Transcription
Investor &Analyst DayPresentationMarch 4, 2021
DisclaimerThis presentation (“Presentation”) is for informational purposes only to assist interested parties in making their own evaluation with respect to the proposed business combination (the “Business Combination”) between Jaws Acquisition Corporation(“Jaws”) and Cano Health, LLC (“Cano” or the “Company”). The information contained herein does not purport to be all-inclusive and none of Jaws, the Company or Credit Suisse Securities (USA) LLC nor any of their respective affiliates nor any of its ortheir control persons, officers, directors, employees or representatives makes any representation or warranty, express or implied, as to the accuracy, completeness or reliability of the information contained in this Presentation. You should consultyour own counsel and tax and financial advisors as to legal and related matters concerning the matters described herein, and, by accepting this Presentation, you confirm that you are not relying upon the information contained herein to make anydecision. The reader shall not rely upon any statement, representation or warranty made by any other person, firm or corporation (including, without limitation, Credit Suisse Securities (USA) LLC or any of its respective affiliates or control persons,officers, directors and employees) in making its investment or decision to invest in the Company. None of Jaws, the Company or Credit Suisse Securities (USA) LLC, nor any of their respective affiliates nor any of its or their control persons, officers,directors, employees or representatives, shall be liable to the reader for any information set forth herein or any action taken or not taken by any reader, including any investment in shares of Jaws or the Company.Certain information contained in this Presentation relates to or is based on studies, publications, surveys and the Company’s own internal estimates and research. The Company’s audit for 2020 is not yet complete. All such financial information ismanagement’s best estimate and is subject to adjustment upon completion of the audit for 2020. In addition, all of the market data included in this Presentation involves a number of assumptions and limitations, and there can be no guarantee as tothe accuracy or reliability of such assumptions. Finally, while the Company believes its internal research is reliable, such research has not been verified by any independent source. This meeting and any information communicated at this meeting arestrictly confidential and should not be discussed outside your organization.Forward-Looking Statements. Certain statements in this Presentation may be considered forward-looking statements. Forward-looking statements generally relate to future events or Jaws’ or the Company’s future financial or operating performance.These statements include our beliefs regarding our financial position and operating performance, including our expected year ended December 31, 2020 financial results; the growth of the Company’s business and its ability to realize expected results,including with respect to patient membership, revenue and earnings; the viability of its growth strategy, including with respect to entry into new markets, consummation of acquisitions and direct contracting opportunities; trends and developmentsin the healthcare industry, including with respect to U.S. healthcare laws and regulations, health plans and payers and the Company’s relationships with such plans and payers; the impact of the COVID-19 pandemic; the advantages and potential of itshealth management platform and tools; its visibility into future financial performance; its total addressable market; and the timing, structure and use of proceeds of the Business Combination. In some cases, you can identify forward-lookingstatements by terminology such as “may”, “should”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”, “potential” or “continue”, or the negatives of these terms or variations of them or similar terminology. Such forward-lookingstatements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward looking statements. These forward-looking statements are based upon estimatesand assumptions that, while considered reasonable by Jaws and its management, and the Company and its management, as the case may be, are inherently uncertain. New risks and uncertainties may emerge from time to time, and it is not possibleto predict all risks and uncertainties. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, various factors beyond management's control including general economic conditions and otherrisks, uncertainties and factors set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in Jaws’ final prospectus relating to its initial public offering, dated May 13, 2020, and other filings with theSecurities and Exchange Commission (SEC), as well as factors associated with companies, such as the Company, that are engaged in the healthcare industry, including the impact of the COVID-19 pandemic; competition in the healthcare industry;inability to recruit or retain a sufficient number of patients or physicians and other employees; changes to federal and state healthcare laws and regulations; changes to reimbursement rates; overall business and economic conditions affecting thehealthcare industry, including conditions pertaining to health plans and payers; failure to develop new technology and products; and security breaches, loss of data or other disruptions. Nothing in this Presentation should be regarded as arepresentation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-lookingstatements in this Presentation, which speak only as of the date they are made and are qualified in their entirety by reference to the cautionary statements herein. Neither Jaws nor the Company undertakes any duty to update these forward-lookingstatements.This Presentation contains certain financial forecast information of Cano. Such financial forecast information constitutes forward-looking information, includes certain assumptions about acquisition activity for Cano, and is for illustrative purposesonly and should not be relied upon as necessarily being indicative of future results. The assumptions and estimates underlying such financial forecast information are inherently uncertain and are subject to a wide variety of significant business,economic, competitive and other risks and uncertainties. See "Forward-Looking Statements" above. Actual results may differ materially from the results contemplated by the financial forecast information contained in this Presentation, and theinclusion of such information in this Presentation should not be regarded as a representation by any person that the results reflected in such forecasts will be achieved.This Presentation also includes certain projections of non-GAAP financial measures. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, togetherwith some of the excluded information not being ascertainable or accessible, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonableeffort. Consequently, no disclosure of estimated comparable GAAP measures is included and no reconciliation of the forward-looking non-GAAP financial measures is included.2
Disclaimer (Cont’d)Non-GAAP Financial Measures. Some of the financial information and data contained in this Presentation, such as EBITDA and Adjusted EBITDA, has not been prepared in accordance with United States generally accepted accounting principles(“GAAP”). Jaws and Cano believe these non-GAAP measures of financial results provide useful information regarding certain financial and business trends relating to Cano Health's financial condition and results of operations. Cano Health'smanagement uses these non-GAAP measures to compare Cano Health's performance to that of prior periods for trend analyses, for purposes of determining management incentive compensation and for budgeting and planning purposes. Jaws andCano believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in and in comparing Cano Health's financial measures with other similar companies,many of which present similar non-GAAP financial measures to investors. Jaws and Cano do not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitationof these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in Cano Health's financial statements. In addition, they are subject to inherent limitations as they reflect theexercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measuresin connection with GAAP results. You should review Cano Health's audited financial statements, which will be presented in the preliminary proxy statement/prospectus to be filed with the SEC, and not rely on any single financial measure to evaluateCano Health's business.Additional Information. In connection with the proposed Business Combination, Jaws has filed with the SEC a registration statement on Form S-4 containing a preliminary proxy statement/prospectus of Jaws, and after the registration statement isdeclared effective, Jaws will mail a definitive proxy statement/prospectus relating to the proposed Business Combination to its shareholders. This Presentation does not contain all the information that should be considered concerning the proposedBusiness Combination and is not intended to form the basis of any investment decision or any other decision in respect of the Business Combination. Jaws’ shareholders and other interested persons are advised to read, when available, thepreliminary proxy statement/prospectus and the amendments thereto and the definitive proxy statement/prospectus and other documents filed in connection with the proposed Business Combination, as these materials will contain importantinformation about the Company, Jaws and the Business Combination. When available, the definitive proxy statement/prospectus and other relevant materials for the proposed Business Combination will be mailed to shareholders of Jaws as of arecord date to be established for voting on the proposed Business Combination. Shareholders will also be able to obtain copies of the preliminary proxy statement/prospectus, the definitive proxy statement/prospectus and other documents filedwith the SEC, without charge, once available, at the SEC’s website at www.sec.gov, or by directing a request to: Jaws Acquisition Corporation, 1601 Washington Avenue, Suite 800, Miami Beach, Florida, 33139.Participants in the Solicitation. Jaws, the Company and their respective directors and executive officers may be deemed participants in the solicitation of proxies from Jaws’ shareholders with respect to the proposed Business Combination. A list ofthe names of Jaws’ directors and executive officers and a description of their interests in Jaws is contained in Jaws’ final prospectus relating to its initial public offering, dated May 13, 2020, which was filed with the SEC and is available free of charge atthe SEC’s web site at www.sec.gov, or by directing a request to Jaws Acquisition Corporation, 1601 Washington Avenue, Suite 800, Miami Beach, Florida, 33139. Additional information regarding the interests of the participants in the solicitation ofproxies from Jaws’ shareholders with respect to the proposed Business Combination will be contained in the proxy statement/prospectus for the proposed Business Combination when available.No Offer or Solicitation. This communication is for informational purposes only and does not constitute, or form a part of, an offer to sell or the solicitation of an offer to sell or an offer to buy or the solicitation of an offer to buy any securities, andthere shall be no sale of securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except bymeans of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.Jaws Acquisition Corp. has retained KPMG among other third-party advisors, to conduct a quality of earnings analysis and perform due diligence on internal controls, IT, IPO readiness and tax. Additionally, Kirkland & Ellis have been retained for legaldue diligence. Both of these work-streams are ongoing.3
Jaws Investment Thesis Cano Health’s Mission: Provide high quality healthcare to underserved seniors– Strongly resonates with Jaws founders Large and Growing Market: 800 billion Medicare market growing 8% annually– Shift to capitated Medicare30% potential annual growth in segment(1) Exceptional Management: Highly experienced, proven team led by Dr. MarlowHernandez Proprietary population health management platform combines– Clinical excellence: Lower mortality, fewer hospital stays and ER visits– Operational excellence: Track record of successful de novo growth and smoothacquisition integration Superior high growth and scalable business model accelerated by Humanarelationship Going public further accelerates growth and captures first-mover advantage forcapitated care in new geographiesSource: CMS, Kaiser Family Foundation, L.E.K.(1)Based on HCPLAN projections as of 20204
Cano Health is Differentiated vs. Primary Care PeersEnterprise Value 6.8 billion(1) 13.2 billion 7.1 billionCapitated Payment Model Operating ModelFlexible (Medical center/Affiliate)Medical center onlyMedical center onlyGrowth StrategyDe Novo, Acquisition & AffiliateDe NovoDe NovoMarkets151613Owned Medical Centers7180107112,82197,000549,000(75% at-risk)(66% at-risk)(0% at-risk)2021E Revenue 1,400- 1,500 million 1,296 million(3) 465- 485 million(4)‘17-’20E Revenue CAGR86%67%29%MA Medical Center Medical ClaimsExpense Ratio66%(5)72%(6)N/ATotal MA Medical Claims ExpenseRatio70%(7)72%(6)N/A2021E EBITDA 90- 100 million( 95) million(3)( 20)- 0 million(4)Capitated Members(2)Source:(1)(2)(3)(4)(5)Company Websites, Company Filings, FactSet as of 3/2/2021Implied based on JWS share price as of 3/2/2021Based on 1/1/2021 membership for Cano and 12/31/21 membership for Oak Street and One MedicalBased on Wall Street research consensus from FactSet as of 3/2/2021Based on 2021E company guidanceRepresents Cano Health’s ratio of third-party medical expenses to capitated revenue during 2020 for Medicare(6)(7)Advantage members at Cano Health’s owned medical centers (comparable to Oak Street)Represents Oak Street’s ratio of medical claims expenses to capitated revenue for the 9/30/20 LTM periodRatio of third-party MA medical expenses to total capitated MA Medical center and Affiliate revenue during2020E. Excludes FFS, pharmacy and other revenue with no associated third-party medical expenses. CanoHealth's total third-party medical expenses include payments to its affiliated primary care physicians,overstating the Medical Claims Expense Ratio relative to Oak Street (no Affiliate model)5
Today’s PresentersBarryDr. MarlowStevenDr. RichardDr. illaFounder andChairmanFounder andChief ExecutiveOfficerChief FinancialOfficerChief ClinicalOfficerChief StrategyOfficerPresident of CanoMedical CentersJaws Acquisition Corp.Cano HealthCano HealthCano HealthCano HealthCano Health6
AgendaTopicPresentersTimeIntroduction &Company Overview Dr. Marlow Hernandez, Founder and Chief Executive Officer, Cano Health10:10am – 10:55amCOVID-19 ClinicalOutcomes Dr. Richard Aguilar, Chief Clinical Officer, Cano Health10:55am – 11:10amPatient Journey andCanoPanorama Gina Portilla, President of Cano Medical Centers, Cano Health11:10am – 11:40amGrowth Strategy Dr. John McGoohan, Chief Strategy Officer, Cano Health11:40am – 12:10pmBreakFinancial Overview12:10pm – 12:30pm Steven Haft, Chief Financial Officer, Cano HealthDr. Marlow Hernandez, Founder and Chief Executive Officer, Cano Health12:30pm – 1:00pm7
Introductionand CompanyOverviewDr. Marlow HernandezFounder and Chief Executive Officer, Cano Health
The Cano Health Value-BasedCare Delivery Platform Primary care‐centric, technologypowered healthcare delivery andpopulation health platform Provide capitated care for 113,000 members across 15markets through a network of 720 primary care providers(1) 1.4– 1.5bn2021E Revenue 90– 100mm2021E Adj. EBITDA86% Utilize CanoPanorama technologyplatform to drive superior clinicalresults at lower cost(1)(2)(3)(4)Historical revenue CAGR(2)#1Quality ranking from multipleMedicare & Medicaid Plans(3)59%Reduction in emergencyroom visits(4)Members as of 1/1/2021 including Cano Health’s medical center and affiliatemodel; market and provider stats as of 12/31/2020Based on 2017A – 2020E revenue CAGRBased on Humana and CarePlus HEDIS reportsBased on Cano Health’s 445 ER visits per thousand patients in the Medical centermodel for full year 2020 as compared to the Medicare benchmark of 1,0919
Cano Health is a Mission Driven CompanyCano Focuses on the Healthcare Needs of Underserved SeniorsWith Mostly First-Generation Americans, Cano Understands TheCommunities We Serve 50%80% Members are dual eligible for Medicare and Medicaid(1)Cano Health associates are from minority groups80%85% Members are from minority groups(1)(2)Cano Health associates are bilingual(1)(2)Based on medical center model managed care members as of 12/1/2020Medical center model Medicare and Medicaid members based on available self-reported race/ethnicity10
Evolving Care Through The Cano EdgeCano Health is Evolving Care FromTraditional Analog Modern Digital TransactionalSpecialist drivenTreatment silosNational Care Platform Value-basedPrimary care / data-drivenCoordinated and holistic With A Flexible Growth ModelQUALITYACCESSBUILDWELLNESSBUYMANAGEThe Cano Edge fuels explosive growthwithin a culture of compliance11
National Care Platform for Value Based Care QUALITYDisease ManagementPreventive ScreeningsCare CoordinationACCESSTransportation24/7 Urgency LineCano@Home and TelehealthWELLNESSClassesPhysiotherapyCano Life12
With A Flexible Growth ModelBUILDDe Novo CentersExpand Existing CentersBUYEnter new markets through selectacquisitions of physician practicesMANAGEExisting Affiliates: Pipeline forScale13
Capital Allocation Criteria Across Multi-Pronged Growth StrategyGrowth StrategyDe NovosAffiliatesAcquisitions Purpose-built medical centers to leverage demand in existing markets and support growth in new markets Proven ability for full-service medical centers to drive superior clinical and financial outcomes Capital efficient means to generate scale and density in market Provides inherent clinical capacity, with tremendous amount of operational data on affiliate partners and members Target capitated, senior-focused primary care gro
Investor & Analyst Day Presentation March 4, 2021. Disclaimer This presentation ("Presentation")is for informational purposes only to assist interested parties in making their own evaluation with respect to the proposed business combination (the " usinessombination") between Jaws Acquisition Corporation
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