JBI Janus International Group Inc

Delivered 9.8% Organic Revenue Growth

Grew Net Income to $26.0 Million, or EPS of $0.18 Per Diluted Share, with Adjusted EPS of $0.18

Delivered a 37% Year-over-Year Increase in Adjusted EBITDA to $61.2 Million

Adjusted EBITDA Margin Improvement of Approximately 480 Basis Points Year-over-Year

Reduced Net Leverage by 0.4x to 2.4x, Year-to-Date

Raises Full-year 2023 Revenue and Adjusted EBITDA Guidance

Janus International Group, Inc. (NYSE: JBI) (“Janus” or the “Company”), a leading provider of cutting-edge access control technologies and building product solutions for the self-storage and other commercial and industrial sectors, today announced financial results for the first quarter ended April 1, 2023.

First Quarter 2023 Highlights

• Revenues of $251.9 million, a 9.8% increase compared to $229.5 million for the first quarter of 2022, driven primarily by strong performance in Restore, Rebuild & Replace (“R3”) up 26.9%, as well as modest increases in New Construction and Commercial and Other.
• Net income was $26.0 million, or $0.18 per diluted share, compared to a $19.7 million, or $0.13 per diluted share in the first quarter of 2022.
• Adjusted Net Income (defined as Net Income plus the corresponding tax-adjusted add-backs shown in the Adjusted Net Income reconciliation tables below) was $26.4 million, up 31.6% compared to $20.1 million in the first quarter of 2022. Adjusted Net Income per diluted share was $0.18, compared to $0.14 per diluted share in the prior year quarter.
• Adjusted EBITDA of $61.2 million, a 37.0% increase compared to $44.7 million for the first quarter of 2022, driven by increased revenue primarily in the R3 sales channel, partially offset by incremental general and administrative expenses. Adjusted EBITDA as a percentage of revenues was 24.3%, an increase of approximately 480 basis points from the prior year period due primarily to increased revenue from commercial actions taken in 2022, partially offset by inflationary increases in raw materials, increased labor costs and increases in personnel as we work to scale the business for continued growth including additional investments in Nokē.
• Operating cash flow of $50.2 million compared to $24.8 million in the first quarter of 2022. Free cash flow was $44.2 million compared to $21.9 million in the first quarter of 2022, representing a trailing twelve-month free cash flow conversion of 88% of Adjusted Net Income.
• Quarter-end net leverage ratio of 2.4x – a decrease of 1.9x from the first quarter of 2022 and 0.4x from the fourth quarter of 2022, with continued focus on maintaining leverage within our target range of 2.0x - 3.0x.

Ramey Jackson, Chief Executive Officer, stated, “Continued strong demand from our customers and a focus on cost control resulted in a solid start to 2023. We generated year-over-year revenue growth across all sales channels with particular strength in our R3 segment, drove a 480-basis point improvement in our margins, and once again generated strong cash flows. Our outstanding performance resulted in another step change improvement in net leverage, which decreased nearly a half turn in the quarter to 2.4x and now sits comfortably within our long-term target range.”

Mr. Jackson continued, “Despite recent macroeconomic volatility, we see strong fundamentals in our end markets, particularly in self-storage. Our market-leading products and suite of solutions offerings continue to make us the partner of choice for our customers as they drive additional investment in existing facilities and new construction. Our robust cash generation profile situates us well to drive share gains and additional margin improvements as we continue to invest in our growth strategy. Based on our strong first quarter results and outlook for the balance of the year, we are pleased to raise our full year 2023 revenue and adjusted EBITDA guidance.”

2023 Financial Outlook:

Based on the Company’s current business outlook, Janus is raising full-year 2023 guidance as follows:

• Revenue in a range of $1.06 billion to $1.08 billion, up from the previous range of $1.05 billion to $1.07 billion. The new range represents a 5.0% increase at the midpoint as compared to 2022 levels.
• Adjusted EBITDA in a range of $253 million to $278 million, up from the previous range of $250 million to $275 million. The new range represents a 17.0% increase at the midpoint as compared to 2022 levels.

The estimates set forth above were prepared by the Company’s management and are based upon a number of assumptions. See “Forward-Looking Statements.” The Company has excluded a quantitative reconciliation with respect to the Company’s 2023 guidance under the “unreasonable efforts” exception in Item 10(e)(1)(i)(B) of Regulation S-K. See "Non-GAAP Financial Measures" below for additional information.

About Janus International Group

Janus International Group, Inc. (www.JanusIntl.com) is a leading global manufacturer and supplier of turn-key self-storage, commercial and industrial building solutions, including: roll-up and swing doors, hallway systems, relocatable storage units and facility and door automation technologies. The Janus team operates out of several U.S. locations and six locations internationally.

Conference Call and Webcast

The Company will host a conference call and webcast to review first quarter results, discuss recent events and conduct a question-and-answer session on Thursday, May 11, 2023, at 10:00 a.m. Eastern time. The live webcast and archived replay of the conference call can be accessed on the Investors section of the Company’s website at www.janusintl.com. For those unable to access the webcast, the conference call will be accessible domestically or internationally, by dialing 1-877-407-0789 or 1-201-689-8562, respectively. Upon dialing in, please request to join the Janus International Group First Quarter 2023 Earnings Conference Call. To access the replay of the call, dial 1-844-512-2921 (Domestic) and 1-412-317-6671 (International) with pass code 13738318.

Forward Looking Statements

Certain statements in this communication, including the estimated guidance provided under “2023 Outlook” herein, may be considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included in this communication are forward-looking statements, including, but not limited to statements regarding Janus’s belief regarding the demand outlook for Janus’s products and the strength of the industrials markets. When used in this communication, words such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions, as they relate to the management team, identify forward-looking statements. Such forward-looking statements are based on the current beliefs of Janus’s management, based on currently available information, as to the outcome and timing of future events, and involve factors, risks, and uncertainties that may cause actual results in future periods to differ materially from such statements. In addition to factors previously disclosed in Janus’s reports filed with the SEC and those identified elsewhere in this communication, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (i) risks of the self-storage industry; (ii) the highly competitive nature of the self-storage industry and Janus’s ability to compete therein; (iii) litigation, complaints, and/or adverse publicity; (iv) cyber incidents or directed attacks that could result in information theft, data corruption, operational disruption and/or financial loss; and (v) the risk that the demand outlook for Janus’s products may not be as strong as anticipated. There can be no assurance that the events, results, trends or guidance regarding financial outlook identified in these forward-looking statements will occur or be achieved. Forward-looking statements speak only as of the date they are made, and Janus is not under any obligation and expressly disclaims any obligation, to update, alter or otherwise revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. This communication is not intended to be all-inclusive or to contain all the information that a person may desire in considering an investment in Janus and is not intended to form the basis of an investment decision in Janus. All subsequent written and oral forward-looking statements concerning Janus or other matters and attributable to Janus or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above and under the heading “Risk Factors” in Janus’s most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q, as updated from time to time in amendments and its subsequent filings with the SEC

Non-GAAP Financial Measures

Janus uses measures of performance that are not required by or presented in accordance with GAAP in the United States. Non-GAAP financial performance measures are used to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures should not be considered in isolation or as a substitute for the relevant GAAP measures and should be read in conjunction with information presented on a GAAP basis.

Adjusted EBITDA and Adjusted Net Income are non-GAAP financial measures used by Janus to evaluate its operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Accordingly, Janus believes Adjusted EBITDA and Adjusted Net Income provide useful information to investors and others in understanding and evaluating Janus’s operating results in the same manner as its management and board of directors and in comparison with Janus’s peer group companies. In addition, Adjusted EBITDA and Adjusted Net Income provide useful measures for period-to-period comparisons of Janus’s business, as they remove the effect of certain non-recurring events and other non-recurring charges, such as acquisitions, and certain variable or non-recurring charges. Adjusted EBITDA is defined as net income excluding interest expense, income taxes, depreciation expense, amortization, and other non-operational, non-recurring items. Adjusted Net Income is defined as net income plus the corresponding tax-adjusted add-backs shown in the Adjusted EBITDA reconciliation.

Please note that the Company has not provided the most directly comparable GAAP financial measure, or a quantitative reconciliation thereto, for the Adjusted EBITDA forward-looking guidance for 2023 included in this communication in reliance on the "unreasonable efforts" exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. Providing the most directly comparable GAAP financial measure, or a quantitative reconciliation thereto, cannot be done without unreasonable effort due to the inherent uncertainty and difficulty in predicting certain non-cash, material and/or non-recurring expenses or benefits, legal settlements or other matters, and certain tax positions. Because these adjustments are inherently variable and uncertain and depend on various factors that are beyond the Company's control, the Company is also unable to predict their probable significance. The variability of these items could have an unpredictable, and potentially significant, impact on our future GAAP financial results.

Adjusted EBITDA and Adjusted Net Income should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA and Adjusted Net Income rather than net income (loss), which is the nearest GAAP equivalent of Adjusted EBITDA and Adjusted Net Income. These limitations include that the non-GAAP financial measures: exclude depreciation and amortization, and although these are non-cash expenses, the assets being depreciated may be replaced in the future; do not reflect interest expense, or the cash requirements necessary to service interest on debt, which reduces cash available; do not reflect the provision for or benefit from income tax that may result in payments that reduce cash available; exclude non-recurring items (i.e., the extinguishment of debt); and may not be comparable to similar non-GAAP financial measures used by other companies, because the expenses and other items that Janus excludes in the calculation of these non-GAAP financial measures may differ from the expenses and other items, if any, that other companies may exclude from these non-GAAP financial measures when they report their operating results. Because of these limitations, these non-GAAP financial measures should be considered along with other operating and financial performance measures presented in accordance with GAAP.

Janus International Group, Inc.

Consolidated Statements of Operations and Comprehensive Income (Loss)

(In thousands)

 

 

Three Months Ended

 

April 1, 2023

 

April 2, 2022

 

(Unaudited)

 

(Unaudited)

REVENUES

 

 

 

Product revenues

$

209,664

 

 

$

197,306

 

Service revenues

 

42,240

 

 

 

32,214

 

Total revenues

 

251,904

 

 

 

229,520

 

Product cost of revenues

 

120,068

 

 

 

128,560

 

Service cost of revenues

 

31,903

 

 

 

24,390

 

Cost of Revenues

 

151,971

 

 

 

152,950

 

GROSS PROFIT

 

99,933

 

 

 

76,570

 

OPERATING EXPENSE

 

 

 

Selling and marketing

 

14,821

 

 

 

13,349

 

General and administrative

 

34,100

 

 

 

28,106

 

Operating Expenses

 

48,921

 

 

 

41,455

 

INCOME FROM OPERATIONS

 

51,012

 

 

 

35,115

 

Interest expense

 

(15,998

)

 

 

(8,775

)

Other expense

 

(15

)

 

 

(29

)

INCOME BEFORE TAXES

 

34,999

 

 

 

26,311

 

Provision for Income Taxes

 

9,017

 

 

 

6,607

 

NET INCOME

$

25,982

 

 

$

19,704

 

Other Comprehensive Income (Loss)

 

692

 

 

 

(516

)

COMPREHENSIVE INCOME

$

26,674

 

 

$

19,188

 

Net income attributable to common stockholders

$

25,982

 

 

$

19,704

 

Weighted-average shares outstanding, basic and diluted

 

 

 

Basic

 

146,703,894

 

 

 

146,561,717

 

Diluted

 

146,751,901

 

 

 

146,832,889

 

Net income (loss) per share, basic and diluted

 

 

 

Basic

$

0.18

 

 

$

0.13

 

Diluted

$

0.18

 

 

$

0.13

 

Janus International Group, Inc.

Consolidated Balance Sheets

(In thousands)

 

 

April 1,

 

December 31,

 

2023

 

2022

 

(Unaudited)

 

 

ASSETS

 

 

 

Current Assets

 

 

 

Cash

$

69,639

 

 

$

78,373

 

Accounts receivable, less allowance for credit losses; $4,652 and $4,549, at April 1, 2023 and December 31, 2022, respectively

 

149,758

 

 

 

155,397

 

Costs in excess of billing on uncompleted contracts

 

40,992

 

 

 

39,251

 

Inventory, net

 

64,769

 

 

 

67,677

 

Prepaid expenses

 

8,354

 

 

 

9,098

 

Other current assets

 

4,450

 

 

 

13,381

 

Total current assets

$

337,962

 

 

$

363,177

 

Right-of-use assets, net

 

43,961

 

 

 

44,305

 

Property and equipment, net

 

46,005

 

 

 

42,083

 

Intangible assets, net

 

397,276

 

 

 

404,385

 

Goodwill

 

368,363

 

 

 

368,204

 

Deferred tax asset, net

 

46,601

 

 

 

46,601

 

Other assets

 

1,740

 

 

 

1,863

 

Total assets

$

1,241,908

 

 

$

1,270,618

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current Liabilities

 

 

 

Accounts payable

 

58,545

 

 

 

52,268

 

Billing in excess of costs on uncompleted contracts

 

18,311

 

 

 

21,445

 

Current maturities of long-term debt

 

8,649

 

 

 

8,347

 

Accrued expenses and other current liabilities

 

61,366

 

 

 

70,551

 

Total current liabilities

$

146,871

 

 

$

152,611

 

Long-term debt, net

 

649,818

 

 

 

699,850

 

Deferred tax liability, net

 

1,909

 

 

 

1,927

 

Other long-term liabilities

 

39,704

 

 

 

40,944

 

Total liabilities

$

838,302

 

 

$

895,332

 

STOCKHOLDERS’ EQUITY

 

 

 

Common Stock, 825,000,000 shares authorized, $0.0001 par value, 146,744,164 and 146,703,894 shares issued and outstanding at April 1, 2023 and December 31, 2022, respectively

 

15

 

 

 

15

 

Treasury stock, at cost, 18,520 and zero shares as of April 1, 2023 and December 31, 2022, respectively

 

(183

)

 

 

—

 

Additional paid-in capital

 

283,744

 

 

 

281,914

 

Accumulated other comprehensive loss

 

(4,105

)

 

 

(4,796

)

Retained earnings

 

124,135

 

 

 

98,153

 

Total stockholders’ equity

$

403,606

 

 

$

375,286

 

Total liabilities and stockholders’ equity

$

1,241,908

 

 

$

1,270,618

 

Janus International Group, Inc.

Consolidated Statements of Cash Flows

(In thousands)

 

 

Three Months Ended

 

April 1, 2023

 

April 2, 2022

 

(Unaudited)

 

(Unaudited)

Cash Flows Provided By Operating Activities

 

 

 

Net income

$

25,982

 

 

$

19,704

 

Adjustments to reconcile net income to net cash provided by operating activities

 

 

 

Depreciation of property and equipment

 

2,180

 

 

 

1,857

 

Reduction in carrying amount of right-of-use assets

 

1,485

 

 

 

1,319

 

Change in inventory obsolescence reserve

 

(304

)

 

 

—

 

Amortization of intangibles

 

7,416

 

 

 

7,225

 

Deferred finance fee amortization

 

1,346

 

 

 

912

 

Provision for losses on accounts receivable

 

102

 

 

 

975

 

Share based compensation

 

1,830

 

 

 

600

 

Loss on extinguishment of debt

 

—

 

 

 

103

 

Loss on sale of equipment

 

6

 

 

 

—

 

Undistributed losses (earnings) of affiliate

 

58

 

 

 

(22

)

Changes in operating assets and liabilities

 

 

 

Accounts receivable

 

5,826

 

 

 

(12,727

)

Costs in excess of billings on uncompleted contracts

 

(1,644

)

 

 

(7,165

)

Prepaid expenses and other current assets

 

9,652

 

 

 

(1,285

)

Inventory

 

3,310

 

 

 

(7,630

)

Accounts payable

 

6,168

 

 

 

10,375

 

Billing in excess of costs on uncompleted contracts

 

(3,294

)

 

 

4,847

 

Accrued expenses and other current liabilities

 

(8,471

)

 

 

4,647

 

Other assets and long-term liabilities

 

(1,402

)

 

 

1,042

 

Net Cash Provided By Operating Activities

$

50,246

 

 

$

24,777

 

Cash Flows Used In Investing Activities

 

 

 

Proceeds from sale of equipment

$

17

 

 

$

—

 

Purchases of property and equipment

 

(6,070

)

 

 

(2,880

)

Cash paid for acquisitions, net of cash acquired

 

(1,002

)

 

 

—

 

Net Cash Used In Investing Activities

$

(7,055

)

 

$

(2,880

)

Cash Flows Used In Financing Activities

 

 

 

Payments on line of credit

$

—

 

 

$

(6,369

)

Principal payments on long-term debt

 

(52,017

)

 

 

(2,017

)

Principal payments under finance lease obligations

 

(141

)

 

 

(19

)

Cash Used In Financing Activities

$

(52,158

)

 

$

(8,405

)

Effect of exchange rate changes on cash

$

233

 

 

$

(58

)

Net Increase (Decrease) in Cash

$

(8,734

)

 

$

13,434

 

Cash, Beginning of Period

$

78,373

 

 

$

13,192

 

Cash, End of Period

$

69,639

 

 

$

26,626

 

Supplemental Cash Flows Information

 

 

 

Interest paid

$

14,513

 

 

$

6,096

 

Income taxes paid

$

185

 

 

$

370

 

Cash paid for operating leases

$

1,987

 

 

$

1,900

 

Non-cash investing and financing activities:

 

 

 

Right-of-use assets obtained in exchange for operating lease obligations

$

33

 

 

$

42,202

 

Right-of-use assets obtained in exchange for finance lease obligations

$

1,113

 

 

$

633

 

RSU Shares withheld related to employee taxes

$

183

 

 

$

—

 

Janus International Group, Inc.

Reconciliation of Net Income to Adjusted EBITDA

(In thousands)

 

 

Three Months Ended

 

 

 

 

 

April 1, 2023

 

April 2, 2022

 

Variance

 

 

 

$

 

%

Net Income

$

25,982

 

$

19,704

 

$

6,278

 

 

31.9

%

Interest Expense

 

15,998

 

 

8,775

 

 

7,223

 

 

82.3

%

Income Taxes

 

9,017

 

 

6,607

 

 

2,410

 

 

36.5

%

Depreciation

 

2,180

 

 

1,857

 

 

323

 

 

17.4

%

Amortization

 

7,416

 

 

7,225

 

 

191

 

 

2.6

%

EBITDA

$

60,593

 

$

44,168

 

$

16,425

 

 

37.2

%

COVID-19 related expenses(1)

 

—

 

 

109

 

 

(109

)

 

(100.0

)%

Restructuring Charges(2)

 

590

 

 

103

 

 

487

 

 

472.8

%

Acquisition expense(3)

 

—

 

 

287

 

 

(287

)

 

(100.0

)%

Adjusted EBITDA

$

61,183

 

$

44,667

 

$

16,516

 

 

37.0

%

(1)

Adjustment consists of signage, cleaning and supplies to maintain work environments necessary to adhere to CDC guidelines during the COVID-19 pandemic. See “Impact of COVID-19” section.

(2)

Adjustments consist of the following: 1) facility relocations, 2) severance and hiring costs associated with our strategic transformation, including executive leadership team changes, strategic business assessment and transformation projects.

(3)

Expenses related to the transition services agreement for the DBCI acquisition which closed August 18, 2021

Janus International Group, Inc.

Reconciliation of Net Income to Non-GAAP Adjusted Net Income

(In thousands)

 

 

Three Months Ended

 

April 1, 2023

 

April 2, 2022

Net Income (Loss)

$

25,982

 

 

$

19,704

 

Net Income Adjustments(1)

 

590

 

 

 

499

 

Tax Effect Non-GAAP on Net Income Adjustments(2)

 

(152

)

 

 

(125

)

Non-GAAP Adjusted Net Income

$

26,420

 

 

$

20,078

 

(1)

Refer to SEC public filings for detailed breakout. This amount reconciles to the EBITDA Adjustments/Non-GAAP Adjustments in the Reconcilation of Net Income to Adjusted EBITDA table above

(2)

Tax effected for the net income adjustments. Used effective tax rates 25.8% and 25.1% for the three months ended April 1, 2023 and April 2, 2022

Janus International Group, Inc.

Non-GAAP Adjusted EPS*

(In thousands)

 

 

 

Three Months Ended

 

April 1, 2023

 

April 2, 2022

Numerator:

 

 

 

GAAP Net Income

$

25,982

 

$

19,704

Non-GAAP Adjusted Net Income

$

26,420

 

$

20,078

Denominator:

 

 

 

Weighted average number of shares:

 

 

 

Basic

 

146,703,894

 

 

146,561,717

Adjustment for Restricted Stock Units

 

48,007

 

 

271,172

Diluted

 

146,751,901

 

 

146,832,889

 

 

 

 

GAAP Basic EPS

$

0.18

 

$

0.13

GAAP Diluted EPS

$

0.18

 

$

0.13

Non-GAAP Adjusted Basic EPS

$

0.18

 

$

0.14

Non-GAAP Adjusted Diluted EPS

$

0.18

 

$

0.14

*Janus uses measures of performance that are not required by or presented in accordance with GAAP in the United States. Non-GAAP financial performance measures are used to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures should not be considered in isolation or as a substitute for the relevant GAAP measures and should be read in conjunction with information presented on a GAAP basis.

Janus International Group, Inc.

Non-GAAP Free Cash Flow Conversion*

(In thousands)

 

 

Three Months Ended

 

April 1, 2023

 

April 2, 2022

Cash flow from operating activities

$

50,246

 

 

$

24,777

 

Less capital expenditure

 

(6,070

)

 

 

(2,880

)

Free cash flow

$

44,176

 

 

$

21,897

 

 

 

 

 

Non-GAAP Adjusted Net Income

$

26,420

 

 

$

20,078

 

 

 

 

 

Free cash flow conversion of Non-GAAP Adjusted Net Income

 

167

%

 

 

109

%

 

Trailing Twelve-Months Ended

 

April 1, 2023

 

April 2, 2022

Cash flow from operating activities

$

113,938

 

 

$

74,044

 

Less capital expenditure

 

(11,997

)

 

 

(20,382

)

Free cash flow

$

101,941

 

 

$

53,662

 

 

 

 

 

Non-GAAP Adjusted Net Income

$

116,299

 

 

$

77,522

 

 

 

 

 

Free cash flow conversion of Non-GAAP Adjusted Net Income

 

88

%

 

 

69

%

*Janus uses measures of performance that are not required by or presented in accordance with GAAP in the United States. Non-GAAP financial performance measures are used to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures should not be considered in isolation or as a substitute for the relevant GAAP measures and should be read in conjunction with information presented on a GAAP basis.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230511005196/en/

Investor Contacts, Janus John Rohlwing Vice President, Investor Relations & FP&A, Janus International 770-562-6399 IR@janusintl.com

Media Contacts, Janus Suzanne Reitz Vice President of Marketing, Janus International 770-746-9576 Marketing@Janusintl.com