- Cano Health warned that it did not have enough cash to continue operations within a year.
- The company’s losses skyrocketed due to lower revenues and higher costs.
- Cano said it is looking for a buyer for all or all of its assets.
Shares of Cano Health (CANO) fell more than 67% in early trading Friday to an all-time low after the healthcare provider for seniors warned it might not be able to continue operations and is looking for a buyer as revenues fall and expenses rise.
The company indicated that it had only $101 million in cash and cash equivalents as of Wednesday, and believes that the amount of liquidity “is not sufficient to cover the company’s operating, investment and financing uses for the next 12 months.”
Cano added that management has concluded that “there is material doubt about the Company’s ability to continue as a going concern within one year.”
Cano reported a net loss in the second quarter of fiscal 2023 of $270.7 million, more than 18 times its loss in the previous year. The company blamed an increase in operating losses, primarily due to lower-than-expected Medicare Risk Adjustment (MRA) revenue, higher third-party medical costs, a change in reserve for certain assets, a change in the fair value of warranty liabilities, and higher interest expense.
Cano added that it is accelerating exit procedures from operations in California, New Mexico, Illinois and Puerto Rico, and is working to consolidate operations in Texas and Nevada. The company also plans to lay off 700 workers in the current quarter.
Cano announced that it is “seeking a comprehensive process to identify and assess interest in the sale of the company, all or substantially all of its assets.”
Shares of Cano Health lost more than two-thirds of their value after the news.