Good day, welcome to The Middleby fourth quarter earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. We will start the call with management comments and then open the line up for questions. Instructions on how to get into the queue will be given at that time. With us today for management are Tim FitzGerald, Chief Executive Officer, Bryan Mittelman, Chief Financial Officer, James Pool, Chief Technology and Operations Officer, and Steve Spittle, Chief Commercial Officer. Please note today's call is being recorded. Now, I'll turn the conference over to Mr. FitzGerald. Please go ahead. Thank you for joining us today on our 4th quarter earnings call. As we begin, please note there's slides to accompany the call on the investor page of our website. We are pleased to have finished the year with strong results in the 4th quarter, along with the close to another record year in 2022. For the year, we surpassed a milestone eclipsing $4 billion in revenues while adding approximately $140 million to our earnings for the year, reporting just over $850 million of EBITDA. We realized sustainable improvements in profitability over the course of the year as our investments in manufacturing and our initiatives to evolve our product portfolio to focus on innovation is taking hold. These efforts are offsetting the significant inflationary and supply chain headwinds we faced throughout the entire year, and these efforts will continue to provide momentum as we move through 2023. In 2022, we continued to make critical strategic investments in innovation, go-to-market capabilities, and acquisitions, strengthening each of our three industry-leading food service businesses and bolstering our competitive positioning in the marketplace. In 2022, we developed and introduced a record number of new products across our brands and significantly furthered our company-wide technology initiatives pertaining to digital controls, IoT, and automation. In 2022, we continued to take steps forward on our go-to-market initiatives, investing in our innovation kitchens, adding to our culinary teams, expanding our digital sales capabilities, and deepening our strategic channel partnerships with a focus on strengthening engagement and support to our end user customers. In 2022, we also continued to execute our long-standing track record with smart and strategic acquisitions, adding eight new brands to our portfolio and further extending offerings with exciting new product innovations in each of our three foodservice segments. As we close 2022, these efforts have us well positioned to capture rapidly evolving market trends, address real-world operator challenges, and offer the sustainable solutions our customers are looking for. As we look forward into 2023, economic conditions continue to be uncertain. However, we continue to have a positive outlook given the pipeline of new product innovations, developing customer opportunities, and the competitive positioning at each of our three foodservice businesses. At our commercial foodservice segment, our customers are investing in solutions to evolve their operations and address pervasive challenges of labor, speed of service, energy, and food costs. Our latest innovations are in demand. We are engaged with customers to solve challenges in the kitchen like never before. Recent attendance at the NAFEM Trade Show, the largest in our industry, further reinforced this. Activity at the NAFEM show was strong. Attendance of over 20,000 was ahead of pre-COVID levels. We were heavily engaged with new and existing customers seeking out the latest innovations to transform their foodservice operations. The longer-term backdrop is also favorable with the restaurant industry still in early stages of recovery. It is estimated that over 100,000 foodservice locations in the U.S. market closed during the pandemic, while only an approximate 5,000 units were added back in 2022, leaving a long runway for new store development. This opportunity is confirmed as we are engaged with many of our chain customers on new store opening plans. In many segments such as schools, travel and lodging, and casual dining are still in early stages of recovery, with only more recent return to travel, increasing in-person attendance at work and school, and a return in dining out. We're confident we are well positioned for this long-term recovery. At our food processing business, there is a need for equipment to increase throughput, solve for labor challenges through automation, address rising food costs, and reduce energy, water, and utility costs. Our customers are increasingly looking to address sustainability concerns. Over the past several years, we've introduced exciting new innovations addressing these customer needs. We have also made significant strides expanding our automated fall line solutions, while also broadening our offerings into new food applications such as pet food, bacon, and alternative protein. We are seeing the benefits of our strategy through increased partnerships with customers on projects and increased business in new categories. At our residential business, rising interest rates, a slowing housing market, and destocking of channel inventory at our outdoor grill business all present headwinds and uncertainty with expected order declines in 2023. Despite these challenges, we continue to remain excited for the developing opportunities with our new product launches, investments in our showroom and sales capabilities, and further development to leverage the strength of our platform. Our product offerings position us to capture new market trends, such as growing demand for electric and induction products, and engagements at our residential showrooms with our culinary and designer teams better position us to capture the imagination and market share. We expect to maintain industry-leading profitability as we navigate the current environment, and we'll continue to invest as we position for growth in sales and profitability as the market recoveries. In summary, I am thankful for the effort of our entire Middleby team as we continue to deliver another disrupted and challenging year in 2022, and I'm proud of the progress we have made as we continue to execute our strategy and transform our business, positioning us for the future. I'm confident the efforts of our team is adding to our competitive differentiation in the marketplace, which will also progress us towards our longer-term financial goals. Now I'll pass the call over to James to spotlight more of our exciting recent product introductions. Yeah. Thanks, Tim. Last quarter, I discussed a couple products aimed at electrification. In hindsight, my comments were well-timed with current events around banning of gas-fired appliances. Middleby has continued to building electric cooking and processing equipment that exceed the demands of the electrification push. As I discussed, it's just not about being electric. It's about being highly efficient and electric at the same time. From combi ovens to our next generation of electric hobs, Middleby is well positioned in the future to deliver products that meet the electrification needs moving forward. Today, I'm gonna talk about three new products launching in 2023. The first is Konnected Joe. If you've heard me talk on prior calls about digital connected charcoal, the Konnected Joe is a continuation of our digital charcoal strategy. The Konnected Joe brings digital controls and app-controlled cooking and content to the Kamado Joe lineup in the same way that we brought digital and connectivity to the Masterbuilt Series of gravity charcoal grills. With the connected control, the Konnected Joe addresses the friction points associated with outdoor grilling and Kamado cooking. Smoking and grilling has never been easier. Simply load charcoal in the connected Kamado and press the Light button. That's it. The auto ignition system takes care of lighting the Kamado. From there, the digital controller takes over to precisely regulate the Kamado's temperature. The Konnected Joe will embolden the grilling novice and will allow the grilling master time to enjoy their favorite beverage or four. Should this digital control scare off the grilling purist, the Kamado Joe can also run in a pure manual mode, making this the most versatile and usable Kamado on the market. The second new product scheduled to launch in the first half of 2023 is the Invoke. It is our new line of high-efficiency electric and gas commercial combis. Our engineering teams have designed the Invoke for connectivity and sustainability. Given that this is an earnings call, we should talk about some numbers. The Invoke is built on a half size combi footprint while still being a full-size combi capable of fitting full-size hotel and sheet pans. This affords us a 32% size advantage versus competitive combis while increasing our cooking capacity by 17%. This smaller footprint reduces our hood space and load by 13% for vented combis. The smaller footprint and innovations around steam generation and cleaning make this a very efficient combi with 38% less power required for operation, which means less copper going into the building, and 27% less water during cleaning. This is our best combi yet, and by the numbers, this is a best-in-class combi delivering on our customer sustainability and environmental initiatives. The Invoke was designed for the Middleby OneTouch control, and it is Open Kitchen ready, Middleby's IoT platform. Finally, the third featured new product is the Pitco Smart Solstice fryer. Before we talk about the Smart Solstice fryer, I'm gonna make some background comments about the two most common types of fryers marketed today, traditional or full oil fryers and ROV or reduced oil volume fryers. ROV fryers have become the preferred choice of fryers due to the benefits they deliver by automating oil filtering and oil top off. These features lead to reduced oil consumption versus traditional fryers. Even with all the benefits of ROV fryers, they tend to struggle when it comes to heavy-duty frying tasks, such as frying chicken and heavily breaded products. Said differently, if a traditional fryer could deliver the same automation and oil savings as an ROV fryer, our customers would continue to use traditional fryers to take advantage of their full oil volume. The Smart Solstice is the first and only full oil volume fryer that deploys automated filtering, oil top off, connectivity, and smart oil sensing, which measures and reports oil quality and life in real time through the Middleby OneTouch control and Open Kitchen. These features make the Smart Solstice the best all-around fryer for our chain customers, and really all customers. While it requires more to fill the vat, the cold zone and filtering process combine to extend oil life beyond the point of an ROV fryer, as it takes longer for threshold levels of total polar compounds, TPCs, to form in the larger oil volume, thus requiring less oil changes. Note concentration of TPCs determine when an oil should be disposed. Finally, the Smart Solstice uses the Middleby OneTouch control and is Open Kitchen ready. Before we move over to Bryan, I would like to mention that we made two acquisitions as we concluded Q4, Marco Beverage Systems and Escher Mixers. These companies are synergistic with the beverage platform and food processing group respectively. Marco bring a lineup of well-engineered and beautifully designed coffee brewing and dispensing products, along with water dispensing, capable of dispensing hot, chilled, and sparkling water. These additions help round out Middleby's already robust beverage platform. Escher Mixers bring large-scale spiral and planetary and automated mixing lines to our food processing group. These mixers afford our customers the ability to specify Middleby mixers as part of a Middleby full-line bakery solution. Thank you, over to you, Bryan. Thanks, James. When I think about 2022, one word comes to mind, records. Record sales, record earnings, record quarter, record year. We delivered this while attacking the challenges from supply chains, logistics, inflation, labor, and the residential market conditions. The thing about records is that they are meant to be broken. We plan to make that happen in 2023. More on that later but let me start by briefly reviewing our recent performance. For fiscal 2022, we generated record revenues of over $4 billion. Our adjusted EBITDA exceeded $853 million and was nearly $874 million when considering the impacts from year-over-year changes in foreign exchange rates. GAAP earnings per share were $7.95, and adjusted EPS, which excludes amortization expense and non-operating pension income, as well as other items noted in the reconciliation at the back of our press release, was $9.10. For the fourth quarter, we generated records in revenue at over $1 billion and adjusted EBITDA at over $233.5 million. Q4 GAAP earnings per share were $2.45, with adjusted EPS at $2.57. For the quarter, year-over-year revenues grew over 19% or 14% organically. Adjusted EBITDA grew 21% over the prior year. Our margins expanded over 100 basis points from Q3 and were 22.6% or 23.8% organically. By the way, all margin values I will discuss hereafter are on an organic basis as well, meaning excluding any acquisitions and FX impacts. Commercial foodservice revenues were up over 19% organically over the prior year. The adjusted EBITDA margin was over 28%. While we worked through some operational hurdles, we did have a rather favorable sales mix. In residential, we saw an organic revenue decline of 9% versus 2021. The adjusted EBITDA margin was 16%. In food processing, total revenues exceeded a whopping $180 million and increased approximately 29% organically. Our adjusted EBITDA margin was 29%. Our full-line solutions are resonating with customers. We delivered record results, it was not an easy quarter. Supply chain and labor matters still impact operations, but we drove volume and did our best to maximize mix. The results show where our innovation is taking us, that we are providing compelling solutions and marching towards our margin goals. Our operating cash flows were over $159 million. The working capital impacts from inflation and supply chain challenges, while still present, were less impactful this quarter. Our free cash flow conversion exceeded 100%, which is the best it has been over the past two years. Looking forward, we expect that our cash flow generation should return to pre-COVID levels, where we had been seeing free cash flow to net income of at least 90% for a fiscal year. Our total leverage ratio is 3.0x. Our covenant limit is 5.5x. We currently have over $2.2 billion borrowing capacity. These figures are after giving effect to the nearly $100 million we deployed in Q4 on acquisitions and stock buybacks. For the year, we had operating cash flows of nearly $333 million and used $67 million for capital expenditures, thus generating over $265 million of free cash flow. We invested almost $290 million in acquisitions. We also deployed $274 million on stock or capital related transactions. Had we not made these capital transactions, our leverage would have been around 0.3 turns lower. While we are exceptionally proud of what we delivered in 2022, we are fully committed to delivering new profitability records in 2023. How will we do this? The answer may be found in an alley amongst wizards and with a little help from spells and magic. In February, Orlando was home to two very popular alleys. Diagon Alley, as made famous by Harry Potter, and the even more impressive Innovation Alley at our NAFEM trade show booth. I was in Florida with my son, it turns out he was more interested in one over the other. The two of us were walking down Diagon Alley on an unseasonably cold day where muggles were wearing heavy coats, scarves and gloves. However, the line around Florean Fortescue's Ice Cream Parlor was long and winding, stretching down the block. As we entered the shop, I discovered a secret. Their treats are not entirely magically produced. They come from a tailored freezer with a special boost from a most recent acquisition. Imagine a machine that starts out its existence dispensing only two flavors. Grab your wand if you have one, and cast a spell of Flavor Burst. You instantly are serving 16 flavors. Our beverage magic does not stop with ice cream, as my son soon learned. At 1 meal, he was playing with the ice in his drink. I asked him why, and he told me he wanted to chew it. This brought a huge smile to my face. Apply the Chewblet spell and your glass will fill with Follett's delectable ice. Exactly what he was looking for. As a bonus, with its larger surface area, it keeps your drink colder longer too. If chewing ice is not your thing, we have a spell for that too. Maestro Plus will make endless nuggets appear. We know dispensing magic too. Looking for Butterbeer, but need it faster and consistently poured. S-tap delivers every time. Has the Brixen curse been affixed to you. To quickly dispense perfectly formulated fountain beverages every time, one special word can remove the curse. Newton, constant flow valves appear and will revolutionize your dispensing. Are you looking bigger? Are you afraid of ghosts but want to have a restaurant pop out of nowhere? The easy combination of Nieco Solstice Evo will have your grilling and frying needs ventlessly addressed. While my son may now believe that I work at the Ministry of Magic, the truth is that my favorite place to be found is at the MIK, the Ministry of Incredible Kitchens. Journey there and you can transform from muggle to culinary wizard. Our talented chefs don't have wands. They have the One Touch control which may seem like magic. It puts all our spells at your fingertips. What keeps this wonderful culinary world running smoothly, even while we battle those whose names cannot be spoken? Just like Hogwarts, Middleby is led by a soft-spoken, distinguished gentleman of Irish descent. Whether at Hogwarts or the MIK, there is much to learn, explore, and experience. We want to share all our powers with you, and we are using all our powers to grow in 23. While it may seem like magic, we will actually grow because of innovation and excellence in execution. In 2023, we look to expand margins for the total company and in 2 of our 3 segments as we work towards our medium term targets. As a reminder, our annual adjusted EBITDA margin targets are 30% for commercial food service and 25% for food processing and the residential platform. I know there is much focus in the market on the challenges residential is facing. I will get to that. Important to understand that across our entire portfolio on a daily basis, we are still tackling supply chain challenges and facing inflationary pressures. Labor is proving to still be problematic in areas. Nonetheless, we are not slowing down, investing in new capabilities and growing our presence in new markets. What will this mean for 23? It should be an even greater year. It is just that Q1 will step back from the great fourth quarter we recently completed. Keeping in mind that Q4 was exceptional in 2 segments. We benefited from a favorable product mix and delivery of full line solutions. I like to think we're now living in a post-COVID world, seemingly getting back to some pre-COVID norms. This means we are back to having some seasonality patterns where Q4 is usually our peak quarter and then Q1 is not quite as strong when comparing sequentially. Over the course of 2023, we look to be improving top and bottom lines sequentially for all the segments. Comparing our Q1 2023 outlook versus our performance for the first quarter of 2022. For commercial and food processing, we are looking to see revenue growth and modest margin expansion at both. What should not be unexpected is that residential will see meaningful revenue declines on a year-over-year basis. Recall that Q1 2022 was Resi's highest revenue quarter ever, which included over $110 million of outdoor grill company revenues. The decline for 2023 is being driven largely from the impact of retail destocking of grills, along with generally challenging conditions around the residential housing market. Nonetheless, our Q1 2023 residential revenues are probably down just slightly from Q4. Overall, as 2023 progresses, I reiterate that we currently expect to be delivering sequential growth across the board. For the year in total, we plan to see organic revenue growth in commercial and food processing with margin expansion. Supporting this are our backlog levels. I won't make you wait for our 10-K filing next week to get this info. As we ended the year, our total backlog was nearly one and a quarter billion dollars. For commercial, it was over $750 million. At food processing, it was over $310 million. Residential came in at $175 million, which does help buoy the segment, even though for the total year, Resi will likely be seeing revenue declines. In spite of that, we look to have decent margins, meaning expected to see them in the mid-teens. Reminding anyone who has not yet fully understood this about our operations, we have industry-leading margins. Given customer buying patterns, the destocking impacts will be much less after Q1. As a result, on a year-over-year basis, we currently anticipate seeing growth in the second half for Resi. Looking at 23 for food processing, we are poised for solid growth. We have a very strong backlog. We continue to land large orders. As is typical for this segment, margins start out the year low but build across the year. Year-over-year, margins should expand. We plan to seek growth in Commercial too. Our leading technology, customers' development plans, and our backlog are amongst the growth drivers. Piecing this all together, for the year, with full year-over-year growth and margin expansion in two segments, with Resi likely seeing second half year-over-year growth, we currently see total company revenues up modestly and growth in EBITDA dollars and margins. We are delivering what Middleby is known for. Before I close, I want to cover one technical area as it will impact our GAAP results when comparing 2023 to 2022. Please bear with me while I spend just a little time on the impact of our pension plans and what they will have on our 2023 GAAP earnings. Within our GAAP results, we have a non-operating and non-cash benefit generated by the accounting for pension plans. This totaled over $42 million in 2022. Note that we exclude this from our non-GAAP adjusted earnings. The amount is determined at the beginning of a year as part of an actuarial valuation process. This amount is most impacted by interest rates and asset values. For 2023, this amount will be much lower at approximately $10 million due to the increase in interest rates and a decline in asset values in the pension plan over the past year. Given our largest pension plan's benefits are frozen, we make only a modest amount of cash contributions to the plan each year, and that will not change for 2023. While the P&L will not see as large a benefit in 2023 due to the changes I just noted, we have seen a large benefit on our balance sheet. The actuarial determined unfunded liability that at the end of 2021 stood at approximately $200 million has been nearly eliminated at the end of 2022. This will not impact our cash flows or non-GAAP metrics. In conclusion, 2022 was an exceptional year. 2023 will be even better. Being a Chicagoan, when I think of 2023, I automatically think of greatness. Ryne Sandberg, Michael Jordan. I probably will wear their jerseys all year as a reminder that 2023 will be Middleby's greatest year yet. With that, we are open for your questions. Thank you. We will now begin our question-and-answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question will be from John Joyner from BMO Capital Markets. Please go ahead. Great. Thank you for taking my questions. Bryan, you might need to cut back there on the Flavor Burst for a few days. Just a suggestion. First on your EBITDA margins, which definitely showed solid progression throughout the year, in both commercial and processing. I know that you mentioned modest margin expansion is expected for the commercial business for this year, which probably makes the exit margin rate a bit that we had in 4Q a bit optimistic for 2023. Is there any more kind of quantification that you can offer around full year EBITDA margins, kind of by the businesses or in particular commercial. you know, as I look at commercial, you know, I would say I start by looking at, you know, the second half of the year, you know, kind of combined. Obviously, as you look through the year, we are expanding and, you know, we're having more pricing, you know, come through as we go through each quarter, as well as, you know, continuing to face, you know, inflation pressures and such. you know, if you look at the back half of the year, you know, that probably is closer to, like, you know, a 27%. I did say Q1 will be a step down from Q4, but I think we get to that 27%, and then we'll build to that level or a little bit better for the year than we did for 2022. Again, it has a building progression from the year. There's always a peak in Q4. Again, the takeaway is. Mm-hmm. As you look at it on a full year basis, we do expect, you know, 2023 to be higher than, you know, than 2022, right? I think we're on our path of, you know, marching towards, you know, that target we have out there. Okay, excellent. Maybe just one more, if I could. Just with regard to overall demand, I mean, again, on the commercial business, and Tim kind of talked about some of these end markets that are, I guess, coming back a bit. Have there been any shifts by end markets versus, say, a quarter ago, you know, almost, you know, positive or negative? Would you say that commercial customers, you know, really haven't stepped back and are really sticking with their expansion plans? I'll kind of trade off here with Steve. I mean, I think we've continued to see strong activity levels. I think order patterns have kind of, you know, been all over the place as you've gone through supply chain issues. I think what's been constant is really kind of the activity that we've got in the marketplace, particularly with our large chains. As I mentioned, also in the comments, I mean, there are other segments that, you know, we see turning on that had not been there, you know, 18 months ago. It's kind of broadening out as time is going on here. Okay, great. Thanks so much. The next question will be from Saree Boroditsky with Jefferies. Please go ahead. Hi. Thanks for taking my question. You know, it looks like, just kind of focusing on resi, it looks like you start the year maybe down 40% year-over-year if you're down sequentially. Is this the right way to think about it? Given this decline, how do we think about margins for the first quarter? Then just to follow that up, you know, how do we think about some margin offsets to volume, maybe from price cost or investments in this segment? You say, what did you call the revenue number for Q1? Maybe down 40%. Yeah, I think, you know, that, you know, that could be right. We did, you know, $330+ last year, Q1. I talked about it being a little bit less than before. You know that kind of $35-$40, you know, range if you do the math. You know, I think that's, you know, that, you know, that. You did capture my comments appropriately. Just maybe, you know, and I think this is in Bryan's comments as well, we'll frame it up. You know, the outdoor grills, you know, probably, not surprisingly, is driving an outsized decline, you know, given that we did north of $110 million in the year. You're seeing a much larger decline as you've got the destocking of the grills. The rest of the platform is not, you know, is not down, you know, as much. Certainly, it's down double digit, but it's kind of weighted, you know, very heavily towards the grills. Yeah, I mean, over more than, more than half, right? The majority of the decline- Yeah. is from those recently acquired grill businesses. Can you just talk about the margin expectations in the first quarter, and then just the rest of the year as you think about volume headwinds maybe being offset by some price cost or investments in that segment? Yeah, you know, with the revenue decline in, you know, Q1, kind of Q4, and looking at the impact of, call it, you know, not having, you know, the leverage that comes with higher revenue levels, margins will step down in Q1 from Q4. You know, as I said, build from there. It's, you know, we still expect to be, you know, for the quarter. Obviously, I talked about, you know, being in the, you know, the teens for the year. You know, Q1 is, you know, I would say there's more pressure on it than, you know, than the full year number, given, you know, I talked about revenues growing from there, right? We get more leverage benefits as we work through the year, right? Thus helping, you know, that margin improvement as well. If I could just squeeze one more in then. Commercial food service, obviously another very strong quarter of growth. Can you just talk about the demand you're seeing in 2023 from a domestic versus international perspective? You, you know, Saree, I think when you think about, you know, the larger chain customers, like again, we've talked about on prior calls. One, I think it's great. They've really reiterated, you know, a lot of their build plans for 2023. Again, most of our big chains, you had record new store openings in 2022. Again, I've talked about before, one of the great things that I think has come from the last couple of years of working through supply chain disruptions, we've gotten a lot closer in terms of understanding, you know, plans for, you know, the upcoming year. I think we have a very good view for this year. I will tell you, I mean, if you look at where the chains are growing especially, it is in many international markets. You think of markets like, you know, India, Brazil, definitely parts of where you see a lot of the chains actually growing. Perspective will be positive year-over-year from a new store build perspective. I actually do think the international market, again, going back to some of those key markets, is where you will see, you know, some pretty substantial new store opening growth. I think when you think of just some of the other segments, not primarily in chains, I do think you'll see, you know, domestic growth in, you know, kind of more the general market. I think we've put a lot of great work into our consultants. I talked about on the prior call, which, you know, is driving specifications in schools, you know, B&I, et cetera. I do think that will show up in the domestic segment. I think both are positive for the year, but I do think, again, going back to the change, you will see some pretty substantial international growth, for 2023. Great. Congrats on the quarter. Thanks for taking my question. Thank you. Our next question is from Tami Zakaria from J.P. Morgan. Please go ahead. Hi. Good morning. Going back to that margin expansion comment for both commercial food and food processing. Is that primarily going to be driven by price cost finally turning into a tailwind? Or would there be some other drivers like mix or operating leverage? Like, what are your price cost assumptions for this year? It's really all of the above. I mean, I think a lot of the margin expansion that we've seen across the platform really is driven by our strategic initiatives. We're definitely involved in the mix of the products. I would say that's number 1. Really investing in our manufacturing, you know, platforms. I think you've seen a lot of that coming through. Price cost has been a headwind, and it continues to be a headwind. I mean, I think, you know, as we've continued to take pricing, you know, inflation has continued to come through even in the, you know, the back half of the year. You see some of the commodity items going down, but as you kind of, you know, dig through things like electronic controls and, you know, and other, I'll say more, you know, specific components, they've continued to go up. The way we see, you know, have kind of, you know, trended here is the gap of price cost is closing. I think we, you know, we saw some progress in the fourth quarter. We're still behind the curve where cost is higher than price. We did take, you know, some pricing going into 2023 that will, you know, further close that gap. It is a, you know, it's a tailwind from the, you know, perspective that we're closing the gap between price and cost. You know, it'll still probably be, you know, a couple of quarters before we get to parity here. Got it. That's very helpful. Just a quick follow-up on that pricing comment you made. Can you remind us what incremental pricing action you're taking across the three segments this year? Well, it's, you know, we didn't take pricing just across the board, right. Like, we've got 110 brands, so it's brand by brand, and we've been very, you know, thoughtful, you know, relative to the costs that they have seen in the marketplace, and passing them around and also, you know, contemplating, you know, what the competitive market, you know, position is. You know, I'll just, you know, also remind, we've launched so many new products. A lot of times we're bringing products to the market that, you know, we really didn't have an existing price out there. That is also, you know, a factor. kind of as you look, you know, at the segments overall, you know, we took, you know, I'll say mid-single digit price increases in commercial going into the year. It's probably somewhat similar on food processing, although a lot of those, you know, are projects that, you know, that we're kind of quoting on a very specific basis, you know, depending on what the customer needs. You know, and it's been a lesser on residential where we took some significant step-ups, you know, last year. Got it. Thank you so much. The next question will be from Jeff Hammond from KeyBanc Capital Markets. Please go ahead. Hey, good morning, guys. Good morning. Hey, just on, you know, back on res kitchen, I guess there's been kind of two issues. One, the destock and weakening and also this kind of supply chain dynamic. Just give us a sense of, you know, when you get line of sight to kind of the supply chain improving. Just around the destock, and I think you talked about at your Analyst Day, some new channel wins and partners and, you know, you had to get through some of their destock. Just when you think some of those new channel partners would inflect. Thanks. Yeah. We're gonna continue to see the destocking in the, you know, the first part of the year. It's not only, again, our products coming out, but I mean, there's inventory of other brands that they've got in the inventory, so they're not gonna load up on, let's say, some of our new products until they're kinda got inventory levels, you know, overall. I mean, I think the way we think about it is we, you know, continue to be impacted by that in the first half of this year. The first quarter most significantly because we had a very strong first quarter last year in grills, kind of with, you know, over that $100 million of, you know, revenues. That drops off, you know, significantly, not unexpectedly, you know, probably to a lesser, you know, effect in Q2. Then, you know, we can't say, you know, precisely, you know, where, you know, inventory in the channels can be at that point. I mean, I think we feel like we're in a much better situation going into the back half of the year and, you know, perhaps could see growth because inventory levels are reset, and we do feel like there's some momentum in, you know, in the platform. You know, certainly, you know, there's a number of new products, and, you know, James commented, you know, on one of them, which is, you know, a great one, the connected, you know, Kamado, and certainly we've got the, you know, Gravity Series, digital charcoal and Masterbuilt as well. I mean, I think, you know, we see some, you know, market share gains and great demand there. You know, we have been having kind of some initial, you know, season, load in orders there. I mean, we're excited about those, you know, those products. I think, you know, as we go through grill season, we'll kind of see what, you know, the, you know, the demand for those products are, but we're pretty excited about those. Just the China supply chain dynamics. Yeah, I mean, that's much, you know, better. I mean, certainly we still have lots of supply chain issues out there, and you could wake up and tomorrow you could have a, you know, a new story. I mean, I think, you know, by and large, a lot of the, you know, the issues that we had from, you know, the China supply chain, which is not only, you know, manufacturing, some COVID related, but also shipping. As you kind of remember, you know, from last year, we're in a very different, you know, situation of, you know, container availability, you know, cost, some of the domestic, you know, freight, which has improved, you know, as well. We're in a much, you know, better situation there. I mean, I think we, you know, we missed a little bit of the grill season last year because of that. We don't foresee that happening in 2023. Okay. Just on the non-operating side, can you just update us on how you're thinking these FX losses go away or don't go away? I think you gave an update on interest expense at your Analyst Day. Just wanted to kind of level set how you're thinking about it, if there's been any change there. You know, on the FX, we are, you know, constantly reviewing our approach to managing that and our hedging approach. I do feel like we will see less significant and less variability in it as we as we work through, you know, 2023. On, you know, interest expense, I'd say have done some forecasting there. I would say based on, you know, current debt levels and current interest rates, I should say our current interest rate swaps and probably baking in another, you know, 50- basis points of increase interest expense, you know, or stays around where it is for Q4. You know, that's based on current state. If we generate cash and, you know, pay down debt, then they could come down. Again, I'm viewing it as, you know, holding it relatively steady, given our swap portfolio that's in place, again, subject to M&A activity and/or pay downs and/or buybacks, all those things. Okay. Does that offer-? 4Q is kind of the good run rate to model absent- Yep. You know, capital. Okay, thanks. Exactly. Yep. Hey, just I'm gonna comment on foreign exchange a little bit to just, I know Bryan went through it, you know, pretty detailed. I mean, You know, I mean, in local currency, I mean, it really was a big impact to us from an operating perspective this year. I mean, it was $20 million of EBITDA just translating the local currency into U.S. dollars given the strength of the, you know, the dollar relative to other currencies as compared to, you know, 2021. You know, I mean, we would have been at, north of $470 million, you know, of EBITDA on a like-for-like, you know, basis. I mean, that's, you know. Now that is now baked into our number, right, of the $850 million of EBITDA. You know, certainly I don't think any-- it's difficult for anybody, you know, to predict financial markets these days. I mean, I just think that, you know, currencies are more stable this year, so that would not be a headwind, you know, most likely that we would incur again in 2023. Okay, thank you. Thanks. Once again, if you have a question, please press star then one. The next question will be from Brian McNamara from Canaccord. Please go ahead. Good morning. Thanks for taking my question. For commercial foodservice demand, are you seeing signs of deferred equipment spending, whether it was deferred pre-COVID or since starting to come through? If so, what is driving that confidence for these customers to step in now with the macro picture a bit murky? I don't think anything has been deferred. Going back to earlier comments, if you think about our chain customers, you know, really continuing to accelerate, you know, new store openings, so we have not seen that slow down. I think the only thing that may have been deferred is some of the replacement business that we've talked about on prior calls. Again, if you think about, you know, where our orders historically come from, you know, pre-COVID, you know, about half our orders traditionally do come from your replacement business, and that has shifted the last year or two with just so many new store openings with the bigger chains. Their focus on new stores, I think, has deferred some replacement. First COVID, then it was the focus on new stores. If anything was deferred, I think it's that replacement cycle. I do think that the new store trend, you know, continues for this year, at the same level as 2022. I do think you see that replacement cycle maybe kick back in, you know, towards the end of this year and certainly into 2024 and 2025, which is obviously exciting. I think a big thing there too, what's exciting about the replacement cycle having been deferred is I think what you're gonna see them replace equipment with is obviously all the new technology and innovation, you know, James talked about on the call then that we've talked about, you know, with our customers. I think it sets us up for a great couple of next years with within commercial. Got it. Then if I could squeeze another one in on residential. At least for the publicly traded grill players, H1 destocking has been signaled and should be pretty well understood. I guess, as it relates to your grill business, is the destocking worse than you had perhaps expected a few months ago? I don't remember what we expected a few months ago, to be perfectly honest. No, I mean, I don't think there's anything here that is surprising to us. No. Okay. Thank you. The next question is from Todd Brooks from The Benchmark Company. Please go ahead. Hey, thanks for taking my questions. First one, with the capital that you invested in your own production capabilities over the past 12 months or so, where do we feel we are as far as the ability to realize backlogs more efficiently, more quickly, with the investments that were made? I think we've been realizing those, you know, benefits. You know, again, we've got a lot of brands, there's 100, you know, 10 brands. We've made a lot of progress across lots of those different, you know, businesses. Some of those are, you know, we're not just trying to respond to, "Hey, we got a lot of backlogs. We need to throw a lot of capital there." I mean, these are kind of longer-term infrastructure, you know, plays as we're thinking about growing, you know, platforms. We've invested in our packaging group, we've invested in our coffee solutions group, we've invested in our ice, you know, platform, a number of our cooking platforms, you know, particularly areas where we see large market opportunities where we think we're gonna have longer term organic growth and where we're launching new innovations across the company. I mean, I think of the investments that we're making, you know, they certainly help us, you know, with our backlogs, but they really are, you know, longer term strategic initiatives to, you know, to grow the platform and profitability. You know, certainly they're gonna help us as we go through, you know, 2023, you know, as, you know, as well. I mean, I think we've been seeing the benefits, you know, as we've gone through the year and we still have, I'll say, more equipment, you know, that's getting turned on as we speak here, you know, particularly in the fabrication areas where we're really trying to automate, you know, our factories, you know, more and more, and fabrication tends to be the pinch point. You know, so we'll, you know, I'll say kinda get continual gradual, you know, improvements in our production as we go through 2023. Okay. Fair enough. There's not really a step function to revenue growth in 2023 that's being unlocked by these investments. It's just a further enhancement as we go through the year then? Yeah, I think that's correct. Okay, great. Two more quick ones if I can. On the food processing side and the demand in the quarter, obviously knowing that we typically get a seasonal build, late in the calendar year, but you've talked about more large projects. Can you just talk about maybe within the backlog, large project mix within that and just trends that you're seeing as you put together increasingly, full line, production solutions for your clients? You know, as I think about, you know, the backlog, right? It is up, I don't know, you know, if I go back to pre-COVID levels, you know, not quite 300%, but, you know, maybe 250% or so. I'd have to, you know, go do a little bit of the math. You know, the predominant driver of that increase is, you know, large orders, right? I mean, there's a good chunk of this business, I'll say that is, you know, parts and more modest equipment that is a little bit more, you know, off-the-shelf-ish or turns, you know, in weeks or months and such. We've talked about, you know, the larger projects come into the backlog, and they stay there longer 'cause they take 12-24 months to deliver. Again, we've seen the backlog continue to grow, you know, over the past two years. Again, I would take that increase and say it is, you know, a large percentage of it driven by you know, larger projects. Okay, great. Thanks, Bryan. Thanks. Ladies and gentlemen, this concludes- Did you have another one? Okay. Sorry, this concludes our question-and-answer session. I'd like to turn the conference back over to management for any closing remarks. We'd just like to thank everybody for being on the call today and look forward to speaking to you at the end of Q1. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.