Ladies and gentlemen, good morning. My name is Abby, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Gates Industrial Corporation third quarter 2023 earnings call. Today's call is being recorded, and all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. Thank you, and I will now turn the conference over to Rich Kwas, Vice President of Investor Relations. You may begin. Good morning, and thank you for joining us on our third quarter 2023 earnings call. I'll briefly cover our non-GAAP and forward-looking language before passing the call over to our CEO, Ivo Jurek, who will be followed by Brooks Mallard, our CFO. Before the market opened today, we published our third quarter 2023 results. A copy of the release is available on our website at investors.gates.com. Our call this morning is being webcast and is accompanied by a slide presentation. On this call, we will refer to certain non-GAAP financial measures that we believe are useful in evaluating our performance. Reconciliations of historical non-GAAP financial measures are included in our earnings release and the slide presentation, each of which is available in the Investor Relations section of our website. Please refer now to slide 2 of the presentation, which provides a reminder that our remarks will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks that could cause actual results to be materially different from those expressed in or implied by such forward-looking statements. These risks include, among others, matters that we have described in our most recent annual report on Form 10-K and in our other filings we make with the SEC. We disclaim any obligation to update these forward-looking statements. During the balance of the quarter, we will be attending the Baird Global Industrial Conference in Chicago and visiting investors in California as well as internationally. We look forward to meeting with many of you. With that out of the way, I'll turn the call over to Ivo. Thank you, Rich. Good morning, and thank you for joining us today. Let's begin on slide three of the presentation. Our global teams executed well, delivering strong operating results, which translated to record revenues and adjusted earnings per share for a third quarter. Core revenue performance year-over-year was consistent with our Q3 guidance midpoint, as automotive outperformed the industrial end markets. Our replacement channels posted positive growth year-over-year and largely offset declines in our First Fit channels. Regionally, EMEA and East Asia and India generated the strongest core growth. Demand in China was softer relative to our expectations when we last updated our outlook after the second quarter. Globally, our focus on replacement markets is providing top-line growth support and mitigating the impact of spotty OEM demand trends. Our book-to-bill remained at 1 in a quarter, and we continue to make progress reducing our past due backlog and improving service levels to our global customers. Our adjusted EBITDA margin was 21.7% in a quarter, an increase of 110 basis points year-over-year, despite less favorable channel and end market revenue mix. The expansion was fueled by a 330 basis point increase in our gross margin compared to the prior year period, partially offset by higher variable compensation costs. The supply chain environment was more stable relative to last year and benefited our performance. But several enterprise-wide initiatives involving supply chain and productivity, as well as our continued implementation of 80/20 best practices across the organization, contributed to the gross margin expansion. We are pleased with the improvement to our profitability, but are not satisfied and intend to advance our various initiatives to drive incremental performance in the future. Q3 free cash flow was approximately $90 million and represented about 96% conversion of our adjusted net income. Our higher margin performance, coupled with stability in our trade working capital, contributed to the solid outcome. Seasonally speaking, this was a strong result and sets us well to achieve our guidance of 100%+ free cash flow conversion for the year. As a reminder, the fourth quarter is typically our strongest quarter for free cash flow generation. Our net leverage ratio finished the quarter at 2.6x, or 0.6 of a turn lower versus the prior year period. Due to the third quarter outperformance, we are raising our 2023 Adjusted EBITDA guidance to a midpoint of $730 million, an increase of $5 million from our prior guidance. Also, we have raised our Adjusted EPS midpoint by $0.04 compared to a previous guidance. We are reiterating our full year guidance for core sales growth and free cash flow conversion. Please move to slide 4. Third quarter total revenues were $873 million, with reported growth of 1.4% and core growth down just slightly year-over-year. Foreign currency changes contributed almost 2 percentage points to our overall growth versus the prior year period. In automotive, we experienced mid-single-digit core growth, both in the replacement and first-fit channels, and across almost all geographic regions. The majority of our industrial end markets experienced decline globally, although energy and on-highway were bright spots, growing mid-single digits compared to the prior year period. Regionally, China industrial demand was weaker than expected. Broadly, our industrial replacement business held up better compared to our first-fit business. Globally, our replacement business increased low single digit year-over-year on a core basis and provided a buffer against ongoing demand choppiness in the industrial OEM markets. Adjusted EBITDA was $189 million, and adjusted EBITDA margin was 21.7%, approximately 110 basis points higher than last year's third quarter. Gross margin expanded 330 basis points year-over-year and was the driver of the improved adjusted EBITDA margin. The gross margin increase was driven by a combination of price realization, a relatively stable supply chain environment, and benefits from our enterprise-wide business initiatives. Of note, our Adjusted EBITDA margin expansion included 170 basis points headwind from higher variable compensation expense. Adjusted earnings per share was $0.35, up 13% year-over-year. Relative to last year, higher operating income was the most important contributor. On Slide 5, we show our segment performance. In the Power Transmission segment, we generated revenues of $536 million and core growth of little over 1% year-over-year. Currency was favorable by approximately 150 basis points. Automotive core growth was in the mid-single-digit range, with replacement growing slightly stronger than First Fit. Our global industrial markets were mixed. Energy, on- highway, and construction revenues all increased in a low double-digit range on a core basis. However, we experienced declines in personal mobility Diversified Industrial. we believe the mobility business continues to work through industry-wide inventory destocking. We anticipate this dynamic to continue through the first half of 2024. Our design win activity in the personal mobility application space remains robust and positions us to resume strong growth once the industry inventory overhang plays out. Our China industrial business was a bit softer than anticipated, declining approximately 10% versus the prior year period on a core basis. Overall, our transmission industrial replacement core revenues were more resilient than First Fit, declining low single digit year-over-year. Despite the softening top line trends, we generated sizable margin expansion, fueled by strengthening business performance in a more normalized supply chain environment. Our Fluid Power segment generated revenues of $337 million, and core revenue declined about 3% year-over-year. Automotive core revenues increased mid-single digits, with growth relatively similar across first-fit and replacement channels. Industrial revenues declined mid-single digits on a core basis. Energy and on-highway realized positive growth, but that was more than offset by year-over-year decreases in agriculture Diversified Industrials. construction also declined slightly versus Q3 2022. Fluid Power segment adjusted EBITDA margins declined 70 basis points year-over-year, as higher variable compensation expense more than neutralized the benefits of gross margin expansion. I will now pass the call over to Brooks for additional details on our results. Brooks? Thank you, Ivo. Starting on slide 6, let's review our core revenue details by region. Our core revenue performance in the third quarter was led by EMEA, which increased about 4%. In EMEA, automotive grew double digits, led by mid-teens growth in replacement. Our energy business grew more than 30%.... Construction and on-highway were also solidly positive, delivering high single-digit core growth. These were offset by declines in Diversified Industrial, and ag. North America core revenues decreased approximately 2% versus the prior year period. Automotive increased low single digits and was accompanied by similar growth trends in on-highway Diversified Industrial. however, we experienced year-over-year headwinds in other verticals, most notably in personal mobility and agriculture, both of which declined double digits, consistent with our expectations. Overall, the revenues from our replacement channels delivered stronger performance than the OEM-based channels. In China, overall demand was softer than expected. We realized positive contributions in the automotive replacement channel and the on-highway end market, but experienced pressure in multiple industrial verticals. Industrial replacement revenues declined more than 20% year-over-year on a core basis. Industrial demand in China continues to be relatively weak, and we now expect our core revenues to be about flat with 2022. East Asia and India and South America core growth rates were nicely positive, both supported by good growth in automotive. Overall, our global replacement business delivered growth and helped mitigate slower demand trends in our industrial first-fit channels. Turning to slide 7, we bridge our year-over-year adjusted earnings per share performance. Improved operating performance, driven by stronger gross margins, benefited our results by approximately $0.04 per share. Net interest expense headwinds of $0.02 per share were offset by reduced share count benefits of approximately the same amount. Overall, we were pleased with our ability to deliver solid year-over-year earnings growth in a challenging global demand environment. Shifting to slide eight, we summarize our cash flow performance and balance sheet position. Our free cash flow for the second quarter was $90 million, or 95.6% conversion of adjusted net income. Year-over-year margin expansion and moderating trade working capital trends versus the prior year period supported the performance. On a trailing twelve-month basis, our free cash flow conversion is approximately 138%. Our net leverage ratio declined to 2.6x, a 0.6-turn decrease relative to the prior year period. In addition, we amended our 2029 term loan and reduced our spread by 50 basis points, which we estimate will generate approximately $3 million of annualized interest savings. Overall, we are pleased with our cash generation performance and its positive impact on our balance sheet. Our trailing twelve-month return on invested capital increased 360 basis points year-over-year to 21.6%, largely driven by margin expansion and disciplined capital investment. Please turn to slide 9 to review our updated 2023 guidance. At the midpoint, we are raising our full-year adjusted EBITDA and adjusted earnings per share guidance to account for third quarter's outperformance. We have maintained our full-year guidance for core revenue growth and free cash flow conversion. For the fourth quarter, we anticipate revenues to be in the range of $855 million-$885 million, which incorporates a core revenue decrease of a little over 4% year-over-year at the midpoint. Based on current business trends, we are tracking towards the lower half of the revenue dollar range. We expect to drive good profitability improvement in the fourth quarter, with Adjusted EBITDA margins anticipated to increase in the range of 60-110 basis points year-over-year, fueled by gross margin expansion, partially offset by higher SG&A. With that, I will turn it back over to Ivo. Thank you. On slide 10, I'll wrap up with a brief summary before taking your questions. We are pleased with our operating performance year to date and intend to finish the year with another quarter of strong gross margin improvement while dealing with softer demand. Year to date, through the third quarter, we have generated a 240 basis points year-over-year increase in gross margin, while experiencing mild volume pressure. The normalization of the supply chain environment this year and our improving performance have translated to stronger margins. Moving forward, we are advancing our enterprise-wide supply chain initiatives to enhance our service, productivity levels, and working capital efficiencies. Furthermore, we continue to evaluate restructuring projects that would optimize our operational footprint and organizational structure. We intend to provide you with additional details on these opportunities in 2024.... Second, we continue to reduce our Net Leverage Ratio. We experienced a nice year-over-year decline in Q3, and are on track to further improve the ratio by year-end. Our year-end 2023 target of 2.5x represents a 0.3 turn reduction in our net leverage ratio relative to 2022, and includes the impact of returning $250 million to shareholders via our share repurchase in May. We continue to generate surplus cash and see opportunities to reduce debt in near term. We believe we have multiple potential levers to create value for our shareholders over the next couple of years and are highly focused on the opportunities available. Before moving to your questions, I want to take the opportunity to thank the 15,000 Global Gates associates for their ongoing dedication and focus to serving our customers. With that, I will now turn the call back over to the operator to begin the Q&A. Thank you. At this time, I would like to remind everyone, in order to ask a question, press Star and then the number one on your telephone keypad. We do ask that you please limit yourself to one question and one follow-up question. We will pause for just a moment to compile the Q&A roster. We will take our first question from Andy Kaplowitz with Citi. Your line is open. Good morning, everyone. Morning, Andy. Good morning, Andy. Ivo, can you give us more color into how you're thinking about industrial markets as you start to turn to 2024? I think you were early to call a destock this year in industrial. And maybe you could talk about where we are sort of in the channel. And I think you said that maybe destock can last into the first half of 2024, but could you elaborate on your thinking there, and could industrial turn positive in 2024? Yeah, thank you for your question, Andy. Look, you know, we anticipated that the industrial activities are going to to weaken throughout the year, and I think that you know, it's playing out the way that we've we've anticipated. I would say that what we didn't anticipate is a little bit weaker China, that certainly is playing itself out, but I also believe that China may be stabilizing as we exit 2023 after almost two years of underperformance. So, you know, our our view is that the industrial markets possibly should start seeing some degree of stability in the back half of 2024. But look, Andy, we just finished a terrific Q3. We are focused on execution on Q4 of this year, and we'll certainly have a lot more to say about the markets and how we view those markets in 2024 on our next earnings call. Totally fair, Ivo. And to that point, maybe just a little more color in terms of power transmission margin and how you're thinking about price versus cost moving forward. But also, you know, this is the highest margin you've seen in that segment in a couple of years. So maybe you can talk about how much impact, you know, these programs, you mentioned 80/20, supply chain initiatives. Any more color on how it's helping you? I think you told us you, you'll tell us more in 2024, but maybe a preview of that. Hey, Andy. You know, we don't get much into profitability, you know, by product line, but what we did say last year, if you remember, is that the power transmission product line was more impacted by some of the headwinds that we saw in the back half of 2022. And if you remember, you know, we said we had about, you know, 200-250 basis points of headwinds that should correct themselves on the gross margin line as we move through 2023. So if I break apart, you know, the gross margin side, and it's probably a little bit heavier on the power transmission versus FP because they were more impacted, you have this, you know, at the midpoint of that 200-250, about 225 basis points of tailwinds from really supply chain normalization that we've seen in the back half of 2023. Now, that's offset by about 125-175 basis points of headwind on volume and mix. So we've seen lower volumes, and we've seen lower mix, particularly on the industrial replacement side. And then I'd say offsetting that, you know, the 80/20, some of the strategic pricing stuff that we've done, you know, that's about 150-200 basis points of tailwind. And then you have productivity initiatives that we're really just starting to see get started, because of the supply chain normalization. That's about 60-80 basis points. And so you kind of roll all that up, and, and that gets you to the, the, you know, 300-350 basis points of gross margin improvement, that we're seeing in the second half of 2023. So hopefully, that kind of frames it up for you. Yeah. No, that's good, Brooks. Appreciate all the color. Yep. Thanks, Andy. We will take our next question from Michael Halloran with Baird. Your line is open. Hey, good morning, everybody. It's Pezan for Mike. Following up on Andy's question there, you know, regarding some of the supply chain initiatives and regarding some of the relief, from prior challenges, you know, how much relief do you see ahead from the external environment on the supply chain? And then additionally, when we think about the internal actions, you know, how much of this do you think about this being more typical course of business, ongoing productivity versus maybe more structural and proactive actions? Yeah, good, good morning. Thank you for your question. Look, we, we believe that as we exit 2023, we have kind of been through the normalization of the supply chain. So, you know, the second half of last year will be fully offset with the performance of, you know, kind of a normalized performance of the supply chain in 2023 exiting. So we believe that that's normalized. Look, you know, we've spoken about our targets of 24% EBITDA, and we've kind of delineated how we're going to get there through our own enterprise initiatives and 80/20, and kind of the ongoing productivity actions that we're delineating. And we certainly believe that, you know, we are starting to demonstrate the validity of that plan. And we still believe that we have a lot of opportunity to be able to deploy self-help, both frankly, on more of the structural items, as well as more on the ongoing productivity-based items. So we'll continue to provide you with the updates. We are very proud of our teams have executed in the second half of this year, and we believe that that positions us quite well for 2024. Yeah, super helpful. Maybe if we switch gears and think more philosophically, as we get back to kind of below that 2.5x leverage level, how do you view M&A coming back into play over time? And obviously, longer term, the company targets M&A contributions as part of the longer term growth algorithm. You know, how do you think about restarting that engine over time and where you'll be looking to maybe over allocate some of your time and resources in terms of markets? Yeah, look, first and foremost, we are committed to get our leverage below 2 times. We've made that commitment to all of our shareholders. We believe that we have a tremendous cash generation opportunities. The business is very good, very capable of generating very robust cash flows. That positions us well to reasonably quickly deliver to below 2 times. Once, you know, once we reach that level, we will have a very substantial capacity to deploy capital in a more strategic manner. We have a ton of opportunities in the pipeline. We are going to be extremely disciplined. We still have not seen a complete reality reset on valuations, and taking into account that we believe the biggest benefit that we can deliver for our shareholders is, delivering the business and potentially deploying capital to incremental share buybacks. You know, we'll be making all of those decisions, but M&A is definitely starting to come more to a frame. We are very excited about it. We believe that that's gonna be a big driver of future, opportunity to drive growth as well as profitability improvements, but we'll be very, very disciplined. Much appreciated, Ivo and team. I'll pass it on. Pardon me. We'll take our next question from Damian Karas with UBS. Your line is open. Hey, good morning, everyone. Good morning, Damian. So I know you called out the mobility destocking. Just wondering if you're able to maybe quantify, how much of an overall headwind the inventory destocking behaviors were in, in the third quarter, and, thinking about your fourth quarter guidance, and really, just if there's any way you could just give us a sense on kind of that sell-in activity versus, you know, kind of the, the sell-through, demand, if you will. Yeah, look, so the overall, let me start with the overall, right? So the overall, we've indicated that our book-to-bill remains at 1, and, you know, that book-to-bill is embedded in our guidance for Q4. We did see, you know, a rather substantial destocking, as we have discussed from about, you know, second quarter earnings call in the mobility, personal mobility space. That continues to play itself out. There's been a very substantial overbuild of equipment that, you know, our view is it's going to take maybe through middle of next year to work itself out. But as you see, we are able to deliver very strong performance despite some of the end market weaknesses in a very specific category. So we are very pleased with how our teams are delivering. We believe that we continue to outgrow the underlying market dynamics, with our franchise, the products, the services that we deliver, and, we are quite optimistic that we can continue to outperform the markets well into the future. And once the destocking, plays itself out in mobility, we have a tremendous backlog of new programs that we believe will continue to re-accelerate the growth in personal mobility and still give us the opportunity to deliver on our midterm targets. Okay, very helpful. Thanks. And then thinking about fourth quarter here and going forward, is there still a positive price uplift that you're getting on the top line? Or has that kind of faded and you basically have lapped most of the, you know, pricing initiatives that you've already taken? No, we're still getting price. You know, part of it is carryover, you know, from last year. Part of it is eighty/twenty. And look, you know, we're gonna continue. Look, there's still inflation out there, right? So I would say that certainly on the freight side, you've seen costs you know, start to come down somewhat. You know, so, you know, some of that for us is more, you know, the supply chain headwinds and productivity that we saw, as opposed to just straight deflation. On the inflation on the material side, we're still seeing inflation, albeit at a much lower rate than we were seeing when it was really ramping. So you're seeing a very moderating amount of inflation. And the other thing I would throw out there is, you know, labor inflation, you know, has gotten, I think, significantly more pronounced, you know, here over the past couple of years, and you're seeing it kind of play out, you know, across the broader environment. And so you kind of add all those things up. We're gonna continue to price, we're gonna continue to go out with price increases to offset inflation, and we're gonna continue to price for 80/20. So, so we think we've got, you know, good pricing dynamics as we head out into the future. And, you know, those are kinda all the pieces of it. Understood. Thank you. Best of luck, guys. Thanks, Damian. We will take our next question from David Raso with Evercore ISI. Your line is open. Hi, thank you. I was curious, the comment you made about the fourth quarter so far tracking toward the low end of the revenue. Can you give us a sense of what is tracking so far, a little bit below what you maybe have put in the guide? And even within the guide, I see the organic is implied or noted as down 4, but total revenues are down less than that. So I'm just trying to get a sense, do you see the currency swinging back to a positive in the fourth quarter? Just trying to square that up. Thank you. Yeah. Yeah, so look, what we're really seeing is, and the reason we made that comment is, we're just seeing a return to more normalized seasonality, right? And so if you think back over the past couple of years, there's been, you know, significant puts and takes, you know, in terms of the seasonality and how it plays out by quarter. And so as we've moved through, you know, Q3 and Q4, what we've seen is just a more normalized return to seasonality. Now, you know, what could uptick that? You know, does China start to recover a little bit more? Is industrial a little bit more robust than normalized seasonality? You know, we'll have to see how that plays out. But what we're implying there is just more normalized seasonality than anything. We have a 1.5% FX tailwind in Q4, and I think that's the other piece you're probably looking at in terms of total sales. Within the segments, the down 4, just so we get a sense of trying to think about how we enter the first half of 2024, are both segments with negative organic growth in the fourth quarter? And if you had to sort of handicap how you're thinking about the destocks into the first half of next year, you know, where would you expect the bottom to be in those year-over-year organic sales declines? So, you know, I would say that in Q4, PT is more affected by weaker China in Q4 and personal mobility. FP, you know, we've, you know, we are leveraging a little better capacity utilization and, and being able to keep up with the order flow, reasonably well. So I would say, you know, I would think about, maybe, think about PT being, being more impacted in Q4. And, you know, we, we, yeah, that's what we have embedded in guidance. Okay, that's helpful. Thank you so much. We will take our next question from Deane Dray with RBC Capital Markets. Your line is open. Thank you. Good morning, everyone. Good morning, Deane. Hey, I'll start with an observation on Brooks's answer to Andy's question. Brooks, I love how you phrased that we don't give a lot of, you know, specific detail by product line, and then you proceeded to give fabulous color on, you know, strategic pricing, restructuring, supply chain normalization. So I really appreciate you've got those details. And so now I want to ask, maybe you have the same level of precision on releasing your own buffer inventory, your own destocking, you know, where and how might that play out in the fourth quarter? Because that would boost an already strong free cash flow quarter. And then just overall, how do you expect the release of your own buffer inventory? Yeah. So, you know, what we've seen so far, Deane, is we've seen the raw materials start to come down, as we've released our inventory. But on the flip side, what we found as we've worked our way through, you know, some of the supply chain issues we had last year, and as Ivo talked about, the supply chain initiatives we're working on, you know, we're working on making sure we optimized our finished goods inventory, which is what's led to some of the improvement in past dues and the improvement in service levels that we've had. So, you know, our cash flow has been strong this year, improved profitability, working capital management, you know, capital's, you know, relatively flat. So we're making sure that we use a balanced approach to be able to drive additional volume when the, you know, when the cycle gets to the upturn, and that we're prepared for that. You know, at the same time, we try to shrink, you know, how much of that, you know, buffer inventory, as you called it, you know, that we had during the downturn. So we think we can take inventory out on a net-net basis, but we're gonna manage it between raw material and finished goods.... to get the best outcome. That's real helpful. Thank you. And then for Ivo, I know you are limited on what you can say about future restructuring. And so my first reaction is, why wouldn't you get started earlier with that and doing some in the fourth quarter? Maybe there's some timing limitations there. But if you could also just frame for us directionally, is this more restructuring than you've done recently, previously? And what kind of payback are you looking for in these types of restructuring actions? Thanks. Yeah, thank you for your question, Deane. So I think we have announced that we are closing one of our facilities in China earlier this year. That project is nearly complete, and, you know, we anticipate that at the end of this quarter, we will have completed the China restructuring activity, and that's gonna give us approximately $4 million of annualized savings for next year. On some of the other restructuring, Deane, as you know, we firmly believe that we can nicely improve the efficiency of our franchise by further optimizing our footprint. We believe, and I've been pretty vocal about our, you know, our desire to continue to improve the efficiency of our assets, position our business to sources of more available direct labor, you know, better skill set mix. And that, you know, that will require some incremental steps to drive some additional footprint reductions that we have in some less efficient areas where we operate. So while we haven't made any of these announcements, we are working feverishly to make these announcements in time to be more, able to, discuss this, you know, publicly and after we have notified all of our, employee infrastructure across the globe. So we do believe we have, lots of opportunities, and that's gonna become certainly a, a, you know, a set of projects that we can execute over the midterm, that's incremental to simply running the business, in an efficient and effective manner. So we are very committed to delivering on midterm target of the mid-20s EBITDA margins, and we believe that we have put ourselves in a position to be able to deliver that over the midterm. That's really helpful color. Thanks, Ivo. We will take our next question from Julian Mitchell with Barclays. Your line is open. Thanks a lot. And one thing I just wanted to circle back with on the top line, you know, you've emphasized in China the headwinds there broadly, and then personal mobility, for example, in the Americas. I just wondered, you know, in the fluid power business, Ivo, you know, what you were thinking about the outlook there for, you know, some of those large OEMs who maybe have not sounded super bullish on next year in construction equipment, for example, Volvo, Cat, and so forth. And if you see them already, you know, cutting invent-- cutting orders to get inventories down, you know, when dealing with suppliers such as yourself, you know, it seems a very kind of mixed picture when I look at your numbers, say, versus, you know, someone like Helios in hydraulics or, or Parker yesterday, so it can be tricky to sort of piece it together. But yeah, curious on that specific kind of Fluid Power into those large machine OEMs. Any perspectives? Yeah, thank you for your question, Julian. I mean, you know, we have, I think that we have delineated during the call that we have seen weakness in ag, we have seen, you Diversified Industrials that were reasonably weak, and, and we have seen, you know, the early signs of the weakness in, in construction equipment. So I mean, you're absolutely right, and, you know, we, we believe that, you know, that is embedded not only in our guidance for certainly for Q4, that purview, but we believe that in, you know, early stages of next year, this is gonna be pretty persistent, in the end markets performance. But that being said, we also have tremendous amount of, other opportunities that we have been working through on, taking incremental market share. You know, we still, while we are, you know, one of the top five players globally in hydraulics, we believe that we have a tremendous opportunity to take market share. And while the markets can compress, you know, these opportunities become more pronounced and more important as you move forward into the future years. So, look, we are being sober and realistic about the end markets, but we're also being reasonably—we are being also reasonably optimistic about you know, the more resilient aftermarket business that we have versus the OE applications. And, you know, over 65% of our revenue comes from the aftermarket, and those markets are, generally speaking, much more resilient as well, and opportunities are out there as well to take more market share. So, you know, while, you know, we certainly are being realistic about what, you know, what the markets look like, we are also reasonably optimistic that we can take more market share. We have positioned the business well. We got, you know, good capacity. We have built a capacity over the last 2-3 years, and frankly, that's paying really good dividends for us, and I think that the results speak for themselves. That's good to hear. And then my second question, maybe following up on the, the sort of cost discussion just now. You know, one, I guess, was your CapEx guide, you know, coming down for this year. You know, I just wondered sort of context on that. Do we just dump that $15 million plus back into next year, or is next year also subdued CapEx? And, wanted to understand on, on the cost base, so are you saying that you can get to that kind of 24% odd EBITDA margin in 2025 even without a, a big new restructuring? Or is that target just more of a question because of the top-line dynamics? Thank you. Yeah. So let me unpack that a little bit. So on the capital side, you know, if you go back and look historically, I mean, you know, where we got it is kind of right in the sweet spot of where we've been. You know, you know, we're, you know, we're there to be, you know, more big projects, more restructuring or something like that, you know, it might creep up, you know, to the, to more to that $100 million level. But, but even that is still kind of at our depreciation expense level. So, you know, we're comfortable, you know, with that, you know, that kind of longer term, 2.5, you know, percent, 2.5%-3% CapEx. That being well within, you know, the purview of ongoing capital, cost reduction, the targeted new capacity, and then if there's some new projects that come online or new things that we need to spend money on, we think we can handle that as well. So, as to your question, I don't think we pull that back necessarily into 2024. We'll cross that bridge when we get there. And then the second part of your question on- The midterm. The midterm. Yeah, I - well, first of all, I wouldn't say... I would say that's probably more out toward 26 than 25, right? When you look at where the cycle is and you, and you have to get through the cycle, first. Look, you know, restructuring is part of how we get there. You know, 80/20 is part of how we get there. Productivity is part of how we get there, and then volume uptake is part of how we get there, right? And so all those things, you know, really flow together. And I’ll tell you, you know, you know, you know, we go through and we look at where we stand and where it's gonna take, you know, what it's gonna take for us to get us there. You know, we feel really good about where we've ended 2023 relative to our EBITDA improvement over 2022. And we feel good about those 2026 targets of 24% EBITDA that we've provided. And so hopefully, that answers your question in terms of all the pieces that get us there. That's great. Thank you. Mm-hmm. We will take our next question from Jerry Revich with Goldman Sachs. Your line is open. Yes. Hi, good morning, everyone. Good morning, Jerry. Yeah, can we just talk about the margin outlook for the fourth quarter? You know, you had an outstanding third quarter. Margins improved sequentially. Normally, they're down sequentially, and so just the outlook implies a 2-point deterioration, 4Q versus 3Q. I'm just wondering, are there any discrete drivers of that view, or is that just to allow room to execute given the moving pieces from an end market standpoint? Nope. I'm gonna go back to what I said earlier, Jerry. It's normal seasonality. You know, we've had, you know, you know, ups and downs and puts and takes over the past three years with, with COVID and inflation and then more pricing and then supply chain issues last year. And so what we're seeing now is, you know, a more normalized supply chain. And, you know, even though, you know, we've talked about, you know, some of the weaker demand outlook, and we've been very transparent in that, what we're seeing is just normalized seasonality, both from a top-line perspective and from a gross margin perspective. Now, having said that, you know, we're still looking at, you know, 250-300 basis points of gross margin improvement, you know, offset by 175-225 bps of SG&A, you know, on some higher variable comp and things like that, as we move through the back, the last part of the year. So still seeing good improvement, but when you look at it sequentially, it's just normalized seasonality. Okay. I guess I was looking more from 2016 to 2019 timeframe, you know, where the Q3 just tends to be your lowest margin quarter, but maybe we can touch base on that offline. And then, you know, in terms of just operationally, it's interesting to see you folks posting the margin improvement that you're posting with the end market volatility over the course of the year. Can you just touch on operationally where you folks stand now exiting, you know, this post-COVID supply chain environment in terms of operationally, what we're doing differently that's allowing us to deal with all of these ebbs and flows in the end markets while, you know, incurring under absorption in some areas and still putting up these types of results? Anything you're doing differently, this cycle versus a couple of years ago? I would say, you know, well, you know, first, it's hard to unpack, you know, kind of what we've done on 80/20 and pricing and some different things like that, from, you know, necessarily what's going on operationally. What I will say, though, is as we've worked through, and Ivo alluded to this in his comments, on the call, you know, as we work through some of these supply chain issues that we've had in the back half of the year, you know, we've come up with some really good projects around, you know, supply chain optimization, around material optimization and cost out and different things like that. And some of that, some of that is starting to, to flow through to the bottom line, and some of it we think will flow through to the bottom line in the next 2-3 years. And so, you know, while it was painful to go through, you know, as we're coming out of it, you know, we have a robust set of projects that we think is really gonna help drive, you know, productivity, both from a material perspective and a cost perspective. Jerry, let me also, you know, maybe put a little bit of a pitch in here for what the company did over the last 2-3 years, right? So we have evolved our mix. We have driven new product vitality up. We have added much higher efficiency asset base into our business over the last 3 years. And during the same time, we worked through an incredible amount of, you know, volatility, both from the geopolitical perspective, economic perspective, and COVID perspective. So I just believe that we have put the business on much stronger footings, and as the macro starts working itself through, things start to stabilize, I think that we are much better positioned to be able to truly demonstrate the potential of this enterprise. Well done. Thanks. We will take our final question from Jeff Hammond with KeyBanc Capital Markets. Your line is open. Hey, good morning, everyone. Last batter over here- Good morning. Just a couple quick ones. Just maybe speak to Europe. You know, I'm surprisingly resilient. We're seeing kinda cracks for some peers. Maybe just speak to what you're seeing there, and then just I know your First Fit business is shrunk over time, but you know, how you've seen any impact from the auto strike. Thanks. Yeah. So, Jeff, on Europe, thank you for the question. Look, we continue to anticipate a better performance in the automotive business, so the trends in auto are better, both on the First Fit side as well as on the replacement channels. Much more stable, and we continue to see that stability, certainly through the end of 2023. Look, energy is performing quite well for us in Europe, so that's also supporting, you know, a reasonably robust performance. And I spoke about, you know, choppiness and weakness in Diversified Industrial, probably for fourth quarters now. So, you know, we've kind of anticipated that and, you know, we've been pretty open and transparent about the weakness Diversified Industrial, and that continues to be pretty choppy and pretty weak. So I don't think that, you know, from that perspective, we are a little different than, you know, than some of the peers, but we do have a very good portfolio of products, and we have business that's providing a little better stability through the replacement channels that we have built out over the decades here. So Europe is reasonably okay. And on the auto strike, look, we have seen weakness in October. You know, we'd anticipated recovery for the pre-strike output. So North America is just such a small amount of auto OEM revenue for the company that it's really not that material for us. But, you know, there's been a small impact that we have taken into an account and, you know, that's, you know, that's all embedded in our guidance. Okay, great. Thanks for fitting me in, guys. Thanks, Jeff. Ladies and gentlemen, I will now turn the call back to Mr. Rich Kwas for closing remarks. Thanks, everyone, for participating. If you have any follow-up questions, I can be reached over the course of the day or in the future weeks. Thanks again. Have a great weekend. Ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.