to ensure we have best in class policies,
procedures, and oversight.
- This plan is being overseen by a highly qualified and
independent Board—including two directors standing for re-election
who bring to Cano Health significant healthcare experience and
demonstrated track records of stockholder value creation.
- In stark contrast, the former directors have put forth
absolutely NO PLAN to deliver long-term value to stockholders—only
a publicly stated objective to dismantle the Company and sell it
for parts—at a time when we believe it is clearly undervalued.
- The former directors are conducting a disruptive, misleading,
and disingenuous campaign intended only to serve their own
short-term interests.
Cano Health is at a pivotal moment in our trajectory. Now is not
the time to disrupt the achievable long-term value creation plan
the Board and management team have underway for the self-serving,
short-term agenda of three former directors.
Your Vote Is Important, No Matter How Many Shares
You Own. We Urge You To Vote The WHITE Proxy Card Today – By
Telephone Or Internet.
Cano Health Is Poised to Unlock Significant Embedded
Value
Our platform is differentiated by our personalized patient care
and proactive approach to preventative care, which has resulted in
leading clinical outcomes with fewer hospital admissions, fewer ER
visits, and lower mortality rates. (See charts on slide 11 of
the Company's May 31 investor
presentation for further details.)
Moreover, Cano Health's scale, profitability, and efficiency
exceed that of key public company peers—yet our share price trades
at a discount to them. (See charts on slide 13 of the Company's
May 31 investor presentation for
further details.)
Your Board and management have a disciplined plan underway to
realize the potential inherent in our model by: 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.
We strongly believe that quarter by quarter, our results will be
the catalyst to bridge the gap between our intrinsic value and our
market value. In our most recent quarter, we:
- Recorded a 44% year-over-year increase in membership and a 23%
increase in revenue
- Raised 2023 guidance for membership and revenue growth
- Meaningfully lowered SG&A expense as a percentage of
revenue year-over-year, despite serving significantly more
patients
- Achieved our 5th consecutive quarter of positive
Adjusted EBITDA
- Reaffirmed our 2023 Adjusted EBITDA outlook
These encouraging signs of progress, which build on our
platform's proven and differentiated capabilities, position Cano
Health to take advantage of the tremendous market opportunity in
front of us and unlock significant value for stockholders over the
long term.
Cano Health's Highly Qualified, Independent Board is
Committed to Taking Necessary Action
Your Board of Directors comprises a deeply experienced set of
directors, who together own more than 35 million Cano Health
shares. Collectively, your Board has expertise in areas critical to
our business—including healthcare, operations, technology and
innovation, financial and investment management, strategic
planning, transformations, compliance oversight, and corporate
governance.
- Dr. Alan Muney
(Standing For Re-Election)
-
- Decades of experience as a physician, medical operations
leader, and healthcare business executive
- Unique insight on operations, quality of care, payor
relationships, and growth and profitability strategy; as well as
track record of successfully implementing innovative solutions to
optimize delivery of quality care with lower costs, at scale
- Kim Rivera (Standing
For Re-Election)
-
- Leadership experience at multiple Fortune 500 companies in the
healthcare and technology sectors
- Broad legal acumen and knowledge of strategic planning
processes, management of the legal function of a complex, regulated
company, corporate governance, and compliance
- Solomon Trujillo
(Chairman)
-
- Strong 40-year track record of executive and board-level
leadership at some of the world's leading companies
- Significant insight across innovation and transformation,
operational excellence, growth strategy and marketing in the
Company's core demographics, finance and investor relations, and
corporate governance
- Dr. Marlow Hernandez
(Chief Executive Officer)
-
- Uniquely valuable track record of leadership in building Cano
Health into a pioneering value-based care provider
- Plays a critical role in guiding the Company's operations,
relationships with stockholders, strategic growth action plan, and
path to accelerated cash flow positivity
- Jacqueline
Guichelaar
-
- Deep technical expertise in digital technologies, information
technology, cybersecurity, privacy, and compliance
- Experience as a senior technology executive at Fortune 500 and
multinational companies, bringing valuable skills and perspectives
relating to growth and technology strategies
- Angel Morales
-
- Strong financial acumen, investment and risk management
expertise, and operational experience
- Valuable investor-oriented and returns-focused perspective with
a deep understanding of the Company's markets, business dynamics,
and financial management
The Two Independent Directors Standing For Re-Election, Dr.
Alan Muney and Kim Rivera, Bring to Cano Health Significant
Public Company Executive Leadership Experience, Extensive
Healthcare Expertise, and Demonstrated Track Records of Driving
Stockholder Value.
Dr. Muney's Track
Record
|
Company
|
Role(s)
|
TSR vs. S&P
500
|
Cigna
|
Chief Medical
Officer
(2011 –
2018)
|
189 %
|
Oxford Health
Plans
|
Chief Medical
Officer
(1998 –
20041)
|
224 %
|
Ms. Rivera's Track
Record
|
Company
|
Role(s)
|
TSR vs. S&P
500
|
Thomson
Reuters
|
Independent
Director
(2019 –
present)
|
59%2
|
HP
|
Chief Legal
Officer/GC/Special Advisor to CEO
(2015 –
2021)
|
76 %
|
DaVita
|
Chief Legal
Officer/GC/Corporate Secretary (2010-2015)
|
53 %
|
Importantly, Your Board Recognizes There Is Work to Be Done
to Strengthen the Company's Governance Practices and We Are Taking
Important Steps to Do Just That.
As part of that commitment, we have recently taken the following
notable actions, among others:
- Separated our Chairman and CEO roles
- Adopted updated compliance policies, including those related to
our code of conduct, conflicts of interest, and related party
transactions
- 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
As we move forward, we are committed to continuing to improve
our monitoring and controls, consistent with what is expected of a
public company.
The Former Directors' Self-Serving Agenda Is Not in
Stockholders' Best Interests
To further their short-term agenda, the former directors have
waged a disruptive, misleading, and disingenuous campaign rooted in
destructive tactics to belie their true intentions. In doing so,
they have demonstrated a clear misalignment between their interests
and those of all other stockholders.
We encourage you to see through their distraction techniques and
focus on the facts:
- The former directors have no long-term value creation plan—they
have failed to present any actionable ideas beyond dismantling our
attractively positioned company and selling it for parts at a time
when we believe it is clearly undervalued.
- Their hostile attacks conveniently ignore that they themselves
architected, advocated, and approved the strategic and governance
decisions they now criticize—including creating the Company's
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.
- Their opposition to the proposed reverse stock split—which is
intended to ensure Cano Health continues to meet the listing
requirements of the New York Stock Exchange—runs counter to a
rational assessment of long-term value for all stockholders. In
fact, the former directors themselves approved proceeding with a
reverse stock split proposal in March
2023.
At this critical inflection point, now is not the time to
acquiesce to disruption from the former directors with no plan
beyond cashing out at a massive discount to Cano Health's inherent
value.
Your Board and management remain decisively focused on our
action plan to maximize our long-term potential on behalf of ALL of
our stockholders, and look forward to continuing to demonstrate our
progress to you. Thank you for your support.
The Cano Health Board of Directors
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:
MacKenzie Partners, Inc.
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 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 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 decisive action plan
focused on operating our business more effectively, growing the
business more sustainably, and increasing operating cash flows to
fully realize our potential and drive long-term value for all
stockholders and our belief that our long-term value creation plan
is achievable, that we are poised to unlock significant embedded
value and are focused on our action plan to maximize our long-term
potential on behalf of all stockholders; (ii) our belief that we
can address the gap between Cano Health's intrinsic value and
current market value, including that quarter by quarter, our
results will be the catalyst to bridge the gap between our
intrinsic value and our 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 unlock embedded medical center
profitability; streamline operations; strengthen cash flows; and
optimize our management team and governance; (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
financial guidance for 2023; (vii) our plans to implement the
reverse stock split; and (viii) our plans to continue to evolve our
governance practices to ensure we have best in class policies,
procedures and oversight. 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; (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) achieve our financial guidance
for 2023, such as 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; (vii) delays
or other developments that may result in our not consummating the
reverse stock split; and/or (viii) 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 shareholders (the "2023 Annual
Meeting"). SHAREHOLDERS 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 at 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 Oxford was acquired by United Healthcare in 2004;
Dr. Muney stayed on as Chief Medical Officer of the Northeast
region until 2008
2 Calculated through 5/31/23
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SOURCE Cano Health, Inc.