- Cano Health, a Florida-based provider of value-based primary care for seniors, said it is divesting certain non-core operations as part of a broader plan to streamline operations and improve cash flow.
- CEO Marlow Hernandez, who discussed the strategy Tuesday on Cano’s first-quarter earnings call, said operating cash flow is improving despite higher interest rates, and the organization is increasing overall membership in its network.
- Cano is implementing its action plan aimed at achieving positive free cash flow after three directors accused Hernandez of poor corporate governance, called for his ouster, and resigned from the company’s board in late March.
Cano’s stock has sunk to just above $1 a share amid the boardroom battle. The three former board members — Barry Sternlicht, Elliot Cooperstone and Lewis Gold — last month demanded the company reopen the window for director nominations. The three own about 35% of Cano’s shares.
In a letter made public today, they urged fellow shareholders to withhold votes for two directors up for re-election this year, Alan Muney and Kim Rivera.
On the earnings call this week, Hernandez said the company is making progress on its plan to improve its financial performance.
“We believe the divestiture of certain non-core assets will create important flexibility to strengthen our high-performing Medicare Advantage operations,” the CEO said.
Cano reported a 23% increase in total revenue, to $866.9 million, in the first quarter, compared to a year ago. The company had a net loss of $60.6 million, compared to a net loss of $100,000 in the prior year.
Total membership grew more than 25% since the end of December, to more than 388,000 members, Hernandez said on the call.
Results in the quarter show the company is on the “right track and gaining momentum,” though there “is still work to be done,” Hernandez said.
Cano raised its full-year outlook for membership and total revenue and reaffirmed ranges for its medical cost ratio and adjusted EBITDA.