Cano Health Inc (CANO) 2023 Q3 法說會逐字稿

Good afternoon, and welcome to Cano Health's third-quarter 2023 earnings call. (Operator Instructions) Please be advised that today's conference is being recorded.

下午好，歡迎參加 Cano Health 的 2023 年第三季財報電話會議。 （操作員指示）請注意，今天的會議正在錄製中。

Joining us on today's call are Mark Kent, Cano Health's Chief Executive Officer; and Eladio Gil, Cano Health's Interim Chief Financial Officer. The Cano Health press release, webcast link, Q3 2023 Form 10-Q and other related materials are available on the Investor Relations section of Cano Health's website.

參加今天電話會議的還有 Cano Health 執行長 Mark Kent；和 Cano Health 臨時財務長埃拉迪奧·吉爾 (Eladio Gil)。 Cano Health 新聞稿、網路廣播連結、2023 年第三季 10-Q 表格和其他相關資料可在 Cano Health 網站的投資者關係部分取得。

As a reminder, this call contains forward-looking statements regarding future events and financial performance. Investors are cautioned not to unduly rely on forward-looking statements and such statements should not be read or understood as a guarantee of future performance or results. We intend these forward-looking statements to be covered by the Safe Harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act.

提醒一下，本次電話會議包含有關未來事件和財務表現的前瞻性陳述。投資者應注意不要過度依賴前瞻性陳述，此類陳述不應被解讀或理解為對未來績效或結果的保證。我們希望這些前瞻性聲明受到《證券法》第 27A 條和《證券交易法》第 21E 條所載前瞻性陳述安全港條款的涵蓋。

We caution you that the forward-looking statements reflect our best judgment as of today, based on factors that are currently known to us. And such statements are subject to risks, uncertainties, and assumptions that could cause actual future events or results to differ materially from those discussed as a result of various factors including but not limited to risks and uncertainties discussed in our SEC filings. We do not undertake or intend to update any forward-looking statements after this call or as a result of new information, except as may be required by law.

我們提醒您，前瞻性陳述反映了我們截至目前基於我們目前已知因素的最佳判斷。此類陳述受到風險、不確定性和假設的影響，這些風險、不確定性和假設可能導致實際的未來事件或結果與由於各種因素（包括但不限於我們在SEC 文件中討論的風險和不確定性）所討論的結果有重大差異。除非法律要求，否則我們不會承諾或打算在本次電話會議後或因新資訊而更新任何前瞻性聲明。

During the call, we will also discuss certain financial measures that are not prepared in accordance with GAAP, such as adjusted EBITDA. A reconciliation of these non-GAAP results to their most directly comparable GAAP results is provided in today's press release and on the Investor Relations section of our website.

在電話會議期間，我們也會討論某些未依照 GAAP 制定的財務指標，例如調整後的 EBITDA。今天的新聞稿和我們網站的投資者關係部分提供了這些非 GAAP 業績與最直接可比較的 GAAP 業績的對帳。

With that, I'll turn the call over to Mark Kent, CEO of Cano Health. Please go ahead.

接下來，我會將電話轉給 Cano Health 執行長 Mark Kent。請繼續。

Thank you, and good evening, everyone. I appreciate you joining us this evening to hear how as of today, Cano Health has achieved major changes to its operating structure that are designed to allow it to operate more efficiently and realize the embedded value for our stakeholders. At the same time care management teams and physicians have partnered in new ways to implement critical enhancements that will improve health outcomes and lower medical costs. We have several initiatives already underway that will help you understand the scope and initial size of what we plan to achieve.

謝謝大家，大家晚上好。我感謝您今晚加入我們，聆聽 Cano Health 如何對其營運結構進行重大變革，這些變革旨在使其能夠更有效地運作並為我們的利害關係人實現內在價值。同時，護理管理團隊和醫生以新的方式合作實施關鍵的增強措施，以改善健康結果並降低醫療成本。我們已經採取了多項舉措，將幫助您了解我們計劃實現的目標的範圍和初始規模。

We are encouraged by the progress our team has made in a short window of time. Our third-quarter results reflect the improved performance and stability of our core Medicare Advantage business due to the operational enhancements and third-party medical cost initiatives we implemented midway through this year. Among our Medicare Advantage populations, in the quarter, we saw lower inpatient and pharmacy costs per member per month, and we expect to demonstrate progress on these and other medical costs through a wide range of initiatives.

我們的團隊在短時間內取得的進步讓我們深受鼓舞。我們的第三季業績反映了我們核心 Medicare Advantage 業務的業績和穩定性的提高，這得益於我們在今年年中實施的營運增強和第三方醫療成本計劃。在我們的醫療保險優勢人群中，本季度我們發現每位會員每月的住院和藥房費用較低，我們希望透過一系列措施展示這些和其他醫療費用的進展。

Since our last earnings call, we have successfully executed a number of objectives aligned with our strategy to focus on Medicare Advantage in Florida and our ACO REACH service line. These actions have simplified our business and organizational structure, reduced costs in the near term, and also created significant opportunities for the organization to realize the inherent profitability embedded within our assets over the long term.

自從上次財報電話會議以來，我們已成功執行了一系列與我們的策略一致的目標，即專注於佛羅裡達州的 Medicare Advantage 和我們的 ACO REACH 服務系列。這些行動簡化了我們的業務和組織結構，降低了短期成本，並為組織創造了重要機會，以實現我們資產的長期內在獲利能力。

First, on September 25, 2023, we sold substantially all of our assets in Texas and Nevada to CenterWell in a transaction with a total value to Cano of approximately $66.7 million, which consisted of approximately $35.4 million in cash paid at closing, plus the release of certain liabilities owed by Cano Health. This transaction was a necessary step to improve our liquidity position, which allowed us to repay our revolving line of credit by quarter end and simplify our organizational structure and administrative overhead. This transaction accounted for substantially all of our assets in Texas and of other markets.

首先，2023 年9 月25 日，我們將德州和內華達州的大部分資產出售給CenterWell，交易對Cano 的總價值約為6,670 萬美元，其中包括交割時支付的約3,540 萬美元現金，加上釋放Cano Health 所欠的某些負債。這項交易是改善我們的流動性狀況的必要步驟，使我們能夠在季度末償還循環信貸額度，並簡化我們的組織結構和管理費用。這項交易幾乎佔據了我們在德州和其他市場的所有資產。

Second, as of today, we have exited markets in California, New Mexico, and Illinois, which came with meaningful expense reduction and efficiencies. And we remain on track to exit Puerto Rico by the beginning of 2024. As a reminder, the decision to exit Puerto Rico impact approximately 8,000 members in our affiliate operations, and we expect this exit will favorably impact consolidated Medicare Advantage margins.

其次，截至今天，我們已經退出了加州、新墨西哥州和伊利諾伊州的市場，這些市場帶來了顯著的費用削減和效率提升。我們仍有望在 2024 年初退出波多黎各。提醒一下，退出波多黎各的決定影響了我們附屬業務中的約 8,000 名會員，我們預計這次退出將對合併的 Medicare Advantage 利潤率產生有利影響。

Together, these actions put us on a path to begin 2024 with a much cleaner slate focused primarily on Medicare Advantage in Florida and the ACO REACH service line. And to help you understand the drag these non-Florida markets had on our operations, as of September 2023 year to date, these markets accounted for only approximately $130 million of revenue with $43 million of adjusted EBITDA losses, primarily due to direct patient, selling, general, and administrative expense that burdened these markets. Aside from alleviating the heavy operating expenses and sub-optimal margins in these geographies, we believe these actions will reduce the administrative burden and complexity of our organization and eliminate redundant functions across markets where the economics didn't make sense.

總之，這些行動使我們在 2024 年開始時走上了一條更清晰的道路，主要關注佛羅裡達州的 Medicare Advantage 和 ACO REACH 服務線。為了幫助您了解這些非佛羅裡達市場對我們營運的拖累，截至 2023 年 9 月，這些市場僅佔約 1.3 億美元的收入，調整後 EBITDA 損失為 4,300 萬美元，這主要是由於直接患者、銷售、一般和管理費用給這些市場帶來了負擔。除了減輕這些地區沉重的營運費用和次優利潤之外，我們相信這些行動將減輕我們組織的行政負擔和複雜性，並消除經濟上沒有意義的市場上的冗餘職能。

Third, we implemented a restructuring plan designed to streamline and simplify the company's operations to improve efficiency and reduce costs. This included reductions to our workforce of approximately 21%, approximately half of which were related to organization restructuring connected to the market exits I mentioned previously.

第三，我們實施了重組計劃，旨在精簡和簡化公司的運營，以提高效率並降低成本。這包括我們裁員約 21%，其中約一半與我之前提到的與市場退出相關的組織重組有關。

While these decisions were difficult, we recognize that the company's historical cost structure did not align with our current objectives of improving economics and accelerating our path to positive free cash flow. We believe that in total, our workforce reductions will yield approximately $65 million of annual cost reductions beginning in the third quarter of 2023 and through the end of 2024. This is approximately $15 million higher than when we embarked on this initiative, and we continue to find opportunities to meaningfully reduce our operating expenses and cash used in operations.

雖然這些決定很困難，但我們意識到公司的歷史成本結構與我們目前改善經濟和加速實現正自由現金流的目標並不相符。我們相信，從 2023 年第三季開始到 2024 年底，我們的勞動力裁員總共將帶來約 6,500 萬美元的年度成本削減。這比我們開始實施這項措施時高出約 1,500 萬美元，我們將繼續尋找機會有效減少我們的營運費用和營運中使用的現金。

These structural initiatives are critical to refocusing our business on Medicare Advantage in Florida and ACO REACH such that we can quickly test and implement new care management initiatives designed to improve health outcomes and lower third-party medical costs.

這些結構性措施對於將我們的業務重新集中在佛羅裡達州的 Medicare Advantage 和 ACO REACH 上至關重要，以便我們能夠快速測試和實施旨在改善健康結果和降低第三方醫療成本的新護理管理措施。

In addition to major changes in our cost structure, we have realigned our clinical operations so that our physicians and care management teams are partnering in new ways to improve the healthcare outcomes of our patients and lower medical costs. We are encouraged by the opportunities our care management teams have identified and implemented to reduce third-party medical costs in 2024. Based on what we have identified to date, we are targeting over $100 million in annualized third-party medical cost reduction by the end of 2024 through medical cost initiatives and optimization of our Medicare Advantage operations.

除了成本結構的重大變化之外，我們還重新調整了臨床運營，以便我們的醫生和護理管理團隊以新的方式合作，以改善患者的醫療保健結果並降低醫療成本。我們的護理管理團隊發現並實施了在2024 年減少第三方醫療費用的機會，這讓我們感到鼓舞。根據我們迄今為止確定的情況，我們的目標是到年底每年減少超過1 億美元的第三方醫療費用透過醫療成本計劃和優化我們的 Medicare Advantage 運營，實現 2024 年的目標。

These initiatives are critical to begin rebuilding long-term value in our 122 staff model medical centers in Florida and our MSO providers in 2024. We believe these initiatives can be achieved in 2024, and they are just the first round of medical cost management programs our teams have identified based on our confidence level where we sit today. We are striving for more as we continue to optimize our care management model.

這些舉措對於在2024 年開始重建我們位於佛羅裡達州的122 個員工模式醫療中心和我們的MSO 提供者的長期價值至關重要。我們相信這些舉措可以在2024 年實現，它們只是我們的第一輪醫療成本管理計劃團隊根據我們的信心水平確定了我們今天所處的位置。隨著我們不斷優化我們的護理管理模式，我們正在努力爭取更多。

Let me give some additional color on how these initiatives are playing out. First, we focused on stronger patient engagement programs and improving our patient retention. The marginal profitability from retaining patients we see regularly drives long-term value through enhanced risk score demographics and lower medical costs. We've identified that one-third of our disenrollments relate to basic scheduling challenges. And as a result, we decentralized our call center and clinic administrative functions to ensure providers and staff in the medical centers have a direct line of communication with their patients and are empowered to engage with them directly.

讓我對這些措施的實施進行一些補充說明。首先，我們專注於加強患者參與計劃並提高患者保留率。我們經常看到，透過提高風險評分人口統計和降低醫療成本，留住患者的邊際利潤會推動長期價值。我們發現三分之一的退學與基本的日程安排挑戰有關。因此，我們分散了呼叫中心和診所的管理職能，以確保醫療中心的提供者和工作人員能夠與患者進行直接溝通，並有權直接與他們互動。

Second, we are enhancing our arrangements with specialty networks to reduce leakage and avoid paying twice for common procedures, once for fixed capitation and then again for out-of-network referrals. We have already expanded in-house services to minimize high-cost procedures performed out of network like x-rays and ultrasound and enhance our best practices and training procedures for physicians. And since then, we have begun cross training operational associates across multiple specialties to leverage our in-house versatility. These services and practice will create greater accountability, optimize our out-of-network referrals and uphold our commitment to quality care.

其次，我們正在加強與專業網絡的安排，以減少洩漏並避免為常見程序支付兩次費用，一次為固定人頭付費，另一次為網絡外轉診支付費用。我們已經擴大了內部服務，以最大限度地減少 X 光和超音波等網路外執行的高成本程序，並增強我們對醫生的最佳實踐和培訓程序。從那時起，我們開始對多個專業的營運人員進行交叉培訓，以充分利用我們內部的多功能性。這些服務和實踐將建立更大的責任感，優化我們的網路外轉診並維護我們對優質照護的承諾。

Third, we plan to optimize the use of generic medications and capture more value for our patients and payer partners by reducing the use of high-cost branded medications, where possible. The complexity that results from navigating many different health plans and their respective formularies have often pushed physicians to prescribe high-cost branded medications.

第三，我們計劃透過盡可能減少高成本品牌藥物的使用來優化仿製藥的使用，並為我們的患者和付款合作夥伴獲取更多價值。瀏覽許多不同的健康計劃及其各自的處方集所帶來的複雜性常常促使醫生開出高成本的品牌藥物。

Now our clinical operations teams have a number of workstreams in place to ensure patients and physicians have the opportunity and awareness to use more cost-effective medication. Our initial scope of brand versus generic optimization includes only the most frequently prescribed branded medications that are very addressable in high volumes.

現在，我們的臨床營運團隊已經制定了許多工作流程，以確保患者和醫生有機會並有意識地使用更具成本效益的藥物。我們的品牌與仿製藥優化的初始範圍僅包括最常開處方的品牌藥物，這些藥物非常適合大量使用。

And finally, reducing high-cost emergency room visits and hospital admissions remains a very achievable task rooted in operational and behavioral changes. This begins with better engagement with high-risk members, and we have expanded the capacity and functions of our urgency line and reallocated resources and capacity to accommodate walk-in emergencies. This is heavily tied to how effectively we engage with our patients and our operations teams have tools and metrics to evaluate their own effectiveness when it comes to managing patient populations.

最後，減少高成本的急診室就診和住院治療仍然是一項非常可實現的任務，其根源在於操作和行為的改變。首先是與高風險成員更好地接觸，我們擴大了緊急熱線的容量和功能，並重新分配了資源和能力來應對緊急情況。這與我們與患者互動的效率密切相關，我們的營運團隊擁有工具和指標來評估他們在管理患者群體時的有效性。

As mentioned, we are targeting over $100 million from these actions, and we are confident these initiatives will drive meaningful improvements in operating results and a meaningful inflection in our cash from operations by the end of 2024. While we have already taken many of these actions, it will take approximately four to six months before we fully realize the cash flow benefit.

如前所述，我們的目標是透過這些行動獲得超過1 億美元的資金，我們相信這些措施將在2024 年底前推動營運績效的顯著改善，並顯著改變我們的營運現金。雖然我們已經採取了其中許多行動，我們大約需要四到六個月的時間才能完全實現現金流效益。

We are confident the road map and direction among our clinical team is much clearer than in prior years. We have disclosed and been clear we are pursuing potential opportunities to sell our Medicaid operations in Florida, pharmacy assets, and other specialty practices for as appropriate, substantially all of the company's assets in order to enhance liquidity and realize critical stakeholder value.

我們相信我們的臨床團隊的路線圖和方向比前幾年更加清晰。我們已經披露並明確表示，我們正在尋找潛在機會出售我們在佛羅裡達州的醫療補助業務、藥房資產和其他專業業務，酌情出售公司的幾乎所有資產，以增強流動性並實現關鍵利益相關者的價值。

I want to emphasize that these potential steps are completely compatible with our intense focus on realizing the benefits from these medical initiatives and further lowering our cost structure. Not only is this what our stakeholders want in order to realize embedded value in the business, but it is also what is right for our patients.

我想強調的是，這些潛在的步驟與我們對實現這些醫療措施的好處並進一步降低我們的成本結構的強烈關注完全一致。這不僅是我們的利害關係人為了實現業務的內在價值所希望的，而且也是對我們的病人有利的。

I am confident in the embedded value within our company. And I want to stress that we continue to manage the business for long-term success. We are developing a disciplined operating culture that we will maintain into the future. Our purpose mission and objectives are aligned with the same operating milestone that our stakeholders desire, and we have a rigorous operating plan in place to achieve them. We remain committed to this focused approach which benefits all stakeholders and enhances our ability to execute strategically, clinically, and financially.

我對我們公司的內在價值充滿信心。我想強調的是，我們將繼續管理業務以取得長期成功。我們正在發展一種紀律嚴明的營運文化，並將在未來保持這種文化。我們的宗旨、使命和目標與利害關係人期望的相同營運里程碑保持一致，並且我們制定了嚴格的營運計劃來實現這些目標。我們仍然致力於這種專注的方法，這將使所有利害關係人受益，並增強我們在策略、臨床和財務方面執行的能力。

Before I finish my remarks, I'd like to note the recent appointment of Eladio Gil as our Interim Chief Financial Officer. Eladio has had over 30 years of comprehensive experience in the healthcare industry, having recently served in leadership roles outside of Cano Health that oversaw finance and accounting functions, management service organization operations, and other key financial leadership roles at other major healthcare companies. I have no doubt his financial expertise within the healthcare sector will help us execute our strategies, reduce complexity, and ensure balance sheet stabilization at Cano Health.

在結束演講之前，我想指出最近任命埃拉迪奧·吉爾 (Eladio Gil) 為我們的臨時財務長。 Eladio 在醫療保健行業擁有 30 多年的豐富經驗，最近在 Cano Health 之外擔任領導職務，負責監督財務和會計職能、管理服務組織運營以及其他主要醫療保健公司的其他關鍵財務領導職務。我毫不懷疑他在醫療保健領域的財務專業知識將幫助我們執行策略、降低複雜性並確保 Cano Health 資產負債表的穩定。

With that, I'll turn the call over to Eladio to take you through the financials.

接下來，我會將電話轉給埃拉迪奧，向您介紹財務狀況。

Thank you, Mark. Along with the rest of the leadership team, I am energized by the steps we have taken to date and committed to a path forward that is designed to unlock embedded value of our stakeholders.

謝謝你，馬克。與領導團隊的其他成員一樣，我對我們迄今為止所採取的步驟感到充滿活力，並致力於走一條旨在釋放利益相關者內在價值的前進道路。

Starting with the results of the quarter, total membership increased 6% year over year to approximately 312,000 members in the third quarter of 2023. This represents an increase of approximately 18,000 members from the third quarter of 2022. Total Medicare Advantage membership grew approximately 2% versus the prior year, but declined sequentially, primarily due to divestitures of assets in Texas and Nevada as well as planned termination of poor performing MSO affiliates.

從本季業績開始，2023 年第三季會員總數年增 6%，達到約 312,000 名會員。這意味著會員數量較 2022 年第三季增加了約 18,000 名。Medicare Advantage 會員總數增加了約 2%與前一年相比，但連續下降，主要是由於德克薩斯州和內華達州的資產剝離以及計劃終止業績不佳的MSO 附屬公司。

Membership also declines in ACA and Medicaid, which were impacted by contractual changes and redetermination respectively. Also, as a reminder, this quarter in membership reflects the reduction in membership that resulted from the divestitures of assets in Texas and Nevada of approximately 14,500 total members.

ACA 和醫療補助計劃的會員人數也有所下降，分別受到合約變更和重新確定的影響。另外，提醒一下，本季會員數量的減少反映了德州和內華達州約 14,500 名會員資產剝離所導致的會員數量減少。

Total revenue for the third quarter of 2023 was approximately $788 million, up from approximately $665 million a year ago. Total capitated revenue in the quarter was approximately $770 million, an increase from $626 million in the third quarter of 2022. The Medicare Advantage revenue PMPM was $1,115 in the third quarter of 2023. That's up 9% from the second quarter of 2023. This increase was driven by lower than expected MRA revenue recognized in the second quarter of 2023, which we discussed on our prior earnings call.

2023 年第三季的總營收約為 7.88 億美元，高於一年前的約 6.65 億美元。本季的人均總收入約為7.7 億美元，較2022 年第三季的6.26 億美元有所成長。2023 年第三季的Medicare Advantage 營收PMPM 為1,115 美元。較2023 年第二季成長9%。這一增長這是由於 2023 年第二季確認的 MRA 收入低於預期，我們在先前的財報電話會議上對此進行了討論。

Medicare ACO REACH revenue PMPM was 1,333, up 2% sequentially from the second quarter of 2023. Additional information about our membership mix, our PMPMs in our third-quarter earnings release and third-quarter financial supplement posted on our website.

Medicare ACO REACH 收入 PMPM 為 1,333，比 2023 年第二季度連續增長 2%。有關我們的會員組合、第三季度收益發布中的 PMPM 以及我們網站上發布的第三季度財務補充的更多信息。

Our medical cost ratio or MCR in the third quarter of 2023 was 91.8% compared to 78% in the third quarter of 2022. Excluding ACO REACH, the MCR was approximately 89.7% in the third quarter of 2023 compared to approximately 72% in the third quarter of 2022. This increase was primarily driven by an increase in our Medicare Advantage MCR. Year-over-year increase in the MCR was primarily driven by higher third-party medical costs in the third quarter of 2023. This is due to higher utilization, higher costs associated with supplemental benefits offered by our health plan partners and underperforming MSO affiliates.

我們的醫療成本比率或MCR 在2023 年第三季為91.8%，而2022 年第三季為78%。不包括ACO REACH，2023 年第三季的MCR 約為89.7%，而第三季約為72%. 2022 年第四季。這一成長主要是由我們的 Medicare Advantage MCR 的成長所推動的。 MCR 的同比增長主要是由於2023 年第三季度第三方醫療成本較高。這是由於利用率較高、我們的健康計劃合作夥伴和表現不佳的MSO 附屬機構提供的補充福利相關的成本較高。

The prior-year quarter also included a reduction in third-party medical costs due to claims that were sold to a third party. The third-quarter results reflect improved performance and stability in our Medicare Advantage business. This is due to the operational enhancements and third-party cost initiatives.

去年同期還包括由於出售給第三方的索賠而導致的第三方醫療費用的減少。第三季業績反映了我們的 Medicare Advantage 業務的業績和穩定性的改善。這是由於營運改善和第三方成本措施。

We saw improvement in our Medicare Advantage medical cost ratio in the third quarter of 2023 from the second quarter of 2023. Even though the previous quarter was impacted by unfavorable prior-period items, we began to see a lower inpatient and pharmacy costs on a PMPM basis in our third-quarter trends.

我們看到 2023 年第三季的 Medicare Advantage 醫療成本比率比 2023 年第二季度有所改善。儘管上一季受到前期不利項目的影響，但我們開始看到 PMPM 的住院和藥房成本下降我們第三季度趨勢的基礎。

Meanwhile, utilization of supplemental benefits, particular OTC and flex card, continue across nearly all of our health plan partners. The aggregated cost of these OTC flex cards year to date through September was approximately $104 million, and that was consistent with the utilization experience we saw in the first quarter and second. Direct patient expense in the third quarter of 2023 was 8.3% of our total revenue, below the 9.6% in the third quarter of 2022.

同時，我們幾乎所有的健康計畫合作夥伴都繼續利用補充福利，特別是非處方藥和彈性卡。今年迄今截至 9 月，這些 OTC 靈活卡的總成本約為 1.04 億美元，這與我們在第一季和第二季看到的使用體驗一致。 2023 年第三季的直接病患費用占我們總收入的 8.3%，低於 2022 年第三季的 9.6%。

SG&A expense in the third quarter of 2023 was approximately $81 million, down approximately $31 million compared to the third quarter of 2022. Total SG&A expense as a percent of revenue was approximately 10.3% and reflects our efforts to restructure the operation to streamline and simplify the organization in order to improve the efficiency and reduce cost.

2023 年第三季的SG&A 費用約為8,100 萬美元，比2022 年第三季減少約3,100 萬美元。SG&A 費用總額佔收入的百分比約為10.3%，反映了我們為重組營運以精簡和簡化業務而所做的努力。組織，以提高效率，降低成本。

While this included a reduction of 21% of our workforce, we expect these actions will yield approximately $65 million of annualized cost reductions through the end of 2024. These were difficult but necessary decisions. We rightsized our organization and focused on our core assets.

雖然這包括減少 21% 的員工隊伍，但我們預計到 2024 年底，這些行動將帶來約 6,500 萬美元的年度成本削減。這些是困難但必要的決定。我們對組織進行了精簡，並專注於我們的核心資產。

These are material cost reductions that we have seen significantly improvement in our overall cost structure since the end of 2022. However, we still believe that there's more opportunities to prudently evaluate expenses across the organization, particularly among our third-party vendors to consolidate and align our reduced footprint. And we will continue to evaluate these opportunities and expect our SG&A expenses, excluding stock compensation as a percent of revenue to continue to decline through the end of the quarter.

自2022 年底以來，我們的整體成本結構得到了顯著改善。但是，我們仍然相信，有更多機會審慎評估整個組織的費用，特別是我們的第三方供應商之間的費用，以進行整合和調整我們減少的足跡。我們將繼續評估這些機會，並預計我們的 SG&A 費用（不包括股票薪酬）佔收入的百分比將在本季末繼續下降。

Net loss in the third quarter of 2023 was approximately $492 million compared to the net loss of $112 million in the prior year. This was primarily driven by a non-cash goodwill impairment of $354 million and higher operating loss, primarily due to high third-party medical cost. The non-cash goodwill impairment resulted from a goodwill impairment test performed by a third-party specialist, which was triggered due to a significant decline in our company's stock price in the third quarter. Adjusted EBITDA in the third quarter of 2023 was a negative $66 million compared to a positive $18 million in the prior year.

2023 年第三季的淨虧損約為 4.92 億美元，而前一年的淨虧損為 1.12 億美元。這主要是由於 3.54 億美元的非現金商譽減損以及較高的營運虧損（主要是由於第三方醫療費用高昂）造成的。非現金商譽減損是由第三方專家進行的商譽減損測試產生的，該測試是由於我們公司第三季股價大幅下跌而引發的。 2023 年第三季調整後 EBITDA 為負 6,600 萬美元，而前一年為正 1,800 萬美元。

We will not be providing guidance for the remaining of 2023 as our management team continues to evaluate strategic interest, assess divestitures of non-core assets. These factors are dynamic and timing can vary. However, there are some positive factors to consider as you contemplate the fourth quarter.

我們將不會為 2023 年剩餘時間提供指導，因為我們的管理團隊將繼續評估策略利益、評估非核心資產的剝離。這些因素是動態的，時間可能會有所不同。然而，在考慮第四季度時，有一些積極因素需要考慮。

First, we expect financial performance to continue and improve in the fourth quarter of 2023. The improvement in the fourth quarter are primarily driven by the benefits of third-party medical cost recoveries such as stop loss, Part C rebates, continued improvement in medical utilization and traditional seasonality of lower medical costs in the fourth quarter of each year. Second, as Mark noted, we recently reduced our workforce and expect to realize reduction from these organizational changes this year into the next.

首先，我們預計 2023 年第四季的財務業績將持續並改善。第四季度的改善主要是由第三方醫療成本回收的好處推動的，例如止損、C 部分回扣、醫療利用率的持續改善每年第四季醫療費用較低的傳統季節性。其次，正如馬克指出的那樣，我們最近減少了員工數量，並期望在今年和明年實現這些組織變革的減少。

Finally, following our sale of substantially all of our assets in Texas and Nevada to CenterWell, a Humana subsidiary, and as of November 3, 2023, we contemplated our exit from the California, New Mexico, and Illinois market. Our current medical center footprint stands at 126 as of November 9, 2023. Following the divestitures and market exits, even with a large majority of medical centers located in Florida, we continue to assess our footprint to seek favorable economics in the areas we are located. As we have mentioned on the second quarter call, this includes approximately 23 centers in Florida, predominantly related to our Medicaid operations.

最後，在我們將德州和內華達州的幾乎所有資產出售給 Humana 子公司 CenterWell 後，自 2023 年 11 月 3 日起，我們考慮退出加州、新墨西哥州和伊利諾州市場。截至2023 年11 月9 日，我們目前的醫療中心覆蓋範圍為126 個。在資產剝離和市場退出之後，即使絕大多數醫療中心位於佛羅裡達州，我們仍將繼續評估我們的覆蓋範圍，以在我們所在地區尋求有利的經濟效益。正如我們在第二季電話會議中提到的，這包括佛羅裡達州大約 23 個中心，主要與我們的醫療補助業務相關。

Now let me turn to our cash flow and liquidity. In the third quarter of 2023, cash used in operating activity was approximately $40 million and was primarily due to unfavorable operating results. We ended the third quarter of 2023 with approximately $27 million in unrestricted cash and $33 million of net cash proceeds from the sale of our Texas and Nevada operations. This will enable the company to repay a portion of the revolving line of credit under the Credit Suisse credit arrangement, such that the financial maintenance covenant of this facility was not applicable for testing periods ending September 30, 2023.

現在讓我談談我們的現金流和流動性。 2023年第三季度，經營活動使用的現金約為4,000萬美元，主要是因為經營業績不佳。截至 2023 年第三季末，我們透過出售德州和內華達州業務獲得了約 2,700 萬美元的非限制性現金和 3,300 萬美元的淨現金收益。這將使該公司能夠償還瑞士信貸信貸安排下的部分循環信貸額度，因此該設施的財務維護契約不適用於截至 2023 年 9 月 30 日的測試期。

The company's current liquidity as of November 9, 2023, is approximately $53 million, which consists of unrestricted cash and reflects a full draw of the Credit Suisse revolving line of credit. As we mentioned last quarter, the immediate use of proceeds from potential asset divestitures would be used to repay the revolving line of credit. And then within 18 months, the intent is to use the net proceeds to reinvest back into the business with the balance being used to repay debt.

截至 2023 年 11 月 9 日，該公司目前的流動資金約為 5,300 萬美元，其中包括不受限制的現金，並反映了瑞士信貸循環信貸額度的全額提取。正如我們上季度所提到的，潛在資產剝離的收益將立即用於償還循環信貸額度。然後在 18 個月內，目的是將淨收益重新投資回業務，餘額用於償還債務。

Consistent with our view at the end of the second quarter, we do not expect the company's current liquidity to be sufficient to cover our operating, investing, financing needs over the next 12 months. I would direct you to the disclosures we provided in our third quarter 10-Q filing. And note that we have underway and have an opportunity to move forward with numerous actions to mitigate this risk. They include pursuing interest in a sale of the company for all or substantially all of its assets, finding short- or long-term financing options with our current creditors, executing new patient engagement and care management protocols that will reduce third-party medical cost and putting in place additional cost initiatives to enhance productivity.

與我們在第二季末的觀點一致，我們預計公司目前的流動性不足以滿足我們未來 12 個月的營運、投資和融資需求。我將引導您查看我們在第三季 10-Q 備案文件中提供的揭露資訊。請注意，我們已經開始並有機會採取多項行動來減輕這種風險。其中包括尋求出售公司全部或幾乎全部資產的興趣，與我們目前的債權人尋找短期或長期融資選擇，執行新的患者參與和護理管理協議，以減少第三方醫療成本和實施額外成本舉措以提高生產力。

Cano is committed to meeting the needs of our patients while taking actions designed to strengthen our financial footing and putting us in a position to implement the operational and strategic initiatives required to improve patient health and deliver value for all of our stakeholders. As you've heard today, and as you will see in our filing, we are actively pursuing a range of initiatives, and we will continue to update you on our progress as appropriate.

卡諾致力於滿足患者的需求，同時採取旨在加強我們財務基礎的行動，並使我們能夠實施改善患者健康並為所有利益相關者創造價值所需的營運和戰略舉措。正如您今天所聽到的，以及您將在我們的文件中看到的，我們正在積極採取一系列舉措，我們將繼續酌情向您通報我們的最新進展。

And finally, I'd personally like to thank our finance and accounting team members for their diligence and professionalism during these times. Since I stepped into the interim CFO role, our finance and accounting teams have worked across multiple work streams and as a result are developing stronger partnerships in collaboration with operational leaders across the organization.

最後，我個人要感謝我們的財務和會計團隊成員在這段時間內的勤奮和專業。自從我擔任臨時財務長以來，我們的財務和會計團隊一直在多個工作流程中工作，因此與整個組織的營運領導者合作建立了更牢固的合作夥伴關係。

And with that, I will ask the operator to open the call to your questions.

然後，我將要求接線員打開電話回答您的問題。

Thank you very much. At this time we will now open the line for your questions.(Operator Instructions)

非常感謝。此時我們將開通您的提問專線。（操作員說明）

Jailendra Singh, Truist Securities.

Jailendra Singh，Truist 證券公司。

Hi, guys. This is [Eduardo] on for Jailendra. Thanks for the question. You referenced the lower inpatient pharmacy cost. Others are calling out higher outpatient costs. Just curious if you're seeing anything on that side of the business?

嗨，大家好。這是 Jailendra 的 [Eduardo]。謝謝你的提問。您提到了較低的住院藥局費用。其他人則呼籲提高門診費用。只是好奇您是否看到了這方面的業務？

We've seen the stable amount of utilization in the outpatients that we've seen all year long.

我們看到門診病人的使用量全年都保持穩定。

Okay. And as you think about the $100 million of savings in third-party medical cost reduction in '24, how does the current utilization environment sort of play into that thought process? Is that $100 million expected to ramp throughout the year, or is it evenly spread?

好的。當您想到 24 年第三方醫療成本節省了 1 億美元時，目前的使用環境對此思考過程有何影響？這 1 億美元預計全年增加，還是平均分配？

Yeah, we see that ramping throughout the rest of the year, specifically on the next 12 months. Yes.

是的，我們看到這一數字在今年剩餘時間裡不斷增加，特別是在接下來的 12 個月。是的。

Okay. And just last one here from me. I believe you guys received shares of MSP recovery as part of your receivable settlement earlier in the year, this cannot still hold those shares or have they been sold?

好的。這只是我的最後一篇。我相信你們今年早些時候收到了 MSP 回收股票作為應收帳款結算的一部分，這仍然不能持有這些股票還是已經被出售了？

Yeah, we still do have them.

是的，我們仍然有它們。

Is that a form of liquidity that you can --?

這是一種你可以──的流動性形式嗎？

Yeah. But no, it's not. We shared that they are not registered. And so that encumbers the sale.

是的。但不，事實並非如此。我們分享說他們沒有註冊。因此這阻礙了銷售。

Got you. Okay. Thank you.

明白你了。好的。謝謝。

(Operator Instructions) Seeing no further questions, this will conclude today's conference call. Thank you all for joining us. You may now disconnect.

（操作員指示）由於沒有其他問題，今天的電話會議將結束。感謝大家加入我們。您現在可以斷開連線。