Good morning, and welcome to the fourth quarter conference call for Graco Inc. If you wish to access the replay for this call, you may do so by visiting the company's website at www.graco.com. Graco has additional information available in the PowerPoint slide presentation, which is available as part of the webcast player. At the request of the company, we will open the conference up for question and answers after the opening remarks from management. During this call, various remarks may be made by management about their expectations, plans, and prospects for future. These remarks constitute forward-looking statements for the purpose of the safe harbor provision of the Private Securities Litigation Reform Act. Actual results may differ materially from those indicated as a result of the various risk factors, including those identified in Item 1A of the company's 2022 annual report on the Form 10-K and in Item 1A of the company's most recent quarterly report on Form 10-Q. These reports are available on the company's website at www.graco.com and the SEC's website at www.sec.gov. Forward-looking statements reflect management's current views and speak only as of the time they are made. The company undertakes no obligation to update these statements in light of new information or future events. I will now turn the conference over to Chris Knutson, Executive Vice President, Corporate Controller. Good morning, everyone, and thank you for joining our call. I'm here today with Mark Sheahan and David Lowe. I will provide a brief overview of our quarterly results before turning the call over to Mark for additional commentary. Yesterday, Graco reported fourth quarter sales of $567 million, an increase of 2% from the fourth quarter of last year. The effect of currency translation increased sales by one percentage point or approximately $6 million. Reported net earnings decreased 13% to $110 million for the quarter, or $0.64 per diluted share. In December, the company transferred $147 million of its pension obligations to an insurance company through the purchase of an annuity contract. In connection with the transfer, we recognized a non-cash, pre-tax pension settlement charge of approximately $42 million, recorded in other non-operating expense. Excluding the impact of this pension settlement loss, certain non-recurring tax provision adjustments and excess tax benefits from stock option exercises, adjusted non-GAAP net earnings were $137 million or $0.80 per diluted share, an increase of 10%. The gross margin rate increased 370 basis points in the quarter. Strong price realization and lower product costs were more than enough to offset lower factory volumes. Total operating expenses increased $10 million or 8% in the quarter, mainly due to volume and rate-related increases of $3 million, as well as higher sales and earnings-based expenses of $3 million. Gross margin rate improvement more than offset these increased operating expenses during the quarter, resulting in operating margin rate growth of 2.5 percentage points. The adjusted effective tax rate was 19% for the quarter. Cash provided by operations totaled $651 million for the year, an increase of $274 million from last year, mostly driven by higher net earnings and a reduction in inventory purchases. Cash provided by operations as a percent of net earnings is 129% for the year. Significant year-to-date uses of cash include dividends of $158 million, share repurchases of $102 million, which were offset by share issuances of $60 million, debt repayment of $75 million, and capital expenditures of $185 million, including $108 million of facility expansion projects. A few comments as we move forward to 2024. Based on current exchange rates, assuming the same volumes, mix of products, and mix of business by currency as in 2023, movement in foreign currencies would have no impact on net sales or net earnings for the full year. Unallocated corporate expenses are projected to increase to a range of $41 million-$44 million, with the increase related to share-based compensation. The effective tax rate is expected to be 19.5%-20.5%, excluding any impact from excess tax benefits related to stock option exercises and other one-time items. We expect capital expenditures to be approximately $120 million, with $60 million for facility expansion projects. Since 2018 and through 2024, we will have invested nearly $500 million to expand our global manufacturing capacity. By the end of this year, we will have completed expansion projects for nearly all of our operations, which should set us up for several years of growth. I'll now turn the call over to Mark for further segment and regional commentary. Thank you, Chris. Good morning, everyone. All my comments this morning will be on an organic constant currency basis. Sales in the fourth quarter were up low single digits, resulting in quarterly and annual records for both revenue and operating earnings. Our Industrial and Process segments saw record annual sales, and I'm encouraged by the fourth quarter sales growth in our Contractor segment. All segments finished the year with record annual operating earnings. Pricing actions implemented in late 2022 and at the beginning of 2023, drove sales growth and gross margin expansion during the quarter and for the year.... Our strong price realization across all businesses and regions, combined with improved product availability, stable product costs, and favorable product and channel mix in Contractor, resulted in meaningful improvement in our gross margin rate. These improvements resulted in company-wide incremental margins of nearly 150% for the year. Adjusted net earnings, expressed as a percentage of sales, was 24% for the year, which is the highest in company history. Pricing actions taken in early 2024 closely resembled traditional levels in terms of size and cadence, with all segments and regions initiating price increases at the beginning of the year. At the end of 2023, our consolidated backlog was $280 million, which was $75 million below last year's ending backlog. Backlogs have returned to normal levels within most product categories, but continue to remain slightly elevated in our semiconductor and powder coatings businesses. Now turning to some commentary on our segments. Contractor segment sales improved in the fourth quarter, growing at low single digits. Soft demand in the home center channel and challenging global construction markets remained headwinds. However, new product introductions and continued strength in the protective coatings and spray foam product categories were more than enough to offset these headwinds in the quarter. Operating earnings were 29% for the quarter and for the year, as Contractor benefited from pricing actions and favorable product mix by selling larger professional units and fewer home center units. Heading into 2024, we're cautiously optimistic about business conditions based on improving global construction indicators. As affordability improves, new and existing home sales are predicted to increase throughout the year, along with expected growth in commercial and non-residential spending. The Industrial segment achieved record sales and earnings for the year, despite a 1% revenue decline in the fourth quarter compared to last year. Growth in liquid finishing and sealant and adhesive product lines were not enough to offset the impact of lower powder finishing system sales in EMEA and Asia Pacific in the quarter. Fourth quarter 2022 represented peak revenue for our powder finishing group, as projects delayed during the pandemic were completed and placed into service. Our Process segment grew 4% in the quarter and 11% for the year. For the year, we saw growth in all regions and reported record earnings. Increases were posted for the quarter in many business units and across all reportable regions, led by double-digit growth in vehicle services and process pumps. Price realization and increased volume drove incremental margins of 89% in the fourth quarter and 83% for the full year. We had broad-based revenue growth in all our businesses this year, resulting in record operating profit margins for the segment. Moving on to our outlook. As we enter 2024, we're keeping a close eye on incoming order rates and global economic indicators. Despite difficult macroeconomic environment, we remain committed to our core strategies of launching new products, entering new markets, expanding our global channel, and pursuing strategic acquisitions. As a result, we're initiating revenue guidance for full year 2024 of low single-digit growth on an organic constant currency basis. That concludes the prepared remarks. Valerie, we're ready for questions. Thank you. The question and answer session will begin at this time. Ladies and gentlemen, if you'd like to ask a question, please press star one one on your telephone. Your question will be taken in the order that it is received. Please stand by for your first question. Our first question comes from the line of Deane Dray of RBC Capital Markets. Thank you. Good morning, everyone. Hi, Deane. Hey, maybe we can start with pricing. And Mark, you gave the kind of the broad brush comments that it's back into the single price increase, and it's representative of what would be normal price across the board. Maybe talk about the expectation for new product introductions, and then where does the on the cost equation, it sounds like labor inflation is still around. Is there anything else? Are we back to normal on the rest of the cost side? Yeah. So the pricing actions, again, they're—I'd say they're more in line with what we've done historically, kind of inflationary, plus or minus a little bit. All the business units are implementing increases, as are all the regions. So, we feel, you know, pretty good about that, getting back to a normal cadence there. Of course, if things change, we know we can, you know, make an adjustment if we need to, but it doesn't look like that's gonna be the case this year. Our cost pressures for the full year in the plant were still unfavorable, compared to what we were expecting them to be, but we did start to see a little bit of light, at the end of the tunnel here, as we worked through the year, and in the fourth quarter, things turned, you know, slightly favorable. So, if those trends continue, I am hopeful that we would see some impact, some favorable impact on the gross margin line, as we kind of work through the year. Labor's tight. We did just raise our wages in line with what the market is, but, you know, even though it's tight, we have not really experienced any major difficulties in terms of attracting people to join Graco. It's a great company. We're growing. We have a great story to tell. And even though we have people retiring all the time, we're able to fill those positions, you know, pretty readily. So feel pretty good as we enter into the year, and we'll see what happens. Great. And then just as a second question, going to our favorite traffic light slide, can you just comment on the changes versus last quarter? So improved outlook in Industrials America, but Industrials Asia Pacific dipping and Process Americas look also has worsened. I know you touched on the powdered finishing impact, but kind of, you know, reconcile some of those changes with what's actually going on in the business and order expectations. Okay. This is David Lowe. Hi, David. As far as North America Industrial goes, what we have seen there is pretty good project activity throughout the second half of 2023. The team reports strength in a number of our core markets. I'll just ramble off two or three. E-mobility has continued to be strong here in the home market, aerospace, solar panel, agricultural equipment. And we're hopeful that suggests that we're gonna have a positive momentum going into 2024. So we thought that was worthy of refinement. I think on the Industrial Asia Pacific side, we clearly have a mixed picture in Asia, and one of the, I'd say, the most impacted markets for us has been the, it falls into Industrial, but it's the construction activity that drives powder coating applications, and that continues to be soft space for us. The picture, you know, the picture, especially in China, remains murky at best. So I think that's at least a reflection of how we see the business today. Finally, on Process in the Americas, overall, as Mark touched on, the business has been strong, but we continue to see some softening in orders in the semiconductor space, sort of consistent with the messaging that's going on around in the industry here. I should add, the business continues to be strong in markets outside of North America. That's really helpful. Just a quick clarification, David, please. You mentioned the weakness in China. We had a company report this morning that referenced weakness in China, no less than 14 times in their prepared remarks. Do you have, has there been any discernible downshift in China? It's, it's been weak, pretty consistently, but let's say in the last couple of months, has it turned, more negative for you? Just any color there would be helpful. I would say the quick answer, I've got a cheat sheet here. I'd say it has not. I'm gonna check this while I'm- I think that the overall China has been weak for us, and I would say that the couple of the areas that have been the weakest have been our Contractor business and our powder- Powder. Coating business. But overall, you know, it's kind of been an ongoing theme for us throughout the year. I would say that throughout—Mark's exactly right. Throughout the whole year, it's been soggy on the order rates. I would say we saw modest for what it's worth. We don't really think of our businesses these ways as turning around in a couple of months or a quarter. But the rate of the—I would say, the rate of softness has decreased. I mean, partly because we're working through the period of the toughest comps in 2022. Thank you. Thanks, Deane. Thank you. One moment, please. Our next question comes from the line of Mike Hall- Michael Halloran of Baird. Your line is open. Good morning, everyone. Hi, Mike. So a couple questions here. First, you know, 2023 was a massive year for margins across the board here. You know, we're talking about more normalized price. How do we think about what the right run rate looks like as we work through this year? You know, Process had a mini step down in the fourth quarter, but was 30%+ all year. Industrial's at these really large levels. You know, you compare that to 2022 and earlier, it's just a sea change. So is this sea change at this higher level, the right run rate across the businesses, or should we be thinking about something different? Yeah, I feel good about it. I really think that the businesses are performing extremely well. I think the factories are doing well on lower volumes. It's really gonna be a volume game for us here in 2024. If we get volume growth, you know, above what we're guiding, it's gonna be pretty nice. We've got capacity to utilize, and I really feel like the factories are in good shape to be able to deliver higher revenue. We have the low single digit guide, mostly because, you know, if you look out at the global trends, they are trending below, you know, normal levels, I would say. And we also have a little bit of inflation sticking around, around the world, too, and you never really know how that's gonna play out. Then you've got other factors that all kind of went into that low single digit number, even though, you know, we're getting some pricing, and we've got really nice new products coming out. So, if we get volume growth, Mike, things will be great. If volumes hang in there at the low single digit level, I don't see any deterioration in terms of the overall performance. And, you know, there could be some upside in terms of, some of the initiatives we have, on the cost side to, you know, make sure that we're taking advantage of all the opportunities that we have available to us. There's plenty of work for us to do here. Well, thanks for that, Mark. Then you mentioned initiatives. How, how do you think the internal M&A efforts are going? Maybe some conversations on pipeline, actionability, and any thoughts on the broader landscape on the M&A side? Well, we're hearing that 2024 might be a little bit more favorable than 2023, just in terms of overall M&A activity levels. I feel good about our pipeline. I think I've said this before, but I think that today I could pull any of the names on our pipeline, I'm gonna know how big the company is, what the strategic fit is, actionability, what kind of contact we've had with those, those companies. And so it's really just a matter of, you know, are they ready to get into a transaction or not? I think Graco is in a good spot to be able to look at those opportunities. I think we have a lot to offer. You know, we have world-class manufacturing operations, we have a global distribution channel, we have professional marketing and sales. So, if we get the right opportunity, with the right management team, we're ready to go. And, like I said, I think we feel pretty good about the overall shape of the pipeline these days. I would just add that to that, I think our experience in 2023 really reflects what we saw industry-wide with declines in deal volume. Certainly, the deal supply slipped. I think as maybe in some cases, sellers, you know, withheld moving forward, trying to figure out where private equity fits in all of this, and at least on some transactions we followed pretty closely, multiples remain elevated. With that said, the work is ongoing with respect to pipeline management, reaching out and cultivating transactions. It's long-term retail work, but I think that any time we can find opportunities where we could work on them on an exclusive basis as opposed to an auction basis, that remains a real opportunity for us. As Mark said, in addition to the, I'd say, our operating philosophy and our channel management skills and some other things that we're proud of, is that, quite frankly, given our financial situation, when the opportunity comes along, we can move very quickly. Appreciate it, gentlemen. Thank you. Thanks, Mike. Thank you. One moment, please. Our next question comes from the line of Saree Boroditsky of Jefferies. Your line is open. Hi, good morning. Hi, Saree. So you typically say low single-digit growth in all regions and segments, but you kind of omitted that today. So maybe just talk about where you expect to see higher or lower growth within the guidance of low single digits for 2024? I don't think we fine-tuned it. I think we just decided that we're gonna go with the overall macro, and I think we're smart enough to know, like, what's gonna be up, what's gonna be down. But I feel very confident at this point that overall, that's where the numbers should be at. One of your customers talked about commercial sales maybe weakening in the second half of this year, due to lower completions. Maybe just talk within Contractor about how you're thinking about the resi and commercial completions within your guidance in 2024. Yeah, I do think that commercial is expected to slow down, but it's still gonna grow in 2024. At least that's what they're predicting right now. I'm probably a little bit more bullish on the residential side than maybe what some of the headlines are. I do believe that rate stabilization, the fact that the Fed's gonna cut rates, gives people more confidence to purchase new homes, and I think that the builders are gonna pick up on that and hopefully we see more activity there. We also expect to see more turnover in the North America market once people can see that they're not gonna be locked into these low mortgage rates and maybe they can, you know, move into new houses. I think that'll be favorable for our Contractor business, too. I'm also really excited about the new products coming out in CED. You know, we had great success with the QuickShot product that we launched last year. That really helped. And we've got some new products coming out here in 2024, including a new line of electric sprayers, a new what we're calling a Pro-Shot, which is basically taking that QuickShot technology and applying it to all our installed base of sprayers in the marketplace. We've got some new guns coming out on the Industrial side. We have a new gun coming out in the spray foam category. We have some two-component flooring products coming out in CED. So, pretty excited about the launches that are happening in 2024. It gives us, you know, confidence that hopefully we'll be able to, you know, grow the revenue in line with what we had projected. And I'll just add one more. Your Industrial margins at 37% in the quarter, I think it's the highest it's ever been. So maybe just think about that as a starting off point, how you're thinking about price costs in 2024, the volume impact, just how you're thinking about Industrial margins as you think about 2024 and beyond. Thanks. Yeah, I think they can go higher if we get the volume. Like I said earlier, I think that there's a lot of capacity in the factories. Volumes have not been as strong lately as they had been historically. Most of the growth in 2023 came from our pricing actions, so there's no lid on the Industrial margins that I am aware of. Great to hear. Congratulations. Thanks. Thanks for taking my questions. Thank you. One moment, please. Our next question comes from the line of Joe Ritchie of Goldman Sachs. Your line is open. Thanks. Good morning, guys. Morning, Joe. So, just my first question, like, I agree with what Mike said earlier, just the performance this year on the margins with really no volumes was pretty impressive. As I kind of think about your product cost initiative, how far along would you say you are? And maybe if you could just provide a little bit more color on how that's impacting margins as well, that'd be great. Are you talking about the purchased items in the factory when you say product cost? Yeah, just that you're continuing to lower product costs. I would imagine that you're, you know, simplifying your line and also from a sourcing perspective probably also benefiting. But any color that's really kind of driving lower product costs across your portfolio? Yeah, we have each of the business units has engineers that are looking for ways to take costs out of products. We do that continuously. And then, of course, when we launch a new product, a lot of times we're looking at how do we take costs out of the old one, so we get kind of a double whammy there if it works the way according to plan. When it comes to the factory input costs, we did, you know, start to see a little bit of favorability creep in, in the late in the third quarter and into the fourth quarter, in terms of what we call PPV, purchase price variance. And so if that trend continues here into 2024, I think that that should be more or less a tailwind. At this point, I don't want to predict it, but we don't really see the big inflationary pressures hitting the way we have over the last couple of years. So our hope is that if we keep our price increase in line and we can do a good job on the cost, that there could be decent potential for gross margin expansion in 2024. That's sort of what we've baked into our internal plans. Got it. That's, that's great to hear. And I guess, look, you took a look across the different regions and your segments, and what does stand out to me is what's happening in the Industrial segment in the U.S. or in the Americas. The growth has been really good, had been in 2023. I guess, you know, we've been talking a lot and writing a lot about mega projects and ultimately what that means for Industrial growth going forward, whether it's this year or next. How are you thinking about the investment that's happening in the U.S. and ultimately, like, when you start to see it flow through your own P&L? You know, I think it should be good for us. I can't say that we've actually started to experience it. I can't point to specific, you know, projects that we've gotten as a result of that. But for sure, anytime they move a factory around, from one location to another, they usually don't rip out the old Graco equipment and put it into a new facility. They usually just rebuy the stuff, because in terms of the overall capital outlay, our stuff really isn't all that expensive, and it's just easier and better if they take advantage of that. In North America Industrial, they've really done a nice job executing on some of the initiatives that we've got around electric vehicles and battery production. And in addition to that, I think that the powder business in North America has actually, you know, performed a little bit better than where it had outside of the North America marketplace. So, feel good about the team there and the growth and what they're working on. I think they got their eye on the ball and they're focused on the right things. And some of the products that they got coming out as well, in the electric pump category, should drive some incremental growth because a lot of these customers, if they're moving into a new facility, they're also looking at their energy consumption. And if they can put in an electric drive pump instead of an air drive pump, they save a lot of energy. And so, we think that there's gonna be the potential to get some incremental business with those new builds, but also we can go back into old customers as well and try to, you know, persuade them that there's a payback in ROI if they move to an electric platform. So a lot of good things happening in Industrial and, you know, I think they'll have a... they're in a good spot to have a decent 2024. Yeah, and I would say, just adding to Mark's comment, that there are opportunities for reshoring or nearshoring, whatever you wanna call it, that I think does play out over time. For example, I can use an example in my own finishing experience, where about a decade ago, a couple of large Japanese automotive OEMs decided to start a couple of greenfield facilities in central Mexico, sort of away from where the traditional automotive manufacturers were operating. And the reason for that is it took the better part of five years to flesh out a vendor base that was suitable for the standards of Japanese car companies. So on the higher end of projects, I think it should be a positive, as alluded to over the next several years, but things like supply chains and so forth don't come together overnight, especially in the higher value-added product categories. Got it. That's great color. If I could just fit one more in, just real quickly on the pension settlement. What's left on the pension at this point? I know that you did the $147 million this quarter, but what's left on the liability side? I think we have about $127 million remaining from the PBO after we did this round of the de-risking. Okay, great. Thank you very much. Thank you. One moment, please. Our next question comes from the line of Jeff Hammond of KeyBanc Capital Markets. Your line is open. Hey, good morning. Hi, Jeff. Just on Process, I mean, it's just had a tremendous run of growth, and I think the growth stepped down Q4, and you're saying, you know, it fits in that low single digits. Is this-- are you seeing any real moderation within that business, or are we just finally kind of catching up to tough comps? Yeah, I think that, like David said earlier, the semiconductor business is probably the one that we would expect to see a little bit of a pullback in 2024. The expectation is that they will actually start to ramp up their spend again, kind of mid-year 2024. But of course, last year at this time, we had these huge backlogs of orders from customers, and while we haven't worked down all of those, we worked down quite a bit of it. So outside of that, I don't really see much in terms of things that have us concerned. The vehicle service side still looks pretty solid. Our Industrial lube side looks good. We still have plenty of opportunity there to gain market position. You know, the Process pumping business looks decent. We have an electric drive diaphragm pump that we're pretty excited about, getting put into customers to drive some incremental growth there. So, you know, I, I feel, I feel overall, pretty good about all of the business units in there with the, you know, slight exception of the, semiconductor space. Okay. And then, so, you know, this looks to be your last year of kind of growth capital. You know, should we expect into 2025 that you start settling back in that $60 million CapEx, or is there in a new funnel of projects? No, I think we're in great shape, facility-wise, once we get through 2024, and I would, I would highly expect that our normal maintenance CapEx plus improvements is gonna be somewhere in that $50million-$60 million range. Okay. Thanks a lot. Thank you. One moment, please. Our next question comes from the line of Matt Summerville of D.A. Davidson. Your line is open. Thanks. Just a couple of quick ones. With respect to the performance you saw in Contractor, can you maybe just touch on the divergence in the home center channel versus pro paint and whether you see that trend continuing in 2024, given kind of the new product cadence you're, you're looking for? Yeah, you know, I, I'll be honest with you, Matt, if, you know, a year ago, somebody would have told me that full year CED is gonna be up, you know, or down 1%, I think we all would have said, we'll take that, just given all the doom and gloom that was out there in the marketplace. Everything from DIY was way overbought to the housing market's gonna collapse and crater and, you know, all that, all that negative stuff. But, you know, as I—I think I reminded people at one point, that business is made up of a lot of different things, and you've got line striping, you've got spray foam, you've got protective coatings, which are all kind of more in the professional camp, as well as all the pro sprayers that we sell through, the professional paint stores. And that side, you know, the pro paint held up probably better than what we would have expected. And then the other pieces that I mentioned were actually fairly robust with a lot of the infrastructure spend that's been going on, and opportunities to, you know, go in and re-insulate homes, for example, with spray foam. So all in all, feel pretty good about that. I feel like the home center, in terms of their inventory levels, has gotten to a point where they're comfortable, and they're at the level that they're seeing in terms of foot traffic in the stores from a demand standpoint. So I feel like we've already been through most of the pain there in terms of reductions. We do have some new products going in there this year. We'll see what happens with that. If the level of activity remains where it is and we do a good job in the new products, we'd actually see some potential growth in the home center in 2024. We'll just have to see how things shake out. Got it. And just as a follow-up, how do you guys think about balance sheet optimization? Especially, you know, to the comment made earlier, this big multi-year kind of CapEx cycle for Graco, you know, really starting to roll off in 2024, essentially abating in 2025, and yet you're sitting here with $500 million in net cash. How should we think about, you know, whether or not you guys are likely to step up and get more aggressive with repurchases if the M&A, you know, pipeline maybe doesn't play out as you hope? How should we be thinking about kind of optimizing the balance sheet for Graco? Well, for sure, top priority would be to do some acquisitions that make sense, strategic ones, so we can add value, or we can put points on the board, you know, that pay back, nice rates of return for our investors. And I think David alluded to the fact that pricing has been a little bit of a challenge here. We'll see what happens. I like the pipeline. We will be active. That would be my top choice, and I think the top choice of our management team. We've always had the, I'll call it the happy problem of, you know, generating more cash than we can plow back into the business. And historically, we've taken care of that through buying back our stock and doing some acquisitions. But for sure, it's front and center in terms of, you know, things that we're keeping an eye on. You know, we do have $500 million in cash on the balance sheet, but, you know, we are a 14+ billion dollar or billion market cap company. So in terms of, you know, the overall leverage, it looks big, but, you know, again, you know, given the size and scale of Graco, I don't really view it as a significant problem at this point. I don't think anyone has a gun to David Lowe's head or my head saying that we have to deploy that capital. We sure would like to. We'll do our best to be able to take advantage of opportunities on the share buyback side and M&A going forward. But, you know, it's a great problem to have. The company performs extremely well. We're fortunate to have this happy problem. So, I should leave well enough alone because that's a good summary. I'll just add the two things. Number one, I think we like the flexibility that the position gives us to move quickly when opportunities and such come along. And some of you have heard me talk about before, while I don't think of our stock as a classic cyclical, Wall Street does because of the markets we serve. And, what that means is, from time to time, without a lot of change in our business, cyclical stocks go on a discount. I think our record over the last couple of decades has been pretty good at buying in, most recently in 2022, also in 2020, back in 2015 and 2016, when we were, I think experiencing a 30% haircut. It's nice to know that that remains a real option for us when the opportunity comes along. Got it. Thank you, guys. Thanks, Matt. Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star one one on your telephone. Again, to ask a question, please press star one one. One moment for our next question. Our next question comes from the line of Andrew Buscaglia of BNP. Your line is open. Hey, guys. You know, just looking at your margins, you know, I think everyone's kind of trying to figure out if you can exceed the sort of watermark, which is, you guys have had such strong margins this year on low growth. I'm wondering, you talked a lot about new products you're introducing. You're always introducing new products. Is this a greater kind of new product cycle we're upon? It seems like you have quite a bit of commentary on that. Yeah, I would say that for sure, new products is oxygen for Graco, right? I mean, it's our primary growth lever. And I really do believe that this year, in the Contractor business in particular, is a strong lineup of new products coming. And we also have, you know, decent products in the other business units as well. So, you know, if you were to take, like, an average of a new product year for Graco, this 2024 looks like it could be a little bit stronger than average. Yeah. Okay. Interesting. And is there a bit more pricing leverage, therefore, in Contractor versus the other segments, both price cost, but also this new product initiative or... Not initiative, but new product expectation? I wouldn't say there's more pricing leverage. I would say that we are able to charge a nice price for new technology when we bring it to the marketplace. And, you know, typically, we're also looking to maybe reduce some of the costs if we're replacing a legacy item with something new. But, Yeah. ... you know, being the first to the customer with new technology is really the name of the game. And if you can do that consistently, like we've been able to do, you really can drive more organic growth than, say, other companies that are playing catch-up. Yeah. Okay. And you're talking, you know, I know acquisitions are your preference. You know, how do we think about margins with new deals? Are these deals you're looking at, I'm assuming, would be margin dilutive, but yeah, can you just kind of remind us what your hurdle rates are and what your expectations are for that? Yeah. We don't really have a targeted, let's say, operating margin for a business that we're going to acquire, but for sure, in most cases, their operating margins are going to be below Graco's or their EBIT margins or EBITDA margins. So what we're really looking for is a good business, where we understand the product line, we understand the customers. We think we can bring some value, particularly on the operational side of the business, and take their existing margin rate and improve it over time. I think we've got good experience with the deals that we have done, and with that kind of a playbook, and that's really what we'd be looking for with M&A as we're scouring the market for opportunities. Okay. Very helpful. Thank you. Yep. Thank you. If there are no further questions, I'll turn the call back over to Mark Sheahan for closing remarks. Okay. Thanks very much. I'd like to thank our customers, employees, all of our channel partners around the world for a great year in 2023. Their dedication and loyalty and unwavering commitment to Graco is really what provides us with the winning edge in the marketplace. I thank you all for participating on today's call. That concludes the call for today. This concludes our conference call for today. Thank you all for participating and have a nice day. All parties may now disconnect.