Welcome to the MasterBrand's Third Quarter 2023 Earnings Conference Call. During the company's prepared remarks, all participants will be in a listen-only mode. Following management's closing remarks, callers are invited to participate in a question-and-answer session. Please note that this conference call is being recorded. I would now like to turn the call over to Farand Pawlak, Vice President of Investor Relations and Corporate Communications. Thank you. Good afternoon. We appreciate you joining us for today's call. With me on the call today are Dave Banyard, President and Chief Executive Officer, and Andi Simon, Executive Vice President and Chief Financial Officer. We issued a press release earlier this afternoon disclosing our third quarter 2023 financial results. If you do not have this document, it is available on the investor section of our website at masterbrand.com. I would like to remind you that this call will include forward-looking statements in either our prepared remarks or the associated question-and-answer session. Each forward-looking statement contained in this call is based on current expectations and market outlook, and is subject to certain risks and uncertainties that may cause actual results to differ materially from those currently anticipated. Additional information regarding these factors appears in the section entitled "Forward-Looking Statements" in the press release we issued today. More information about risks can be found in our filings with the Securities and Exchange Commission, including under the heading "Risk Factors" in our full year 2022 Form 10-K, and updated as necessary in our subsequent 2023 Form 10-Qs, which are available at sec.gov and at masterbrand.com. The forward-looking statements in this call speak only as of today, and the Company does not undertake any obligation to update or revise any of these statements except as required by law. Today's discussion includes certain non-GAAP financial measures. Please refer to the reconciliation tables, which are in the press release issued earlier this afternoon and are also available at sec.gov and at masterbrand.com. Our prepared remarks today will include a business update from Dave, followed by a discussion of our third quarter 2023 financial results from Andi, along with our current 2023 financial outlook. Finally, Dave will make some closing remarks before we host a question-and-answer session. Now, with that, let me turn the call over to Dave. Thanks, Farand. Good afternoon, everyone. We appreciate you joining us here today for our third quarter 2023 earnings conference call. I'm pleased to report that MasterBrand delivered another solid quarter of financial performance. Net sales in the third quarter were $677 million, a 21% decline over the same period last year. This decline was slightly greater than our expectations due to the impact of higher than anticipated trade-downs. Absent the roughly 3% effect from trade-downs, net sales for the third quarter were roughly in line with our previous outlook. Despite the net sales decline, Adjusted EBITDA margin expanded by 150 basis points to 16.2% in the third quarter. This equates to a year-on-year decremental margin of less than 10%, well inside our stated guidance. Our exceptional margin expansion was driven by the team's continued execution on MasterBrand's strategic initiatives, particularly around supply chain improvements and productivity savings. This performance was higher than our internal estimates as our associates continued to outperform our expectations. Our strategic initiatives drove another quarter of working capital improvements as we reduced inventory by roughly $50 million sequentially from the end of the second quarter to the end of the third quarter. Our supply chain efforts, which are rooted in our Align to Grow initiative, are allowing us to reduce inventory as we continue to drive commonization amongst our componentry, product, and processes. Our rollout of RFID technology across our manufacturing network is helping improve inventory control at our facilities while simultaneously reducing the labor costs. These inventory improvements helped us generate free cash flow of $133 million in the third quarter of 2023, a threefold increase over the prior year quarter. Our year-to-date strong free cash flow not only demonstrates the value of our operational performance, but has also strengthened our balance sheet and provides us with great optionality in an uncertain market. Now I'll take a moment to discuss the end market served by our customers and the trends we saw in the third quarter. The single-family new construction market remains the most resilient, with underlying demand running flat year-over-year. We saw expected seasonality in this market late in the third quarter, which has continued into the fourth quarter. Trends across builders vary as some are more equipped to navigate rising interest rates. Our large builder partners continue to find ways to lower the cost of ownership for potential home buyers. This includes buying down mortgage rates or providing other discounts. As a result, we've seen that portion of the market perform better than the overall market. As we have mentioned in the past, builders are using product trade-down to help reduce their costs, and we saw this accelerate in the third quarter. We expect this trend to persist through the fourth quarter. On the whole, we continue to be encouraged by the resiliency of home builders despite the current interest rate environment, and we believe that the long-term fundamentals for new construction are strong. The repair and remodel market, which we serve through our dealer and retail customers, continued to be tepid in the third quarter. In line with our prior commentary, this market demand is down more than our original expectations for the year, as consumers are prioritizing other spending. At the beginning of the year, we expected this portion of the market to be down mid-single digits, but as we finish the year, we anticipate closer to double-digit declines for the overall R&R market. Generally speaking, larger ticket R&R tends to have a greater magnitude change than the smaller project R&R. Additionally, our dealers are relaying that consumers' decision lead time has extended from a year ago, which adds some further inertia into the buying behavior. Specific to the U.S. retail channel, we experienced the final stages of destocking this past quarter, and we now believe that we have worked through the impact of it with our retail partners and are at underlying consumer demand levels. Retail POS is following the double-digit decline in this category that I mentioned earlier. In the U.S. dealer channel, we saw similar trends overall to the retail channel, but within dealers, we continue to see better performance in the higher and lower-end product categories. We expect that dynamic to continue moving forward as cash customers favor more premium products and the rest of the market targets value-priced products. As we heard last quarter from our dealer network, the end consumer is getting multiple quotes before doing a remodel project and looking for trade-down opportunities to achieve a desired price point. We continue to experiment with price to ensure that we are putting the right products in front of the right customers and are being disciplined about promotions. In Canada, both new construction and repair and remodel markets remain weak, declining over 25%. While Canada represents a relatively small portion of our net sales, slightly less than 10%, year-over-year declines of this magnitude are presenting a headwind to our business. As discussed on our last earnings call, we expect continued weakness in this portion of our business in the second half of 2023, and we are seeing that play out as anticipated. In summary, we expect the dynamics that started in the third quarter with both current demand levels and product trade down to continue into the fourth quarter. Domestic new construction continues to hold up better than repair and remodel, and we expect continued weakness across both Canadian markets. Coupled with normal seasonality, we now expect the overall market to be down sequentially from the third quarter, with our performance matching that trend on a daily sales cadence. Andi will provide more color on this later in the call. With this backdrop in mind, we remain encouraged by our ability to deliver incremental cost savings despite an environment with soft or down volume. At the same time, we are investing in the business and positioning our company for growth. Now, I'd like to talk a little more about some of the investments we are making through our strategic initiatives. On the last earnings call, I mentioned that our strong performance gave us the confidence to accelerate investment spending, particularly in our Tech Enabled Initiative. During the third quarter, we did just that, more than doubling our investment in technology sequentially. And as mentioned on our previous earnings call, we plan to increase this spending further in the fourth quarter of 2023. These opportunities are across the plant floor, back office, and customer-facing. For example, we believe our Tech Enabled Initiative presents a meaningful opportunity in the area of quality processes. Much like supply chain efficiency, quality processes are hindered by complexity in product offering and manufacturing. With our Common Box Initiative and more standard work across the plants, we can now improve the overall efficiency and cost of the quality processes that exist today in our manufacturing. Using technology, we'll be able to inspect product quicker and with a higher degree of accuracy. MasterBrand has robust automation throughout its facilities, but we see ample opportunity to introduce newer and more advanced automation to support our quality processes. While this technology might be newer to the cabinet industry, it has been proven in a number of other industries. Accordingly, we are trialing advanced, yet time-tested solutions in a number of areas this year and into 2024. Beyond the plant floor, we have expedited our efforts around cloud migration. We have varied systems that organically grew and constrained our ability to optimize decisions across functions, creating reporting inefficiencies and out-of-support hosted applications. With our cloud migration efforts, we are standardizing our processes based on leading practices, leveraging centralized master data and near real-time analytics. This helps us automate processes across MasterBrand and enables shared service models for functions like AP and AR. This is also helping us allocate our internal resources from manual process steps to value-added activities. Finally, we continue to invest in technology to improve the overall buying experience for our customers. Our new tech platforms are designed to improve the connection between MasterBrand and our channel. As mentioned last quarter, we have invested in the team and in applications to bring these tools to life for our customers. Our digital and technology team is making good progress in this area and are rolling out the first of these applications this quarter. Initiatives such as these serve as a reminder that the tools of the MasterBrand Way not only drive efficiency, but also target growth. I look forward to sharing more details about our progress on these efforts going forward. Now, I'd like to hand the call over to Andi for a more detailed discussion of our third quarter financial results and our revised 2023 outlook. Thanks, Dave, and good afternoon, everyone. It's great to be joining you here today. I'll begin with an overview of our third quarter financial results, and then I'll discuss our updated 2023 outlook. Third quarter net sales were $677.3 million, a 21.1% decline compared to $858.4 million in the same period last year. Our top-line performance was primarily the result of anticipated volume declines in the market. As Dave mentioned, we also experienced some softening in our net ASP, due primarily to more pronounced trade-down activity. As mentioned in previous calls, we were the leader in price enactment in 2022, but the benefit of price to the top line was limited by trade downs in the third quarter. Gross profit was $237.5 million in the third quarter, down 10.3%, compared to $264.9 million in the same period last year. Gross profit margin expanded 421 basis points year-over-year from 30.9% - 35.1%. The margin expansion was driven by continued execution on MasterBrand's strategic initiatives, particularly around supply chain improvements and productivity savings, which mitigated the impacts of reduced volume, trade-downs, and personnel inflation year-over-year. Also, I want to highlight that this year's third quarter gross profit includes two discrete items. We received insurance proceeds of $2 million related to the tornado damage sustained at our Jackson, Georgia facility earlier in the year, as well as $3 million in accumulated medical rebates related to the favorable renegotiation of our health insurance program. Excluding these two discrete items, we still delivered strong gross margin expansion. Selling, general, and administrative expenses were $140.3 million, 20.3% lower compared to the same period last year. Outbound freight savings, as well as an additional $700,000 in medical rebates discussed earlier, lowered our SG&A spend, even as we invested more quarter-over-quarter in our strategic initiatives, particularly Tech Enabled. As I've previously discussed, we were allocated a portion of Fortune Brands Home & Security costs in 2022, but that allocation is now gone. Instead, we have standalone costs. But if you compare the impact of the two, it remains a net savings year-over-year in 2023, as anticipated. You should expect a sequential increase in SG&A spend in the fourth quarter as we continue to ramp up the pace of investment in our strategic initiatives. I'll provide more color on this when I discuss outlook shortly. We delivered net income of $59.7 million in the third quarter, compared to $52.2 million in the same period last year. The 14.4% year-over-year increase was driven by higher operating income and lower income tax expense, partially offset by higher interest expense. Income tax was $18.2 million, or a 23.4% effective tax rate in the quarter, compared to $26.1 million or a 33.3% rate in the third quarter of 2022. This quarter's lower effective tax rate was driven by favorable state and local income tax items recognized this year and the mix of earnings in different jurisdictions. While our third quarter 2022 effective tax rate was unfavorably impacted by adjustments made by Fortune Brands following an IRS audit settlement. In the third quarter of 2023, interest expense of $15.3 million was related to debt necessary to fund the dividend of Fortune Brands at the time of the spin. As a reminder, in 2022, we did not have any external debt assigned to our balance sheet, and therefore, there was no external interest expense in our earnings during the prior year. Further, we recognized related party interest income of $4.3 million from loan agreements with Fortune Brands in the third quarter of 2022. Diluted earnings per share were $0.46 in the third quarter, an increase from a pro forma diluted earnings per share of $0.41 in the third quarter last year. Please note that prior year pro forma diluted earnings per share is calculated using 128 million shares outstanding, as under U.S. GAAP, it is assumed that there were no dilutive equity instruments prior to the separation, as there were no equity awards of MBC outstanding. Adjusted EBITDA was $109.8 million, compared to $126 million in the same period last year. Adjusted EBITDA margin expanded 153 basis points to 16.2%, compared to 14.7% in the comparable period of the prior year, despite lower sales. Our strong margin performance was driven by continued execution on MasterBrand's strategic initiatives, particularly around supply chain improvements, productivity savings, and the discrete items I mentioned earlier. These more than offset year-over-year volume declines, the impact of trade downs, and personnel inflation. Finally, as I mentioned earlier, we recognized two discrete items in the quarter that were not factored into our previous outlook. To quickly recap, we received $2 million in insurance proceeds related to the tornado damage sustained at our Jackson, Georgia facility earlier in the year. Second, we received $3.7 million in accumulated rebates related to the favorable renegotiation of our health insurance program. Excluding these two discrete line items, we still expanded our Adjusted EBITDA margin, and I am pleased with the operational excellence our associates delivered in the quarter. Turning to the balance sheet, we ended the third quarter with $122.5 million of cash on hand and $480.2 million of liquidity available on our revolver. Net debt at the quarter end was $585 million, resulting in a net debt to Adjusted EBITDA leverage ratio of 1.5x, down from 2x and 1.7x at the end of the first and second quarters of 2023, respectively, our third successive quarterly reduction. Our balance sheet remains strong, with the financial flexibility to invest in the business for growth. Operating cash flow was $336.5 million for the nine months ended September 24th, 2023, compared to $117.9 million in the comparable period last year. Our working capital improvement plans, as well as strong operational performance, specifically around inventory management and collections, drove this tremendous year-on-year improvement. We expect our working capital to be flat in the fourth quarter as our pace of improvement slows and as we plan for normal seasonal activities. Capital expenditures for the nine months ended September 24th, 2023, were $21.4 million. We anticipate significant payments in the fourth quarter as invoices come due and now expect to spend $50 million in capital expenditures in 2023. Free cash flow was $315.1 million for the nine months ended September 24th, 2023, compared to $85.7 million in the comparable period last year. This is a $229.4 million improvement year-over-year. As we have discussed previously, cash outflows are expected to increase in the fourth quarter due to our last significant spin-related payment to Fortune Brands of roughly $30 million, increased capital expenditures, and the slowing of improvement on our working capital. Because of these items, we now expect fourth quarter free cash flow to be slightly positive. Finally, during the quarter, we repurchased approximately $11.5 million of our common stock under our existing stock repurchase program. Turning to our outlook, we remain optimistic about the steady demand we've seen with our customers servicing the new construction market and expect this trend to continue through the balance of the year. For those customers servicing the repair and remodel market, we anticipate the current pace of weaker year-over-year conditions will persist throughout the fourth quarter. Additionally, we believe the entirety of the Canadian market will remain weak into the fourth quarter. In total, we expect net sales in the fourth quarter to be down mid-teens year-over-year. Given this market backdrop and the typical fourth quarter seasonality, we are currently planning for a two week holiday shutdown in December. Included in this two week shutdown is our 53rd week, so we will see no benefit from that in our fourth quarter top-line performance. As a reminder, this extra week is the result of our normal 4/4/5 fiscal calendar. From an Adjusted EBITDA standpoint, our operational momentum is expected to continue through the fourth quarter. As discussed on the last earnings call, we planned for accelerated investment spending in the second half of 2023, particularly in our Tech Enabled initiatives to position the company for future growth. Based on our strong operational performance again in the third quarter, we are raising our Adjusted EBITDA outlook range to $370 million-$380 million, a $20 million increase at the midpoint compared to our prior outlook. On this updated range, we now expect Adjusted EBITDA margins of roughly 13.5%-14% for 2023. This revised 2023 outlook shows our confidence in our ability to expand Adjusted EBITDA margins year-over-year, even in a softer environment. Because we have already collected a final payment of $3.2 million in the fourth quarter, this full year outlook includes these final insurance proceeds related to the tornado damage sustained at our Jackson, Georgia, facility earlier in the year. We expect the benefit of this payment to be nearly offset by certain anticipated foreign exchange headwinds in the fourth quarter. Our expected 2023 interest expense of $65 million-$70 million remains unchanged, and our 2023 year-to-date effective tax rate of 25.4% is the approximate tax rate for the year. The established tools and principles of the MasterBrand Way have helped the team deliver strong results in the first nine months of 2023. We believe that continued execution on our strategic initiatives and further investments in the business will yield incremental savings in future years, positioning us for net sales growth and market outperformance. With that, I would like to turn the call back to Dave. Thanks, Andi. As you can see, there's a lot of great work taking place across the organization. Our associates are executing at a very high level, and their progress on our strategic initiatives continues to drive results. The ability to deliver strong EBITDA dollars on declining sales and expanded adjusted EBITDA margins is a result of their disciplined use of the tools of the MasterBrand Way. Beyond our financial and operational results, I'm extremely pleased with our ESG efforts and the impact we are having on our broader stakeholders. During the third quarter, we participated in Habitat for Humanity's 2023 Jimmy and Rosalynn Carter Work Project as the exclusive cabinet provider. Our associates have supported Habitat events from coast to coast for over two decades, and now we're excited to support the organization in a more focused way. As a platinum-level partner, we were pleased to provide design, material, and labor to help build a 27-home community in Charlotte, North Carolina. This was a great event and a meaningful way to support local families in the Charlotte area. Since this is our last earnings call before our one-year anniversary as a standalone public company, I'd like to take a moment to thank our more than 13,000 associates for their hard work and dedication this year. We exceeded our initial expectations for what we would accomplish this year, and I look forward to what 2024 will bring us. Now with that, I will open up the call to Q&A. Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we pull for questions. Thank you. Our first question comes from the line of Adam Baumgarten with Zelman. Please proceed with your question. Hey, good evening, guys. This quarter, I guess maybe to start, just if you could give us a rough sense of the tailwind that you got from material and freight costs in the quarter, just because it seems like they were pretty meaningful. Yeah, I think it's, I'd say the, the combination of tailwinds from continued, price, or excuse me, continued, cost reductions sequentially, as well as the continuous improvement efforts that we've put into the business, Adam, is what's driving the results that you're seeing in Q3. Andi, did you want to add anything? You want to talk a little bit more detail about any of the particular elements? Yeah, sure. So really that, you know, Q3 was a great quarter, and, you know, especially with those decrementals full of 10%. But our continued progress really on continuous improvement and those supply chain initiatives very significantly offset the headwinds we had, whether it was market-related volumes, the trade-downs, which Dave mentioned in the prepared remarks at about 3%, the increased spend in our tech initiatives and personnel costs. So we did, you know, that price discipline and continued initiatives in supply chain and cost improvement really helped us out. And then, of course, you know, we had those discretes in the Q3 as well, $5.7 million. That was in our prepared remarks, which also helped the quarter. Adam, I'll add one other thing. In terms of the pace of change in the market. You know, labor is still a headwind, and we, you know, we have various layers of that throughout the year. The other aspect is freight, I'd say, has stabilized now. And, so that, you know, as we look forward, those benefits are probably behind us. Materials is still not what I'd say below COVID levels. There's still been inflation that's stacked up over the year. It's sequentially come down, but again, I'd say that part of the market and all those things have stabilized, moving forward here. Okay, got it. And then just, just on pricing generally, are, are you seeing any pickup in pricing pressure, whether it's promotions or, you know, outside of mix, obviously, pricing promotions or outright price cuts specifically in the R&R market? And, and if so, or maybe you could talk about dealer versus retail. Yeah, I think the pricing environment is similar to what I said last quarter, which is normal, and cabinets do have a normal tempo of promotional activity, and we're seeing some of that, but I think it's not outsized in terms of what we would normally see. So, you know, there's obviously those situations where somebody's anxious to get a particularly, maybe a large deal done, and there's some promotion that goes along with that. There's certain seasonal promotions that you certainly see in retailers. That's normal course. And so, you know, we've built that into our plan, and the guidance that we've given, but I wouldn't say anything's outsized in terms of change in price. Got it, and just lastly for me, how much of your revenue is from the multifamily channel? And I guess, what trends are you seeing there? Yeah, I mean, we follow the multifamily activity because it gets released around the same time as single family, but it's de minimis for us. We've intentionally not focused on that portion of the market. Okay. Got it. Thanks. Thanks a lot. Thank you. Our next question comes from the line of Garik Shmois with Loop Capital Markets. Please proceed with your question. Oh, hi. Thanks. Thanks for taking my question. Just first off, for the fourth quarter, how much of the anticipated sales decline do you anticipate being impacted by the trade-downs? Is it a similar rate as what we saw in Q3, or is there any change in that anticipation? Yeah, Garik, we actually expect it to be greater than the Q3 impact. So I'd say more mid-single digit. You know, we had 3% impact to the top line in Q3, and it'll be more in Q4 as that has taken hold more. And so obviously, we look at that and, you know, we've said before that we're comfortable with mix change within our portfolio in terms of the margin that that drives, but we're cognizant of the fact that there are fewer dollars coming in when you have a trade down like that. And so we have to look at that, and as we look ahead, that's, you know, part of our planning process is to be prepared for that. And, you know, that requires, at certain points, you have to look at your fixed costs. So we're doing that, and we're reacting to that, but that is a trend that we think is continuing. Great. And, just given the, I guess, relative performance in new construction versus the remodel market, is there anything that you're able to do or contemplating doing as you look out to 2024, maybe strengthening your position even more in new residential or any way to, you know, target the market that's outperforming for the next, you know, indefinite period of time? Yeah, absolutely. I think... You know, probably the biggest thing that—I mean, there are a lot of factors that matter into how you win business in any given market, but I think an overarching part of winning in new construction is the service level that you provide. I think we, we are world-class at that, and we have a great team that's focused on that, and that's a lot of what we sell. And I think also builders are appreciating our ability to adjust product mix with them and get them to a lower cost point and not, you know, take away anything from what they're delivering to their customers. You saw that all through COVID, when it was a very difficult time for all the builders, both with labor, material, you name it. We were very reliable with them in many ways, and I think that's carried through this year, and that's what we lead with. We have a great product, don't get me wrong, but I think that our ability to really deliver the service level that they need to be successful, because we're one piece of a very large project, and they stamp that project out over and over again. So if you can, y ou know, frankly, it's the tools that we use internally that we bring to them, when it comes to things like lead through lean. We bring that kind of approach to our customers because we know that helps them. Understood. Last question is just on the incremental or decremental margins, you know, moving forward. You've, you've done a fantastic job this year, but, you know, seems like the top line is, you know, still gonna be a bit choppy, given the trends that you discussed. It seems like you're lapping some of the material and transportation cost benefits, but you are contemplating taking fixed costs out of the system. So just kinda curious how to think about the incremental margin line, you know, moving forward. You know, any additional color that you could provide would be great. Sure. I think that, you know, maybe Andi can speak a little bit about Q4, as you do the math on that, but I think that's... We wanna outperform, but we're also cognizant, particularly with what we've been able to accomplish in the second half of this year. We're cognizant of our desire to keep investing in the business, 'cause the investments we're making right now are focused on growth in the future. Some of them take more time to come to fruition, and we'll talk more specifically about those as they develop. But I think that that's the balance. And so, you know, our team, I think, has institutionalized as part of our culture, the continuous improvement mindset, and so that's just part of how we do things. They take that money, and we can either make it higher return for shareholders and/or it's usually an and, take some of that money and invest it. That's gonna really dictate, moving forward, how we have decremental margins. But our goals are always to be world-class and to be better than, you know, contribution margin. We look at the fixed cost base that we have, and we're always looking to make, make sure we're optimizing that, along with the continuous improvement in the variable side, to, to build the, the headroom, if you will, for us to make decisions about investments. You know, obviously, as you go into a, a market like this year, even, we were unsure, and so we wanted to, you know, hold off and, and wait until we saw how things progressed before we dove into investments. We'll treat it the same way any given year. As things go better, we'll invest more, and as things go, if things don't go well, we'll trim back. Yeah, I think I can add a little color for the Q4, if it's helpful. Generally, for this year, we do still plan to stay within our stated guidance, so decremental is no more than 20%. So we continue that trend, and really, we'll see the Q4 from a what's impacting the quarter perspective, it to be very similar to Q3. And again, it'll be that continuous improvement, supply chain initiatives on top of deflation, that we expect to, again, heavily to offset that volume decline, trade-downs, the strategic initiative spend, which we are gonna continue for growth purposes, and those personnel costs. And, just a slight clarification, just to make sure we understand on the discretes. Of course, the Q3 discretes will not repeat in the Q4, but as we mentioned in our prepared remarks, we do have that last insurance payment coming through from the tornado we experienced earlier in the year, $3.2 million. That is in the outlook. However, just to be clear, we do anticipate that to be offset by some FX headwinds and also some just normal holiday-related inefficiencies, which we talked about last quarter. Yeah, and to put a finer point on what Andi said, you know, similar, but we will be investing more in Q4, and we do have the inefficiency, which we're gonna—we've already seen far enough ahead to say we're gonna take a couple of weeks shut down for maintenance in our plants. And that fixed cost, therefore, just comes and hits the bottom line. So it's, you know, I think if you do the math on the numbers, you know, it's not quite as good a performance as Q3, but that's for a number of reasons that we are looking at controlling and deciding to do. No, understood. Thanks for all that, and I'll pass it on. Thank you. Our next question comes from the line of Tom Mahoney with Cleveland Research. Please proceed with your question. Hello, good afternoon. I wanted to ask about the working capital comment in the fourth quarter, where it'd be neutral, and you mentioned normal seasonal activity. Is there some restart of production that's associated with that? Just trying to get a sense for how you think about building it into the end of this year and looking forward into 2024 from a working capital perspective. Yeah, Tom, I'll add a few things, and then Andi may wanna add some further detail. But generally speaking, in a normal year, we tend to have a slight build in inventory at the tail end of Q4 and into Q1, and a lot of that is driven by Lunar New Year in Asia. You have to get material on the water sooner to bolster through a couple weeks of shutdown in that region. So that's a normal course. I will say it's really hard to look through our financials for last year, because that wasn't the case last year. We actually extended the Lunar New Year shutdown with our suppliers longer to kind of help reduce some of the choppiness that we had, and we had plenty of inventory, obviously. So it's really hard in this particular one-year period to look at a year-over-year as what's a normal Q4 into Q1. So I would say the normal pace for our working capital is we have to build some inventory for Lunar New Year. And then on top of that, you know, if you think about the new construction market, it does have some seasonality to it because of the weather in the north. And so we tend to have higher activity coming out of Q1, and so you start building some inventory ahead of that as well. So those two dynamics are back in play this year. Again, we still think we have improvements to make to inventory. So it's kind of a, you know, balances each other out, maybe not perfectly, but somewhere, you know, in the middle to balance each other out. So we're gonna continue to work on improving inventory with the supply chain initiatives that we have, but there is a dynamic of needing to order more material starting, you know, sooner rather than later here in the fourth quarter. Andi, is there anything? Yeah, maybe just kind of add, you know, we talked a bit about our, you know, Tech Enabled Initiatives, and I want to talk about how that's really helping us with working capital. It's not just about, you know, volume coming down and adjusting inventory. We're fundamentally reducing our need for inventory and improving our collections. And just a couple examples, you know, using the MasterBrand Way, we've developed a pretty robust S&OP program, and that's really been a key driver in the year-to-date reduction of inventory of $100 million. And then secondly, we have really embraced our Tech Enabled Initiative to improve the data availability of our customers and customer receivables, and it's allowed us to collect faster and more completely. So those types of trends, despite the cyclicality, those types of improvements will continue. And probably this is a good time to mention, just for a reminder on the Q4 on cash flow, again, we expect you know, we expect great operational performance and cash flow generated from that. However, as we stated in the last quarter, the Q4 has some unique cash outflows that will offset that cash flow generation we've done year to date. Again, it's related to that final Fortune-related spin payment of about $30 million. We have remaining CapEx to go out the door of about $30 million, and most of that's related to the timing of the invoices and when they're due and paid. We are increasing that Strategic investment, and we'll have even though working capital again keeps improving, that slowing of pace of improvement will occur in the Q4. So just a reminder of that, and that's why we stated in our comments, you know, we expect that free cash flow to, you know, be positive, but not, not at the level we've seen year to date. Got it. I I appreciate that color on the cadence. And then, as you look out into 2024, and think about the market environment, I realize that it's early, but is there any way you could characterize how you're thinking about 2024 from a demand perspective, primarily on the repair remodel side is my question, but curious what thoughts you have there? Yeah, Tom, we're not going to give an outlook today. We will, in our normal course, as part of our guidance in the Q4 earnings next year. I think what I will say is, the market is hard to gauge right now. And so well, the way we're approaching that is we do scenario planning, and I think that what our strategy is designed to do is to give us the flexibility to be nimble in any environment that we enter into. And I think you saw a lot of the elements of that this year. You know, we planned ahead for this year. We saw what was coming. We took the appropriate action from a fixed standpoint and then really went to work hard on continuous improvement. And that's, as I said, that's our methodology. We look at what we think might happen. In this case, I would say we have a multiple, you know, several scenarios that we think might happen, and that, that applies... You know, this year, obviously, it was in a focusing on a down environment. We don't know, you know, there could be a, a wide variety of outcomes next year. We want that flexibility and that nimble behavior to apply both up or down, that we can react both with, from a, you know, an overall picture of our capacity, but, but beyond that, just to how we can drive continuous improvement to be able to deliver on whichever direction the market goes. So that's how we think about planning. We've done that planning so far with our budget, but not ready yet to really tell you what we think about the market because, frankly, it's, you know, changes quite a bit week to week here, right now. So we're letting that settle out a little bit before we really tell you which scenario we think is most likely. Understood. That's helpful. Thank you. Our next question comes from the line of Julio Romero with Sidoti. Please proceed with your question. Yes. Hi, thank you. This is Alex Hantman on for Julio. Could we talk a little bit about the impact of higher interest rates? Curious, you know, how you guys think about this directly and indirectly across the value chain? Sure. I mean, I think higher interest rates in general put a damper on housing activity in particular, higher ticket housing activity. So that's gonna be, A, the home purchase. Obviously, it's a direct input to the cost of the home because most people borrow or to certain projects that people might do if they're planning on borrowing against their home equity. So generally speaking, high interest rates is not a good thing for the housing market. What I would say is the way the market behaves, and it's been an interesting year in that regard, in that I think stability is another key factor in decision-making around housing. And that plays in when the consumer has money to spend, when the home—when the consumer feels that the home is worth what the price tag says or what they've paid for it, gives them that wealth effect. And so when interest rates stabilize in a particular zone, they feel more comfortable taking the action. And I think you're seeing that with new construction this year. I think it's a proof point that there's demand, there's underlying demand for housing in the world, because as interest rates have significantly increased this year, new construction continues to plug along very nicely. So I look for, there's an absolute, you know, interest rate to look at, but I also look at the rate of change. And consumers generally just don't like rates of change when things cost things. It's sort of similar to inflation. So, I look for stability in rates. We saw that coming out of 2022 into 2023, and I think that sparked some demand in the new construction in that rates, although higher, stabilized for a while. So people can, you just plan better when you can see something that's stable. I mean, we all kinda think that way. So that's what I'm looking for. I mean, it's a very volatile situation right now. I spend more time paying attention to the 10-year than what the Fed says, because that 10-year is really what drives mortgage. And, you know, the 10-year skyrocketed a month ago, and then last week it came down, you know, significantly in a week. And so that's a lot of volatility and probably similar to stock market. It's just people tend to stop doing stuff when, when it's like that. I don't think that's a normal world that we'll live in for a long period of time, but it is the world we're in this week. Yeah, super helpful. Appreciate the color there. And, you know, you've spoken about a number of strategic initiatives today: plant floor work, cloud migration, supply chain, and tech platforms. Just curious, you know, as you look across the strategic, you know, initiative portfolio, is there something you think will be most impactful, you know, to the 2024 P&L? Yeah, I think the most impactful, you know, thing that we do day in and day out, which is, I'd say now, embedded in our culture, but it's it spreads itself out into these initiatives, is that lean culture and the continuous improvement culture that we've driven over the last four years. This is an organization that's great at problem-solving, and every issue, even day-to-day issues, but strategic issues, always have problems to solve. And the team has done a wonderful job of learning how to do that in a very crisp and fact-based way. That helps drive these projects forward, because when you run into a roadblock, which you invariably do, in anything you're working on, that's complicated, problem-solving really helps you get to the core of why you're at that roadblock, and it helps you come up with solutions to get around that roadblock. So, I think that underlies everything we do. It's the culture that we have as an organization, and, I think that's gonna... You know, not only does it help drive tangible dollar savings, but it also helps move things forward at pace. And that's always key to do that, so that you can get out in front of whatever issue you're facing. But I really am excited about the tech initiatives that we're working on. I think they're all focused on how do we grow this business beyond the market growth rate. Some of them take a little longer to germinate when you plant them, but some of them are direct impact. And I think we described those things today in our prepared remarks, and we're excited about them. Appreciate the context there. Last one from me. Should we be expecting somewhat similar pacing with respect to buybacks over the next couple of quarters? Yeah, I think the... You know, we're still kinda working through our forward look on capital deployment. I think, you know, as I look at our capital deployment priorities, first and foremost, it's invest in the business. We think we have some great investments with great return. Secondly, is to continue to focus on our debt position, which for us, I think we're in a really good spot right now. I think we have a great balance sheet. But I think that's always prudent in a market that's uncertain. It's just a great way to bolster yourself in the face of what we don't know is gonna happen in front of us. So those are the top two priorities. In terms of returning cash to shareholders, I think, the way we look at the market is, if we think we're a cheap stock, we're gonna keep buying it. We think it's a good investment. Just for a point of reference, so to save you some time, we have about $35 million left on the currently approved program as of the end of the Q3. Thank you. Very helpful. That's all for me. Thank you. There are no further questions at this time, and I would like to turn the floor back over to Farand Pawlak for closing comments. Thank you, operator. Thank you everyone for joining us. We appreciate your interest and support, and look forward to speaking with you in the future. This concludes our call. Thank you. You may now disconnect your lines at this time. Thank you for your participation.