Good morning and welcome to the Fourth Quarter 2023 results and Full Year 2024 guidance presentation for Hillman Solutions Corp. My name is Tawanda, and I will be your conference call operator today. Before we begin, I would like to remind our listeners today's presentation is being recorded and simultaneously webcast. The company's earnings release, earnings presentation, and 10-K 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 conference over to Michael Koehler with Hillman. Sir, you may begin. Thank you, Tawanda. 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, I would like to remind our audience that certain statements made on today's call may be considered forward-looking and are subject to 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 2 in our earnings call slide presentation, which is available on our website at 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 our Chairman, President, and CEO, Doug Cahill. Doug? Thanks, Michael. Good morning, everyone, and thank you for joining us. Before we get into our healthy 2023 results and our 2024 guidance, I want to take a moment to recognize the rich legacy that this company was built on as we celebrate our 60th anniversary this year. In 1964, the Hillman Bolt and Screw Corporation was founded by Max Hillman in Cincinnati. Back then, the company got its start by distributing fasteners to independent hardware stores in southern Ohio and northern Kentucky. Max grew his business every year due to his relentless commitment to taking care of his customers, a commitment that's ingrained in how we do business today. As Max neared retirement, his sons, Mick and Rick, took the reins of the company during the 1980s. The business continued to grow every year, and it was during the 1990s that the two brothers doubled down on their dad's commitment to customer service and started Hillman's field sales and service team. Today, this team consists of 1,100 members, and it is the key component of our competitive moat. Building an organization like this from scratch today would be nearly impossible. This field sales and service team enables us to build another key part of the Hillman moat: shipping our products directly to our customers' retail locations, bypassing their distribution networks altogether. These two differentiators have allowed Hillman to become one of the largest value-added partners for hardware and home improvement retailers throughout North America. It also enabled Hillman to grow its sales every year but one over the last 60 years. Mick and Rick ran the company for over 30 years until they retired in 2013 and 2012, respectively. From there, we have continued to do things the Hillman way by remaining committed to building on the legacy of service that Max Hillman began 60 years ago. This is our true north. I'd like to thank the Hillman team, both past and present, for building on this rich legacy, including our 1,100 amazing folks in the field, our hardworking employees in our distribution centers throughout North America, and the entire customer support team, which I'm grateful to be part of. After 60 years, we sometimes forget just how solid our business is. Over time, we have earned our customers' trust because of the high level of service and quality we provide, the unique perspective we bring, and our commitment to long-term relationships. We win with our customers because of our competitive moat and the unique advantages we bring to the table. Our customers continue to give us new opportunities and, simply put, we grow where our customers encourage us to grow. For example, a top-5 customer of ours challenged us to enter rope and chain accessories business. Our team worked together with our customer in order to come up with a winning game plan. We flawlessly launched this new business win across our customer's national footprint of stores on a compressed timeline during the second half of 2023. As a result of the exceptional implementation, we were awarded Vendor of the Year from this customer. Our successful launch in the rope and chain accessory category sparked interest from other customers while reinforced our decision to acquire Koch Industries, which is in the adjacent rope and chain category. Now we can take care of the entire rope and chain aisle for our customers. We have the unique ability to help manage the complex, SKU-intensive categories that we're in today. Our data-driven approach helps optimize the product mix for our customers. In other words, we know what products the DIYer and Pickup Truck Pro want, and Hillman team ensures these products are on our customers' shelves. This type of partnership is unparalleled, particularly in the traditional hardware channel, where we continue to convert stores to the Hillman platform and pick up new shelf space with existing customers. Our traditional Hardware business makes up about 12,000 hardware stores and is about 27% of our entire business. It grew 4% last year versus 2022. This is demonstrated by our Hardware Solutions performance over the past 20 years, 10 years, and 5 years, where the Hardware's top-line CAGR has increased 7%, 7.3%, and 8.2%, respectively. This consistent growth has been fueled organically by new business wins and price, coupled with the acquisitions that supplement organic growth after year one. More recently, over the past three years, we have won an average of $25 million of new business per year in HS alone. We believe we'll exceed that number during 2024 and into the future as we continue to grow with our customers. Combining that with our ability to do accretive acquisitions that leverage our moat gives us great confidence that we will continue to win with our partners. We believe that our runway for growth is meaningful. We build on the 60-year Hillman legacy again in 2023. Operationally, no matter the challenges, this team continues to execute. During the year, we maintain healthy fill rates of over 94% while reducing inventory by over 100 million across our business. We flawlessly launched multiple new business wins ahead of schedule with some of our biggest customers. On their own, these are three sizable accomplishments. However, we did so while moving our distribution hub from Rialto, California, to Kansas City in the midst of our busy season, all while overcoming a cyber incident mid-year. I mportantly, we grew our Adjusted EBITDA in our Hardware and Protective Solutions segments by 13.4% over 2022. Now I'd like to hit on our financial highlights for the year before turning it to Rocky for details. I'm pleased with how our team successfully navigated the year. At Hillman, repair, maintenance, and remodel projects done by the DIYer and Pickup Truck Pro drive our business. U.S. Existing home sales totaled just 4.09 million in 2023, which was nearly a 19% decrease from 2022 and a 33% decrease from 2021. Existing home sales drive all three of our businesses: Hardware, Protective, and Robotics and Digital, as home sellers fix up their homes to prepare to sell and home buyers take on projects to turn their new house into their dream home. We nearly offset the soft macro environment by launching a number of new business wins and held a bit of price early in the year. Net sales for 2023 totaled $1.476 billion, which was just shy of our full year 2022 results that included a 53rd week of sales. However, excluding the extra week from 2022, net sales increased by 0.4% and grew for the 59th time in our 60-year history. For 2023, we generated $219.4 million of Adjusted EBITDA, an increase of 4.3% from 2022. With our relatively flat top line, our bottom line increased as adjusted gross margins improved over 120 basis points to 44.2% from 43% during 2022. Further, our adjusted gross margins improved each quarter throughout the year, ending at 48.2% during the fourth quarter, a 400 basis point sequential improvement over the third quarter. We believe we can maintain healthy adjusted gross margin throughout 2024, which Rocky will touch on in his guidance section later on. Now let's touch on the performance of each business for 2023. Hardware Solutions is our biggest business, and it makes up 59% of our overall revenue. This business is the heart and soul of our company, the same way Max, Mick, and Rick were for 40 years. For the year, hardware saw 3.7% growth compared to 2022, or 4.7% when you exclude the 53rd week. New business wins drove the majority of the increase as we organically grew our share with our customers. Our Protective Solutions business makes up about 14% of our overall revenue. For the year, Protective Solutions revenues decreased 10.7%. However, excluding COVID-related PPE sales and 2022's 53rd week, Protective Solutions revenue decreased just 2.5%. The second half of 2023 was up nearly 10% versus the comparable period, and we finished the year strong in Protective Solutions. Thankfully, this should be the last time we talk about COVID. Robotics and Digital Solutions, or RDS, makes up 17% of our overall revenue. RDS revenue was essentially flat for the year, or up 2% excluding the 53rd week. A 10% increase in revenue from our self-serve key duplication kiosk, MinuteKey, offset a relatively soft market. Looking forward, we remain very encouraged about our high-margin RDS business, especially our new MinuteKey 3.5 kiosk. We are leveraging MinuteKey, the number one self-serve home and office machine, to now include RFID key duplication and technology that enables transponder and smart auto capability. We currently have 40 MinuteKey 3.5 machines in the field, and the initial results are encouraging. Our top customers are very excited about this machine and are anxious for the rollout during 2024. We believe that these capabilities and services for our new MinuteKey 3.5 machine are great not only for our retailer but for their consumers. Additionally, we expect to roll out Endless Aisle capabilities on our MinuteKey 3.5 self-serve machine during the middle of this year. This means that our user can get effectively any key duplicated. Our machines will scan the key. We will cut the key at our plant in Tempe, Arizona, and mail that key directly to the customer in just a few days. This solves the problem for customers seeking to duplicate unique keys like boat, riding lawnmower, and unique lock keys. Further, the Endless Aisle allows a customer to get an out-of-market key. For example, someone living in Los Angeles will now be able to get a Cincinnati Reds key. Our RDS field service team, which is part of our 1,100, is in our customer store on a regular basis. There, they replenish inventory, collect cash, and perform routine and service-related maintenance on our machines. We have several new opportunities to leverage this team of skilled technicians for other companies in the kiosk space, which will drive revenue and profitability for RDS in the second half of 2024. Lastly, our Canadian segment, which makes up about 11% of our revenue, saw a 9% top-line decrease versus 2022. Following a strong year in 2022, market volumes and foreign exchange were a drag on the 2023 results. It's no secret that since mid-2023, the Canadian economy has been sluggish, which has been a drag on our business. Our Canadian Retail business, which makes up about 70% of their sales, has roughly 60% market share and continues to provide strong service for the major retailers like they have in Canada for now well over 100 years. You all have heard us talk about this before, but I think it's important to touch on again. We have implemented a cumulative total of approximately $225 million in price increases since the beginning of 2021 to cover a like amount of inflation. These costs break down to approximately $120 million of transportation and shipping, which includes the inbound cost of ocean containers, $80 million of commodities, and $25 million of labor. As lower-cost products flowed out of our inventory and through our income statement during 2023, we experienced sequential improvement in gross margin. We are now getting at the right side of the power curve with margins at or above our historical rates, and we expect to stay there. Having said that, we continue to see some costs remain stubbornly high, like labor, outbound freight, and drayage, which includes the local port service charges. Additionally, there is uncertainty in the cost of ocean containers as we have seen disruption in the Red Sea at the Suez Canal as well as at the Panama Canal. Since the majority of our products come from Asia to the West Coast, the impact has been minimal to our global product flows, but we're keeping a close eye on the situation. Let's change gears and turn to the balance sheet. Back in 2021, we invested in our inventory to protect our fill rates as we saw the supply chain tighten and lead times increase dramatically. I'm proud to report that we have worked through all of the inventory with no negative impact on our fill rates or excess and obsolete inventory. This strategic move is yet another example of doing things the Hillman way, taking care of our customers first. This is why our longstanding relationship with our customers is so strong, from the board level to each store level. We believe this decision has and will continue to yield new business wins. With that inventory out of our network, we benefited from a meaningful working capital tailwind during the year, generating $172 million of free cash flow, which we used to pay down debt. The resulting year-end leverage ratio of 3.29 x meant that we could once again take advantage of M&A market by making a small tuck-in acquisition subsequent to the end of the year. As we discussed, during January, we acquired Koch Industries, a Midwestern-based supplier of rope and chain and related hardware products. This acquisition marks our expansion into a new product category for us. Having recently won the rope and chain accessories with one of our top five customers, our expansion into rope and chain is a logical place to grow. We can bring these products to our existing customers while realizing synergies in shipping, sourcing, and service, and we have new products for our team to go sell and service. Customer reaction has been outstanding. Since closing Koch during the second week of January, we've had great feedback on the news, and real growth opportunity discussions are already on their way. The opportunities to grow via M&A are out there. Our customers are encouraging us to get into certain product categories because of our long track record and the value-added services we provide each and every day. Now, with the balance sheet on its way to below 3x, we're ready to play offense. We're confident about 2024 because of the resilient end markets we serve, our diverse business with 114,000 SKUs shipping to 46,000 locations across North America, and 60 years of believing that nothing happens until you sell something at Hillman. We are an embedded partner for our customers, and our moat provides value-added differentiation versus our competition. With that, let me turn it to Rocky to talk numbers. Thanks, Doug, and good morning, everyone. Before I get into our guidance for 2024, I'm going to provide a quick summary of our fourth quarter and year-end results. I would like to remind everyone that the 2022 fourth quarter and full year included an extra week. Net sales in the fourth quarter of 2023 decreased 0.8% to $347.8 million versus the prior year quarter. 2023 full-year net sales totaled $1.476 billion, which is down slightly versus 2022 full year but up slightly when excluding the 53rd week from 2022. Net sales came in toward the top end of our revised guidance range. Remember, because of the resilient nature of our products that are a critical part of repair and maintenance projects, demand for our products is relatively consistent. We don't experience the highs nor the lows that our customers often do, and during 2023, our top line outpaced some of our biggest customers. Fourth quarter adjusted gross profit margin increased over 480 basis points to 48.2% versus the prior year quarter. Sequentially, these margins improved by 400 basis points compared to the third quarter of 2023. For the full year 2023, adjusted gross profit margin increased over 120 basis points to 44.2% from 43% during 2022. As Doug likes to say, the pig is through the python, and in the second half of 2023, we finally returned to normal historic margin rates. Q4 2023 adjusted SG&A as a percentage of sales increased to 32.5% from 30.6% during the year-ago quarter. For the full year 2023, adjusted SG&A as a percentage of sales increased to 29.5% from 28.9%. Adjusted SG&A increases during both periods were driven by an increased investment in IT and a $6 million increase in our standard employee bonus expense during 2023, coming off a disappointing 2022 bonus payout. Adjusted EBITDA in the fourth quarter increased 20.8% to $54.4 million, exceeding the comparable year-ago quarter for the second quarter in a row. Adjusted EBITDA for the 2023 full year increased 4.3% to $219.4 million and came in ahead of the midpoint of our revised guidance range, which was $217.5 million. Adjusted EBITDA was driven by a positive mix of price-cost, partially offset by a soft macro environment, which had outsized impacts on our RDS and Canadian businesses. Let's talk cash flow and balance sheet. During 2023, operating activities generated $238 million of cash versus $119 million in 2022. Driving the improvement was a $104 million reduction in net inventories and prudent cash management. Capital expenditures for the year were $66 million compared to $70 million in 2022. We continued to invest in our MinuteKey 3.5 and QuickTag 3.0 machines, which are important parts of our CapEx initiatives. Free cash flow for the year totaled $172.3 million versus $49.4 million in 2022. Driven by a meaningful and accelerated working capital benefit, free cash flow exceeded the high end of our guidance and surpassed our initial internal expectations. During the year, we used free cash flow to pay down $160 million of debt. We ended 2023 with $722 million of net debt versus $888 million at the end of 2022. Towards the end of Q4, we took advantage of the swap market and the inverted yield curve by entering into a new set of swaps. Currently, we have $360 million of existing swaps that expire on July 31st of 2024. These swaps are fixed at 74 basis points + our 270 basis point spread for an all-in borrowing cost of about 3.5%. In December, we entered into new swap agreements for the same $360 million that go into effect on the day our existing swaps expire. These swaps are fixed at 3.69% + our 270 basis point spread for an all-in borrowing cost of about 6.4%. These new swaps will expire on January 31st, 2027. Our net debt to trailing 12-month Adjusted EBITDA ratio at the end of the quarter was 3.29 x, which improved from 3.7 x at the end of the third quarter and 4x at the end of Q2. Our long-term net debt to Adjusted EBITDA ratio target remains unchanged at below 3 x, and we expect we will end 2024 around 2.7 x, assuming we fall near the midpoint of our guidance and we do not make any sizable acquisitions during the remainder of 2024. Speaking of, let me spend a few minutes talking about our outlook and guidance for 2024. We anticipate full-year net sales to be between $1.475 billion-$1.555 billion, with a midpoint of $1.515 billion. Historically, our top line has grown about 6% annually. This consists of approximately 1% price and 5% volume growth. The 5% volume growth is made up of 2%-3% market growth, which looks a lot like GDP, and 2%-3% growth from new business wins. As it relates to our 2024 top line guide, our midpoint assumes a 1% headwind from price, a 1% decrease from market volumes, a 2% lift from new business wins, and a 3% lift from the Koch acquisition. As you would expect, our top line is going to be dependent upon sales volume at our customers, which is predominantly driven by their POS. Our ability to win new business, the strength of the consumer, and the health of the economy and housing market will impact our results. For our bottom line, we expect full year 2024 Adjusted EBITDA will total between $230 million-$240 million. The midpoint of $235 million represents an increase of about 7% versus 2023. During 2024, we expect our full-year adjusted gross margin to come in above 45% for the year, which is where we expect the business to perform over the long term. Lastly, free cash flow for the full year of 2024 is expected to come in between $100 million-$120 million, with a midpoint of $110 million. There was some pull forward of cash flow from 2024 into 2023, and we anticipate our normalized level of free cash flow to be in the $130 million-$140 million range for the next several years following 2024. During 2024, we expect to be able to purchase products from our vendors a bit less expensively than we did in 2023 because of lower raw material commodity prices, but expect this to be partially offset by our return to more normal purchasing patterns, which will provide a modest working capital benefit in the range of $5 million-$15 million. Keep in mind that these guidance figures are made with the following full-year assumptions. Interest expense will be between $55 million-$65 million. Cash interest will be between $50 million-$60 million. We expect to pay cash taxes between $10 million-$20 million. CapEx will remain between $65 million-$75 million. We anticipate restructuring-related or other expenses of approximately $20 million, $10 million, excuse me, and our adjusted diluted weighted average share count for 2024 will be approximately $199 million. Our success reducing inventory and paying down debt during 2023 has put us in the position to play offense and use our improved balance sheet to execute low-risk acquisitions like Koch. As we look forward, we believe our competitive moat and longstanding relationships with customers will allow us to continue to win and to perform at or above our historic growth rate over the long term. With that, back to you, Doug. Thanks, Rocky. We've made excellent progress during 2023 from reducing inventory and paying down debt to winning new business and transitioning one of our main distribution hubs from Rialto, California, to Kansas City, and I'm truly impressed with our team's results during the year. Looking forward, we fired up the M&A machine and believe that by leveraging the Hillman moat, we can add tremendous value via M&A. We started with Koch and are excited about bringing additional categories to our customers, either organically or through M&A. As we think about 2024, we're ready to capitalize on the progress we made during 2023. While we can't control the macro, we believe we are very well positioned to drive share gain and a healthy profit increase during 2024. Our True North continues to be the guiding principle of Hillman. We live by the model that nothing happens until you sell something, and once you do, don't disappoint. We know that in today's environment, service matters as much as it ever has in our 60-year history. Our commitment to all of our stakeholders remains steadfast. This includes not only our customers but our suppliers, team members, and our investors. We look forward to updating you during the year with our progress. With that, we'll begin the Q&A portion of the call. Let's see. Tawanda, can you please open up the call? Thank you. Ladies and gentlemen, to ask a question, please press star one one on your telephone and then wait to hear your name announced. To withdraw your question, please press star one one again. We ask that you limit yourself to one question and one follow-up, and then you may get back into the queue. Please stand by while we compile the Q&A roster. Our first question comes from the line of Lee Jagoda with CJS Securities. Your line is open. Hi. Good morning. It's Peter Lukas for Lee. Congrats on the quarter. Just wanted to know, I guess, first question, what assumptions are built into the forecast in terms of growth in Robotics, both in terms of growth in keys versus engraving and then the ramp of machine placements throughout the year? Yeah. A s we think and thanks for the question, Pete. Thanks for the compliments on the quarter. As we think about Robotics for this year, as Doug said in his prepared remarks, we expect to ramp in the back half, but the first half is going to be relatively tough. We're anticipating, just given what we've seen in the economy, we've continued to see some of the pet retailers struggle a bit. W hen you think about anything that's discretionary spend, we don't see people spending unless the economy turns towards the back half. O verall, in the Robotics and Digital, we would say a flattish kind of year. That would be with areas like MinuteKey performing better and areas such as engraving performing a little worse. T hen, Doug, do you want to comment on rollouts? Yeah. When you think about, Pete, the new 3.5, obviously, we're going to have a machine that can do a lot more than just home and office with the Endless Aisle capability as well as RFID as well as the transponder and auto capability for Smart Fob. W e're excited about that. A s I have said repeatedly, we're not going to run out there and lead with our chin. We're going to make sure that we roll these out and that we've got the back end taken care of for the support and service. A gain, every retailer is excited about it. I think the one thing about RDS, and we're frustrated with the performance so let me say that upfront. I wish it was growing quicker. W hen you take it, it makes total sense on engraving and accessories. That's a discretionary, and we know that pet and that is way off. W hen you think about keys, both full-serve and self-serve keys, which is the biggest part of RDS, we have one customer that's given us fits, and that's Walmart. I f you look at the rest of the customers in 2023, RDS was up about 7.5%. T hey had a good year. W hat happened at Walmart is they elected to take full-serve machines out. We had 100% of that business. We had to do a lot of work that didn't sell a key to get those machines out. T hen we relocated all of the self-serve machines throughout the store. We have about 70% of the self-serve share. U nfortunately, we saw machines go from the front vestibule to sporting goods to painting to ACC. They're not getting to the places that even Walmart wants with their store ops issues. W e had a tough year with Walmart in lots of machines in and out and around. W hen you look at our other major key companies and customers like the Aces of the World and Depot and Lowe's, we had a good year. And so we should turn that side second half of 2024 and get this thing going again. Then just one quick follow-up. You talked about the new services you're introducing on the next-generation key-making machines. Any sense what that adds to your TAM? I'll tell you what. It's a really, really good question, and it can vary dramatically. If you think about the average key that would be cut in a MinuteKey machine today, you're talking about probably a $5 key versus in the future, you'll have keys ranging from $10.99-$79 to $179. T he big variability. What we don't know is what's the consumer going to do. T hat's what's interesting about the first 40. Pete, it's a little early yet. I do also believe that we'll see different kinds of numbers based on different geographics as far as how that store trades out, what it's around, and what areas. W e're just learning. It's a little early for us to say. The great news from a retailer standpoint is we're spending the capital doing all the work, and they get a percent of a higher number. T hey're excited about it, and we are as well. It 's a little early for me to tell you average key cut price was average new key cut price will be. T hat's what we're going to work on. It'll probably take us that we're going to need about 500 machines out there around the U.S. for us to get our heads around that. Very helpful. Thanks. I'll jump back in the queue. Thanks, Pete. Thank you. Please stand by for our next question. Our next question comes from the line of Ryan Merkel with William Blair. Your line is open. Hey, everyone. Good morning. Hey, Ryan. Wanted to start off with some of the revenue assumptions for 2024. I think you mentioned price down 1%. Can you just unpack that a little bit? Yeah. I mean, if you take 1% of our revenue, obviously, you can do the math there, Ryan. It's about $15 million. I mean, we've said, as you think about price over time, we expect that we're going to get some price back because we've seen some deflation in the business, and we're anticipating that we'll do that. I think what we've said consistently is as costs come down, we would expect that we'll hold on to about half of that, a nd so far, that's playing out. We're pretty proud of the fact that we've been able to expand gross margin like we have. We've gotten back to where we were historically, obviously, a little bit above it in the fourth quarter. A s we think about 2024, what we're really excited about is we think not only are we at, but we maintain that historic gross margin throughout the year. W e think that's where the business needs to live. Got it. Okay. In terms of the timing, is that kind of even through the year, or should we think about that price give back more second half? I would say it's more back-end loaded, but we're obviously having those conversations with our retailers as we speak. Yeah. Okay. T hen my second question, the market down 1%, I think that's pretty fair. I guess, two-part question. What are some of the things you're watching? Is it mainly just interest rates and housing turnover? T hen the second part of the question, Doug, do you think there's pent-up demand? Is that how your business works? I f turnover increases, do all these people start doing projects again? Yeah. I think that, Ryan, when you think about existing home sales, man, we get helped on both sides of that trade, right? People get their house ready, and they use our products, and then they try to turn their new one into what they want. T hat number being 4 million versus 5 and 6 is really probably the biggest drag on Home Depot, Lowe's, and Harbor Freight stores in our business. I think that's a second half begin, but it really probably ends up being a 2025 tailwind. We feel like it'll start to help us in the second half, but I think you'll see that our guess is that you'll see that really help our business in 2025. T hat's why we didn't want to put a number out there that had to go perfect. We wanted to put a number out there that hopefully, we could do better but not solve for volume until we see volume in a consistent way. I think it's always confusing in January and February because of weather, this, that, and the other. I think the thing that we're really hoping for for our retail partners is a good spring. It's been two years without it. It would be great to have a good spring for them. Obviously, it would help us too. We're not super tied to spring, but they are. That would really help them to get started because I think Depot and Lowe's are prepared for a good year. I think just like us, they're trying to look at things saying it's probably a second half before this thing starts moving and then into 2025. Yep. Makes sense. All right. Best of luck. Thanks, Ryan. Thanks, Ryan. Thank you. Please stand by for our next question. Our next question comes from the line of David Manthey with Baird. Your line is open. Thank you. Good morning, everyone. M y question is on new business wins. I think, Doug, you had said more than $25 million. Rocky, you referenced this 2%-3% focusing on 2% for the current year. I guess mathematically, 2% is $30 million. I just wanted to check in. Is that your plan? Is that based on discussions you're having? How concrete is that? S econdarily, is that number net of the line that you exited and wrote off this quarter? Yeah. On the line that we wrote, we weren't actually selling much of that, Dave. T hat kind of led to where the write-off occurred. T hat has nothing to do with the math. I would say, as you think about it, probably north of 2/3 of that business is already done and baked with our retailers. Y ou think about the rollover impact plus new business wins that we know of. W e've still got some work to do. I would say we're in at least as good a spot as we've been the last couple of years, and we've been able to hit those numbers each year as we think about today. Even as we speak, our guys in the field are out working on new business, and we are confident we'll pick up more. Dave, the reason I feel even better than I did is because we're actually having some interesting conversations with three of our customers talking about doing things for them that they have historically directly imported themselves. That tells me that they've got to free up their warehouses and that they want us to service these complicated categories. W e haven't seen that as an opportunity in front of us. I haven't seen that. I've been here nine years. W e have three discussions going on right now with people who are importing the product. Q uite honestly, it's really tricky for them to do that as they saw through COVID. A gain, we're not going to be able to meet the price that they could get, but we can show them with us servicing it and us thinking about the category differently than maybe a merchant who doesn't understand it, how we could actually grow it and maybe change the category. T hat's why I feel like you'll see us exceed that number this year. That sounds great. Second question is on rope and chain. What percentage overlap do you have with Koch currently? I mean, when you think about the number of locations you're in versus what their overlap is with those locations? I'm thinking here about the cross-sell opportunity. If you look at the $45 million in Koch's revenues, are you looking to capture multiples of that over 3 years-5 years, or is it more of an incremental opportunity? Yeah. I'll turn it to JMA because he's all over this one. Dave, let me just say first, our top three customers, Koch has 8% of their share. I love that. That's a good place to start. JMA, anything on that? Yeah. I'll answer that, Doug. Dave, excellent question because we're really excited about Koch. Tiny overlap, very little. In accessories, rope and chain accessories are a little bit of overlap. W ith the acquisition, now we're able to bring the bulk and package product and then bring our merchandising solutions together to really grow it. A s Doug mentioned, it's just a huge opportunity. W e really feel good about that really accelerating our growth in 2024 and beyond. We had a major customer. One, they saw the announcement call and say, "We're about to make a decision on a line review. If you guys are going to own this, we'll delay it." T hat says something to me. I think we've had several of the regional players say, "Listen, let us know when you're ready. You can take over our rope and chain now because you've got service." This is a pain-in-the-ass product category, and Koch didn't have service. It's a great Midwest company. W hen you take that with service and the relationships we have, Dave, I don't know how big it'll be, but we're going to see some really nice growth here. Yeah. Hey, Dave, just to make sure that everyone listening is clear, what JMA was talking about is the category, and so very little overlap. W hen you think about customers, they probably don't have a customer that we aren't already servicing. T his has put it through the goose. Yeah. That all sounds great. Thanks, guys. Yep. Thank you. Please stand by for our next question. Our next question comes from the line of Michael Hoffman with Stifel. Your line is open. Hi. Good morning, and thanks for taking the question. Hey, Michael. Hi, guys. Can we talk about the cadence of your gross margin through the year just so we get all the puts and takes of this sort of the end of the transition out of the 225 and COVID and rebalancing inventory and all that? Yeah. I think the way to think about it, Michael, is as we said, we expect to be at or above our historic margins all year. T hat kind of sets a floor where we believe the margins will be. Obviously, as you think historically about Hillman, our second and third quarters are usually our most profitable just because of seasonality. I think you will see that again this year, with the exception being that the first quarter we expect to be pretty profitable. It's going to probably look a lot like the fourth quarter did. T hen when you start to think about some of the price give back that we anticipate is going to happen, etc., you would expect that margin to come down a bit but still, again, remain at or above historic levels. Okay. A ll year, we're at 45, and then the 2Q and 3Q are even higher, and 4Q actually may be below 45 just to get it to balance? Again, I'll restate what I said, Michael, that we expect all year, every quarter to be at or above historic levels. Okay. Your customer is having real foot traffic issues. What are you doing differently to keep your business on pace despite their foot traffic? Yeah. I think if you think about Depot and Lowe's, clearly, foot traffic issues. We're not seeing that as much in the farm and fleet. T hese little hardware stores, and I say little when you have 12,000 of them, and they represent 27% of your business, they just refuse to partake in this load-up. They're doing really well, and they've got the service, and they've got the product. I think, micro-brands that people are now starting to say, "I have no idea how to get this brand here." Ag and towns that have income, I do better in fasteners than a lot of other categories where. I would say, Dave, that Harbor and our San Francisco area have been able to give a new impact. Our Industrial business have had some strong double-digit kind of move this past year. Those three areas are not being as impacted by foot traffic. I think Depot and Lowe's are both certainly hoping that with the spring and kind of midyear, that turns around. I t's been tough for three years. Okay. If I could squeeze one more, what's your M&A pipeline look like? One of the great things we got lucky. Let's face it. We wanted to buy Koch a couple of years ago and just didn't feel like it was the right time with what we had to do on inventory. We spent time with the owners and told them we genuinely wanted to buy it, and this is when we thought we could. They waited for us. Ironically, they also ended up buying stock in Hillman during that time. I just think that we got to know them. They got to know us. We were very honest about when we wanted to buy. For two brothers who have run a company and built a company, honestly, we're a great fit for them. We've already integrated the team. We just had 31 people in Minnesota this week. They love what's happening. They know the two brothers know that they can retire, and this will be very well taken care of. We've got 6 of those, Michael. Again, not all will come together. The fact that the private equity guys stopped chirping in their ear because there was no debt market has really helped us. Got it. Thank you. Thank you. Please stand by for our next question. Our next question comes from the line of Reuben Garner with Benchmark. Your line is open. Thanks. Good morning, everybody. Hey, Reuben. Hardware has been fairly resilient for you guys. You talked about the issues with Walmart at RDS. Can you talk about Protective Solutions, maybe what's changed in the last couple of quarters, and kind of what's embedded in your outlook in that category for 2024? Reuben, yeah. I mean, we look at the back half of 2023. We're really proud of what that team has done the last couple of years. I'll say rebuilt that business a bit. We've focused on remixing our glove mix. We've introduced some new products, and we've rebalanced it. We've gotten some nice off-shelf opportunities, incremental shelf space, which we've been able to maximize. T hat led to a really good back half of the year. We feel good about where the business is positioned in 2024, and we're excited about what that team's got on the plate. It's part of the new growth opportunities that Doug referenced earlier. W e feel really good about our go-forward with that being a category we can continue to grow. I think the other thing, Reuben, is we've got a Digz line that really is a great positioning for the female and the gardening side. N ow our retail partner wants us to expand that name into other products because it's really starting to take hold. W e've got some interesting things there. We also are introducing a higher-end, if you will, tool bag that a lot of the pros want. I t's the first time, and the price point's up there pretty high, but the quality is fantastic. W e're trying to think differently in that work gear and knee pads because the pro, the more we interview them and get to know them, they don't like buying four or five of these a year. They like buying one and bragging about the fact that it lasts three years. Historically, these retailers don't want to hit that price point. They now know they can hit that price point if they have the right goods. Yeah. I think, Reuben, the only thing I would add just as people are modeling is we think PS will look a lot like the overall guide for the year, probably without the price pressure. Got it. T hen it's been a little while since M&A has been part of the story. Can you kind of maybe remind us of are there other areas like rope and chain that are left from a bolt-on perspective in the hardware aisle, or are you starting to get to the point where you've got to go outside of hardware to kind of grow the business? Yeah. No, I would say there's probably an equal amount inside hardware. I would say that zip code like a Koch. T hen obviously, we always are looking and thinking through plumbing and electrical, which, Reuben, we would consider more than just around the corner, that we'd consider that outside. W e're looking at both. A gain, nothing crazy. W hen you think about buying something at, call it, 6x pre-synergy, and then you add what we're able to do with the business, not just from a cost standpoint, but with our relationship and with our service capability, the top line in that business is not going to look anything like it has historically. Okay. Congrats on the strong close to last year, and good luck this year, guys. Thanks. Thanks, Reuben. Thank you. Please stand by for our next question. Our next question comes from the line of Brian McNamara with Canaccord Genuity. Your line is open. Good morning, guys. Thanks for taking the questions. Pricing, Doug, I know you have foreshadowed this for some time, but price -1% in 2024 is probably a little bit better than I would have expected, as we've heard. Some of your retail customers, particularly the home centers, haven't been shy to ask for price back. What could make that -1% materially better or worse as the year goes on, or is that a pretty good place to lock in? Yeah, Brian, I think it's a little so here's the way to think about it. That 1% is a little bigger than 1% as you think about the timing for those decreases. L et's just use an example. Let's say something goes into effect in June. It may be impacting our 2024 as such, but it then rolls into 2025 in the first half. T he 1% is accurate, but it's a little bigger than that, the answer to your question is how things roll. Yeah. The only thing I would add, Brian, this is Rocky. W hen you think about cost, we've seen a nice benefit on containers, and we've talked about that. V irtually every other category that we look at, there's inflation. I mean, and we're all seeing it. I mean, labor isn't getting cheaper. Once we get product into the United States, it's not getting cheaper. W hile we did see a bit last year and continue to see a bit of commodity benefit, as we sit today, we've seen the cost of steel in Taiwan and China go up pretty dramatically. Now, that typically happens going into Chinese New Year, and we'll see what happens after Chinese New Year. As we think about our business and think about the future, there's a lot of prices going a lot of different directions that helps us to explain why our prices need to be what they need to be so we get a fair profit. That's fair. I guess with Home Depot expecting another year of customers taking on smaller projects, deferring larger projects, does this materially impact your ability to plan and guide the business? I don't think so. I think we play in the Pickup Truck and the DIYer. The thing we're looking for is for people to get off cruise ships and out of concert halls so they get back into the backyard. I mean, the DIYer the Pickup Truck Pro is about where they've been. The DIYer, Brian, is the one that's off. W e're hoping that we'll see that start to pick up and normalize a little bit. I don't know how they're going to do what they want to do when you look at the price of airline tickets right now. So that's the part we'd like to see improve. Got it. And I'm just going to squeeze in one last one, a quick one. After a really nice year of free cash flow generation last year, how should investors think about sustainable cash flow generation in the business given the last few years haven't been particularly normal? Yeah. I think I said in my prepared remarks, Brian, we think this is $130 million-$140 million of free cash flow, kind of normal benefit. If you look over the last two years, we did $172 million last year. We're guiding to about $110 million this year. If you average those out, that's just north of that, probably $141 million, $142 million. And so that's what we think kind of the normal generation in the business should be. We'll grow that cash flow over time as we grow EBITDA. The one challenge that we will have as we think about the future a bit is around taxes because we're not a full-cash taxpayer in the U.S. today. We will be eventually. And then the flip side is we expect to continue to pay down debt. And as we do, we'll obviously bring that interest line down as well. 130-140 feels like a good number. We've guided to 110 this year. Obviously, we would be disappointed if we don't do better than that as we go through the year. Got it. Thanks a lot, guys. Best of luck. Thanks, Brian. Thanks, Brian. Thank you. Ladies and gentlemen, that concludes the Q&A portion of today's call. I would now like to turn the call back over to Mr. Cahill for closing remarks. Thank you. Thanks, everyone, for joining us this morning. Again, we're lucky to have the customers we do. We got great vendor partners. I mportantly, most importantly, this team at Hillman continues to do things for us each and every day, particularly in the store for our customers that allows us to grow and allows us to continue to find ways to do more. W e look forward to updating you again in the near future. T hank you for joining us this morning. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.