- Cano Health warned it doesn’t have enough cash to continue operations within a year.
- The company’s loss skyrocketed on lower revenue and higher costs.
- Cano said it is looking for a buyer for all or substantially all of its assets.
Cano Health (CANO) shares plummeted over 67% in early trading on Friday to an all-time low after the health care provider for seniors warned it may not be able to continue operations and is looking for a buyer as revenue sank and expenses rose.
The company indicated that it had just $101 million in cash and cash equivalents on hand as of Wednesday, and believes that amount of liquidity “is not sufficient to cover the Company’s operating, investing and financing uses for the next 12 months.”
Cano added that management has concluded that “there is substantial doubt about the company’s ability to continue as a going concern within one year.”
Cano posted a net fiscal 2023 second quarter loss of $270.7 million, more than 18 times its loss a year earlier. The company blamed a higher operating loss, mainly because of lower-than-expected Medicare Risk Adjustment (MRA) revenue, higher third-party medical costs, a change in reserve for some assets, a change in fair value of warrant liabilities, and higher interest expense.
Cano added that it accelerated actions to exit operations in California, New Mexico, Illinois, and Puerto Rico, and is consolidating operations in Texas and Nevada. The firm also plans to lay off 700 workers in the current quarter.
Cano announced that it was “pursuing a comprehensive process to identify and evaluate interest in a sale of the Company, or all or substantially all of its assets.”
Shares of Cano Health lost more than two-thirds of their value following the news.