Cano Health announces financial results for the 2Q 2021

Cano Health, Inc. a leading value-based primary care provider for seniors and underserved communities, today announced financial results for the second quarter and six months ended June 30, 2021.

“We are pleased to report our quarterly results for the first time as a publicly traded company and appreciate the interest of those who may be new to the Cano Health story,” said Dr. Marlow Hernandez, Co-Founder, Chairman, and CEO of Cano Health.

“As we continue on our path to become America’s Primary Care provider, I am proud of the many ways we are bringing our care model to more patients and measurably improving clinical outcomes – important work that accelerated in the second quarter. Our results reflect successful execution of our business model, and the contribution of our employees and affiliate providers. We are delivering on our promise of growth through increased membership, pursuit of highly accretive acquisitions, and the addition of new service lines, including CMS’ DCE program.”

The Company had 170.3 million shares of Class A common stock outstanding and 306.8 million shares of Class B common stock outstanding at June 30, 2021. Our total share count for calculation of market capitalization is 477.1 million as of June 30, 2021.

COVID-19 Update
The United States has entered a fourth wave of the COVID-19 pandemic. Even though Florida is experiencing a record number of new COVID-19 cases, for Cano Health members, as of August 9, we have observed a seven-day daily average of 14.3 cases compared to a seven day daily average of 24.0 cases at Cano Health’s pandemic peak in January 2021. For the month of August, thus far, we have observed 7.5 COVID-19 hospital admissions per 1,000 as compared to Cano Health’s pandemic peak of 21.2 in July 2020. Our COVID-19 mortality rate continues to be at least 50% lower than the senior population in Florida. Additional detail is provided in our Second Quarter 2021 Financial Supplement found on the Investor Relations section of our website, canohealth.com/investors.

The medical claims expense ratio for the second quarter 2021 was 77.0%, compared to 73.0% in the first quarter for 2021. The increase was driven primarily by the inclusion of DCE members who we initially expect to have higher medical costs, and, to a lesser extent by higher elective procedure utilization and costs related to COVID-19.

For the first half of 2021, the medical claims expense ratio was 75.3%. For the full year of 2021, we are projecting a medical claims expense ratio of approximately 75.0%.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, 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. Such forward-looking statement include, without limitation, our anticipated results of operations, including our financial guidance for the 2021 and 2022 fiscal years, our business strategies, the anticipated impact of the recent transactions on our business and future financial and operating results, the expected amount and timing of synergies from the recent transactions, our projected costs, prospects and plans, and other aspects of our operations or operating results. 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. 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 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 forward-looking statements include, among others, changes in market or industry conditions, regulatory environment, competitive conditions, and receptivity to our services; our ability to realize expected results with respect to patient membership, total revenue and earnings; our ability to enter into new markets and continue our growth; our ability to integrate our acquisitions and achieve desired synergies; changes in laws and regulations applicable to our business; our ability to maintain our relationships with health plans and other key payors; the impact of COVID-19 or another pandemic on our business and results of operation; our future capital requirements and sources and uses of cash, including funds to satisfy our liquidity needs; and our ability to recruit and retain qualified team members and independent physicians. 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 filings with the Securities and Exchange Commission (the “SEC”), including the risk factors identified in the definitive Proxy Statement/Prospectus filed with the SEC on May 7, 2021 and incorporated by reference into our Super 8-K filed on June 9, 2021 and in subsequent Quarterly Reports on Form 10-Q. All information provided in this press release is as of the date hereof, and we undertake no duty to update or revise this information unless required by law.

Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures as defined by the SEC rules. EBITDA and Adjusted EBITDA have not been prepared in accordance with United States generally accepted accounting principles (“GAAP”). EBITDA is defined as GAAP net income (loss) before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA, adjusted to add back the effect of certain expenses, such as stock-based compensation expense, de novo losses (consisting of losses incurred in the twelve months after the opening of a new facility), acquisition transaction costs (consisting of transaction costs, fair value adjustments in contingent consideration, management fees and corporate development payroll costs), restructuring and other charges, loss on extinguishment of debt, changes in fair value of an embedded derivative, and changes in fair value of warrant liabilities. We believe these non–GAAP financial measures provide an additional tool for investors to use in evaluating ongoing operating results and trends in and in comparing our financial measures with other similar companies. We do not consider these non–GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non–GAAP financial measures. In addition, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. A reconciliation of those measures to their most directly comparable GAAP measures is available under the heading “Reconciliation of Non-GAAP Measures.” Insurance News Net