Cano Health Sinks 60% on Going Concern Warning

Cano Health (CANO:US) shares sank as much as 65% at Friday's open after the healthcare services provider issued a cautionary statement regarding its status.

The company has disclosed its intention to undertake a comprehensive evaluation process aimed at identifying potential sale opportunities for the company or a significant portion of its assets. 

"Cano Health is evaluating strategic interest in the Company to ensure we continue caring for our patients, while maximizing value for our stakeholders," said Mark Kent, Cano Health's Interim Chief Executive Officer. 

“Cano Health took critical strategic steps during the second quarter of 2023 that are intended to accelerate our strategy to enhance operational efficiency and execute on the plan to improve the management of our medical costs."

The company plans to discontinue its operations in California, New Mexico, Illinois, and Puerto Rico. In an effort to enhance operational efficiency and mitigate costs, Cano Health has also outlined a comprehensive operational restructuring plan that will see the company cut about 700 employees, constituting 17% of the workforce.

During the second quarter, the company's financial performance fell short of expectations. The total revenue reached $766.7 million, below the estimated $829 million. 

Additionally, an adjusted Ebitda loss of $149.7 million was reported, in stark contrast to the estimated profit of $12 million. 

The membership count stood at 381,066, and the available cash, cash equivalents, and restricted cash amounted to $27.7 million. The loss per share was recorded at $0.51.

Congresswoman Maria Elvira Salazar received $250,000 - $500,000 worth of CANO shares in early 2022. The company went public in June 2021.