Hello? Can you hear me? Good afternoon. We're continuing our conference panels with Stanley Black & Decker. I'm Neil Burke. I'm an analyst on the multi-industry team at UBS. We're happy to host Pat Hallinan, Chief Financial Officer of Stanley Black & Decker. He's gonna have some opening remarks and slides, and then we'll go into the discussion. Thank you. Yeah. Thank you. Thank you. And good afternoon to those here today in Florida. I was just gonna cover three slides, really, for those of you who didn't get a chance to either attend in person or online our Investor Day. We had Investor Day right before Thanksgiving. A big part of Investor Day was to kinda talk about where we are in our journey. For those of you who might not be very familiar with us, obviously we had some challenges coming out of COVID. Don Allan, our CEO, put us on a transformation journey starting late 2022. We're trying to wrap substantively all that up in 2025, and then pivot towards growth. That's a lot of what our Investor Day was all about, was kinda wrapping up the transformation, where do we go from here. A few slides. I don't know. You're not too much in the way, Neil. I think we can get through this pretty quickly. But some of the key messages coming out of our Investor Day, you know, one is we definitely refocused the portfolio. We sold off the security business, the oil and gas business, the doors business, a number of businesses. And you know, our portfolio today is about $15.25 billion of revenue, about $13 and a fraction that is tools and a global tools and outdoor business, with our biggest brand being DeWalt, other big brands being Stanley and Craftsman. All of those well beyond $1 billion. And in the case of DeWalt, almost about $7 billion. Then we have an industrials business, which is mostly a fasteners business that services auto, aero, and general industrial, both with the fasteners themselves, but often the tools or robots or welding equipment that go along with those fasteners. That business is about $2 and a fraction billion. The portfolio is very focused. We believe we have both of the businesses on a strong improvement path, which put them on a solid foundation for growth. We've delivered on the promises, all the major promises we've made in terms of margin expansion, cash generation, inventory reduction, and debt paydown that we put forth as part of the transformation. We expect to finish this year at about 30% gross margin, which is what we expected at the start of this year. We expect to have inventory reduced about $2.2 billion, debt reduced about $2 billion, and have the brands on an investment path where they could return to growth. We definitely wanna get back to growth. That's our full intent. We are a year and a half into investing for growth. Chris Nelson, the gentleman who runs our tools and outdoor business, spent a lot of time at the Investor Day, talking about the investments we're making in our three biggest brands, DeWalt, Stanley, and Craftsman, around speeding product innovation, investing in brand building, and investing in the field support of those to pivot towards growth. And we really believe our company provides a great, strong opportunity for economic value creation, and certainly for investor value creation, especially since, unfortunately, a little of the tumult of the current macroeconomy and geopolitical environment, we think, still leaves a lot of upside in front of us. At the Investor Day, we talked about the long-term financial outlook. When Don put the company on a transformation path at the start of 2023, really the latter innings of 2022, he outlined some financials through 2025. We felt we needed to start talking about where we expect to go long-term. This is kinda beyond 2027. We fully expect the portfolio, more often than not, to be growing mid-single digits in a low single-digit growth market. So, you know, about anywhere from 100 to 250 basis points of market-beating growth. We will get, relatively soon, the margins to 35%. And beyond that, we think we have the opportunity with product platforming to get them beyond 35% to 37%. Once we get the business model into a more steady state right now where our operating leverage is beyond 20% to 25%, obviously, as we're on a big margin improvement journey. But even once we're in a steadier state operating model, having annual operating leverage, so pre-tax operating income as a percentage of net sales growth in the 20% to 25% range, EBITDA margins, adjusted EBITDA margins in the high teens, getting CFROI to the mid-teens or above, cash conversion around 100%± 10 percentage or 10 basis points, and having our leverage back into the 2.0 to 2.5x net debt to EBITDA. And you know, we think by 2027 we're gonna be close to many of these. Maybe, maybe given the level of revenue growth, maybe not the EBITDA and CFROI margins quite yet. But certainly in terms of growth rate and gross margin and leverage on the balance sheet, we think we're kinda at or better than these levels. And you know, the underlying dynamics that we expect, part of this is low single-digit real GDP growth, which is our kind of main growth underlying growth metric. And you know, relatively benign inflation and deflation, and the extent to which we have to deal with things like tariffs or other geopolitical dynamics that we can kinda work through those in 24 months or less, which you know, we talked about both at the Investor Day and before the Investor Day, some of our tariff preparedness. So, you know, when we look to 2025 and beyond, we really see wrapping up the transformation substantively by the end of 2025. Maybe some of it trickles into the earliest days of 2026, but not far beyond, really pivoting towards growth, and getting back to that mid-single digits growth, and then really deploying capital with discipline. We have a really strong dividend. We expect to have the balance sheet re-solidified by early 2026 or sooner, maintaining that dividend, and actively deploying capital, probably, you know, beyond things like investing in the organic turnaround and growth, and maintaining a strong dividend, probably more likely than not share buybacks in the near term. With that, turn it over to Q&A. Thank you. So, Pat, gross margins are a focus for the company. You've already demonstrated an ability to expand gross margins quite a lot of 400 basis points from 2023, despite a weak demand environment. What are the kind of building blocks to go from here in the low 30s where we are currently to 35%? Yeah. So for those aren't close to our story, you know, really they chopped out around 20%. And as you mentioned, we'll finish this year at 30%. We'll probably have the Q4 at 31 and a fraction, and carry that into the front part of next year. We're still trying to work towards 35% by the Q4 of next year. We might slip into some part of 2026, depending on headwinds and tariffs. But that's still our focus. And the three big levers that get us to 35% are additional waves of strategic sourcing, some further footprint rationalization. We probably are working out two to three facilities each of the next two years, creating some centers of excellence in the process of doing that. In addition, I'll call it some kinda maybe long-term integration opportunity that we're just realizing now. And then finally, some improvement in operational efficiency, mostly through lean. Those are the three big building blocks. I'd say that the road to 35% really is not about some new pricing dynamic, and it's really not about volume leverage. I mean, obviously, we need the volume to stop declining, but we don't need volume leverage. The route to 35% is very, very heavily cost structure focused. Right. And do you, do you see the next 400 basis points, call it from the low 30% to 35%? Understand going out longer term, you have up to 37%. Mm-hmm. But I mean, do you see that the next 400 basis points are somehow more challenging than the last? No, in terms of degree of difficulty or the types of levers we're pulling, I would say what's been the pacing of it, and this has been true in fiscal 2024 as it will be in fiscal 2025, is you're working on projects. And, you know, we laid a lot of this roadmap out more than a year ago. And as volumes have been softer, you end up with your net result isn't quite at the pace you wanted your net result. And it's forced us to roll in more projects sooner. So I would say the challenge of it has been the challenge of moving things in more quickly. Mm-hmm. To offset the soft macro volume environment that we've lived through for the last two, two and a half years. But the actual what we're trying to get done isn't, in and of itself, in isolation, more difficult. And I'd say all that you've seen, 'cause you, if you've followed us by quarter, it hasn't been a perfect linear line. It's kinda been more half-year increments. And that's more, it takes about, six months for stuff to come off our balance sheet. So, you know, anything we're doing the back half of this year is affecting the front half of next year and vice versa. And you're just kinda moving things into these, these waves of half years. Just one more question on gross margin for now. Sorry. We can move on from that, the weak demand environment. I apologize. That's been stated a couple times now. What are the biggest variables that you see that could maybe speed up or slow down the timeline or maybe lead to upside or downside versus the gross margin? Yeah, I'd say, you know, like I said, we're still as a team trying to raise as many initiatives forward to deliver on that Q4 2025. And we'll see, you know, we'll see as we get to early part of next year, and we'll give guidance, you know, what our read is on that. I'd say the things that would accelerate it would be, does the macro accelerate? We're mostly tied to construction, so that's pretty interest rate sensitive. I'd say, you know, having the 10-year get below 4% would be probably a pretty good help to that. Or do you end up with meaningful deflation, which in our world, you know, materials have been slightly deflated. It's really been freight that's been inflated. And so if that freight dynamic could die off, I think those things would accelerate. Right. The dynamic. In terms of operating profit, you have a pretty significant ramp through 2027, about $900 million. Mm-hmm. If I remember correctly in EBITDA. Correct. Yep. What are the drivers of that? I imagine gross margin is a big contributor to that, but also are cost outs on the OpEX line also contributing to that EBITDA ramp? I mean, we're gonna be doing what any mature and appropriately disciplined company will be doing inside of our SG&A of how do we make the back office more efficient to invest for growth? And are we getting the right level and pace of returns for any type of growth-based SG&A investment? But the pure EBITDA expansion that you talked about $900 million to $1 billion, which is correct over that three-year horizon, I'd say it's, you know, 3/5 gonna be a margin expansion and 2/5 volume growth over that time horizon at about a 3% volume CAGR over that time horizon. And then you do have SG&A probably growing $300-400 million consuming some of that. But I'd say as a percentage of sales, not deviating materially from where we are now. Right. And, in terms of investments and products, I know that's a big driver of organic growth over time. What level of investment should we expect over the next couple of years? What areas are you investing in? Yeah, yeah. I, you know, our investment focus has been threefold, enhancing and speeding product innovation, brand building, so activating the brands much more actively and then supporting them in the field, both field sales and field product support. Those have been, disproportionately what we're investing in. Mm-hmm. And disproportionately in our three biggest brands, DeWalt, Stanley, and Craftsman. The mix and the recipe has been a little bit different in each. You know, you have DeWalt, which is heavily a pro-centric brand, a truly global brand. And therefore, you know, there's a lot of investment we're making in specific trade categories, whether it's concrete, electrical, plumbing. You know, you have another brand, Craftsman, which is a heavy DIY retail-centric brand. So, I'd say tightening up the breadth of that product line and going a bit deeper on the direct-to-consumer marketing. And Stanley is a brand that straddles both of those spaces, and has a little different footprint outside. It's a. I'd say it's a bit more of a pro brand and a power tool brand outside the US And in the US, it's a pro brand, but a hand tool brand, right? And so the recipe's a little bit distinct for each, but all of them have elements of expediting product innovation, enhancing marketing, both direct-to-buyer marketing, but also the support with the channel. And then in the case of pro-centric field support of the brand. In terms of the recipe being a little bit different for the brands, DeWalt's strength has clearly been outgrowing the market over the last decade. Maybe DIY brands are struggling a bit more over the last two or three years. Are there differences in terms of the core product lines, in terms of what you're maximizing, whether it's organic growth or operating margin? Or would you say that organic growth is overall the priority across the brand? Yeah, I mean, the slight differences, but I wouldn't say in the pure algorithm of, there, you know, there's not one that's a growth vehicle and one that's a margin vehicle, and they're kind of going down very different paths. I think obviously, when you start looking at pro-centric tool brands, they're gonna be above our fleet average margin, but they also probably have as much or more growth potential just because, when you're bringing productivity, safety, quality enhancements to pros, they're willing to pay a premium and they're willing to switch faster than their existing tool expires. But we would expect them all to be within a relatively tight envelope of our portfolio averages. Right. Moving to organic growth, you have a low single-digit organic growth outlook, I believe, through 2027, longer-term mid-single digit, but that's outgrowing a low single-digit market. Market, yeah. What drives that outperformance for Stanley? Yeah, I think it's going to be the effectiveness and pace of innovation and the level of which we're supporting things in the field and a disproportionate focus on the pro. I think those will all be the things. You know, I would tell you, you know, COVID, the back half of COVID aside, and even if you take off the front half of COVID, you're probably looking at DeWalt was a brand that for the decade that preceded COVID growing at an 8% CAGR. You know, obviously different market share dynamics at that time, but we think very much within that brand to be growing mid-single digits or above for sure. Right. And is price, is there sort of a long-term strategy of price? Price has been held in, I think pretty well considering the destocking and the weak demand environment, at least on DIY. Is there kind of a longer-term growth algorithm that you think about when you think about mid-single digit growth? Yeah, but it's not really in the numbers we've shared today or the investor day, which are obviously the same. You know, that's kind of an assumption that competitive dynamics and brand health kinda represent the current frontier, which is, you know, really pricing. In the current state is kind of preserving% margin-type pricing and price-cost neutral on a percentage base. I do think an appropriate challenge for our commercial teams is once we have the brand health back to where we'd like it, especially in brands other than DeWalt. You know, can price be a more continual lever of revenue growth and margin expansion? But I think that's, you know, that's probably something that's more than five years down the road. I think we need to return to the pace of our innovation and get our brand health up a bit before we start leaning into price at that level. Right. When I think about the, in Stanley's company growth historically included in this, or just the US tools market overall over the last call it, decade, this is a market that's grown about 6% to 7% annually. Mm-hmm. So a bit, a bit above your mid-single-digit long-term target. Is there some conservatism in that mid-single-digit target given the challenges of the last two or three years? Or do you think that there's maybe, maybe some upside there given this is $100,000? I think there's upside. I think, you know, it's not so much intentional conservatism or there's a, you know, some hidden dynamic in there. It's more predicated on the, it would seem to us while there, we feel like we are exposed to a lot of very attractive growth opportunities in that there's a lot of pent-up demand for construction, you know, everywhere in the world, not just in the US. You are though starting to run into interest rate dynamics that are not, are likely to be not as favorable as near-zero interest rate dynamics, which affected a pretty good chunk of the time horizon you were going up against. And so all we're saying is we think construction markets will grow at or above GDP, but probably, you know, at a level that's distinct from when interest rates were near zero. That's really the basis of it so much as some intentional conservatism or other dynamic. And you, at the investor, you talked about some new geographies that you're expanding into, expanding the presence. And can you talk about that? Where are you seeing the biggest growth outside of the United States for Stanley's biggest market currently? And what types of investments will you need to make to grow that? Yeah, yeah. You know, we have a presence in Europe, which is going deeper. It's been in Eastern Europe for a while, but deeper in Eastern Europe and in Latin America. Both areas have been providing very consistent and very strong growth, on the backs of DeWalt and Stanley predominantly. We would expect those to continue. Then we've made some meaningful investments in the Middle East, Saudi, and beyond, around serving infrastructure buildout. You know, we would expect those to be disproportionate growers going forward. Understood. And one more question on growth within the brands. Like, I think the case for the pro, you know, higher productivity, safety, clearly that's worked for DeWalt. Is that something that you think applies equally to the sort of DIY brands? Is that equal focus of investment in R&D? I think, I think it applies heavily to things like Stanley and some of our other specialty brands like Lenox, with cutting tools that are, you know, would be deemed to be always kinda pro grade and premium priced. I think in the case of Craftsman, it's really about the garage, the outdoor space, and people wanting high performance at an attainable price, and ease of use. And so I think it's the stuff that proves itself in the pro, gets to scale, gets up the cost curve, then gets deployed in places like Craftsman. Talking about DIY coming back, DIY, I believe, its volumes are below 2019 levels at this point, I believe. Certainly in outdoor categories. Certainly outdoor categories. You mentioned interest rates a couple of times. Are there any other, kind of macro indicators that you're looking at to see a recovery in DIY? I mean, I think there is a little bit of tool life dynamic, and you know, while we haven't yet, and we talked about this on both of the last two quarterly calls, while we haven't seen POS in developed world retail, you know, especially kinda US and parts of Europe kind of sustain you know, four to kind of 13-week positive growth cycles, we have seen positive weeks, right, so I think it tells us, you know, independent of interest rates, that we're starting to kinda get to the bottom of the reset and tool life must be expiring 'cause we are seeing, you know, kind of the rate of decline has slowed. It might not be completely done. Mm-hmm. But if it's not completely done, it seems very close. Right. Moving to balance sheet, inventory reduction is a priority in terms of balance sheet. Yeah. Can you talk about that, how you're driving down inventory levels despite the low volume? Yeah, yeah. You know, for those of us who, those of you who've been maybe close to us, for a lot of 2023, it was really about idling capacity, whether you know, temporarily or more permanently than that, to get inventory out of the system relative to the demand at the time, and that was one of the reasons that affected the cost journey, right? 'Cause for a while, any plant that wasn't being closed, that absorption was just going onto the balance sheet as kind of expensive inventory. We're kinda through that cycle. We probably finished this year in the 150 days of sales range, mid-150s, you know, and we ultimately wanna get to about 120-130. So think of it as 125. So if we still have 25-30 days to get out of the system, we're probably two to three years away from that. The reason we're not racing towards it is a little bit less of an unwillingness to idle. It's more of the footprint changes we're also making. Mm-hmm. So as we close some plants and we create centers of excellence and consolidated footprint, and we're doing similar things with our distribution network, we need some inventory buffer as we work through that. And so the pace of inventory reduction is kind of a combination of the pace of footprint change and the type of footprint change that's going on relative to the demand cycle. But I would say we're, you know, we're probably taking $300-500 million of inventory out, each of the next two to three years until we're at that kinda 125± five days. At the capital markets, so you talked about divesting over $500 million or proceeds of over $500 million. What types of businesses are that? Are those, what are the criteria for divestment? Yeah, I'd say so. You know, we really wanna get our balance sheet back down to and below 2.5x net debt to EBITDA. We'd like that to be the case and our challenge to ourselves. And where we've been working with the rating agencies is to do that, or have an agreement to do that by the end of 2025. And we still feel like we're tracking to that. We've been meeting all of our balance sheet commitments. Just by the nature of a low volume growth environment, that's what requires the inorganic proceeds to do it. So we probably need to divest one or a couple assets, that can generate that type of net proceeds. I think first it starts with a strategic review, like what is core to your long-term growth and margin mission? And there's a few businesses that we love, but they're probably not the closest thing to our long-term mission. And you're right, you know, we talked about some subsets of each of our businesses in the past on this dynamic. I'd also say then you get to the practical realities of where is there an M&A market in 2025, 2026? Is the business ready to be sold? What's the challenge of extracting it when you got all this other stuff going on? And is the industry in a stable or upswing environment versus it's an industry in a down environment? So we have our eye on a handful of assets that probably fit that category. You know, we'll see what the new administration kinda puts forth in its first half of the year, and then we'll kinda make a decision from there on what that asset is and probably go into a process at that point. Moving from divestitures to acquisitions, are there any, you know, once the balance sheet is in order, areas that you would look to expand the balance sheet with your M&A? Yeah, I would say, we certainly at some point in the future would expect to reengage in M&A. It's not our most pressing matter. We wanna get our balance sheet in order. But I'd say just as important of getting our balance sheet in order is Chris Nelson, president of our tools and outdoor business and the COO of the whole business. You know, we need to get his team back to consistently having market beating growth. We need to get them operating with consistent margin performance and margin expansion and get the pace of innovation and the platforming engine going before we slap another big asset on it. So in other words, get our organic capabilities up before. So it's more than just a balance sheet dynamic. It's a balance sheet plus capability dynamic. I'd say, you know, it could be as soon as 2026 that we have capital allocation flexibility beyond the transformation, organic growth, and the dividend. That's probably more likely to go to share buybacks at that point in time. And once we feel like we have a really strong organic performance engine and a clean balance sheet, you know, we're probably inclined to do acquisitions in the tool space is probably where that would be. You know, aside from the cost restructuring, you know, the business has gone through a big transformation the last few years through the divestiture of oil and gas infrastructure security. What has that meant for the company, being more tools focused in terms of capital allocation? I mean, I think it's meant that, especially in this period where we're coming out of leverage, that we're protecting investments in organic growth, right? You know, that you know the company was such a strong acquirer for so long. That was among the highest calling of capital. It's really, I'd say, retraining the enterprise 'cause the company was built by a handful of really big brands, and brands were the primary consumer of capital. I think it's kinda getting back to the roots of that of having really strong organic growth agendas and feeding those appropriately, but also getting in place the mechanisms. You know, Chris's team this year is the second year where they're deploying the bulk of our $100 million of SG&A investment. You know, they have five metrics they're looking at, in terms of brand or a few of them are brand oriented, a few of them are product oriented, and a few of them are geography oriented around making sure when they deploy these investments that they are starting to return on the timeline we expect. Right. You're relatively new to the company. You said April 2023. You know, there's a lot of, a lot of management changes. You know, in your, in your time at, at Stanley so far, do you notice a change from what, you know, your perception of the company before you joined in any of the culture, the way it operated? Yeah, you know, I came from another durable goods player, not terribly dissimilar in terms of a company built by a mix of acquisition and divestiture over 100 years. You know, what I've noticed is a company with a lot of pride in its brands. You know, our biggest brands, you know, Stanley's almost 200 years old. DeWalt just celebrated 100 years. What I would tell you was true when I arrived, and it's still true today, is the passion for seeing the brand succeed and the passion for the end user and innovating for the end user. I'd say that's the core of the DNA, and that's what underpins the strength of the business, and we're trying to work actively to preserve. And then, you know, what this current leadership team has done has kinda pivoted the culture away from kind of an acquisition strategy heavy on acquisition and a heavy sales focus and pivoted more towards a brand and product focus. That's really kinda getting probably back to the historic DNAs of the business. So, that's where we've been investing our time in both cultural change and business and economic change. Right. Moving to tariffs, which have been a big topic of discussion. You talked about the framework going from the current tariff levels, China tariffs to 60% would add an incremental about $200 million on the current $100 million. So is that the way we should sort of think about it? 'Cause there's a lot of volatility in the potential tariffs that could be imposed for China. Is it sort of like, like one-to-one in terms of the tariff rate and the impact on the company given that framework, or there's something? Yeah, well, we did, and, you know, I encourage, if you're interested in this dynamic, we, we did at both the investor day and before, we kinda disclosed our US COGS are roughly half our global COGS. And then we had a pie chart of our U.S. COGS, which were 20%-25% China, 25%-30% neither China nor U.S., and then the balance 45%-50% U.S. And you can kinda take those COGS and, and those COG dollars and kinda run whatever scenario you think might happen. Obviously, even since investor day, there's probably been at least two tweets that have kind of changed that, and I'm sure there'll be a number more between now and February. I would say what we are anticipating, and we're anticipating even before the results of the election were known, is over time, it seems to us as a company that we need to make our US business less reliant on China, almost irrespective of whether that's a Republican or Democratic regime, you know, both for geopolitical tension reasons and kind of understandable interest in protecting the American workforce reasons. So I'd say, you know, that means while we've taken the US, the U.S. market was probably getting 40%-45% of its products from China, now 20%-25% of its COGS from China, we need to keep on that path, and all the tariff dynamic does is reorder the pace of that path, right? You know, it's the faster the government forces it, then the faster it's not just our company forcing ourselves to move. We gotta move suppliers with us. We gotta reorient where our engineers are based. And those are, those tend to be harder than us choosing where to have a new rooftop. It's, you know, how do you get your suppliers and your engineers to move that quickly? So I think that is gonna happen kinda irrespective of tariffs. And that's why we pointed towards the China dynamic. I think as you've seen in the intervening weeks, it's gonna be a fluid environment. And we're probably gonna have to deal with more than just China, but our expectation is most of those things will be temporary. And irrespective of what comes at us, we're gonna use a combination of price, supply chain moving and government relations to deal with it. We'll work really hard on the price front to preserve our margins as we go through the early innings of it. That $200 million of incremental cost from China going from 25%- 60%, is that assuming you don't raise price, you don't, and no one does? Yeah, that was just kind of the COGS, right? That's kind of the, if you take this pool of, and we were being specific of list one, two, three, and four A, which are the four things that are currently tariffed. That's just the pure cost. We wouldn't expect to just accept a $200 million hole in our P&L. We would start by pricing, and then we would be changing the supply chain, and then those two things would get kinda rebalanced over time. Right. And thinking about, you know, the tariff escalation in 2017, Stanley has materially brought lower its China COGS exposure, now 20%-25% you mentioned. Is there anything else? I mean, understand that, that precedes your time at the company, but is there any other changes that, that the company's made to kinda set up the next round of, you know, avoidance of tariff, tariff ex-escalation? No, I'd say, I mean, again, as we went down a cost transformation journey the last three years, we also had, as part of that, a longer-term supply chain resiliency strategy, which is over time, how do you get, you know, more NAFTA for NAFTA, more, Asia for Asia, and how does that, how does that Asia for Asia become less China-centric? And I'd say those were always elements. So as, the kinda 2022 through 2025 cost journey was playing out, you were trying to, as you, as you rationalize your footprint, go to what you expect your end state to be. And we're still doing that. You know, putting first cost and then geopolitical diversification second, I think all tariffs does is kinda commingle those or reorder them a little bit, on the margin. One more question on tariffs. Are there any aspects of, you know, a lot of moving pieces in the transformation with the balance sheet, inventory reduction, gross margin? Are there any pieces of that that you think are most at risk, or do you think it's all manageable based on offsets? I think, I think tariffs really affects the pace of margin going up, but not in some way that's, you know, like we're talking about multiple year shifts, right? You know, does it put you six to 15 months behind a timeline you'd like to otherwise have, just because you know, there are finite hours in the day and people even, we are willing to invest in more people that you know could shift that. But I don't think it's more than that. Right. And you know, that brings to mind the question I wanted to ask on gross margin earlier. You know, it's assuming no real change in demand, which remains weak. And so, would you anticipate, you know, the gross margin ramp to be helped materially by, you know, capital? Yeah, definitely. It would definitely be, you know, what we would really welcome, a volume tailwind. But we're committed to getting the 35%+ margins, you know, absent that for sure. Right, right, and oh, question? Just follow up on that tariff thing. Yeah. To get more capacity in the US, you can't flip a switch. How, how long would it take for you to get the 25% from China down to something less than 10%? Is there unused capacity in the United States that you could reach out to your suppliers, or is this something that's gonna take a workforce training and factories be built and would take a couple of years? Yeah, you know, and again, I sometimes hesitate to be the mouthpiece of the new U.S. industrial policy. I think it in the U.S. specifically. First, I'd remind that we do have 40%-45% of our capacity already here, which is mostly hand tools and outdoor power equipment. You know, power tools are mostly outside the US, not exclusively, but mostly outside the US It's less about rooftops and it's more about labor, right? We're starting with a 4% unemployment rate. I don't wanna trivialize the rooftops, but you think of, you could probably solve the rooftop equation. It's equipment it takes for equipment that runs plants. They tend to be nine to 18 months, sometimes longer than 18 months equipment lead times if you're not just moving the equipment, if you have to actually buy it new, and then it's labor. And so I think to the extent some or all of the tariff push actually becomes about where plants are located, it's not likely to all be coming back to the US. You know, could there be small subsets of it? Yes. Probably more likely than not governed by labor and equipment lead times than by real estate. I think the time's up. So thank you very much. Thank you. Thank you. Thank you for the interest. Have a good afternoon.