Good morning, and welcome to the third quarter 2023 results presentation for Hillman Solutions Corp. My name is Cherie, and I will be your conference call operator today. Before we begin, I would like to remind our listeners that today's presentation is being recorded and simultaneously webcast. The company's earnings release, presentation, and 10-Q were issued this morning. These documents and a replay of today's presentation can be accessed on Hillman's Investor Relations website at ir.hillmangroup.com. I would now like to turn the call over to Michael Koehler with Hillman. Please go ahead. Thank you, Cherie. Good morning, everyone, and thank you for joining us. I am Michael Koehler, Vice President of Investor Relations and Treasury. Joining me on today's call are Doug Cahill, our Chairman, President, and Chief Executive Officer, Rocky Kraft, our Chief Financial Officer, and Jon Michael Adinolfi, our Chief Operating Officer. Before we begin today's call, I would like to remind our audience that certain statements made today may be considered forward-looking and are subject to the safe harbor provisions of applicable securities laws. These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties, assumptions, and other factors, many of which are beyond the company's control, and may cause actual results to differ materially from those projected in such statements. Some of the factors that could influence our results are contained in our periodic and annual reports filed with the SEC. For more information regarding these risks and uncertainties, please see slide two in our earnings call slide presentation, which is available on our website, ir.hillmangroup.com. In addition, on today's call, we will refer to certain non-GAAP financial measures. Information regarding our use of and reconciliations of these measures to our GAAP results are available in our earnings call slide presentation. With that, it's my pleasure to turn the call over to Chairman, President, and CEO, Doug Cahill. Doug? Thanks, Stretch, and good morning, everyone. I will kick off today's call going through some of the highlights of our strong third quarter. Our results were healthy as we grew both our top and bottom line versus year ago quarter. I will then give an update on our full year guidance, highlight Hillman's competitive mode, and provide some additional color on the quarter before I turn it over to Rocky. Our team did a great job during the quarter, and I'm proud of them for successfully navigating this environment. Our results demonstrate the resilience and consistency of our business, and we're in line with our expectations heading into the quarter. Net sales in the third quarter of 2023 increased 5.4% to $398.9 million from the year ago quarter, driven by a 4% increase in total volumes, which included new business wins, plus a 2% lift from price, offset a bit by FX headwinds in our Canadian business. Hardware and Protective Solutions led the way as HS sales grew by 8% and PS sales grew by a robust 14% over Q3 of 2022. Driving the increase in HS was a launch of rope and chain accessories at one of our top five customers, marking another meaningful new business win for Hillman. This win was the direct result of taking care of our customers during the challenging logistics and supply chain environment over the past few years. This is a new category for Hillman, and our service delivery team did an amazing job resetting over 2,000 stores flawlessly. Driving the increase in PS was an increase in our national promotional off-shelf activity at another one of our top five customers. When we say promotional off-shelf, this means we load in product and display quarter pallets near the entrance, near the checkout, and on end caps. These offerings have been very successful and many times they're planned 10-12 months in advance with our retail partners. Together, new business wins and increased promotional off shelf drove healthy growth during the quarter, which more than offset lighter volumes in other categories. For the year-to-date period, our net sales were down less than 1%, demonstrating the resilience of the business during our otherwise soft market throughout the year. Third-party data showed that foot traffic at home improvement centers declined 8% year to date compared to the year ago period. Our results illustrate that demand for our small ticket items that are essential for repair and maintenance projects is consistent and resilient in most any market environment. Turning to our bottom line for the quarter, Adjusted EBITDA increased to $66.8 million, up 13.3% over the year ago quarter, which produced a 110 basis point improvement in Adjusted EBITDA margin to 16.7%. Driving this increase was lower cost of goods sold as our margins began to return to historical averages. Remember, we spent most of 2021 and 2022 chasing inflation-related costs with price increases. We caught costs with our price increase in the fall of 2022, and the benefits are finally flowing through our income statement now. Similar to last quarter, we did a nice job controlling costs and driving operational efficiencies. Turning to free cash flow, it came in ahead of our expectations, totaling $41.3 million for the quarter and $119.3 million for the year-to-date period. This is an improvement over the $31 million in the year-ago quarter, and $16.8 million for the year-to-date period last year. We used our free cash flow to pay down over $40 million in debt during the quarter and have reduced our net debt to Adjusted EBITDA leverage ratio to 3.7 times. I would like to provide an update to our 2023 full year guidance. As a result of our performance for the first three quarters of the year, coupled with the expectations for the overall market, we are providing the following updates to our full-year 2023 guide. We are narrowing our net sales guidance within our original range to between $1.455 billion-$1.485 billion, which sets a new midpoint at $1.47 billion. We are narrowing our Adjusted EBITDA guide within our original range to between $215 million-$220 million, which sets our new midpoint at $217.5 million. We're increasing our free cash flow guidance to between $135 million-$155 million, which sets our new midpoint at $145 million $10 million above our original guide. As we've talked about, our results for the first nine months have been strong despite slow foot traffic at our retailers. We made the decision to narrow our guidance within our original range, but below the midpoint. This was mainly due to the market volumes being a tick softer than we planned for the year, and sales being light over the past month, illustrated by the industry-reported foot traffic being down 13% in October versus down 8% in the first nine months of the year. I'll take a moment to share what makes us the indispensable strategic partner to our retail customers and allows us to perform well across multiple economic environments. We are one of the largest providers of hardware product solutions in North America. We offer an extensive range of products that cater to the needs of the pickup truck pro and the DIYer. The vast majority of our products are used for repair, remodel, and maintenance projects. Because of the predictable nature of our end markets, we have seen consistent demand for our products in both up and down economic cycles since our founding in 1964. Said differently, we don't see the highs nor the lows of the market like many companies in our sector. Importantly, we help our customers overcome labor, complexity, and supply chain challenges in the critical, highly profitable, and traffic-generating product categories we offer. Our competitive moat, which provides our customers with value add they don't get from other companies, consists of three main components. One, we have 1,100 sales and service folks that are in the stores with our customers on a regular basis, providing top-notch customer service at the shelf. Two, we ship direct to the store of our retail customers, meaning our products typically do not flow through our customers' distribution centers, saving them time, money, and corresponding inventory adjustments or investments. A great example of this advantage has been happening live over the past week or so, as one of our top five customers experienced a cybersecurity event. We are one of only a handful of suppliers who could still ship because of our direct store delivery model and the fact that our service teams are in the store and write the orders. I'm happy to report they're back up and running, which is really good for everybody. We get the right products to the right place at the right time at scale. We source over 112,000 SKUs and distribute them to over 40,000 individual locations. Three, approximately 90% of our revenue comes from brands that we own and control, and this allows us to anticipate and meet the evolving needs of our customers and end users. These are the reasons why we're embedded with our customers and why they view us as a partner critical to the success of their business. In fact, during the quarter, we're thrilled to have been named Vendor of the Year by two of our customers, Tractor Supply, which is one of our top five customers, and Mid-States Hardware, a great farm, ranch, and home retail co-op that serves the central and northwest states as well as Canada. We take great pride in being recognized by our customers, and let's face it, it's the Hillman team and the stores that at the end of the day, are the ones that win these awards for us. With that, let's move on to our balance sheet. At Hillman, we've always believed nothing happens until you sell something, and we always try to put our customers first. During 2021 and 2022, we put our money where our mouths are when we invested heavily into inventory to ensure we kept product in our DCs and on the shelves of our customers during a challenging supply chain environment. This strategic move, working closely with our long-term supply partners, separated us from our competition and allowed us to gain market share then, now, and we believe in the future. At the peak, during the summer of 2022, we carried about $180 million more inventory than normal. Since that peak, our supply chain has normalized and inventories have been reduced by $178 million, including $92 million this year, and we think we'll take another $5 million-$10 million before the end of the year to put us near our normalized inventory run rate. With our inventory reduction, we have seen a meaningful cash flow benefit and subsequent reduction in our net leverage ratio, which we expect to continue throughout the year. I'm super proud of our entire global supply chain team for being able to surge inventories up and then back down, while maintaining healthy fill rates during it all. With 100,000+ SKUs, it's actually one of the finest examples of total teamwork I've witnessed in my entire career. Now, turning to pricing and cost. The peak cost inflation in our business was approximately $225 million. We passed on these higher costs to our customers via multiple price increases. These costs peaked at approximately $120 million for transportation and shipping, which includes inbound transportation of ocean containers, $80 million for commodities, and $25 million for labor. Over the past several quarters, we've seen ocean container costs come down from the historical highs of 2022, while other inbound costs have remained elevated. Having priced for these more expensive transportation and shipping costs last year, we're now starting to see our gross margin return to our historical rate of 44%-45%, with lower costs of goods sold flowing through our income statement. We expect these margins to expand again in fourth quarter of this year to above 45%. Commodities such as raw materials should be a tailwind for us in the second half of 2024. Typically, costs related to raw materials can take between 9 and 12 months to flow through our income statement. That consists of a 150-day lead time to source the material, make the product, and ship it to our distribution centers. From there, our inventory turns in about 4-6 months. As we're all familiar, many of these higher costs do not appear to be going away. In fact, many of the costs continue to increase, like labor and transportation costs within the United States. That said, we'll focus on what we can control, something we know our customers are doing as well. Hillman's in-store service team and direct store delivery model continue to be on trend, helping our customers minimize these two pressure points: labor and logistics. Now, turning to our markets before I turn it to Rocky. Even though interest rate increases have definitely slowed existing home sales, we remain optimistic about the customers and end markets we serve, as well as the trends for the future of our business for two meaningful reasons. Number one, home equity values continue to be healthy. Home values are near all-time highs, and the average homeowner in the U.S. has nearly 200,000 of untapped equity. Home equity loan activity has held firm since the beginning of the year and is keeping pace with the pre-pandemic levels. Remodeling, renovation, or home repairs are the leading reason homeowners tap equity in their home. Number two is the state of the existing homes in the U.S. The average owner-occupied home is over 40 years old. The older the house, the more repair and maintenance projects are necessary. Additionally, there are over 2 million more homes entering their prime remodeling age than there were during the Great Recession. These are homes between 25 and 39 years old, and the number of homes in this category is expected to increase over the next several years as the U.S. housing stock continues to age. Next year, Hillman will proudly celebrate our 60th anniversary. Our service organization will turn 28 years old, and the average tenure of our top five customers will be 25 years. Taking care of our customers first has driven our success over a very long period. Our focus today and commitment going forward is to defend our moat, profitably execute our growth strategy, and stay disciplined. We believe this sets Hillman up for continued long-term success. With that, let me turn it to Rocky. Thanks, Doug. Net sales in the third quarter of 2023 grew by $399 million, an increase of 5.4% versus the prior year quarter. As Doug mentioned, we narrowed our full-year net sales guidance within our original range, below the midpoint. To unpack that a bit, we maintain our belief that our full-year net sales results will benefit 2% from price that will roll from 2022, and new business wins offset last year's COVID-related sales. The midpoint of our revised net sales guidance assumes unit volumes for the year decline about 3% compared to our original estimate of down 1%, as we extrapolate current volume trends into Q4. Now, let me provide some more detail on our top line by business. Hardware Solutions is our biggest business and makes up over 50% of our overall revenue. For the quarter, net sales increased 8% to $229 million versus last year. This breaks out to just under 2% of price, plus 4% new business wins, and 2% increase in our market volumes compared to the softer year-ago quarter. Robotics and Digital Solutions, or RDS, makes up about 16% of our overall revenue. During the quarter, RDS net sales were down 1% to $63.5 million, driven by lighter foot traffic, continued softness in discretionary spending on things like pet tags and accessories, and a decrease in existing home sales, which is a key driver of key duplication. The exception was a 9.5% increase in sales at our Minute Key self-service machines. Since 2020, Minute Key has grown at a 19% CAGR as customers prefer the convenience and simplicity of these self-service kiosks. Additionally, the self-serve nature of the kiosk solved the labor issues many of our big box retailers face today. For these reasons, we are excited about the future of our Minute Key platform. As we've talked about on previous calls, we are in the process of testing our new and improved Minute Key 3.5 self-service key machine. These kiosks have smart auto and RFID fob duplication capabilities, an enhanced key identification system, and a more robust guided user interface when compared to our 3.0 version. We currently have two Minute Key 3.5 machines that have been live for about six weeks in the Phoenix market, and performance thus far is encouraging. We remain on track for a soft launch during the first quarter of next year, and plan to slowly and prudently roll out these machines throughout 2024. Hillman associates will be providing the VIP support for our retailers' customers, and this unique experience is a tremendous opportunity for both Hillman and our retail partners. Our Canadian segment, which makes up about 10% of our overall revenue, was down 9% compared to the prior year. This was driven by approximately a 6% decline in volumes and 3 points of FX headwinds during the quarter. Lastly, Protective Solutions makes up just under 20% of our business. Protective had a nice quarter due to the promotional off-shelf activity Doug discussed earlier. Revenues increased $8 million or 14% compared to last year. Third quarter adjusted gross profit margin increased by 90 basis points to 44.2% versus the prior year quarter. Sequentially, adjusted gross profit margin improved 120 basis points, which was ahead of the 100 basis point improvement we said we would see on our last earnings call. As Doug mentioned, we caught price in the fall of 2022 and are now starting to see margins return to normal. Looking forward, we expect to see margins expand again during the fourth quarter in excess of our historical rate of 44%-45% and hold into 2024. Adjusted SG&A as a percentage of sales decreased to 27.5% during the quarter, from 27.6% from the year ago quarter. The slight improvement was driven by realizing efficiencies in our operations and logistics and controlling costs where we were able. Adjusted EBITDA in the second quarter was $66.8 million, which grew 13.3% over $59 million in the year ago quarter. Adjusted EBITDA was driven by the increase in net sales, coupled with a higher gross margin when compared to last year. Now let me turn to our cash flow and balance sheet. For the 39 weeks ended September 30, 2023, operating activities provided $171 million of cash, compared to $63 million in the year ago period. Capital expenditures were $52.1 million, compared to $46.4 million in the prior year period. We continue to invest in our RDS Minute Key 3.5 and QuickTag 3.0 machines, important parts of our high-margin, long-term growth opportunities. Our customers are very excited about the new markets this game-changing technology will enable us to attack. Now back to the balance sheet. Net inventories were $397.1 million, down $92.2 million from the end of 2022, and down $138 million from the prior year quarter. We ended the third quarter of 2023 with $771.8 million of total net debt outstanding, a reduction of $115.9 million from the end of 2022. Free cash flow for the 39 weeks ended September 30, 2023, totaled $119.3 million, compared to $16.8 million in the prior year period. This increase in free cash flow was primarily driven by the working capital benefit of converting our excess inventory into cash and controlling costs. Because of this, we are raising our free cash flow guidance. We ended the third quarter of 2023 with approximately $291 million of liquidity, which consists of $252 million of available borrowing under our revolving credit facility and $39 million of cash and equivalents. Our net debt to trailing twelve-month adjusted EBITDA ratio at the end of the quarter was 3.7 times, compared to 4.2 times at the end of 2022, and a full turn better than our recent leverage peak of 4.7 times at the end of the second quarter of 2022. Looking forward, we still maintain our expectation that we will end 2023 under 3.5 times leverage, assuming our results fall in the range offered in our revised guidance. As we think about 2024, if the market remains soft, our top line could look similar to 2023. We feel confident we will grow our EBITDA in that case and even in a down market, as we will benefit from lower cost of goods sold. We look forward to giving our formal 2024 guidance when we report our full year 2023 results in February. Looking further out, we believe our longer term growth algorithm remains intact. Historically, our business has seen organic growth of 6% year-over-year and high single-digit to low double-digit organic adjusted EBITDA growth, all that before M&A. Using Hardware Solutions as a proxy, which is our largest business, if you go back 20 years, 10 years, 5 years, 4 years, or 3 years, the top line CAGR is between 6.7% and 8.6% over those time periods. Our longer-term view on the strength and resilience of this business is unchanged. With that, let me turn it back to Doug. Thanks, Rocky. As we navigate this market, I want to thank the Hillman team for remaining steadfast in our top priority of taking care of our customers. From the folks keeping products humming through our distribution centers, to our warriors in the field managing the shelves in the store, to our customer care teams, I could not be more proud of your resilient and awesome commitment to our customers and Hillman. Looking ahead, I'm filled with optimism about the future as our competitive moat and the determination of our team positions us to capitalize on opportunities on the horizon. We will keep making this company more efficient, more agile, and more resourceful, which we believe will allow us to grow profitably and win over the long term. We have executed well during this market and believe that when the tide turns and the market picks up, great things are in store for us. Hillman will celebrate its sixtieth anniversary next year, and we remain committed to continuing its fantastic legacy into the future. We're grateful for our customers, associates, shareholders, and partners, and I want to reiterate our commitment to you all, as trust is our most valuable asset. We look forward to updating you on our progress along the way, and with that, we'll begin the Q&A portion of the call. Cherie, can you please open the call up for questions? Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Due to time restraints, we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster. Our first question will come from the line of Matthew Bouley with Barclays. Your line is open. Morning, everyone. Thank you for taking the questions. Hey, Matt. Morning. Wanted to pick up on the comments that you made at the end there around 2024. You know, I think you mentioned that you could grow EBITDA if the top line was flatter. So I guess the question is more on the top line. You know, here we are in November. What are you guys planning for around, I guess, specifically R&R activity? I know you mentioned obviously foot traffic is kind of decelerating a little bit here, but you know, how are you guys seeing the early part of 2024 shaping up from an R&R market perspective? Yeah, I think, Matt, for, you know, for us, we're kind of looking at 2024 and saying, "Let's plan on flat and even slightly down, so that we make sure that our costs are under control and that we can still grow our EBITDA in that world." I think our retailers, you know, they've been through a year that's that hasn't been a tremendous amount of fun. Their comps are obviously gonna get easier, but I think they're seeing things for next year, a couple% down would be my guess. We've, you know, spent time with all of them, but flat to down a couple% is kinda couple% is kind of what we're thinking and what we're planning on seeing at this point. Again, it could change, and I... You just never know about, you know, an 8% down foot traffic year to date, and then, you know, an October that was down 12 or 13. So you don't know if that's a trend or that's just a blip. That's the hard part of what, what we're trying to figure out in the market. Got it. No, that's great color. Appreciate that, Doug. The second question, clearly, good progress on the inventory reduction and you lifted the free cash flow guide. And so, you know, as you do get towards your year-end leverage target of below 3.5, wanted to get an update on your thoughts on reengaging with the M&A market at some point. You know, where do you need to be from a leverage perspective to do that? And, you know, how has the pipeline kind of come together? Would you be, you know, looking at expanding within your existing categories or some of the stuff you spoke about, back on the initial roadshow around, you know, expanding into adjacent categories? What are some of the broader thoughts there? Yeah, I think the great news for us is that there's really not been much of a debt market or a private equity play out there. So entrepreneurs have definitely changed their tone in that, you know, they don't have three people calling them saying, "I want to buy your business." So good news for us is they're available. You know, we're talking basically, Matt, right around the corner. You know, go to the end of our aisle and go to the next one, and that's what we're looking at. It's basically stuff that you would understand and say, "Okay, that makes sense." And we think that, you know, these are gonna be very accretive for us. And so, yeah, I think in 2024, you'll see us reengage in the discussions. I will tell you, as an entrepreneur, there's just no better place to put your business and, you know, go to Naples and feel good about it, because, you know, they know that our moat is different. They know that we love our customers, and our customers trust us. So we're kind of a pure play that is a really nice way for people to say, "I put my business in a good place." There is that fear by that entrepreneur who's built their business of saying, "I just don't trust the private equity guys." And so we do have that going for us as well. Great. Well, thank you, Doug, and good luck, everybody. Thanks, Matt. Thank you. One moment for our next question. That will come from the line of Lee Jagoda with CJS Securities. Your line is open. Hi, good morning. Hey, Lee. Good morning, Lee. I guess just again, focusing on that 2024 commentary. Doug, can you talk to the new business wins you already have in hand, in terms of the size of those for 2024, and how you would expect those to flow through the P&L, over the quarters? Yeah, Lee, I think we, you know, a while back, we had said we had, like, $25-$27 million inked for 2024. Nothing's changed there, except we were able to speed up and get about $10 million of that into this year. We'll be able to. And that was really as a result of the existing supplier, literally disappointing the hell out of our customer, and our customer saying, "Can you guys speed this up?" So the $27 million's about $17 million right now. We continue to see progress with customers. But again, I, you know, I would say, Rocky, traditionally, we've been in that 2%-3%? Yeah, we have. I mean, and as you heard in my remarks, Lee, I mean, if we were up 4 this year, and it's so far, year to date, and HS is a little ahead of where we would have expected to be. As we think about next year and maybe a little back to the prior question, right? We still would expect to be up 2%-3% with new business wins in our business, but we're going to be, you know, muted, muted as we think about what's going to happen with volumes with what we see today. Hopefully, we're wrong, and our retailers see a lot more traffic than we're seeing today, but if they don't, we're going to prepare for that. Obviously, as we think about next year, we're not going to have the normal price increase that we have at the beginning of, you know, the last few years. Lee, from the perspective of if you're a merchant, you're going to dangle new business for lower price. And, you know, I think you'll support us, you know, being there for them, but not doing anything silly on price. So that's also part of our strategy, if you think about where we are. You know, the gross margin, we've worked so hard to get it back, and so we're going to probably be a little more cautious about going after something. Sure. And then assuming you've gone through preliminary plans with customers for next year, can you talk about the level of promotional activity you expect in 2024 versus 2023? And to the extent you have guidance from them on when that might hit, that could just be helpful for modeling. Yeah, I think this year, as you know, was a bit more back-end loaded. I would say as we sit right now, I was just there with them about 6-7 days ago, and you know, they obviously have the comp they wanna get. They'd like to see it even more evenly distributed. I think you'll see the same kind of number. That'll be 3 years in a row where it's similar with maybe a tad of growth. So we're planning on the same number. I'd say it's probably gonna be a little less lumpy than this year. We did this year differently, and I'd say it'd be more quarter to quarter to quarter next year, but the numbers should be similar. We don't have it inked everything because we're working on one we've never done before, and so we don't have that one done, but we're in progress of working on that one. If I can just sneak one more in for clarification. The sort of soft outlook that could be flat for next year, that's total business or just Hardware? Good question, Lee. We meant to say our total business. And again, we just kind of start there, right? What if? Sure. All right. Thanks very much. Okay. Thank you. One moment for our next question. That will come from the line of Ryan Merkel with William Blair. Your line is open. Hey, Ryan, we can't hear you. Ryan, if your line is muted, please unmute it, or please rejoin using the call me feature. I know Ryan was going to ask me about my golf game, so you want me to answer that, Stretch? No, thank you. Okay, we'll go to the next question. Thank you. Our next question will come from Brian McNamara with Canaccord Genuity. Your line is open. Good morning. This is, Madison Callinan on for Brian. Thanks for taking our questions. First, could you provide any additional color on the, like, new business wins? I know you mentioned rope and chain, but, like, any other product categories or specific retailers, just a little bit more color would be helpful. Thanks. Yeah, I think, we've got three wins, one in rope and chain accessory, one in gloves, and one in deck screw area. And so the two of the three will be, well, we started them in the second half of the year, so you'll get the benefit of that as it goes into 2024. The deck screw win will be a rollout. We've also—J.M. may maybe talk about, you know, kind of how we plug away with hardware, an example of what happens each year in stores, plus some new store openings. Maybe talk about that for a second. Absolutely, yeah. We're excited about 2024. We feel like we have quite a bit of growth opportunity in front of us. In our traditional hardware channel where we serve, you know, close to 15,000 outlets, we have tremendous amount of opportunity. We've got a number of wins, that Doug referenced there, that are starting to, we're starting to feel in the back half of this year, which will help us next year. A chain of stores in Florida, we've got some in the Midwest. We've got actually a pretty good-sized target in the Northeast. So we're excited about 2024 and the opportunities in the hardware chain, and that'll be across all categories in many of those stores, so it really helps the entire Hillman business. Madison, we also have, and that's not in the number we gave you, but we also have the new QuickTag 3 pet engraving machine that's going into one of our major customers with every new remodel, and there's 400 or 500 of those going in. We have the new 3.5 Minute Key, which is to take what is office and home self-serve and now provide the consumer an opportunity to do smart fob and transponder and RFID, and that will be growth opportunities. I think that last one, the 3.5 Minute Key, is really gonna be second half of 2024 because we wanna make sure the consumer experience is really good in that regard, and we're taking care of the back end. The retailer is essentially not doing the work, we're doing it for them, so we don't want to scale that one too quickly.... Retail excited. Retail is really excited 'cause they're used to $3.99 key, and now we're gonna do an $80 fob for them. So, that should be also a growth for us next year. But we wanna be very cautious how we do that, 'cause we don't want the consumer to get excited and then not be able to come through with the service on the backside. Great. Thanks so much. And then just secondly, if you could expand upon, like, how you're maintaining or gaining market share, even as the market slows, kind of based off of, you know, your commitment to retailers during the supply chain challenges, with your strong fill rates? Thanks. Yeah, for us, I mean, we're capitalizing, to your point, on the performance that Hillman delivered over the last several years, and that's really some of the wins that we see in hardware. And I mean, I'd have to really go back to rope and chain that Doug mentioned earlier. That's a perfect example where we expanded into a category where we weren't before. We actually successfully launched it early, and we continued to build some momentum. We expect to take that, I'll say, category strength to other customers. So we're gonna continue to build on the momentum we have in the categories that we serve today and then continue to expand into the categories where we're not. So, you know, we're really excited about 2024 in that area. Great. Thanks so much, guys. Sure. Thank you. One moment for our next question. That will come from the line of Brian Butler with Stifel. Your line is open. Hey, good morning. Thanks for taking my questions. Hey, how you doing, Brian? Morning. Very good. Very good. I guess, well, back on the 2024, when you think about the inventory benefit that's in 2023 guidance, how, how much is that? And then when you look at 2024, how much of a headwind is that, and how do you overcome it? Yeah, Brian, I don't think we think it's necessarily a headwind for 2024, and the reason is, you know, we're placing POs today from a commodity perspective that are below where they were, call it, 90 days ago. And so if you know, you go back and listen to the remarks, we talked about how that benefit in the P&L will flow through the back half of next year, but we'll feel that benefit, we believe, next year in a lower price of our inventory. So the way to think about it is, in 2023, we've seen some reduction in the value of the inventory because of containers. We've also right-sized our inventory, and there'll be a minor benefit as we think about 2024 from those commodities coming down, that we believe offsets any headwind that we would have from putting, you know, inventory back in the system for growth. So, you know, as we think about next year, we think working capital is probably a neutral type item for us and, you know, we'll grow our Free Cash Flow with our EBITDA growth. Okay, that's helpful. And then for the margin benefits or for EBITDA, when you think about flat, flat revenues or down revenues in 2024, how much margin benefit do you just get from kind of the lower inventory costs rolling through? Is that 50 basis points, 100 basis points? Can you give some color on that? Yeah. We're not gonna quantify that at this point, Brian, 'cause, you know, we're still working on what our plan will be for next year and what we'll give as guidance. The only thing I would tell you is, you know, as we think about this year's kind of full year EBITDA rate, we would expect next year to be at or above that number. Okay. And then last, just on the 3.5, Minute Key rollout. So that sounds like it's second half of 2024. How many units ultimately do you think goes into that, and are those all replacing current units? So the great news about that is, you think about the retailer, they hate it when all of a sudden you've got all this stuff coming in and going out and all these new... You know, I want more floor space. We're not asking them to do anything, and what we'll do is, for the most part, is retrofit our existing 3.0 Minute Key with new brains and a new, you know, capability. But it's not, it's not something that the retailer will even feel.... So for the most part, it's that, and, and J.M.e, the number for next year on the machines? Yeah, we're gonna be north of 500. Yeah. And I think, you know, the reason, Brian, I'm saying second half, it's not that we won't be doing it in the first half. I just wanna be real careful because when the consumer, you know, gets excited about and decides to spend that kind of money at a kiosk, I think you have to make sure that the backside of that is a really good experience with five stars. That's why I'm being a little cautious as to when it'll kick in. But there'll be machines, they'll be over 50 by the end of the year or 45, and then they'll be rolling out starting first quarter, but, but it's gonna take us time to make sure that experience is great. Now, again, it will cut home and office just like it did, and then additionally, you'll have these other options that'll be new. Okay, great. Thank you so much for taking the questions. Sure. Thank you. One moment for our next question. That will come from the line of Chirag Patel with Jefferies. Your line is open. Hey, good morning, guys. Actually, it's Steve Volkman here. Hope you're all doing well. Hey, how you doing? Doing fine, thank you. Most of my questions have been answered, so maybe, Doug, I should ask you about your golf game, but... I tell you what, I always hate it when I peak in the fall, and I'm peaking right now. My driver is ridiculous. So, that's an update, but I wish it was spring right now. All right, on that note, I actually do have a couple quick ones. Can we talk, Rocky, just a little bit about the cadence of margins in 2024? And I'm thinking specifically about sort of the various price cost dynamics. Is there some kind of pass-through of the lower transportation costs at some point, or do margins kind of, you know, grow a little bit or flat to a little bit each quarter? How do we think about that sort of flow-through? Yeah. Again, Steve, not gonna give full guidance, but I think we would be naive to think we're not gonna give some price back to some retailers next year. And so I think you are gonna see us do that. We are gonna feel the benefit flowing through from the lower cost of goods sold. So, you know, as we exit the fourth quarter, you know, we've said we'll be above that 45% kind of historical rate, and we would expect to maintain that for most of next year. Okay, great. Is it too early to sort of think about what the mature Minute Key 3.5 economics are? I mean, how much do you think one of those generates in terms of revenue and margin when it's kind of at its run rate? So it is right now because, you know, the big question is, we're gonna need and want, and the retailers definitely have agreed, once we get the right number of machines, they need to start talking to the consumer about what's available. Now, Steve, there'll be a big auto key on top of that machine that used to just be an office key, and so, you know, we'll, we'll be doing all we can, and we've got over 2 million emails of current Minute Key customers that obviously we'll be targeting, not in a nuisance way, but in a, in a great way of saving them money. So I would... I'll be honest, I don't know yet. All I know is that the software and the brains that the team have put together are working, and the back end, meaning the programming of that, are working on our two machines. So we're two for two, but it's a little early, at least for me, because we just don't know how many consumers are gonna be comfortable with that. So, for example, on a transponder key, where there's a key that you have to plug into the car to make it start, meaning you can't keep it in your pocket, we're gonna be able to copy that at the machine, and we'll send that to your house. That is pretty slick, but we don't know yet if the consumer's gonna get all that, and it's our job to make sure, one, they do know they can, and two, we make sure that, you know, it's five stars when they're done. So I think it's a bit early, but we're excited, and the retailer is super excited because they don't have to lift a finger. We're doing the work, and we should be bringing them a market that, from the smart fob side, they have zero share today, so it could be, it could be good for both. They're definitely supportive of it. Okay. I appreciate it. Thanks. Yep. Thank you. Thank you. One moment for our next question. That will come from the line of Ryan Merkel with William Blair. Your line is open. Hey, Ryan. Ryan, you there? We're still not able to hear you. Bummer. Okay, I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. Doug Cahill for any closing remarks. Thanks, Cherie. And Ryan, we'll catch up with you, no worries. Thanks, everyone, for joining us this morning. I'd like to thank our customers, our vendors, suppliers, and importantly, our hardworking team for the contribution to the quarter. We look forward to updating you again in the near future. Thanks for joining us this morning. This concludes today's program. Thank you all for participating. You may now disconnect.