Thank you for standing by. Welcome to the Central Garden & Pet fourth quarter and fiscal 2023 earnings call. My name is Shamali, and I will be your conference operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Instructions will be given at that time. If anyone should require assistance during the call, please press star followed by zero on your touch tone phone. As a reminder, this conference call is being recorded. I would now like to turn the call over to Friederike Edelmann, Vice President, Investor Relations. Please go ahead. Good afternoon, everyone. Thank you for joining Central's fourth quarter and fiscal year 2023 earnings call. With me on the call today are Beth Springer, Interim Chief Executive Officer and Lead Director, Niko Lahanas, Chief Financial Officer, J.D. Walker, President, Garden Consumer Products, and John Hanson, President, Pet Consumer Products. In a moment, Beth will provide our key takeaways from the fiscal year, and Niko will discuss our financial results, our Cost and Simplicity program, as well as our outlook in more detail. After the previous remarks, J.D. and John will join us for the Q&A. Before they begin, I would like to remind you that all forward-looking statements made during this call are subject to risks and uncertainties that could cause our actual results to differ materially from what we share today. We describe the range of risk factors in our annual report filed with the Securities and Exchange Commission. Central undertakes no obligation to publicly update these forward-looking statements to reflect new information, subsequent events, or otherwise. Our press release and related materials are available at ir.central.com and contain the GAAP reconciliation for the non-GAAP measures discussed on this call. Lastly, all growth comparisons made during this call are against the same period in the prior year, unless otherwise stated. For further discussion after the call, please reach out to me. And with that, I will turn it over to Beth. Thanks, Friederike, and good afternoon, everyone. It's a pleasure to be here and thank you for joining our call today. Let's start with the three themes I'd like you to take away from this call. First, our fiscal year 2023 achievements. We are proud of what Team Central was able to achieve in light of a challenging environment, an environment characterized by unfavorable consumer behavior, unfavorable retail dynamics, high inflation, and some extreme weather. Most notably, we delivered fiscal year 2023 non-GAAP EPS within our revised guidance, generated record cash flow, and grew market shares broadly across pet and garden. We're grateful to our 6,700 associates for their hard work driving these results. Second, I want to speak to the strides we're making on our Cost and Simplicity program. As we've shared on prior calls, we've embarked on a journey to simplify our business and improve efficiency across our organization. We are doing this by rationalizing our footprint, optimizing our portfolio, and improving our cost structure. Today, we'll share some of the proof points we've accomplished in fiscal year 2023, including the closure of our dog bed manufacturing and distribution facility in Texas as a result of exiting certain low-margin, private label pet bed product lines, and the successful sale of our distribution business to the fragmented independent garden center channel, a complex channel to serve that was dilutive to our garden operating margin. We'll also provide more color around our recently announced acquisition of TDBBS, a provider of premium natural dog chews and treats. The TDBBS acquisition adds scale and e-commerce capabilities to our fast-growing dog and cat platform. And third, fiscal year 2024 guidance. We remain committed to our long-term central to home strategy. We are intensely focused on executing our cost and cash agenda and making thoughtful investments to fortify our foundation and to drive growth. We expect to continue to face a challenging external environment in fiscal year 2024 and guide to non-GAAP EPS of $2.50 or better. Importantly, we remain confident in the health of our business and our categories and are particularly encouraged by data showing younger households spending more money on their pets and enjoying their time gardening. Before I turn it over to Niko, I want to reiterate that our FY 2023 achievements underscore our ability to execute in challenging times and the fundamental strength of Central Garden & Pet. With that, I'll now turn it over to Niko. Thank you, Beth. Good afternoon, everyone. Building on Beth's remarks, I'm pleased to walk you through our financial results and share details on our Cost and Simplicity program, as well as our outlook for fiscal 2024. Let me start with our fiscal 2023 results. Net sales were $3.3 billion, in line with prior year. As a reminder, this year, we benefited from an additional 53rd week. Non-GAAP gross profit for the year was $957 million, compared to $992 million, and a non-GAAP gross margin was 28.9%, compared to 29.7%. The decrease was due to inflation and lower volumes, resulting in an unfavorable overhead absorption, partially offset by improved pricing and productivity efforts throughout the year.... While commodity costs have continued to moderate, the benefit of the lower costs takes more time to be realized as we continue to work through older, higher cost inventory. Non-GAAP SG&A was $729 million, compared to $732 million a year ago, and was 22% as a percentage of net sales versus 21.9%. Non-GAAP one-time charges were approximately $17 million for the year, which are net of the gain of approximately $6 million on the sale of our distribution business into the independent garden center channel and related facility closures, the majority of which are part of our Cost and Simplicity program. Non-GAAP operating income for the year was $227 million, compared to $260 million in the prior year, and non-GAAP operating margin was 6.9%, compared to 7.8%. The decrease was due to inflation and lower volumes, resulting in unfavorable overhead absorption, which was only partially offset by improved pricing and productivity efforts. Other income and expense was income of $1.5 million, compared to expense of $3.6 million in the prior year. Net interest expense was $50 million, compared to $58 million a year ago, driven by higher cash balance and interest income. Non-GAAP net income was $138 million, compared to $152 million a year ago, and Non-GAAP EPS came in at $2.59. In line with our revised guidance, GAAP EPS was $2.35. Adjusted EBITDA for the year decreased 7% to $343 million. Our tax rate for the year decreased by 80 basis points to 22.4%, due to the impact of a lower blended state tax rate. Now turning to the consolidated financials for the quarter. Fourth quarter net sales were $750 million, up 6%, primarily benefiting from the additional week this year. Non-GAAP gross profit for the quarter was $199 million, essentially in line with a year ago, and non-GAAP gross margin was 26.6% versus 28.2%, as the favorable impact of our pricing actions and productivity efforts was more than offset by inflation and unfavorable overhead absorption due to lower unit volumes. Non-GAAP SG&A expense for the quarter was $187 million, in line with prior year, and as a percentage of net sales was 25% compared to 26.4%, as we benefited from the additional week of sales while managing commercial spend and administrative expense. Non-GAAP operating income for the quarter was $12 million, compared to $13 million, and non-GAAP operating margin was 1.6%, compared to 1.8% in the prior year. Net interest expense was $8 million, compared to $14 million a year ago. Non-GAAP income for the quarter was $5 million, compared to a loss of $2 million in the prior year, and non-GAAP earnings per share was $0.10, compared to a loss per share of $0.04 a year ago. GAAP EPS was $0.05. Weighted diluted shares outstanding decreased to 53.4 million from 54.4 million in the prior year. We bought back approximately 65,000 shares for roughly $2.4 million. Now we'll provide some insights into the fourth quarter of our two segments, starting with Pet. Pet net sales for the fourth quarter increased 10% to $483 million, thanks to the extra week and strong consumer demand. Our POS growth was in the high single digits and, coupled with improved service levels, resulted in share gains in a number of categories. Sales continued to grow in our pet consumables business across all categories, including dog and cat, which had a record quarter. Pet distribution, animal health, small animal, bird, and aquatics all experienced growth versus prior year. Pet durables continued to decline in high single digits. Sales of our pet brands increased low double digits, outperforming private label sales, which were negatively impacted by the purposeful exit of low profit private label product lines and SKU rationalization. Driven by our efforts over the last couple of years to build capabilities around consumer insights, innovation, and category management, we gained or held market share in most of our categories, including dog toys and treats, small animal, bird, aquatics and equine, reflecting the overall health of our brands. We gained mid-single digits in total distribution points, or TDPs. E-commerce continues to drive growth for the segment at the expense of brick and mortar. Thanks to our investments into online and digital, our e-commerce sales increased low double digits and now represent approximately 25% of total pet sales. Moreover, we grew online market share broadly across many of our categories, including dog toys, equine and animal health, small animal, and bird. Non-GAAP operating income for Pet was $48 million, compared to $40 million, and non-GAAP operating margin was 9.9% versus 9.2% a year ago. The increase was driven by productivity efforts and improved pricing, partially offset by unfavorable overhead absorption. Pet adjusted EBITDA increased 15% to $58 million. Moving on to Garden. In the fourth quarter, Garden net sales were $267 million, in line with the prior year, due to softness across most of the Garden portfolio, except for Garden controls and fertilizer, live goods, and grass seed. We continue to grow market share in grass seed and wild bird, two important anchor categories in our Garden business. We saw retailers continue to manage their inventory closely, shifting to just-in-time replenishment. This, coupled with the declining foot traffic in home centers and mass channel, as well as the extreme weather for the second year in a row, resulted in another challenging quarter for the garden segment. Garden e-commerce sales continue to grow faster than brick-and-mortar as consumers shift more and more of their purchasing to online. Our e-commerce business, while still small, now represents approximately 6% of total garden sales, thanks to our investments in digital and e-commerce capabilities. Non-GAAP operating loss for garden was $5 million, compared to operating profit of $2 million, and non-GAAP operating margin was -2%, compared to 0.7% a year ago. The decrease was due to inflation, partially offset by improved pricing and productivity efforts. Garden adjusted EBITDA was $6 million, compared to $12 million in the prior year. Now turning to the balance sheet and cash flows. Cash provided by operations was $382 million in fiscal 2023, versus cash used by operations of $34 million in the prior year. I'm extremely proud of our team's focus on converting inventories into cash. Inventories at year-end were $100 million below prior year, and inventory value is down for total Central and across both segments. CapEx for the year was $54 million, about half of what we invested in the prior year. In the quarter, we invested in automation and expansion of pet and wild bird, aquatics, live plants, and controls and fertilizer. Depreciation and amortization was $88 million, compared to $81 million a year ago. Thanks to our focus on turning inventories into cash, we had a record cash flow year. Cash and equivalents, including short-term investments, were $489 million at year-end, compared to $177 million in the prior year. Total debt was $1.2 billion, in line with prior year. We ended the quarter with a leverage ratio of 3.1 times, compared to 2.9 times a year ago. Well in line with our target range of 3-3.5 times. We had no borrowings under our $750 million credit facility at the end of the year. Given our financial strength, and in addition to our recent pet consumables acquisition, we continue to be on the lookout for high growth companies with accretive margins in both pet and garden to build scale in core categories, enter adjacent categories and add key capabilities. Let me now touch on our Cost and Simplicity program. As previously communicated, we're on a multi-year journey to reduce cost and simplify how we operate. We have meaningful opportunity to better leverage the scale of our business across a number of areas, including procurement, manufacturing, logistics, portfolio optimization, and administrative costs. We expect to reduce complexity, which means fewer SKUs, increased manufacturing warehouse efficiency, as well as fewer facilities. We seek to lower costs through improved logistics costs, better procurement, and lower administrative costs. This will be done by leveraging our scale and capabilities across the company. We believe this program will drive higher margins and generate more fuel to invest in organic growth and accretive M&A in both pet and garden. Now turning to the progress we've made so far in the different areas. First, in manufacturing. We continue to pursue a continuous improvement mindset by measuring cost and productivity by manufacturing line, by facility, which resulted in major improvements in cost per unit. In Q4, we announced the closure of an outdoor cushion manufacturing warehousing facility in Amarillo, Texas, moving all manufacturing to a centrally located consolidated facility. Second, logistics. We're aligning for scale in logistics by expanding our corporate transportation management system and centralizing load planning. In addition, we are standardizing how we operate our warehouses by reapplying internal best practices across BUs, deploying technology solutions to reduce waste, and implementing voice direct picking in multiple facilities. Moreover, we're closing three smaller pet distribution facilities in Kansas and one in Illinois. Third, portfolio optimization. To become a more focused, higher margin consumer products company, as a result of the purposeful exit of low margin, private label pet bed product lines, we closed a smaller distribution facility in Corsicana, Texas, in December of 2022, followed by the closing of our pet bedding manufacturing and distribution facility in Athens, Texas, in April of 2023. We sold our independent garden center distribution business. As you recall, this channel represents less than 5% of our garden net sales and was dilutive to our garden operating income margin. As a result of this sale, we plan to close our Portland, Oregon, garden distribution facility. Fortifying the Central portfolio, two weeks ago, we acquired premium natural chews and treats company, TDBBS. Adding their established brands and digital capabilities solidifies our position in this large and growing category.... Strengthens our footprint with key customers and enhances our e-commerce and digital capabilities. We remain committed on this multi-year journey to reduce costs and simplify our business. We have a pipeline of projects to leverage our scale and deploy our capabilities across the company. We'll continue to provide regular progress updates on a quarterly basis. As always, our priority will be on business continuity and minimizing disruption to our operations. As a company that has grown through acquisition and that has the intention of continuing on that path, there's no shortage of opportunity ahead of us. Now, turning to our fiscal 2024 outlook. We currently expect non-GAAP EPS for the year to be $2.50 or better. Let me provide some color around our assumptions. We expect a challenging retail environment, with customers continuing to manage their inventories closely and consumers faced with high prices and interest rates reining in their spending. While our team has done a great job managing inventories, higher value inventory is gonna put pressure on margins for some part of the fiscal year. The benefit of the lower costs is taking more time to realize as we continue to work through existing high-cost inventory. Our pet segment continues to perform well, especially in the consumables business, such as dog treats and chews, small animal, and bird. Conversely, in line with the softer pet ownership, durables continue to present a challenge for the industry and Central. In addition, we remain cautious about the 2024 garden season after two years of unfavorable weather and continued declines in foot traffic at retail. As we look at CapEx, we're planning to invest approximately $70 million, most of which is required maintenance and productivity initiatives across both our segments. While the near-term external environment remains challenging, we remain committed to our Central to Home strategy as it relates to our consumer growth agenda, and we continue to selectively invest in our digital marketing, brand building, and innovation to drive profitable long-term organic growth, as well as investments to enable future cost and simplicity savings. Our guidance reflects our belief in the long-term health of our business, our team's execution, and the long-term trends that support the pet and garden industries. Fiscal 2024 is back to 52 weeks, whereas fiscal 2023 benefited from an additional week. As always, our outlook excludes any impact from acquisitions, divestitures, or restructuring activities that may occur during fiscal 2024, including any such project under the Cost and Simplicity program. It also excludes the impact of our recent pet consumables acquisition, as we're still in the early stages of the integration process. We expect the acquisition to be accretive over time. However, it will have a minimal impact on fiscal 2024. Now, as we look forward to the first quarter of fiscal 2024, I want to remind you that Q1 is typically one of our smallest quarters and not indicative of the full year. We expect Q1 non-GAAP loss per share to be in the range of $0.15-$0.20 for the quarter. To summarize, 2023 was a challenging year for our industries and Central. Nevertheless, we delivered fiscal 2023 non-GAAP EPS within our revised guidance, turned inventories into cash, generated record cash flow, and grew market share broadly across pet and garden. We continue to believe in the fundamental trends that support long-term growth in the pet and garden industries. Our company remains strong, well-capitalized, and well-positioned to grow both organically and through acquisitions in the coming years. With that, I'd like to open the line for questions. Thank you. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Brad Thomas with KeyBanc Capital Markets. Please proceed with your question. Hi, good afternoon. Thanks for taking the question. Wanted to ask Niko a couple of questions as we think about the fiscal year ahead of you, and maybe starting first with margins. I was hoping you could talk a little bit about, you know, some of the puts and takes, some of the opportunities and headwinds that you have as you think about margins for this year. Sure, Brad. You know, I've said this almost every year. We go into every year planning to expand margin. I mean, that's our, that's our goal. That's how our financial algorithm works. I think, you know, this year's gonna be unlike the last three years in that I think we're heading into a little bit of a deflationary environment. So, I think we're gonna benefit from some commodity downdraft. However, I think it's gonna be a much more, you know, promotional environment as well. The other piece of this is what we've, you know, discussed in the prepared remarks, that we do still have some higher cost inventory to roll through, so that's gonna create a little bit of pressure. The question will be, you know, how promotional does it get? You know, what our product mix is, because the margins there are kind of all over the map, and that becomes a wild card as well. So, that's sort of how we're thinking about it, but we are going into the year expecting to expand margin. That, that's helpful. And understanding this is such a challenging environment to forecast sales, can you help us think in broad strokes, what you're starting to plan for in terms of organic trends in the segments? And what level of growth or potentially maybe modest decline you might be able to go through and still have flat or up operating margins? Yeah, I mean, if we, you know, the way we're looking at it is, you know, keep in mind, we had a 53rd week, so if I look at it in absolute terms, we're gonna be down year-over-year because of the 53rd week. We also sold off the garden distribution business, which also will drop down. Now, the upside is we bought TDBBS, so that's gonna help on the top line. If I look at it apples to apples, we think that, you know, flattish to modestly up. In absolute terms, I think we'll be down. But again, we have to see how it all plays out because the deflationary environment, you know, could put pressure on the top line. I think that's gonna be a real wild card and, you know, I think it's gonna be a very competitive environment in 2024 as well. That makes sense. Certainly what we're hearing out there as well. Great. Thanks so much, Niko. Appreciate it. Sure. Our next question comes from the line of Bill Chappell with Truist Securities. Please proceed with your question. Yeah, thanks. Good afternoon. Hey, Bill. I guess first, could you any update on the CEO search at this stage? Hey, Bill, it's Beth Springer. Nice to hear your voice again. Hello, Beth. Hi. Before we talk about that, I do wanna take a moment to reiterate that we have a really experienced leadership team, an engaged board, and a clear direction in our Central-to-Home strategy. So we're very focused on continuing to execute that. As we look ahead to new leadership, our board is committed to finding the best possible successor. Our goal specifically is to recruit a world-class leader who can champion Central's culture of entrepreneurship, collaboration and partnership, and drive our company's positive trajectory. Obviously, Bill, we'd like to finish that sooner rather than later, but the most important thing is to find the right long-term leader. So when we have an update, we'll provide it to you. Got it. Thank you. And then Niko, I guess, is there any way you could just... for modeling, just trying to understand kind of what the, almost the pro formas were for 2023 in terms of pet and garden, taking out, you know, the business exits, taking out the distribution exits, stuff like that, because it's tough to handicap unless we kinda understand what you've exited. Yeah, what I would say is, like I said, I think, you know, overall, top line is gonna be down if you look at it apples to apples. The TDBBS business and the exit of distribution are sort of a wash, but then you have the extra week, so that, you know, in absolute terms, would cause us to be down year-over-year. Got it. But, I mean, I'm just trying to quantify the distribution exit in terms of revenue and the pet bed exit in terms of revenue, maybe be more specific. Yeah, we, we haven't given that out, Bill, and I don't, I don't think we will, going forward. Okay. Then just trying to understand, you know, I, the, the garden outlook in particular, I mean, I understand it's November and you wanna be conservative, but it seemed that there was, you know, it certainly from your pre-announcement back in early April, it was a much more impactful on the negative side for the business than normal. And so are you just assuming that the abnormal happens in again this year, or do you expect some recovery? Because, I mean, that was, you know, $0.20-$0.30 out of your guidance that doesn't appear to be coming back. Hey, Bill, it's J.D. I, I'll take a shot at that. You know, I, I would say that we're taking a very cautious approach to our outlook for fiscal 2024 after the last two years. We're still, as most companies are, still trying to understand consumer behavior in a post-pandemic period. Household penetration has been down over the last couple of years. Niko referenced in his, in his script that foot traffic at retail has been down. In our largest channels, it's down 8% in home centers and 2% in mass channels. So given all of that and two years of challenging weather, you know, it's, it, it's a little bit difficult to get too aggressive in terms of looking at next year. I will say this, when we look at the controllable causal factors, things like total points of distribution, they're up mid-single digits. We feel great about the level of support that we're gonna get from our retailers next year. We have a long list of cost and simplicity initiatives, and those will fund some of our strategic investments in the business. So there's a lot to like here. However, while we're optimistic, we think that, you know, taking a more measured approach to planning for the year is appropriate. Okay. And then just, just last one on that. Are you seeing anything different from the competitive landscape in garden? Certainly as, as you have a, a competitor that's gonna get excess inventory and maybe get some excess inventory going into early next year, do you see it being more promotional than normal, or, or that's just kinda all factored in? It's all factored in, Bill, but I just as Niko said earlier, we expect it to be more promotional next year. We expect the retailers to be trying to drive footsteps into the stores in the spring season. Our competitors, we expect to continue to be very competitive and aggressive in that area, and we will as well. Great. Thanks so much. Mm-hmm. Our next question comes from the line of Jim Chartier with Monness, Crespi, Hardt. Please proceed with your question. Hi, thanks for taking my questions. First on the garden business, can you tell us what POS trends were in fourth quarter and for the year? Hi, Jim, it's J.D. POS was flattish, down slightly, less than 1% in Q4. For the quarter? For the quarter and up for the year. Up low single digits. Great. And then in terms of the promotional activity, are you seeing increased promotions today? Have the retailers communicated to you already that they, you know, that they expect lower pricing, or is this just something that you're expecting will happen, and embedding that in the guidance? Jim, it's, it's something we're expecting will happen. So the retailers are very much in their planning stages right now, so we don't have hard evidence that it'll be more aggressive, but we're expecting that. We're not seeing any unusual activity at the moment. Okay. And then, Niko, can you just tell us what the sales and earnings impact was from the extra week for both the garden and pet segment? The earnings were de minimis. It was very small. Top line, I mean, what I would do is just, you know, use straight math on the quarter and calculate it that way. Okay. Yeah. And then. 'Cause it's really, it's really like, you know, that part of the year. There's not a lot going on in garden. It's sort of counterseasonal, so we're not throwing off a lot of EBIT. Okay. And then how should we think about interest income, next year? You know, your cash balance is up nicely. Yeah. What, what are you forecasting for interest expense and income next year? Yeah, we're... You know, it's always tricky, right? Because we, we've got a working cap build, that really starts now and then goes into March, and then it's gonna also depend on what type of M&A we do. It certainly is gonna be, you know, probably lower than it is this year. I think this year we, we printed around $50 million. So, you know, I would, I would guide somewhere, you know, $45 million-$50 million, in that range. But again, there's a lot of variability there, just based off of M&A activity and, and what sort of working cap build we end up with. Okay. And then on the pet business, did you say the POS was up high single digits? And then kind of if so, what's kind of informing your caution on that business? Is there anything unusual that drove the strong POS in this quarter? Yeah, this is John. Yeah, Q4 POS was up, you know, mid-high single digits along with sales. So we, you know, felt good about that. You know, the big thing going on for us is, you know, the mix between consumables and durables, right? You know, durables, you know, I think we started communicating back in Q2. You know, durables are about 25% of the category, 20% of Central's business. Back in Q2, we started seeing the declines. The declines accelerated in Q3 and Q4. You know, so we feel like we've got a couple quarters ahead of us, to lap that, and then hopefully it moderates, and we see some flattening of it. Well, and also live animals, I would add, too. Yep. You know, we've seen a little bit of a drop-off in penetration, particularly in dog. Cat seems to be doing pretty well, and aquatics and live animal or small animal, excuse me, are holding up pretty well. But that's gonna be another driver, and we have a small live animal business as well, and that's been down because of, you know, you're just not seeing the adoption rate from the COVID high. So that's gonna drive, you know, the durables and then also the consumables downstream. The other thing, you know, I would say is what we have to be mindful of, too, is the consumer trading down. Now on the garden side, like, you know, if... Sorry, we put it on mute there for a sec. In Wild Bird, you know, we have good, better, best, and so we can cover up the consumer if they decide to trade down. And we have to see how that plays out in pet as well, particularly in our treats business, you know, in terms of the consumer feeling a little bit stressed and wanting to trade down from, say, Natural Chews to all the way down to biscuits. And that's something we don't even make biscuits, but so far it's held up pretty well, but we do have to be a little bit cautious there. Thank you. Yep. Our next question comes from the line of Bob Labick with CJS Securities. Please proceed with your question. And Bob, your line is live. All right, it seems as if Bob's line is having some technical difficulties. We'll go ahead and proceed to the next question. Our next question comes from the line of Andrea Teixeira with J.P. Morgan. Please proceed with your question. Thank you, operator, and good afternoon, everyone. A question on the top line, the flat to modest up, I think underlying you mentioned. Are you assuming better POS? You just discussed obviously strong POS for the pet business, and more modest on the garden. So I was just trying to parse out what are your expectations in terms of like real POS data, from a volume perspective. So I'm assuming in your transcript, on your transcript, your release, you talk about modest pricing into 2024. So I wanted to see what are your assumptions in terms of the, of the shipments in 2024. And then also, if I add on the mid-single digit TDP growth you mentioned, is that additional, that you're coming on the spring, your visibility for the shelf effects into the spring? And then your outlook for slightly up operating margin, can you update us on how much you expect from your program, the savings program, if there is any update on those savings? And finally, sorry for all these questions, but the clarification on the gain that you had of $6 million in the quarter, you adjusted out all the expenses from the program, but I think the gain is added back to the EBIT. So just to see if the adjusted GAAP number... adjusted non-GAAP number includes the gain, but excludes the expenses. Thank you. Okay. I'm gonna take a crack at it. As far as POS and into 2024, I think, you know, we go into every year assuming, you know, again, a fairly normal weather on the garden side. On the pet side, I think, you know, given we feel great about where inventories are, I think in both segments, we feel like, you know, POS should be pretty stable. So, we feel like there's good equilibrium there in terms of our ships and then sales going forward to the consumer. Niko, I think there was also a piece of that that was added TDP, when we would see the lift from that. Yeah. That would be in the spring. Yeah. So the retailers set their shelves, typically in the January timeframe for the coming season. So that's when we'll start to see the impact from that. Yeah. Yeah. Mm-hmm. You know, based on- That's included in your guide. I'm sorry. Yeah. Yeah, absolutely. Mm-hmm. Yeah, and we've seen some... You know, on the pet side, we've seen some TDP growth as well, you know. And, you know, the good news for pet, you know, even with the softness in pet acquisition and pet ownership, and we talked a little bit about durables, you know, we feel really good about our share position. You know, we've taken market share in consumables, in durables, brick-and-mortar, and e-com, and we feel very good about that, and feel very good about continuing that in fiscal 2024. That's very helpful. And then on the operating margin and the gain in the quarter, you can help us? Yeah. So the number we gave you, so the Non-GAAP of, I think total year was like $16 million. Now, that was net of the gain, so we netted all that out, and we Non-GAAPed it. So if you look at garden, I think their GAAP number in the quarter is actually higher because of the gain. That's correct. We- Mm-hmm. Just like we took out the expenses- That's right. doing the non-GAAP. Yeah. We deducted the gain- Yeah - from our non-GAAP results. Okay, perfect. Does that help? And then, just-- Oh, that's super helpful. Thank you for clarifying. And then the operating margin, outlook, right? That you're expecting, on the savings program, which obviously you did, make a lot of efforts on a bunch of facilities that you closed, and then also, warehouses. How we should be expecting embedded in your $250 and better outlook? What is the, what is we're expecting and embedding there in terms of savings? Yeah, as I mentioned in the prepared remarks, we're not gonna guide on the total savings number. It's in the guide. We also feel, you know, that there will be a lot of promotional activity. We need to see how the consumer and the retailers react in the year. You know, if you look at the last few years too, we took savings every year. However, a lot of those savings were overshadowed by runaway inflation. So, that's why we're a little reluctant to guide on an absolute number because you know, we may not be able to see it, given the competitive environment in the marketplace in the coming year. That's why we're opting to be a little bit more accurate and give specific data points on projects every quarter, and actions that we're taking every quarter. Okay. That's fair. Okay, thank you. Our next question comes from the line of William Reuter with Bank of America. Please proceed with your question. Good afternoon. The first is, you've made a bunch of comments, kind of with regard to your expectations of promotions, and it wasn't clear to me whether these comments were across both lawn and garden, as well as pet. I think it was clear that they were part of the lawn and garden commentary, but if you could talk a little more about that. Yeah, I think it's across the entire business. You know, if you look at what's going on right now, you know, the macro environment is, you know, it's flashing a little bit red right now. And you've got higher interest rates. You've got, you know, CPG companies as well as retailers really working their working cap down because of the higher cost of capital. We think that, you know, it's gonna be a bit of a dogfight in 2024 and trying to take share here and there. And everyone's gonna be doing kind of the margin grab. So we think it's gonna be a lot more promotional in particular in a deflationary environment. So we think it's gonna be across the board. It's gonna be a pretty tough year. Got it. And then I wanna make sure I got the previous point correct. But I think you said that inventory levels across both segments, you believe to be in good position. So PO sell in and sell through should be pretty well aligned. Is that correct? Yeah, they've been, you know, the spread's been narrowing throughout the year. So we feel pretty good about that sort of state of equilibrium right now. That said, our inventory levels, you know, if you ask me, I'd like to see us drive them down a little more. You know, I think we still have some work to do there, and in particular, the higher cost inventory. But we're gonna keep at it. I think we made great progress this last year, decreasing by $100 million, and I think our cash flow from operations really reflect that. Got it. Then lastly, you brought up M&A towards the end of the prepared remarks. I feel like there's been a disconnect in valuations of public companies and a lot of private seller expectations over the last handful of years, particularly in pet. Do you believe that this disconnect still exists? Do you think that sellers are becoming more rational? Are you more optimistic about the ability to find suitable targets at good valuations? We are. I mean, we're very value-driven, so we're value buyers of growth businesses. And you're right, you know, the last few years, the pet businesses were, you know, very, very high multiples, and that's why you didn't see us doing a lot of pet acquisitions. This is our first one in a while. We feel like we got a great business, fits in really well into our dog and cat platform. We're seeing a lot more activity, I would say, in the last few weeks, so we're seeing a lot more deal flow. I do believe the valuations are more realistic right now than they were in the last few years. So I'm quite optimistic about the M&A pipeline and our ability to identify and get deals done. Great. That's it for me. Thank you. Thanks. Our next question comes from the line of Hale Holden with Barclays. Please proceed with your question. Hi. I just have two questions. The pet treats business that you guys just announced the acquisition of, does that meaningfully change the mix of hard goods and consumables in the pet segment? No, I mean, it's a bit of a bolt-on. It'll slide right into our dog and cat platform. So it's not gonna meaningfully change, you know, the mix between consumable and durable. But what I would point out, and I think if there's anything I want folks to take away from the call is really the kind of the real-time evolution of our portfolio. So if you think about what we did a quarter ago, we sold the garden distribution business, and then we turn around and we buy a pet consumable business that has much better consumer tailwinds. It's, you know, faster growth, higher margin, consumable and really not seasonal. So, you can see kind of what's going on there real time in terms of our portfolio, and I think if there's anything to take away from the call, it'd be that. Great. Thank you. The second question was, on the SKU reduction efforts for this upcoming 12 months, do you have a or would you be able to give a range in terms of what, you know, in aggregate, what, what level of SKUs you're taking out? Is it low single digits or much higher? Where, where that could help on margins going forward in the future? I won't quantify it. It's gonna vary BU by BU, so we're gonna look at all the businesses. We're gonna have to make judgment calls, too. You know, that kind of work is not free. Sometimes you know, you have to get rid of SKUs, and sometimes you don't get full price. So we're gonna have to weigh, you know, each BU and look at the SKU count and look at what the contribution of those SKUs are. So, very hard for me to quantify right now. Fair enough. I appreciate the time. Thank you. Thank you. Our next question comes from the line of Carla Casella with JPMorgan. Please proceed with your question. Carla, your line is now live. Hi, can you hear me now? Hey, Carla. Yes. Hi. So following on some of the prior questions, the inventory you mentioned is a little bit heavier on your books. How long do you think till you work through some of that, excess and high cost inventory? I think probably anywhere from 12-18 months, I think, in that area. Okay, great. And then on the garden distribution business that you sold, did you give the total price? Or I'm wondering if there's any connection between that, any ties between that business and any other pieces of your business? I'm not quite following that, Carla. Could you, could you repeat that question? I wanna make sure I answer it properly. Yeah, yeah. So the garden distribution business that was sold- Yeah. Yeah, did that business interact to any of your other arms? Like, there, is there any- Oh, sure. Synergies or dis- Yeah dissynergies that you lose? Sure, Carla, this is J.D. It, it did. So this was a distribution of third party vendor items to the independent channel, to the independent garden nurseries. And they, we also, through that same distribution organization, sold our branded products as well. Now, the beauty of the deal that we have with BFG Supply, they are a national distributor, and this is their core competency. They will continue to distribute our branded products to that channel, to the independent channel as well. So really, it's both companies focusing on their core competencies. And it was an incredibly complex business for us. 4,500 SKUs distributing to 4,000 customers that had 6,000 stores. So we're, we're reducing the complexity significantly by exiting that business. And as Niko said before, it was a marginally profitable business. We will maintain our distribution business to our larger big box customers, and they're, here again, our branded products ride along with those products to the stores. Okay, great. And then did you give the sale price or the impact on revenue or EBITDA? I may have missed. I missed a bit, little bit at the beginning. No, we haven't done that. It's fairly de minimis. Okay. It was 5% of garden revenue, is what we gave out, but it was margin dilutive to the garden business overall. Okay, great. Thank you. Our next question comes from the line of Karru Martinson with Jefferies. Please proceed with your question. Good afternoon. Apologies if I missed it, did we break out what the TDBBS acquisition cost us and what it's gonna add to the top and bottom line? No, no, we don't give that information out. But, you know, if you look at the cash flow statement next quarter, you probably can figure it out. Okay. And certainly working capital, nice source of cash. I mean, I hear your commentary that there's still some inventory that you guys would like to move out, but how should we think about working capital this year, you know, certainly compared to this past year, that was certainly a benefit to our bottom line? Yeah, I don't think it'll be quite as dramatic, but I think there's still work we can do as far as converting, you know, inventories into cash, working on payables, receivables. I think it's... You know, and everybody's doing it, it's not just us. Mm-hmm. So, we're gonna stay after it. I really love the progress we've made, but there's still more work to do. Okay. And then when we look at the opportunity for M&A, it certainly does sound like, you know, value buyers of growth businesses, tuck-ins, things of that nature. It doesn't sound like these are transformative transactions, but for the right one, where are you guys comfortable taking leverage to? We'll go over 4 for the right deal. We're happy going over 4 and then delevering as quickly as possible back to our stated, you know, range of 3-3.5. So willing to lean into the right deal for sure. Thank you very much, guys. Appreciate it. Thank you. That was our last question. With that, I would like to thank you, everyone, for attending our call today, and have a wonderful Thanksgiving. If there are any questions later on, please reach out to me. Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.