Ladies and gentlemen, at this time I'd like to welcome everyone to the Resideo Technologies fourth quarter 2022 earnings conference call. Today's call is being recorded. All participants will be in a listen-only mode until the formal question and answer portion of the call. It is now my pleasure to turn today's call over to Mr. Jason Willey, Vice President of Investor Relations. Mr. Willey, please go ahead, sir. Good afternoon, everyone. Thank you for joining us for Resideo's fourth quarter 2022 earnings call. On today's call will be Jay Geldmacher, Resideo's Chief Executive Officer, and Tony Trunzo, our Chief Financial Officer. A copy of our earnings release and related presentation materials are available on the investor relations page of our website at investors.resideo.com. We would like to remind you that this afternoon's presentation contains forward-looking statements. Statements other than historical facts made during the call may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Resideo's filings with the Securities and Exchange Commission. The company assumes no obligation to update any such forward-looking statements. We identify the principal risks and uncertainties that affect our performance on our annual report on Form 10-K and other SEC filings. With that, I will turn the call over to Jay. Thank you, Jason, good afternoon, everyone. 2022 was a year of historic market, geopolitical, and macroeconomic conditions. We navigated these challenges to deliver record full-year revenue and operating income. Business conditions around our residential end markets softened as 2022 progressed. Given this, we've taken actions to reduce cost and ensure we are both protecting near-term profitability and positioning the business for long-term success. While the macro conditions remain dynamic, we believe our OEM and distribution customers have made substantial progress in rightsizing their inventories. We expect Q1 will mark the low point in terms of destocking impacts, and we expect to build from that base as 2023 progresses. We expect that cost actions and improving customer inventory situation, coupled with growing momentum in new product activity and Products & Solutions, will position us for improved financial performance as 2023 progresses. Late in the year, we respond to evolving market conditions by taking action to reduce costs and initiate manufacturing optimization work. This includes actions that are expected to result in an approximate 5% decrease in Resideo's global workforce. These measures will further focus resources on advancing strategic initiatives and better positioning Resideo to scale with future growth. We are working aggressively to ensure the business is sized and focused appropriately to deliver strong profitability and cash flow. For 2022, Products & Solutions delivered record revenue up 13% year-over-year as we added First Alert and drove strong price realization across the portfolio. We grew our position in the connected thermostat market in both the distribution and retail channels, expanded content with builders in the new construction channel, and grew our presence at a number of key OEMs, all positioning the business for future growth. We saw significant returns from investments in pricing and sales force tools and training. This is visible in our strong price realization activities throughout 2022 and a meaningful increase in average revenue generated per salesperson. These investments are further enhanced by the increased customer engagement driven by our brand ambassador program and business development efforts. We significantly advanced the ball on our software platforming efforts, a critical building block as we look to accelerate partnerships, leverage our hardware leadership to support value-added services, and reduce development time and support costs. This work is reducing the number of internal back-end platforms our products run on top of and providing simpler ways to interface with our products. We acquired First Alert, a leading smoke and carbon monoxide sensing provider, at the end of Q1 2022. We are pleased with the financial performance and integration of the business. We have already driven new commercial opportunities around cross-selling into our distribution channel, achieved deeper builder penetration, and improved positioning with key retailers. Over time, we will add more connectivity into the First Alert portfolio and see significant opportunity from further integrating First Alert with our traditional security business. In late December, we acquired Teknique, adding a New Zealand-based team of engineers with significant capabilities in sensors, optics, and AI-enabled video solutions. The team brings a track record of innovations in sensors, optics, and processors, along with deep relationships with silicon and original design manufacturer partners. These capabilities will help advance our security video strategy and help accelerate our focus on providing actionable intelligence for end users. ADI had another great year in 2022, with revenue growing over 6%, gross margin up 130 basis points, and operating income up 17%. 2022 marked the 12th consecutive year that ADI has grown its revenue year-over-year, a testament to the execution of the entire ADI organization and the attractiveness of the markets they serve. ADI saw continued strength in its commercial categories and has worked hard to deliver for customers in a challenging supply chain environment. At the same time, ADI continues to execute on expanding its e-commerce and digital capabilities, enhancing its exclusive brands offerings and investing in tools to drive sales force efficiency. ADI reached total touchless sales of 37% for 2022 and crossed the 20% of total sales threshold for e-commerce revenue in the fourth quarter. We are also leveraging these digital investments to offer customers and suppliers cloud-based, AI-driven data analytic tools. These tools provide contractors and suppliers better understanding of their sales and inventory through customized reporting and access to granular data. This creates a new subscription revenue opportunity for ADI and provides differentiation as we look to drive share of wallet with customers. Exclusive brands revenue grew 25% in 2022 and remains a significant long-term revenue and margin enhancement opportunity. We launched over 250 new SKUs and three new brands during 2022. Capture Advance, which includes NDAA compliant video, AVARO for AV and Datacom equipment, and ADI Pro for wire access control and accessories. We will continue to build upon these offerings in 2023 and see meaningful revenue expansion opportunity for new SKUs and sales initiatives. ADI continues to execute on the strategy to expand into adjacent AV and Datacom markets. These categories accounted for over $500 million of revenue in 2022, up 20% year-over-year. Building on this momentum, in mid-January of this year, ADI added new capabilities with the acquisition of BTX Technologies. BTX is a specialist professional AV distributor with Datacom capabilities for insourcing custom fiber assemblies, filling a hole in our value proposition to customers in the Datacom and AV market. With that, I will turn the call over to Tony to discuss fourth quarter performance and 2023 outlook in more detail. Thank you, Jay. Good afternoon, everyone. Fourth quarter revenue of $1.56 billion was up 7% compared to Q4 last year. Excluding $139 million from acquisitions and approximately $46 million of negative foreign exchange impact, fourth quarter revenue grew by approximately 1%. Gross margin for the quarter was 27.6%, flat with last year's fourth quarter, while operating income of $98 million compared to $141 million last year. Included in our fourth quarter operating expenses was a $35 million charge for restructuring and related asset impairment. These restructuring actions, which include headcount reductions, initial factory optimization work, corporate functional rationalization, reduced third-party spend, and general G&A cost reductions, are expected to generate in-year savings of $60 million in 2023. Associated cash costs in 2023 are expected to be approximately $25 million spread throughout the year. Products & Solutions' fourth quarter revenue of $693 million was up 9%. Excluding $116 million from First Alert and approximately $35 million of unfavorable foreign exchange impact, revenue declined approximately 5% compared to last Q4. Price realization added approximately $35 million to revenue year-over-year, while aggregate volumes declined approximately 10%. Volumes were impacted by distribution and OEM customers continuing to adjust inventory levels. Our security revenue in Europe was down in Q4, and lower year-over-year 3G radio migration affected U.S. security revenue. After the 1st quarter of this year, Resideo sales comparables will begin to normalize, and we expect to be in market with new security products in key European countries in the second quarter of this year. Products & Solutions gross margin in Q4 was 38.4%, relatively flat compared to last year. Total operating expenses for Products & Solutions were up $44 million year-over-year due to $18 million in First Alert costs and $29 million of restructuring costs. Products & Solutions operating profit was $96 million, or 13.9% of sales, compared with $125 million, or 19.7% of sales last year. Excluding restructuring costs, Products & Solutions operating profit was flat year-over-year. First Alert contributed revenue of $116 million and operating income of $12 million in Q4. First Alert exceeded our expectations for both revenue and operating profit in 2022. We achieved in-year synergies of $7 million and remain on track to achieve run rate annual cost synergies of at least $30 million by the end of this year. ADI delivered another solid quarter in Q4 with revenue up 6% to $867 million. Acquisitions added $23 million of revenue, which was largely offset by approximately $20 million of unfavorable foreign exchange impact. Key commercial categories, including fire, video surveillance, and access control, remained strong in the quarter, more than offsetting slower activity in residential security and residential AV categories. ADI gross margin in the fourth quarter was 19.1%, compared with 19.2% last year. ADI operating profit of $69 million was essentially flat with the prior year. Corporate costs were $67 million, up from $54 million in the prior year fourth quarter. This increase reflects $4 million of restructuring as well as higher IT and finance costs. Our full-year 2022 corporate spend of $229 million was down 8% year-over-year. Over the past three years, corporate costs have declined by 18% from 5.6% of revenue to 3.6% of revenue. Operating cash flow for the full-year was $152 million, compared with $315 million for 2021. Working capital dollars and days rose in 2022. With the addition of First Alert, inflationary impacts in inventory, incremental safety stock, and unfavorable changes to some supplier terms, all contributing to the increase. Before turning to our outlook for 2023, I wanted to discuss the decision we made to begin providing selected non-GAAP measures beginning with our Q1 2023 earnings report. This will allow us to discuss EBITDA, a very common measure of financial performance, in a manner consistent with many other public companies, as well as provide better clarity on unusual items that may affect our financial results. Our non-GAAP disclosure will include EBITDA, adjusted EBITDA to the extent relevant in any given period, adjusted net income, and adjusted earnings per share. Adjustments will be limited in scope and include such items as depreciation, amortization, share-based compensation, significant acquisition-related costs, and other material unusual items. Turning to our outlook for the full-year 2023, we expect revenue to be in the range of $6.2 billion-$6.55 billion, implying flat revenue at the midpoint. Consolidated gross margin is expected to be in the range of 26.8%-27.8%, and operating profit is expected to be in the range of $625 million-$675 million, an increase of 6% at the midpoint. We expect GAAP earnings per share to be in the range of $1.85-$2.15. We expect our cash conversion and days of working capital to improve in 2023 over 2022. The magnitude and in-year timing of this improvement will be dependent on market and supply chain factors that are still difficult to predict. As is typical, Q1 will be our softest cash flow quarter due to annual rebate and incentive compensation payments that were accrued in 2022. For the first quarter, we expect revenue to be in the range of $1.52 billion-$1.56 billion, consolidated gross margin to be in the range of 26.3%-27.3%, GAAP operating profit in the range of $120 million-$140 million, and GAAP earnings per share between $0.29 and $0.39. Our outlook incorporates further customer inventory destocking in Q1, as well as uncertain demand for residential new construction and renovation activity. We do expect Q1 will mark the low point in terms of destocking impacts on our financial results. Our full-year 2023 revenue outlook assumes mid-single-digit volume declines in Products & Solutions, partially offset by carryover price impacts and targeted new pricing actions. Products & Solutions gross margin is expected to be impacted by lower volumes and continued material cost pressures, offset by price realization and restructuring and efficiency actions. For ADI, our 2023 outlook incorporates low single-digit revenue growth as stability in commercial focus categories is partially offset by continued slower activity in residential categories, including AV and intrusion. ADI gross margin is expected to be roughly flat with 2022, as reduced inflationary benefits are offset by continued progress on pricing optimization and growth in higher margin exclusive brands. full-year 2023 consolidated operating expense is expected to be down by approximately $60 million year-over-year. Corporate expenses are expected to be approximately $210 million, down from $229 million for 2022. We are continuing to evaluate further cost actions and manufacturing optimization opportunities that would yield further savings and likely result in additional restructuring costs that are not included in this initial outlook. Regarding our 2024 financial targets, as we indicated with our second quarter 2022 earnings, despite significant underlying progress, the impact of supply chain and inflationary pressures have limited near-term Products & Solutions gross margin progress. Given the expected continuation of some of these factors, as well as near-term macroeconomic uncertainty, achieving our 2024 profitability and cash generation targets on our original timeframe is unlikely. We remain committed to substantially improving Products & Solutions gross margins and believe the business is still positioned to deliver mid-single-digit top-line growth and low teens operating margin over a longer timeframe. I'll now turn the call back to Jay for a few concluding remarks before we take questions. Thanks, Tony. As we look to 2023, we are focused on delivering to our financial targets, improving cash generation, and accelerating the momentum on key initiatives across the business. We are well-positioned to be a meaningful player in attractive market trends around home energy management, energy transitions, and the increased focus on physical security and video analytics. Our newly expanded business development organization will enhance these opportunities and is focused on growing share of wallet with major accounts while opening new partnership avenues and strategic growth opportunities. We are also very excited about an increasing cadence of new product introductions within Products & Solutions as we enter 2023. This includes several connected water leak detection and shutoff products, T10 thermostat enhancements, additions to our gas valve portfolio, including entry into the pool heater category, underfloor heating controller, and the ProSeries security product for EMEA. These launches reflect initial returns from increased investment in our innovation and engineering organizations. As we move through the year, we expect to build momentum in this key area. As we drive growth opportunities, we are committed to managing costs and delivering ongoing margin and cash flow expansion and earnings growth. We are moving forward with manufacturing facility optimization work and product portfolio pruning, which will help us improve margins, focus on core growth areas, and maintain supply chain and manufacturing resiliency. At the same time, we remain focused on leveraging our channel strength, product breadth, relationship with the professional, and exposure to attractive long-term structural trends to drive revenue expansion and deliver long-term shareholder value. I want to again thank the entire Resideo employee base for their efforts in the quarter and a continued focus on delivering for our customers. This concludes our prepared remarks. Operator, we are now ready for questions. Thank you, Mr. Geldmacher. Ladies and gentlemen, at this time, if you do have any questions, please press star one. If you do find that your question has already been addressed, you can remove yourself from the queue by pressing star one again. We'll pause for just a moment to assemble the queue. We'll go first this afternoon from Erik Woodring at Morgan Stanley. Hey, guys. Thank you for taking my questions. I have two. Maybe the first one just on the last comments you made about P&S. You know, thinking about it as mid-single digit growth is still achievable. You know, I guess I look outside of the 2021 and say, you know, P&S has been kind of flat to down organically in most years since 2019. I realize it's been a very unusual kind of three to four years with COVID and supply chain and macro. You know, I guess my question is: What actions do you believe need to be taken to get this business kind of back into that more sustainable, again, kind of low to mid-single digit growth range? Then I have a follow-up. Thanks. Hey, Erik, this is Jay. How are you? Good, good. Thanks, Jay. You know, the I made a comment towards the latter part of our call about the introduction of new products, and I'm really excited about that because that is one of the pieces of the puzzle that, you to answer your question. The velocity and cadence of new products for PNS is very important. You know, that's why I wanted to highlight that in today's call. That will continue as we move forward, and that is one of the big areas of focus between the introduction of the cadence and velocity of new products as well as opportunities there along with it for margin expansion. Yeah. Erik, it's Tony. Good question. I guess I'd add that when you look across our portfolio, we see pockets of really strong growth and pockets of real opportunity where we're adding market share. Our OEM business, we're growing market share pretty clearly in our air products, thermostats and filters and zoning equipment, we're adding market share. We have real momentum in a number of places. Over the last few quarters, we have had some headwinds, particularly in the security business associated with the, you know, the kind of rise and then decline of the 3G radio migration that I think probably distorts what is the underlying inherent growth rate that we've seen across the business over the last two or three years. I think, you know, I think the underlying growth rate is probably a little stronger maybe than what you're seeing just looking at trailing four quarters kind of trends, which is, which is one of the things that I look at. Clearly, in order for us to grow faster than the market across the entirety of our portfolio, NPI is gonna be the crucial component of that. I'll add one other thing is that on the security thing that Tony brought up. We're gonna be introducing the ProSeries EMEA. The ProSeries that we introduced in North America has been a strong new product for us, the ProSeries EMEA one comes out in a few months. That addresses some of the issues that we had in Europe. We have several other new products going in the security portfolio over the next six months that we're excited about. The acquisition of Teknique that we talked about, that gives us some additional capabilities beyond our innovation technology and existing engineering organizations. That's gonna provide some really cool things from the standpoint of video analytics, AI, and other capabilities that helps accelerate some opportunities there. Awesome. That was super helpful. I really appreciate that kind of color. I guess maybe the second question is just on gross margins. Obviously, I know this has been a big point of emphasis for you guys. Again, certain specific headwinds in terms of volumes in 2023. Can you maybe rank order for us kind of the what has the most significant or what's the most significant headwind versus what's the potential tailwinds as we think about 2023? I imagine most of this is on the PNS side, but just correct me if I'm wrong there. Thanks. Yeah, Erik, I'll address both. I'm doing this a little bit off the top of my head, but I think this is correct. Probably the single biggest factor in 2023 is factory deleveraging. Even though we're seeing, you know, expanded price, we're gonna see unit volumes come down. We've responded to that in this restructuring by addressing some direct labor and some other inefficiencies. You know, we have not, we've not yet been able to really achieve a lot of the factory optimization that we've been pursuing over the last couple of years. We did just say that, you know, we're doing our first one now, and I think we'll be doing more. We do have somewhat of a rigid cost structure. The factory deleveraging, I think, is the biggest one. The second is we're still seeing some inflation in 2023. We're factoring in some element of increasing inflation, some element of higher material costs. You know, while we're responding to that with some targeted price action, we're not gonna get sort of incremental margin on top of the price that we're putting through at this level and at this stage of the cycle, versus the inflation that we're seeing. I'd also add, Erik, that, you know, we're being a little careful because of the fact that even though, you know, 2021 and 2022, as everybody in the world knows, was really challenging on supply chain and material costs and the inflation that increased last year. Yeah, certain aspects of that are in certain pockets are getting better in 2023, but there's others that aren't yet, as I think most everyone knows. We're being careful in terms of the speed of that. I personally think, and you know, I'm sure it's a question that you have as well as some of the other folks, that I think that this will continue to improve throughout the year, but timing is gonna be, you know, one we everybody has to watch closely as part of that. That's all tied to that along with what Tony said. Yeah. Then also maybe to add with respect to ADI, you know, they benefited last year from some inflationary trends in their business. That was about half of their margin expansion for the year. The other half was really through a lot of the initiatives that we've been investing in with respect to that business. Our outlook for this year kind of incorporates ± flat margins for ADI. We see that probably as maybe better than some of the other news in the distribution space, largely because of the leverage that we can pull still around price optimization and as importantly, around our exclusive brands. Right. Those products have dramatically higher margins than our average, and they continue to grow at a much, much faster rate than the overall business. Hey, by the way, on P&S, one thing I neglected to mention is we continue to see direct labor inflation as well. Mm. We have pretty significant factory footprint in Mexico. Mexican wage rates have definitely trended up, and that's continuing in 2023. Okay, super. Thank you for the color. Yeah, just to mention the ADI performance is very strong. You guys and Rob, you know, I tip my cap to you guys. They do a great job. Thanks. Thank you. Just a reminder, ladies and gentlemen, star one, please, for questions. We go next now to Ian Zaffino of Oppenheimer. Hi, great. Thank you. I just wanted to kind of build on that last question or last answer. What are you assuming for pricing into 2023? You know, how do you also think about pushing price in the face of declining volumes? You know, I know you're trying to get a material and inflation recovery, but maybe also talk about the competitive environment and maybe your ability to do it in that environment. Thanks. Yeah. Clearly, I think our expectation is for less in the way of price increases this year than we saw last year and in the latter part of 2021. They'll be targeted. They'll be focused in areas where we're seeing underlying, you know, increases in our cost structure. We're always gonna be attuned to the competitive environment and making sure that we put ourselves in a position to remain competitive. I think there's, you know, there's still a lot of inflation in the world, right? I mean, today's inflation numbers were not awesome. I think there's a general recognition that while maybe getting a little bit better, inflation hasn't really gone away. I think you're right. We wanna make sure that we're focused on the competitive environment. When we look at that dynamic, the data points that we see indicate that we are incrementally gaining market share. We feel good about our execution in the market, in the environment as well. Okay. Thank you. Then, you know, I wanted to talk or, you know, ask you guys about some of the new products. You know, a lot of them are in the monitoring category. What should we expect as far as maybe revenues or, you know, how is a lot of these new products that you're trying to introduce on the monitoring side? How's that kind of tracking to your expectations of what you could get maybe recurring revenues to? You know, and what should we expect as far as growth? Thanks. Yeah. I'll make a couple of comments. I suspect Jay probably has some input as well. Jay kind of gave a little bit of a laundry list. The majority of the products that we talked about just now are connected or connectable, which means that as we build out our overall ecosystem, which has frankly been a significant effort internally over the last year and a half with respect to investment, the chunk of our investment in R&D going in that direction. The thermostat and the water leak detection, they're all sort of early pieces of what we are working to develop in terms of a fully connected ecosystem. There's always gonna be new products that are gonna come in that are, you know, that are outside of that ecosystem. The primary thrust is really on the connected products. Given that we are building that out sort of piece by piece, there's gonna be a, we think, a network effect as we get to a certain critical mass of products where you'll see a more meaningful contribution of revenue. I wouldn't point you to the products that we just talked about today as being a key driver to the revenue performance this year. I think as we look further out and we look to have more and more of our products on that platform, I think a lot of the focus is really gonna be on driving revenue across that platform. With more products on it, we think that in and of itself will help to accelerate the revenue. Yeah. I would say also, Ian, that, you know, this expansion on the ecosystem that Tony mentioned and as you know, we've been talking about that in particular quite a bit over the last year. Even as we built that out, both from a software platforming standpoint, we need the hardware to help drive that and to expand that and in terms of the total offering. What does that provide? Gives us opportunity, as you just asked a few minutes ago, for RMR opportunity, as well as things that we're doing that we'll talk probably more about in the months ahead in areas of services. I think it's, That's why I told you, as I mentioned on the previous question of the other caller, how excited I am that now I really see a velocity change increasing of the cadence of new products coming out. That's how it's so important in terms of the total ecosystem play that I think is, helps differentiate us in the marketplace. All right, great. Thank you very much. Thank you. We go next out to Paul Chung at JP Morgan. Hi, thanks for taking my question. Just on the manufacturing initiatives, so are you looking to outsource more of the P&S portfolio? Or if you could kind of expand on some of the cost initiatives you're thinking about and, you know, the respective impact on longer term margins and cost saves, et cetera. Sure. I mean, it's going from insource to outsource is part of it. There's sort of a range of activities going from, you know, trying to be more efficient in the factories we have, to the efforts that we have going on at First Alert initially around factory automation, which we think is gonna create some really great leverage in the cost environment in those factories, to certain areas where we will look to outsource. I wanna make clear that we've been cautious and are gonna continue to be cautious about how and where we outsource, being mindful of supply chain resiliency. you know, we have some rigidity in our cost structure, but we also have pretty good supply chain resiliency today because of that, because we've got a lot of in-market factories. We're gonna continue to work to balance the transition to a lower, a lower cost footprint, while keeping in mind that resilience. There's any number of steps. The one that we, you know, reserved for in Q4 is the first and I think clearest opportunity. There'll be more as we roll through 2023 and 2024. Yeah. I think I may have mentioned, Paul, maybe just very at a high level the last call that, you know, there was a number of the factory opt-optimization projects that, you know, we actually had kind of had built the plans for. During COVID and during supply chain craziness, you know, we were very cautious not to impact ourselves by moving forward on some of those 'cause of the risk it provided or the risk that it would have created. Now with, you know, us coming out of that, of course, now gives us the opportunity to really exercise our playbook in terms of a variety of different things. Factory cost optimization, the automation piece that Tony just talked about for First Alert, but automation opportunities in other parts of the company. You know, I'm excited about that too because it gives us levers that we had to kind of put on the sideline for a while until we're in the position we are now. You know, the folks that we've brought in over the last few years are very good at that and have a lot of experience in doing that kind of work. Great. Thanks for that. Just to follow up on First Alert, I mean, you mentioned the asset kind of performing better than expected this year. What in your mind kind of drove that incremental upside to your, you know, original projections? You know, how do we think about the momentum of this asset heading into 2023? Other assets you may be looking at to kind of complement the portfolio. Thank you. Yeah. I'll comment, Tony will too, 'cause I see him over here waving me down. You know, the integration, I think what, you know, better than expected, you never know when you do any acquisition, I don't care if it's $10 million, $400 million or $4 billion of some of the things that are somewhat unpredictable. I'm very pleased to say that teams both from the First Alert team, people at Resideo have worked super well together and that's part of the reason why we've been able to outperform some of the things that we had laid out in our original business case. From the standpoint of your question about, you know, opportunities moving forward in the future. I mean, you know, the, As you know, the types of products in the First Alert portfolio, they're types that, you know, smoke carbon monoxide, et cetera, they're in the house or in small business offices, and they're in many, many different places. It's additional sensors that are in the building. This comes back to the ecosystem comment that we were talking about before. It gives us opportunity to connect all this in certain products and then even incorporate new types of things off of the base platforms of those as we move forward. We're excited about the opportunities there. Our innovation and technology group has come up with some pretty cool ideas that we can productize over the years ahead that help us. Of course, leveraging our channels that we have that are really super important, that's one of the big things that we're tied to the commercial side of things, of leveraging the strength of Resideo's very strong commercial channels, our Pro network. You can hopefully can tell by my voice, I'm pretty excited about what we've done in, you know, less than a year and where the future holds. Yeah, the only thing I'd add to all that is, there's a transition in the, in the standards requirements for, smoke and carbon monoxide detectors that are coming out in the middle of 2024 that, we're pretty excited about our position in terms of being able to capitalize on that. We're pretty excited about the product offerings we'll have in that, in that category that should drive some continued growth as we basically enhance the technology. You know, to the point Jay Geldmacher made about the additional sensors and real estate in the connected ecosystem, there's a fair bit of work underway now to capitalize on the, you know, the First Alert products to bring them into that, into that ecosystem. You know, looking forward, I think that this is an area of real meaningful growth for us. Okay, great. Thank you. Those guys, I wanna say one other thing about that. Jay, I don't know, that team's done a great job. I mean, that team has been in place for a really long time. They've been executing in this marketplace for a really long time. I think we said this early on after the acquisition, when you, when you make acquisitions, you know, one of the things you really count on is having a solid management team to lead it, and we definitely got that with First Alert. Yep. I have to agree 100%. Thank you. We go next now to Paul Dircks of William Blair. Hi, good afternoon. Thank you for taking my questions. First question from me, within products, the P&S business, can you remind us here at the end of 2022 what percent of sales are by channel OEM versus distribution, etc? You know, maybe you could tie into that comment, what gives you confidence that first quarter will in fact be the destocking low point? Let me try to answer the second part of that question 'cause you're gonna send us scrambling for numbers here to try to provide some context. We track, I think we talked about this last quarter, but for our top 26 trade customers, we get information from them and collaborate with them, and we get not only our sell in, but their point of sale and their inventory levels in terms of days, as well as their sort of inventory level objectives. You know, what we've seen, particularly in January, is that we talked about this last quarter too, I think. You know, at that time, I think we were a little uncertain as to the slope of the decline and just how far it was going to go and how long it was going to take. I think we are coming out with the feeling that Q1 is going to be the low point. The point of sale data that we are seeing is still pretty darn good. Inventory levels have come down, not to the desired levels, but as point of sale continues to hold up, I think we feel like maybe there will be a little less destocking than we had originally anticipated as well. Got it. That's helpful. Okay. I guess maybe I can follow up offline regarding the. No, I got this. the sales. Oh, you got it. Great. Hold on, Paul. I got roughly trade plus or minus 40% OEM, somewhere in the 25% zip code. Okay. Appreciate that. Thank you. You know, next question from me. You know, speaking about the manufacturing optimization plans, you know, go back, I realize it was a different market, but in early 2021 at your Investor Day, obviously manufacturing optimization, it was one of the key components behind the 2024 operating margin target of 20%-30% in PNS. I guess maybe today, can you help me walk through what the right read is, thinking about what's realistic for an operating margin target, you know, exiting 2023? I guess related to that as well, is there an internal appetite, I'm almost sensing there is, to start fast-forwarding, beyond the manufacturing optimization plans you've announced here today, you know, to accelerate those plans and to try to bring some of those savings to the P&L here exiting the year? Let me make a couple comments, and I know Tony has some follow-up on it. As I was mentioning a few minutes ago, we have a, I think, a really good playbook of things beyond what we even at the time of the 2021 Investor Day. Again, we were very cautious during 2021 and 2022 because of the world we were all living in. There's definitely opportunities there. And it isn't just factory optimization. It's factory optimization, it's automation, it's a variety of different things that we have access to and levers on as part of the playbook for this. You know, as I said before, I'm excited about being able to leverage the strength of my operations group that we have to take a look at these opportunities to, Even though we've thought through a variety of different dynamics, as Tony had talked about before, that we have the opportunity to take that and move those levers and benefit by it. Paul, from my perspective, there are clearly other actions to follow on beyond what we reserved for in Q4. The cadence of those, we're gonna manage, I would say, somewhat more carefully. The business cases remain at least as strong as they were two years ago. The opportunity is at least as good as it was then. We did not have the, you know, another call-out to First Alert, we didn't have the view to the factory automation opportunity in those plans in 2021. We think we're gonna learn from First Alert over the next year and a half, but we think that's pretty real as well. The opportunity suite there is significant and probably bigger than it was in 2021. The cadence at which we unwind it, we're gonna be patient because we were successful over the last couple years making sure that we were able to meet our customer demand better than others and to be a good supplier and to build those relationships. I would say that we have more of a focus on supply chain resilience today than we maybe did then. We're gonna balance those two things as we kind of proceed through what's gonna be a multi-year process. Got it. Very helpful color. You know, switching to the ADI business. I agree with your comments that the performance and the the outlook into 2023 is quite a bit better, certainly from the margin side, than many other distributor peers. I do think part of that has to relate to your investments internally and expanding the business increasingly into the digital world. My question is, could you remind us of the margin difference for your business, touchless versus traditional? Also maybe could you talk briefly about, some of the other investments, whether it's into increasing multichannel business or, you know, perhaps expanding into adjacent categories or, into, further exclusive brand sales that you think will be powerful drivers here in 2023? You just gave an excellent list. Yeah. You gave our answer. I guess so, a few things. The difference in margin between touchless and sort of in branch is not huge. It's there, but it's not huge. The real motivation behind our migration to touchless relates to some other initiatives, which is around sales enablement and creating and enabling our branch associates to do what they do best, which is to be collaborative, consultative sales folks, and to work and build relationships with our customers that are enduring, but also, you know, provide the appropriate level of margin for us. You know, maybe that's a little bit of a different view than maybe just we wanna push it all to touchless because we wanna drive costs out of the branch or because we wanna get margin just exclusively from that action. It's a more nuanced approach than that. If Rob's listening, he probably thinks I butchered that explanation. It is a nuanced approach. The exclusive brands piece is that margin differential is significant. Mm. The growth trajectory in that business has been significant. You know, as we've talked about, we are very focused on being a great partner with our third-party suppliers, and we are not gonna stop that. We have found that there is an ability to grow that exclusive brands business in ways that don't harm the third-party relationships at all, and in some cases, they're fine with it. I think those two things are really the critical investments. I'd also call out, I mean, we, the operating expenses in that business relative to sales have not gone down. We could have driven them down, and we didn't. We are in the position that we're in today because we made those investments. This year, there's gonna be another chunk because we're building out the new ERP system, that I think is gonna drive sort of the next wave of initiatives and enablement around the business. The only thing else I'd add, and you mentioned it, is the adjacent space, and I think we've. Yeah what adjacencies that they've helped moved into and been successful with and are still growing, like Datacom. They're continuing as part of their own strategy. We're continuing to look at that. There's other opportunities there that's not a complete adjacency, like something out in the left field, that they match up well with the rest of the products that they offer. They've done a nice job with that. Appreciate the color. Thank you, guys. Thank you. Thanks, Paul. Thank you. We take our next question now from Brett Kearney at Gabelli Funds. Hi, guys. Good afternoon. Thanks for taking my question. You bet. Hey, Brett. You talked about this, some in your prepared remarks, was curious how you, I guess one, about finding that, sounds like an interesting engineering acquisition in, I believe you said New Zealand, obviously sounds like it fits with the software platforming initiative you have underway, just, kind of broadly what your vision is, I guess longer term, you talked about the actionable intelligence, you might be able to offer to contractors and customers, kind of what you see these capabilities, unlocking for yourselves and customers over, you know, medium term? I would say, Brett, that, you know, software opportunity, but also the hardware. The hardware work that these guys have done up to this point in time, what it provides us now in terms of new products or accelerating new products, along with what we have internally before the acquisition, we believe they're really excited about. We believe they can, you know, really, you know, two plus two equals eight. The innovative capability of this group is very impressive, in terms of the. I believe we're just talking about it in a meeting earlier this morning of where they can provide a lot of additional capabilities to many of our other products too. I think on hardware, software opportunities, AI, I mentioned in particular, 'cause we were talking, following up on a question that came up on security, but the video analytics thing, some of the new video cameras that we have coming out this year. They're gonna do some really cool stuff for us. We're gonna be really excited to share a lot more with you guys on that as we move forward. You know, that deal we got wrapped up right after around the Christmas timeframe. I spent time with the founder and CEO of the company out in CES with a bunch of our teammates. Brainstorming ideas and things together, and they've integrated very quickly into the company, which is great. It's a good cultural fit, so we're excited about it. Great. Thanks so much, guys. Thank you. We go next now to Brian Ruttenbur of Imperial Capital. Yes, thank you very much. Hi, Brian. Quick question. First of all, hopefully I'm price increases, you talked about potentially in 2023. What were your total price increases on average in 2022, and were there any pushbacks in 2022, and do you anticipate any pushback on price increases potentially in 2023 given the market? The 2022 price number was ±$200 million. I think we're looking this year at price increases substantially less than that, a fraction of that. I don't, I don't know exactly what number I'd give, but it's gonna be substantially less. In large part, because of the collaborative way that we tried to do the price increases, they stuck. Nobody, us included, is happy when we see increases in costs, right? We've worked collaboratively with our customers and our channel and, you know, by and large, they stuck. This year, the price changes, like I said, are gonna be much more modest, and they're gonna be targeted to areas where our costs are increasing, and where the channel is gonna be in a position to support it. We, you know, we've really tried not to get out over our skis and take advantage of this environment in any way, shape, or form. I'd just add that, and Tony mentioned it, but then the opportunity for the price to be more sticky, and I think the way that we did it, the way that Tony explained, that's, that's how you get, you know, that's how you do that. Now, you know, 12 months from now, 18 months from now, everything, you know, gets back to more of a normalcy out in inflation, that's a whole different. You know, we'll see how that goes. I think that's a, I think Tony's spot on for this year in his comments. Is there, just as a follow-up, is there a seasonality to your standard price increases? Is it the spring? Is it the fall? If you could just remind me of normally when you would, impose those price increases potential? Usually, I mean, historically, we saw we did some in the spring. Over the last couple years, it's been kind of there hasn't been that level of seasonality. Yeah, it's just tied to, you know, some of the dynamic, the unique dynamics that we've all gone through together the last two years. You know, I'd also say that, you know, the strong brands that allow us to, you know, help also on the price too. I think, you know, that's been another factor for us. Great. Thank you. Thanks, Brian. Thanks, Brian. Thank you. gentlemen, it appears we have no further questions this afternoon. Mr. Willey, I'll hand things back to you for any closing comments. I'd like to thank everyone for their participation today, and we look forward to speaking with you over the coming weeks and months. Everyone, have a good day. Thank you very much. Thanks, everybody. Thanks, everybody. Again, ladies and gentlemen, that does conclude today's Resideo Technologies fourth quarter 2022 earnings conference call. We'd like to thank you all so much for joining us and wish you all a great evening. Goodbye.