Great. Thanks, everyone, for being here. It's my pleasure to have next Stanley Black & Decker, Patrick Hallinan, CFO, and Dennis Lange in Investor Relations. So thanks very much, Pat and Dennis for being here. Not sure if you wanted to make some intro remarks. I'll start off with a few things and then turn it over to you for questions, Julian. But yeah, thank you. Thank you for the interest. Those of you who followed us of late, obviously we're on a journey of recovering our margins and growth post some COVID disruption. Last year our focus was really on gross profit margin recovery, cash generation, and starting to implant the seeds of growth investment. And those are all the things we executed on last year. We hit our gross margin target, actually finished the back half a bit stronger than we expected, and we generated $850 million of cash and used a good portion of it to de-lever, and we made $125 million of growth investments. And this year we have a very similar focus. Until we get our gross margin back up to a traditional level of 35%+, we're gonna stay very focused on getting our gross margin up to a level that can sustain innovation, brand building, and investment in talent where we need to, and stay focused on generating cash to de-lever. But we're also gonna continue to plant some growth investments, and we're gonna invest about $100 million this year in innovation and field resources and brand building. So, we're pretty proud of what we delivered, with a tough macro in 2023. You know, 2024 is an important year of showing continued progress, but I'd say it's for the longer-term journey to return Stanley Black & Decker to above-market growth, which would be kinda mid-single digits or better top-line growth and a 35%+ gross profit margin with, you know, cash conversion that's high, around 100% ±10 points depending on what we're investing in. But, you know, that's our focus, and we're well down that path, and we continue to make progress at the trajectory we expect in a tough macro, which I think 2024 will be another tough macro. Great. And so you mentioned, Pat, the sort of tough macro for the year, and that's obviously embedded in your guide already. You know, maybe just any sort of pointers, you know, how's the year starting out in terms of, you know, there's the interplay of your own inventory reduction needs, then the sort of point of sale, something else. You know, how, how are those two things present? Yeah, yeah. Well, I'll talk about first demand and then how does that relate to our top line 'cause two important moving parts. You know, I'd say all of last year, 2023, was probably about 400 basis points softer than our opening guidance for 2023, our annual plan. Now, much of that was baked in updated guidance throughout the year. We were probably a little bit softer at the finish, you know, on a revenue base of about $15.5 billion for the full year. We were maybe about $100 million softer in the whole fourth quarter than we would have expected. I'd say the start of this year, it's always in durables, especially home-centric durables. It's tough to read until you get to the full spring season, but I wouldn't say it's gotten any better or any worse since the fourth quarter. It's kind of started with a soft DIYer, especially at high price points and outdoor, and a strong pro. And I'd say in our industrial business, you know, strength in aerospace, and EV automotive and smart storage, which is also very linked to defense like aerospace is, has persisted in general industrial softness. So I would say the start of the year feels like the end of the year, the end of 2023. I'd say as it relates to sales, in most of our businesses, the channels have adjusted their inventory during 2023 or earlier. There's a few exceptions that I'll touch on. So, you know, for the most part, we feel like we're through most of any destocking. So, you know, sales in 2023 were a little bit behind POS in 2023. We don't see big things like that on the horizon. There's a few pockets, like in independent dealers of outdoor equipment, where you could see some more of that, and in some parts of the inventory chain that supplies general industrial fastening, but not big magnitudes of things. So I think right now our sales line should be moving in pretty close lockstep with POS. Maybe not perfectly, but they shouldn't be big gaps between the two. Understood. When you think about that sort of consumer aspect, 'cause you said it's sort of soft DIY, strong pro, how's kind of pricing holding up? You know, people were concerned. Third quarter, it seems softer, firmer again. Fourth, Yeah, I'd break it into a few things. I'd say one, if you just talk about manufacturer competitive dynamics. Mm-hmm. I've seen good discipline. You know, I suspect all of us would like our margins to be better, and all of us would like to find more money to invest for long-term growth. And so I'd say manufacturing pricing has been very disciplined, and we don't see those dynamics breaking down. There's no indication that it certainly didn't happen last year, not even the back half of last year, and it's not changing right now, even with everybody having a bit more inventory than they would like. They're not using price to move inventory. They tend to be adjusting capacity to move inventory. I would say there's not big changes in inflation-deflation in our space, so there's not a driving force from inflation-deflation. And so we see pricing being steady, and we're gonna be very—our objective this year is to be very disciplined. Because we haven't seen deflation rear its head in a big way, or because our margins aren't where we'd like them to be, we have pretty firm ground with our channel partners to stay on that. I would say it's going to be interesting if the big boxes, not just in the U.S. but elsewhere, get deep into a second year of another negative year. Does something change? I mean, that's where I have my eye, more on a manufacturer dynamic. But right now, pricing is pretty steady. And if it ebbs and flows in our quarters, that's just mix and promo volumes, relative to normal cadence. How about your sort of, you know, market share perspectives in, say, tools and outdoor? It feels like outdoor, you've been performing a little bit lower than some peers, tools very much in line. Yeah, I would say, reasonable observations. Outdoor's always a little bit more difficult because everybody has very different ex market exposures when you look at the peers. I'd say we're all feeling our own pain, and the pain seems to be of a similar order of magnitude in outdoor as you get a post-COVID rebalance. But when I look at tools, by far and away, our biggest brand is DEWALT. Yeah. which competes globally, and it competes in all noteworthy channels. You know, DEWALT had a very good year. You look at the POS we can collect globally for DEWALT, it was about flat for the year, right? And that, you know, you heard, you know, Depot report their full year earnings. I mean, that's a very respectable performance. I know there's sometimes another competitor out there who's above that, but relative to market, DEWALT is still performing well relative to the market. We have some other tool brands that are very DIY-centric and very retail-centric, where we need to work with ourselves and with our channel partners to improve their performance, brands like CRAFTSMAN and STANLEY. And so I think that's the mix of results you would see in our tools business. I would say in outdoors, when we look at outdoors, I, you know, I don't think we feel like it's really a market share issue. It's a high price point; in fact, our portfolio has a high price point, gas ride-on component, which has been what I think some of where some of the most extreme pain is. If you look at our handheld battery outdoor growth, it's been very, very strong, a double digit, and very good margins. So I think we're gonna have to find the base in COVID. And so our job as stewards of brands and investor returns is we're gonna have to probably do more capacity takeout in outdoor and more SG&A right-sizing in outdoor to kinda get that business rebalanced for the current demand profile. Got it. And when you think about the sort of, you know, SKU reduction program, you know, how, how is that affecting, you know, share, you know, shelf space, that type of thing? Yeah, it's a valid question because we keep, you know, throughout the year, I think when I joined in April, we were around 50, 45, 50 thousand. By the middle of the year, it was around 70, and we probably were around 85,000 SKUs identified with, you know, Dennis Lange, if I'm wrong, maybe of those 85,000, 40 or 50 out of the at least out of production. I will tell you, Julian, that that is important work for decluttering the environment and enabling the footprint change and the sourcing change and optimizing in-plant performance, but it has not been a big driver of share or sales. You know, most of us have been in a business if a general manager has a reason to complain, they will complain. When they come in to talk about their sales, they're not pointing to SKU reduction as, as one of the issues, right? It's, it's usually a high price point goods, DIY-centric goods, outdoor goods have been our headline. Does that sort of $50 million-ish number still, yeah, seem sort of bright? That would be if we lost it all, which, you know, that's not. That has not been the case. That is not. I wouldn't say you could point in any material way to the finish of 2023 and point to SKU reduction being somehow responsible for, you know, a T&O full year sales performance that was roughly down 7% organically. There's not some meaningful SKU rationalization driver of that. Got it. When we think about kind of the pace of Stanley's own inventory, you know, how quickly or when does that get back to that? You know, it was mid-teens as a share of sales pre-COVID. Yeah. Maybe you'll run with a bit higher than that for some time, but, you know, how quickly do we get down from the current levels? Yeah, I think, on a day's basis, you know, pre-Outdoors, we were more like in the 110-ish range. Yeah. Pre-Outdoors and pre-CAM, which is our aerospace business. We might end up more like 115, 120-ish, or thereabouts. But I think we're still two to two and a fraction years away from that. Yeah. It's not, it's not for want of getting there or knowing what to do to get there. It's really our inventory right now. If sales stayed flat, it would be about $1 billion more inventory dollars than we would like. But it's disproportionately concentrated in batteries, in all manner of electrical components, and in outdoor, and especially outdoor that supports independent retailers. And so, you know, probably chip away at that $400 million-$500 million every 12 months. Yeah. You know, if we can get 500 done in two years, that gets us to it in two years. If it's four, it's two and a slight fraction. But it's really because given the contacts we have with our battery and electrical suppliers, and given the pace, you can move outdoor equipment while staying price and disciplined, it's kind of that pace. And, you know, that excess is not spread across all product categories and brands. Most of the other product categories and brands are pretty much where you would like them. Mm-hmm. Most of our channel partners, except for some of the independent retailers in outdoor and in some general industrial fastener customers, their, their inventories are pretty lean as well. And so it's not a broad-based dynamic we're solving for. You know, when we think about kind of the cadence of earnings through this year, I think you were quite explicit about sort of first quarter. You know, how do we think about that ramp of earnings post that? I realize there's some sort of dynamics of, you know, EBITDA and then the below-the-line moving as a whole. Yeah. Well, there's multiple moving parts. I mean, we, you know, we finished the back half of 2023 with a gross profit margin around 28.7%, which was the average for the back half. We expect to make progress on that margin percentage in the first half, probably in the 25 or 30-50 basis point range. And we expect some seasonality, a return to start getting some normal seasonality where Q2 revenues become kind of more if, if not the highest, certainly among the higher revenue quarters. And so when you look at revenue, you know, times a 29-ish% margin, you're gonna end up with pretty good EPS growth year-over-year, but that's because the front half of 2023 was underwater. And then, the back half of our year in 2024, we're gonna have some more traditional seasonality around the fourth quarter, so a little bit lower revenue. but that's when we expect to have kind of disproportionate margin performance. And so, you know, especially around the fourth quarter, we're gonna be in the low 30s. So those are gonna be the things that, that drive it. But I, you know, I'm sure 2024, like the last five or so years, will be dynamic. You, you know, when you're talking one of our quarters being, $3 and a fraction billion of revenue in total, you're talking any one quarter can be moving at one or two points variance across the quarter. And you're kinda talking, a 29 or low 29 average gross margin for the front half, and then most of the gross margin expansion coming in the back half. And that's kinda how I'd be thinking about and I would. Or SG&A cadence. You know, we're gonna be maybe a bit conservative on SG&A absolute dollars of the back half of the year, but again, somewhat flattish throughout the year, just because we were exceptionally conservative the first half of last year, right? And so, I think most of our year is gonna be bopping around the 21%-ish plus or minus a fractional percentage point in any given quarter. And I think that's gonna be the quarter. I think the tax rate is gonna be what drives the EPS number a bit more dramatically, and that is some of our planning is gonna be very back-half weighted. You know, we're guiding a 10% adjusted ETR for the year, but it's gonna be more like in the low to mid-20s the front half of the year. Got it. So second quarter versus the first, on the sort of sales and margins, not that different. The sales step up a little bit. The sales step up. [audio distortion] There'll be some leverage. Yeah, with that. Yeah. And where are we on sort of outdoor, you know, from a steep drop off a very inflated base. Base. You know, when do you sort of see that start to improve? And are the inventory issues very, you know, could that take about three years to get rid of? Yeah. I think because the decline and reset post the COVID peak has been so significant, even in a place where you've taken price, you know, it's probably gonna wind up being at least a quarter. Yeah. Or thereabouts, if not more. And that's on a revenue basis, right? It's more on a volume basis. We're gonna have to reset the cost structure for that. Yeah. I think where we are right now is, certainly the pace of deceleration has slowed quite considerably. But you can imagine after, you know, the peak was in 2021, after three years of challenges, the channel is incredibly skittish right now. Yeah. So, you know, where the channel is in that business is, you know, they're only gonna, you know, take inventory once they see the velocity in their environment pick up, which it hasn't yet picked up. So, you know, we're, we're gonna control what we can control this year, which is we're gonna right-size the cost structure, both, both the, the physical capacity we have and, and the SG&A, and really focus on where do we have the most right to win. And that's more of a geography and, and product line breadth question for us. And I, you know, I, I expect we'll be through it in 2024, but I don't expect that, it will be a pleasant surprise if 2024 suddenly turns into a growth year in outdoor. That would be a that would be an inflection, that hasn't yet occurred. How do we think about sort of margin, you know, as you said, the sales had a big bounce, then a very long drawdown. You know, where do margins sit versus that segment average? What’s their sort of entitlement medium term? Yeah. You know, I will tell you, we're targeted on trying to get that to be. It's probably never going to be at the level of a DEWALT power tools. Yep. If you have a segment that's gonna be averaging 35+, it's certainly gonna be below that. Yeah. You know, we'd like to get it around 30. Well, you know, whether we can is gonna be, because the pace of electrification has been different than we would have thought and the breadth of the electrification penetration. So we're revisiting that. But, you know, I think it's a big this is a big year, with Chris Nelson on board running that business. Yeah. Of outlining the future of that business 'cause we've, I don't wanna say our progress in tools is done, but we've made a ton of progress in tools and less progress in outdoors. And, you know, we need that business to be able to grow better than market, and we need that business to be at, at least a 30+. I don't wanna say that that's our, our final answer, but that range. Otherwise, you gotta challenge, you know, how are we gonna allocate resources in our portfolio at that point, right? Yeah. So that's our focus. I think this year is gonna be a big year as, again, tools isn't gone, but we can afford a bit more brainpower to be diverted to that, to that focus and also doing it under the light of the current buying load. And in terms of sort of cost reduction, you know, what's the sort of satisfaction with the progress there, particularly versus the revenue line? And at what point would you, you know, have to think about, "Okay, do we need to extend the plan if revenues are not doing X? We're trying to not do that. I mean, I will say honestly, it was a challenge. You know, as you know, the program we've lined out, if you haven't been following us closely, is a $2 billion by 2020, by the end of 2025, $1.5 billion of which is COGS-related. So we've done the SG&A part. Yeah. We've done about 850+, 900-ish of the COGS part in there. Thereabouts. The progress that we lined out wasn't ever predicated, that $1.5 billion, on a big leverage lift inside the facilities. Mm-hmm. but it also wasn't predicated on a big volume decline. And we saw volumes last year that were about 400 basis points lower than the original transformation plan. Yeah. Our guide this year at zero is about 400-500 basis points below our original transformation plan. So we are pulling savings initiatives forward to deliver the same dollars in the same timeframe, and we did that successfully in 2023. We'll have to do that again in 2024 to deliver the full $500 million of 2024. We expect to do that, and it will challenge us, Julian, but we feel like we have a pathway to it, and we don't anticipate changing that 35% by Q4 2025. Obviously, if the macro changed materially down further, then we might have to revisit that, but that's not where we are right now. You know, reinvestment-wise, as you said, I think it's sort of, you know, 125 last year, 100 this year. Is that, you know, sort of difficult to pause that once you get into the run rate 'cause if the sales recover, there should be more reinvestment. But do we assume there's another sort of 100+ next year, and then after that, we may be in a steady state? Yeah. No, I, you know, I, I'd say, you know, obviously, the rate at which we can get a macro that drives volume, the pace of our, our growth margin and our cash conversion governs that. But, you know, where I would say is there's, there's certainly 100, if not more than 100 in the next couple of years. Mm-hmm. But if you're trying to target, you know, I've been a little bit reticent to say what should be the SG&A, the percentage of net sales, 'cause over our history, it's kinda moved anywhere from 19, if not lower than 19. Mm-hmm. To over 22, and obviously, because of our performance volatility, it's moved around quite a bit. This year, it'll be like 21, 22. Mm-hmm. Unless the macro starts to speed up greatly, I would say I would be, as a CFO, fighting for the long term, fighting to keep it at least 21 until the macro really lifts it. And the reason for that is I do feel long-term, we have a big-time right to win. Yeah. but we need to reenergize our innovation and our brand building. And so, you know, if you were putting something in a model, I, I'd be modeling in the range of 20%-21% medium term, and I don't know that we'll go below that in the future. It'll depend on are we getting returns for our innovation? Are we getting returns on our brand building? 'Cause if we are and we're able to realize good price, I don't know that we need to go back down to the teens. Yeah. to drive a returns matrix for investors that are attractive. I'd rather get our team excited about innovating and realizing price capture. Got it. And when we think sort of medium-term earnings power, you know, any sort of impressions there now, you know, we're getting on for sort of, you know, 18 months into the existing plan? Yeah. Well, when I started, I was already living with 2024 guidance, so I'm gonna avoid giving myself 2025 guidance. But, you know, what I would tell you as a leadership team, you know, while we were focused on gross margin and cash right now. Yeah. Because it's what gives us the fuel to invest in business our business and deliver, you know, our long-term objective is greater than 35% gross margin. Yeah. Can we get EBITDA margin to the high-teens, mid- to high teens, and can we get ROIC back to kind of the, the high teens or better? That's our objective. I don't think that is all gonna come to fruition in 2025 and maybe not even in 2026. Yeah. When the leadership team gets together and says, "Where are we pointing to on a 5+ year basis?" That's, you know, therefore, when we look through the lens of what should be in our portfolio and what should we be allocating resources and investing in, are there things that can fit into that profile? Understood. And then, so there's sort of a, yeah, high single-digit EPS dollar number is, yeah, sort of a couple of years. Yeah. Type of framework. Yeah. And then the free cash flow dollar-wise, you know, last year was a very good year 'cause of working capital liquidation. This year, less of a working cap tailwind, but EBITDA recovering somewhat. How are we thinking about sort of free cash flow, you know, after this year? You've got another year of working cap tailwinds, EBITDA improving. So is this dollar-wise, is this a reasonable sort of free cash flow, you know, rate? Right. That's $7,800 million a year. Yeah. I mean, next year, though, 2025, that is. Yeah. Should step up with EBITDA growth, 'cause you'll see the dynamics as we move from 2023 to 2024 on cash is EBITDA recovery. Yeah. Is about sufficient to offset a lower working capital reduction. Yes. Last year, we reduced working capital roughly $1 billion. This year, we've scored $500 million. EBITDA recovery, that those are neutral. Cash, free cash flow is about $150 million lower in 2024, but only two drivers: higher CapEx as we do footprint changes. Yeah. and higher, cash cut transformation as we do footprint changes. As we head into 2025, you have basically a like working capital reduction, so no delta driven by that. Yeah. We should have lower, cash, oriented restructuring charges and then EBITDA growth. So, you know, I think I think the cash next year, 2025, effectively grows, roughly around the contribution margin, which you could think of as something approximate to, to, gross margin, you know, somewhere in the 30%-20-some% range with, volume growth. Got it. So, okay. So look, yeah. So the cash conversion is it's improving next year. Correct. 'Cause, yeah, less restructuring. Okay. Yep. Because we'll also be, we're gonna be in order to maximize deleverage, we'll be trying to hold CapEx constant 2024-2025, if not a bit better than that. Yeah. And then leverage path, last very quick question? Yeah. slope of. Yeah. I mean, organically, you're looking at, you know, $3 million to $400 million a year down of debt reduction. Yeah. As somebody knows, we sold an infrastructure business. We'll get, you know, net proceeds somewhere north of $700 million on that, and we'll use all that to pay down debt. You know, we may do some other modestly sized M&A, but I think if you put that aside 'cause we can't control. Yeah. If and when that happens perfectly, you know, we'd probably finish 2024 at about, about a little above four times with Moody's and a little bit below four times with Fitch and S&P. Yeah. And then we're probably a full turn better than that, the next year. Perfect. And then I think we have to turn quickly to audience response survey questions, so if you could grab those gray boxes. First question, do you currently own Stanley? So a lot of opportunity there. Number two is around sort of current bias or predisposition towards the name. You know, generally positive. Third one is around the earnings growth and, yeah, the peer set here, at least for this context, is sort of multi-industry companies. So it's sort of below the group average. Next question is around excess cash usage, so small sort of scope of the discussion for now. Yeah. So debt reduction. Next one is around valuation. So what's the sort of year one PE? Obviously, the E's depressed. So a real broad range there, broader than normal. And the final question, kind of what's the key gating factor, like why don't people own more of the shares? So a broad sway, on that front, mostly margins. Well, with that, thanks so much, Pat and Dennis. Thank you. Appreciate it. Thank you. Enjoyed that. Appreciate the invitation. Thanks, Mitch, to you. Yeah.