Good day, and thank you for standing by. Welcome to the Armstrong World Industries, Inc. fourth quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Theresa Womble, Vice President of Investor Relations. Thank you. Welcome everyone to our call this morning. On today's call, Vic Grizzle, our CEO, and Chris Calzaretta, our CFO, will discuss Armstrong World Industries fourth quarter 2022 results and our outlook for 2023. To accompany these remarks, we have provided a presentation that is available on the IR section of the Armstrong World Industries website. Our discussion of operating and financial performance will include non-GAAP financial measures within the meaning of SEC's Regulation G. A reconciliation of these measures with the most directly comparable GAAP measure is included in the earnings press release and in the appendix of the presentation. During this call, we will be making forward-looking statements that represent the view we have of our financial and operational performance as of today's date, February 21st, 2023. These statements involve risks and uncertainties that may differ materially from those expected or implied. We provide a detailed discussion of our risks and uncertainties in our SEC filings, including the 10-K that was also filed this morning. We undertake no obligation to update any forward-looking statement beyond what is required by applicable securities law. With that, I will now turn the call over to Vic. Thank you, Theresa. Good morning. Thank you all for joining our call today. Today, we reported solid fourth quarter and full year results in what continues to be a challenging environment for many of our end markets. Fourth quarter net sales increased 8% and adjusted EBITDA rose 5%. For the full year, net sales increased 11% from 2021 results and EBITDA improved 4%, driven by strong AUV growth in Mineral Fiber, strong architectural specialty sales and earnings growth, as well as solid productivity gains in our Mineral Fiber plants. These results were at the low end of our expectations heading into the fourth quarter, primarily due to the lower-than-expected WAVE equity earnings on a continuation of inventory corrections on grid products. All in all, I'm proud of the work our teams did to close out what was a challenging year on many levels. Taking a closer look at our segments, let me begin with our architectural specialty segment, where we achieved 18% sales growth in the fourth quarter and 20% for the full year. This marks the ninth consecutive quarter of double-digit year-over-year sales growth in this specialty segment. These outstanding results were driven by strong, broad-based demand for both our standard and custom products. While demand for these products spans several verticals, we saw particular strength in transportation and higher education projects. We've delivered strong growth in the architectural specialty segment by leveraging the new product platforms that we've been acquiring over the past several years and the design capabilities we've built over the last decade. This has allowed us to create the scale and reach of Armstrong to further penetrate the specialty ceiling and wall category, participating in more spaces in commercial buildings and importantly, in larger, more complex jobs. One of the projects and true highlights of the quarter that best illustrates our scale and capability as a competitive advantage was the completion of the Kansas City International Airport project. As you can imagine, airport projects are large, complex, and contain many design challenges. Slated to open next week, the Kansas City Airport is likely to generate tremendous interest from the design community for the unique look and feel our products have helped achieve there. As you will notice when you see the work there, the design, particularly with our wood products, is simply inspiring. It's also a project that tapped our broad and industry-leading portfolio utilizing multiple Armstrong products, from lots of wood to metal, felt, and Mineral Fiber products. This project also demanded new technology to meet heightened product safety standards that I'm confident few companies would have been able to meet. Again, a further testament to the innovation and material sciences capabilities we have here at Armstrong. It's the combination of all these factors and capabilities, along with the passion of our team, that is enabling our continued success in this growing category. Further to this point, we were just awarded the new terminal at the Pittsburgh Airport, which is our largest project ever in the Americas. It will involve multiple products from our portfolio, including custom wood look metal, METALWORKS panels, our Móz column covers, and Mineral Fiber and WAVE grid products. An incredible win, and again, a confirmation of the competitive advantage we've built with our unique size, scale, and capability. Turning to the Mineral Fiber segment, we generated solid top-line growth driven by a second year of robust AUV growth at double-digit levels. This was driven primarily by like-for-like pricing, and secondarily, positive product mix, with the fourth quarter achieving the strongest mix contribution of the year. Our AUV execution allowed us to successfully manage inflationary pressures on raw materials and natural gas. As we've said before, pricing is an affirmation of the value you create for customers, and we never take this for granted and are committed to being the best in class in quality, innovation, and speed. All helping to differentiate us in the market and to support our price achievement. Our Mineral Fiber plants also continue to execute and run well, delivering strong productivity, which helped offset inflationary pressures. Our production teams continue to deploy lean manufacturing practices and execute a variety of efficiency initiatives every year, while still maintaining excellent quality and service levels. We continue to innovate and introduce new products that help drive consistent product mix benefits. I continue to be impressed with how our plant teams adapt and deliver results in all market conditions. As we've reported, the most significant headwind throughout the year was lower than expected Mineral Fiber volumes and soft WAVE equity earnings tied to weaker volumes. The weakness in Mineral Fiber volumes was driven primarily by inventory corrections early in the year, and then weakening market demand in the second half of the year. WAVE earnings were challenged throughout the year by inventory corrections as steel prices began to turn, exacerbated by the deceleration in market demand that began in the third quarter and continued into the fourth quarter. We were certainly disappointed in how market demand shaped up in 2022 after having a strong outlook to begin the year. You'll remember we came into the year expecting a positive market tailwind, driving low to mid-single- digit Mineral Fiber volumes. That was based on strong Dodge bidding activity, increasing return to office activity, and improvements in supply chains against a positive macroeconomic backdrop, with 2022 GDP forecast at 3.9% at the beginning in January. Conditions for commercial construction deteriorated from the repercussions of the war in Ukraine, including rapid inflation, leading to rising interest rates and eventually economic uncertainty. Macroeconomic growth outlooks also weakened throughout the year, with real GDP in the fourth quarter at the weakest level of the year. Consequently, demand in our key markets decelerated and ultimately turned negative toward the end of the year. This resulted in weaker industry indicators, with Dodge bidding activity turning negative and ABI remaining below 50 for the last three months. Against this softer backdrop, there are areas of notable strength within our key verticals that are worth noting. We're seeing stronger demand from the healthcare and life sciences and education, both K through 12 and the higher ed, as well as transportation. Data centers have also been a bright spot, and that is a positive for our higher AUV products, both on the Mineral Fiber tile side and the grid product side. Office activity, however, continues to lag and back to office momentum seems to have stalled in some areas. We believe this is negatively impacting tenant improvement work and contributing to the headwind in Mineral Fiber sales volumes. We are expecting market weakness to continue in 2023, particularly given the current economic outlook and additional interest rate hikes as the Fed tries to further curb inflation. We expect the first half of 2023 activity to be at fourth quarter 2022 levels, with further weakness in the back half of 2023, and to result in full year Mineral Fiber sales volume down mid-single digits. Architectural specialty segment activity is also likely to experience a reduction in activity, however, to a lesser extent as compared to Mineral Fiber renovation activity. That said, new construction activity was positive in 2022, and when lagged for when a ceiling will be required, could provide partially offsetting positive demand in the second half of 2023 and into 2024. I'll pause here for a moment and turn it over to Chris to provide some more details on our financials. Chris? Thanks, Vic. Good morning to everyone on the call. As I review our fourth quarter and full year 2022 results, as well as our 2023 outlook, please keep in mind that I'll be referring to the slides available on our website, and slide three details our basis of presentation. On slide six, we begin with our consolidated fourth quarter results. As Vic mentioned, net sales of $305 million were up 8% versus the prior year, driven by growth in both segments. Adjusted EBITDA increased 5% and Adjusted EBITDA margin contracted 90 basis points. Adjusted diluted earnings per share decreased by $0.01 - $1.08 or 1% below prior year, primarily due to an increase in the effective tax rate, partially offset by a reduced share count from the prior year. Slide six also shows our fourth quarter adjusted EBITDA bridge versus the prior year. The 5% increase in adjusted EBITDA was driven primarily by favorable AUV performance, which was partially offset by increased levels of inflation, a decrease in volumes, and lower equity earnings from our WAVE joint venture. Inflation headwinds remain, although natural gas prices softened in the fourth quarter. Raw material inflation remained the largest component of input cost inflation. Negative Mineral Fiber volumes were partially offset by another quarter of solid contributions from the AS segment. Mineral fiber volume declines were driven by weaker market demand in the fourth quarter, in addition to lapping a strong prior year period in which some customers were buying ahead of a January 2022 price increase. WAVE equity earnings were down 19% versus prior year and were negatively impacted by lower volumes as customer inventory corrections continued into the fourth quarter, partially offset by favorable AUV. On slide seven, we summarize our Mineral Fiber segment results. Fourth quarter net sales increased 4% year-over-year, driven by favorable AUV of 15%, which was partially offset by lower volumes of 10%. On AUV, we delivered favorable like for like pricing in the quarter, along with positive channel and product mix. Channel mix was positive as a result of lower relative sales to home center customers versus prior year. Product mix benefited from stronger sales of our higher-end SWAT products or smooth white acoustical tile. On volume, a large portion of the 10% decline was driven by the difficult comparison to the prior year quarter. As we've discussed in prior calls, the fourth quarter of 2021 included the buy ahead activity in advance of our January 2022 price increase. The remainder of the volume decline was driven by weakening market demand, primarily in the home center customer channel. As a reminder, home center volumes increased in the third quarter and drove negative channel mix, and lumpiness in this particular sales channel is not uncommon. With strong price execution and moderating inflation, our price over inflation dollar realization sequentially improved over Q3. Mineral Fiber EBITDA in the fourth quarter grew 2% as a result of the strong AUV performance and benefits from manufacturing productivity. In the quarter, our operations teams over-delivered manufacturing productivity with solid contributions across the plant network. We also saw a benefit from lower SG&A on prudent cost control as we finished the year. These positives were partially offset by weaker volumes, continued input cost inflation, and lower earnings from our WAVE joint venture. The Mineral Fiber EBITDA margin compression was more than explained by weaker WAVE earnings, partially offset by lower SG&A expense. As I mentioned, we were happy to see moderating energy inflation driven by natural gas pricing, but several of our key raw materials continue to see cost pressure, and we expect this to continue into 2023. On slide eight, we discuss our Architectural Specialties or AS segment results. In the fourth quarter, we completed a tuck-in acquisition of GC Products, which is an attractive complement to our existing plaster form architectural castings business and expands our geographic reach in this product area. AS continued to perform well in the fourth quarter and delivered sales growth of 18% versus prior year. This marks the segment's ninth consecutive quarter of double-digit year-over-year sales growth, with eight out of the last nine delivering over 15% growth. By building the broadest product portfolio, enabling network efficiencies through AWI scale and channels to grow our product categories, we're further penetrating the market and expanding margins. In fact, the AS segment delivered their fifth consecutive quarter of EBITDA margin expansion, with Q4 expanding 60 basis points versus prior year. Driving the margin expansion was the fall- through from the top line, which was partially offset by increased manufacturing costs in line with higher sales. SG&A expenses were slightly higher than the prior year due to continued investments in support of increased sales growth. Slide nine shows our full year consolidated company metrics. We drove net sales growth of 11%, while the EBITDA result of 4% growth was pressured by inflation, an increase in SG&A, and lower WAVE equity earnings. The majority of the contraction in EBITDA margin was driven by the negative WAVE result. Adjusted diluted earnings per share increased 9% and adjusted free cash flow increased by 16%. Looking at the full year EBITDA bridge, favorable AUV and positive volumes were partially offset by higher inflation, increased SG&A expenses primarily related to the investments and company-wide growth initiatives, including AS sales growth and lower WAVE equity earnings. Slide 10 shows full year adjusted free cash flow performance versus the prior year. The 16% increase in adjusted free cash flow resulted primarily from an increase in WAVE dividends, which includes a $25 million special dividend. The WAVE board of directors periodically reviews the capital structure and net debt leverage of the joint venture and returns excess cash to the parent companies. In addition to the WAVE special dividend, higher cash earnings and lower spend on capital expenditures provided free cash flow benefit. That benefit was partially offset by timing-related net negative working capital impacts. Cash interest was a headwind versus the prior year due to the rising interest rate environment throughout 2022. Returning cash to our shareholders through share repurchases and dividends is one of the three pillars of our capital allocation strategy, and we continue to deliver on this in 2022. In the fourth quarter, we repurchased $20 million of shares, which brings our full year share repurchase total to $165 million. Since the inception of the share repurchase program in 2016, we have repurchased 12.4 million shares or more than 20% of outstanding shares at the time of the authorization, for a total of about $851 million. When including our dividend payments, we have returned over $1 billion to shareholders through both share repurchases and dividends since 2016. We increased our quarterly cash dividend by 10% in the fourth quarter. Slide 11 shows our full year 2023 guidance. We are focusing on delivering sales and earnings growth in a challenging macroeconomic environment. Our guidance assumes a weaker market in 2023, with pressure most pronounced in the back half of the year. We expect consolidated net sales growth in the range of 2%-6% and adjusted EBITDA growth in the range of 3%-9%. We expect challenging macroeconomic conditions to weigh on market demand, partially offset by positive contributions from our initiatives, netting a mid-single-digit decline in Mineral Fiber volumes year-over-year. We expect above average Mineral Fiber AUV growth with historical fall through rates. We expect positive WAVE equity earnings versus the prior year rebounding from 2022 results. Additionally, as part of our normal operating rhythm of assessing investments and their returns, we have decided to pull back investment related to one of our digital growth initiatives. As a result of this decision, we have initiated a headcount reduction and restructuring plan that Vic will explain in more detail shortly. These actions are expected to deliver annual SG&A savings of about $6 million, primarily realized in the second half of the year. To close out the discussion on our 2023 guidance, adjusted EPS is expected to grow in the range of 1%-7%, and adjusted free cash flow is expected to grow in the 4%-13% range, driven by higher cash earnings and working capital benefits. Additional assumptions are available in the appendix to this presentation. While we don't provide quarterly guidance, we expect first quarter Mineral Fiber input cost inflation to be temporarily impacted by a $4 million-$5 million headwind related to inventory valuation timing. This will weigh on Mineral Fiber EBITDA margins in the first quarter, but will be less impactful throughout the rest of the year. Now I'll turn it back to Vic for some additional thoughts before we take your questions. Thanks, Chris. As Chris referenced, we're planning for further economic weakening in 2023 and have taken a thoughtful look at our organization, our growth investments, and all the levers in our control to ensure we deliver consistent profitable growth. As a result, in January, we trimmed our workforce in an effort to size our organization to the market conditions we expect to see in 2023. This has also included stopping an investment in one of our digital growth initiatives related to sales lead optimization. While we'll continue to use the tool our team has built thus far, we will not be investing to further expand and enhance it at this time. We also took the opportunity to streamline our sales management organization for efficiency and to further manage Mineral Fiber and Architectural Specialties sales effectively as one face to the customer. This is an important point of leverage that delivers the competitive advantage of Armstrong's size, scale, and breadth of capability. We are continuing to invest in Kanopi by Armstrong, PROJECTWORKS, and Healthy Spaces as each of these initiatives are meeting their investment case and unlocking new sources of demand. With the gains these initiatives are providing, we are proving we can outperform market demand and further strengthen our competitive position. In our Healthy Spaces initiative, specifically, the Mineral Fiber Healthy Spaces portfolio grew double digits in 2022 while most Mineral Fiber products declined. This is because the need for cleanable, antimicrobial products continues to grow, and Armstrong's portfolio of products is unmatched in the industry. In addition, our STRATACLEAN IQ product line that was launched in the second half of 2022 is gaining traction in the market and winning awards for product innovation Just recently, we advanced our commitment to leading the movement toward Healthy Spaces by signing the White House and EPA's Clean Air in Buildings Challenge. On the digital front, Kanopi by Armstrong delivered quarter-on-quarter growth throughout 2022. Our intent from the beginning has been to create new sales opportunities from latent demand in the large installed base of Mineral Fiber ceilings. From our survey work, we are seeing validation of our proof points. Surveys of customers in 2022 indicated that nearly 50% of customers buying on Kanopi today have never purchased an Armstrong product before using the Kanopi website. A third of the customers were renovating ceilings and buildings that are less than 10 years old. Now, that's well above the national average, again, validating that Kanopi is providing something missing in the marketplace and creating new demand. We are encouraged with 2022 results, and we expect 2023 to be a continuation of this strong growth trend. Importantly, we expect Kanopi to contribute positive EBITDA growth for the full year. PROJECTWORKS, our automated design services, also made important progress in 2022 by expanding the number of AWI products on its design platform and increasing its speed in turning project designs into drawing packages that simplify ordering and installation. Throughout the year, the PROJECTWORKS team more than doubled the number of projects and shortened the turnaround time to less than three days. The time savings, along with an accurate bill of goods and installation instructions that eliminate waste on the job site, are key value propositions to our customers that strengthen our relationships with contractors and the architect and design community. Our growth investments have also included increasing the selling and manufacturing capabilities in our rapidly growing Architectural Specialties business. These investments have supported the strong growth we've delivered in 2022 and sets us up for solid growth in 2023, despite a weaker market. The power of focus we have in the ceilings and specialty walls sector is unlike existing players in this category. With the key relationships we've developed across the value chain here with designers and architects to the general contractors to distributors, we are best positioned to win both small and large statement spaces. Our unique ability to invest in these initiatives is enabled by the overall resilience of our free cash flow generation, supported by the attractive fundamentals of the Mineral Fiber segment. We expect to continue delivering solid free cash flow growth in 2023. Beyond this, as Chris said, we'll continue our commitment to return value to shareholders through our cash dividends and our share repurchases. Finally, I would like to say thank you to the entire Armstrong team for their tireless efforts in what turned out to be a more challenging year in 2022. I remain confident that we have the right people in the right places to lead our company forward in 2023 and beyond. With our strong team, our focus on profitable growth, and our unique position in an attractive industry category, we have the ability to consistently deliver results through all parts of the economic cycle. With that, now we'll be happy to take your questions as I hand it back to the operator. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question comes from Susan Maklari with Goldman Sachs. You may proceed. Thank you. Good morning, everyone. Good morning, Susan. My first- Good morning. My first question is, you know, thinking about the pricing in the Mineral Fiber segment, you've obviously seen a lot of success there over the last couple years actually in this inflationary environment. As you think about 2023, can you talk a bit of the ability to continue to get incremental pricing through? And how much of the gains you're expecting for this year reflect carryover versus potentially moving back to a more normalized cadence of pricing? Yeah, Susan, the backdrop to that clearly is, as Chris mentioned, a continuation of the inflationary environment. You know, we expect a tail on this inflationary curve given, and a lot of companies are probably in this situation where they were protected under contracts, in 2022, and as those contracts roll over, there's some catch-up in some of the inflation, or in those contracts in terms of inflation. That's exactly, I think, the condition we're gonna be in. We're gonna see some, although some rolling over of certain inflationary items in both our raw materials and energy, we are gonna see some additional inflation from contracts that have rolled over and are now repriced. I think, again, a lot of companies are in that, so we're gonna be in an inflationary environment where, to your question, the incremental pricing is gonna be really important for us. With that said, I hope for us, and our plan is at this point to get back to a regular cadence on our price increases. One in February and then one in August, get back to our cadence of two price increases a year. We've already priced our first one at 8%, and we're expecting to get good realization, really our normal realization on that. With the carryover that you're referencing, I think we're gonna have some, again, historically normal carryover rates going into the year that's gonna support foundationally the price realization we need to have to expand margins in 2023. That's our plan. You can see it in our outlook that the incremental pricing with the carryover, the gains from a more regular price increase cadence to deliver margin expansion in the fall through. Okay. That's very helpful. Thinking a bit about the office end market, you know, clearly you talked about some of the weakness that you're seeing there. That's been an area that's been a little slower to come back relative to some of the other sectors that you cover in there. How do you think about that space in the broader sense? What's gonna get that to finally sort of kick in there, where we can really see some of those investments coming through? How do you think about that in relation to your ability to really grow volumes in the business over time? Yeah, I think the again, the office segment is about 30% of our business, right? It's not the majority of our business, but it certainly is impactful in the Mineral Fiber business, as you're referencing. Susan, you know, I think we were well on our way, as I mentioned in my prepared remarks, with the back to office activity. I think people were getting back to a normal cadence around their maintenance and their tenant improvement work. I think the uncertainty in the back half of the year around the economy, of course, I know companies are thinking about their profitability and pulling back on expenses. These discretionary projects and offices clearly got pulled back. To your question about what has to happen, I think the uncertainty needs to get cleared up, and then I think we'll get back to that office segment healing itself as people get back into the offices. Again, a lot of this renovation work is sitting there. It still needs to get done. It hasn't gone away. I think for the funds to find those projects, I think we're gonna have to have some of this uncertainty clear up, and I think that's what's gonna be required for us to get back onto a growth curve in the office segment in particular. Okay. Thanks for all the color, and good luck. Yeah. Thank you, Susan. Thank you. Our next question comes from Keith Hughes with Truist. You may proceed. Thank you. On the guidance for the year, you've given kind of a framework for it, but is it fair to assume that you're expecting every one of your end user markets to contract or, in volume, or is there some kind of standout positives? Can you give me some sort of idea of what the flavor of what's going on? Yeah, I think broadly speaking, Keith, we're expecting a contraction in activity across all of the verticals. I think there's a couple of standouts. Let me just... I mean, transportation, I mentioned the Pittsburgh Airport project, but there's several other airport projects that we're winning and I would expect us to outperform in the transportation segment. That's gonna show up mostly in the Architectural Specialties because the majority of those products tend to be on that side of the business. With that said, it does pull through Mineral Fiber volume. That's a bit of a standout. When I look at the Dodge bidding activity, and I'm tracking that, the one standout that continues to be positive with all the other verticals being negative, is education. That stands to reason when you think about the funding behind education right now, the funding from the CARES Act, the majority of that still hasn't been spent. That would make sense that as some of that starts to come through, we'll see more project activity there. I think generally speaking, most of the verticals we're expecting, softer, market conditions. There was a comment earlier about the second half of the year, I guess, being weaker. Is that a volume comment or I just kinda missed what you were going towards with that? That's a volume. Re-referencing to market activity and its impact on volumes, Keith. Again, I think as I've been around, Keith, and talking to our customers, I think they have visibility in the first half, and they kinda see it as a run rate, well, similar to the fourth quarter run rates. The back half has got the most uncertainty in it right now. I think people are still trying to figure out what's gonna get spent and what kind of activity will we have based on, you know, the macroeconomic conditions and what the Fed does and so forth. Okay. Thank you. Thank you. Thank you. Our next question comes from Garik Shmois with Loop Capital. You may proceed. Thanks. Just wondering if you could speak to the cadence of project delays as opposed to outright cancellations. I think last quarter you were seeing delays, you weren't seeing cancellations. I was wondering if maybe the proportion there has changed a bit over the last 90 days. Yeah. We continue to track this, Garik, and I would say that for the most part, these continue to be delays. You know, you'll hear one or two projects, especially in the tech sector, right, we'll hear what sounds like a cancellation, even if it's clothed in delayed language, it feels like a cancellation. Again, that's isolated to a couple projects in the tech sector. For the most part, most of these projects continue to be in delayed status. I think the important part to consider that against the context of what doesn't get started or what hasn't gotten started in terms of projects based on supply chain issues or labor issues, that is creating a bit of a void in the pipeline. I think what we're also trying to keep an eye on that, as that kind of works its way through the system. Thank you for that. I wanna follow up on inventories. You talked about destocking, in WAVE. Are you seeing any destocking, in any other channels? What we saw Again, it's all in the same channel, right? Just to remind everybody, our grid products that are made by our WAVE joint venture and our tile products are sold as a package through the same channel. In the other channels, like the home centers, if you will, and the like, we've not seen the same destocking. It's kind of the normal pattern of a build up in inventory and a drawdown in inventory. We've seen that similar behavior, but it's not unique behavior. I think what we've seen in the grid side of the business or the steel products in particular, we've had unprecedented levels of steel inflation in back-to-back years that drove inventory levels as everybody was buying ahead of these price increases. Reminder, we had nine price increases in 2021. There was lots of steel companies or steel products raising prices as rapidly as they could, and that drove inventory levels higher than most other products, from what we can see in our channels. Again, it was that unprecedented level of inflation and supply chain disruptions that drove an extraordinary condition around this destocking. It's something that we were, you know, really following and chasing down all year. Most of that seems to be behind us. In talking with our distributors and as steel prices start to stabilize here in the first quarter, have stabilized, I would say, in the first quarter, we believe the majority and the extent of that destocking is behind us. Understood. Thank you very much. Thank you. Thank you. Our next question comes from Phil ip Ng with Jefferies. You may proceed. Hey, guys. Vic, I was a little confused on your comment- Hey, Phil. Hey, how you doing? I was a little confused on your comments on your outlook on volumes. I thought you were saying 1Q was tracking kinda the fourth quarter. I mean, sorry, the first half of 2023 is gonna be tracking similar to fourth quarter levels, which was down about 10%, I think. You're also saying maybe the back half could be weaker or you have less visibility. Kinda help us think through the volume progression through the year. Just wanna make sure we understand the moving pieces. Yeah, that comparison is really, Phil, is really market to market comparison. If you look at the -10% in the fourth quarter, there's a lot of noise in that, right? With that base period comparison from where we had a January price increase that drove a lot more volume in the fourth quarter last year. A big part of that -10%, as we've been talking about, is a base period comparison. When you look at the apples to apples comparison of what we saw in the market, I think that general market activity is what we're commenting that we expect to see in the first half of the year. Is that like- Does that help? down mid-single digits or. I just wanna make sure we get the number right. You're closer to down mid, is it down high? I just wanna make sure we get the first half right versus the back half. Well, I think the way to think about this is for our full year, we're outlooking for the full year down mid-single digits. Our first half is probably not as much as down five as we outlook further slowdown in the back half of the year to get to that average of down mid-single digits. Okay, that's better. Maybe just to add on a little bit, Phil, just for maybe a little more there. On the first quarter, we expect positive volume as we're lapping the prior year period, which was softer. The progression of volume through the rest of the year kind of decelerates Q2 to Q4. As Vic mentioned, really a more pronounced softness in the back half of the year. Okay. That makes perfect sense. On price costs, how much do you think is carryover in terms of your, you know, 8% AUV guide for 2023? You know, on the inflation side, appreciating you're seeing some relief on nat gas perhaps, but how should we think about inflation and for 2023 and that price cost outlook for you guys this year? Phil, it's Chris. On the inflation, I'd be thinking about overall input cost inflation in the mid-single digits range. You mentioned nat gas, you know, a little bit of deflationary environment there. You know, as Vic mentioned earlier on the raw side, that's really where we're gonna see a lot of the continued inflationary pressure with some of those input costs kind of rolling by way of contracts that are picking up here in 2023 and have higher levels of inflation. That's kinda how I'd paint the inflationary landscape for 2023, mid-single digits. In terms of price, you know, again, a little bit of carryover here from 2022, and then getting back to, as Vic mentioned, our normal cadence of price increases, going forward. Chris, is the pricing you guys are guiding to AUV, is that more skewed towards carryover, or is it pretty evenly split between incremental price versus carryover? Yeah, I'd be thinking more in terms of that AUV split overall, you know, absent the carryover, more weighted towards price in that AUV number. Okay. Thank you. Appreciate it. Yep. Sure. Thank you. Our next question comes from Adam Baumgarten with Zelman & Associates. You may proceed. Hey, good morning, everyone. just back on the first half commentary, and you talked about activity level similar to 4Q. Should we sort of be thinking about quarterly earnings in the first couple quarters of the year similar to 4Q as well? I think I'm gonna stay away from some of the quarterly specific guidance on that, but I think the volume side of this is a pretty good proxy of what we saw, except again, for the base period comparison. We're not talking about - 10 volume. As Chris said, in the first quarter, you got another base period comparison unusual to pay attention to with the destocking that happened earlier in 2022, was a very unusual event and didn't represent what was going on in the marketplace. I recognize there's some noise there. I think as also Chris recognized, there's a little bit of timing of some issues coming into the first quarter that we'll have to pay attention to that could, you know, negate some of that goodness that we're gonna see on the volume side. Again, that's as close I think to the quarterly guidance we'd like to give, but I think the first half is going to be a down market in a fashion very similar to what we were seeing in the fourth quarter. Again, that's based on some triangulation and based on what the sentiment of our customers are seeing. With the majority or I think additional softness coming in the back half of the year, given the unknown and the lack of the backlog that supports further continuation of what we're in right now. Hopefully that helps. That's as much color as I'd like to give in terms of the quarterly guidance, and especially in an environment like we're in at the moment. Okay. No, got it. That's helpful. Just on the margin side, just I know you mentioned some of the digital initiatives you're shelving and the savings around that, but just broadly speaking, as we think about SG&A which has been, you know, growing over the last couple of years, how should we think about it from a dollars perspective in 2023 and what's embedded in your guidance? Yep. This is Chris. In terms of the guide and assumptions around SG&A, I mean, there's continued investments there in 2023 above 2022 to further, you know, invest back in the business. And that's both in AS as well as on the Mineral Fiber side of the business. You know, the restructure that we talked about and savings associated with that helped, you know, fund some of those initiatives. Overall, I'd be thinking about it in terms of, you know, continued growth in those initiatives that we've highlighted in the guide. Okay. Thank you. Sure. Thank you. Our next question comes from Rafe Jadrosich with Bank of America. You may proceed. Hi, good morning. Thanks for taking my question. Just following up on the SG&A, the last question on SG&A, just can you just give a little bit more color on the assumption of gross margin versus the SG&A ratio through 2023? Is there any commentary just on the cadence of inflation through the year, will it be higher in the first half of the year compared to the second half? Yeah. Let me take the second part of that first, Rafe. Yes, expect, you know, certainly on the raw materials side, the front half to be a little more inflationary weighted. Then going back to margins on initiatives, you know, as we talked, we expect, you know, some strong margin contribution here in 2023 on our digital initiatives, but haven't really, you know, outlooked obviously the overall gross margin impact. I'd say, you know, overall given, you know, our AUV contribution and our overall SG&A investments and the contribution back from WAVE in 2023, you know, we're looking to expand margins, expand EBITDA margins for the company in a challenging macroeconomic environment. Thank you. That's helpful. Just as you think about the SG&A outlook sort of longer term, you do have some longer term initiatives that you're investing in, and then obviously more cautious on the near term. You know, if volume stays under pressure kind of going into 2024, or office stays sort of weak, would you look at pulling back on some of those SG&A investments? Just how do you think about the level of investment going kind of over the long term relative to the market condition? Yeah. Let me take that. I think, Rafe, the way we would think about this is kind of how we thought about it coming into this year. You know, if the market opportunity environment is challenging, then we'll be looking at the rate and pace of our investments. You know, we talk about the investments themselves, but there's an other part of this which is making room in the organization for these new investments. We're very encouraged by the results that we're getting from these investments, which is why we're continuing those investments in the face of another downturn. The challenge is making room for those investments to continue those investments in other parts of the organization. That's the work that we did in January. Again, given the hypothetical situation you outlined for 2024, I think we would run a very similar play. We'd be looking at the rate and pace of SG&A overall, but how do we maintain the investments to keep our longer term growth initiatives moving forward? Very clear. Thank you. Thank you. Thank you. Our next question comes from Joe Ahlersmeyer with Deutsche Bank. You may proceed. Yeah. Thanks, everybody. Good morning. Morning. Yeah. I don't envy you guys having to explain the volume comps, I heard Vic pretty loud and clear that I think he said all he's gonna say on that. I have some questions about the SG&A following up from earlier questions here. I hear you on the investments, I hear you on the productivity. Is there a third component that we need to be thinking about into next year, which is one, lapping sort of the release of the incentive accruals from 3Q of 2022? Just wanna make sure we have that correct. As we rebase here, with a new plan for incentives, is there an unfavorable number for the full year that you'd like to quantify on incentives? Yeah. I think. Hey, Joe, it's Chris. I think you're thinking about the right way. I'll stop short of quantifying it. That's certainly included in the overall, call it SG&A step up, coupled with, you know, an inflationary assumption there on wages, et cetera, that goes into that step up for SG&A. Okay. That's helpful. When I look at your contributing factors to the EBITDA bridge, you have volume and manufacturing. The volume number seems to imply, in sort of the quarters where you have down volumes that under absorption's included in that number. On the manufacturing line, that's where you would get more specific on productivity with what's remaining on the production levels. Is that right for 2023, such that if I'm putting a higher decremental on your volume, you might still have positive productivity because the under absorbed costs are actually in the volume line? Yeah. That's right. Going back kind of to the, to the bridge, any productivity, you'd see in that manufacturing line, in that table. That's the right way to think about it. That's where it would fall out. Is there a number on the manufacturing that you're targeting for 2023? Yeah, there is. You know, we've been public around what that productivity number is, and it's about 3% of adjusted COGS. That's kind of how we've historically been targeting and delivering against the manufacturing productivity, Mineral Fiber side. All right, great. Thanks a lot. You're welcome. Thank you. Our next question comes from John Lovallo with UBS. You may proceed. Good morning, guys. Thanks for taking my questions. The first one was you mentioned- Morning. Good morning. You mentioned the strong growth in 2022 for Healthy Spaces, also talked about the CARES Act and the education funding in there. I mean, do you see education as a real opportunity in 2023 for Healthy Spaces? Yeah, I think education was actually a strong point for us in 2022. Obviously, got overshadowed by a lot of other dynamics. Yeah, I think, based on what we're seeing in the bidding activity and the money being spent there, again, to improve air quality, in particular in schools and with our product portfolio, I think it's an opportunity. Yeah, there's no question about it. Okay, that's helpful. In terms of Architectural Specialties and maybe some of, you know, the slowing that we're just seeing and just broadly in the economy, I mean, are you seeing any opportunities on the acquisition front present themselves given the slowing? I wouldn't tie it just to slowing activity. I think we've been proactive with a lot of these companies that are not for sale. I wouldn't say there's a step change in interest level based on a slowing economy. I wouldn't attribute at least the advancement of our pipeline to that specifically. We're very active in building the pipeline. We're committed to doing more in 2023. I like again, I like how our pipeline is building out, but developing. However they get into the pipeline, but I'd say a lot of these pipelines is, as we've talked about, John, is these companies aren't for sale, and we're developing the kind of relationships with them that when they're ready to sell and they believe in the vision that we have to take these companies forward, then, you know, we're obviously in a, in the pole position to acquire these companies. That's how we've kind of done majority of the 8 deals that we've done already. I think it's kind of more of that going forward. Got it. Thank you, guys. Thank you. Our next question comes from Stephen Kim with Evercore ISI. You may proceed. Yeah. Thanks a lot, guys. A lot of and good info already provided. A couple of quick ones for me. In Mineral Fiber, you talked a little bit about positive mix. Was curious if you could be a little more specific about what you're seeing there. I think there was a little bit of a difference in AUV for the whole company versus Mineral Fiber. Does that mean Architectural Specialty saw a little bit of, you know, AUV pressure, and do you expect that to continue into 2023 to any measurable degree? Yeah. Let me grab the second one first on AUV, because in our AUV numbers, we don't include Architectural Specialties. That's really a Mineral Fiber number. Given the project nature and the custom nature of Architectural Specialties, we choose not to pollute that metric. Anything you're seeing in AUV is really Mineral Fiber, is all Mineral Fiber driven, okay? We're expecting above historical performance in AUV, primarily because we're gonna get good like-for-like pricing again against a more modest inflationary environment, but still an inflationary environment. Plus the missing component of mix, which is, as you were alluding to, I think in 2022, we had channel mix, in particular in our retail channel and our highest AUV channel being softer, we had a negative channel mix going on. That should normalize in 2023, and we'll get back to positive channel mix as well as product mix. At least a neutral channel mix, I'll say, and a positive product mix coming through, contributing and adding to the like-for-like pricing that we expect to get, based on the inflationary context that we're operating in in 2023. Did that answer your question on- Yeah. I mean. On the AUV in particular. Yeah. Well, yeah, historically, I know that certainly AUV is limited to Mineral Fiber, and your comments suggest that's gonna continue. It's just, I think in your presentation, it looked like 29 and for the whole company, and it was 30 for Mineral Fiber. That's fine. I'm sure it's probably just rounding or something. If I could ask about WAVE. The, you know, your comment about a rebound in WAVE, you know, certainly welcome. Was curious as to whether we could expect to see that kind of favorable year-over-year comparison in 1Q. Should we generally think that the, you know, the spread of the earnings in WAVE would be, you know, pretty consistent quarter to quarter throughout 2023? Is there some sort of, you know, deviation there that we should be thinking about? Yeah. Again, see, I'll stay away from the quarterly guidance on WAVE. It's a big part of our, you know, in terms of our equity earnings, right? To our EBITDA level. You know, again, WAVE had the same kind of destocking in the first half of the year last year as we did on the tile side. Sold through the same channel again and under the same pressures. What happened throughout the year, though, so when you get to the back half of the year, I think we're gonna continue to have favorable comps and WAVE, maybe different than what we certainly different than what we had in the tile business. If that helps with your phasing and how to think about it, that's probably as good as I can do on that front. Again, we're gonna continue to watch the margins there and make sure that our pricing is staying ahead of inflation. This is an opportunity for us to expand margins in that business, given the expectations of what steel prices are gonna do. Yeah. That's, that's great. Last one for me is in Architectural Specialties. Kind of a two-parter there, but curious if you could... You know, that division is getting, you know, pretty large now, and I was curious if you could sort of call out any specific product categories within Architectural Specialties that we might wanna be keeping our eye on, where maybe the trends are a little stronger, than even the segment as a whole. Is there any kind of grid, you know, product associated with the Architectural Specialties that shows up in WAVE, or is that sequestered within your Architectural Specialties segment? Yeah, that's a good question. you know, probably the highlight of what's going on in Architectural Specialties is the broad nature of the demand and the growth. It's not in one vertical or one product category. It's really across the board. That's very encouraging that we're broadly playing in these new spaces in commercial buildings, and that's a, that's a really encouraging sign. The metal part of our business continues to grow nicely. You know, a lot of these airport projects are using metal and ceilings, and that's a big driver for the metal business. As, as basic or foundational, if you will, in Architectural Specialties as metal is, it illustrates, I think, how and where the growth can come from in the Architectural Specialties for many years to come. We'll continue to keep our eye out on some of the more specialty or newer materials, like the felt category, for example, and looking for ways to further expand our participation in those categories. I think that's, those are the new runways that we can add to the growth in Architectural Specialties. Maybe just to close out there, Stephen. The grid sales, you should be thinking about going through the WAVE equity earnings line. Okay. All right. That's all on that point. Thanks. Sure. Thank you. Our next question comes from Kathryn Thompson with Thompson Research Group. You may proceed. Hi. Thank you for taking my questions today. Just as, you know, obviously lots of detail on volume and outlook today, but just a higher level approach in terms of forecasting, the landscape has clearly changed a lot in a post-COVID world and all the various factors impacting today. Has there been any change into how you approach guidance just from a philosophy versus the past? You know, we've gotten a lot of questions from our clients in terms of how do you get predictability for just kind of your core product, I'm not sure, especially in terms of predicting volumes 'cause they've been down, you know, five of the past seven years. Any other way that you can give us clarity and just in terms of how you think about forecasting and especially on that base product? Thank you. Yeah, I think, it's a fair question, Kathryn, on our forecasting and, given our inability to forecast it well last year. I think there was just extraordinary set of dynamics that confused, I think, a lot of the information, the traditional information that we would use for forecasting. Maybe the biggest change, I think, for us as we think about forecasting is the sources of where we get our information and different levels of information. We've talked a lot about the closer connection that we have with our distribution partners on inventories, for example. I mean, never up until this point has that dynamic been a meaningful dynamic. It just adjusts itself, and it kinda happens in the rounding. Obviously, we saw a very different dynamic last year. That's just an example, I think, where we've tightened up the level of data, I guess you would, and that goes into our forecasting, and also the additional sources that you have to triangulate to what's really going on in a very confusing set of dynamics like we had in 2022. You know, I think given the outlook in the back half of this year, I think there's a lot of people guessing about what's gonna happen in the back half of this year. There's a lot of opinions about what's gonna happen in the back, but I think there's a lot of uncertainty. We've taken that level of uncertainty into consideration as we think about our forecasting, and maybe more so than we've had to in the past. Until we get to more stable operating conditions, I think this is a prudent approach to our forecasting. I appreciate the question. We certainly have been very thoughtful about this guidance, and we're gonna continue to have to be agile in the way that we control the cost of the business, maintain the investments, and stay close to our customers. We're gonna have to continue to do that as the market kinda moves around throughout 2023. Okay, perfect. Thank you. Thank you. Thank you. This concludes the Q&A session. I'd now like to turn the call back over to Vic Grizzle for any closing remarks. Yeah. Thank you again, all, for joining and for the questions. We worked hard to clarify and provide as much color as we could today, given the uncertainty a lot that's in the marketplace today. I think the one thing that I wanna communicate that we're in a very strong position, I think, to navigate the waters that we're about to go into in 2023. We feel very good about our position. We took some cost actions in January that we talked about. I think, again, we're in a much better position to be agile and to move around as the market requires us to. That's gonna allow us to outperform the market. Our growth initiatives that we talked about is allowing us to dampen some of the downturn that we expect to see in the market and into the second half of the year. I'm really glad that we have these investments that we've made, these initiatives to help us offset that, It's our opportunity to outperform the market in 2023. Look forward to that and look forward to keeping you all updated on our progress in the quarters to come. Thank you again for joining. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.