Zach Silverberg

Zach Silverberg inquired about Ardent's underlying HICS assumptions for 2026, specifically expected volume declines and the percentage shift to other coverage versus uninsured. He also asked for details on the $15 million increase in the IMPACT program savings, including how they were identified and bucketed.

Answer

Marty Bonick, President and Chief Executive Officer, explained that Ardent's markets saw initial HICS enrollment increases, but they are planning for a 20% decline post-grace period, with 10-15% moving to employer-sponsored coverage and the rest to self-pay, assuming 30% lower utilization in that cohort. Alfred Lumsdaine, Chief Financial Officer, added that the vast majority of the $15 million increment in IMPACT program savings is in the Salaries, Wages, and Benefits (SWB) line.

Zach Silverberg asked about the company's tavern strategy, its ability to source new or high-end customers, the return profile of taverns, and an update on the timing and progress of Durango's cannibalization backfill.

Answer

Scott Kreeger, President, explained the tavern strategy as a micro-market approach to penetrate neighborhoods with high-net-worth and growth, targeting a younger, male, sports-bettor demographic. He noted they have 8 taverns, with 3 more opening in H1 and the remainder in H2 this year, aiming for accretive investments. He stated that the company feels positive about the cannibalization and backfill from Durango, with core properties growing at low single digits last quarter, indicating they are on track to hit targets.