Cano Health, Inc. (NYSE:CANO) Q4 2022 Earnings Call Transcript

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Marlow Hernandez: Yeah. So I think I understand where you’re going. I think, the way we’re looking at it is, we have depending on how you €“ whether you look at when fourth quarter or where we just talked about in the February $180 million of liquidity to execute on the goals, that model laid out in a very thoughtful and deliberate way. So this is the nice part about the additional financing that we just received. And it’s really the covenants within the agreement are very similar to the existing term loan covenant agreements that we have. And, we €“ there is a maximum limit within the covenant. But it’s important to note that the definition, or the calculation of that credit adjusted EBITDA is different. And just more liberal than you can get right off our financial statements. But as we look at it, and we look at the projections, we expect to have sufficient headroom in our leverage ratio, given where we are now.

A.J. Rice: Okay. Obviously, the last number of months, a lot of stuff has played out in the public domain, and you guys probably would have preferred to be out of the public eyesight as much as you were. I wondered, and maybe there’s nothing to talk about here, but at least give you a chance to comment on it. When you think about adding affiliates, adding new doctors, when you think about your relations with health plans, can you just sort of comment on how things have unfolded in recent months? And whether that’s had any impact on your relations? Or the dialogue you’ve had? What have you done to sort of reassure key constituencies that you’re on track and everything’s good?

Marlow Hernandez: Well, I would say, as it relates to patients, we’re serving more patients than ever and far ahead of our expectations. We continue to have the same contracts with all the major national players and going very significantly. So, ultimately, it comes down to the differentiators of our business, which is our ability to serve the underserved to have scale and density in key markets and those key areas and deliver the service and clinical quality that continues to be in very high demand.

A.J. Rice: Okay. Maybe one last technical question. I think in the prepared remarks, you said in your guidance that MCR would improve in the back half versus the first half, I think that’s the whole book, but maybe as MA specifically. Is that related to your reinsurance? Or is there something else you’re calling out when you think about that?

Marlow Hernandez: Yeah. No, I think, you’re right. We’re expecting that the seasonal first quarter to fourth quarter pattern that we would normally expect. There’s a number of factors in there. But generally, you’re going to see starting off at the high end and improving throughout the year. And so it’s very consistent with what we’ve seen in the past.

A.J. Rice: All right. Thanks a lot.

Marlow Hernandez: Thank you. And thanks, everyone, for joining and we’re here for any additional follow-up questions. And thank you and have a good evening.

Operator: Ladies and gentlemen, thank you for participating. This concludes today’s conference call. You may now disconnect.

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