Segment

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

FORM 10-Q

________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~July 1, 2023~~March 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number 001-40456

________________________

JANUS INTERNATIONAL GROUP, INC.

(Exact name of registrant as specified in its charter)

________________________


Delaware			86-1476200
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)
135 Janus International Blvd. Temple, GA			30179
(Address of Principal Executive Offices)			(Zip Code)

(866) 562-2580

(Registrant's telephone number, including area code)

________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class:	Trading Symbol(s)	Name of Each Exchange on Which Registered:
Common Stock, par value $0.0001 per share	JBI	New York Stock Exchange

~~Securities registered pursuant to section 12(g) of the Act: None~~

________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐☒	Accelerated filer	☒☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☒☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~August 4, 2023, 146,827,066~~May 3, 2024, 145,978,142 shares of ~~Class A Common Stock, par value $0.0001,~~the Registrant’s common stock were ~~issued and~~ outstanding.

JANUS INTERNATIONAL GROUP, INC.

Quarterly Report on Form 10-Q

Table of Contents



			Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			3
PART I--FINANCIAL INFORMATION			4
Item 1. Condensed Consolidated Financial Statements			4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			2526
Item 3. Quantitative and Qualitative Disclosures About Market Risk			43
Item 4. Controls and Procedures			43
PART II--OTHER INFORMATION			44
Item 1. Legal Proceedings			44
Item 1A. Risk Factors			44
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			44
Item 3. Defaults upon Senior Securities			44
Item 4. Mine Safety Disclosures			44
Item 5. Other Information			44
Item 6. Exhibits			4546
SIGNATURES			4647

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements contained in this Quarterly Report on Form 10-Q (this “Form 10-Q”) that reflect our current views with respect to future events and financial performance, business strategies, expectations for our business and any other statements of a future or forward-looking nature, constitute “forward-looking statements” ~~for~~within the ~~purposes~~meaning of ~~federal securities laws.~~Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

These forward-looking statements include, but are not limited to, statements about our financial condition, results of operations, earnings outlook and prospects or regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those contemplated in the forward-looking statements, including, without limitation, the risks set forth in Part II, Item 1A, “Risk Factors” in this Form 10-Q and in our other filings with the Securities and Exchange Commission (the “SEC”). We do not assume any obligation to update any forward-looking statements after the date of this Report, except as required by law.

In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would”, and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on us. We cannot assure you that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to:

•changes adversely affecting the business in which we are engaged;

•geopolitical ~~risk~~risks and changes in applicable laws or regulations;

•the possibility that Janus may be adversely affected by other economic, business, and/or competitive factors;

•operational risk;

•any failure to effectively manage, and receive anticipated returns from, acquisitions, divestitures, investments, joint ventures and other portfolio actions;

•fluctuations in the demand for our products and services;

•the impact of supply chain disruptions and inflation and our ability to recoup rising costs in the rates we charge to our customers;

•the possibility that ~~we may impair~~ our long-lived assets and other assets, including inventory, property, plant, and equipment, intangibles, and investments in unconsolidated ~~affiliates;~~

•~~the possibility that the COVID-19 pandemic, or another major disease, disrupts Janus's business;~~affiliates may become impaired;

•our ability to maintain the listing of our securities on a national securities exchange;

•the possibility of significant changes in foreign exchange rates and controls;

•litigation and regulatory enforcement risks, including the diversion of management time and attention and the additional costs and demands on Janus’s resources;

•general economic conditions, including the capital and credit markets;

•the possibility of political instability, war or acts of terrorism in any of the countries where we operate; and

•other risks detailed from time to time in our filings with the SEC, press releases, and other communications, including those set forth under “Risk Factors” included in our ~~2022~~2023 Annual Report on Form 10-K for the year ended December ~~31, 2022,~~30, 2023, and in the documents incorporated by reference herein and therein.

All subsequent written and oral forward-looking statements concerning the matters addressed in this Form 10-Q and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Form 10-Q. Except to the extent required by applicable law or regulation we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect the occurrence of unanticipated events.

PART I--FINANCIAL INFORMATION

Item 1. Financial Statements.


Janus International Group, Inc.

Condensed Consolidated Balance Sheets
(dollar amounts in ~~thousands,~~millions, except share and per share data - Unaudited)


		July 1,		December 31,
		2023		2022
	March 30, 2024					March 30, 2024	December 30, 2023
ASSETS	ASSETS
Current Assets	Current Assets
Current Assets
Current Assets
Cash	Cash	$	110,707	$	78,373
Accounts receivable, less allowance for credit losses; $5,389 and $4,549, at July 1, 2023 and December 31, 2022, respectively		156,018		155,397
Cash
Cash
Accounts receivable, less allowance for credit losses of $4.1 and $3.6, at March 30, 2024 and December 30, 2023, respectively
Contract assets	Contract assets	50,171		39,251
Inventory, net		59,573		67,677
Inventories
Prepaid expenses	Prepaid expenses	10,125		9,098
Other current assets	Other current assets	3,912		13,381
Total current assets	Total current assets	$	390,506	$	363,177
Right-of-use assets, net	Right-of-use assets, net	43,428		44,305
Property and equipment, net		47,183		42,083
Property, plant and equipment, net
Intangible assets, net	Intangible assets, net	390,186		404,385
Goodwill	Goodwill	368,523		368,204
Deferred tax asset, net	Deferred tax asset, net	46,601		46,601
Other assets	Other assets	1,702		1,863
Total assets	Total assets	$	1,288,129	$	1,270,618
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities	Current Liabilities
Current Liabilities
Current Liabilities
Accounts payable	Accounts payable	$	55,666	$	52,268
Billing in excess of costs		18,840		21,445
Accounts payable
Accounts payable
Contract liabilities
Current maturities of long-term debt	Current maturities of long-term debt	8,854		8,347
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	72,248		70,551
Total current liabilities	Total current liabilities	$	155,608	$	152,611
Long-term debt, net	Long-term debt, net	649,220		699,850
Deferred tax liability, net	Deferred tax liability, net	1,751		1,927
Other long-term liabilities	Other long-term liabilities	38,576		40,944
Total liabilities	Total liabilities	$	845,155	$	895,332
STOCKHOLDERS’ EQUITY	STOCKHOLDERS’ EQUITY
Common Stock, 825,000,000 shares authorized, $0.0001 par value, 146,825,494 and 146,703,894 shares issued and outstanding at July 1, 2023 and December 31, 2022, respectively		15		15
Treasury stock, at cost, 18,638 and zero shares as of July 1, 2023 and December 31, 2022, respectively		(184)		—
Common Stock, 825,000,000 shares authorized, $0.0001 par value, 147,059,095 and 146,861,489 shares issued at March 30, 2024 and December 30, 2023, respectively
Common Stock, 825,000,000 shares authorized, $0.0001 par value, 147,059,095 and 146,861,489 shares issued at March 30, 2024 and December 30, 2023, respectively
Common Stock, 825,000,000 shares authorized, $0.0001 par value, 147,059,095 and 146,861,489 shares issued at March 30, 2024 and December 30, 2023, respectively
Treasury stock, at cost, 1,111,882 and 34,297 shares as of March 30, 2024 and December 30, 2023, respectively
Additional paid-in capital	Additional paid-in capital	285,495		281,914
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(3,474)		(4,796)
Retained earnings	Retained earnings	161,122		98,153
Total stockholders’ equity	Total stockholders’ equity	$	442,974	$	375,286
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	1,288,129	$	1,270,618

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements


Janus International Group, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income
(dollar amounts in ~~thousands,~~millions, except share and per share data - Unaudited)


		Three Months Ended				Six months ended
		July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022

	Three Months Ended										Three Months Ended
	March 30, 2024									March 30, 2024		April 1, 2023
REVENUES	REVENUES
Product revenues
Product revenues
Product revenues	Product revenues	$	232,831	$	219,022	$	448,239	$	420,849
Service revenues	Service revenues	37,780		28,692		74,277		56,385
Total Revenues	Total Revenues	270,611		247,714		522,516		477,234
Product cost of revenues	Product cost of revenues	126,342		142,391		250,701		274,165
Service cost of revenues	Service cost of revenues	27,949		21,342		55,561		42,519
Cost of Revenues	Cost of Revenues	154,291		163,733		306,262		316,684
GROSS PROFIT	GROSS PROFIT	116,320		83,981		216,254		160,550
OPERATING EXPENSE
OPERATING EXPENSES
Selling and marketing
Selling and marketing
Selling and marketing	Selling and marketing	16,721		14,389		31,542		27,739
General and administrative	General and administrative	35,316		29,743		69,416		57,849
Operating Expenses	Operating Expenses	52,037		44,132		100,958		85,588
INCOME FROM OPERATIONS	INCOME FROM OPERATIONS	64,283		39,849		115,296		74,962
Interest expense	Interest expense	(14,797)		(8,868)		(30,796)		(17,643)
Other expense		(145)		(342)		(161)		(369)

Other income, net
Other income, net
Other income, net
INCOME BEFORE TAXES	INCOME BEFORE TAXES	49,341		30,639		84,339		56,950
Provision for Income Taxes	Provision for Income Taxes	12,354		7,802		21,370		14,409
NET INCOME	NET INCOME	$	36,987	$	22,837	$	62,969	$	42,541
Other Comprehensive Income (Loss)		631		(3,387)		1,322		(3,901)
Other Comprehensive (Loss) Income
COMPREHENSIVE INCOME	COMPREHENSIVE INCOME	37,618		19,450		64,291		38,640
Net income attributable to common stockholders		$	36,987	$	22,837	$	62,969	$	42,541
Weighted-average shares outstanding, basic and diluted (Note 12)

Weighted-average shares outstanding, basic and diluted (Note 13)
Weighted-average shares outstanding, basic and diluted (Note 13)
Weighted-average shares outstanding, basic and diluted (Note 13)
Basic
Basic
Basic	Basic	146,765,631		146,575,720		146,734,762		146,568,719
Diluted	Diluted	146,772,157		146,717,937		146,762,029		146,648,306
Net income per share, basic and diluted (Note 12)
Net income per share, basic and diluted (Note 13)
Basic
Basic
Basic	Basic	$	0.25	$	0.16	$	0.43	$	0.29
Diluted	Diluted	$	0.25	$	0.16	$	0.43	$	0.29

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements


Janus International Group, Inc.

Condensed Consolidated ~~Statement~~Statements of Changes in Stockholders’ Equity
(dollar amounts in ~~thousands,~~millions, except share data - Unaudited)


	Class A Preferred Units (1,000,000 shares authorized par value of .0001)			Common Stock			Treasury Stock			Additional paid-in capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total
	Shares	Amount		Shares	Amount		Shares	Amount
Balance as of December 31, 2022	—	$	—	146,703,894	$	—	—	$	—	$	281.9	$	(4.8)	$	98.2	$	375.3
Issuance of restricted units	—	—		58,790	—		—	—		—		—		—		—
Shares withheld for taxes upon vesting of restricted units	—	—		(18,520)	—		18,520	(0.2)		—		—		—		(0.2)
Share-based compensation	—	—		—	—		—	—		1.8		—		—		1.8
Foreign currency translation adjustment	—	—		—	—		—	—		—		0.7		—		0.7
Net income	—	—		—	—		—	—		—		—		26.0		26.0
Balance as of April 1, 2023	—	$	—	146,744,164	$	—	18,520	$	(0.2)	$	283.7	$	(4.1)	$	124.2	$	403.6

Class A Preferred Units
(1,000,000 shares authorized
par value of .0001)
Common Stock Additional paid-in capital Accumulated Other Comprehensive Loss Retained Earnings
(Accumulated Deficit) Total
Shares Amount Shares Amount
Balance as of January 1, 2022 — $ — 146,561,717 $ 15 $ 277,799 $ (949) $ (8,578) $ 268,287
Share-based compensation — — — — 600 — — 600
Cumulative effect of change in accounting principle(a)
— — — — — — (924) (924)
Cumulative translation adjustment — — — — — (514) — (514)
Net income — — — — — — 19,704 19,704
Balance as of April 2, 2022 — $ — 146,561,717 $ 15 $ 278,399 $ (1,463) $ 10,202 $ 287,153
Share-based compensation — — 77,660 — 910 — — 910
Cumulative translation adjustment — — — — — (3,387) — (3,387)
Net income — — — — — — 22,837 22,837
Balance as of July 2, 2022 — $ — 146,639,377 $ 15 $ 279,309 $ (4,850) $ 33,039 $ 307,513


	Class A Preferred Units (1,000,000 shares authorized par value of .0001)			Common Stock			Treasury Stock			Additional paid-in capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total
	Shares	Amount		Shares	Amount		Shares	Amount
Balance as of December 30, 2023	—	$	—	146,861,489	$	—	34,297	$	(0.4)	$	289.0	$	(2.9)	$	233.9	$	519.6
Repurchase of common shares				(1,019,889)			1,019,889	(15.3)								(15.3)
Issuance of restricted units	—	—		163,309	—		—	—		—		—		—		—
Shares withheld for taxes upon vesting of restricted units	—	—		(57,696)	—		57,696	(0.9)		—		—		—		(0.9)
Share-based compensation	—	—		—	—		—	—		1.9		—		—		1.9
Foreign currency translation adjustment	—	—		—	—		—	—		—		(0.6)		—		(0.6)
Net income	—	—		—	—		—	—		—		—		30.7		30.7
Balance as of March 30, 2024	—	$	—	145,947,213	$	—	1,111,882	$	(16.6)	$	290.9	$	(3.5)	$	264.6	$	535.4

~~(a)~~ ~~Effective January 2, 2022,~~Total shares issued are the ~~Company adopted the provisions~~aggregate of ~~Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326)~~Common Stock outstanding and ASU 2016-02, Leases (Topic 842). We have elected to adopt each of the two standards using the modified retrospective approach through a cumulative-effect adjustment to the opening balance of accumulated deficit for both. See Note 2 in the Annual Report on Form 10-K, for the year ended December 31, 2022, for further details of the impact of each standard.

Class A Preferred Units
(1,000,000 shares authorized
par value of .0001)
Common Stock Treasury Stock Additional paid-in capital Accumulated Other Comprehensive Loss Retained Earnings Total
Shares Amount Shares Amount Shares Amount
Balance as of
December 31, 2022
— $ — 146,703,894 $ 15 — $ — $ 281,914 $ (4,796) $ 98,153 $ 375,286
Issuance of restricted units — — 58,790 — — — — — — —
Shares withheld for taxes upon vesting of restricted units — — (18,520) — 18,520 (183) — — — (183)
Share-based compensation — — — — — — 1,830 — — 1,830
Cumulative translation adjustment — — — — — — — 691 — 691
Net income — — — — — — — — 25,982 25,982
Balance as of
April 1, 2023 — $ — 146,744,164 $ 15 18,520 $ (183) $ 283,744 $ (4,105) $ 124,135 $ 403,606
Issuance of restricted units — — 81,448 — — — — — — —
Shares withheld for taxes upon vesting of restricted units — — (118) — 118 (1) — — — (1)
Share-based compensation — — — — — — 1,751 — — 1,751
Cumulative translation adjustment — — — — — — — 631 — 631
Net income — — — — — — — — 36,987 36,987
Balance as of
July 1, 2023
— $ — 146,825,494 $ 15 18,638 $ (184) $ 285,495 $ (3,474) $ 161,122 $ 442,974

Treasury Shares.

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements


Janus International Group, Inc.
Condensed Consolidated Statements of Cash Flows
(dollar amounts in ~~thousands~~millions - Unaudited)


		Six Months Ended
		July 1, 2023		July 2, 2022
	Three Months Ended						Three Months Ended
	March 30, 2024					March 30, 2024		April 1, 2023

Cash Flows Provided By Operating Activities	Cash Flows Provided By Operating Activities
Cash Flows Provided By Operating Activities
Cash Flows Provided By Operating Activities
Net income
Net income
Net income	Net income	$	62,969	$	42,541
Adjustments to reconcile net income to net cash provided by operating activities	Adjustments to reconcile net income to net cash provided by operating activities
Depreciation of property and equipment		4,369		3,835
Reduction in carrying amount of right-of-use assets		3,048		2,615
Change in inventory obsolescence reserve		(829)		(253)
Depreciation of property, plant and equipment
Depreciation of property, plant and equipment
Depreciation of property, plant and equipment
Noncash lease expense
Provision (reversal) for inventory obsolescence
Amortization of intangibles	Amortization of intangibles	14,837		14,871
Deferred income taxes
Deferred finance fee amortization	Deferred finance fee amortization	2,196		1,832
Provision for losses on accounts receivable	Provision for losses on accounts receivable	844		1,158
Share-based compensation	Share-based compensation	3,581		1,510
Loss (gain) on sale of equipment		54		(28)
Loss on abandonment of lease		—		571
Loss (gain) on equity investment		53		(60)
Changes in operating assets and liabilities	Changes in operating assets and liabilities
Accounts receivable
Accounts receivable
Accounts receivable	Accounts receivable	(973)		(26,682)
Contract assets	Contract assets	(10,776)		1,406
Prepaid expenses and other current assets	Prepaid expenses and other current assets	8,410		2,481
Inventory		9,125		(9,920)
Inventories
Other assets	Other assets	2,002		39
Accounts payable	Accounts payable	3,188		1,464
Billings in excess of costs		(2,866)		2,877
Contract liabilities
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	2,006		4,094
Long-term liabilities		(4,639)		(1,199)
Other long-term liabilities
Net Cash Provided By Operating Activities	Net Cash Provided By Operating Activities	$	96,599	$	43,152
Cash Flows Used In Investing Activities	Cash Flows Used In Investing Activities
Proceeds from sale of equipment		$	17	$	45
Purchases of property and equipment		(9,602)		(5,268)
Purchases of property, plant, and equipment
Purchases of property, plant, and equipment
Purchases of property, plant, and equipment
Cash paid for acquisitions, net of cash acquired	Cash paid for acquisitions, net of cash acquired	(1,002)		—
Net Cash Used In Investing Activities	Net Cash Used In Investing Activities	$	(10,587)	$	(5,223)
Cash Flows Used In Financing Activities	Cash Flows Used In Financing Activities
Payments on line of credit		$	—	$	(6,369)
Principal payments on long-term debt
Principal payments on long-term debt
Principal payments on long-term debt	Principal payments on long-term debt	(54,034)		(4,034)
Principal payments under finance lease obligations	Principal payments under finance lease obligations	(268)		(66)
Cash Used In Financing Activities		$	(54,302)	$	(10,469)
Repurchase of common shares
Net Cash Used In Financing Activities
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	$	624	$	66
Net Increase in Cash		$	32,334	$	27,526
Net Increase (decrease) in Cash
Cash, Beginning of Period	Cash, Beginning of Period	$	78,373	$	13,192
Cash, End of Period	Cash, End of Period	$	110,707	$	40,718
Supplemental Cash Flows Information	Supplemental Cash Flows Information
Interest paid
Interest paid
Interest paid	Interest paid	$	28,448	$	18,296
Income taxes paid	Income taxes paid	$	11,226	$	11,889
Cash paid for operating leases included in operating activities	Cash paid for operating leases included in operating activities	$	4,101	$	3,832
Non-cash investing and financing activities:	Non-cash investing and financing activities:
Right-of-use assets obtained in exchange for operating lease obligations	Right-of-use assets obtained in exchange for operating lease obligations	$	39	$	42,380
Right-of-use assets obtained in exchange for operating lease obligations
Right-of-use assets obtained in exchange for operating lease obligations
Right-of-use assets obtained in exchange for finance lease obligations	Right-of-use assets obtained in exchange for finance lease obligations	$	2,102	$	706
RSU Shares withheld related to employee taxes		$	184	$	—
RSU shares withheld included in accrued employee taxes

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

1.Nature of Operations

Janus International Group, Inc. is a holding company incorporated in Delaware. References to “Janus,” “Group,” “Company,” “we,” “our” or “us” refer to Janus International Group, Inc. and its consolidated subsidiaries. The Company is a global manufacturer, supplier, and provider of turn-key self-storage, commercial, and industrial building solutions. The Company provides ~~facility and door automation and access control technologies,~~ roll up and swing doors, hallway systems, and relocatable storage “MASS” (Moveable Additional Storage Structures) units, among other solutions, and works with its customers throughout every phase of a project by providing solutions ~~spanning from~~including facility planning and design, construction, technology, and the restoration, rebuilding, and replacement (“R3”) of ~~damaged or end-of-life products.~~self-storage facilities. Additionally, the Company provides facility and door automation and access control technologies.

The Company is headquartered in Temple, ~~Georgia, and has domestic~~GA with operations in ~~Georgia, Texas, Arizona, Indiana, North Carolina, with international operations in~~the United States of America (“United States”) (“U.S.”), United Kingdom (“U.K.”), Australia, France, and ~~Singapore.~~Poland. The Company provides products and services through its two operating and reportable segments which are based on the geographic region of its operations: (i) Janus North America and (ii) Janus International. The Janus International segment is comprised of Janus International Europe Holdings Ltd. ~~(UK)~~(U.K.) (“JIE”), whose production and sales are largely in Europe and Australia. The Janus North America segment is comprised of all the other entities including Janus Core together with each of its operating subsidiaries, Betco, Inc. (“BETCO”), Nokē, Inc. (“NOKE”), Asta Industries, Inc. (“ASTA”), Access Control Technologies, LLC (“ACT”), U.S. Door & Building Components, LLC (“U.S. Door”), Janus Door, LLC (Janus Door”) and Steel Door Depot.com (“Steel Door Depot”), LLC. The Company’s common stock is currently traded on the New York Stock Exchange under the symbol “JBI”.

The dollar amounts in the notes are shown in ~~thousands~~millions of dollars ~~unless otherwise noted,~~ and rounded to the nearest ~~thousand~~million, unless otherwise noted, except for share and per share amounts.

Assets held at foreign locations were approximately $65,393 and $61,144 as of July 1, 2023 and December 31, 2022, respectively. Revenues earned at foreign locations totaled approximately $21,209 and $20,324 for the three months ended July 1, 2023 and July 2, 2022, respectively, and $42,782 and $38,238 for the six months ended July 1, 2023 and July 2, 2022, respectively.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with ~~U.S. GAAP~~accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the applicable rules and regulations of the SEC. In the opinion of the Company’s management, the Unaudited Condensed Consolidated Financial Statements include all adjustments necessary for the fair presentation of the Company’s balance sheet as of ~~July 1, 2023,~~March 30, 2024, and its results of operations, including its comprehensive income and stockholders’ equity for the ~~six months~~three month periods ended ~~July~~March 30, 2024 and April 1, 2023 ~~and July 2, 2022~~. The year-end condensed consolidated balance sheet data was derived from audited financial ~~statement,~~statements, but ~~does~~may not include all disclosures required by ~~accounting principles generally accepted in the United States of America.~~U.S. GAAP. This Quarterly Report on Form 10-Q should be read in conjunction with the Audited Consolidated Financial Statements and notes that are included in the Annual Report on Form 10-K, for the year ended December ~~31, 2022.~~30, 2023.

Principles of Consolidation

The Unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. The Company’s joint venture is accounted for under the equity method of accounting. All significant intercompany accounts and transactions have been eliminated in consolidation.

Reclassification

Certain items have been reclassified in the prior year financial statements to conform to the presentation and classifications used in the current year. These reclassifications had no effect on our previously reported results of operations or retained earnings.

Prior Period Financial Statement Correction of Immaterial Error

Subsequent to the issuance of the fiscal year 2022 Form 10-K consolidated financial statements, an immaterial error was identified relating to certain contracts that were recognized as revenue based on two performance obligations, but it was subsequently determined that the performance obligations were not distinct within the context of the contract with the customer. The correction of this immaterial error led to a presentation change on the ~~condensed consolidated statement~~Unaudited Condensed Consolidated Statement of ~~operations~~Operations and ~~comprehensive income~~Comprehensive Income and in Footnote 1311 to the ~~condensed consolidated financial statements~~Unaudited Condensed Consolidated Financial Statements for the three ~~and six-month periods~~month period ended ~~July 2, 2022,~~April 1, 2023, as illustrated in the table below. The Company has corrected this immaterial error and prior year revenues are derived from previously issued financial statements. Accordingly, we have revised previously reported financial information for such immaterial error, as previously disclosed in our Form 10-K for the year ended December 30, 2023 and our Quarterly Reports for the three month periods ended July 1, 2023 and September 20, 2023, on Form 10-Q under the heading “Prior Period Financial Statement Correction of Immaterial Error.”A summary of revisions to certain previously reported financial information presented herein for comparative purposes. These presentation changes had no effect on our previously reported results of operations or retained earnings.


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The effect of correcting the immaterial error in the ~~condensed consolidated financial statements~~Unaudited Condensed Consolidated Financial Statement for the three ~~and six~~ month ~~periods~~period ended ~~July~~April 1, 2023 is shown in the following table:

As previously reported Correction As adjusted
Condensed Consolidated Statements of Operations and Comprehensive Income
Three Months Ended July 2, 2022
Product Revenues $ 213,969 $ 5,053 $ 219,022
Service Revenues 33,745 (5,053) 28,692
$ 247,714 $ — $ 247,714
Six Months Ended July 2, 2022
Product Revenues 411,274 9,575 420,849
Service Revenues 65,960 (9,575) 56,385
$ 477,234 $ — $ 477,234
Footnote 13. Revenue Recognition
Reportable Segments by Timing of Revenue Recognition
Three Months Ended July 2, 2022
Janus North America
Product revenues transferred at a point in time $ 215,865 $ (19,922) $ 195,943
Product revenues transferred over time — 24,975 24,975
Services revenues transferred over time 25,597 (5,053) 20,544
$ 241,462 $ — $ 241,462
Six Months Ended July 2, 2022
Janus North America
Product revenues transferred at a point in time $ 416,023 $ (43,180) $ 372,843
Product revenues transferred over time — 52,754 52,754
Services revenues transferred over time 50,696 (9,574) 41,122
$ 466,719 $ — $ 466,719


	As previously reported		Correction		As adjusted
Condensed Consolidated Statement of Operations and Comprehensive Income
Three Months Ended April 1, 2023
Product revenues	$	209.7	$	5.7	$	215.4
Service revenues	42.2		(5.7)		36.5
	$	251.9	$	—	$	251.9
Three Months Ended April 1, 2023
Product cost of revenues	$	120.1	$	4.3	$	124.4
Service cost of revenues	31.9		(4.3)		27.6
	$	152.0	$	—	$	152.0

Footnote 11. Revenue Recognition
Reportable Segments by Timing of Revenue Recognition
Three Months Ended April 1, 2023
Janus North America
Product revenues transferred at a point in time	$	204.4	$	(34.8)	$	169.6
Product revenues transferred over time	—		32.9		32.9
Services revenues transferred over time	33.8		(5.8)		28.0
	$	238.2	$	(7.7)	$	230.5
Eliminations	(7.9)		7.7		(0.2)
	$	230.3	$	—	$	230.3

Use of Estimates in the Consolidated Financial Statements

The preparation of Unaudited Condensed Consolidated Financial Statements in conformity with U.S GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

~~Significant items~~Items subject to such estimates and assumptions include, but are not limited to, income taxes and the effective tax rates, ~~reserves~~

~~for~~ inventory ~~obsolescence,~~basis adjustments, the fair value of assets and liabilities related to acquisitions, the derivative warrant liability, the recognition and valuation of unit-based compensation arrangements, the useful lives of property and equipment, the commencement date of leases, the incremental borrowing rate used to calculate lease liabilities, estimated progress toward completion for certain revenue contracts, ~~allowances~~allowance for ~~uncollectible receivable balances,~~credit losses, fair values and impairment of intangible assets and goodwill, and assumptions used in the ~~recognition of contract assets.~~

~~Emerging Growth Company~~

~~Section 102(b)(1) of the Jumpstart Our Business Startups Act, or JOBS Act, exempts emerging growth companies from being required to comply with new or revised financial~~ accounting standards until private companies are required to comply with the new or revised financial accounting standards. The Company qualifies as an “Emerging Growth Company” and has elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. This election allows the Company to adopt the new or revised standard at the same time periods as private companies.business combinations.

Fair Value Measurement

The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. A three-tiered hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation


~~Janus International Group, Inc.~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

methodologies in measuring fair value. This hierarchy requires that the Company use observable market data, when available, and minimize the use of unobservable inputs when determining fair value:

•Level 1, observable inputs such as quoted prices in active markets;

•Level 2, inputs other than the quoted prices in active markets that are observable either directly or indirectly;

•Level 3, unobservable inputs in which there is little or no market data, which requires that the Company develop its own assumptions.

The fair value of cash, accounts receivable less allowance for credit losses, and accounts payable approximate the carrying amounts due to the short-term maturities of these instruments. The fair value of the Company’s debt approximates its carrying amount as of ~~July 1, 2023~~March 30, 2024 and December ~~31, 2022~~30, 2023 due to its variable interest rate that is tied to the current ~~SOFR~~Secured Overnight Financing Rate (“SOFR”) rate plus an applicable ~~margin and consistency in our credit rating.~~margin. To estimate the fair value of the Company’s debt, which consists of the First Lien Term Loan and the Revolving Credit


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Facility, the Company utilized fair value based risk measurements that are indirectly observable, such as credit risk that fall within Level 2 of the Fair Value ~~hierarchy.~~hierarchy (see Notes 7 and 8 to our Unaudited Condensed Consolidated Financial Statements in this Form 10-Q for a further discussion of the Company’s debt).

Significant Accounting Policies

The Company’s significant accounting policies have not changed materially from those described in its Annual Report on Form 10-K for the fiscal year ended December ~~31, 2022.~~30, 2023.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable primarily arise from the sale of products and services to established customers. Accounts receivable are recorded at the invoiced amount and do not bear interest. ~~Accounts~~Additionally, accounts receivable are stated at estimated net realizable value, ~~from~~net of allowance for credit losses which is based on the ~~sale~~Company’s assessment of ~~products and services to established customers. All trade receivables are due in one year or less.~~ the collectability of customer accounts.

The Company ~~pools accounts receivable by customer type, commercial and self-storage, and by business units due to the similarity of risk characteristics within each group.~~

Commercial customers typically are customers contracting with the Company on short-term projects with smaller credit limits and overall, smaller project sizes. Due to the short-term nature and smaller scale of these types of projects, the Company expects minimal write-offs of its receivables at the commercial pool.

Self-storage projects typically involve general contractors and make up the largest portion of the Company’s accounts receivable balance. These projects are usually longer-term construction projects and billed over the course of construction. Credit limits are larger for these projects given the overall project size and duration. Due to the longer-term nature and larger scale of these types of projects, the Company expects a potential for more write-offs of its receivable balances within the self-storage pool.

At origination, we evaluate credit risk based on a variety of credit quality factors including prior payment experience, customer financial information, credit ratings, probabilities of default, industry trends, macroeconomic factors and other internal metrics. On an ongoing basis, we monitor credit quality based on past-due status as there is a meaningful correlation between the past-due status of customers and the risk of loss. In determining past-due status, we consider the receivable past due when any installment is over 30 days past due. Receivable balances are written off toestimates the allowance for credit losses ~~when, in~~using the ~~judgment of management, they are considered uncollectible. Revolving charge~~loss-rate method. As the Company determined that its customers at various business units and sales channels share similar risk characteristics, the same loss rate is applied to all accounts ~~are generally deemed to be uncollectible and written off to~~receivable. The Company estimates the allowance for credit losses ~~when~~by considering various factors such as historical write-offs, changes in customers’ credit ratings, delinquency, ~~reaches 120 days, taking into consideration~~payment history, the ~~financial condition~~age of the ~~customer.~~

~~The Company uses~~accounts receivable balances, and current and expected economic conditions that may affect a customer’s ability to pay. Account balances are charged off against the ~~loss-rate method in the CECL analysis for trade receivables and contract assets. The~~ allowance ~~for credit losses reflects the estimate of the amount of receivables~~when it is determined that ~~the Company will~~internal collection efforts should no longer be unable to collect based on historical collection experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectability. The Company's estimate reflects changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, the Company may be required to increase or decrease its allowance.pursued.

The activity for the allowance for credit losses during the ~~six months~~three month period ended ~~July~~March 30, 2024 and April 1, 2023, ~~and the fiscal year ended December 31, 2022,~~ is as follows:

July 1, 2023 December 31, 2022
Balance at beginning of period $ 4,549 $ 5,449
CECL Adoption (1)
— 366
Write-offs (4) (2,949)
Provision (reversal), net 844 1,683
Balance at end of period $ 5,389 $ 4,549

~~(1)~~ On January 2, 2022, the Company adopted the provisions of ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326), which introduced a new model known as CECL.



Balance at December 31, 2022	$	4.6
Write-offs	—
Provision for expected credit losses, net	0.1
Balance at April 1, 2023	$	4.7



~~Janus International Group, Inc.~~Balance at December 30, 2023
$	3.6
~~Notes to Unaudited Condensed Consolidated Financial Statements~~Write-offs		—
Provision for expected credit losses, net		0.5
Balance at March 30, 2024		$	4.1

Product Warranties

The Company records a liability for product warranties at the time of the related sale of goods. The liability is estimated using historical warranty experience, projected claim rates and expected costs per claim. The Company adjusts its liability for specific warranty matters when they become known and the exposure can be estimated. Product failure rates as well as material usage and labor costs incurred in correcting a product failure affect the Company's warranty liabilities. If actual costs differ from estimated costs, the Company must make a revision to the warranty liability. Generally, the Company offers warranties ranging between ~~1-3~~one and three years for our products with the exception of warranties for roofing at one of our business units, ~~which is~~where we offer warranties of up to 10 years.

The activity related to product warranty liabilities recorded in Accrued expenses and other current liabilities during the ~~six months~~three month period ended ~~July~~March 30, 2024 and April 1, 2023, ~~and the fiscal year ended December 31, 2022,~~ is as follows:

July 1, 2023 December 31, 2022
Balance at beginning of period $ 876 $ 736
Aggregate changes in the product warranty liability 608 140
Balance at end of period $ 1,484 $ 876


Balance at December 31, 2022	$	0.9
Aggregate changes in the product warranty liability	0.3
Balance at April 1, 2023	$	1.2


Balance at December 30, 2023	$	2.3
Aggregate changes in the product warranty liability	0.1
Balance at March 30, 2024	$	2.4


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Treasury Stock

We account for treasury stock under the cost method pursuant to the provisions of ASC 505-30, Treasury Stock. Under the cost method, the gross cost of the shares reacquired is charged to a contra equity account, treasury stock. The equity accounts that were originally credited for the original share issuance, common stock and additional paid-in capital, remain intact.

If the treasury shares are ever reissued in the future at a price higher than its cost, the difference will be recorded as a component of additional paid-in-capital in our Unaudited Condensed Consolidated Balance Sheets. When treasury stock is re-issued at a price lower than its cost, the difference will be recorded as a component of additional paid-in-capital to the extent that there are previously recorded gains to offset the losses. If there are no treasury stock gains in additional paid-in-capital, the losses upon re-issuance of treasury stock are recorded as a reduction of retained earnings in our Unaudited Condensed Consolidated Balance Sheets. If treasury stock is reissued in the future, a cost flow assumption will be adopted to compute excesses and deficiencies upon subsequent share re-issuance.

Concentrations of Risk

Financial instruments that are potentially subject to concentration of credit risk consist primarily of cash and accounts receivable. The Company maintains cash in bank deposit accounts that, at times, may exceed the insured limits of the local country. The Company has not experienced any losses in such accounts. The Company sells its products and services mainly in the United States and European regions. The Company performs ongoing evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary. The Company generally does not require its customers to provide collateral or other security to support accounts receivable. As of ~~July 1, 2023 and December 31, 2022,~~March 30, 2024, no customer accounted for more than 10% of the accounts receivable ~~balance.~~balance or more than 10% of revenues.

Segments

The Company manages its operations through two operating and reportable segments: Janus North America and Janus International. These segments align the Company’s products and service offerings based on the geographic location between North America and International locations, which is consistent with how the Company’s Chief ~~Executive Officer, its Chief~~ Operating Decision Maker (“CODM”), reviews and evaluates the Company’s operations. The CODM allocates resources and evaluates the financial performance of each operating segment. The Company’s segments are strategic businesses that are managed separately because each one develops, manufactures and markets distinct products and services. Refer to Note ~~14,~~15, Segments Information, for further detail.


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Recently Adopted Accounting Pronouncements

On January 1, 2023, the Company adopted ASU 2021-08, Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("(“ASU ~~2021-08"~~2021-08”), which amends ASC 805, Business Combinations (Topic 805), to add contract assets and contract liabilities to the list of exceptions to the recognition and measurement principles that apply to business combinations and to require that an acquiring entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers (Topic 606) ("(“ASC ~~606"~~606”). Janus will be applying the pronouncement prospectively to business combinations occurring on or after the adoption date.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and subsequent amendment to the initial ~~guidance:~~guidance, ASU 2021-01, Reference Rate Reform (Topic 848): Scope (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference ~~LIBOR~~the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. ASU 2022-06 defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024. Effective April 2, 2023, the Company transitioned its credit agreements from LIBOR to the ~~Secured Overnight Financing Rate ("SOFR").~~SOFR. The Company adopted this guidance prospectively on April 2, 2023, and the adoption did not have a material impact on the Consolidated Condensed Financial Statements.

Recently Issued Accounting Pronouncements

On August 23, 2023, the FASB issued ASU 2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement, under which an entity that qualifies as either a joint venture or a corporate joint venture as defined in the FASB ASC master glossary is required to apply a new basis of accounting upon the formation of the joint venture. Specifically, the ASU provides that a joint venture or a corporate joint venture (collectively, “joint ventures”) must initially measure its assets and liabilities at fair value on the formation date. The Company does not believe this will have a material impact on the Company’s consolidated financial position or results of operations.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. The update will be effective for annual periods beginning after December 15, 2023. We are assessing the effect of this update on our consolidated financial statements and believe the adoption of this standard could add material additional segment disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in a public entity’s income tax rate reconciliation table and other disclosures regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2024. We are assessing the effect of this update on our consolidated financial statements and related disclosures.

Although there are several other new accounting pronouncements issued or proposed by the FASB, which have been adopted or will be adopted as applicable, management does not believe any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial position or results of operations.


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

3. Inventories

Inventories are stated at the lower of cost or net realizable ~~value utilizing the~~value. Cost is determined using actual costs or standard costs (that approximate

actual cost) determined on a first-in, first-out ~~(FIFO) method.~~basis or average cost. Labor and overhead costs associated with inventory produced by the

Company are capitalized into inventories. The major components of inventories as of ~~July 1, 2023~~March 30, 2024 and December ~~31, 2022~~30, 2023 are as follows:

July 1, December 31,
2023 2022
Raw materials $ 41,954 $ 49,788
Work-in-process 581 1,566
Finished goods 17,038 16,323
Inventory, net $ 59,573 $ 67,677

~~The Company has recorded a reserve for inventory obsolescence as of July 1, 2023 and December 31, 2022, of approximately $2,872 and $2,034, respectively.~~


	March 30, 2024		December 30, 2023
Raw materials	$	35.1	$	31.0
Work-in-process	0.9		1.4
Finished goods	15.1		16.0
Inventories	$	51.1	$	48.4

4. Property, Plant, and Equipment

Property, ~~equipment,~~plant, and ~~other fixed assets~~equipment as of ~~July 1, 2023~~March 30, 2024 and December ~~31, 2022~~30, 2023 are as follows:


			July 1,		December 31,
		Useful Life	2023		2022
	Useful Life						Useful Life	March 30, 2024	December 30, 2023
Land	Land	Indefinite	$	4,501	$	4,501
Building	Building	39 years	2,459		2,459
Manufacturing machinery and equipment	Manufacturing machinery and equipment	3-7 years	40,689		38,814
Leasehold improvements	Leasehold improvements	Over the shorter of the lease term or respective useful life	9,731		8,327
Computer and software	Computer and software	3 years	3,877		9,580
Furniture and fixtures, and vehicles	Furniture and fixtures, and vehicles	3-7 years	8,457		3,623
Construction in progress	Construction in progress	—	8,095		1,852
			$	77,809	$	69,156
				$
Less: accumulated depreciation	Less: accumulated depreciation		(30,626)		(27,073)
			$	47,183	$	42,083
				$

Depreciation expense included in cost of revenues, was approximately ~~$2,189~~$1.8 and ~~$1,978~~$1.7 for the three month periods ended ~~July~~March 30, 2024 and April 1, 2023, respectively. Depreciation expense included in operating expenses was $1.0 and ~~July 2, 2022, respectively, and $4,369 and $3,835~~$0.5 for the ~~six months~~three month periods ended ~~July~~March 30, 2024 and April 1, 2023, ~~and July 2, 2022,~~ respectively.

5. Acquired Intangible Assets and Goodwill

Intangible assets acquired in a business combination are recognized at fair value and amortized over their estimated useful lives. The carrying ~~basis~~amount and accumulated amortization of recognized intangible assets at ~~July 1, 2023~~March 30, 2024 and December ~~31, 2022,~~30, 2023, are as follows:


			July 1,						December 31,
			2023						2022
			Gross Carrying Amount		Accumulated Amortization		Net Amount		Gross Carrying Amount		Accumulated Amortization		Net Amount
Intangible Assets		Useful Life
	Useful Life														Useful Life	March 30, 2024			December 30, 2023
				Gross Carrying Amount													Gross Carrying Amount	Accumulated Amortization		Net Amount	Gross Carrying Amount	Accumulated Amortization	Net Amount
Customer relationships	Customer relationships	10-15 years	$	408,853	$	139,910	$	268,943	$	408,246	$	125,613	$	282,633
Tradenames and trademarks	Tradenames and trademarks	Indefinite	107,613		—		107,613		107,378		—		107,378
Software development	Software development	10-15 years	20,320		6,808		13,512		20,320		6,085		14,235
Noncompete agreements	Noncompete agreements	3-8 years	396		278		118		394		255		139
Backlog		< 1 year	—		—		—		41,390		41,390		—
			$	537,182	$	146,996	$	390,186	$	577,728	$	173,343	$	404,385
				$

Changes to gross carrying amount of recognized intangible assets due to translation adjustments include ~~an approximate $638~~a loss of $0.3 and gain ~~and $1,972 gain~~of $0.8 for the periods ended ~~July 1, 2023~~March 30, 2024 and December ~~31, 2022,~~30, 2023, respectively. The amortization of intangible assets is included in the general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income. Amortization expense was approximately $7.4 for both the three month periods ended March 30, 2024 and April 1, 2023.


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Amortization expense was approximately $7,421 and $7,646 for the three month periods ended July 1, 2023 and July 2, 2022, respectively, and $14,837 and $14,871 for the six months ended July 1, 2023 and July 2, 2022, respectively.

The changes in the carrying amounts of goodwill for the period ended ~~July 1, 2023~~March 30, 2024 were as follows:


~~Balance as of December 31, 2022~~	$	~~368,204~~
~~Foreign Currency Translation Adjustment~~	~~319~~
~~Balance as of July 1, 2023~~	$	~~368,523~~


	Janus North America		Janus International		Consolidated
Balance as of December 30, 2023	$	357.0	$	11.6	$	368.6
Foreign Currency Translation Adjustment	—		(0.2)		(0.2)
Balance as of March 30, 2024	$	357.0	$	11.4	$	368.4

6. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities, as of March 30, 2024 and December 30, 2023 are summarized as follows:


		July 1,		December 31,
		2023		2022
	March 30, 2024					March 30, 2024	December 30, 2023
Customer deposits	Customer deposits	$	34,089	$	29,581
Employee compensation	Employee compensation	13,474		16,520
Interest payable
Current operating lease liabilities	Current operating lease liabilities	5,248		5,310
Sales tax payable	Sales tax payable	5,800		5,144
Income taxes		1,026		773
Accrued professional fees	Accrued professional fees	2,652		3,594
Product warranties	Product warranties	1,256		876
Accrued freight	Accrued freight	951		1,177
Interest payable		386		235
Indemnity holdback liability		—		1,002
Other liabilities	Other liabilities	7,366		6,339
Total	Total	$	72,248	$	70,551

Other liabilities as of ~~July 1, 2023~~March 30, 2024 and December ~~31, 2022~~30, 2023 consists of property tax, credit card and various other accruals.


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

7. Line of Credit

Amendment No. 3 to the ABL Credit and Guarantee Agreement - On April 10, 2023, the Company entered into Amendment Number Three to ~~the~~ ABL Credit and Guarantee Agreement (the “LOC ~~Amendment”~~Amendment No. 3”) to that certain ABL Credit and Guarantee Agreement, dated as of February 12, 2018 (the “LOC Agreement”). The LOC Amendment No. 3, among other things, (i) replaced the interest rate based on the LIBOR and related LIBOR-based mechanics applicable to borrowings under the ~~ABL Credit and Guarantee~~LOC Agreement with an interest rate based on the ~~Secured Overnight Financing Rate (“SOFR”)~~SOFR and related SOFR-based mechanics and (ii) ~~updates~~updated certain other provisions of the ~~ABL Credit and Guarantee~~LOC Agreement to reflect the transition from LIBOR to SOFR.

The ~~current~~LOC Amendment provided for a revolving line of credit ~~facility is for $80,000~~of $80.0 with interest payments due in arrears. The interest rate on the facility is based on a base rate, unless a SOFR Rate (as defined in the LOC Agreement) option is chosen by the Company.

2023 ABL Credit and Guarantee Agreement - On August 3, 2023, the Company refinanced the revolving credit facility, pursuant to a new ABL Credit and Guarantee Agreement (the “2023 LOC Agreement”). The 2023 LOC Agreement, among other things, (i) increased the previous aggregate commitments from $80.0 to $125.0, (ii) updated the manner in which the previous borrowing base under the 2023 LOC Agreement was determined, and (iii) replaced the administrative agent with a new administrative agent. Interest payments with respect to the 2023 LOC Agreement are due in arrears. The maturity date is August 3, 2028.

The interest rate on the facility is based on a base rate, unless an Adjusted Term SOFR Rate (as defined in the 2023 LOC Agreement) option is chosen by the Company. If the Adjusted Term SOFR Rate is elected, the interest computation is equal to the Adjusted Term SOFR Rate, which is subject to a 10 basis points flat credit spread adjustment (“CSA”) plus the SOFR Rate Margin of 1.25%, as of July 1, 2023. If the Base Rate (as defined in the LOC Agreement) is elected, the interest computation is equal to the Base Rate of the greatest of (a) the federal funds rate plus .5%, (b) the SOFR rate plus 1%, or (c) the financial institution’s Prime Rate (as defined in the LOC Agreement), plus the Base Rate Margin (as defined in the 2023 LOC Agreement) of ~~.25% as of July 1, 2023. At the beginning of each quarter, the applicable margin is set and determined by the administrative agent~~either 1.25%, 1.50%, or 1.75%, based on excess availability (as of March 30, 2024, the ~~average net availability on the line of credit for the previous quarter.~~

SOFR Margin Rate was 1.25%). As of ~~July 1, 2023~~March 30, 2024 and December ~~31, 2022,~~30, 2023, the interest rate in effect for the facility was ~~8.5%~~6.6% and ~~7.8%~~6.8%, respectively. The line of credit is collateralized by accounts receivable and inventories. The Company accrues an unused commitment fee to the administrative agent at the varying rate of .25% to .38%, based on the unused portion of the maximum commitment, as defined in the 2023 LOC agreement.

The Company ~~has~~ incurred ~~deferred loan~~$1.3 of debt issuance costs, ~~in the amount of $1,483~~ which were capitalized and are being amortized over the term of the facility that expires on August ~~12, 2024,~~3, 2028, using the straight-line method, and are presented as part of other assets within our Unaudited Condensed Consolidated Balance Sheet. The amortization of the deferred loan costs is included in interest expense on the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income.

Amortization of approximately ~~$62~~$0.1 was recognized for both the three month periods ended ~~July~~March 30, 2024 and April 1, ~~2023 and July 2, 2022, and $123 was recognized for both the six month periods ended July 1, 2023 and July 2, 2022.~~2023. The unamortized portion of the fees as of ~~July 1, 2023~~both March 30, 2024 and December ~~31, 2022~~30, 2023, was approximately ~~$279 and $402, respectively.~~$1.1. There were no borrowings outstanding on the line of credit as of ~~July 1, 2023~~March 30, 2024 and December ~~31, 2022.~~30, 2023.

As of March 30, 2024 and December 30, 2023, the Company maintained one letter of credit totaling approximately $0.4 on which there were no balances due. The amount available on the line of credit as of both March 30, 2024 and December 30, 2023 was approximately $124.6.


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

8. Long-Term Debt

Long-term debt consists of the following:


		July 1,		December 31,
		2023		2022
Note payable - Amendment No.5 First Lien		$	660,279	$	714,312
	March 30, 2024					March 30, 2024	December 30, 2023
Note payable - Amendment No.6 First Lien
Financing leases	Financing leases	2,880		1,043
		$	663,159	$	715,355
	$
Less: unamortized deferred finance fees	Less: unamortized deferred finance fees	5,085		7,158
Less: current maturities	Less: current maturities	8,854		8,347
Total long-term debt	Total long-term debt	$	649,220	$	699,850

~~Notes Payable - Amendment No.4 First Lien -~~ On August 18, 2021, the Company completed an incremental raise in the form of that certain Incremental Amendment No. 4 (the “Amendment No. 4 First Lien”) to the First Lien Term Loan. The Amendment No. 4 First Lien is comprised of a syndicate of lenders modified on August 18, 2021 for an aggregate principal balance of $726,413 with interest payable in arrears. The outstanding loan balance is to be repaid on a quarterly basis of 0.28% of the original balance beginning the last day of September 2021 with the remaining principal due on the maturity date of February 12, 2025. During the six months ended July 1, 2023, the Company made a voluntary prepayment of $50,000 on the Amendment No. 4 First Lien.

Notes Payable - Amendment ~~No.5~~No. 5 First Lien - On June 20, 2023, the Company entered into Amendment No. 5 (the “Amendment No. 5 First Lien”) to the First Lien Credit and Guarantee Agreement, dated as of February 12, 2018 (the “First Lien Agreement”) (“First Lien Term ~~Loan.~~Loan”). The Amendment No. 5 First Lien, among other things, (i) ~~replaces~~replaced the interest rate based on ~~the London Interbank Offered Rate (“LIBOR”)~~LIBOR and related LIBOR-based mechanics applicable to borrowings under the First Lien Agreement with an interest rate based on ~~the Secured Overnight Financing Rate (“SOFR”)~~SOFR and related SOFR-based mechanics and (ii) ~~updates~~updated certain other provisions of the First Lien Agreement to reflect the transition from LIBOR to SOFR. The Amendment No. 5 First Lien had an aggregate principal balance of $726.4 with interest payable in arrears. The outstanding loan balance was to be repaid on a quarterly basis of 0.28% of the original principal amount of the loans outstanding on the Fourth Amendment Effective Date (i.e., August 17, 2021) with the remaining principal due on the maturity date of February 12, 2025.

Notes Payable - Amendment No. 6 First Lien - On August 3, 2023, the Company refinanced its existing First Lien Term Loan pursuant to Amendment No. 6 (the “Amendment No. 6 First Lien”) to the First Lien Agreement. The loan was made by a syndicate of lenders, with the aggregate amount of $625.0. The outstanding loan balance is to be repaid on a quarterly basis of 0.25% of the original balance of the amended loan beginning the last business day of December 2023 with the remaining principal due on the maturity date of August 3, 2030. As chosen by the Company, the amended loan bears interest at a floating rate per annum consisting of Adjusted Term SOFR plus an applicable margin ~~percent (effective~~percent. As a result of a Credit rating upgrade in March 2024, the term agreement allowed the previous applicable margin rate ~~of 8.5%~~to decrease from 3.25% to 3.00%. The interest rate on the Amendment No. 6 First Lien term loan as of ~~July 1, 2023)~~March 30, 2024, was 8.37%, which is a variable rate based on Adjusted Term SOFR, subject to a 1.00% floor, and includes a 0.10% CSA and an applicable margin percentage of 3.00%.

The debt iswas secured by substantially all business assets. There are no prepayment penalties if the company makes voluntary prepayments on the outstanding principal balance.

In ~~connection~~conjunction with the Amendment No 6, the Company ~~entering into the First Lien debt agreement discussed above,~~incurred $9.5 of additional deferred finance ~~fees were capitalized and are being~~costs, which will be amortized ~~using~~over the ~~effective interest method.~~remaining term of the modified loan. Amortization of approximately ~~$789~~$0.4 and ~~$858~~$1.3 was recognized for the three ~~months~~month periods ended ~~July~~March 30, 2024 and April 1, 2023, ~~and July 2, 2022, respectively. $2,073 and $1,709 was recognized for the six months ended July 1, 2023 and July 2, 2022,~~ respectively, as a component of interest expense. The ~~increase during~~unamortized portion of the ~~six months ended July 1,~~fees as of March 30, 2024 and December 30, 2023, was approximately $11.4 and $11.8, respectively.

9. Leases

The Company primarily ~~a result~~leases certain office and manufacturing facilities, as well as vehicles, copiers, and other equipment. These operating leases generally have an original lease term between 1 year and 20 years, and some include options to extend (generally 5 to 10 years). Lease agreements generally do not include material variable lease payments, residual value guarantees, or restrictive covenants.

The components of ~~the voluntary prepayment~~right-of-use (“ROU”) assets and lease liabilities were as ~~noted above.~~follows:

~~As of July 1, 2023 and December 31, 2022, the Company maintained one letter of credit totaling approximately $400 on which there were no balances due.~~


(in millions)	Balance Sheet Classification	March 30, 2024		December 30, 2023
Assets:
Operating lease assets	Right-of-use assets, net	$	46.9	$	47.6
Finance lease assets	Right-of-use assets, net	3.0		3.3
Total leased assets		$	49.9	$	50.9
Liabilities:
Current:
Operating	Other accrued expenses	$	5.5	$	5.4
Financing	Current maturities of long-term debt	1.0		1.0
Noncurrent:
Operating	Other long-term liabilities	$	46.3	$	46.9
Financing	Long-term debt	2.2		2.4
Total lease liabilities		$	55.0	$	55.7

1516


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

~~9. Leases~~

At lease commencement, a right-of-use (“ROU”) asset and lease liability is recorded based on the present value of the future lease payments over the lease term. The Company has elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. The Company leases facilities, vehicles, and other equipment under long-term operating and financing leases with varying terms.

In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar service, which are considered non-lease components for accounting purposes. For our real estate leases, we apply a practical expedient to include these non-lease components in calculating the ROU asset and lease liability. Furthermore, for all other types of leases, the practical expedient was also elected whereby lease and non-lease components have been combined.

The Company uses the non-cancellable lease term unless it is reasonably certain that a renewal or termination option will be exercised. When available, the Company will use the rate implicit in the lease to discount lease payments to present value, however as most leases do not provide an implicit rate, the Company will estimate the incremental borrowing rate to discount the lease payments. The Company estimates the incremental borrowing rate based on the rates of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis, over a similar term, and in a similar economic environment. The ROU asset also includes any lease prepayments and initial direct costs, offset by lease incentives. The Company does not consider renewal periods or early terminations to be reasonably certain and are thus not included in the lease term for real estate or equipment assets.

~~The components of ROU assets and lease liabilities were as follows:~~

(in thousands) Balance Sheet Classification July 1, 2023 December 31, 2022
Assets:
Operating lease assets Right-of-use assets, net $ 40,607 $ 43,282
Finance lease assets Right-of-use assets, net 2,821 1,023
Total leased assets $ 43,428 $ 44,305
Liabilities:
Current:
Operating Other accrued expenses $ 5,248 $ 5,310
Financing Current maturities of long-term debt 787 280
Noncurrent:
Operating Other long-term liabilities $ 38,486 $ 40,907
Financing Long-term debt 2,093 763
Total lease liabilities $ 46,614 $ 47,260

The components of lease expense were as follows:


		Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
(in thousands)		July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022
			Three Months Ended									Three Months Ended		Three Months Ended
(in millions)										(in millions)	March 30, 2024		April 1, 2023
Operating lease cost	Operating lease cost	$	2,145	$	2,018	$	4,289	$	4,005
Variable lease cost	Variable lease cost	159		80		321		165
Short-term lease cost	Short-term lease cost	—		—		—		60
Finance lease cost:	Finance lease cost:
Amortization of right-of-use assets	Amortization of right-of-use assets	$	182	$	45	$	306	$	62
Amortization of right-of-use assets
Amortization of right-of-use assets
Interest on lease liabilities	Interest on lease liabilities	49		9		79		12
Total lease cost	Total lease cost	$	2,535	$	2,152	$	4,995	$	4,304

Other information related to leases was as follows:
July 1, 2023 December 31, 2022
Weighted Average Remaining Lease Term (in years)
Operating Leases 9.44 9.66
Finance Leases 3.49 3.37
Weighted Average Discount Rate
Operating Leases 7.1% 7.1%
Finance Leases 8.3% 6.6%


~~Janus International Group, Inc.~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~


	March 30, 2024	December 30, 2023
Weighted Average Remaining Lease Term (in years)
Operating Leases	8.62	8.85
Finance Leases	3.18	3.39
Weighted Average Discount Rate
Operating Leases	7.6%	7.6%
Finance Leases	8.4%	8.4%

As of ~~July 1, 2023,~~March 30, 2024, future minimum lease payments under noncancellable operating leases with initial or remaining lease terms in excess of one year were as follows:


(in thousands)
2023		$	4,153
(in millions)
2024
2024
2024	2024	7,531
2025	2025	6,668
2026	2026	6,084
2027	2027	5,309
2028
Thereafter	Thereafter	31,864
Total future lease payments	Total future lease payments	$	61,609
Less: imputed interest	Less: imputed interest	$	(17,875)
Present value of future lease payments	Present value of future lease payments	$	43,734

As of ~~July 1, 2023,~~March 30, 2024, future minimum repayments of finance leases were as follows:


(in thousands)
2023		$	495
(in millions)
2024
2024
2024	2024	990
2025	2025	990
2026	2026	480
2027	2027	288
2028
Thereafter	Thereafter	86
Total future lease payments	Total future lease payments	$	3,329
Less: imputed interest	Less: imputed interest	$	(449)
Present value of future lease payments	Present value of future lease payments	$	2,880


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

10. Income Taxes

The Company is taxed as a Corporation under Subchapter C, for U.S. income tax purposes and similar sections of the state income tax laws. The Company’s effective tax rate is based on pre-tax earnings, enacted U.S. statutory tax rates, non-deductible expenses, and certain tax rate differences between U.S. and foreign jurisdictions. The foreign subsidiaries file income tax returns in the United Kingdom, France, Poland, and Australia, as necessary, and ~~Singapore~~are included on the U.S. tax returns as ~~necessary. For~~pass-through entities, with the exception of Poland, which is shown on the US tax ~~reporting purposes, the Company includes the taxable income or loss with respect to the 45% ownership~~return as a corporation and is not taxed in the ~~joint venture operating in Mexico.~~US, The ~~Company’s provision~~Company accounts for income taxes ~~consists of provisions for federal, state, and foreign income taxes. Deferred tax liabilities and assets attributable to different tax jurisdictions are not offset.~~

~~The provision for income taxes for the three and six months ended July 1, 2023 and July 2, 2022 includes amounts related to entities within the Company taxed as corporations~~ in ~~the United States, United Kingdom, France, Australia, and Singapore.~~accordance with FASB ASC 740, “Income Taxes” (“ASC 740”).” The Company determines its provision for income taxes for interim periods using an estimate of its annual effective tax rate on year to date ordinary income and records any changes affecting the estimated annual effective tax rate in the interim period in which the change occurs. ~~Additionally, the~~The Company’s provision for income taxes consists of provisions for federal, state, and foreign income taxes. Deferred tax ~~effects of significant unusual or infrequently occurring items~~liabilities and assets attributable to different tax jurisdictions are ~~recognized entirely within the interim period in which the event occurs.~~not offset.

During the three ~~months~~month periods ended ~~July~~March 30, 2024 and April 1, 2023, ~~and July 2, 2022,~~ the Company recorded a total income tax provision of approximately ~~$12,354~~$10.5 and ~~$7,802~~$9.0 on pre-tax income of ~~$49,341~~$41.2 and ~~$30,639~~$35.0 resulting in an effective tax rate of ~~25.0%~~25.5% and ~~25.5%~~25.7%, respectively. During the six months ended July 1, 2023 and July 2, 2022, the Company recorded a total income tax provision of approximately $21,370 and $14,409 on pre-tax income of $84,339 and $56,950 resulting in an effective tax rate of 25.3% and 25.3%, respectively.

For the three ~~and six months~~month period ended ~~July 1, 2023,~~March 30, 2024, effective tax rates were primarily impacted by the change in statutory rate differentials, changes in estimated state income tax and apportionment rates, and permanent differences. For the three ~~and six months~~month period ended ~~July 2, 2022,~~April 1, 2023, effective rates were primarily impacted by statutory rate differentials, changes in estimated tax rates, and permanent differences.

11. Revenue Recognition

The Company accounts for a contract with a customer when both parties have approved the contract and are committed to perform their respective obligations, each party’s rights and payment terms can be identified, the contract has commercial substance, and it is probable that the Company will collect substantially all of the consideration to which it is entitled. Revenue is recognized when, or as, performance obligations are satisfied by transferring control of a promised good or service to a customer. The performance obligations typically have an original expected duration of one year or less.

Contract Balances

Contract assets are the rights to consideration in exchange for goods and services that the Company has transferred to a customer. Revenues in excess of billings result from revenues recognized over time. Unbilled receivables result from revenues recognized point in time and represent an unconditional right to payment for earned revenues and result from timing differences between when revenues are earned and billed for. Unbilled receivables are recognized as accounts receivable when they are billed. Contract liabilities result from revenues recognized over time and represent cash received in excess of revenue earned on active projects. Where the Company receives a down-payment from the customer, it is recorded in customer deposits within accrued expenses and other current liabilities until the project becomes active.

Contract balances as of March 30, 2024 were as follows:


Revenues in excess of billings at December 30, 2023	$	17.8
Unbilled receivables at December 30, 2023	31.9
Contract assets at December 30, 2023	$	49.7

Revenues in excess of billings at March 30, 2024	$	24.1
Unbilled receivables at March 30, 2024	11.3
Contract assets at March 30, 2024	$	35.4

Contract liabilities at December 30, 2023	$	26.7
Contract liabilities at March 30, 2024	$	29.7

During the three month period ended March 30, 2024, the Company recognized revenue of approximately $20.2 related to contract liabilities at December 30, 2023.

The Company derives subscription revenue from continued software support and through the Nokē Smart Entry System, a product which provides mobile access for tenants and remote monitoring and tracking for operators. We determine standalone selling price for recurring software revenue by using the adjusted market assessment approach. The recurring revenue recognized from the Nokē Smart Entry System, included in service revenues, for the three month periods ended March 30, 2024 and April 1, 2023 was $0.6 and $0.4, respectively.


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

~~11.~~Disaggregation of Revenue

The principal categories we use to disaggregate revenues are by timing and sales channel of revenue recognition. The following disaggregation of revenues depict the Company’s reportable segment revenues by timing and sales channel of revenue recognition for the three month periods ended March 30, 2024 and April 1, 2023:

Revenue by Timing of Revenue Recognition


	Three Months Ended
Reportable Segments by Timing of Revenue Recognition	March 30, 2024		April 1, 2023
Janus North America
Product revenues transferred at a point in time(1)	$	174.2	$	169.6
Product revenues transferred over time(1)	32.7		32.9
Service revenues transferred over time(1)	33.6		28.0
	$	240.5	$	230.5
Janus International
Product revenues transferred at a point in time	$	8.9	$	13.1
Service revenues transferred over time	5.8		8.5
	$	14.7	$	21.6
Eliminations	$	(0.7)	$	(0.2)
Total Revenue	$	254.5	$	251.9

(1) These numbers have been revised for the three month period ended April 1, 2023. See Note 2 to our Unaudited Condensed Consolidated Financial Statements for additional information.

Revenue by Sales Channel


	Three Months Ended
Reportable Segments by Sales Channel Revenue Recognition	March 30, 2024		April 1, 2023
Janus North America
Self Storage-New Construction	$	104.2	$	64.6
Self Storage-R3	68.3		82.4
Commercial and Others	68.0		83.5
	$	240.5	$	230.5
Janus International
Self Storage-New Construction	$	12.4	$	18.6
Self Storage-R3	2.3		3.0
	$	14.7	$	21.6
Eliminations	$	(0.7)	$	(0.2)
Total Revenue	$	254.5	$	251.9


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

12. Equity Compensation

2021 Omnibus Incentive Plan

The Company maintains its 2021 Omnibus Incentive Plan (the “Plan”) under which it grants ~~stock-based~~share-based awards to eligible directors, officers and employees in order to attract, retain and reward such individuals and strengthen the mutuality of interest between such individuals and the Company’s stockholders. The Plan allows the Company to issue and grant 15,125,000 shares.

The Company measures compensation expense for ~~stock-based~~share-based awards in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). During the ~~six months~~three month period ended ~~July 1, 2023,~~March 30, 2024, the Company granted ~~stock-based~~share-based awards including restricted stock units (“RSUs”), and performance-based restricted stock units (“PSUs”)~~, and stock options~~ under the Plan. The grant date fair value of RSUs ~~are~~is equal to the closing price of the Company’s common stock on either: (i) the date of grant; or (ii) the previous trading day, depending on the level of administration required. Forfeitures are recognized as they occur, any unvested RSUs or stock options are forfeited upon a “Termination of ~~Service”,~~Service,” as defined in the Plan, or as otherwise provided in the applicable award agreement or determined by the Company’s Compensation Committee of the Board of Directors. In connection with the equity awards, the share-based compensation expense was $1.9 and $1.8, respectively, and the income tax benefit from share-based compensation was $0.4 for both the three month periods ended March 30, 2024 and April 1, 2023.

Restricted Stock Unit Grants

RSUs are subject to a vesting period between one and four years. RSU activity for the ~~six months~~three month period ended ~~July 1, 2023~~March 30, 2024 is as follows:

~~(dollar amounts in thousands, except share and per share data)~~


(dollar amounts in millions, except share and per share data)
	RSUs	Weighted-Average Grant Date Fair Value
Unvested, outstanding at December 30, 2023	944,810	$	10.6
Granted	804,131	14.8
Vested	(163,309)	10.6
Forfeited	(10,834)	10.7
Unvested, outstanding at March 30, 2024	1,574,798	$	12.8

Six Months Ended July 1, 2023
RSUs Weighted-Average Grant Date Fair Value
Unvested, outstanding at December 31, 2022 465,064 $ 10.5
Granted 593,587 10.4
Vested (140,238) 10.5
Forfeited (14,659) 10.2
Unvested, outstanding at July 1, 2023 903,754 $ 10.5

~~Stock-based~~Share-based compensation expense for RSUs is recognized straight line over the respective vesting period, reduced for actual forfeitures, and included in general and administrative expense in the accompanying Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income. Total compensation expense related to the above awards was approximately ~~$947~~$1.2 and ~~$679~~$0.6 for the three ~~months~~month periods ended ~~July~~March 30, 2024 and April 1, 2023, ~~and July 2, 2022, respectively. Total compensation expense related to the above awards was approximately $1,584 and $1,278 for the six months ended July 1, 2023 and July 2, 2022,~~ respectively. As of ~~July 1, 2023,~~March 30, 2024, there was an aggregate of ~~$8,494~~$18.4 of unrecognized expense related to the RSUs granted, which the Company expects to amortize over a weighted-average period of ~~2.62~~2.6 years.

Performance-based Restricted Stock Unit Grants

PSU awards are based on the satisfaction of the Company’s ~~performance metrics.~~three-year cumulative adjusted EBITDA. The number of PSUs that become earned can range between 0% and 200% of the original target number of ~~PSUs awarded for the 2022 and 2023 awards.~~PSUs. PSUs are subject to a three-year performance cliff-vesting period.

PSUs activity for the ~~six months~~three month period ended ~~July 1, 2023~~March 30, 2024 is as follows:

~~(dollar amounts in thousands, except share and per share data)~~

Six months ended July 1, 2023

PSUs

Weighted-Average Grant Date Fair Value

Unvested, outstanding at December 31, 2022

252,923

9.5

(dollar amounts in millions, except share and per share data)

PSUs

Weighted-Average Grant Date Fair Value

Unvested, outstanding at December 30, 2023

Granted

229,091

10.6

Vested

—

Forfeited

—

Unvested, outstanding at July 1, 2023 (1)

482,014

10.0

Unvested, outstanding at March 30, 2024 (1)

1) This number excludes 252,923 performance stock units, which represents the incremental number of units that would be issued based on performance results from previously-granted PSU awards. ~~The PSUs granted in 2022 are currently estimated at 200% of target.~~

~~Stock-based~~Share-based compensation expense for PSUs is recognized straight line over the requisite vesting period, reduced for actual forfeitures, and included in general and administrative expense in the accompanying Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income. Total compensation expense related to the PSUs was approximately $0.5 and $1.0 for the three month periods ended

1820


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

~~Income. Total compensation expense related to the PSUs was approximately $598~~March 30, 2024 and ~~$138 for the three months ended July~~April 1, 2023, ~~and July 2, 2022, respectively.~~

~~Total compensation expense related to the performance-based awards was approximately $1,591 and $138 for the six months ended July 1, 2023 and July 2, 2022,~~ respectively. As of ~~July 1, 2023,~~March 30, 2024, there was an aggregate of ~~$4,391~~$5.8 of unrecognized expense related to the PSUs granted, which the Company expects to amortize over a weighted-average period of ~~1.96~~2.3 years.

The above table represents PSUs assuming 100% of target payout at the time of the grant. ~~Actual payouts can~~The actual payout of the 2022 grants will be in a range ~~between~~of 0% ~~and~~to 200%, depending on performance results for the three-year performance ~~period.~~period from January 2, 2022, through December 28, 2024. As of ~~July 1, 2023,~~March 30, 2024, the Company deemed the estimate of the PSUs granted in fiscal year ended December 31, 2022 to be issued at 200% of target, and have reflected such estimates within the share-based compensation expense. ~~The Company estimates the PSU’s granted during the period ending July 1, 2023 to be issued at 100% of target.~~

The ~~Actual payout of the 2022 grants will be in a range of 0% to 200%, depending on performance results for the three-year performance period from January 2, 2022, through December 28, 2024. The Actual~~actual payout of the 2023 grants will be in a range of 0% to 200%, depending on performance results for the three-year performance period from January 1, 2023, through December 27, 2025. As of March 30, 2024, the Company deemed the estimate of the PSUs granted in the three month periods ended March 30, 2024 to be issued at 100% of target, and have reflected such estimates within the share-based compensation expense.

The actual payout of the 2024 grants will be in a range of 0% to 200%, depending on performance results for the three-year performance period from January 1, 2024, through December 26, 2026. As of March 30, 2024, the Company deemed the estimate of the PSUs granted in the three month period ended March 30, 2024 to be issued at 100% of target, and have reflected such estimates within the share-based compensation expense.

Stock Options

Stock options are granted by applying a Black-Scholes valuation model to determine the fair value on the grant date. Stock options are subject to a vesting period of either three or four years. Stock option awards typically vest in 33% or 25% annual installments on each annual anniversary of the vesting commencement date for the duration of the vesting period, and expire ten years from the grant date.

The principal assumptions utilized in valuing stock options include, the expected option life, the risk-free interest rate (an estimate based on the yield of United States Treasury zero coupon with a maturity equal to the expected life of the option), the expected stock price volatility using the historical and implied price volatility, and the expected dividend yield.

~~A summary of the assumptions used in determining the fair value of stock options is as follows:~~

~~(dollar amounts in thousands, except share and per share data)~~


	~~Six Months Ended July 1, 2023~~
~~Expected life of option (years)~~	~~6.00 - 6.25~~
~~Risk-free interest rate~~	~~2.9% - 3.7%~~
~~Expected volatility of the Company’s stock~~	~~45% - 48%~~
~~Expected dividend yield on the Company’s stock~~	—	%

Stock option activity for the ~~six months~~three month period ended ~~July 1, 2023~~March 30, 2024 is as follows:


(dollar amounts in millions, except share and per share data)	Stock Options	Weighted-Average Grant Date Fair Value		Weighted-Average Exercise Price, per share		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Unvested, outstanding at December 30, 2023	544,350	$	4.5	$	9.4	8.4	$	2.0
Granted	—	—		—		—	—
Exercised	—	—		—		—	—
Vested	—	—		—		—	—
Forfeited	(18,796)	5.3		10.6		9.0	0.1
Unvested, outstanding at March 30, 2024	525,554	$	4.5	$	9.4	8.1	$	3.1
Vested not exercised at March 30, 2024	175,175	$	4.5	$	9.4	8.1	$	1.0

Six Months Ended July 1, 2023
Stock Options Weighted-Average Grant Date Fair Value Weighted Average Remaining Contractual Life (in years) Intrinsic value
Unvested, outstanding at December 31, 2022 700,729 $ 4.5 9.8 $ 0.2
Granted 18,796 5.3 9.7 0.1
Exercised — — — —
Vested (175,175) 4.5 8.7 1.2
Forfeited — — — —
Unvested, outstanding at July 1, 2023 544,350 $ 4.5 8.9 $ —
Vested not exercised at July 1, 2023 175,175 $ 4.5 8.7 $ 1.2

~~Stock-based~~Share-based compensation expense for stock options is recognized straight line over the respective vesting period, reduced for actual forfeitures, and included in general and administrative expense in the accompanying Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income. Total compensation expense related to stock options was approximately ~~$206 and $94~~$0.2 for both of the three ~~months~~month periods ended ~~July~~March 30, 2024 and April 1, ~~2023 and July 2, 2022, respectively. Total compensation expense related to stock options was approximately $406 and $94 for the six months ended July 1, 2023 and July 2, 2022, respectively.~~2023. Total unamortized ~~stock-based~~share-based compensation expense related to the unvested stock options as of March 30, 2024, was approximately ~~$2,338,~~$1.7, which the Company expects to amortize over a weighted-average period of ~~2.84~~2.1 years.

1921


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

~~12.~~13. Net Income Per Share

Basic net income per share is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is computed based on the weighted average number of common shares outstanding plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. For the three month periods ended March 30, 2024 and ~~six months ended July~~April 1, 2023, ~~and July 2, 2022,~~ dilutive potential common shares include stock options and unvested restricted stock units. Dilutive ~~EPS~~earnings per share (“EPS”) excludes all common shares if their effect is anti-dilutive.

The following table sets forth the computation of basic and diluted EPS attributable to common stockholders for the three month periods ended March 30, 2024 and ~~six months ended July~~April 1, ~~2023 and July 2, 2022 (in thousands, except share and per share data):~~2023:


		Three Months Ended				Six Months Ended
		July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022
	Three Months Ended												Three Months Ended
(in millions, except share and per share data)										(in millions, except share and per share data)	March 30, 2024	April 1, 2023
Numerator:	Numerator:
Net income attributable to common stockholders
Net income attributable to common stockholders
Net income attributable to common stockholders	Net income attributable to common stockholders	$	36,987	$	22,837	$	62,969	$	42,541
Denominator:	Denominator:
Weighted average number of shares:	Weighted average number of shares:
Weighted average number of shares:
Weighted average number of shares:
Basic
Basic
Basic	Basic	146,765,631		146,575,720		146,734,762		146,568,719
Adjustment for dilutive securities	Adjustment for dilutive securities	6,526		142,217		27,267		79,587
Diluted	Diluted	146,772,157		146,717,937		146,762,029		146,648,306
Basic net income per share attributable to common stockholders	Basic net income per share attributable to common stockholders	$	0.25	$	0.16	$	0.43	$	0.29
Diluted net income per share attributable to common stockholders	Diluted net income per share attributable to common stockholders	$	0.25	$	0.16	$	0.43	$	0.29

~~13. Revenue Recognition~~14. Share Repurchase Program

On February 28, 2024, the Company announced that the Board of Directors authorized a share repurchase program, pursuant to which the Company is authorized to purchase up to $100 million of its common stock. The repurchase authorization does not have an expiration date and may be terminated by the Company’s Board of Directors at any time. As of March 30, 2024, $84.9 is remaining under the share repurchase program. There was no repurchase program in place in the three month period ended April 1, 2023.

The ~~Company accounts for~~Inflation Reduction Act of 2022 imposes a contract with a customer when both parties have approved the contract and are committed to perform their respective obligations, each party’s rights and payment terms can be identified, the contract has commercial substance, and it is probable that the Company will collect substantially all of the consideration to which it is entitled. Revenue is recognized when, or as, performance obligations are satisfied by transferring control of a promised good or service to a customer.

~~Contract Balances~~

Contract assets are the rights to consideration in exchange for goods and services that the Company has transferred to a customer. Unbilled receivables result from revenues recognized at a point-in-time and represent an unconditional right to payment subject primarily to the passage of time. Unbilled receivables are recognized as accounts receivable when they are billed. Costs1% excise tax on share repurchases in excess of ~~billings result from revenues recognized over time and represent~~issuances, which is effective for Janus for

repurchases completed after December 31, 2022. We reflect the ~~net balance~~excise tax within equity as part of ~~billings that already occurred. Contract liabilities (billings in excess~~the repurchase of ~~costs) represent billings to a customer in excess of revenue that has been recognized over time~~the common stock.

~~Contract balances as of July 1, 2023 were as follows:~~The following table presents the share repurchase activity for the three month period ended March 30, 2024:


(in millions, except share and per share data)			Three Months Ended
~~Costs in excess~~	March 30, 2024
Number of ~~billings at December 31, 2022~~shares repurchased	1,019,889
Share repurchase cost (including excise taxes)	$	~~17,008~~15.3
~~Unbilled receivables at December 31, 2022~~	$	~~22,243~~
~~Contract assets at December 31, 2022~~	$	~~39,251~~

~~Costs in excess of billings at July 1, 2023~~	$	~~17,600~~
~~Unbilled receivables at July 1, 2023~~	$	~~32,571~~
~~Contract assets at July 1, 2023~~	$	~~50,171~~

~~Billings in excess of cost at December 31, 2022~~	$	~~21,445~~
~~Billings in excess of cost at July 1, 2023~~	$	~~18,840~~

During the three and six months ended July 1, 2023, the Company recognized revenue of approximately $6,642 and $18,590 related to contract liabilities at December 31, 2022. This reduction was offset by new billings of approximately $7,171 and $15,985 for product and services for which there were unsatisfied performance obligations to customers and revenue had not yet been recognized for the three and six month periods ended July 1, 2023.

2022


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The Company derives subscription revenue from continued software support and through the Nokē Smart Entry System, a product which provides mobile access for tenants and remote monitoring and tracking for operators. We determine standalone selling price for recurring software revenue by using the adjusted market assessment approach. The recurring revenue recognized from the Nokē Smart Entry System for the three months ended July 1, 2023 and July 2, 2022 was $774 and $316, respectively. The recurring revenue recognized from the Nokē Smart Entry System for the six months ended July 1, 2023 and July 2, 2022 was $1,208 and $611, respectively.

~~Disaggregation of Revenue~~

The principal categories we use to disaggregate revenues are by timing and sales channel of revenue recognition. The following disaggregation of revenues depict the Company’s reportable segment revenues by timing and sales channel of revenue recognition for the three and six months ended July 1, 2023 and July 2, 2022:

~~Revenue by Timing of Revenue Recognition~~

Three Months Ended Six Months Ended
Reportable Segments by Timing of Revenue Recognition July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022
Janus North America
Product revenues transferred at a point in time(1)
$ 204,548 $ 195,943 $ 381,847 $ 372,843
Product revenues transferred over time(1)
27,700 24,975 60,584 52,754
Service revenues transferred over time(1)
29,061 20,544 57,092 41,122

$ 261,309 $ 241,462 $ 499,523 $ 466,719
Janus International
Product revenues transferred at a point in time $ 12,038 $ 12,176 $ 25,143 $ 22,975
Service revenues transferred over time 9,171 8,148 17,638 15,263
$ 21,209 $ 20,324 $ 42,781 $ 38,238
Eliminations $ (11,907) $ (14,072) $ (19,788) $ (27,723)
Total Revenue $ 270,611 $ 247,714 $ 522,516 $ 477,234

~~(1) These numbers have been revised for the three and six month periods ended July 2, 2022. See Note 2 to our Unaudited Condensed Consolidated Financial Statements for additional information.~~

~~Revenue by Sales Channel~~

Three Months Ended Six Months Ended
Reportable Segments by Sales Channel Revenue Recognition July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022
Janus North America
Self Storage-New Construction $ 88,599 $ 70,650 $ 156,842 $ 146,359
Self Storage-R3 78,022 69,431 160,275 131,003
Commercial and Others 94,688 101,381 182,406 189,357

$ 261,309 $ 241,462 $ 499,523 $ 466,719
Janus International
Self Storage-New Construction $ 18,529 $ 14,884 $ 37,067 $ 26,782
Self Storage-R3 2,680 5,440 5,714 11,456
$ 21,209 $ 20,324 $ 42,781 $ 38,238
Eliminations $ (11,907) $ (14,072) $ (19,788) $ (27,723)
Total Revenue $ 270,611 $ 247,714 $ 522,516 $ 477,234


~~Janus International Group, Inc.~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

~~14.~~15. Segments Information

The Company operates its business and reports its results through two reportable segments: Janus North America and Janus International, in accordance with ASC Topic 280, Segment Reporting. The Janus International segment is comprised of JIE, with its production and sales located largely in Europe. The Janus North America segment is comprised of all the other entities including Janus Core, BETCO, NOKE, ASTA, DBCI, ACT, Janus Door, U.S. Door, and Steel Door Depot.

Summarized financial information for the Company’s segments is shown in the following tables:


		Three Months Ended				Six Months Ended
		July 1,		July 2,		July 1,		July 2,
		2023		2022		2023		2022
(dollar amounts in tables in millions)										(dollar amounts in tables in millions)	Three Months Ended
	March 30, 2024											March 30, 2024	April 1, 2023
Revenue	Revenue
Janus North America	Janus North America	$	261,309	$	241,462	$	499,523	$	466,719
Janus International		21,209		20,324		42,781		38,238
Eliminations		(11,907)		(14,072)		(19,788)		(27,723)
Consolidated Revenue		$	270,611	$	247,714	$	522,516	$	477,234
Income From Operations
Janus North America
Janus North America	Janus North America	$	61,541	$	38,173	$	110,419	$	73,028
Janus International	Janus International	2,842		1,702		5,121		1,949
Eliminations		(100)		(26)		(244)		(15)
Intersegment eliminations
Consolidated Revenue
Income (Loss) From Operations
Janus North America
Janus North America
Janus North America
Janus International
Total Segment Operating Income	Total Segment Operating Income	$	64,283	$	39,849	$	115,296	$	74,962
Depreciation Expense	Depreciation Expense
Janus North America
Janus North America
Janus North America	Janus North America	$	1,967	$	1,791	$	3,921	$	3,464
Janus International	Janus International	222		187		448		371
Consolidated Depreciation Expense	Consolidated Depreciation Expense	$	2,189	$	1,978	$	4,369	$	3,835
Amortization of Intangible Assets	Amortization of Intangible Assets
Janus North America	Janus North America	$	7,105	$	7,324	$	14,210	$	14,210
Janus North America
Janus North America
Janus International	Janus International	316		322		627		661
Consolidated Amortization Expense	Consolidated Amortization Expense	$	7,421	$	7,646	$	14,837	$	14,871
Capital Expenditures
Purchases of property, plant, and equipment
Janus North America
Janus North America
Janus North America	Janus North America	$	3,170	$	2,121	$	8,315	$	4,673
Janus International	Janus International	362		267		1,287		595
Consolidated Capital Expenditures		$	3,532	$	2,388	$	9,602	$	5,268
Consolidated purchases of property, plant, and equipment

July 1,

December 31

March 30, 2024

December 30, 2023

Property, Plant, and Equipment, Net

Janus North America

Janus International

6.7

6.1

Consolidated Property, Plant, and Equipment, Net

2023

2022

Identifiable Assets

Janus North America

1,223,137

1,209,905

Janus International

64,992

60,713

Intersegment Eliminations

Consolidated Assets

1,288,129

1,270,618

Assets held at foreign locations were approximately $68.5 and $70.5 as of March 30, 2024 and December 30, 2023, respectively. Revenues earned at foreign locations totaled approximately $14.7 and $21.6 for the three month periods ended March 30, 2024 and April 1, 2023, respectively.

2223


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

~~15.~~16. Restructuring

~~During fiscal year 2022 and 2023, the~~The Company initiated a restructuring plan in 2023 to relocate ~~one~~two of its ~~international~~ facilities and align its ongoing corporate strategy. ~~The~~In addition, the Company ~~incurs~~incurred costs associated with restructuring initiatives intended to improve operating performance, profitability and efficiency of business processes. Restructuring charges can include severance costs, relocations costs, recruiting fees affiliated with hiring new personnel, legal costs, and contract cancellation costs.

The Company records restructuring charges when they are probable and estimable. Restructuring costs are accrued when the Company announces the closure or restructuring event, and the amounts can be reasonably estimated. Restructuring costs are included in general and administrative expenses on the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income.

The Company’s restructuring expenses are comprised of the following:

(in thousands) Three Months Ended Six Months Ended
July 1, July 2, July 1, July 2,
2023 2022 2023 2022
Severance and termination benefits $ 51 $ 250 $ 145 $ 250
Facility related charges 37 517 37 620
Legal, consulting, and other
professional fees 148 250 644 250
Total Restructuring Charges $ 236 $ 1,017 $ 826 $ 1,120


(dollar amounts in tables in millions)	Three Months Ended
	March 30, 2024		April 1, 2023
Severance and termination benefits	$	0.4	$	0.1
Legal, consulting, and other costs	—		0.5
Total Restructuring Charges	$	0.4	$	0.6

The following table summarizes the changes in the Company’s accrued restructuring balance, which are included in accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheets.



Balance at December 31, 2022	$	—
Restructuring charges	~~826~~0.6
Payments	~~(826)~~(0.5)
Balance at ~~July~~April 1, 2023	$	0.1



Balance at December 30, 2023	$	—
Restructuring charges	0.4
Payments	—
Balance at March 30, 2024	$	0.4

~~16.~~17. Commitments and Contingencies

Accounting principles generally accepted in the United States of America require disclosure of certain significant estimates and current vulnerabilities due to certain concentrations. Those matters include the following:

General Litigation

The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company.

Self-Insurance

Under the Company’s workers’ compensation insurance program, coverage is obtained for catastrophic exposures under which the Company retains a portion of certain expected losses. The Company has stop loss workers’ compensation insurance for claims in excess of ~~$200~~$0.2 as of ~~July 1, 2023~~both March 30, 2024 and December ~~31, 2022, respectively.~~30, 2023. Provision for losses expected under this program is recorded based upon the Company’s estimates of the aggregate liability for claims incurred and totaled approximately ~~$394~~$0.2 and ~~$409~~$0.5 as of ~~July 1, 2023,~~March 30, 2024 and December ~~31, 2022,~~30, 2023, respectively. The amount of actual losses incurred could differ materially from the estimates reflected in these Unaudited Condensed Consolidated Financial Statements.

Under the Company’s health insurance program, coverage is obtained for catastrophic exposures under which the Company retains a portion of certain expected losses. The Company has stop loss insurance for claims in excess of ~~$275~~$0.3 as of ~~July 1, 2023~~both March 30, 2024 and December ~~31, 2022, respectively.~~30, 2023. Provision for losses expected under this program is recorded based upon the Company’s estimates of the aggregate liability for claims incurred and totaled approximately ~~$2,212~~$2.1 and ~~$2,099~~$2.4 as of ~~July 1, 2023~~March 30, 2024 and December ~~31, 2022,~~30, 2023, respectively. The amount of actual losses incurred could differ materially from the estimates reflected in these Unaudited Condensed Consolidated Financial Statements.

2324


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

~~17.~~18. Related Party Transactions

For the ~~six months~~three month periods ended ~~July~~March 30, 2024 and April 1, 2023, ~~and July 2, 2022,~~ there were no material related party transactions.

~~18.~~19. Subsequent Events

For the interim Unaudited Condensed Consolidated Financial Statements as of ~~July 1, 2023,~~March 30, 2024, the Company has evaluated subsequent events through the issuance date of the financial statements.

On ~~July 14, 2023,~~April 18, 2024, the Company ~~announced that it would make~~made a voluntary prepayment of ~~$35 million~~$21.9 toward ~~that~~the certain First Lien Credit and Guarantee Agreement, dated as of February 12, 2018 (as amended to date, the “First Lien Term Loan”)~~, which was made effective on July 19, 2023.~~. The Company used cash on hand to make the voluntary prepayment.

On ~~August 3, 2023, Janus International Group, Inc. (the “Company”)~~April 30, 2024, the Company completed a ~~refinancing~~repricing pursuant to Amendment No. 67 (the ~~“Amendment”~~“Repricing Amendment”) to that certain First Lien ~~Credit~~Term Loan, The Repricing Amendment reduced the applicable interest rate margins on the $600.0 First Lien’s Term Loan by 0.5% to 1.50%, for the term loans bearing interest at rates based on the base rate, and ~~Guarantee Agreement (the “First Lien”)~~to 2.50%, ~~dated as of February 12, 2018, by and among Janus Intermediate, LLC, a wholly owned subsidiary of~~for the term loans bearing interest at rates based on the secured overnight financing rate. The company uses the secured overnight financing rate. In addition to the change in the applicable margin rate, the Company ~~(“Janus Intermediate”), Janus International Group, LLC,~~is no longer subject to a ~~wholly owned subsidiary~~CSA rate of the Company (“Janus International”), UBS AG, Stamford Branch, as administrative agent and collateral agent, Goldman Sachs Bank USA, as successor administrative agent and collateral agent and the other parties thereto. The Amendment is comprised of a syndicate of lenders originating on August 3, 2023 in the amount of $625,000,000 with interest payable in arrears (with respect to base rate loans) or at the end of an interest period (with respect to Secured Overnight Financing Rate loans)0.1%. The outstanding loan balance is to be repaid on a quarterly basis in an amount equal to 0.25% of the original balance beginning the last business day of December 2023 with the remaining principal due on the maturity date of August 3, 2030.

On August 3, 2023, the Company also refinanced that certain ABL Credit and Guarantee Agreement, dated as of February 12, 2018 (the “LOC Agreement”) by and among Janus Intermediate, Janus International, Wells Fargo Bank, National Association, as administrative agent and collateral agent and the other parties thereto, pursuant to a new ABL Credit and Guarantee Agreement (the “2023 LOC Agreement”) by and among Janus Intermediate, Janus International, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, along with Bank of America and Goldman Sachs as syndication lenders. The 2023 LOC Agreement, among other things, (i) increased the previous aggregate commitments with respect to the LOC Agreement from $80,000,000 to $125,000,000, (ii) updated the manner in which the previous borrowing base under the LOC Agreement was determined and (iii) replaced the administrative agent with a new administrative agent. Interest payments with respect to the 2023 LOC Agreement are due in arrears.

2425

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

JANUS’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provides information which Janus’s management believes is relevant to an assessment and understanding of consolidated results of operations and financial condition. You should read the following discussion and analysis of Janus’s financial condition and results of operations in conjunction with the Unaudited Condensed Consolidated financial statements and notes thereto contained in this quarterly report on Form 10-Q (the “Form 10-Q”). and the consolidated financial statements and notes

thereto contained in Janus’s annual report on Form 10-K for the year ended December 30, 2023.

Certain information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to plans and strategy for Janus’s business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the section entitled “Risk Factors,” Janus’s actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Factors that could cause or contribute to such differences include, but are not limited to, capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this Form 10-Q. We assume no obligation to update any of these forward- looking statements.

Unless otherwise indicated or the context otherwise requires, references in this Janus’s Management’s Discussion and Analysis of Financial Condition and Results of Operations section to “Janus,” “we,” “us,” “our,” and other similar terms refer to Janus International Group Inc. (Parent) and its consolidated subsidiaries.

Percentage amounts included in this Form 10-Q have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this Form 10-Q may vary from those obtained by performing the same calculations using the figures in our Unaudited Condensed Consolidated Financial Statements included elsewhere in this Form 10-Q. Certain other amounts that appear in this Form 10-Q may not sum due to rounding.

Dollar amounts are shown in millions of dollars, unless otherwise noted, and rounded to the nearest million except for share

and per share amounts.

Introduction

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is a supplement to the accompanying Unaudited Condensed Consolidated Financial Statements, and provides additional information on our business, recent developments, financial condition, liquidity and capital resources, cash flows and results of operations. MD&A is organized as follows:

•Business Overview: This section provides a general description of our business, and a discussion of management’s general outlook regarding market demand, our competitive position and product innovation, as well as recent developments that we believe are important to understanding our results of operations and financial condition or in understanding anticipated future trends.

•Basis of Presentation: This section provides a discussion of the basis on which our ~~unaudited condensed consolidated financial statements~~Unaudited Condensed Consolidated Financial Statements were prepared.

•Results of Operations: This section provides an analysis of our unaudited results of operations for the three ~~and six~~ month periods ended ~~July~~March 30, 2024 and April 1, ~~2023 and July 2, 2022.~~2023.

•Liquidity and Capital Resources: This section provides a discussion of our financial condition and an analysis of our unaudited cash flows for the ~~six~~three month periods ended ~~July~~March 30, 2024 and April 1, ~~2023 and July 2, 2022.~~2023. This section also provides a discussion of our contractual obligations, other purchase commitments and customer credit risk that existed at ~~July 1, 2023,~~March 30, 2024, as well as a discussion of our ability to fund our future commitments and ongoing operating activities through internal and external sources of capital.

•Critical Accounting ~~Policies and~~ Estimates: This section identifies and summarizes those accounting ~~policies~~estimates that significantly impact our reported results of operations and financial condition and require significant judgment or estimates on the part of management in their application.

Business Overview

Janus is a 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 with manufacturing operations in Georgia, Texas, Arizona, Indiana, North Carolina, Poland, United Kingdom, and Australia. The self-storage industry is comprised of institutional and non-institutional facilities. Institutional facilities typically include multi-story, climate controlled facilities located in prime locations owned

and/or managed by large Real Estate Investment Trusts (“REITs”) or returns-driven operators of scale and are primarily located in the top 50 U.S. metropolitan statistical areas (“MSAs”), whereas the vast majority of non-institutional facilities are single-story, non-climate controlled facilities located outside of city centers owned and/or managed by smaller private operators that are mostly located outside of the top 50 U.S. MSAs. Janus is highly integrated with customers at every phase of a project, including facility planning/design, construction, access control and restore, rebuild, replace (R3) of ~~damaged or end-of-life products.~~

self-storage facilities.

Our business is operated through two geographic regions that comprise our two reportable segments: Janus North America and Janus International. The Janus International segment is comprised of JIEH, whose production and sales are largely in Europe and Australia. The Janus North America segment is comprised of all the other entities including Janus International Group, LLC (together with each of its operating subsidiaries, “Janus Core”), Betco, Inc. (“BETCO”), Noke, Inc. (“NOKE”), Asta Industries, Inc. (“ASTA”), Access Control Technologies, LLC (“ACT”), U.S. Door & Building Components, LLC (“U.S. Door”), Janus Door, LLC (“Janus Door”), and Steel Door Depot.com, LLC (“Steel Door Depot”).

Furthermore, our business is comprised of three primary sales channels: New Construction-Self-storage, R3-Self-storage (R3), and Commercial and Other. The Commercial and Other category is primarily comprised of roll-up sheet and rolling steel door sales into the commercial marketplace.

New construction consists of engineering and project management work pertaining to the design, building, and logistics of a greenfield new self-storage facility tailored to customer specifications while being compliant with ADA regulations. Any Nokē Smart Entry System revenue associated with a new construction project also rolls up into this sales channel.

The concept of Janus R3 is to ~~replace~~remodel self-storage facilities including storage unit doors, hallways, ceilings, offices, optimizing unit mix and ~~idle~~utilizing vacant land for movable storage units (JBI MASS relocatable storage units), and adding a more robust security solution to enable customers to (1) charge higher rental rates and (2) compete with modern self-storage facilities and large operators. In addition, the R3 sales channel includes new self-storage capacity being brought online through conversions and expansions. R3 transforms facilities through door replacement, facility upgrades, Nokē Smart Entry Systems, and relocatable storage MASS (Moveable Additional Storage Structure).

Commercial light duty steel roll-up doors are designed for applications that require less frequent and less demanding operations. Janus offers heavy duty commercial grade steel doors (minimized dead-load, or constant weight of the curtain itself) perfect for warehouses, commercial buildings, and terminals, designed with a higher gauge and deeper guides, which ~~combats~~combat the heavy scale of use with superior strength and durability. Janus also offers rolling steel doors known for minimal maintenance and easy installation with, but not limited to, the following options for: commercial slat doors, heavy duty service doors, fire doors, fire rated counter shutters, insulated service doors, counter shutters and grilles.

Executive Overview

Janus’s financials reflect the result of the execution of our operational and corporate strategy to penetrate the ~~fast-growing~~ self-storage, commercial and industrial storage markets, as well as capitalizing on the aging self-storage facilities, while continuing to diversify our products and solutions. ~~We believe~~ Janus is a bespoke provider of products and solutions for our clients.

•Revenues increased into $254.5 for the ~~three and six month periods ended July 1, 2023 as~~period ending March 30, 2024 compared to the three and six month period ended July 2, 2022, representing a 9.2% and 9.5% increase in revenue, respectively. This increase is largely due to continued strong performance within the New Construction sales channel, coupled with the impact from the commercial actions taken in 2022. The same trends were generally present in both the Janus North America segment as well as the Janus International segment, with the exception of the fact that the international segment does not sell into the Commercial sales channel.

~~Net income was $37.0 million and $63.0 million~~$251.9 for the ~~three and six month periods ended July~~period ending April 1, 2023, representing a 62.0% and 48.0% increase from $22.8 million and $42.5 million for the three and six month periods ended July 2, 2022. Net income as a percentage of revenue was 13.7% and 12.1% representing an increase of 4.4% and 3.1% from 9.2% and 8.9% for the three and six month periods ended July 2, 2022.

Adjusted EBITDA was $74.0 million and $135.2 million for the three and six month periods ended July 1, 2023, representing a 46.0% and 41.8% increase from $50.7 million and $95.3 million for the three and six month periods ended July 2, 2022.2023.

•Net income increased to $30.7 for the period ending March 30, 2024, compared to $26.0 for the period ending April 1, 2023.

•Adjusted EBITDA ~~as a percentage of revenue was 27.3%~~grew to $66.3 for the ~~three month~~ period ~~ended July 1, 2023, and 25.9%~~ending March 30, 2024 compared to $61.2 for the ~~six month~~ period ~~ended July~~ending April 1, ~~2023, representing an increase~~2023.

•Cash flows from operations of ~~6.8% from 20.5%~~$28.6 and $24.0 free cash flows were generated for the ~~three month~~ period ~~ended July 2, 2022~~ending March 30, 2024 compared to $50.3 and ~~an increase of 5.9%~~$44.2 cash flows from ~~20.0%~~operations and free cash flows for the six months July 2, 2022 . The increase in Adjusted EBITDA margins is a direct result of increased revenue primarily due to commercial actions taking full effect in third quarter of 2022, product mix, as well as the impact of cost synergies from our acquisitions of DBCI and ACT in 2021,period ending April 1, 2023.

•Common stock worth $15.3 was repurchased, which was ~~partially offset by~~1.02 million shares as part of our previously announced $100.0 share buy-back program.

•Long-Term Debt to Net Income ratio decreased to 4.4x for the ~~inflationary increases in raw material, labor and logistics costs impacting~~period ending March 30, 2024, from 4.6x as of December 30, 2023, Net leverage ratio decreased to 1.5x for the ~~business in advance~~period ending March 30, 2024, down from 1.6x as of ~~commercial actions taking full effect.~~December 30, 2023.

Information regarding use of Adjusted EBITDA, aFree Cash Flow, and Net Leverage Ratio non-GAAP ~~measure,~~measures, and a reconciliation ~~of Adjusted EBITDA~~ to ~~net income,~~ the most comparable GAAP measure, isare included in “Non-GAAP Financial Measures.”

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Business Segment Information

Our business is operated through two geographic regions that comprise our two reportable segments: Janus North America and Janus International.

Janus North America ~~is comprised of eight operating segments including Janus Core, Janus Door, Steel Door Depot, ASTA, NOKE, BETCO, DBCI, and ACT. Janus North America~~ produces and provides various fabricated components such as commercial and self-storage doors, walls, hallway systems, metal roof panels, metal wall panels and building components used primarily by owners or builders of self-storage ~~facilities and~~facilities. Installation services are also ~~offers installation services~~provided along with the products. Janus also provides industrial building solutions. Janus North America ~~represented 92.2% and 91.8%~~represents approximately 90% - 95% of the Company’s ~~revenue for the three and six month periods ended July 1, 2023. Janus North America represented 91.8% and 92.0% of the Company’s revenue for the three and six month periods ended July 2, 2022.~~revenue.

~~Janus International is comprised solely of one operating segment, Janus International Europe Holdings Ltd (UK).~~ The Janus International segment, whose production and sales are largely in Europe and Australia, produces and provides similar products and services as Janus North America, with the exception of the fact that the international segment does not sell into the Commercial sales ~~channel, and they’re largely in Europe as well as Australia.~~channel. Janus International ~~represented 7.8% and 8.2%~~represents approximately 5% - 10% of Janus’s ~~revenue for the three and six month periods ended July 1, 2023. Janus International represented 8.2% and 8.0% of the Company’s revenue for the three and six month periods ended July 2, 2022.~~revenue.

Key Performance Measures

Management evaluates the performance of its reportable segments based on the revenue of services and products, gross profit, operating margins, and cash from business operations. We use Adjusted EBITDA, which is a non-GAAP financial metric, as a supplemental measure of our performance in order to provide investors with an improved understanding of underlying performance trends. Please see the section “Non-GAAP Financial Measure” below for further discussion of this financial measure, including the reasons why we use such financial measures and reconciliations of such financial measures to the nearest GAAP financial measures.

Human capital is also one of the main cost drivers of the manufacturing, selling, and administrative processes of Janus. As a result, headcount reflect Janus’s operational status, indicating whether the business is ~~reflective of the health of Janus, indicative of an expansion~~expanding or ~~contraction of the overall business.~~contracting. We expect a continued rise in our workforce as we expand our operations. Additionally, we foresee the need to hire additional software personnel as we continue to ~~increase headcount in~~expand the ~~future as we grow~~software accessibility component of our business. As of ~~July~~March 30, 2024, and April 1, 2023, ~~and July 2, 2022,~~ the headcount was ~~2,385~~2,382 employees (including ~~585~~424 temporary employees) and ~~2,205~~2,301 employees (including ~~575~~518 temporary employees), ~~respectively~~respectively.

The following table sets forth key performance measures for the three month periods ended ~~July~~March 30, 2024 and April 1, ~~2023 and July 2, 2022 (dollar amounts in thousands):~~2023:

Three Months Ended Variance
July 1, 2023 July 2, 2022 $ %
Total Revenue $ 270,611 $ 247,714 $ 22,897 9.2 %
Adjusted EBITDA $ 73,984 $ 50,683 $ 23,301 46.0 %
Adjusted EBITDA (% of revenue) 27.3 % 20.5 % 6.8 %


		Six Months Ended						Variance
		July 1, 2023			July 2, 2022			$		%
(dollar amounts in tables in millions)												(dollar amounts in tables in millions)	Three Months Ended										Variance
	March 30, 2024																March 30, 2024					April 1, 2023					$			%
Total Revenue	Total Revenue	$	522,516		$	477,234		$	45,282	9.5	%	Total Revenue	$	254.5		$		$	251.9		$			$	2.6	1.0		1.0	%
Adjusted EBITDA	Adjusted EBITDA	$	135,167		$	95,349		$	39,818	41.8	%	Adjusted EBITDA	$	66.3		$		$	61.2		$			$	5.1	8.3		8.3	%
Adjusted EBITDA (% of revenue)	Adjusted EBITDA (% of revenue)	25.9		%	20.0		%			5.9	%	Adjusted EBITDA (% of revenue)	26.1		%			24.3		%									1.8	%

Total revenue increased by ~~$22.9 million and $45.3 million~~$2.6 or ~~9.2% and 9.5%~~1.0% for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023~~March 30, 2024 compared to the ~~six~~three month period ended ~~July 2, 2022,~~April 1, 2023, primarily due to improved market conditions, product mix, and commercial actions.

Adjusted EBITDA increased by ~~$23.3 million and $39.8 million~~$5.1 or ~~46.0% and 41.8%~~8.3% from the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023~~March 30, 2024 compared to the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022,~~April 1, 2023, primarily due to increased revenue and decrease in cost of revenues, which increased the gross margin, and was partially offset by increased ~~cost of revenues and general and administrative~~operating expenses.

Adjusted EBITDA as a percentage of revenue increased ~~6.8% and 5.9%~~180bps for the three ~~and six~~ month period ended ~~July 1, 2023~~March 30, 2024 primarily due to increased revenue, ~~due to commercial actions taking full effect,~~segment mix and the benefit of decreases in raw material costs, which was partially offset by ~~inflationary~~ increases in ~~raw material, labor and logistics costs in advance of commercial and cost containment actions taking full effect. In addition to~~operating expenses as the ~~inflationary cost pressures, Janus also experienced incremental costs as a public company and incremental costs associated with the robust pace of activity~~business scales for ~~the balance of the year and investing in customer service.~~continued growth. (See “Non-GAAP Financial Measures” section).

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Basis of Presentation

The Unaudited Condensed Consolidated Financial Statements have been derived from the accounts of Janus and its wholly owned subsidiaries. Janus’s fiscal year follows a 4-4-5 calendar which divides a year into four quarters of 13 weeks, grouped into two 4-week “months” and one 5-week “month.” As a result, some monthly comparisons are not comparable as one month is longer than the other two. The major advantage of a 4-4-5 calendar is that the end date of the period is always the same day of the week, making manufacturing planning easier as every period is the same length. Every fifth or sixth year will require a 53rd week.

We have presented results of operations, including the related discussion and analysis for:

•The thirteen ~~weeks~~week period ended ~~July 1, 2023~~March 30, 2024 compared to the thirteen ~~weeks~~week period ended ~~July 2, 2022.~~April 1, 2023.

Components of Results of Operations

Product Revenues. Product revenues represent the revenue from the sale of products, including steel roll-up and swing doors, rolling steel doors, steel structures, as well as hallway systems and facility and door automation technologies for commercial and self-storage customers. Product revenue is recognized upon transfer of control to the customer, which generally takes place at the point of destination. Product revenues also include all revenues affiliated with erecting a self storage facility for our customers, which is recognized over-time, over the life of the contract. We expect our product revenue may vary from period to period based on, among other things, the timing and size of orders and delivery of products and the impact of significant transactions. Revenues are monitored and analyzed as a function of sales reporting within the following sales ~~channels,~~channels; New Construction, R3, and Commercial and Other.

Service ~~revenues.~~Revenues. Service revenues reflect installation services to customers for steel facilities, steel roll-up and swing doors, hallway systems, and relocatable storage units which is recognized over time based on the satisfaction of our performance obligation. Janus is highly integrated with customers at every phase of a project, including facility planning/design, construction, access control and R3 of damaged, or end-of-life products or rebranding of facilities due to market consolidation. Service obligations are primarily short term and completed within a one-year time period. We expect our service revenue to increase as we add new customers and our existing customers continue to add more and more content per square foot.

Product ~~cost~~Cost of ~~revenues.~~Revenues. Product costs of revenues includes the manufacturing cost of our steel roll-up and swing doors, rolling steel doors, steel structures, and hallway systems which primarily consists of amounts paid to our third-party contract suppliers and personnel-related costs directly associated with manufacturing operations as well as overhead and indirect costs. Our product cost of revenues includes warranty costs, excess and obsolete inventory charges, shipping costs, cost of spare or replacement parts, and an allocated portion of overhead costs, including depreciation. Product costs of revenues also include all costs affiliated with erecting a self storage facility for our customers. We expect our product cost of revenues to increase ~~in absolute dollars in future periods~~ as ~~we expect~~ our product revenues ~~to continue to~~ grow.

Service ~~cost~~Cost of ~~revenues.~~Revenues. Cost of services includes third-party installation subcontractor costs directly associated with the installation of our products. Our cost of revenues include purchase price variance, cost of spare or replacement parts, warranty costs, excess and obsolete inventory charges, shipping costs, and an allocated portion of overhead costs, including depreciation. We expect our service cost of revenues to increase ~~in absolute dollars in future periods~~ as ~~we expect~~ our service revenues ~~to continue to~~ grow.

Selling and ~~marketing expense.~~Marketing Expense. Selling expenses consist primarily of compensation and benefits of employees engaged in selling activities as well as related travel, advertising, and trade shows/~~conventions, meals and entertainment expenses.~~conventions. We expect selling expenses to increase in absolute dollars in future periods as we expect our revenues to continue to grow.

General and ~~administrative expense~~Administrative Expense. General and administrative (“G&A”) expenses are comprised primarily of expenses relating to back office employee compensation and benefits, travel, meals, and entertainment expenses as well as depreciation, amortization, and non-recurring costs. We expect general and administrative expenses to increase in absolute dollars in future periods as we expect our revenues to continue to grow.

Interest ~~expense.~~Expense. Consists of interest expense on short-term and long-term debt and amortization on deferred financing fees (see “Long-Term Debt” section).

Factors Affecting the Results of Operations

Key Factors Affecting the Business and Financial Statements

Janus’s management believes our performance and future growth depends on a number of factors that present significant opportunities but also pose risks and challenges.

Factors Affecting Revenues

Janus’s revenues from products sold are driven by economic conditions, which impacts new construction of self-storage facilities, R3 of self-storage facilities, and commercial revenue.

Janus periodically modifies sales prices of ~~their~~its products due to changes in costs for raw materials and energy, market conditions, labor and logistics costs and the competitive environment. In certain cases, realized price increases are less than the announced price increases due to project pricing, competitive reactions and changing market conditions.

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Janus also offers a wide assortment of products that are differentiated by style, design, and performance attributes. Pricing and margins for products within the assortment vary. In addition, changes in the relative quantity of products purchased at different price points can impact year-to-year comparisons of net sales and operating income.

Service revenue is driven by the product revenue and the increase in value-added services, such as ~~pre-work planning, site drawings,~~ installation and general contracting, project management, and third-party security. Janus differentiates itself through on-time delivery, efficient installation, customer service satisfaction, and a reputation for high quality products.

Factors Affecting Growth Through Acquisitions

Janus’s business strategy ~~involves~~includes growth through, ~~among other things,~~ the acquisition of other ~~companies.~~companies, which yielded our acceptable internal rate of return. Janus ~~tries to evaluate~~evaluates companies that it believes will strategically fit into its business and growth ~~objectives. If Janus is unable to successfully integrate and develop acquired businesses, it could fail to achieve anticipated synergies and cost savings,~~objectives, including ~~any expected increases in revenues and operating results, which could have a material adverse effect on its financial results.~~

Janus may not be able to identify suitable acquisition or strategic investment opportunities or may be unable to obtain the required consent of its lenders and, therefore, may not be able to complete such acquisitions or strategic investments. Janus may incur expenses associated with sourcing, evaluating and negotiating acquisitions (including those that ~~do not get completed),~~will support its overall strategy of portfolio diversification, geographic expansion, and ~~it may also pay fees and expenses associated with financing acquisitions to investment banks and~~technological innovation, among other ~~advisors. Any~~areas of ~~these amounts may be substantial, and together with the size, timing and number of acquisitions Janus pursues, may negatively affect and cause significant volatility in its financial results.~~

~~In addition, Janus has assumed, and may in the future assume, liabilities of the company it is acquiring.~~focus. While Janus ~~retains third-party advisors to consult on potential liabilities related to these acquisitions, there can be no assurances~~seeks acquisition opportunities that ~~all potential liabilities~~it believes will ~~be identified or known to it. If there are unknown liabilities or~~augment its business and growth objectives, certain factors could prevent acquisition opportunities from materializing, including target-company availability, relative valuation expectations, and certain due diligence considerations, among other ~~obligations, Janus’s business could be materially affected.~~factors.

Seasonality

Generally, Janus’s sales tend to be the slowest in ~~January~~the first and fourth quarters due to more unfavorable weather conditions, customer business cycles, and the timing of renovation and new construction project launches.

Factors Affecting Operating Costs

Janus’s operating expenses are comprised of direct production costs (principally raw materials, labor, and energy), manufacturing overhead costs, freight, costs to purchase sourced products, selling and marketing, and general and administrative ~~(“G&A”)~~ expenses.

Janus’s largest individual raw material expenditure is steel coils. Fluctuations in the prices of steel coil are generally beyond Janus’s control and have a direct impact on the financial results. Janus ~~entered~~enters into agreements with ~~two of its largest~~large suppliers in order to lock in steel coil prices for part of Janus’s production needs. These agreements are renewed annually and partially mitigate the potential impacts of short-term steel coil price fluctuations. These arrangements allow Janus to purchase quantities of product within specified ranges as outlined in the contracts.

~~Freight~~Outbound freight costs are driven by Janus’s volume of ~~sales of products~~product revenues and are subject to the freight market pricing environment.

Results of Operations - Consolidated

The period to period comparisons of our results of operations have been prepared using the historical periods included in our ~~unaudited condensed consolidated financial statements.~~Unaudited Condensed Consolidated Financial Statements. The following discussion should be read in conjunction with the ~~unaudited condensed consolidated financial statements~~Unaudited Condensed Consolidated Financial Statements and related notes included elsewhere in this document. The following tables set forth our results of operations for the periods presented in dollars and as a percentage of total revenue.

Results of Operations

For the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023~~March 30, 2024 compared to the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022 (dollar amounts in thousands):~~April 1, 2023:

Three Months Ended Variance
July 1, 2023 July 2, 2022 $ %
REVENUES
Product revenues(1)
$ 232,831 $ 219,022 $ 13,809 6.3 %
Service revenues(1)
37,780 28,692 9,088 31.7 %
Total Revenues $ 270,611 $ 247,714 $ 22,897 9.2 %
Product cost of revenues 126,342 142,391 (16,049) (11.3) %
Service cost of revenues 27,949 21,342 6,607 31.0 %
Cost of Revenues $ 154,291 $ 163,733 $ (9,442) (5.8) %
GROSS PROFIT $ 116,320 $ 83,981 $ 32,339 38.5 %
OPERATING EXPENSE
Selling and marketing 16,721 14,389 2,332 16.2 %
General and administrative 35,316 29,743 5,573 18.7 %
Operating Expenses $ 52,037 $ 44,132 $ 7,905 17.9 %
INCOME FROM OPERATIONS $ 64,283 $ 39,849 $ 24,434 61.3 %
Interest expense (14,797) (8,868) (5,929) 66.9 %
Other expense (145) (342) 197 (57.6) %
INCOME BEFORE TAXES $ 49,341 $ 30,639 $ 18,702 61.0 %
Provision for Income Taxes 12,354 7,802 4,552 58.3 %
NET INCOME $ 36,987 $ 22,837 $ 14,150 62.0 %


		Six Months Ended				Variance
		July 1, 2023		July 2, 2022		$		%
(dollar amounts in tables in millions)										(dollar amounts in tables in millions)		Three Months Ended													Variance
	March 30, 2024															March 30, 2024								April 1, 2023								$							%
REVENUES	REVENUES
Product revenues(1)
Product revenues(1)
Product revenues(1)	Product revenues(1)	$	448,239	$	420,849	$	27,390	6.5	%	$	215.1			$			$	215.4			$					$	(0.3)			(0.1)				(0.1)		%
Service revenues(1)	Service revenues(1)	74,277		56,385		17,892		31.7	%	Service revenues(1)		39.4			36.5					36.5				2.9						2.9			7.9					7.9	%
Total Revenues	Total Revenues	$	522,516	$	477,234	$	45,282	9.5	%	Total Revenues		$	254.5		$				$	251.9			$					$	2.6		1.0					1.0		%
Product cost of revenues	Product cost of revenues	250,701		274,165		(23,464)		(8.6)	%	Product cost of revenues		114.7			124.4					124.4				(9.7)						(9.7)			(7.8)					(7.8)	%
Service cost of revenues	Service cost of revenues	55,561		42,519		13,042		30.7	%	Service cost of revenues		29.4			27.6					27.6				1.8						1.8			6.5					6.5	%
Cost of Revenues	Cost of Revenues	306,262		316,684		(10,422)		(3.3)	%	Cost of Revenues		$	144.1		$				$	152.0			$					$	(7.9)		(5.2)					(5.2)		%
GROSS PROFIT	GROSS PROFIT	$	216,254	$	160,550	$	55,704	34.7	%	GROSS PROFIT		$	110.4		$				$	99.9			$					$	10.5		10.5					10.5		%
OPERATING EXPENSE
OPERATING EXPENSES
Selling and marketing
Selling and marketing
Selling and marketing	Selling and marketing	31,542		27,739		3,803		13.7	%	17.6				14.8				14.8				2.8						2.8			18.9					18.9		%
General and administrative	General and administrative	69,416		57,849		11,567		20.0	%	General and administrative		37.3			34.1					34.1				3.2						3.2			9.4					9.4	%
Operating Expenses	Operating Expenses	$	100,958	$	85,588	$	15,370	18.0	%	Operating Expenses		$	54.9		$				$	48.9			$					$	6.0		12.3					12.3		%
INCOME FROM OPERATIONS	INCOME FROM OPERATIONS	$	115,296	74,962		$	40,334	53.8	%	INCOME FROM OPERATIONS		$	55.5		$				$	51.0			$					$	4.5		8.8					8.8		%
Interest expense	Interest expense	(30,796)		(17,643)		(13,153)		74.6	%	Interest expense		(14.4)			(16.0)					(16.0)				1.6						1.6			(10.0)					(10.0)	%
Other income expense		(161)		(369)		208		(56.4)	%
Other income										Other income		0.1							—									0.1							100.0		%
INCOME BEFORE TAXES	INCOME BEFORE TAXES	$	84,339	$	56,950	$	27,389	48.1	%	INCOME BEFORE TAXES		$	41.2		$				$	35.0			$					$	6.2		17.7					17.7		%
Provision for Income Taxes	Provision for Income Taxes	21,370		14,409		6,961		48.3	%	Provision for Income Taxes		10.5			9.0					9.0				1.5						1.5			16.7					16.7	%
NET INCOME	NET INCOME	$	62,969	$	42,541	$	20,428	48.0	%	NET INCOME		$	30.7		$				$	26.0			$					$	4.7		18.1					18.1		%

(1) These numbers have been revised for the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022.~~April 1, 2023. See Note 2 to our Unaudited Condensed Consolidated Financial Statements for additional information.

Revenues


(Dollar amounts in tables in millions)	Three Months Ended				Variance
	March 30, 2024		April 1, 2023		$		%
Product revenues (1)	$	215.1	$	215.4	$	(0.3)	(0.1)	%
Service revenues	39.4		36.5		2.9		7.9	%
Total	$	254.5	$	251.9	$	2.6	1.0	%

~~Revenue (dollar amounts~~(1) Product revenues include product revenues transferred at a point in ~~tables in thousands)~~
Three Months Ended
July 1, 2023 July 2, 2022 Organic Growth

%
Product revenues $ 232,831 $ 219,022 $ 13,809 6.3 %
Service revenues 37,780 28,692 9,088 31.7 %
Total $ 270,611 $ 247,714 $ 22,897 9.2 %

Six Months Ended
July 1, 2023 July 2, 2022 Organic Growth

%
Product revenues $ 448,239 $ 420,849 $ 27,390 6.5 %
Service revenues 74,277 56,385 17,892 31.7 %
Total $ 522,516 $ 477,234 $ 45,282 9.5 %
time and product revenues transferred over time.

The ~~$22.9 million and $45.3 million~~$2.6 revenue increase for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023~~March 30, 2024 compared to the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022~~April 1, 2023 is due to growth in the self storage sales channel, and is primarily attributable to ~~the positive impact from commercial actions taken~~an increase in ~~2022.~~volume.

The following table and discussion compares Janus’s sales by sales ~~channel (dollar amounts in tables in thousands)~~channel:.

Three Months Ended Variance
Consolidated July 1, 2023 % of sales July 2, 2022 % of sales $ %
New Construction - Self Storage $ 103,220 38.1 % $ 77,094 31.1 % $ 26,126 33.9 %
R3 - Self Storage 80,343 29.7 % 74,647 30.1 % 5,696 7.6 %
Commercial and Other 87,048 32.2 % 95,973 38.8 % (8,925) (9.3) %
Total $ 270,611 100.0 % $ 247,714 100.0 % $ 22,897 9.2 %


		Six Months Ended								Variance
(dollar amounts in tables in millions)														(dollar amounts in tables in millions)	Three Months Ended															Variance
Consolidated	Consolidated	July 1, 2023		% of sales		July 2, 2022		% of sales		$		%		Consolidated	March 30, 2024					% of sales					April 1, 2023					% of sales			$					%
New Construction - Self Storage	New Construction - Self Storage	$	186,364	35.7	%	$	158,094	33.1	%	$	28,270	17.9	%	New Construction - Self Storage	$	116.5		45.8			45.8		%			$	83.1		33.0		33.0	%		$	33.4		40.2				40.2	%
R3 - Self Storage	R3 - Self Storage	165,780		31.7	%	141,974		29.8	%	23,806		16.8	%	R3 - Self Storage	70.7			27.8			27.8		%			85.5			33.9		33.9	%		(14.8)			(17.3)				(17.3)	%
Self Storage														Self Storage	187.2					73.6		%			168.6					66.9	%		18.6					11.0		%

Commercial and Other
Commercial and Other
Commercial and Other	Commercial and Other	170,372		32.6	%	177,166		37.1	%	(6,794)		(3.8)	%	67.3			26.4		26.4		%			83.3				33.1		33.1	%		(16.0)			(19.2)			(19.2)		%
Total	Total	$	522,516	100.0	%	$	477,234	100.0	%	$	45,282	9.5	%	Total	$	254.5		100.0			100.0		%			$	251.9		100.0		100.0	%		$	2.6		1.0				1.0	%

New construction sales increased by ~~$26.1 million and $28.3 million~~$33.4 or ~~33.9% and 17.9%~~40.2% for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023~~March 30, 2024 compared to the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022.~~April 1, 2023. The increase in the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023 is primarily~~March 30, 2024 was due to ~~commercial initiatives.~~

~~R3 sales increased by $5.7 million~~continued high occupancy rates at existing facilities and ~~$23.8 million or 7.6% and 16.8%~~continued demand for ~~the three and six month periods ended July 1, 2023 compared to the three and six month periods ended July 2, 2022, due to the increase of conversions and expansions as self-storage~~ capacity ~~continues to be brought online~~additions through ~~R3, coupled with the positive impacts from commercial actions.~~

Commercial and other sales decreased by $8.9 million and $6.8 million or 9.3% and 3.8% for the three and six month periods ended July 1, 2023 compared to the three and six month periods ended July 2, 2022, due to the three and six month periods ended July 2, 2022, benefiting from favorable 2022 market gains due to share gains in both the commercial steel roll up door market and ASTA’s rolling steel product line, partially offset by commercial actions.

greenfield sites.

R3 sales decreased by $14.8 or 17.3% for the three month period ended March 30, 2024 compared to the three month period ended April 1, 2023. The R3 sales decrease was primarily driven by the decline in capacity additions being brought on through retail big-box conversion activity.

Commercial and other sales decreased by $16.0 or 19.2% for the three month period ended March 30, 2024 compared to the three month period ended April 1, 2023, due to shifts in demand for certain product lines, affecting the commercial steel roll up door market.

Cost of Revenues and Gross Margin

Gross margin increased by 9.1% and 7.8% to 43.0% and 41.4% for the three and six month period ended July 1, 2023, from 33.9% and 33.6% for the three and six month period ended July 2, 2022. This increase is primarily due to the commercial and cost containment initiatives.

~~(Dollar amounts in tables in thousands)~~

Three Months Ended Variance
July 1, 2023 July 2, 2022 $ %
Product cost of revenues $ 126,342 $ 142,391 $ (16,049) (11.3) %
Service cost of revenues 27,949 21,342 6,607 31.0 %
Cost of Revenues $ 154,291 $ 163,733 $ (9,442) (5.8) %


		Six Months Ended				Variance
		July 1, 2023		July 2, 2022		$		%
(dollar amounts in tables in millions)										(dollar amounts in tables in millions)	Three Months Ended								Variance
	March 30, 2024													March 30, 2024				April 1, 2023						$				%
Product cost of revenues	Product cost of revenues	$	250,701	$	274,165	$	(23,464)	(8.6)	%	Product cost of revenues	$	114.7	$		$	124.4	$			$	(9.7)		(7.8)			(7.8)	%
Service cost of revenues	Service cost of revenues	55,561		42,519		13,042		30.7	%	Service cost of revenues	29.4		27.6			27.6		1.8				1.8			6.5		6.5	%
Cost of Revenues	Cost of Revenues	$	306,262	$	316,684	$	(10,422)	(3.3)	%	Cost of Revenues	$	144.1	$		$	152.0	$			$	(7.9)		(5.2)			(5.2)	%

The cost of revenues ~~decrease of $9.4 million and $10.4 million~~decreased by $7.9 or ~~5.8% and 3.3%~~5.2% for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023~~March 30, 2024 compared to the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022.~~April 1, 2023. The decrease in product cost of revenues of ~~$16.0 million and $23.5 million~~$9.7 for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023,~~March 30, 2024, is primarily attributable to the decline in steel coil pricing, ~~due to supplier agreements Janus entered into in 2022,~~ while the increase in service cost of revenue of ~~$6.6 million and $13.0 million~~$1.8 for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023,~~March 30, 2024, is due to the higher costs necessary to support the service revenue growth of ~~31.7% and 31.7%, respectively.~~7.9%.

Gross margin increased by 370bps to 43.4% for the three month period ended March 30, 2024. This increase is primarily attributable to a decline in steel coil pricing due to supplier agreements Janus entered into in 2023.

Operating Expenses - Selling and marketing

Selling and marketing expense increased ~~$2.3 million and $3.8 million~~$2.8 or ~~16.2% and 13.7%~~18.9% for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023~~March 30, 2024 compared to the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022.~~April 1, 2023. This is primarily due to ~~increased travel and~~increases in payroll related costs for additional headcount ~~to support revenue growth.~~in sales and advertising activities.

Operating Expenses - General and administrative

General and administrative expenses increased ~~$5.6 million and $11.6 million~~$3.2 or ~~18.7% and 20.0%~~9.4% for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023~~March 30, 2024 compared to the three ~~and six~~ month period ended ~~July 2, 2022.~~April 1, 2023. The increase for the three ~~and six month period~~months is primarily due to ~~higher health insurance costs, professional fees and payroll related costs associated with~~ additional headcount ~~to support~~primarily for the ~~continued top line revenue growth.~~Atlanta software center opened in fiscal year 2023 and inflationary costs.

Interest Expense

Interest expense ~~increased $5.9 million and 13.2 million~~decreased $1.6 or ~~66.9% and 74.6%~~10.0% for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023~~March 30, 2024 compared to the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022,~~April 1, 2023, primarily due to ~~an increase in interest rates in~~voluntary debt repayments of $85.3 million during 2023, partially offset by ~~the principal repayment of $50.0 million~~higher interest rates on ~~Note payable during the first quarter of 2023~~floating rate debt. (See “Liquidity and Capital Resources” section).

Income Taxes

Income tax expense increased by ~~$4.6 million and $7.0 million~~$1.5 or ~~58.3% and 48.3% and~~16.7% from ~~$7.8 million and $14.4 million~~$9.0 for the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022,~~April 1, 2023, to ~~$12.4 million and $21.4 million~~$10.5 expense for the three ~~and six~~ month period ended ~~July 1, 2023,~~March 30, 2024, due to ~~statutory rate differentials, changes~~increase in ~~estimated state~~ income ~~tax and apportionment rates, and permanent differences.~~before taxes.

Net Income

The ~~$14.2 million and $20.4 million~~$4.7 or ~~62.0% and 48.0%~~18.1% increase in net income for ~~the~~ three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023~~March 30, 2024 as compared to the three ~~and six~~ month period ended ~~July 2, 2022, respectively,~~April 1, 2023, is largely due to an increase in revenues and a decrease in cost of revenues, partially offset by an increase in ~~selling and marketing~~operating expenses ~~general and administrative expenses and interest expense~~ for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023.~~March 30, 2024.

Segment Results of Operations

We operate in and report financial results for two segments: Janus North America and Janus International with the following sales channels, New Construction, Self-Storage R3, and Commercial and Other.

Segment operating income is the measure of profit and loss that our chief operating decision maker uses to evaluate the financial performance of the business and as the basis for resource allocation, performance reviews and compensation. For these reasons, we believe that segment operating income represents the most relevant measure of Segment profit and loss. Our chief operating decision maker may exclude certain charges or gains, such as corporate charges and other special charges, to arrive at a Segment operating income that is a more meaningful measure of profit and loss upon which to base our operating decisions. We define Segment operating margin as Segment operating income as a percentage of the segment’s Net revenues.

The segment discussion that follows describes the significant factors contributing to the changes in results for each segment included in Results of Operations.

Results of Operations - Janus North America

For the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023~~March 30, 2024 compared to the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022 (dollar amounts in thousands):~~

Three Months Ended Variance
July 1, 2023 July 2, 2022
$ %
REVENUES
Product revenues(1)
$ 232,248 $ 220,918 $ 11,330 5.1%
Service revenues(1)
29,061 20,544 8,517 41.5%
Total revenues $ 261,309 $ 241,462 $ 19,847 8.2%
Product cost of revenues 129,885 148,825 (18,940) (12.7)%
Service cost of revenues 21,867 14,413 7,454 51.7%
Cost of Revenues 151,752 163,238 (11,486) (7.0)%
GROSS PROFIT $ 109,557 $ 78,224 $ 31,333 40.1%
OPERATING EXPENSE
Selling and marketing 15,983 13,643 2,340 17.2%
General and administrative 32,033 26,408 5,625 21.3%
Operating Expenses $ 48,016 $ 40,051 $ 7,965 19.9%
INCOME FROM OPERATIONS $ 61,541 $ 38,173 $ 23,368 61.2%
April 1, 2023:

Six Months Ended Variance
July 1, 2023 July 2, 2022
$ %
REVENUES
Product revenues(1)
$ 442,431 $ 425,597 $ 16,834 4.0%
Service revenues(1)
57,092 41,122 15,970 38.8%
Total revenues $ 499,523 $ 466,719 $ 32,804 7.0%
Product cost of revenues 253,523 286,173 (32,650) (11.4)%
Service cost of revenues 42,955 30,036 12,919 43.0%
Cost of Revenues 296,478 316,209 (19,731) (6.2)%
GROSS PROFIT $ 203,045 $ 150,510 $ 52,535 34.9%
OPERATING EXPENSE
Selling and marketing 29,882 26,261 3,621 13.8%
General and administrative 62,744 51,221 11,523 22.5%
Operating Expenses $ 92,626 $ 77,482 $ 15,144 19.5%
INCOME FROM OPERATIONS $ 110,419 $ 73,028 $ 37,391 51.2%


(dollar amounts in tables in millions)	Three Months Ended				Variance
	March 30, 2024		April 1, 2023
					$		%
REVENUES
Product revenues(1)	$	206.9	$	202.5	$	4.4	2.2%
Service revenues(1)	33.6		28.0		5.6		20.0%
Total revenues	$	240.5	$	230.5	$	10.0	4.3%
Product cost of revenues	109.1		116.1		(7.0)		(6.0)%
Service cost of revenues	24.4		21.1		3.3		15.6%
Cost of Revenues	$	133.5	$	137.2	$	(3.7)	(2.7)%
GROSS PROFIT	$	107.0	$	93.3	$	13.7	14.7%
OPERATING EXPENSES
Selling and marketing	16.6		13.9		2.7		19.4%
General and administrative	34.2		30.7		3.5		11.4%
Operating Expenses	$	50.8	$	44.6	$	6.2	13.9%
INCOME FROM OPERATIONS	$	56.2	$	48.7	$	7.5	15.4%

Revenue

~~Revenue (dollar amounts in tables in thousands)~~

Three Months Ended Organic Growth
July 1, 2023 July 2, 2022 $ %
Product revenues $ 232,248 $ 220,918 $ 11,330 5.1 %
Service revenues 29,061 20,544 8,517 41.5 %
Total $ 261,309 $ 241,462 $ 19,847 8.2 %


		Six Months Ended				Organic Growth
		July 1, 2023		July 2, 2022		$		%
(dollar amounts in tables in millions)										(dollar amounts in tables in millions)	Three Months Ended								Variance
	March 30, 2024													March 30, 2024				April 1, 2023						$				%
Product revenues	Product revenues	$	442,431	$	425,597	$	16,834	4.0	%	Product revenues	$	206.9	$		$	202.5	$			$	4.4		2.2			2.2	%
Service revenues	Service revenues	57,092		41,122		15,970		38.8	%	Service revenues	33.6		28.0			28.0		5.6				5.6			20.0		20.0	%
Total	Total	$	499,523	$	466,719	$	32,804	7.0	%	Total	$	240.5	$		$	230.5	$			$	10.0		4.3			4.3	%

The ~~$19.8 million and $32.8 million~~$10.0 or ~~8.2% and 7.0%~~4.3% revenue ~~growth~~ increase is primarily attributable to New Construction sales channel growth ~~due~~and is primarily attributable to ~~new capacity additions~~an increase in volume within the New Construction - self storage sales channel, partially offset by the decline in R3 and ~~the positive impact from commercial actions.~~Commercial sales channels.

The following table and discussion compares Janus North America sales by sales ~~channel (dollar amounts in thousands).~~
Three Months Ended Variance
July 1, 2023
% of Total
Sales
July 2, 2022
% of Total
Sales
$ %
New Construction - Self Storage $ 88,599 33.9 % $ 70,650 29.2 % $ 17,949 25.4 %
R3 - Self Storage 78,022 29.9 % 69,431 28.8 % 8,591 12.4 %
Commercial and Other 94,688 36.2 % 101,381 42.0 % (6,693) (6.6) %
Total $ 261,309 100.0 % $ 241,462 100.0 % $ 19,847 8.2 %
channel.


		Six Months Ended														Variance
		July 1, 2023				% of Total Sales			July 2, 2022				% of Total Sales
												$				%
(dollar amounts in tables in millions)																						(dollar amounts in tables in millions)		Three Months Ended																			Variance
	March 30, 2024
												$
										$
									$																															%
New Construction - Self Storage		New Construction - Self Storage		$	156,842		31.4	%			$	146,359		31.3	%			$	10,483		7.2		%	New Construction - Self Storage		$	104.2		43.3					43.3	%					$	64.6			28.0			28.0	%				$	39.6		61.3					61.3	%
R3 - Self Storage	R3 - Self Storage	160,275				32.1	%		131,003				28.1	%		29,272				22.3	%	R3 - Self Storage		68.3				28.4				28.4		%				82.4				35.7				35.7	%			(14.1)				(17.1)					(17.1)	%
Self Storage																						Self Storage		172.5							71.7		%				147.0								63.7	%			25.5							17.3		%

Commercial and Other
Commercial and Other
Commercial and Other	Commercial and Other	182,406				36.5	%		189,357				40.6	%		(6,951)				(3.7)	%	68.0				28.3				28.3		%				83.5				36.3					36.3	%			(15.5)			(18.6)					(18.6)		%
Total	Total	$	499,523			100.0	%		$	466,719			100.0	%		$	32,804			7.0	%	Total		$	240.5			100.0				100.0		%				$	230.5			100.0				100.0	%			$	10.0			4.3					4.3	%

New Construction sales increased by ~~$17.9 million and $10.5 million~~$39.6 or ~~25.4% and 7.2%~~61.3% for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023~~March 30, 2024 compared to the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022,~~April 1, 2023, primarily due to ~~commercial initiatives put in place in 2022 and~~ continued high occupancy rates at existing ~~facilities.~~facilities and continued demand for capacity additions through greenfield sites.

R3 sales ~~increased~~decreased by ~~$8.6 million and $29.3 million~~$14.1 or ~~12.4% and 22.3%~~17.1% for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023~~March 30, 2024 compared to the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022, respectively, primarily due~~April 1, 2023, respectively; $11.0 of the decline was attributed to ~~the continued trend of new self-storage capacity being brought online through conversions and expansions coupled with the positive impacts~~a volume decline from ~~commercial actions.~~facility expansion/retail conversion activity.

Commercial and Other sales decreased by ~~$6.7 million and $7.0 million~~$15.5 or ~~6.6% and 3.7%~~18.6% for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023~~March 30, 2024 compared to the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022, primarily~~April 1, 2023, due to ~~the second quarter of 2022 benefiting from strong market competitions~~shifts in ~~Janus Core and ASTA~~demand for certain product lines, affecting the commercial steel roll up door and rolling steel product line market, due to pent up demand in the six month period ended July 2, 2022, offset by commercial initiatives implemented due to the inflationary increases of raw materials, labor, and logistics costs.market.

3433

Cost of Revenues and Gross Margin

Gross Margin increased by ~~9.5% and 8.4%~~400bps to ~~41.9% and 40.6%~~44.5% for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023,~~March 30, 2024, from ~~32.4% and 32.2%~~40.5% for the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022~~April 1, 2023 is primarily attributable to the decline in steel coil pricing due to supplier agreements Janus entered into in ~~2022, and an increase in service revenues for the three months ended July 1, 2023, primarily due to project mix and timing.~~2023.

~~(Dollar amounts in tables in thousands)~~

Three Months Ended Variance
July 1, 2023 July 2, 2022 $ %
Product cost of revenues $ 129,885 $ 148,825 $ (18,940) (12.7) %
Service cost of revenues 21,867 14,413 7,454 51.7 %
Cost of Revenues $ 151,752 $ 163,238 $ (11,486) (7.0) %


		Six Months Ended				Variance
		July 1, 2023		July 2, 2022		$		%
(dollar amounts in tables in millions)										(dollar amounts in tables in millions)	Three Months Ended								Variance
	March 30, 2024													March 30, 2024				April 1, 2023						$				%
Product cost of revenues	Product cost of revenues	$	253,523	$	286,173	$	(32,650)	(11.4)	%	Product cost of revenues	$	109.1	$		$	116.1	$			$	(7.0)		(6.0)			(6.0)	%
Service cost of revenues	Service cost of revenues	42,955		30,036		12,919		43.0	%	Service cost of revenues	24.4		21.1			21.1		3.3				3.3			15.6		15.6	%
Cost of Revenues	Cost of Revenues	$	296,478	$	316,209	$	(19,731)	(6.2)	%	Cost of Revenues	$	133.5	$		$	137.2	$			$	(3.7)		(2.7)			(2.7)	%

The ~~$11.5 million and $19.7 million~~$3.7 or ~~7.0% and 6.2%~~2.7% decrease in cost of revenues for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023~~March 30, 2024 compared to the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022,~~April 1, 2023, is primarily due to ~~increased revenue coupled with a~~the decrease in product cost of revenues of $7.0, which is primarily attributable to the decline in steel coil pricing, while the increase in service cost of revenue of $3.3 for the three month period ended March 30, 2024, is due to the ~~commercial and cost containment initiatives taken in 2022.~~higher costs necessary to support the service revenue growth of 20.0%

Operating Expenses - Selling and marketing

Selling and marketing expenses increased ~~$2.3 million and $3.6 million~~$2.7 or ~~17.2% and 13.8%~~19.4% from ~~$13.6 million and $26.3 million~~$13.9 for the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022~~April 1, 2023 to ~~$16.0 million and $29.9 million~~$16.6 for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023~~March 30, 2024 primarily due to increased ~~travel and~~ payroll related costs for additional headcount to support revenue growth.

Operating Expenses - General and administrative

General and administrative expenses increased ~~$5.6 million and $11.5 million~~$3.5 or ~~21.3% and 22.5%~~11.4% from ~~$26.4 million and $51.2 million~~$30.7 for the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022~~April 1, 2023 to ~~$32.0 million and $62.7 million~~$34.2 for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023.~~March 30, 2024. The increase for the three ~~and six month periods~~months is primarily due to ~~an increase in health insurance costs, professional fees and payroll related costs for~~ additional headcount ~~to support~~primarily for the ~~continued top line revenue growth.~~Atlanta software center and inflationary costs.

Income from Operations

Income from operations increased by ~~$23.4 million and $37.4 million~~$7.5 or ~~61.2% and 51.2%~~15.4% from ~~$38.2 million and $73.0 million~~$48.7 for the three ~~and six~~ month ~~periods~~period ended ~~July 2, 2022~~April 1, 2023 to ~~$61.5 million and $110.4 million~~$56.2 for the three ~~and six~~ month ~~periods~~period ended ~~July 1, 2023,~~March 30, 2024, primarily due to an increase in revenue and a reduction in cost of revenues, partially offset by an increase in selling and general and administrative expenses.

INTERNATIONAL

Results of Operations - Janus International - For the three month period ended March 30, 2024 compared to the three month period ended April 1, 2023:


(dollar amounts in tables in millions)	Three Months Ended				Variance
	March 30, 2024		April 1, 2023		$		%
REVENUE
Product revenues	$	8.9	$	13.1	$	(4.2)	(32.1)	%
Service revenues	5.8		8.5		(2.7)		(31.8)	%
Total revenues	$	14.7	$	21.6	$	(6.9)	(31.9)	%
Product cost of revenues	6.4		8.5		(2.1)		(24.7)	%
Service cost of revenues	4.9		6.5		(1.6)		(24.6)	%
Cost of Revenues	$	11.3	$	15.0	$	(3.7)	(24.7)	%
GROSS PROFIT	$	3.4	$	6.6	$	(3.2)	(48.5)	%
OPERATING EXPENSES
Selling and marketing	1.0		0.9		0.1		11.1	%
General and administrative	3.1		3.4		(0.3)		(8.8)	%
Operating Expenses	$	4.1	$	4.3	$	(0.2)	(4.7)	%
(LOSS) INCOME FROM OPERATIONS	$	(0.7)	$	2.3	$	(3.0)	(130.4)	%

International Revenue


(dollar amounts in tables in millions)	Three Months Ended				Variance
	March 30, 2024		April 1, 2023		$		%
Product revenues	$	8.9	$	13.1	$	(4.2)	(32.1)	%
Service revenues	5.8		8.5		(2.7)		(31.8)	%
Total	$	14.7	$	21.6	$	(6.9)	(31.9)	%

The $6.9 or 31.9% decrease in revenue is from a decline in volume as a result of the U.K. recessionary period.

The following table illustrates the sales by channel for the three month periods ended March 30, 2024 and April 1, 2023.


(dollar amounts in tables in millions)	Three Months Ended								Variance
	March 30, 2024		% of Total Sales		April 1, 2023		% of Total Sales		$		%
New Construction - Self Storage	$	12.4	84.4	%	$	18.6	86.1	%	$	(6.2)	(33.3)%
R3 - Self Storage	2.3		15.6	%	3.0		13.9	%	(0.7)		(23.3)	%
Total	$	14.7	100.0	%	$	21.6	100.0	%	$	(6.9)	(31.9)	%

New Construction sales decreased by $6.2 or 33.3% to $12.4 for the three month period ended March 30, 2024 compared to $18.6 for the three month period ended April 1, 2023. The decrease is due to a decline in volume as a result of the U.K. recessionary period.

R3 sales decreased by $0.7 or 23.3% to $2.3 for the three month period ended March 30, 2024 from $3.0 for the three month period ended April 1, 2023 is due to a decline in volume as a result of the U.K. recessionary period.

International Cost of Revenues and Gross Margin

Gross Margin decreased by 750bps to 23.1% for the three month period ended March 30, 2024, from 30.6% for the three month period ended April 1, 2023. The decrease in the Gross Margin for the three month period ended March 30, 2024 is due primarily to decreased revenues.


(dollar amounts in tables in millions)	Three Months Ended				Variance
	March 30, 2024		April 1, 2023		$		%
Product cost of revenues	$	6.4	$	8.5	$	(2.1)	(24.7)	%
Service cost of revenues	4.9		6.5		(1.6)		(24.6)	%
Cost of Revenues	$	11.3	$	15.0	$	(3.7)	(24.7)	%

Cost of revenues decreased by $3.7 or 24.7% for the three month period ended March 30, 2024. Cost of revenues were $11.3 for the three month period ended March 30, 2024 and $15.0 for the three month period ended April 1, 2023. The decrease in cost of revenues for the three month period ended March 30, 2024, is primarily due to a decrease in sales volume.

(Loss) Income from Operations

Income from operations decreased from $2.3 for the three month period ended April 1, 2023 to a $0.7 loss from operations, for the three month period ended March 30, 2024. The decrease for the period is primarily due to a decrease in sales volume.

Results of Operations - Eliminations

Eliminations include transactions to account for intersegment activity. The eliminations necessary to arrive at consolidated financial information activity for the three month periods ended March 30, 2024 and April 1, 2023 are as follows:

Revenues


(dollar amounts in tables in millions)	Three Months Ended
	March 30, 2024		April 1, 2023
North America Segment revenues before eliminations	$	240.5	$	230.5
International Segment revenues before eliminations	14.7		21.6
Intersegment eliminations	(0.7)		(0.2)
Consolidated total revenues	$	254.5	$	251.9

Cost of Revenues


(dollar amounts in tables in millions)	Three Months Ended
	March 30, 2024		April 1, 2023
North America Segment cost of revenues before eliminations	$	133.5	$	137.2
International Segment cost of revenues before eliminations	11.3		15.0
Intersegment eliminations	(0.7)		(0.2)
Consolidated total cost of revenues	$	144.1	$	152.0

3536

Liquidity and Capital Resources

We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. In doing so, we review and analyze our current cash on hand, borrowing capacity, days sales outstanding, inventory turns, days payable outstanding, capital expenditure forecasts, interest and principal payments on debt and income tax payments.

Our primary sources of liquidity include cash balances on hand, cash flows from operations, debt offerings and borrowing availability under our existing credit facility. We believe our operating cash flows, along with funds available under the line of credit, provide sufficient liquidity to support Janus’s short and long-term liquidity and financing needs, which are working capital requirements, capital expenditures, service of indebtedness, and acquisitions.

Financial Policy

Our financial policy seeks to: (i) selectively invest in organic and inorganic growth to enhance our portfolio, including certain strategic capital investments and (ii) maintain appropriate leverage by using free cash flows to repay outstanding borrowings.

Liquidity Policy

We maintain a strong focus on liquidity and define our liquidity risk tolerance based on sources and uses to maintain a sufficient liquidity position to meet our obligations under both normal and stressed conditions. We manage our liquidity to provide access to sufficient funding to meet our business needs and financial obligations, as well as capital allocation and growth objectives, throughout business cycles.

We have operations in various foreign countries, principally the United Kingdom, France, Australia, and Poland. Therefore, changes in the value of the related currencies affect our financial statements when translated into U.S. dollars.

Debt Profile (dollar amounts in table in millions)


	Principal Amount		Issuance Date	Maturity Date	Interest Rate	Net Carrying Value
						March 30, 2024		December 30, 2023
Notes payable - First Lien	$	625.0	August 3, 2023	August 3, 2030	8.37%1	$	621.9	$	623.4
Financing leases						3.2		3.4
Total principal debt						$	625.1	$	626.8
Less: unamortized deferred finance fees						11.4		11.8
Less: current portion of long-term debt						7.3		7.3
Long-term debt, net of current portion						$	606.4	$	607.7

(1)The interest rate on the Amendment No. 6 First Lien Term Loan as of March 30, 2024, was 8.37%, which is a variable rate based on Adjusted Term SOFR, subject to a 1.00% floor and 10 basis points flat CSA, plus an applicable margin percent of 3.00%.

As of March 30, 2024 and December 30, 2023, the Company maintained one letter of credit totaling approximately $0.4, on which there were no balances due.

First Lien Term Loan - On June 20, 2023, the Company entered into Amendment No. 5 (the “Amendment No. 5 First Lien”) to the First Lien Term Loan. The Amendment No. 5 First Lien, among other things, (i) replaces the interest rate based on the LIBOR and related LIBOR-based mechanics applicable to borrowings under the Agreement with an interest rate based on the SOFR and related SOFR-based mechanics and (ii) updates certain other provisions of the Agreement to reflect the transition from LIBOR to SOFR. As chosen by the Company, the amended loan bears interest at a floating rate per annum consisting of Adjusted Term SOFR, plus an applicable margin percent. The debt is secured by substantially all business assets.

On August 3, 2023, the Company refinanced its existing First Lien Term Loan pursuant to the Amendment No. 6 First Lien. The loan was made by a syndicate of lenders, with the aggregate amount of $625.0. The outstanding loan balance is to be repaid on a quarterly basis of 0.25% of the original balance of the amended loan beginning the last business day of December 2023 with the remaining principal due on the maturity date of August 3, 2030. As chosen by the Company, the amended loan bears interest at a floating rate per annum consisting of Adjusted Term SOFR plus an applicable margin percent (effective rate of 8.37% as of March 30, 2024). (See Note 8 to our Unaudited Condensed Consolidated Financial Statements in this Form 10-Q for a further discussion)

In April 2024, the Company made a voluntary prepayment of $21.9 toward the certain First Lien Credit and Guarantee Agreement. The Company used cash on hand to make the voluntary prepayment. The Company also completed a repricing of its existing First Lien Term Loan pursuant to Amendment No. 7 (the “Repricing Amendment”) First Lien Credit. As a result of the Repricing Amendment, the applicable interest rate of the Term Loan was reduced from Adjusted Term SOFR + 3.00% to Adjusted Term SOFR + 2.50% and no longer contains a 0.1% credit spread adjustment.

Revolving Credit Facility - On August 18, 2021, the Company increased the existing available LOC Agreement with a domestic bank, from $50.0 to $80.0, incurred additional fees for this amendment of $0.4 and extended the maturity date from February 12, 2023 to August 12, 2024. On August 3, 2023, the Company refinanced the revolving credit facility, pursuant to a new ABL Credit and Guarantee Agreement (the “2023 LOC Agreement”). The 2023 LOC Agreement, among other things, (i) increased the previous aggregate commitments from $80.0 to $125.0, (ii) updated the manner in which the previous borrowing base under the 2023 LOC Agreement was determined, and (iii) replaced the administrative agent with a new administrative agent. Interest payments with respect to the 2023 LOC Agreement are due in arrears. The maturity date is August 3, 2028.

~~INTERNATIONAL~~As chosen by the Company, the amended revolving credit facility bears interest at a floating rate per annum consisting of SOFR plus an applicable margin percent that is based on excess availability. There was no outstanding balance on the line of credit as of March 30, 2024. As of March 30, 2024, the interest rate in effect for the facility was 6.6%. The line of credit is secured by accounts receivable and inventories. (See Note 7 to our Unaudited Condensed Consolidated Financial Statements in this Form 10-Q for a further discussion)

~~Results~~The LOC Agreement and Amendment No. 6 First Lien contain affirmative and negative covenants, including limitations on, subject to certain exceptions, the incurrence of ~~Operations - Janus International-~~indebtedness, the incurrence of liens, fundamental changes, dispositions, restricted payments, investments, transactions with affiliates as well as other covenants customary for financings of these types.

The LOC Agreement also includes a financial covenant, applicable only when the excess availability is less than the greater of (i) 10% of the lesser of the aggregate commitments under the line of credit facility and the borrowing base, and (ii) $10.0. In such circumstances, we would be required to maintain a minimum fixed charge coverage ratio for the trailing four quarters equal to at least 1.00 to 1.00; subject to our ability to make an equity cure (no more than twice in any four quarter period and up to five times over the life of the facility). As of March 30, 2024, we were compliant with our covenants under the agreements governing our outstanding indebtedness.

Statement of cash flows

The following table presents a summary of cash flows from operating, investing and financing activities for the following comparative periods. For additional detail, please see the ~~three and six~~Unaudited Condensed Consolidated Statements of Cash Flows in the Unaudited Condensed Consolidated Financial Statements.

Three month ~~periods~~period ended ~~July 1, 2023~~March 30, 2024 compared to the three ~~and six month periods ended July 2, 2022 (dollar amounts in thousands):~~

Three Months Ended Variance
July 1, 2023 July 2, 2022 $ %
REVENUE
Product revenues $ 12,038 $ 12,176 $ (138) (1.1) %
Service revenues 9,171 8,148 1,023 12.6 %
Total revenues $ 21,209 $ 20,324 $ 885 4.4 %
Product cost of revenues 7,811 7,612 199 2.6 %
Service cost of revenues 6,535 6,929 $ (394) (5.7) %
Cost of Revenues 14,346 14,541 (195) (1.3) %
GROSS PROFIT $ 6,863 $ 5,783 $ 1,080 18.7 %
OPERATING EXPENSE
Selling and marketing 738 746 (8) (1.1) %
General and administrative 3,283 3,335 (52) (1.6) %
Operating Expenses $ 4,021 $ 4,081 $ (60) (1.5) %
INCOME FROM OPERATIONS $ 2,842 $ 1,702 $ 1,140 67.0 %

Six Months Ended Variance
July 1, 2023 July 2, 2022 $ %
REVENUE
Product revenues $ 25,143 $ 22,975 $ 2,168 9.4 %
Service revenues 17,638 15,263 2,375 15.6 %
Total revenues $ 42,781 $ 38,238 $ 4,543 11.9 %
Product cost of revenues 16,269 15,700 569 3.6 %
Service cost of revenues 13,059 12,483 576 4.6 %
Cost of Revenues 29,328 28,183 1,145 4.1 %
GROSS PROFIT $ 13,453 $ 10,055 $ 3,398 33.8 %
OPERATING EXPENSE
Selling and marketing 1,660 1,478 182 12.3 %
General and administrative 6,672 6,628 44 0.7 %
Operating Expenses $ 8,332 $ 8,106 $ 226 2.8 %
INCOME FROM OPERATIONS $ 5,121 $ 1,949 $ 3,172 162.8 %

~~Revenue (dollar amounts in tables in thousands)~~

Three Months Ended Organic Growth
July 1, 2023 July 2, 2022 $ %
Product revenues $ 12,038 $ 12,176 $ (138) (1.1) %
Service revenues 9,171 8,148 1,023 12.6 %
Total $ 21,209 $ 20,324 $ 885 4.4 %

Six Months Ended Organic Growth
July 1, 2023 July 2, 2022 $ %
Product revenues $ 25,143 $ 22,975 $ 2,168 9.4 %
Service revenues 17,638 15,263 2,375 15.6 %
Total $ 42,781 $ 38,238 $ 4,543 11.9 %

~~The $0.9 million and $4.5 million or 4.4% and 11.9% increase in revenue is due to organic growth driven by increased sales volumes, improved market conditions and commercial actions instituted.~~

~~The following table illustrates the sales by channel for the three and six month periods ended July 1, 2023 and July 2, 2022.~~

~~(Dollar amounts in tables in thousands)~~

Three Months Ended

% of Total
Sales
Variance
July 1, 2023

% of Total
Sales
July 2, 2022 $ %
New Construction - Self Storage $ 18,529 87.4 % $ 14,884 73.2 % $ 3,645 24.5%
R3 - Self Storage 2,680 12.6 % 5,440 26.8 % (2,760) (50.7) %
Total $ 21,209 100.0 % $ 20,324 100.0 % $ 885 4.4 %

Six Months Ended

% of Total
Sales
Variance
July 1, 2023

% of Total
Sales
July 2, 2022 $ %
New Construction - Self Storage $ 37,067 86.6 % $ 26,782 70.0 % $ 10,285 38.4%
R3 - Self Storage 5,714 13.4 % 11,456 30.0 % (5,742) (50.1) %
Total $ 42,781 100.0 % $ 38,238 100.0 % $ 4,543 11.9 %

New Construction sales increased by $3.6 million and $10.3 million or 24.5% and 38.4% to $18.5 million and $37.1 million for the three and six month periods ended July 1, 2023 compared to $14.9 million and $26.8 million for the three and six month periods ended July 2, 2022. The increase was due to increased volumes, commercial actions, and higher occupancy rates at existing facilities, leading to a necessity for an expansion in capacity by operators.

R3 sales decreased by $2.8 million and $5.7 million or 50.7% and 50.1% to $2.7 million and $5.7 million for the three and six month periods ended July 1, 2023 from $5.4 million and $11.5 million for the three and six month periods ended July 2, 2022 primarily due to project timing and mix factors affecting the six month period ended ~~July~~April 1, ~~2023.~~2023:


	March 30, 2024		April 1, 2023		Variance
(dollar amounts in tables in millions)					$		%
Net cash provided by operating activities	$	28.6	$	50.2	$	(21.6)	(43.0)	%
Net cash used in investing activities	(4.6)		(7.1)		2.5		(35.2)	%
Net cash used in financing activities	(17.1)		(52.1)		35.0		(67.2)	%
Effect of foreign currency rate changes on cash	(0.2)		0.2		(0.4)		(200.0)	%
Net increase (decrease) in cash	$	6.7	$	(8.8)	$	15.5	(176.1)	%

~~Cost of Revenues and Gross Margin~~Net cash provided by operating activities

~~Gross Margin increased~~Net cash provided by ~~3.9% and 5.1% to 32.4% and 31.4%~~operating activities decreased by $21.6 for the ~~three and six month periods ended July 1, 2023, from 28.5% and 26.3% for the three and six month periods ended July 2, 2022. The increase in the Gross Margin for~~ three month period ended ~~July 1, 2023 is due primarily~~March 30, 2024 as compared to ~~increased revenue resulting in improved absorption.~~

~~(Dollar amounts in tables in thousands)~~

Three Months Ended Variance
July 1, 2023 July 2, 2022 $ %
Product cost of revenues $ 7,811 $ 7,612 $ 199 2.6 %
Service cost of revenues 6,535 6,929 (394) (5.7) %
Cost of Revenues $ 14,346 $ 14,541 $ (195) (1.3) %

Six Months Ended Variance
July 1, 2023 July 2, 2022 $ %
Product cost of revenues $ 16,269 $ 15,700 $ 569 3.6 %
Service cost of revenues 13,059 12,483 576 4.6 %
Cost of Revenues $ 29,328 $ 28,183 $ 1,145 4.1 %

~~Cost of revenues decreased by $0.2 million and increased by $1.1 million or 1.3% and 4.1% for~~ the three ~~and six~~ month ~~periods~~period ended ~~July~~April 1, 2023. Cost of revenues were $14.3 million and $29.3 million for the three and six month periods ended July 1, 2023 and $14.5 million and $28.2 million for the three and six month periods ended July 2, 2022. The decrease was primarily due to the change in ~~cost~~the net working capital balances of ~~revenues~~$29.8, due to the timing of accounts receivable cash receipts and the timing of interest payments for the three month ~~periods~~period ended ~~July 1, 2023, is due~~March 30, 2024, partially offset by an increase of $8.2 to ~~higher costs~~net income adjusted for non-cash items.

Net cash used in ~~the second quarter of 2022 because of supply chain constraints. The increase~~investing activities

Net cash used in ~~cost in revenue~~investing activities decreased by $2.5 for the ~~six~~three month period ended ~~July~~March 30, 2024 as compared to the three month period ended April 1, ~~2023, is due to an increase~~2023. This decrease was driven by $1.5 decrease in ~~raw material costs~~capital expenditures and a $1.0 decrease in cash paid for the Indemnity holdback liability related to ~~an increase in mezzanine product sales and the increase in cost of revenue is due to an increase in revenues.~~

~~Income from Operations~~

Income from operations increased from $1.7 million and $1.9 million for the three and six month periods ended July 2, 2022 to $2.8 million and $5.1 million for the three and six month periods ended July 1, 2023. The increasea previous acquisition for the period isended April 1, 2023.

Net cash used in financing activities

Net cash used in financing activities decreased by $35.0 for the period ended March 30, 2024 as compared to the period ended April 1, 2023. This decrease was primarily due to ~~an increase~~a decrease in ~~revenue.~~debt principal payments of $50.4, partially offset by the Company’s share repurchase of common stock for $15.3.

Capital allocation strategy

We continually assess our capital allocation strategy, including decisions relating to M&A, dividends, stock repurchases, capital expenditures, and debt pay-downs. The timing, declaration and payment of future dividends, if any, falls within the discretion of Janus’s Board of Directors and will depend upon many factors, including, but not limited to, Janus’s financial condition and earnings, the capital requirements of the business, restrictions imposed by applicable law, and any other factors the Board of Directors deems relevant from time to time.

3738

Non-GAAP Financial Measure

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. This section also provides a discussion of Adjusted EBITDA, Adjusted Net Income, Free Cash Flow and Debt Leverage Ratio, non-GAAP financial measures that the Company uses to assess liquidity and capital allocation and deployment.

Adjusted EBITDA

Janus presents Adjusted EBITDA which is a non-GAAP financial performance measure, which excludes from reported GAAP results, the impact of certain items consisting of acquisition events and other non-recurring charges. Janus believes such expenses, charges, and gains are not indicative of normal, ongoing operations, and their inclusion in results makes for more difficult comparisons between years and with peer group companies.

~~Adjusted EBITDA~~

Adjusted EBITDA is a non-GAAP financial measure 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 these measures 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. In addition, they provide useful measures for period-to-period comparisons of Janus’s business, as they remove the effect of certain non-cash items and certain variable charges. Adjusted EBITDA is defined as net income excluding interest expense, income taxes, depreciation expense, amortization, and other non-operational, non-recurring items.

Adjusted EBITDA 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 rather than net income (loss), which is the nearest GAAP equivalent of Adjusted EBITDA. 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 which are unlikely to occur again and have not occurred before (e.g., 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.

The following table present a reconciliation of ~~net income~~Net Income to Adjusted EBITDA for the periods ~~indicated (dollar amounts in tables in thousands):~~
Three Months Ended Variance
July 1, 2023 July 2, 2022
$ %
Net Income $ 36,987 $ 22,837 $ 14,150 62.0%
Interest Expense 14,797 8,868 5,929 66.9%
Income Taxes 12,354 7,802 4,552 58.3%
Depreciation 2,189 1,978 211 10.7%
Amortization 7,421 7,646 (225) (2.9)%
EBITDA $ 73,748 $ 49,131 $ 24,617 50.1%
Restructuring charges(1)
236 1,017 (781) (76.8)%
Acquisition Expense(2)
— 535 (535) (100.0)%
Adjusted EBITDA $ 73,984 $ 50,683 $ 23,301 46.0%
indicated:


		Six Months Ended								Variance
		July 1, 2023				July 2, 2022
									$				%
(dollar amounts in tables in millions)																(dollar amounts in tables in millions)	Three Months Ended												Variance
	March 30, 2024
							$
						$
						$																							%
Net Income		Net Income		$	62,969			$	42,541			$	20,428		48.0%		Net Income		$	30.7		$			$	26.0			$			$	4.7		18.1%			18.1%
Interest Expense		30,796				17,643				13,153				74.6%
Income Taxes		21,370				14,409				6,961				48.3%
Interest expense																Interest expense	14.4						16.0							(1.6)						(10.0)%
Income taxes																Income taxes	10.5						9.0							1.5						16.7%
Depreciation	Depreciation	4,369				3,835				534				13.9%		Depreciation	2.8				2.2			2.2				0.6				0.6			27.3%			27.3%
Amortization	Amortization	14,837				14,871				(34)				(0.2)%		Amortization	7.4				7.4			7.4				—				—			—%			—%
EBITDA	EBITDA	$	134,341			$	93,299			$	41,042			44.0%		EBITDA	$	65.8			$		$	60.6			$			$	5.2			8.6%			8.6%
Restructuring charges(1)	Restructuring charges(1)	826				1,120				(294)				(26.3)%		Restructuring charges(1)	0.4				0.6			0.6				(0.2)				(0.2)			(33.3)%			(33.3)%
Acquisition Expense(2)		—				821				(821)				(100.0)%
COVID-19 related expenses(3)		$	—			$	109			$	(109)			(100.0)%
Acquisition expense(2)																Acquisition expense(2)	0.1						—							0.1						100.0%
Adjusted EBITDA	Adjusted EBITDA	$	135,167			$	95,349			$	39,818			41.8%		Adjusted EBITDA	$	66.3			$		$	61.2			$			$	5.1			8.3%			8.3%

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

(2)~~Expenses~~Income or expenses related to the transition services agreement and legal settlement for ~~the DBCI acquisition which closed August 18, 2021.~~an acquisition.

~~(3)Adjustment consists of signage, cleaning and supplies to maintain work environments necessary to adhere to CDC guidelines during the COVID-19 pandemic.~~

~~Liquidity and Capital Resources~~

We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. In doing so, we review and analyze our current cash on hand, days sales outstanding, inventory turns, days payable outstanding, capital expenditure forecasts, interest and principal payments on debt and income tax payments.

Our primary sources of liquidity include cash balances on hand, cash flows from operations, proceeds from equity, debt offerings and borrowing availability under our existing credit facility. We believe our operating cash flows, along with funds available under the line of credit, provide sufficient liquidity to support Janus’s short and long-term liquidity and financing needs, which are working capital requirements, capital expenditures, service of indebtedness, as well as to finance acquisitions.

~~Financial Policy~~

~~Liquidity Policy~~

We maintain a strong focus on liquidity and define our liquidity risk tolerance based on sources and uses to maintain a sufficient liquidity position to meet our obligations under both normal and stressed conditions. At Janus, we manage our liquidity to provide access to sufficient funding to meet our business needs and financial obligations, as well as capital allocation and growth objectives, throughout business cycles.

We have operations in various foreign countries, principally the United States, the United Kingdom, France, Australia, and Singapore. Therefore, changes in the value of the related currencies affect our financial statements when translated into U.S. dollars.

~~Debt Profile (dollar amounts~~Adjusted Net Income

Adjusted Net Income is defined as net income attributable to shareholders, which excludes from reported GAAP results, the impact of certain items consisting of acquisition events and other non-recurring charges. Similar to Adjusted EBITDA, such expenses, charges, and gains are excluded since they are not indicative of Janus’s normal, ongoing operations, and their inclusion in results makes for more difficult comparisons between years and with peer group companies.

We use Adjusted Net Income to facilitate a comparison of our operating performance on a consistent basis from period to period that, when viewed in combination with our results prepared in accordance with U.S. GAAP, provides a more complete understanding of factors and trends affecting our business than does U.S. GAAP measures alone. Adjusted net income should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP.

The following table ~~in thousands)~~presents a reconciliation of Net Income to Adjusted Net Income for the periods indicated:

Principal Amount Issuance Date Maturity Date Interest Rate Net Carrying Value
July 1, 2023 December 31, 2022
Notes Payable - Amendment No. 5 First Lien $ 726,413 February 12, 2018 February 12,
2025
8.45%1
$ 660,279 $ 714,312
Financing leases 2,880 1,043
Total principal debt 663,159 715,355
Less: unamortized deferred finance fees 5,085 7,158
Less: current portion of long-term debt 8,854 8,347
Long-term debt, net of current portion $ 649,220 $ 699,850


(dollar amounts in tables in millions)	Three Months Ended
	March 30, 2024		April 1, 2023
Net Income	$	30.7	$	26.0
Net Income Adjustments(1)	0.5		0.6
Tax Effect on Net Income Adjustments(2)	(0.1)		(0.2)
Non-GAAP Adjusted Net Income	$	31.1	$	26.4

(1)The interest rate on the Amendment No. 5 First Lien term loan as of July 1, 2023, was 8.45%, which is a variable rate based on SOFR, subject to a 1.00% floor, plus an applicable margin percent of 3.25%.

~~As of July 1, 2023~~Net Income Adjustments include $0.4 restructuring charges and ~~December 31, 2022, the Company maintained one letter of credit totaling approximately $0.4 million, on which there were no balances due.~~

~~On June 20, 2023, the Company entered into Amendment No. 5 (the “Amendment No. 5 First Lien”)~~$0.1 acquisition expenses. Refer to the ~~First Lien Term Loan. The Amendment No. 5 First Lien, among other things, (i) replaces~~Adjusted EBITDA table above for further details.

(2)Tax effected for the ~~interest rate based on~~net income adjustments. Using effective tax rates of 25.5% and 25.7% for the ~~London Interbank Offered Rate (“LIBOR”)~~three months ended March 30, 2024 and related LIBOR-based mechanics applicable to borrowings under the Agreement with an interest rate based on the Secured Overnight Financing Rate (“SOFR”) and related SOFR-based mechanics and (ii) updates certain other provisions of the Agreement to reflect the transition from LIBOR to SOFR. As chosen by the Company, the amended loan bears interest at a floating rate per annum consisting of SOFR, plus an applicable margin percent (effective rate of 8.5% as of JulyApril 1, ~~2023). The debt is secured by substantially all business assets. (see Note 8 to our Unaudited Condensed Consolidated Financial Statements in this Form 10-Q for a further discussion)~~2023.

Free Cash Flow

The ~~LOC Agreement~~Company uses a measure of free cash flow to facilitate an understanding of its ability to generate cash for reinvestment into its businesses. We define "Free Cash Flow" as cash flow from operating of continuing operations, less cash used in purchases of property and ~~Amendment No. 5 First Lien contain affirmative~~equipment. Free Cash Flow is not intended as an alternative measure of cash flow from operations, as determined in accordance with GAAP in the United States. We use this financial measure both in presenting results to shareholders and ~~negative covenants, including limitations on, subject~~the investment community and in our internal evaluation and management of our businesses. We believe that this financial measure and the information it provides are useful to ~~certain exceptions,~~investors because it permits investors to view our performance using the ~~incurrence~~same tool that we use to gauge progress in achieving our goals. We believe that the non-GAAP financial measure "Free cash flow" is also useful to investors because it is an indication of ~~indebtedness, the incurrence~~cash flow that may be available to fund investments in future growth initiatives. Free cash flow should not be considered in isolation of, ~~liens, fundamental changes, dispositions, restricted payments, investments, transactions~~or as an alternative to, measures prepared in accordance with ~~affiliates as well as other covenants customary for financings of these types.~~GAAP.

The ~~LOC Agreement also includes~~following table presents a ~~financial covenant, applicable only when the excess availability is less than the greater~~reconciliation of ~~(i) 10% of the lesser of the aggregate commitments under the line of credit facility and the borrowing base, and (ii) $5.0 million. In such circumstances, we would be required~~cash flows provided by operating activities to ~~maintain a minimum fixed charge coverage ratio~~free cash flow for the trailing four quarters equal to at least 1.0 to 1.0; subject to our ability to make an equity cure (no more than twice in any four quarter period and up to five times over the life of the facility). As of July 1, 2023, we were compliant with our covenants under the agreements governing our outstanding indebtedness.periods indicated:

On August 18, 2021, the Company increased the existing available LOC Agreement with a domestic bank, from $50.0 million to $80.0 million, incurred additional fees for this amendment of $0.4 million and extended the maturity date from February 12, 2023 to August 12, 2024. There was no outstanding balance on the line of credit as of July 1, 2023 and December 31, 2022. The interest rate on the facility is based on a Base Rate, unless a SOFR Rate option is chosen by Janus. If the SOFR Rate is elected, the interest computation is equal to the SOFR Rate, subject to a 0.00% floor, plus the SOFR Rate Margin. If the Base Rate is elected, the interest computation is equal to the Base Rate plus the Base Rate Margin. At the beginning of each quarter the applicable margin is set and determined by the administrative agent based on the average net availability on the line of credit for the previous quarter. As of July 1, 2023 and December 31, 2022 the interest rate in effect for the facility was 8.5% and 7.8%, respectively. The line of credit is secured by accounts receivable and inventories.


(dollar amounts in tables in millions)	Three Months Ended
	March 30, 2024			April 1, 2023
Cash flow from operating activities	$	28.6		$	50.2
Less: capital expenditure	(4.6)			(6.1)
Free cash flow	$	24.0		$	44.1

Non-GAAP Adjusted Net Income	$	31.1		$	26.4

Free cash flow conversion of Non-GAAP Adjusted Net Income	77		%	167		%

~~Statement~~Net Leverage Ratio

The Company uses the net leverage ratio as a metric to assess liquidity and the flexibility of its balance sheet. Consistent with other liquidity metrics, the Company monitors the net leverage ratio as a measure to determine the appropriate level of debt the Company believes is optimal to operate its business, and accordingly, to quantify debt capacity available for strengthening the balance sheet for strategic capital allocation and deployment through investments in the business, and for returning capital to the shareholders. The net leverage ratio is the ratio of our consolidated senior secured indebtedness reduced by cash ~~flows~~

to our trailing four-quarter consolidated earnings before interest, taxes, depreciation, and amortization (“EBITDA”).

The following table presents a ~~summary~~reconciliation of ~~cash flows from operating, investing~~Long-Term Debt to Net Debt and ~~financing activities~~Long-Term Debt to Net Income Ratio to Net Leverage Ratio for the ~~following comparative periods. For additional detail, please see~~periods indicated:


(dollar amounts in tables in millions)	March 30, 2024		December 30, 2023
Note payable - Amendment No.6 First Lien	$	621.9	$	623.4
Less: Cash	178.4		171.7
Net Debt	$	443.5	$	451.7

Net Income (Trailing Twelve-Month periods ended)	$	140.5	$	135.7
Adjusted EBITDA (Trailing Twelve-Month periods ended)	$	290.8	$	285.6

Long-Term Debt to Net Income	4.4		4.6
Non-GAAP Net Leverage Ratio	$	1.5	$	1.6

Credit Ratings

Costs of borrowing and their respective ability to access the ~~Condensed Consolidated Statements~~capital markets are affected not only by market conditions but also by the short-term and long-term credit ratings assigned to our respective debt by the major credit rating agencies.

In determining our credit ratings, the rating agencies consider a number of ~~Cash Flows in the Unaudited Condensed Consolidated Financial Statements.~~

~~Six month period ended July 1, 2023 compared to the six month period ended July 2, 2022:~~

~~(dollar amounts in thousands)~~

July 1, 2023 July 2, 2022 Variance
$ %
Net cash provided by (used in) operating activities $ 96,599 $ 43,152 $ 53,447 123.9 %
Net cash provided by (used in) investing activities (10,587) (5,223) (5,364) 102.7 %
Net cash provided by (used in) financing activities (54,302) (10,469) (43,833) 418.7 %
Effect of foreign currency rate changes on cash 624 66 558 845.5 %
Net increase (decrease) in cash $ 32,334 $ 27,526 $ 4,808 17.5 %

~~Net cash provided by operating activities~~

Net cash provided by operating activities increased by $53.4 million to $96.6 million for the six month period ended July 1, 2023 compared to $43.2 million for the six month period ended July 2, 2022. This was primarily due to an increase of $22.5 million to net income adjusted for non-cash items, as well as gaining efficiencies within our net working capital balances as the six month period ended July 2, 2022 had an increase in net working capital balances of $25.4 million, while the six month period ending July 1, 2023 had a decrease of net working capital balances of $5.5 million.

~~Net cash used in investing activities~~

Net cash used in investing activities increased by $5.4 million for the six month period ended July 1, 2023 as compared to the six month period ended July 2, 2022. This increase was driven by $4.3 increase in capital expenditures and a $1.0 million increase in cash paid for the Indemnity holdback liability related to the ACT acquisition for the period ended July 1, 2023 as compared with the period ended July 2, 2022 to continue to support our strategic growth initiatives.

~~Net cash used in financing activities~~

Net cash used in financing activities increased by $43.8 million for the period ended July 1, 2023 as compared to the period ended July 2, 2022. This increase was driven primarily by an increase in principal payments on long-term debt due to a $50.0 million voluntary principal payment in the period ended July 1, 2023, partially offset by a $6.4 payment on the line of credit in the period ended July 2, 2022.

~~Capital allocation strategy~~

We continually assess our capital allocation strategy, including decisions relating to M&A, dividends, stock repurchases, capital expenditures, and debt pay-downs. The timing, declaration and payment of future dividends, falls within the discretion of Janus’s Board of Directors and will depend upon manyquantitative factors, including but not limited to, ~~Janus’s financial condition~~debt to total capitalization, operating cash flow relative to outstanding debt, and operating cash flow coverage of interest. In addition, the rating agencies consider qualitative factors such as consistency of our earnings over time, and the ~~capital requirements~~quality of our management and business strategy.

Our debt is rated by two rating agencies: Standard & Poor’s Corporation (S&P) and Moody’s Investors Service (Moody’s). As of March 30, 2024, our outlook and current debt ratings are as follows:


	S&P	Moody’s
Corporate1	B+	B1
Senior secured long-term debt1	BB-	B1
Outlook	Positive	Stable

1) Subsequent to quarter-end, Moody’s Ratings upgraded the ~~business, restrictions imposed~~Company’s corporate family rating (CFR) and its senior secured term loan to Ba3 from B1. The outlook was also revised to positive.

A credit rating is not a recommendation to buy, sell or hold securities. Our credit ratings may be revised or withdrawn at any time by ~~applicable law,~~the rating agencies, and each rating should be evaluated independently of any other ~~factors the Board~~rating. There can be no assurance that a rating will remain in effect for any given period of ~~Directors deems relevant from~~ time ~~to time.~~or that a rating will not be lowered, or withdrawn entirely, by a rating agency if, in its judgment, circumstances so warrant.

Contractual Obligations

Summarized below are our contractual obligations as of ~~July 1, 2023~~March 30, 2024 and their expected impact on our liquidity and cash flows in future periods (dollar amounts in ~~thousands)~~millions):

Total 2023 2024-2025 2026-2027 Thereafter
Debt Obligations $ 663,159 $ 4,462 $ 657,958 $ 663 $ 76
Supply Contracts (1)
13,280 8,296 4,984 — —
ASC 842 Liabilities
43,734 2,948 10,080 8,088 22,618
Total $ 720,173 $ 15,706 $ 673,022 $ 8,751 $ 22,694


	Total		2024		2025-2026		2027-2028		Thereafter
Debt obligations	$	621.9	$	4.7	$	12.5	$	12.5	$	592.2
Finance lease obligations	3.2		0.8		1.7		0.7		—
Supply contracts (1)	7.7		7.7		—		—		—
Operating lease obligations	51.8		4.8		12.7		10.8		23.5
Total	$	684.6	$	18.0	$	26.9	$	24.0	$	615.7

(1)Supply ~~Contracts~~contracts relate to the multiple fixed price agreements.

Debt ~~Obligations~~obligations are ~~comprised of an Amendment No 5~~presented for the principal balance and include the First Lien Term Loan ~~(see~~payments. The First term loan has a maturity date of August 3, 2030. (See Note 8, Long-Term Debt, to our Unaudited Condensed Consolidated Financial Statements in this Form 10-Q for a further discussion) ~~that expires on February 12, 2025. Subsequent~~.

Finance lease obligations include future payments related to ~~July 1, 2023,~~finance leases. Operating lease obligations consist of future payments related to operating lease liabilities for real and personal property leases with various lease expiration dates. The amount included in the ~~Company modified the First Lien Term Loan (see~~“Thereafter” column is primarily comprised of eleven real property leases with expiration dates ranging from 2029 – 2036. Finance and operating lease obligations are presented net of imputed interest. (See Note 189, Leases, to our Unaudited Condensed Consolidated Financial Statements in this Form 10-Q for a further ~~discussion). In addition, the Company has finance~~a discussion of future lease ~~liabilities included in debt obligations.~~

ASC 842 liabilities consist of operating lease liabilities for real and personal property leases with various lease expiration dates (see Note 9 to our Unaudited Condensed Consolidated Financial Statements in this Form 10-Q for a further discussion)payments). ~~The amount listed in the thereafter category is primarily comprised of twelve real property leases with expiration dates ranging from 2026 – 2036.~~

The table above does not include warranty liabilities because it is not certain when ~~this liability~~these liabilities will be funded and because ~~this liability is~~they are considered immaterial.

In addition to the contractual obligations and commitments listed and described above, the Company also had another commitment for which it is contingently liable as of ~~July 1, 2023~~March 30, 2024 and December ~~31, 2022~~30, 2023 consisting of an outstanding letter of credit of ~~$0.4 million.~~$0.4.

Critical Accounting ~~Policies and~~ Estimates

For the critical Accounting ~~Policies and~~ Estimates used in preparing Janus’s Unaudited Condensed Consolidated Financial Statements, Janus makes assumptions, judgments and estimates that can have a significant impact on its revenue, results from operations, and net income, as well as on the value of certain assets and liabilities on its consolidated balance sheets. Janus bases its assumptions, judgments and estimates on historical experience and various other factors that Janus believes to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. The Company’s critical accounting estimates requiring significant judgment that could materially impact the Company's results of operations, financial position and cash flows are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the year ended December ~~31, 2022.~~30, 2023. Since the date of the Company’s most recent Annual Report, there have been no material changes in the Company’s critical accounting estimates or assumptions.

Recently Issued Accounting Standards

See Note 2 to our Condensed Unaudited Condensed Consolidated Financial Statements in this Form 10-Q for a discussion of recently issued accounting pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in exposures to market risk since December ~~31, 2022.~~30, 2023. For information regarding our exposure to certain market risks, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the fiscal year ended December ~~31, 2022.~~30, 2023.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer, with the participation of certain members of management (collectively “the management team”) evaluated the effectiveness of our disclosure controls and procedures as of ~~July 1, 2023,~~March 30, 2024, the end of the period covered by this Quarterly Report on Form 10-Q. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission, or SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As discussed in Item 9A “Controls and Procedures” in our 2022 Annual Report on Form 10-K, the Company identified unremediated material weaknesses related to the Control Environment and Control Activities elements established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO framework”) as of December 31, 2022.

Based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this ~~form~~Form 10-Q, our Chief Executive Officer and Chief Financial Officer concluded, as of such date, our disclosure controls and procedures were ~~ineffective due~~effective to ensure that information required to be disclosed in reports we file or submit under the ~~existence of~~Exchange Act is (1) recorded, processed, summarized and reported within the ~~material weaknesses discussed further below.~~time periods specified in SEC rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow their timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the quarter ended ~~July 1, 2023,~~March 30, 2024, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

~~Remediation of Material Weaknesses~~

Remediation of the identified material weaknesses and strengthening our internal control environment is a priority for us. Management continues to make progress towards remediating the control deficiencies contributing to the material weaknesses. The remedial actions include, but are not limited to, the following:

•~~General Information Technology Controls~~ – Management will design and implement controls to monitor user access and segregation of duties in a timely manner to key information systems used in the financial reporting process. Additionally, management will create a transaction log of administrative users’ activity and review for unauthorized activity.

•~~Revenue~~ - As part of the financial statement close process, management will: 1) provide additional oversight to project managers around the review of the job completion progress on open installation projects; 2) design management review controls over the stand-alone selling price on contracts with multiple performance obligations; and 3) design and implement controls over cutoff for certain point-in-time revenue and maintain adequate documentation of controls which ensure the proper cutoff for point in time revenue.

The material weaknesses cannot be considered remediated until the applicable controls have been designed and implemented and have operated for a sufficient period of time, and management has concluded, through testing, that these controls are operating effectively.

Limitations on Effectiveness of Controls and Procedures

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, as specified above. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions, and cannot provide absolute assurance that its objectives will be met. Management continues to refine and assess its overall control environment.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

See Note 16 to the Condensed Consolidated Financial Statements, in this Form 10-Q, which is incorporated herein by reference.

Item 1A. Risk Factors

For information regarding factors that could affect the Company’s results of operations, financial condition, and liquidity, see the risk factors discussed in Part I, Item 1A “Risk Factors” in our ~~2022~~ Annual Report on Form 10-K for the fiscal year ended December ~~31, 2022.~~30, 2023.

As of the date of this report, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended December 30, 2023. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

~~None.~~The following table sets forth repurchases of our common stock during the three month period ended March 30, 2024:


(dollar amounts in millions, except share and per share data)	Total number of shares purchased(1)	Average price paid per share(2)		Total number of shares purchased as part of the publicly announced program	Approximate dollar value of of shares that may yet to be purchased under program (in millions)
December 31, 2023 - January 30, 2024	—	$	—	—	$	—
January 31, 2024 - March 1, 2024	—	$	—	—	$	—
March 2, 2024 - March 30, 2024	1,019,889	$	14.84	1,019,889	$	84.9
Total	1,019,889	$	14.84	1,019,889	$	84.9

(1)On February 28, 2024, the Company announced that the Board of Directors authorized a share repurchase program, pursuant to which the Company is authorized to purchase up to $100 million of its common stock. The repurchase authorization does not have an expiration date and may be terminated by the Company’s Board of Directors at any time. There were 1,019,889 shares repurchased as part of our publicly announced share repurchase program during the three month period ended March 30, 2024.

(2)The share price paid per share is exclusive of $0.2 for the three month period ended March 30, 2024, of commission and excise taxes associated with the share repurchase transactions.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

~~None.~~Adoption of Amended and Restated Bylaws

(b) On January 31, 2024, the Board of Directors determined that it was in the best interests of the Company and its stockholders to amend and restate the Amended and Restated Bylaws of the Company, and by resolution authorized, approved and adopted the Amended and Restated Bylaws of the Company (the “Amended and Restated Bylaws”). The Amended and Restated Bylaws became effective immediately. The Amended and Restated Bylaws, among other things, revised the procedures and disclosure requirements for the nomination of directors and the submission of proposals for consideration at meetings of the stockholders of the Company, including, among other things, (i) incorporating the requirements of Rule 14a-19(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (including the statement of an intent to solicit the holders of shares representing at least 67% of the voting power of shares entitled to vote on the election of directors), and (ii) adding a requirement that a stockholder seeking to nominate one or more directors at an annual meeting deliver to the Company reasonable evidence that it has complied with the requirements of Rule 14a-19 of the Exchange Act no later than eight business days prior to the annual meeting.

The foregoing description of the Amended and Restated Bylaws does not purport to be complete and is qualified in its entirety by reference to the full text of the Amended and Restated Bylaws, which is attached as Exhibit 3.2 to this Form 10-Q and is incorporated herein by reference.

Equity Trading Plan Elections

(c) Certain executive officers and directors of the Company may execute purchases and sales of the Company’s common stock through 10b5-1 and non-Rule 10b5-1 equity trading plans.

On March 11, 2024, Peter Frayser, Chief Commercial Officer, adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 35,000 shares of the Company’s common stock until March 10, 2025.

During the three month period ended March 30, 2024, none of our executive officers or directors (as defined in Section 16 of the Securities Exchange Act of 1934, as amended), adopted, terminated, or modified a “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of Regulation S-K).

Item 6. Exhibits.

Exhibit Number

Description

3.1

Amended and Restated Certificate of Incorporation of Janus International Group, Inc., filed with the Secretary of State of Delaware on June 7, 2021 (incorporated by reference to Exhibit 3.1 to Janus International Group, Inc.’s Form 8-K filed on June 11, 2021).

3.2

Amended and Restated Bylaws of Janus International Group, Inc., ~~filed with the Secretary~~adopted as of ~~State of Delaware on June 7, 2021~~January 31, 2024 (incorporated by reference to Exhibit 3.2 to Janus International Group, Inc.’s Form 8-K filed on ~~June 11, 2021)~~February 1, 2024).

~~10.1~~10.1***

Amendment ~~Number Three~~No. 7 to ~~ABL~~First Lien Credit and Guarantee Agreement, dated April ~~10, 2023~~30, 2024, by and among Janus International Group, LLC, JPMorgan Chase Bank, N.A., Goldman Sachs Bank USA, and the other parties thereto (incorporated by reference to Exhibit 10.1 to Janus International Group, Inc.’s's Form 8-K filed on April ~~12, 2023).~~30, 2024

~~10.2~~

Open Market Sale Agreement, dated as of May 15, 2023, by and among Janus International Group, Inc., Clearlake Capital Partners IV (AIV-Jupiter), L.P., Clearlake Capital Partners IV (Offshore), L.P., Clearlake Capital Partners IV (AIV-Jupiter) USTE, L.P., Clearlake Capital Partners V, L.P., Clearlake Capital Partners V (Offshore), L.P., Clearlake Capital Partners V (USTE), L.P. and Jefferies LLC (incorporated by reference to Exhibit 10.1 to Janus International Group, Inc.’s Form 8-K filed on May 15, 2023).

~~10.3~~

~~Amendment No. 5 to First Lien Credit and Guarantee Agreement, dated June 20, 2023 (incorporated by reference to Janus International Group, Inc.’s Form 8-K filed on June 23. 2023)~~).

31.1*

Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*

Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**

Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**

Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS^

Inline XBRL Instance Document

101.SCH^

Inline XBRL Taxonomy Extension Schema Document

101.CAL^

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF^

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB^

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE^

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104^

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Filed herewith.

** The certifications furnished in Exhibit 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.

*** Contains schedules and exhibits that have been omitted pursuant to Item 601(b) of Regulation S-K.

^ Submitted electronically with this Report in accordance with the provisions of Regulation S-T.

4546

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:

~~August 10, 2023~~May 9, 2024

By:

/s/ Anselm Wong

Name:

Anselm Wong

Title:

Chief Financial Officer

4647


	July 1, 2023		December 31, 2022
Balance at beginning of period	$	4,549	$	5,449
CECL Adoption (1)	—		366
Write-offs	(4)		(2,949)
Provision (reversal), net	844		1,683
Balance at end of period	$	5,389	$	4,549


	Total		2023		2024-2025		2026-2027		Thereafter
Debt Obligations	$	663,159	$	4,462	$	657,958	$	663	$	76
Supply Contracts (1)	13,280		8,296		4,984		—		—
ASC 842 Liabilities	43,734		2,948		10,080		8,088		22,618
Total	$	720,173	$	15,706	$	673,022	$	8,751	$	22,694