Good day, and thank you for standing by. Welcome to the Tempur Sealy Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Aubrey Moore, Investor Relations. Please go ahead. Thank you, operator. Good morning, everyone, and thank you for participating in today's call. Joining me today are Scott Thompson, Chairman, President, and CEO, and Bhaskar Rao, Executive Vice President and Chief Financial Officer. This call includes forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve uncertainties, and actual results may differ materially due to a variety of factors that could adversely affect the company's business. These factors are discussed in the company's SEC filings, including its annual reports on Form 10-K and quarterly reports on Form 10-Q, under the headings "Special Note Regarding Forward-Looking Statements and Risk Factors." Any forward-looking statement speaks only as of the date on which it is made. The company undertakes no obligation to update any forward-looking statements. This morning's commentary will include non-GAAP financial information. Reconciliations of this non-GAAP financial information can be found in the accompanying press release, which has been posted on the company's investor website at investor.tempursealy.com and filed with the SEC. Our comments will supplement the detailed information provided in the press release. Now, with that introduction, it's my pleasure to turn the call over to Scott. Thank you, Aubrey. Good morning, everyone, and thank you for joining us on our 2023 fourth quarter and full year earnings call. I'll begin with some highlights from the quarter and full year, and then turn the call over to Bhaskar to review our financial performance in more detail and discuss our 2024 guidance. After that, I'll provide an update of our proposed acquisition of Mattress Firm before opening up the call for Q&A. In the fourth quarter of 2023, net sales were approximately $1.2 billion, and Adjusted EPS was $0.53. Our results were in line with our expectation for the quarter, with sales and Adjusted EPS approximately consistent with prior years. Turning to a few highlights for 2023. First, I'd like to highlight our resilience of our business model, our robust cash flow, and industry-leading balance sheet. Our solid financial position has given us flexibility to capitalize on the industry's opportunities. We're delivering strong operating cash flow, investing in the business, and outperforming the broader bedding market in North America and internationally. In the last three years, we've generated over $1.0 billion in cash flow after investing $1.3 billion in advertising and over $600 million in CapEx. We believe the strategic investments in our brands, capabilities, and capacity enabled us and our retailers to succeed in a dynamic environment. Versus the prior year, adjusted EBITDA to net debt leverage declined from 3.1 to 2.87. We expect to continue to reduce our leverage in the coming quarters as we prepare for the closing of the proposed Mattress Firm transaction. The U.S. bedding industry, which is our largest market, was challenged in 2023. Based on preliminary figures, we believe the category units were down double digits versus the prior year, and the U.S.-produced mattress units were below the 20-year trough for the industry. However, we have recently seen stabilization of the category demand. The international markets we operate in have generally demonstrated similar trends on a consolidated basis. Over the prior two decades, the bedding industry has consistently grown through both ASP and unit expansion over time. We anticipate that the category will return to its historical trends of consistent growth. With our strong financial position, resilient operating model, and the recent investments we've made in the business, Tempur Sealy is uniquely positioned to reap the benefits of an improving market. The second item I'd like to highlight is our successful rollout of our new iconic premium products and continued expansion of our extensive manufacturing capabilities. These actions in 2023 solidified our position as a leading vertically integrated global bedding company. Internationally, we successfully launched an all-new lineup of Tempur mattresses, pillows, and bed bases in over 90 markets, introducing new innovation and expanding our total addressable market globally. The consumer-centric innovation and expanded price points in the new collections are driving positive traction in broad range of customers, including our legacy ultra-premium consumers, at mattress prices at $3,000 and above, as well as consumers shopping for mattresses starting at $2,000.... The reaction to the new products has been positive. On the cost side, we have streamlined the construction of the new product to maximize manufacturing efficiencies and enhance our ability to efficiently customize products to meet customers' needs in diverse markets and channels. In the U.S., the new Tempur-Breeze and Stearns & Foster product portfolio completed their rollout in 2023 and realized notable year-over-year growth. The Tempur-Breeze portfolio achieved double-digit sales growth and a 5% increase in mattress and foundation ASP, while Stearns & Foster portfolio also delivered strong sales growth over the same period. These premium brands significantly outperformed the market and drove higher ASP for the entire category at a time when retailers are dealing with reduced floor traffic. In 2024, we expect to complete the full refresh of our U.S. Tempur portfolio by introducing our next generation of Adapt products. The new Adapt products are focused on meeting one of the highest consumer needs in mattresses: reduced aches and pains. This line includes our most advanced TEMPUR material, uniquely designed to deliver 20% more pressure relief than the standard TEMPUR material. The Adapt products, paired with our own proven line of innovative, smart, adjustable bases, will build on the success of prior generations and Tempur Sealy's robust R&D track record. We have over 60,000 new Adapt mattresses ready as we prepare for the rollout to begin in the first quarter and expect to reach substantial completion before the Memorial Day holiday. In 2023, we also opened our newest and largest state-of-the-art plant in Crawfordsville, Indiana. This new facility, located in the Midwest, complements our existing manufacturing footprint and enhances our ability to serve Northeast customers. Our expanded U.S. manufacturing footprint will allow us to capture the projected long-term demand for our products and to support our rapidly growing OEM business. The new facility has the capabilities to manufacture a wide variety of bedding products and components for branded and non-branded operations. Our third highlight is the diversification of our business model and go-to-market approach. One of our long-term initiatives is to increase the visibility with the consumer, wherever and however they choose to shop. We follow the customer's lead and aim to provide quality products at every price point, both on and offline. In support of our broader portfolio diversification strategy, we are pursuing growth initiatives through innovation and development of industry-leading products, growing our wholesale business through existing and new retail relationships, and increasing our investments in Stearns & Foster brands. We'll also look to expand further into the OEM market and grow our direct-to-consumer business through the expansion of our e-commerce channels and company-owned stores. All these initiatives are in line with our pursuit of long-term, sustainable growth. For example, our direct-to-consumer channel has increased from $150 million in 2015 to over $1.2 billion in 2023, a compound annual growth rate of 30%. This was in part thanks to the expansion into hundreds of new company-owned stores around the world and the successful launch of our Stearns & Foster and Sealy e-commerce websites. Additionally, we began offering OEM and private label products in 2020, and today, we generate hundreds of millions of dollars in profitable private label and OEM sales, with further opportunities for growth in 2024 and beyond. Lastly, our growth in wholesale has been broad-based across existing and new distribution. In fact, in April, we'll be expanding our products into additional big box stores with one of the largest U.S. bedding retailers. Fourth, I'd like to highlight significant expansion in our year-over-year consolidated gross margin. We delivered year-over-year improvement of 260 basis points in our consolidated gross margin to 44.2% in the fourth quarter of 2023. This is a result of efforts from the team to drive profitability by leveraging our fixed cost structure over multiple growth initiatives. As mentioned, our new product innovation, investments in manufacturing processes and plant, and diversification of our go-to-market strategy have all contributed to improved gross margin. As we continue to drive greater efficiency, we increase our ability to invest in advertising, product development, and our people. We also benefit from a larger pool of free cash flow to drive EPS growth and reduce our net leverage. While we expect the retail environment to remain dynamic, we have a track record of delivering results during challenging cycles. In fact, we generated $4.9 billion in sales and $2.2 billion in gross profit for the full year 2023, both of which were just shy of our highest-ever annual sales and gross profit figures. In 2024, we plan to stay focused on our long-term initiatives, stay agile to capture opportunities, and deliver higher sales and profits. Our last highlight is on our commitment to protect and improve our communities and the environment, as we detailed in our recently published 2024 Corporate Social Values Report. The report is available on our IR website. We are proud of our achievements over the last year, including our zero waste to landfill status at our Canadian and Mexican manufacturing facilities, and maintaining our zero waste to landfill status at our U.S. and European manufacturing operations. This year, we contributed over $800,000 in charitable contributions through our Tempur Sealy Foundation and donated more than 12,100 mattresses, worth approximately $16.9 million, bringing our cumulative ten-year donation total to over $100 million. With that, I'll turn the call over to Bhaskar. Thank you, Scott. In the fourth quarter of 2023, consolidated sales were approximately $1.2 billion, and adjusted earnings per share was $0.53. We have $33 million of pro forma adjustments in the quarter, all of which are consistent with the terms of our senior credit facility. These adjustments are primarily related to the cost incurred in connection with our planned acquisition of Mattress Firm. Turning to North America results. Net sales decreased 4% in the fourth quarter. On a reported basis, the wholesale channel decreased 6% and the direct channel increased 11%. North America adjusted gross profit margin improved to 40.7%, primarily driven by favorable commodities and operational efficiencies, partially offset by unfavorable product mix. Product mix is primarily being driven by the continued growth of our OEM initiative. North American adjusted operating margin improved to 15.9%, driven by improved gross margins, partially offset by investments in growth initiatives. Now turning to international. Net sales increased 8% on a reported basis and 4% on a constant currency basis in the fourth quarter. As compared to the prior year, our international gross margin improved to 55.7%, driven by commodities, partially offset by unfavorable mix. Our international operating margin decreased to 19.2%, driven by higher operating expense from investments in growth initiatives, partially offset by improvements in gross margins. One of our growth initiatives is expanding our retail store footprint, and we now operate over 750 stores globally. Now to balance sheet and cash flow items. At the end of the fourth quarter, consolidated debt, less cash, was $2.5 billion, and our leverage ratio under our credit facility was 2.87 times, within our historical target range of 2-3 times. In the fourth quarter, we generated operating cash flow of $91 million. We're pleased to report that we have successfully entered into a $625 million delayed draw term loan and increased the availability of our existing revolver by $40 million. This is in connection with our financing plan for the anticipated acquisition of Mattress Firm in late 2024. Upon closing the acquisition, we plan to fund the cash portion of the transaction with a combination of cash on hand and through existing and incremental borrowings. Our financing plan for this acquisition is consistent with our historic history of balancing financial flexibility, leverage, and the cost of capital. We have already executed on elements of this strategy by successfully refinancing our credit facilities in 2023 and now with the new delayed draw term loan. We anticipate raising incremental borrowings closer to the closing of the transaction and expect net leverage to be between 3x-3.25x, assuming a closing in the second half of 2024. We expect to return to our target leverage ratio range of 2-3 in the first 12 months after closing. Now, turning to our 2024 guidance. We expect adjusted EPS to be in the range of $2.60-$2.90. Our guidance is based on sales increasing low to mid-single digits versus 2023. This also considers our expectation that the U.S. bedding industry unit volumes are stable versus the prior year, which implies slight headwinds in the first half and recovery in the second half of 2024. Our sales outperforming the industry due to new distribution wins in the U.S. and the continued success from the new product launches overseas. Advertising spend of about $500 million as we continue to support our leading brands and new products. All of this resulting in Adjusted EBITDA of approximately $1 billion at the midpoint of the range. I want to note two phasing items for 2024. First, we believe the year-over-year negative unit trends seen in the U.S. bedding industry over the past year are mitigating. We believe industry units will likely be down high single digits through the end of 2023, and while we expect the first quarter will be down some, we believe units for the industry will return to year-over-year growth later this year. Second, we recently opened our new Crawfordsville facility to provide us with incremental capacity to support our long-term growth. In April, we will start servicing our new distribution that Scott spoke to previously, which will mark the beginning of our growth into this capacity. The phasing between this capacity and our new volume will result in our historical seasonality being a bit off. As we grow into Crawfordsville, the timing of the shipping of new distribution and our near-term category outlook, we expect this to pressure profits in the first quarter, likely resulting in EPS being between $0.45 and $0.50. We expect to return to delivering year-over-year EPS growth starting in the second quarter of 2024. As we noted, we expect our full-year adjusted EPS to grow 15% at the midpoint of our guidance. Our guidance also considers the following allocations of capital in 2024: CapEx of approximately $150 million, down significantly from prior years as our major capital projects are complete. This is a more normalized level of spend, driven by maintenance spend of $110 million and growth spend of approximately $40 million, and a quarterly dividend of $0.13, representing an increase of 18% relative to 2023. Lastly, I would like to flag a few modeling items. For the full year of 2024, we expect D&A of approximately $200 million-$210 million, interest expense of approximately $135 million-$140 million on a tax rate of 25%, with a diluted share count of 179 million shares. With that, I'll turn the call back over to Scott. Thank you, Bhaskar. Nice job. Before opening up the call for questions, let me provide a brief update on our pending acquisition of Mattress Firm. In the fourth quarter, we certified substantial completion with the FTC Second Request. We continue to work with the FTC to advance the transaction approval process and anticipate these conversations will continue through the first quarter. As previously disclosed, we continue to expect the transaction to close in mid- to late 2024. In connection with and contingent upon the acquisition, we are proactively pursuing a divestiture plan and engaging with Mattress Firm's suppliers. In parallel, Tempur Sealy and Mattress Firm continue to make joint progress on integration planning. Lastly, a brief comment on Mattress Firm's financial performance. Mattress Firm recently made their quarterly results available on their website, which were consistent with our expectations. We encourage you to review Mattress Firm's website for more information on their financial performance for their most recent quarter. In summary, our progress towards the transaction close is on track, and we look forward to joining with the Mattress Firm team. With that, I'll open up the call for questions. Operator? Certainly. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Thank you. As a friendly reminder, please limit yourself to one question. Please rejoin the queue to ask a follow-up. One moment while we compile our Q&A roster. Our first question will be coming from Susan Maklari of Goldman Sachs. Your line is open. Thank you. Good morning, everyone. Good morning, Susan. Good morning, Scott. Maybe to start with, why don't we talk a little bit about demand? You know, you mentioned that it seems like we have bottomed out in the fourth quarter and that this year we could see a sequential improvement as we move through. How are you thinking about that, I guess, relative to the macro backdrop, the potential for rates to come down? And what else do you think is stimulating the consumer a bit, perhaps, to start to see some improvement on the unit side? Well, obviously, we have easier comps, which is probably the first thing that's got to be pointed out. Second thing, obviously, we are at an all-time low, and we're talking about the U.S. in volume. So we are really at rock bottom from a historical standpoint. And as you mentioned, there's some green shoots. Obviously, we're in an environment where interest rates are trending down. We're also, if you look at the bedding industry, and we just got back from the Las Vegas bedding show, there's good innovation in the industry. We've got some new product coming out, and others have some new product coming out that's very interesting. We've also seen some of our larger retailers, I'm gonna say, refocus on advertising, and we've got several of them increasing their advertising budgets going into 2024. So yeah, in general, it feels like I've used the term bouncing around the bottom. We're kind of bouncing around the bottom. If you go back and look at the fourth quarter and kind of look at it, parse it by month, October was not good in the U.S., and then it got better throughout the quarter. And then you get to, you know, the January period, and obviously, it's very difficult in this world to forecast. If we look at our own order book, you know, in January, it's positive. If I look at our online sales in January, it's up double digits. So it looks like some green shoots, but you have to dampen that when you look at some of the details. You know, the order book's positive, but it's concentrated in the way of some larger customers. It's not as broad-based as we'd like to see. If you go talk to the retailers and listen to them, you know, the floor traffic is down double digits, and their January, when you look, talk to the retailers, in general, are talking about being down 10%. And you think about January, it's only 30% of the quarter. So what I'm kind of saying, it's all mixed, and we continue to get some mixed signals, but clearly bouncing around the bottom seems to be the best description currently. Okay. That's helpful color. Thank you. Good luck. One moment for our next question. Our next question will be coming from Peter Keith of Piper Sandler. Your line's open. Oh, hey, thanks. Good morning, everyone. Maybe this is a bit of a financial question for Bhaskar, but I was hoping you could quantify the EPS or EBITDA impact from these facility startup costs in Q1, and then also provide a little bit of color on how you guys are thinking about input costs year-over-year and launch costs year-over-year? Absolutely. So let me take those one at a time. If you think about the first quarter, specifically, a couple of things happening there. We called out the phasing of revenue, we called out our expectations on a category. Also, we have some great news; we're really excited about what's happening from a Tempur-Adapt, and also good news is that the Adapt is going out earlier than where the Breeze did in prior year. So that's a couple of cents between the first and second quarter. Specifically, as it relates to the question you asked about Crawfordsville, as a whole, about $30 million of D&A increase on a year-over-year basis. So when you parse that out for the quarter, think of that at about a couple of three cents. As it relates to input costs from a full-year perspective, we still remain constructive. We've seen some tailwinds in 2023. It's very consistent with where we left it in as coming out of the third quarter, as it relates to our input cost expectations. At that point, we called out, let's call it, 20 basis points-30 basis points of benefit for 2024. So that's basically where we remain today. All that said, we are mindful of what's happening in the Red Sea, but our expectations are still positive as it relates to the commodity input costs. And then closing it out with launch expenses, on a full year basis, we would expect launch costs to be flat. However, as I called out, there is some phasing that happens between Q1 and Q2, given the timing of the Adapt is a bit earlier than where it was with Breeze in prior year. I'll pile on that just a little bit, Bhaskar, and highlight Crawfordsville. Obviously, that's a huge investment for us, and, you know, while others in the industry are closing plants and reducing capacity, we're adding capacity. And what you're seeing in the first quarter is basically turning on the plant full, and so you get the fixed cost of the plant coming through the income statement before you get the profits coming from the product, which will come in the second quarter. The good news is we've got orders, and we need the plant, and it's busy. We've just got a timing on the building of the product and when revenues show up. 'Cause the cost of the products will show up in inventory, but the whole fixed cost of the plant has got to go through the income statement. So, we're really excited about the future of that operations. Okay. Thank you very much, guys. One moment for our next question. Our next question will be coming from Bobby Griffin of Raymond James. Your line is open. Hey, good morning, everybody. Thanks for taking my question. So Scott or Bhaskar, I was just hoping, when we look at the 2024 sales guidance, flat industry units, kind of as the starting point, and then maybe build a little bit to your guide of call it maybe 3%-4% at the midpoint, can you unpack the drivers to get there? Is it mostly market share gains, mix, price? Just anything to help put some context around what's assumed in the building blocks and the size of those building blocks to, to walk us from the industry to Tempur Sealy's performance? Sure. I'll let Bhaskar do the details, but, you know, foundationally, we have two big distribution wins that have been executed, and those sales will show up in April. But you wanna, you know, build the board? Absolutely. So just starting with the category, as we indicated, is that our expectation is that it will be flat for the full year. However, as you call that as well, there will be a build. So let's call that big round numbers down low singles in the first half and up in the back half. So when you think about the phasing of sales and with the new distribution that Scott spoke to, is that it is a build as you go from one to two, and then you see the growth in three from a couple of different areas. The new products getting out there in Adapt, the continuing momentum that we're seeing in international and the improvement from a category standpoint. Specifically, disaggregating that a little bit, we're super excited about what we're seeing internationally. We would expect the growth in our international new product launch. We saw the green shoots in the third quarter. It continues to grow in the fourth quarter, and we're very excited about what that could do for us in 2024 and beyond. So the expectation is that we would see growth in international in all of the quarters. And then now bouncing back to the U.S., so what that would imply is that taking share internationally. When we get into the U.S., our the way that we think about this, it is really the market share gains would be tied to the new distributions wins that we have in hand. Obviously, that's, our expectation is that's what we've assumed in the guide, but our expectation is always is to continue to outperform the market. Very good. I appreciate the details. Best of luck here executing this year. One moment for our next question. Our next question will be coming from Jason Haas of Bank of America. Your line is open. Hey, good morning, and thanks for taking my questions. I'm curious if you could provide a little bit more color on the distribution gains that you cited. Was that really in reference to one big box retailer, or are you seeing some more broad distribution gain? Thanks. There we've got two large distribution gains in-house that the revenues will come starting in, call it April. So there's two big ones. And then, like always, there's hand-to-hand combat on the smaller side, but there are two that are a little more needle moving, I guess, would be a fair way to say it. Got it. A couple. Thank you. One moment for our next question. Our next question will be coming from Seth Basham of Wedbush. Your line is open. Thanks a lot, and good morning. My question is on the margin outlook for 2024. Hoping for some more color between expectations for gross margins and SG&A. Seems like you expect material gross margin improvement, probably from commodities, but what about from improved operational efficiency? And on the SG&A side, it seems like advertising growth is likely to be about in line with sales growth, by expecting deleverage and other costs. Thank you. Scott, want me to take that? Yeah, go ahead. So from a gross profit perspective, good call out, Seth. It would be our expectation that we would see nice year-on-year improvement from gross margin. So a couple of big drivers I would call out: I spoke to commodities briefly in the prior question. We would expect that to be a tailwind. We're very excited about the continuing momentum that we see in our U.S. operations. Just to put a reference on that, we invested in customers and spilled some EBITDA historically. We started seeing the benefits of that starting to turn around in the back half of 2023. The expectation is that that would continue to build momentum as we get into 2024. So that would be a tailwind for us as well. Previously, I think I mentioned something around $50 million-$60 million. It would be our expectation that that would continue. On a year-on-year basis, yes, there's some phasing between quarters as it relates to launch, but big picture floor models should be a slight tailwind for us versus the prior year, and then Crawfordsville would be a headwind. So when I think about that, Crawfordsville, again, a headwind on rate. However, if Crawfordsville was not there, it would be difficult for us to manage this new distribution wins that we would have without incurring overtime and with our various other facilities. So that's really the gross profit story. As I think about from an operating expense perspective, a couple of things is we continue to manage this business for long-term growth, so we're gonna invest in those things that will give us that growth and outlook perspective. That, when you think about OpEx on an overall basis, is that we would expect just a bit of deleverage. On the advertising perspective, just parsing that out, is I would think of the North American business being flat on rate on a year-over-year basis. And internationally, we're going to invest to really support that growing into that new addressable market. So what that blends to, when you put all that together, is we expect incremental investments on rate from advertising. Also, we continue to be very excited about the potential of our direct-to-consumer business, not only in the bricks-and-mortar, which is a global story. In fact, our brick-and-mortar doors on a year-over-year basis from first quarter to first quarter have grown 40 million, sorry, have grown 40 stores. So we're gonna continue to invest in that initiative as well as the e-com. As you know, we have a robust e-commerce business in the U.S., and now all of our brands are represented, Stearns, Sealy, as well as Tempur. Then we spoke to international, but just parsing that a bit, China remains a big opportunity for us, so we're going to spend some money there. Really what's again flat to slightly up as it relates to rate from an OpEx perspective, but really what's driving it is the investments we're making in future growth. One moment for our next question. Our next question will be coming from Brad Thomas of KeyBanc Capital Markets. Your line is open, Brad. Hi, good morning. I was hoping we could talk a little bit more about the international segment and perhaps a bit more about the outlook for new product rollouts and some of the timing of some of the margin opportunities that you have as we look forward. Thanks. Sure. I'll talk a little bit about the international rollout. It's gone really well. And I think it's just probably the beginning from the international standpoint. And you can see from, I think, Bhaskar's earlier comments about what we're doing from an advertising standpoint, we feel we've got the right product now at the right price points. We're spending a little more money in advertising because we think the returns are going to be good. But all that is a very bullish sign for international on a, we'll call it a multi-year strategy. It's taken us quite a while, quite a number of years to get the product, get it right, get the manufacturing process right. But we think we're in the early innings from an international growth standpoint. Bhaskar, do you want to add anything? Sure. What I would say from timing of a margin perspective is, as I think about gross margin, is, we mentioned the typical seasonality. We meant we're not going to see that necessarily this year, just given as we ramp into that new distribution and given Crawfordsville, from a gross margin expectation standpoint, again, overall, up year-over-year, and then margin consistent with prior years, is that it would increase as we go throughout the year, really driven by a couple of different items. One is that we do expect from a growth standpoint, sales growth more in the back half than we would in the first half, therefore, giving us some leverage from a gross margin on the gross margin line. And as well as those, as the operational improvements, is that will gain momentum and continue to build on itself. Great. Thank you very much. One moment for our next question. Our next question will be coming from Michael Lasser, UBS. Your line's open, Michael. Good morning. Thank you so much for taking my question. How do you think about the incremental margin on either sales upside or potential downside as, as the year unfolds, and into next year, assuming that the, bedding, recovery continues to gain steam? Thank you so much. Okay, I'm going to speak for a second, then I'm going to let Bhaskar answer it. You know, it's interesting. It's a really interesting question. You know, on the upside, it's obviously good. I think the part I want to call out is on the downside, if for some reason we've missed our call on the industry, we've got a lot of flexibility in the system to take cost out because we've got the company positioned, I'm going to call it aggressively, for growth. And when you position a company aggressively for growth, you're spending some money, as we've talked about earlier in this call. If for some reason there was a downside case someone was working with, we have the ability to take out a good bit of cost if we reposition the company for that kind of environment that we don't see. Do you want to talk about that a little bit, Bhaskar? Absolutely. What I would say on a blended basis, the way I've historically thought about this business, the incremental contribution profit, call it, is somewhere between 30%-35%. As I sit here today, it feels closer to 35%, maybe a bit, maybe a bit, above that, versus where we have been historically. And that, in context, is all things being equal. As we pointed out, we have expectations about the category, and, as the consumer starts coming back, and they will, bedding is not going obsolete, mattresses are not going obsolete, there will be a mix of when that- when those, when those units come back. Again, positive from an EBITDA standpoint, positive from a contribution profit standpoint. However, that mix would be something to think about as this industry begins to recover. Thank you so much. One moment for our next question. Our next question will be coming from Keith Hughes of Truist. Keith, your line is open. Thank you. Question on the new facility in Indiana. Once you get up to full capacity, how much of your foam pouring will that represent? And will you actually hit full capacity in the second quarter? Really complicated question. Let me put some words around it. No, we will not hit full capacity in the second quarter, and it depends on when you talk about capacity, whether you're running one shift, two shifts, all that kind of stuff. The way you should probably think about it is, look, first quarter, a little bit of a drag to get it going. By the time you're into the second and third quarter, Crawfordsville is contributing, okay? But you should think about optimized. You know, optimized, it's probably a couple of years out as far as being totally optimized, depending on what the bedding market is, and it gives us great flexibility.... But we've, you know, with Crawfordsville and the other plants we have, and the ability to go to second shifts, you should think about Tempur has, you know, capacity for the foreseeable future, both in pouring OEM foam and in regular foam. Okay. One follow-up question to that is- Go ahead. Do you think you're going to, in terms of, like, spring production, do you think you'll do some more backward integration on spring production, in the future as well, particularly, given the, the volume you're starting to move in the industry? Yeah, I don't know. That's something we've always looked at. We've got a great partnership with Leggett, for sure. They do a fabulous job for us. We've got some other manufacturers that are doing a good job for us. And we make a good bit of our springs already. You know, we make our own springs in the Asian market. In the JV, Mexico. The JV Mexico, we make our own springs. We make a few here in the U.S. So we'll continue to use kind of what I'll call a blended strategy of best-in-class spring manufacturers and build some our own and continue to look at the economics and the pluses. But right now, I think we're very happy with the current relationships we have and the mix that's both, we'll call it insource and outsource from a spring standpoint. Okay. Thank you. One moment for our next question. Our next question will come from Laura Champine of Loop. Your line is open. Good morning. Thanks for taking my question. Could we get any more context on how, how TPX formulated the divestiture plan related to the Mattress Firm acquisition, and then just anything you're comfortable saying about next steps? Yeah, you're probably not gonna get much there. The FTC lawyers will call me after the call and whip me like a dog. What I would tell you is, there is a formal process that goes on in that area, and it's ongoing and flexible. But other than that, I really can't give you any color other than to tell you there's been good interest in the package and the activity. Thanks, Scott. I did not mean to cause you peril. Maybe we could talk a little bit about expected AUR in mattresses this year, and that'll be a little less controversial. There you go. AUR, that'd be you, Bhaskar. Yep. And just to make sure that we're on the same page, Laura, that's ASP? Average sales price? Correct. Correct. Absolutely. So, the way that we're thinking about it currently is, again, very excited about what's happening with Adapt. Breeze continues to have legs, so just to make sure we're grounded, Adapt largely will be complete, in the first quarter, and then it's out there. This is great. It's ahead of where we were from a Breeze standpoint, so the momentum will build, build. And what's, what's very nice about that is our expectation is, is that Adapt and Breeze will live harmoniously together, if you exclude the impact of floor models. So what that would mean is we're not expecting that, ASP, will be materially one way or the other, let's call it flattish. On an overall basis, when you think about the U.S., our expectation is that there's not gonna be a significant difference sitting here today as it relates to how we think about units and dollars. So the implication there is that ASP is gonna be flattish, broadly speaking, across the world. Again, what I would call out, as I referenced this before, is that, you know, eventually the consumer is gonna come back. We feel like there's momentum that's happening from a consumer getting back a little bit as we think about the back half of the year and beyond. So as that consumer does come back, they will come back at all price points. However, it is that incremental EBITDA, but it is something to be mindful of as those units come back and where they come back to. Great. Thank you very much. Thank you. One moment for our next question. Our next question will be coming from William Reuter of Bank of America. Your line's open. Hi. This kind of follows on that last question, but you mentioned you expect ASP to be flat. Are you seeing a trade-down currently? Are you currently seeing ASP flat, or are you seeing greater strength at lower price points? Yeah. I know you have Stearns & Foster rollout last year, so that may be contributing some to some greater success there, but any comments on mix? Yeah, on mix, we're generally seeing the higher price units do better than the lower priced units. That's a trend that has been around for a year or so. I would say the gap has narrowed some, but we continue to see that mix. We haven't seen any deterioration in the strength of the higher end. And I think in general, what I think Bhaskar is talking about, correct me if you're not, on a like-for-like basis- Mm-hmm. We aren't expecting to see ASP increases as there's quite a bit of pricing put in the market over the last few years due to commodity increases. And it feels like the commodity thing is behind us, and price on a like-for-like basis is stabilized. Yes, sir. Thanks so much. One moment for our next question. Our next question will come from Jonathan Matuszewski of Jefferies. Your line is open. Great, good morning, and thanks for taking my question. Scott and Bhaskar, I was hoping you could expand upon your recent conversations with retail partners. Sounds like you're hearing from them a little bit of a change in mindset regarding advertising spend, with them signaling to you some year-over-year increases in their budgets for 2024. So, you know, any added color that could provide context for us in terms of, you know, what's changing their mindset to get a little bit more aggressive in their own ad spend? Thanks so much. Sure. Look, when you look at the retail business model, it's got quite a bit of fixed cost. The retailers have absorbed quite a bit of sales decrease. And so I think the obvious thing to do if you're a retailer, and you're trying to get your sales going, is you look at your content, make sure you're advertising quality content, and see whether or not you can spend a little bit more and get a high return on investment because and floor traffic has been down. Clearly, we're waving the flag about the need for the industry, not just any individual retailer or manufacturer to advertise, but you know, it takes a village, and we've been fairly aggressive about asking others to pony up. And we're of course doing our share. By historical standards, we're leaning in heavy. And I think the people that have invested in advertising are getting good returns. And to the extent that that continues, hopefully we'll get some other manufacturers and some more retailers leaning in. And like I said, we've got, I can think of two off the top of my head that are leaned in, and I think that's gonna be part of the turnaround story in 2024, is the market—people getting back to understanding the category, and the category is driven, sure, on consumer confidence, but you also have to have a good bit of advertising in the marketplace for the industry to succeed. That's really helpful. Thank you. Okay, and I'm showing no further questions at this time. I would now like to turn the call back to Scott Thompson for closing remarks. Thank you. To our 12,000 employees all around the world, thank you for all you do every day to make the company successful. To our retail partners, thank you for your outstanding representation of our brands. To our shareholders and lenders, thank you for your confidence in Tempur Sealy's leadership team and its board of directors. This ends the call today, operator. Thank you. Certainly. This concludes today's conference call. Thank you for participating. You may now disconnect.