Segment
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

________________________

FORM 10-Q/A
Amendment No. 110-Q
________________________

(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 25, 2021October 1, 2022

OR

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)

________________________

Delaware86-1476200
(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 shareJBINew York Stock Exchange
Warrants, each to purchase one share of Common StockJBI WSNew 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 filerAccelerated filer
Non-accelerated filerSmaller 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 November 5, 2021, 142,936,5808, 2022, 146,647,275 shares of Class A Common Stock, par value $0.0001, were issued and outstanding.









EXPLANATORY NOTE

Janus International Group, Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-Q/A for the quarter ended September 25, 2021 (this “Form 10-Q/A”).

This Form 10-Q/A amends the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 25, 2021, as filed with the Securities and Exchange Commission (“SEC”) on November 9, 2021 (the “Original Filing”). This Form 10-Q/A is being filed to restate the Company’s unaudited Consolidated Financial Statements for the three and nine months period ended September 25, 2021. The restatement reflects the reclassification and presentation of certain transaction bonuses related to the Business Combination from a component of stockholders’ equity to a component of general and administrative expense for the nine months period ended September 25, 2021 upon the closing of the Business Combination in June 2021 and the reclassification of the private placement warrants from liability-classified instruments to equity-classified instruments including the remeasurement of the private placement warrants to fair value at the date of reclassification for the three and nine months period ended September 25, 2021. In addition, the Company determined that certain other transaction bonuses related to the Business Combination should have been recorded in the Janus International segment instead of the Janus North American segment. The errors related to the transaction bonuses impacted the presentation of our segment reporting for the nine months period ended September 25, 2021. See Note 2 to the restated and unaudited Consolidated Financial Statements included in this Form 10-Q/A for further detailed information regarding this restatement.

The Company is filing this Form 10-Q/A to amend and restate the Original Filing with modification as necessary to reflect the restatement. The following items have been amended to reflect the restatement:

Part I, Item 1: Financial Information
Part I, Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations
Part I, Item 4: Controls and Procedures
Part II, Item 6: Exhibits

In addition, the Company’s Chief Executive Officer and Chief Financial Officer have provided new certifications dated as of the date of this Form 10-Q/A (Exhibits 31.1, 31.2, 32.1 and 32.2).

Except as described above and set forth in this Form 10-Q/A, this Form 10-Q/A does not amend or update any other information contained in the Original Filing. This Form 10-Q/A does not purport to reflect any information or events subsequent to the Original Filing, except as expressly described herein.



JANUS INTERNATIONAL GROUP, INC.
Quarterly Report on Form 10-Q/A10-Q

TABLE OF CONTENTSTable of Contents
SAFE HARBOR, FORWARD-LOOKING STATEMENTS
Page
Item 1A. Risk Factors
Item 6. Exhibits
















2


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 the purposes of federal securities laws.

These forward-looking statements include, but are not limited to, statements about our financial condition, results of operations, earnings outlook and prospects or regarding 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,” “will”, “likely”, 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 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;

the possibility that the COVID-19 pandemic, or another major disease, disrupts Janus’ business;

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

litigation and regulatory enforcement risks, including the diversion of management time and attention and the additional costs and demands on Janus’ resources; 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 2021 Annual Report on Form 10-K for the year ended January 1, 2022, 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. We undertake no obligation to update any forward-looking statement, whether written or oral, to reflect events or circumstances after the date of this Form 10-Q or to reflect the occurrence of unanticipated events.
3


PART I--FINANCIAL INFORMATION
Item 1.    Financial Statements.
Janus International Group, Inc.
Condensed Consolidated Balance Sheets
(dollar amounts in thousands, except share and per share data)
September 25,December 26,October 1,January 1,
2021202020222022
(Unaudited)(Unaudited)
(Restated)
ASSETSASSETSASSETS
Current AssetsCurrent AssetsCurrent Assets
Cash and cash equivalents$9,221,607 $45,254,655 
Accounts receivable, less allowance for doubtful accounts; $4,366,000 and $4,485,000, at September 25, 2021 and December 26, 2020, respectively101,680,287 75,135,295 
CashCash$55,335 $13,192 
Accounts receivable, less allowance for credit losses; $4,553 and $5,449, at October 1, 2022 and January 1, 2022, respectivelyAccounts receivable, less allowance for credit losses; $4,553 and $5,449, at October 1, 2022 and January 1, 2022, respectively151,694 107,372 
Costs and estimated earnings in excess of billing on uncompleted contractsCosts and estimated earnings in excess of billing on uncompleted contracts23,602,670 11,398,934 Costs and estimated earnings in excess of billing on uncompleted contracts30,831 23,121 
Inventory, netInventory, net52,830,737 25,281,521 Inventory, net69,050 56,596 
Prepaid expensesPrepaid expenses8,851,831 5,949,711 Prepaid expenses12,282 9,843 
Other current assetsOther current assets3,505,602 5,192,386 Other current assets2,227 4,057 
Total current assetsTotal current assets$199,692,734 $168,212,502 Total current assets$321,419 $214,181 
Right-of-use assets, netRight-of-use assets, net45,529 — 
Property and equipment, netProperty and equipment, net49,786,563 30,970,507 Property and equipment, net42,855 41,607 
Customer relationships, netCustomer relationships, net319,339,643 309,472,398 Customer relationships, net288,770 312,199 
Tradename and trademarksTradename and trademarks107,958,402 85,597,528 Tradename and trademarks106,971 107,980 
Other intangibles, netOther intangibles, net18,380,776 17,387,745 Other intangibles, net14,743 15,861 
GoodwillGoodwill369,607,198 259,422,822 Goodwill367,262 369,286 
Deferred tax asset, netDeferred tax asset, net63,616,900 — Deferred tax asset, net59,979 58,915 
Other assetsOther assets1,992,783 2,415,243 Other assets1,874 1,973 
Total assetsTotal assets$1,130,374,999 $873,478,745 Total assets$1,249,402 $1,122,002 
LIABILITIES AND STOCKHOLDERS’ EQUITYLIABILITIES AND STOCKHOLDERS’ EQUITYLIABILITIES AND STOCKHOLDERS’ EQUITY
Current LiabilitiesCurrent LiabilitiesCurrent Liabilities
Accounts payableAccounts payable$56,817,373 $29,889,057 Accounts payable$55,728 $54,961 
Billing in excess of costs and estimated earnings on uncompleted contractsBilling in excess of costs and estimated earnings on uncompleted contracts25,759,923 21,525,319 Billing in excess of costs and estimated earnings on uncompleted contracts27,235 23,207 
Current maturities of long-term debtCurrent maturities of long-term debt8,111,212 6,523,417 Current maturities of long-term debt8,379 8,067 
Other accrued expensesOther accrued expenses61,731,013 37,164,627 Other accrued expenses75,919 54,111 
Total current liabilitiesTotal current liabilities$152,419,521 $95,102,420 Total current liabilities$167,261 $140,346 
Line of creditLine of credit19,350,803 — Line of credit— 6,369 
Long-term debt, netLong-term debt, net706,927,275 617,604,254 Long-term debt, net701,189 703,718 
Deferred tax liability, netDeferred tax liability, net— 15,268,131 Deferred tax liability, net1,678 749 
Derivative warrant liability27,693,750 — 
Other long-term liabilitiesOther long-term liabilities4,234,276 4,631,115 Other long-term liabilities41,764 2,533 
Total liabilitiesTotal liabilities$910,625,625 $732,605,920 Total liabilities$911,892 $853,715 
STOCKHOLDERS’ EQUITYSTOCKHOLDERS’ EQUITYSTOCKHOLDERS’ EQUITY
Common Stock, 825,000,000 shares authorized, $.0001 par value, 138,384,360 and 66,145,633 shares issued and outstanding at September 25, 2021 and December 26, 2020, respectively13,838 6,615 
Additional paid in capital244,671,425 189,298,544 
Common Stock, 825,000,000 shares authorized, $0.0001 par value, 146,647,275 and 146,561,717 shares issued and outstanding at October 1, 2022 and January 1, 2022, respectivelyCommon Stock, 825,000,000 shares authorized, $0.0001 par value, 146,647,275 and 146,561,717 shares issued and outstanding at October 1, 2022 and January 1, 2022, respectively15 15 
Additional paid-in capitalAdditional paid-in capital279,944 277,799 
Accumulated other comprehensive lossAccumulated other comprehensive loss(1,123,039)(227,160)Accumulated other comprehensive loss(7,887)(949)
Accumulated deficit(23,812,850)(48,205,174)
Retained earnings (accumulated deficit)Retained earnings (accumulated deficit)65,438 (8,578)
Total stockholders’ equityTotal stockholders’ equity$219,749,374 $140,872,825 Total stockholders’ equity$337,510 $268,287 
Total liabilities and stockholders’ equityTotal liabilities and stockholders’ equity$1,130,374,999 $873,478,745 Total liabilities and stockholders’ equity$1,249,402 $1,122,002 
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements
4


Janus International Group, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income
(dollar amounts in thousands, except share and per share data)
Three Months EndedNine Months Ended
September 25, 2021September 26, 2020September 25, 2021September 26, 2020Three Months EndedNine Months Ended
(Unaudited)(Unaudited)(Unaudited)(Unaudited)October 1, 2022September 25, 2021October 1, 2022September 25, 2021
(Restated)(Restated)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
REVENUEREVENUEREVENUE
Sales of productSales of product$155,669,772 $113,511,689 $417,922,304 $317,048,413 Sales of product$230,847 $155,670 $642,122 $417,922 
Sales of servicesSales of services32,120,153 26,827,369 96,874,278 83,334,062 Sales of services31,700 32,120 97,659 96,874 
Total revenueTotal revenue187,789,925 140,339,058 514,796,582 400,382,475 Total revenue262,547 187,790 739,781 514,796 
Cost of SalesCost of Sales125,551,395 87,574,908 340,070,342 254,755,038 Cost of Sales165,755 125,551 482,439 340,070 
GROSS PROFITGROSS PROFIT62,238,530 52,764,150 174,726,240 145,627,437 GROSS PROFIT96,792 62,239 257,342 174,726 
OPERATING EXPENSEOPERATING EXPENSEOPERATING EXPENSE
Selling and marketingSelling and marketing12,065,859 7,823,145 31,906,155 25,800,711 Selling and marketing14,477 12,066 42,216 31,906 
General and administrativeGeneral and administrative24,947,491 18,309,277 81,469,391 52,875,943 General and administrative28,418 24,947 86,267 81,469 
Contingent consideration and earnout fair value adjustmentsContingent consideration and earnout fair value adjustments— (2,875,248)686,700 (2,875,248)Contingent consideration and earnout fair value adjustments— — — 687 
Operating ExpensesOperating Expenses37,013,350 23,257,174 114,062,246 75,801,406 Operating Expenses42,895 37,013 128,483 114,062 
INCOME FROM OPERATIONSINCOME FROM OPERATIONS25,225,180 29,506,976 60,663,994 69,826,031 INCOME FROM OPERATIONS53,897 25,226 128,859 60,664 
Interest expenseInterest expense(7,663,536)(8,768,791)(23,265,333)(27,447,267)Interest expense(10,979)(7,664)(28,622)(23,265)
Other income (expense)90,873 319,091 (2,387,997)418,302 
Other expenseOther expense56 91 (313)(2,388)
Change in fair value of derivative warrant liabilitiesChange in fair value of derivative warrant liabilities1,270,875 — (657,625)— Change in fair value of derivative warrant liabilities— 1,271 — (658)
Other Expense, Net(6,301,788)(8,449,700)(26,310,955)(27,028,965)
INCOME BEFORE TAXESINCOME BEFORE TAXES18,923,392 21,057,276 34,353,039 42,797,066 INCOME BEFORE TAXES42,974 18,924 99,924 34,353 
Provision for Income TaxesProvision for Income Taxes3,381,769 284,282 5,786,742 1,054,574 Provision for Income Taxes10,575 3,382 24,984 5,787 
NET INCOMENET INCOME$15,541,623 $20,772,994 $28,566,297 $41,742,492 NET INCOME$32,399 $15,542 $74,940 $28,566 
Other Comprehensive Income (Loss)Other Comprehensive Income (Loss)(1,169,565)3,339,777 (895,879)(418,283)Other Comprehensive Income (Loss)(3,037)(1,170)(6,938)(896)
COMPREHENSIVE INCOMECOMPREHENSIVE INCOME$14,372,058 $24,112,771 $27,670,418 $41,324,209 COMPREHENSIVE INCOME29,362 14,372 68,002 27,670 
Net income attributable to common stockholdersNet income attributable to common stockholders$15,541,623 $20,772,994 $28,566,297 $41,742,492 Net income attributable to common stockholders$32,399 $15,542 $74,940 $28,566 
Weighted-average shares outstanding, basic and diluted (Note 15)
Weighted-average shares outstanding, basic and diluted (Note 16)Weighted-average shares outstanding, basic and diluted (Note 16)
BasicBasic138,384,284 65,875,152 95,179,726 65,773,907 Basic146,639,452 138,384,284 146,592,296 95,179,726 
DilutedDiluted142,840,792 65,875,152 97,828,380 65,773,907 Diluted146,717,917 142,840,792 146,671,509 97,828,380 
Net income per share, basic and diluted (Note 15)
Net income per share, basic and diluted (Note 16)Net income per share, basic and diluted (Note 16)
BasicBasic$0.11 $0.32 $0.30 $0.63 Basic$0.22 $0.11 $0.51 $0.30 
DilutedDiluted$0.10 $0.32 $0.30 $0.63 Diluted$0.22 $0.10 $0.51 $0.30 
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.Statements

5


Janus International Group, Inc.
Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)
(dollar amounts in thousands, except share data)
Class B
Common Units
Class A
Preferred Units
Common StockAdditional paid-in capitalAccumulated Other Comprehensive Income (Loss)Accumulated
Deficit
TotalClass B
Common Units
Class A
Preferred Units
Common StockAdditional paid-in capitalAccumulated Other Comprehensive Income (Loss)Retained Earnings
(AccumulatedDeficit)
Total
UnitAmountUnitAmountSharesAmountUnitAmountUnitAmountSharesAmount
Balance as of December 28, 20192,599 $91,278 $189,044 $189,043,734  $ $ $(2,152,685)$(56,088,082)$130,894,245 
Balance as of December 26, 2020Balance as of December 26, 20204,478 $261 189,044 $189,044  $ $ $(227)$(48,205)$140,874 
Retroactive application of the recapitalizationRetroactive application of the recapitalization(2,599)$(91,278)$(189,044)(189,043,734)$65,676,757 $6,568 $189,128,444 $— $— $— Retroactive application of the recapitalization(4,478)(261)(189,044)(189,044)66,145,633 189,299 — — — 
Balance as of December 28, 2019, as adjusted $  $ 65,676,757 $6,568 $189,128,444 $(2,152,685)$(56,088,082)$130,894,245 
Balance as of December 26, 2020, as adjustedBalance as of December 26, 2020, as adjusted $  $ 66,145,633 $7 $189,299 $(227)$(48,205)$140,874 
Vesting of Midco LLC class B unitsVesting of Midco LLC class B units— — — — 93,054 27,683 — — 27,692 Vesting of Midco LLC class B units— — — — 111,895 — 52 — — 52 
Distributions to Janus Midco LLC Class A unitholdersDistributions to Janus Midco LLC Class A unitholders— —   — — — — (54,484)(54,484)Distributions to Janus Midco LLC Class A unitholders— — — — — — — — (96)(96)
Cumulative translation adjustmentCumulative translation adjustment— —   — — — (3,531,485)— (3,531,485)Cumulative translation adjustment— — — — — — — 311 — 311 
Net incomeNet income— — — — — — — 9,952,030 9,952,030 Net income— — — — — — — — 14,719 14,719 
Balance as of March 28, 2020, as adjusted $  $ 65,769,811 $6,577 $189,156,127 $(5,684,170)$(46,190,536)$137,287,998 
Balance as of March 27, 2021Balance as of March 27, 2021 $  $ 66,257,528 $7 $189,351 $84 $(33,582)$155,860 
Vesting of Midco LLC class B unitsVesting of Midco LLC class B units— — — — 105,341 11 29,956 — — 29,967 Vesting of Midco LLC class B units— — — — 4,012,872 — 5,210 — — 5,210 
Distributions to Janus Midco LLC Class A unitholders—  — — — — — — (285,498)(285,498)
Issuance of PIPE SharesIssuance of PIPE Shares— — — — 25,000,000 249,997 — — 250,000 
Issuance of common stock upon merger, net of transaction costs, earn out, and merger warrant liabilityIssuance of common stock upon merger, net of transaction costs, earn out, and merger warrant liability— — — — 41,113,850 226,940 — — 226,944 
Issuance of earn out shares to common stockholdersIssuance of earn out shares to common stockholders— — — — 2,000,000 — 26,480 — — 26,480 
Distributions to Janus Midco, LLC unitholdersDistributions to Janus Midco, LLC unitholders— — — — — — (541,710)— — (541,710)
Distributions to Class A preferred unitsDistributions to Class A preferred units— — — — — — — — (4,078)(4,078)
Deferred Tax AssetDeferred Tax Asset— — — — — — 78,291 — — 78,291 
Cumulative translation adjustmentCumulative translation adjustment—  — — — — — (226,575)— (226,575)Cumulative translation adjustment— — — — — — — (37)— (37)
Net incomeNet income— — — — — — — — 11,017,468 11,017,468 Net income— — — — — — — — (1,694)(1,694)
Balance as of June 27, 2020, as adjusted $  $ 65,875,152 $6,588 $189,186,083 $(5,910,745)$(35,458,566)$147,823,360 
Vesting of Midco LLC class B units— — — — 177,426 18 60,593 — — 60,611 
Distributions to Janus Midco LLC Class A unitholders—  — — — — — — (35,797,005)(35,797,005)
Balance as of June 27, 2021Balance as of June 27, 2021 $  $ 138,384,250 $14 $234,559 $47 $(39,354)$195,266 
Warrant redemptionWarrant redemption— — — — 110 — — — 
Cumulative translation adjustmentCumulative translation adjustment—  — — — — — 3,339,777 — 3,339,777 Cumulative translation adjustment— — — — — — — (1,170)— (1,170)
Net income— — — — — — — — 20,772,994 20,772,994 
Balance as of September 26, 2020, as adjusted $  $ 66,052,578 $6,606 $189,246,676 $(2,570,968)$(50,482,577)$136,199,737 
Warrant movements from private to publicWarrant movements from private to public— — 10,111 10,111 
Net IncomeNet Income— — — — — — — — 15,542 15,542 
Balance as of September 25, 2021Balance as of September 25, 2021 $  $ 138,384,360 $14 $244,671 $(1,123)$(23,812)$219,750 








6


Janus International Group, Inc.
Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)
(dollar amounts in thousands, except share data)
Class B
Common Units
Class A
Preferred Units
Common StockAdditional paid-in capitalAccumulated Other Comprehensive Income (Loss)Accumulated
Deficit
Total
UnitAmountUnitAmountSharesAmount
Balance as of December 26, 20204,478 $261,425 189,044 $189,043,734  $ $ $(227,160)$(48,205,174)$140,872,825 
Retroactive application of the recapitalization(4,478)(261,425)(189,044)(189,043,734)66,145,633 6,615 189,298,544 — — — 
Balance as of December 26, 2020, as adjusted $  $ 66,145,633 $6,615 $189,298,544 $(227,160)$(48,205,174)$140,872,825 
Vesting of Midco LLC class B units— — — — 111,895 11 51,865 — — 51,876 
Distributions to Class A preferred units—  — — — — — — (95,883)(95,883)
Cumulative translation adjustment—  — — — — — 310,768 — 310,768 
Net income— — — — — — — — 14,718,821 14,718,821 
Balance as of March 27, 2021, as adjusted $  $ 66,257,528 $6,626 $189,350,409 $83,608 $(33,582,236)$155,858,407 
Class B
Common Units
Class A
Preferred Units
Common StockAdditional paid-in capital (Restated)Accumulated Other Comprehensive Income (Loss)Accumulated
Deficit (Restated)
Total (Restated)
UnitAmountUnitAmountSharesAmount
Balance as of March 27, 2021, as adjusted $  $ 66,257,528 $6,626 $189,350,409 $83,608 $(33,582,236)$155,858,407 
Vesting of Midco LLC class B units— — — — 4,012,872 401 5,209,592 — — 5,209,993 
Issuance of PIPE Shares—  — — 25,000,000 2,500 249,997,500 — — 250,000,000 
Issuance of common stock upon merger, net of transaction costs, earn out, and merger warrant liability—  — — 41,113,850 4,111 226,939,423 — — 226,943,534 
Issuance of earn out shares to common stockholders—  — — 2,000,000 200 26,479,800 — — 26,480,000 
Distributions to Janus Midco, LLC unitholders—  — — — — (541,710,278)— — (541,710,278)
Distributions to Class A preferred units—  — — — — — — (4,078,090)(4,078,090)
Deferred Tax Asset—  — — — — 78,290,839 — — 78,290,839 
Cumulative translation adjustment—  — — — — — (37,082)— (37,082)
Net income— — — — — — — — (1,694,147)(1,694,147)
Balance as of June 26, 2021 $  $ 138,384,250 $13,838 $234,557,285 $46,526 $(39,354,473)$195,263,176 
Warrant Redemption—  — — 110 — 1,265 — — 1,265 
Cumulative translation adjustment—  — — — — — (1,169,565)— (1,169,565)
Warrant movements from private to public— — — — — — 10,112,875 — — 10,112,875 
Net income— — — — — — — — 15,541,623 15,541,623 
Balance as of September 25, 2021 $  $ 138,384,360 $13,838 $244,671,425 $(1,123,039)$(23,812,850)$219,749,374 
Class B
Common Units
Class A
Preferred Units
Common StockAdditional paid-in capitalAccumulated Other Comprehensive LossRetained Earnings
(AccumulatedDeficit)
Total
UnitAmountUnitAmountSharesAmount
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 
Issuance of restricted units— — — — 77,660 — — — — — 
Share based compensation— — — — — — 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 
Issuance of restricted units— — — — 7,898 — — — — — 
Share based compensation— — — — — — 635 — — 635 
Cumulative translation adjustment— — — — — — — (3,037)— (3,037)
Net income— — — — — — — — 32,399 32,399 
Balance as of October 1, 2022 $  $ 146,647,275 $15 $279,944 $(7,887)$65,438 $337,510 

(a)    Effective January 2, 2022, the Company adopted the provisions of Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326) 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 for further details of the impact of each standard.

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

7


Janus International Group, Inc.
Condensed Consolidated Statements of Cash Flows
(dollar amounts in thousands)
Nine Months Ended
September 25, 2021September 26, 2020
(Unaudited)(Unaudited)
(Restated)
Cash Flows Provided By Operating Activities
Net income$28,566,297 $41,742,492 
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation4,677,954 4,270,649 
Intangible amortization21,851,717 20,287,353 
Deferred finance fee amortization2,286,480 2,419,061 
Share based compensation5,261,869 118,270 
Loss on extinguishment of debt2,414,854 (257,545)
Change in fair value of contingent consideration and earnout686,700 (2,875,248)
Loss on sale of assets43,091 22,595 
Change in fair value of derivative warrant liabilities657,625 — 
Undistributed (earnings) losses of affiliate75,565 (12,685)
Deferred income taxes(767,658)237,359 
Changes in operating assets and liabilities
Accounts receivable(16,942,650)571,872 
Costs and estimated earnings in excess of billings and billings in excess of costs and estimated earnings on uncompleted contracts(12,101,214)1,392,227 
Prepaid expenses and other current assets(4,488,285)(2,846,461)
Inventory(18,474,167)1,033,221 
Accounts payable18,409,091 1,011,609 
Other accrued expenses28,648,513 7,728,116 
Other assets and long-term liabilities(1,122,519)2,068,168 
Net Cash Provided By Operating Activities59,683,264 76,911,053 
Cash Flows Used In Investing Activities
Proceeds from sale of equipment79,409 7,348 
Purchases of property and equipment(15,930,575)(4,936,347)
Cash paid for acquisitions, net of cash acquired(179,713,814)(4,472,105)
Net Cash Used In Investing Activities(195,564,980)(9,401,104)
Cash Flows Provided by (Used In) Financing Activities
Net borrowings on line of credit19,350,803 — 
Distributions to Janus Midco LLC unitholders(4,173,973)(36,136,986)
Principal payments on long-term debt(64,824,518)(6,623,601)
Proceeds from issuance of long term debt155,000,000 — 
Proceeds from merger334,873,727 — 
Proceeds from PIPE250,000,000 — 
Payments for transaction costs(44,489,256)— 
Payments to Janus Midco, LLC unitholders at the business combination(541,710,278)— 
Proceeds from warrant redemption1,265 — 
Payment of contingent consideration— (3,923,271)
Payments for deferred financing fees(4,320,821)— 
Cash Provided By (Used In) Financing Activities$99,706,949 $(46,683,858)
Effect of exchange rate changes on cash and cash equivalents141,720 (1,003,090)
Net (Decrease) Increase in Cash and Cash Equivalents$(36,033,047)$19,823,001 
Cash and Cash Equivalents, Beginning of Fiscal Year$45,254,655 $19,905,598 
Cash and Cash Equivalents as of September 25, 2021 and September 26, 2020$9,221,607 $39,728,599 
Supplemental Cash Flows Information
Interest paid$19,226,554 $20,231,744 
Income taxes paid$1,509,592 $848,831 
Nine Months Ended
October 1, 2022September 25, 2021
(Unaudited)(Unaudited)
Cash Flows Provided By Operating Activities
Net income$74,940 $28,566 
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation of property and equipment5,817 4,678 
Reduction in carrying amount of right-of-use assets3,997 — 
Amortization of intangibles22,278 21,852 
Deferred finance fee amortization2,758 2,286 
Provision (reversal) for losses on accounts receivable1,206 (59)
Share based compensation2,145 5,262 
Loss on extinguishment of debt— 2,415 
Change in fair value of contingent consideration— 687 
(Gain) loss on sale of assets(45)43 
Loss on abandonment of lease571 — 
Change in fair value of derivative warrant liabilities— 658 
Undistributed (earnings) losses of affiliate(102)76 
Deferred income taxes, net— (768)
Changes in operating assets and liabilities
Accounts receivable(45,893)(16,884)
Costs and estimated earnings in excess of billings and billings in excess of costs and estimated earnings on uncompleted contracts(7,710)(12,101)
Prepaid expenses and other current assets(531)(4,488)
Inventory, net(12,454)(18,474)
Accounts payable766 18,409 
Other accrued expenses17,658 28,649 
Other assets and long-term liabilities(2,810)(1,124)
Net Cash Provided By Operating Activities$62,591 $59,683 
Cash Flows Used In Investing Activities
Proceeds from sale of equipment$67 $79 
Purchases of property and equipment(7,856)(15,930)
Cash paid for acquisition, net of cash acquired— (179,714)
Net Cash Used In Investing Activities$(7,789)$(195,565)
Cash Flows Used In Financing Activities
(Repayments) proceeds from line of credit$(6,369)$19,351 
Distributions to Janus Midco LLC unitholders— (4,174)
Principal payments on long-term debt(6,051)(64,825)
Proceeds from long-term debt— 155,000 
Proceeds from merger— 334,874 
Proceeds from PIPE— 250,000 
Payments for transaction costs, net— (44,489)
Payments to Janus Midco, LLC unitholders at the Business Combination— (541,710)
Proceeds from warrant exercise— 
Principal payments under finance lease obligations(137)— 
Payments for deferred financing fees— (4,321)
Cash (Used In) Provided by Financing Activities$(12,557)$99,707 
Effect of exchange rate changes on cash and cash equivalents$(102)$142 
Net Increase (Decrease) in Cash and Cash Equivalents$42,143 $(36,033)
Cash and Cash Equivalents, Beginning of Period$13,192 $45,255 
Cash and Cash Equivalents, End of Period$55,335 $9,222 
Supplemental Cash Flows Information
Interest paid$28,351 $19,227 
Income taxes paid$21,655 $1,510 
Cash paid for operating leases$5,763 $— 
Non-cash investing and financing activities:
Right-of-use assets obtained in exchange for operating lease obligations$47,999 $— 
Right-of-use assets obtained in exchange for finance lease obligations$1,373 $— 
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

8

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements

11.. NatureBasis of OperationsPresentation
Janus International Group, Inc. (“Group” or “Janus”) is a holding company. References to“Janus,” “Group,” “Company,” “we,” “our” or “us” refer to Janus International Group, Inc., and its consolidated subsidiaries. Janus International Group, LLC (“Janus Core”) is a wholly-owned subsidiary of Janus Intermediate, LLC (“Intermediate”). Intermediate is a wholly-owned subsidiary of Janus Midco, LLC (“Midco”) and. Midco is a wholly-owned subsidiary of Janus Intermediate Holdco, Inc. (“Intermediate Holdco”). Intermediate Holdco is a wholly-owned subsidiary of Juniper Industrial Holdings, Inc. (“Juniper” or “JIH”), and Juniper is a wholly-owned subsidiary of Group. These entities are all incorporated

The dollar amounts in the statenotes are shown in thousands of Delaware. dollars, unless otherwise noted, and rounded to the nearest thousand except for share and per share amounts.
The accompanying Unaudited Condensed Consolidated Financial Statements are presented in U.S. dollars and have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC for interim financial information. However, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements. 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 October 1, 2022, and its results of operations, including its comprehensive income and stockholders’ equity for the three and nine months ended October 1, 2022 and September 25, 2021.
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 January 1, 2022.
Nature of Operations
The Group 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, the United Kingdom, Australia, and Singapore.
The Group’s wholly owned subsidiary, Janus International Europe Holdings Ltd. (UK) (“JIE”), owns 100% of the equity of Janus International Europe Ltd. (UK), a company incorporated in England and Wales, and its subsidiary Steel Storage France (s.a.r.l), a company incorporated in France. JIE owns 100% of the equity for Active Supply & Design (CDM) Ltd. (UK) (“AS&D”), a company incorporated in England and Wales and 100% of the equity for Steel Storage Australia & Steel Storage Asia (“Steel Storage”), companies incorporated in Australia and Singapore.
The Group’s wholly owned subsidiary, Janus Cobb Holdings, LLC (“Cobb”), owns 100% of the equity of Asta Industries, Inc. (“ASTA”), a company incorporated in Georgia, and its subsidiary Atlanta Door Corporation, a company incorporated in Georgia. Cobb also owns 100% of the equity of Nokē, Inc. (“NOKE”), a company incorporated in Delaware, and Betco, Inc. (“BETCO”), a company also incorporated in Delaware.
On January 2, 2020, JIE purchased 100% of the outstanding shares of Steel Storage.
On January 18, 2021, the Group, through its wholly owned subsidiary Steel Storage acquired 100% of the net assets of G & M Stor-More Pty Ltd (“G&M”) as more fully described in Note 9 — “Business Combinations.”
On August 18, 2021, the Group, through its wholly owned subsidiary Janus Core acquired 100% of the equity interests of DBCI, LLC f/k/a Dingo NewCo, LLC (“DBCI”), a company incorporated in Delaware as more fully described in Note 9 — “Business Combinations.”
On August 31, 2021, the Group, through its wholly owned subsidiary Janus Core acquired 100% of the equity of Access Control Technologies, LLC (“ACT”), a company incorporated in North Carolina. Through this acquisition, the Group also acquired all assets and certain liabilities of Phoenix Iron Worx, LLC (“Phoenix”), a company incorporated in North Carolina as more fully described in Note 9 — “Business Combinations.”
The Group’s business is operated through 2two geographic regions that comprise our two reportable segments: Janus North America and Janus International. The Janus International segment is comprised of JIE,Janus International Europe Ltd., a company incorporated in England and Wales (“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, NOKE, ASTA, DBCI, ACT,Betco, Inc. (“BETCO”), Noke, Inc. (“NOKE”), Asta Industries, Inc. (“ASTA”), Janus Door, LLC (“Janus Door”), Access Control Technologies, LLC (“ACT”), U.S Door & Building Components, LLC (“U.S. Door”), and Steel Door Depot.com, LLC.
As of June 7, 2021, Janus Parent, Inc. (“Company”) consummated the business combination (the “Business Combination”) contemplated by the Business Combination Agreement, dated as of December 21, 2020 (as amended from time to time, the “Business Combination Agreement”), by and among Janus International Group, Inc. (f/k/a Janus Parent, Inc.), Juniper Industrial Holdings, Inc. (“Juniper” or “JIH”), a blank check company, JIH Merger Sub, Inc., a wholly-owned subsidiary of the Company (“JIH Merger Sub”), Jade Blocker Merger Sub 1, Inc., Jade Blocker Merger Sub 2, Inc., Jade Blocker Merger Sub 3, Inc., Jade Blocker Merger Sub 4, Inc., Jade Blocker Merger Sub 5, Inc. (collectively referred to as the “Blocker Merger Subs”), Clearlake Capital Partners IV (AIV-Jupiter) Blocker, Inc., Clearlake Capital Partners IV (Offshore) (AIV-Jupiter) Blocker, Inc., Clearlake Capital Partners V (AIV-Jupiter) Blocker, Inc., Clearlake Capital Partners V (USTE) (AIV-Jupiter) Blocker, Inc., Clearlake Capital Partners V (Offshore) (AIV-Jupiter) Blocker, Inc. (collectively referred to as the “Blockers”), Janus Midco, LLC (“Midco”Steel Door Depot”), Jupiter Management Holdings, LLC, Jupiter Intermediate Holdco, LLC, J.B.I., LLC and Cascade GP, LLC, solely in its capacity as equityholder representative. Pursuant to the Business Combination Agreement, (i) JIH Merger Sub merged with and into Juniper with Juniper being the surviving corporation in the merger and a wholly-owned subsidiary of the Company, (ii) each of the Blocker Merger Subs merged with and into the corresponding Blockers with such Blocker being the surviving corporation in each such merger and a wholly-owned subsidiary of the Company, (iii) each other equityholder of Midco contributed or sold, as applicable, all of its equity interests in Midco to the Company or Juniper, as applicable, in exchange for cash, preferred units and/or shares of the Common Stock, as applicable, and (iv) the Company contributed all of the equity interests in Midco acquired pursuant to the foregoing transactions to Juniper, such that, as a result of the consummation of the Business Combination, Midco became an indirect wholly-owned subsidiary of Juniper. Refer to Note 9 — “Business Combinations” for further discussion on the Business Combination.
Immediately upon the completion of the Business Combination, Juniper and Midco became wholly-owned subsidiaries of Janus International Group, Inc. The Group’s common stock and warrants issued to the public shareholders are currently traded on the New York Stock Exchange under the symbols “JBI” and “JBI WS”, respectively.

.

Janus International Group, Inc.
Notes to Unaudited Consolidated Financial Statements
Assets held at foreign locations were approximately $56,439,000$55,749 and $53,424,000$58,439 as of September 25, 2021October 1, 2022 and December 26, 2020,January 1, 2022, respectively. Revenues earned at foreign locations totaled approximately $17,824,000$16,959 and $12,621,000$17,824 for the three months ended October 1, 2022 and September 25, 2021, respectively, and September 26, 2020$55,197 and $48,729,000 and $32,165,000$48,729 for the nine months ended October 1, 2022 and September 25, 2021, and September 26, 2020, respectively.
2. SummaryPrinciples of Significant Accounting Policies
Unaudited Interim Financial StatementsConsolidation
The accompanying consolidated balance sheet asUnaudited Condensed Consolidated Financial Statements include the accounts of September 25, 2021, consolidated statementsthe Company and its wholly owned subsidiaries. The Company’s joint venture is accounted for under the equity method of operationsaccounting. All significant intercompany accounts and comprehensive income and consolidated statements of stockholders’ equity for the three and nine months ended September 25, 2021 and September 26, 2020, respectively and consolidated statements of cash flows for the nine months ended September 25, 2021 and September 26, 2020, are unaudited.
These financial statementstransactions have been preparedeliminated in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”)consolidation.
Reorganization
On June 7, 2021, Midco transferred Janus Core, its wholly owned direct subsidiary, to the Group, thereby transferring the business for interim financial information. However, they do not include all of thewhich historical financial information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the unaudited consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet as of September 25, 2021, and itsis included in these results of operations, including its comprehensive income and stockholders’ equity for the three and nine months ended September 25, 2021 and September 26, 2020, and its cash flows for the nine months ended September 25, 2021 and September 26, 2020. The results for the three and nine months ended September 25, 2021 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending January 1, 2022. These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Form S-1 (as amended), initially filed with the Securities and Exchange Commission (the “SEC”) on July 7, 2021 and declared effectiveindirectly held by the staff of the SEC on August 6, 2021, including the final prospectus dated August 6, 2021 (including supplements to the prospectus filed from time to time).
Basis of Presentation
The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with U.S. GAAP and pursuant to the accounting and disclosure rules and regulations of the SEC for interim financial information.Midco.
The Business Combination completed as of June 7, 2021,(defined and discussed below) was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, JIHJuniper is treated as the acquired company and Midco is treated as the acquirer for financial statement reporting purposes (the “Combined Company”). Midco has been determined to be the accounting acquirer based on an evaluation of the following facts and circumstances:

Janus Midco equityholders have the majority ownership and voting rights in the Combined Company. The relative voting rights is equivalent to equity ownership (each share of common stock is one vote). JIH shareholders (IPO investors, founders, PIPE investors) hold 49.2% voting interest compared to Janus Midco’s 50.8% voting interest.
The board of directors of the Combined Company is composed of nine directors, with Janus Midco equity holders having the ability to elect or appoint a majority of the board of directors in the Combined Company.
Janus Midco’s senior management are the senior management of the Combined Company.
The Combined Company has assumed the Janus name.
Accordingly, for accounting purposes, the financial statements of the Combined Company represent a continuation of the financial statements of Midco with the acquisition being treated as the equivalent of Midco issuing stock for the net assets of JIH, accompanied by a recapitalization. The net assets of JIH will be stated at historical cost, with no goodwill or other intangible assets recorded. Midco is deemed to be the predecessor of the Company, and the consolidated assets and liabilities and results of operations prior to the Closing Date (for the year ended December 26, 2020 and the three and nine months ended September 26, 2020) are those of Midco. The shares and corresponding capital amounts and net income (loss) per share available to common stockholders, prior to the Business Combination, have been retroactively restated to reflect the exchange ratio established in the Business Combination Agreement.
One-time direct and incremental transaction costs incurred by the Company were recorded based on the activities to which the costs relate and the structure of the transaction. The costs relating to the issuance of equity is recorded as a reduction of the amount of equity raised, presented in additional paid in capital, while all costs related to the warrants and contingent consideration were estimated and charged to expense.
Principles of Consolidation
The consolidated financial statements include the accounts of the Group 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


Janus International Group, Inc.
Notes to Unaudited Consolidated Financial Statements
In the third quarter of 2021, the Group reclassified the change in fair value of earnout recorded in June 2021 from general and administrative expense to contingent consideration and earnout fair value adjustments within operating expenses in the Consolidated Statements of Operations and Comprehensive Income.

Reorganization
As of June 7, 2021, Midco transferred its wholly owned direct subsidiary Janus Core, to the Group, thereby transferring the business for which historical financial information is included in these results of operations, to be indirectly held by Midco.
Use of Estimates in the Unaudited Condensed Consolidated Financial Statements
The preparation of consolidated financial statementsUnaudited 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.
9

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Significant items subject to such estimates and assumptions include, but are not limited to, the fair value of contingent consideration, the fair value of assets and liabilities related to acquisitions, the derivative warrant liability, the recognition of the valuations and unit-basedof share-based compensation arrangements, the useful lives of property and equipment, revenue recognition, allowances for uncollectible receivable balances, fair values and impairment of intangible assets and goodwill and assumptions used in the recognition of contract assets.
Coronavirus Outbreak
The COVID-19 outbreak will continue to have a negative impact on our operations, supply chain, transportation networks and customers. The impact on our business and the results of operations included temporary closure of our operating locations, or those of our customers or suppliers, among others. In addition, the ability of our employees and our suppliers’ and customers’ employees to work may be significantly impacted by individuals contracting or being exposed to COVID-19, which may significantly hamper our production throughout the supply chain and constrict sales channels. The extent of these factors are uncertain and cannot be predicted. Our consolidated financial statements reflect estimates and assumptions made by management as of September 25, 2021. Events and changes in circumstances arising after September 25, 2021, including those resulting from the impacts of COVID-19 pandemic, will be reflected in management’s estimates for future periods.
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.
Shipping and Handling (Revenue & Cost of Sales)
The Company records all amounts billed to customers in sales transactions related to shipping and handling as revenue earned for the goods provided. Shipping and handling costs are included in cost of sales. Shipping and handling costs were approximately $8,562,000 and $5,993,000 and $24,136,000 and $17,729,000 for the three and nine months ended September 25, 2021 and September 26, 2020, respectively.
Inventories
Inventories are measured using the first-in, first-out (FIFO) method. Labor and overhead costs associated with inventory produced by the Company are capitalized. Inventories are stated at the lower of cost or net realizable value as of September 25, 2021 and December 26, 2020. The Company has recorded a reserve for inventory obsolescence as of September 25, 2021 and December 26, 2020, of approximately $1,672,000 and $1,964,000, respectively.
Property and Equipment
Property and equipment acquired in business combinations are recorded at fair value as of the acquisition date and are subsequently stated less accumulated depreciation. Property and equipment otherwise acquired are stated at cost less accumulated depreciation. Depreciation is charged to expense on the straight-line basis over the estimated useful life of each asset. Leasehold improvements are amortized over the shorter of the lease term or their respective useful lives. Maintenance and repairs are charged to expense as incurred.


Janus International Group, Inc.
Notes to Unaudited Consolidated Financial Statements
The estimated useful lives for each major depreciable classification of property and equipment are as follows
Manufacturing machinery and equipment3-7 years
Office furniture and equipment3-7 years
Vehicles3-10 years
Leasehold improvements3-20 years
Other Current Assets
Other current assets as of September 25, 2021 consists primarily of other receivables and net VAT taxes of approximately $3,506,000. As of December 26, 2020, other current assets consists primarily of other receivables, net VAT taxes and deferred transaction costs associated with the Business Combination with Juniper of $3,444,000.
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 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; and
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 doubtful accounts and account payable approximate the carrying amounts due to the short-term maturities of these instruments which fall within Level 1 of the Fair Value hierarchy.instruments. The fair value of the Company’s debt approximates its carrying amount as of September 25, 2021October 1, 2022 and December 26, 2020January 1, 2022 due to its variable interest rate that is tied to the current London Interbank Offered Rate (“LIBOR”) rate plus an applicable margin and consistency in our credit rating. To estimate the fair value of the Company’s long term debt, the Company utilized fair value based risk measurements that are indirectly observable, such as credit risk that fallsfall within Level 2 of the Fair Value hierarchy. As of September 25, 2021, the public warrants were valued at market price. The fair value of the private warrants contains significant unobservable inputs including the expected term and volatility. Therefore, the privateshare exchange ratio in evaluating the fair value of underlying common stock, and exercise price, therefore, the warrant liabilities were evaluated to be a Level 3 fair value measurement.
Significant Accounting Policies
Other than the following, 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 January 1, 2022.
Allowance for Credit Losses
On January 2, 2022, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326) (“CECL”), which changes the impairment model for most financial assets. The fairnew model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. Refer to Recently Adopted Accounting Pronouncements section of this note for more information on the impact to the Unaudited Condensed Consolidated Financial Statements.
The Company gathered information about its current bad debt reserve and write-off practices and loss methodology, in-scope assets, historical credit losses, proposed pooling approach and expected changes to business practices under CECL. Accounts receivables are stated at estimated net realizable value from the sale of private warrants is estimated using a Binomial Lattice in a risk-neutral framework. Specifically,products and services to established customers. The Company determined that pooling accounts receivable by business units was the future stock pricemost appropriate because of the Company is modeled assuming a Geometric Brownian Motion (GBM) in a risk-neutral framework. Forsimilarity of risk characteristics within each modeled future price,line such as customers and services offered. Historical losses and customer-specific reserve information that are used to calculate the warrant payoff is calculated based on the contractual terms, and then discounted at the term-matched risk-free rate. Finally, the value of the private warrants was calculated as the probability-weighted present value over all future modeled payoffs. The following assumptions were usedhistorical loss rates are available for the valuation of the private warrants:each business unit.

Warrant term (yrs.)4.7 
Volatility30.4 %
Risk-free rate0.91 %
Dividend yield— %
The change inDuring the fair value of warrant liabilities is as follows:pooling process, the Company identified two distinct customer types: commercial and self-storage. As these customer types have different risk characteristics, the Company concluded to pool the financial assets at this level within each business unit.

Balance at June 26, 2021$39,077,500 
Change in fair value of warrants(3,552,500)
Balance at September 25, 2021$35,525,000
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.

Warrant Liability
TheSelf-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 classifies Private Placement Warrants (defined and discussed in Note 11 - “Stockholders’ Equity”) as liabilities. At the endexpects a potential for more write-offs of each reporting period, changes in fair value during the period are recognized as a component of other income (expense), netits receivable balances within the consolidated statements of operations and comprehensive income. The Company will continue to adjust the warrant liability for changes in fair value until the earlier of a) the exercise or expiration of the warrants or b) the redemption of the warrants, at which time the warrants will be reclassified to additional paid-in capital. On October 13, 2021, the Group announced that the Company will redeem all of its outstanding warrants which is further discussed in Note 18 - “Subsequent Events.”self-storage pool.

10

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements

The Company reviewed methods provided by the guidance and determined to use the loss-rate method in the CECL analysis for trade receivables and contract assets. This loss-rate method was selected as there is reliable historical information available by business unit, and this historical information was determined to be representative of the Company’s current customers, products, services, and billing practices.

The summary of activity in the allowance for credit losses for the nine months ended October 1, 2022 and the allowance for doubtful accounts for the nine months ended September 25, 2021 are as follows:

Beginning Balance
CECL Adoption1
Write-offsProvision (Reversal), netEnding Balance
2022$5,449 $366 $(2,468)$1,206 $4,553 
20214,485 — (59)(59)4,367 

(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.
2. Recently Issued Accounting Pronouncements Not Yet AdoptedStandards
In June 2016,March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This standard provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is effective and may be applied beginning March 12, 2020 and will apply through December 31, 2022. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”). The amendments in ASU 2021-01 provide optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the LIBOR or another reference rate expected to be discontinued because of the reference rate reform. The provisions must be applied at a Topic, Subtopic, or Industry Subtopic level for all transactions other than derivatives, which may be applied at a hedging relationship level. In April 2022, the FASB, proposed the deferral of the sunset date of this guidance to December 31, 2024. The Company is currently evaluating the impact this adoption will have on the Company’s consolidated financial statements.
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 Group’s consolidated financial position or results of operations.
Recently Adopted Accounting Pronouncements
In June 2020, the FASB issued ASU 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842) which deferred the effective date for ASC 842, Leases, for one year. The leasing standard will be effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company adopted the leasing standard effective January 2, 2022 and has elected to adopt the new standard at the adoption date using the modified retrospective method and recognized a cumulative effect adjustment to accumulated deficit in the amount of $558. Under this approach, we will continue to report comparative period financial information under ASC 840. We have elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carry forward the historical lease classification. We also made an accounting policy election to exclude leases with an initial term of 12 months or less from the consolidated balance sheet. We will recognize those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. As part of this adoption, we have implemented internal controls and key system functionality to enable the preparation of financial information.
The adoption of the standard resulted in recording right-of-use assets of $42,835 and lease liabilities of $44,776 as of January 2, 2022. The right-of-use assets are lower than the lease liabilities as existing deferred rent and lease incentive liabilities were recorded against the right-of-use assets at adoption in accordance with the standard. The standard had no impact on our debt-covenant compliance under our current agreements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326), which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. ASU 2016-13, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates for fiscal years beginning after December 15, 2022 and for interim periods within those fiscal years. The Company is currently evaluating the impact ofadopted this standard toeffective January 2, 2022 using the consolidated financial statements.
In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This update removes Step 2 of the goodwill impairment test under current guidance, which requires a hypothetical purchase price allocation. The new guidance requires an impairment charge to be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. Upon adoption, the guidance is to be applied prospectively. ASU 2017-04 is effective for Emerging Growth Companies in fiscal years beginning after December 15, 2021, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of the adoption of ASU 2017-04 on the consolidated financial statements and does not expect a significant impact of the standard on the consolidated financial statements.
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. This standard provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is effective and may be applied beginning March 12, 2020, and will apply through December 31, 2022. Janus is currently evaluating the impact this adoption will have on Janus’s consolidated financial statements. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”). The amendments in ASU 2021-01 provide optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the LIBOR or another reference rate expected to be discontinued because of the reference rate reform. The provisions must be applied at a Topic, Subtopic, or Industry Subtopic level for all transactions other than derivatives, which may be applied at a hedging relationship level.
In June 2020, the FASB issued ASU 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842) which deferred the effective date for ASC 842, Leases, for one year. The leasing standard will be effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption would continue to be allowed. The Company is evaluating the impact the standard will have on the consolidated financial statements; however, the standard is expected to have a material impact on the consolidated financial statements due to the recognition of additional assets and liabilities for operating leases.
In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain convertible instruments, amends guidance on derivative scope exceptions for contracts in an entity’s own equity, and modifies the guidance on diluted earnings per share (EPS) calculations as a result of these changes. The standard will be effective for Janus beginning February 7, 2022 and can be applied on either a fully retrospective or modified retrospective basis. Early adoption is permittedmethod and recognized a cumulative-effect adjustment increasing accumulated deficit and increasing the allowance for fiscal years beginning after December 15, 2020. Janus is currently evaluating the impact of this standard on Janus’s consolidated financial statements.
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. ASU 2021-04 addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. ASU 2021-04 is effective for fiscal years beginning after December 15, 2021 and interim periods within those fiscal years, with early adoption permitted. The Group does not expect adoption of the new guidance to have a significant impact on the consolidated financial statements.
Although there are several other new accounting pronouncements issued or proposedcredit losses 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 Group’s consolidated financial position or results of operations.

Restatement of Previously Reported Financial Statements
During the preparation of the 2021 Annual Report on Form 10-K, the Company determined that certain transaction bonuses related to the Business Combination should have been recorded as a component of general and administrative expense instead of a component of stockholders’ equity for the nine months ended September 25, 2021 and the private placement warrants should have been reclassified from liability-classified instruments to equity-classified instruments and remeasured to fair value at the date of the reclassification for the three and nine months ended September 25, 2021. In addition, the Company determined that certain other transaction bonuses related to the Business Combination in the amount of $4.0 million should have been recorded in the Janus International segment instead of the Janus North American segment. The errors related to the transaction bonuses impacted the presentation of our segment reporting for the nine months ended September 25, 2021.$366.

11

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements

January 2, 2022
Pre-ASC 326
Adoption
 Impact of ASC
326 Adoption
As Reported
Under ASC 326
Accounts Receivable, net$107,372 $(366)$107,006 
Cost in Excess of Billings23,121 — 23,121 
Accumulated Deficit(8,578)(366)(8,944)
In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company determined that the unaudited consolidated financial statements for the three and nine months period ended September 25, 2021 were materially misstated and should be restated. The amounts and disclosures included in this Form 10-Q/A have been revised to reflect the corrected presentation.

Impact of the Restatement
The table below present the effects of the restatement on the Company's unaudited consolidated balance sheet as of September 25, 2021:

September 25, 2021
As Previously
Reported
AdjustmentsAs Restated
ASSETS
Current Assets
Cash$9,221,607 $— $9,221,607 
Accounts receivable, less allowance for doubtful accounts; $4,366,000 and $4,485,000, at September 25, 2021 and December 26, 2020, respectively101,680,287 — 101,680,287 
Costs and estimated earnings in excess of billing on uncompleted contracts23,602,670 — 23,602,670 
Inventory, net52,830,737 — 52,830,737 
Prepaid expenses8,851,831 — 8,851,831 
Other current assets3,505,602 — 3,505,602 
Total current assets$199,692,734 $ $199,692,734 
Property and equipment, net49,786,563 — 49,786,563 
Customer relationships, net319,339,643 — 319,339,643 
Tradename and trademarks107,958,402 — 107,958,402 
Other intangibles, net18,380,776 — 18,380,776 
Goodwill369,607,198 — 369,607,198 
Deferred tax asset, net63,616,900 — 63,616,900 
Other assets1,992,783 — 1,992,783 
Total assets$1,130,374,999 $ $1,130,374,999 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable$56,817,373 $— $56,817,373 
Billing in excess of costs and estimated earnings on uncompleted contracts25,759,923 — 25,759,923 
Current maturities of long-term debt8,111,212 — 8,111,212 
Other accrued expenses62,209,935 (478,922)61,731,013 
Total current liabilities$152,898,443 $(478,922)$152,419,521 
Line of credit19,350,803 — 19,350,803 
Long-term debt, net706,927,275 — 706,927,275 
Deferred tax liability— — — 
Derivative warrant liability35,525,000 (7,831,250)27,693,750 
Other long-term liabilities4,234,276 — 4,234,276 
Total liabilities$918,935,797 $(8,310,172)$910,625,625 
STOCKHOLDERS’ EQUITY
Common Stock, 825,000,000 shares authorized, $.0001 par value, 138,384,360 and 66,145,633 shares issued and outstanding at September 25, 2021 and December 26, 2020, respectively13,838 — 13,838 
Additional paid in capital231,407,780 13,263,645 244,671,425 
Accumulated other comprehensive loss(1,123,039)— (1,123,039)
Accumulated deficit(18,859,377)(4,953,473)(23,812,850)
Total stockholders’ equity$211,439,202 $8,310,172 $219,749,374 
Total liabilities and stockholders’ equity$1,130,374,999 $ $1,130,374,999 



Janus International Group, Inc.
Notes to Unaudited Consolidated Financial Statements
The tables below present the effects of the restatement on the unaudited consolidated statements of operations and comprehensive income for the three and nine months ended September 25, 2021:

Three Months Ended September 25, 2021
As Previously
Reported
AdjustmentsAs Restated
REVENUE
Sales of product$155,669,772 $— $155,669,772 
Sales of services32,120,153 — 32,120,153 
Total revenue187,789,925 — 187,789,925 
Cost of Sales125,551,395 — 125,551,395 
GROSS PROFIT62,238,530 — 62,238,530 
OPERATING EXPENSE
Selling and marketing12,065,859 — 12,065,859 
General and administrative24,947,491 — 24,947,491 
Contingent consideration and earnout fair value adjustments— — — 
Operating Expenses37,013,350 — 37,013,350 
INCOME FROM OPERATIONS25,225,180 — 25,225,180 
Interest expense(7,663,536)— (7,663,536)
Other income (expense)90,873 — 90,873 
Change in fair value of derivative warrant liabilities3,552,500 (2,281,625)1,270,875 
Other Expense, Net(4,020,163)(2,281,625)(6,301,788)
INCOME (LOSS) BEFORE TAXES21,205,017 (2,281,625)18,923,392 
Provision (benefit) for Income Taxes3,527,275 (145,506)3,381,769 
NET INCOME (LOSS)$17,677,742 $(2,136,119)$15,541,623 
Other Comprehensive Income (Loss)(1,169,565)— (1,169,565)
COMPREHENSIVE INCOME (LOSS)$16,508,177 $(2,136,119)$14,372,058 
Net income (loss) attributable to common stockholders$17,677,742 $(2,136,119)$15,541,623 
Weighted-average shares outstanding, basic and diluted (Note 15)
Basic138,384,284 — 138,384,284 
Diluted142,840,792 — 142,840,792 
Net income (loss) per share, basic and diluted (Note 15)
Basic$0.13 $(0.02)$0.11 
Diluted$0.10 $— $0.10 



Janus International Group, Inc.
Notes to Unaudited Consolidated Financial Statements
Nine Months Ended September 25, 2021
As Previously
Reported
AdjustmentsAs Restated
REVENUE
Sales of product$417,922,304 $— $417,922,304 
Sales of services96,874,278 — 96,874,278 
Total revenue514,796,582 — 514,796,582 
Cost of Sales340,070,342 — 340,070,342 
GROSS PROFIT174,726,240 — 174,726,240 
OPERATING EXPENSE
Selling and marketing31,906,155 — 31,906,155 
General and administrative78,318,621 3,150,770 81,469,391 
Contingent consideration and earnout fair value adjustments686,700 — 686,700 
Operating Expenses110,911,476 3,150,770 114,062,246 
INCOME (LOSS) FROM OPERATIONS63,814,764 (3,150,770)60,663,994 
Interest expense(23,265,333)— (23,265,333)
Other income (expense)(2,387,997)— (2,387,997)
Change in fair value of derivative warrant liabilities1,624,000 (2,281,625)(657,625)
Other Expense, Net(24,029,330)(2,281,625)(26,310,955)
INCOME (LOSS) BEFORE TAXES39,785,434 (5,432,395)34,353,039 
Provision (benefit) for Income Taxes6,265,664 (478,922)5,786,742 
NET INCOME (LOSS)$33,519,770 $(4,953,473)$28,566,297 
Other Comprehensive Income (Loss)(895,879)— (895,879)
COMPREHENSIVE INCOME (LOSS)$32,623,891 $(4,953,473)$27,670,418 
Net income (loss) attributable to common stockholders$33,519,770 $(4,953,473)$28,566,297 
Weighted-average shares outstanding, basic and diluted (Note 15)
Basic95,179,726 — 95,179,726 
Diluted97,828,380 — 97,828,380 
Net income (loss) per share, basic and diluted (Note 15)
Basic$0.35 $(0.05)$0.30 
Diluted$0.33 $(0.03)$0.30 

The table below present the effects of the restatement on the segment income from operations for the nine months ended September 25, 2021:

Nine Months Ended September 25, 2021
As Previously
Reported
AdjustmentsAs Restated
Income From Operations
Janus North America$60,884,392 $3,993,943 $64,878,335 
Janus International2,881,576 (7,144,713)(4,263,137)
Eliminations48,796 — 48,796 
Total Segment Operating Income (Loss)$63,814,764 $(3,150,770)$60,663,994 

The tables below present the effects of the restatement on the consolidated statements of changes in stockholders’ equity:



Janus International Group, Inc.
Notes to Unaudited Consolidated Financial Statements
As Reported
Class B
Common Units
Class A
Preferred Units
Common StockAdditional paid-in capitalAccumulated Other Comprehensive Income (Loss)Accumulated
Deficit
Total
UnitAmountUnitAmountSharesAmount
Balance as of December 26, 20204,478 $261,425 189,044 $189,043,734  $ $ $(227,160)$(48,205,174)$140,872,825 
Balance as of Retroactive application of the recapitalization(4,478)(261,425)(189,044)(189,043,734)66,145,633 6,615 189,298,544 — — — 
Balance as of December 26, 2020, as adjusted $  $ 66,145,633 $6,615 $189,298,544 $(227,160)$(48,205,174)$140,872,825 
Vesting of Midco LLC class B units— — — — 111,895 11 51,865 — — 51,876 
Distributions to Class A preferred units—  — — — — — — (95,883)(95,883)
Cumulative translation adjustment—  — — — — — 310,768 — 310,768 
Net income— — — — — — — — 14,718,821 14,718,821 
Balance as of March 27, 2021, as adjusted $  $ 66,257,528 $6,626 $189,350,409 $83,608 $(33,582,236)$155,858,407 
Vesting of Midco LLC class B units    4,012,872 401 2,058,822   2,059,223 
Issuance of PIPE Shares—  — — 25,000,000 2,500 249,997,500 — — 250,000,000 
Issuance of common stock upon merger, net of transaction costs, earn out, and merger warrant liability—  — — 41,113,850 4,111 226,939,423 — — 226,943,534 
Issuance of earn out shares to common stockholders—  — — 2,000,000 200 26,479,800 — — 26,480,000 
Distributions to Janus Midco, LLC unitholders      (541,710,278)  (541,710,278)
Distributions to Class A preferred units        (4,078,090)(4,078,090)
Deferred Tax Asset      78,290,839   78,290,839 
Cumulative translation adjustment       (37,082) (37,082)
Net income        1,123,207 1,123,207 
Balance as of June 26, 2021 $  $ 138,384,250 $13,838 $231,406,515 $46,526 $(36,537,119)$194,929,760 
Warrant Redemption— — — — 110 — 1,265 — — 1,265 
Cumulative translation adjustment— — — — — — — (1,169,565)— (1,169,565)
Net income— — — — — — — — 17,677,742 17,677,742 
Balance as of September 25, 2021 $  $ 138,384,360 $13,838 $231,407,780 $(1,123,039)$(18,859,377)$211,439,202 



Janus International Group, Inc.
Notes to Unaudited Consolidated Financial Statements
Adjustments
Class B
Common Units
Class A
Preferred Units
Common StockAdditional paid-in capitalAccumulated Other Comprehensive Income (Loss)Accumulated
Deficit
Total
UnitAmountUnitAmountSharesAmount
Balance as of December 26, 2020— $— — $— — $— $— $— $— $— 
Balance as of Retroactive application of the recapitalization— — — — — — — — — — 
Balance as of December 26, 2020, as adjusted $  $  $ $ $ $ $ 
Vesting of Midco LLC class B units— — — — — — — — — — 
Distributions to Class A preferred units—  — — — — — — — — 
Cumulative translation adjustment—  — — — — — — — — 
Net income— — — — — — — — — — 
Balance as of March 27, 2021, as adjusted $  $  $ $ $ $ $ 
Vesting of Midco LLC class B units    — — 3,150,770   3,150,770 
Issuance of PIPE Shares—  — — — — — — — — 
Issuance of common stock upon merger, net of transaction costs, earn out, and merger warrant liability—  — — — — — — — — 
Issuance of earn out shares to common stockholders—  — — — — — — — — 
Distributions to Janus Midco, LLC unitholders      —   — 
Distributions to Class A preferred units        — — 
Deferred Tax Asset      —   — 
Cumulative translation adjustment       —  — 
Net income        (2,817,354)(2,817,354)
Balance as of June 26, 2021 $  $  $ $3,150,770 $ $(2,817,354)$333,416 
Warrant Redemption— — — — — — — — — — 
Cumulative translation adjustment— — — — — — — — — — 
Warrant movements from private to public— — — — — — 10,112,875 — — 10,112,875 
Net income— — — — — — — — (2,136,119)(2,136,119)
Balance as of September 25, 2021 $  $  $ $13,263,645 $ $(4,953,473)$8,310,172 



Janus International Group, Inc.
Notes to Unaudited Consolidated Financial Statements
As Restated
Class B
Common Units
Class A
Preferred Units
Common StockAdditional paid-in capital (Restated)Accumulated Other Comprehensive Income (Loss)Accumulated
Deficit (Restated)
Total (Restated)
UnitAmountUnitAmountSharesAmount
Balance as of December 26, 20204,478 $261,425 189,044 $189,043,734 — $— $— $(227,160)$(48,205,174)$140,872,825 
Balance as of Retroactive application of the recapitalization(4,478)(261,425)(189,044)(189,043,734)66,145,633 6,615 189,298,544 — — — 
Balance as of December 26, 2020, as adjusted $  $ 66,145,633 $6,615 $189,298,544 $(227,160)$(48,205,174)$140,872,825 
Vesting of Midco LLC class B units— — — — 111,895 11 51,865 — — 51,876 
Distributions to Class A preferred units—  — — — — — — (95,883)(95,883)
Cumulative translation adjustment—  — — — — — 310,768 — 310,768 
Net income— — — — — — — — 14,718,821 14,718,821 
Balance as of March 27, 2021, as adjusted $  $ 66,257,528 $6,626 $189,350,409 $83,608 $(33,582,236)$155,858,407 
Vesting of Midco LLC class B units    4,012,872 401 5,209,592   5,209,993 
Issuance of PIPE Shares—  — — 25,000,000 2,500 249,997,500 — — 250,000,000 
Issuance of common stock upon merger, net of transaction costs, earn out, and merger warrant liability—  — — 41,113,850 4,111 226,939,423 — — 226,943,534 
Issuance of earn out shares to common stockholders—  — — 2,000,000 200 26,479,800 — — 26,480,000 
Distributions to Janus Midco, LLC unitholders      (541,710,278)  (541,710,278)
Distributions to Class A preferred units        (4,078,090)(4,078,090)
Deferred Tax Asset      78,290,839   78,290,839 
Cumulative translation adjustment       (37,082) (37,082)
Net income        (1,694,147)(1,694,147)
Balance as of June 26, 2021 $  $ 138,384,250 $13,838 $234,557,285 $46,526 $(39,354,473)$195,263,176 
Warrant Redemption— — — — 110 — 1,265 — — 1,265 
Cumulative translation adjustment— — — — — — — (1,169,565)— (1,169,565)
Warrant movements from private to public— — — — — — 10,112,875 — — 10,112,875 
Net income— — — — — — — — 15,541,623 15,541,623 
Balance as of September 25, 2021 $  $ 138,384,360 $13,838 $244,671,425 $(1,123,039)$(23,812,850)$219,749,374 

The table below present the effects of the restatement on the consolidated statements of cash flows for the nine months ended September 25, 2021:



Janus International Group, Inc.
Notes to Unaudited Consolidated Financial Statements
Nine Months Ended September 25, 2021
As Previously
Reported
AdjustmentsAs Restated
Cash Flows Provided By Operating Activities
Net income (loss)$33,519,770 $(4,953,473)$28,566,297 
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation4,677,954 — 4,677,954 
Intangible amortization21,851,717 — 21,851,717 
Deferred finance fee amortization2,286,480 — 2,286,480 
Share based compensation2,111,099 3,150,770 5,261,869 
Loss on extinguishment of debt2,414,854 — 2,414,854 
Change in fair value of contingent consideration and earnout686,700 — 686,700 
Loss on sale of assets43,091 — 43,091 
Change in fair value of derivative warrant liabilities(1,624,000)2,281,625 657,625 
Undistributed (earnings) losses of affiliate75,565 — 75,565 
Deferred income taxes(767,658)— (767,658)
Changes in operating assets and liabilities
Accounts receivable(16,942,650)— (16,942,650)
Costs and estimated earnings in excess of billings and billings in excess of costs and estimated earnings on uncompleted contracts(12,101,214)— (12,101,214)
Prepaid expenses and other current assets(4,488,285)— (4,488,285)
Inventory(18,474,167)— (18,474,167)
Accounts payable18,409,091 — 18,409,091 
Other accrued expenses29,127,435 (478,922)28,648,513 
Other assets and long-term liabilities(1,122,518)— (1,122,518)
Net Cash Provided By Operating Activities59,683,264 — 59,683,264 
Cash Flows Used In Investing Activities
Proceeds from sale of equipment79,409 — 79,409 
Purchases of property and equipment(15,930,575)— (15,930,575)
Cash paid for acquisitions, net of cash acquired(179,713,814)— (179,713,814)
Net Cash Used In Investing Activities(195,564,980)— (195,564,980)
Cash Flows Provided by (Used In) Financing Activities
Net borrowings on line of credit19,350,803 — 19,350,803 
Distributions to Janus Midco LLC unitholders(4,173,973)— (4,173,973)
Principal payments on long-term debt(64,824,518)— (64,824,518)
Proceeds from issuance of long term debt155,000,000 — 155,000,000 
Proceeds from merger334,873,727 — 334,873,727 
Proceeds from PIPE250,000,000 — 250,000,000 
Payments for transaction costs(44,489,256)— (44,489,256)
Payments to Janus Midco, LLC unitholders at the business combination(541,710,278)— (541,710,278)
Proceeds from warrant redemption1,265 — 1,265 
Payment of contingent consideration— — — 
Payments for deferred financing fees(4,320,821)— (4,320,821)
Cash Provided By (Used In) Financing Activities$99,706,948 $— $99,706,948 
Effect of exchange rate changes on cash and cash equivalents141,720 — 141,720 
Net (Decrease) Increase in Cash and Cash Equivalents$(36,033,048)$ $(36,033,048)
Cash and Cash Equivalents, Beginning of Fiscal Year$45,254,655 $ $45,254,655 
Cash and Cash Equivalents as of September 25, 2021$9,221,607 $ $9,221,607 
Supplemental Cash Flows Information
Interest paid$19,226,554 $— $19,226,554 
Income taxes paid$1,509,592 $— $1,509,592 


Janus International Group, Inc.
Notes to Unaudited Consolidated Financial Statements
3. Inventories
Inventories are stated at the lower of cost or net realizable value utilizing the first-in, first-out (FIFO) method. The major components of inventories at:as of October 1, 2022 and January 1, 2022 are as follows:
September 25,December 26,October 1,January 1,
2021202020222022
Raw materialsRaw materials$38,852,320 $17,431,731 Raw materials$48,043 $41,834 
Work-in-processWork-in-process838,389 637,109 Work-in-process650 671 
Finished goodsFinished goods13,140,028 7,212,681 Finished goods20,357 14,091 
$52,830,737 $25,281,521 $69,050 $56,596 
The Company has recorded a reserve for inventory obsolescence as of October 1, 2022 and January 1, 2022, of approximately $1,996 and $1,295, respectively.
4. Property and Equipment
Property, equipment, and other fixed assets as of September 25, 2021October 1, 2022 and December 26, 2020January 1, 2022 are as follows:
September 25,December 26,October 1,January 1,
2021202020222022
LandLand$4,501,295 $3,361,295 Land$4,501 $4,501 
Manufacturing machinery and equipmentManufacturing machinery and equipment34,913,905 26,446,933 Manufacturing machinery and equipment37,286 35,688 
Leasehold improvementsLeasehold improvements5,204,632 5,127,065 Leasehold improvements5,615 4,599 
Construction in progressConstruction in progress11,127,210 2,170,193 Construction in progress6,063 3,571 
OtherOther12,725,431 8,084,391 Other14,274 13,287 
$68,472,473 $45,189,877 $67,739 $61,646 
Less accumulated depreciationLess accumulated depreciation(18,685,910)(14,219,370)Less accumulated depreciation(24,884)(20,039)
$49,786,563 $30,970,507 $42,855 $41,607 


5. Acquired Intangible Assets and Goodwill
Intangible assets acquired in a business combination (see Note 9 -- “Business Combinations”) are recognized at fair value and amortized over their estimated useful lives. The carrying basis and accumulated amortization of recognized intangible assets at September 25, 2021October 1, 2022 and December 26, 2020,January 1, 2022, are as follows:
September 25,December 26,October 1,January 1,
2021202020222022
Gross Carrying AmountAccumulated AmortizationAverage Remaining Life in YearsGross Carrying AmountAccumulated AmortizationGross Carrying AmountAccumulated AmortizationAverage Remaining Life in YearsGross Carrying AmountAccumulated Amortization
Intangible AssetsIntangible AssetsIntangible Assets
Customer relationshipsCustomer relationships$410,021,868 $90,682,225 12$380,862,639 $71,390,241 Customer relationships$406,970 $(118,200)10$410,094 $(97,895)
Noncompete agreementsNoncompete agreements411,010 238,732 6412,949 151,028 Noncompete agreements380 (233)5412 (231)
Tradenames and trademarksTradenames and trademarks107,958,402 — Indefinite85,597,528 — Tradenames and trademarks106,971 — Indefinite107,980 — 
Other intangiblesOther intangibles61,831,402 43,622,904 658,404,905 41,279,081 Other intangibles61,626 (47,030)1061,836 (46,156)
$580,222,682 $134,543,861 $525,278,021 $112,820,350 $575,947 $(165,463)$580,322 $(144,282)
Changes to gross carrying amount of recognized intangible assets due to translation adjustments include an approximate $369,000$3,278 and $997,000$270 loss for the period ended September 25, 2021October 1, 2022 and December 26, 2020,January 1, 2022, respectively. Amortization expense was approximately $8,229,000$7,408 and $6,892,000 and $21,852,000 and $20,287,000$8,229 for the three and nine months ended September 25, 2021 and September 26, 2020, respectively.
The changes in the carrying amounts of goodwill for the period ended September 25, 2021 were as follows:
Balance as of December 26, 2020$259,422,822
Goodwill acquired during the period110,641,756 

12

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
three month periods ended October 1, 2022 and September 25, 2021, and $22,278 and $21,852 for the nine months periods ended October 1, 2022 and September 25, 2021, respectively.
The changes in the carrying amounts of goodwill for the period ended October 1, 2022 were as follows:
Balance as of January 1, 2022$369,286
Changes due to foreign currency fluctuations(457,380)(2,076)
Goodwill adjusted during the period52 
Balance as of September 25, 2021October 1, 2022$369,607,198367,262 
6. Accrued Expenses
Accrued expenses are summarized as follows:
September 25,December 26,
20212020October 1,January 1,
(Restated)20222022
Sales tax payableSales tax payable$2,132,147 $1,324,696 Sales tax payable$5,236 $3,606 
Interest payableInterest payable6,576,691 4,832,590 Interest payable254 2,741 
Contingent consideration payable - short term4,000,000 4,000,000 
Indemnity Holdback LiabilityIndemnity Holdback Liability1,002 — 
Other accrued liabilitiesOther accrued liabilities1,998,182 5,294,414 Other accrued liabilities6,222 1,766 
Employee compensationEmployee compensation10,088,860 6,090,304 Employee compensation14,016 13,857 
Customer deposits and allowancesCustomer deposits and allowances25,179,906 10,780,783 Customer deposits and allowances36,297 24,555 
Income taxesIncome taxes2,121 810 
Current operating lease liabilitiesCurrent operating lease liabilities5,293 — 
OtherOther11,755,227 4,841,840 Other5,478 6,776 
TotalTotal$61,731,013 $37,164,627 Total$75,919 $54,111 
Other accrued liabilities consist primarily of deferred transaction costs of $0 and $3,337,000 as of September 25, 2021October 1, 2022 and December 26, 2020, respectively. OtherJanuary 1, 2022 consists primarily of property tax, freight accrual, Federal and State income taxes, legal, accounting and other professional fees.fee accruals.
7. Line of Credit
On February 12, 2018, the Company, through Intermediate and Janus Core, entered into a revolving line of credit facility with a financial institution.institution pursuant to ABL Credit And Guarantee Agreement (the “LOC Agreement”). In August 2021, the Company increased the available line of credit from $50,000,000$50,000 to $80,000,000,$80,000, incurred additional fees for this amendment of $425,000$425 and extended the maturity date from February 18, 2023 to August 12, 2024. The current line of credit facility is for $80,000,000$80,000 with interest payments due in arrears. The interest rate on the facility is based on a base rate, unless a LIBOR Rate (as defined in the LOC Agreement) option is chosen by the Company. If the LIBOR Rate is elected, the interest computation is equal to the LIBOR Rate plus the LIBOR Rate Margin.Margin of 1.25%, as of October 1, 2022. 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 LIBOR rate plus 1%, or (c) the financial institution’s Prime Rate (as defined in the LOC Agreement), plus the Base Rate Margin.Margin (as defined in the LOC Agreement) of .25% as of October 1, 2022. 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 September 25, 2021October 1, 2022 and December 26, 2020,January 1, 2022, the interest rate in effect for the facility was 6.5% and 3.5%., respectively. The line of credit is collateralized by accounts receivable and inventories. The Company has incurred deferred loan costs in the amount of $1,483,000$1,483 which are being amortized over the term of the facility that expires on August 12, 2024, using the effective interest method.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 consolidated statementsUnaudited Condensed Consolidated Statements of operationsOperations and comprehensive income.Comprehensive Income. The unamortized portion of the fees as of September 25, 2021October 1, 2022 and December 26, 2020January 1, 2022 was approximately $740,000$463 and $448,000,$648, respectively. There was $19,350,803$— and $0$6,369 outstanding balance on the line of credit as of September 25, 2021October 1, 2022 and December 26, 2020,January 1, 2022, respectively.
8. Long-Term Debt
Long-term debt consists of the following:
September 25,December 26,
20212020
Note payable - First Lien$— $562,363,000 
Note payable - First Lien B2— 73,875,000 
Note payable - Amendment No. 4 First Lien
726,413,482 — 
Notes payable - Auto Loans92,684 — 
726,506,166 636,238,000 
Less unamortized deferred finance fees11,467,679 12,110,329 
Less current maturities8,111,212 6,523,417 
Total long-term debt$706,927,275 $617,604,254 
Notes Payable – First Lien and First Lien B2


13

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
The First Lien notes payable was comprised of a syndicate of lenders that originated on February 12, 2018, in the amount of $470,000,000 with interest payable in arrears. The Company subsequently entered into the first amendment8. Long-Term Debt
Long-term debt consists of the First Lien notes payable on March 1, 2019, to issue an additional tranche of the notes payable in the amount of $75,000,000 (First Lien B2), and the second amendment of the First Lien notes payable on August 9, 2019, to increase the first tranche of the notes payable by $106,000,000. Both tranches bore interest, as chosen by the Company, at a floating rate per annum consisting of LIBOR plus an applicable margin percent, and were secured by substantially all business assets. On July 21, 2020, the Company repurchased $1,989,000 principal amount of the First Lien (the “Open Market Purchase”) at an approximate $258,000 discount, resulting in a gain on the extinguishment of debt of approximately $258,000. Following the repurchase of the First Lien in the Open Market Purchase, approximately $573,000,000 principal amount of the 1st Lien remained outstanding. The total interest rate for the First Lien was 4.75% as of December 26, 2020. Unamortized debt issuance costs were approximately $10,304,000 at December 26, 2020.following:
The First Lien B2 was comprised of a syndicate of lenders that originated on March 1, 2019, in the amount of $75,000,000 with interest payable in arrears. The outstanding loan balance was to be repaid on a quarterly basis of 0.25% of the original balance beginning the last day of June 2019 with the remaining principal due on the maturity date of February 12, 2025. As chosen by the Company, the First Lien B2 notes payable bore interest at a floating rate per annum consisting of LIBOR plus an applicable margin percent (total rate of 5.50% as of December 26, 2020.) The debt was secured by substantially all business assets. Unamortized debt issuance costs were approximately $1,806,000 as of December 26, 2020.
Notes Payable - Amendment No. 3 First Lien
October 1,January 1,
20222022
Note payable - Amendment No. 4 First Lien
$716,329 $722,379 
Financing leases1,260 — 
$717,589 $722,379 
Less unamortized deferred finance fees8,021 10,594 
Less current maturities8,379 8,067 
Total long-term debt$701,189 $703,718 

As of February 5, 2021, the Company completed a repricing of its First Lien and First Lien B2 Term Loans, in which the principal terms of the amendment were a reduction in the overall interest rate based upon the loan type chosen and a consolidation of the prior two outstanding tranches into a single tranche of debt with the syndicate. The Amendment No.3 First Lien was comprised of a syndicate of lenders originating on February 5, 2021 in the amount of $634,607,000 with interest payable in arrears. The outstanding loan balance was to be repaid on a quarterly basis of 0.25% of the original balance beginning the last day of September 2021 with the remaining principal due on the maturity date of February 12, 2025. As chosen by the Company, the amended loan bears interest at a floating rate per annum consisting of LIBOR, plus an applicable margin percent (total rate of 4.25% as of September 25, 2021). The debt was secured by substantially all business assets.
As a result of the repricing transaction, the Company recognized a loss on extinguishment of approximately $1,421,000. The loss is included in Other income (expense) on the Consolidated Statements of Operations and Comprehensive Income.
As of June 7, 2021 and as a result of the Business Combination, the Company repaid approximately $61,600,000 of debt and recognized a loss on extinguishment of approximately $994,000. The loss is included in Other income (expense) on the Consolidated Statements of Operations and Comprehensive Income.
Notes Payable - Amendment No.4 First Lien
-
On August 18, 2021, the Company completed a refinancing in the form of itsthat certain First Lien Amendment No. 3,4, in which the principal terms of the amendment were new borrowings of $155,000,000$155,000 which was used to fund the DBCI (hereinafter defined) acquisition. The Amendment No. 4 First Lien is comprised of a syndicate of lenders originating on August 18, 2021 in the amount of $726,413,000$726,413 with interest payable in arrears. The outstanding loan balance is to be repaid on a quarterly basis of 0.25% of the original balance beginning the last day of September 2021 with the remaining principal due on the maturity date of February 12, 2025. As chosen by the Company, the amended loan bears interest at a floating rate per annum consisting of LIBOR, plus an applicable margin percent (total(effective rate of 4.25%6.4% as of September 25, 2021)October 1, 2022). The debt is secured by substantially all business assets. Unamortized debt issuance costs are approximately $11,468,000 at September 25, 2021. This refinancing amendment was accounted for as a modification and as such no gain or loss was recognized for this transaction and any third party fees were expensed with bank fees, original issue discount and charges capitalized and are being amortized as a component of interest expense over the remaining loan term.
Notes Payable - Auto Loans Third party fees paid in connection with this amendment were expensed.

With the acquisition of ACT (see Note 9 -- ���Business Combinations”), the Group acquired various loans secured by automobiles used by ACT to service customers. The loans outstanding balances at September 25, 2021 are approximately $93,000 and have interest rates ranging from 4.29% to 8.35%, are secured by the individual vehicles and have remaining terms of 1 to 4 years. The loans have approximate monthly payments ranging from $400 to $1,200.
As of September 25, 2021,October 1, 2022 and December 26, 2020,January 1, 2022, the Company maintained one letter of credit totaling approximately $400,000 and $295,000,$400 on which there were no balances due.
In connection with the Company entering into the First Lien debt agreementsagreement discussed above, deferred finance fees were capitalized. These costs are being amortized over the terms of the associated debt under the effective interest rate method. Amortization of approximately $800,000$865 and


Janus International Group, Inc.
Notes to Unaudited Consolidated Financial Statements
$810,000 $800 and $2,286,000$2,573 and $2,419,000$2,286 was recognized for the three and nine months ended October 1, 2022 and September 25, 2021, and September 26, 2020, respectively, as a component of interest expense, including those amounts amortized in relation to the deferred finance fees associated with the outstanding line of credit.
Aggregate annual maturities of long-term debt at September 25, 2021, are:
2021$2,029,869 
20228,106,224 
20238,090,601 
20246,063,807 
2025702,215,665 
Total$726,506,166 
9. Business Combinations

Access Control Technologies, LLC Acquisition
On August 31, 2021, Janus Core acquired 100% of the equity interests of ACT and all assets and certain liabilities of Phoenix Iron Worx, LLC for total consideration of approximately $10,733,000$10,385 which was comprised of approximately $9,383,000$9,383 of cash plus $1,350,000$1,002 of hold back
liability. The hold back liability will be trued up and settled upon the finalization of the closing statement.

The assets and liabilities of the acquisitions have been recorded based upon management's estimates of their fair market values as of each
respective date of acquisition. The following tables summarize the fair values of consideration transferred and the fair values of identified
assets acquired, and liabilities assumed at the date of acquisition:

Fair Value of Consideration Transferred
Cash9,383,460 
Hold Back Liability1,350,000 
Total Fair Value of Consideration Transferred$10,733,460
Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed
Cash169,485 
Accounts receivable1,100,533 
Other current assets102,521 
Property and equipment196,561 
Identifiable intangible assets
Customer relationships2,470,000 
Backlog280,000 
Trademark1,450,000 
Recognized amounts of identifiable liabilities assumed
Accounts payable(473,353)
Accrued expenses(152,191)
Other liabilities(1,395,911)
Total identifiable net assets3,747,645
Goodwill6,985,815
The fair values of assets acquired and liabilities assumed, including current and noncurrent income taxes payable and deferred taxes, may be subject to change as additional information is received and certain tax returns are finalized. Accordingly, the provisional measurements of fair value of income taxes payable and deferred taxes are subject to change. We expect to finalize the valuation as soon as practicable, but not later than one year from the acquisition date.

14

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements

Fair Value of Consideration Transferred
Cash$9,383 
Hold Back Liability1,002 
Total Fair Value of Consideration Transferred$10,385
Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed
Cash169 
Accounts receivable1,101 
Other current assets103 
Property and equipment197 
Identifiable intangible assets
Customer relationships2,470 
Backlog280 
Trademark1,450 
Recognized amounts of identifiable liabilities assumed
Accounts payable(473)
Accrued expenses(152)
Other liabilities(1,398)
Total identifiable net assets$3,747
Goodwill$6,638
The goodwill balance of $6,986,000$6,638 is attributable to the expansion of our product offerings and expected synergies of the combined workforce, products and technologies with ACT. All of the goodwill was assigned to the Janus North America segment of the business and is deductible for income tax purposes.
The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:
Fair ValueUseful Lives
Customer Relationships$2,470,0002,470 P15Y15 Years
Backlog280,000280 P3M3 Months
Trade Name1,450,0001,450 Indefinite
Identifiable Intangible Assets$4,200,0004,200 

Customer relationships represent the fair values of the underlying relationships with ACT’s customers. Unbilled contracts (“Backlog”) representBacklog represents the fair value of ACT’s contracts that have yet to be billed. Trade names represent ACT’s trademarks, which consumers associate with the source and quality of the products and services they provide.
The weighted-average amortization of acquired intangibles is 8.8 yearsyears.
During 2021, the Company incurred approximately $284,000$284 of third-party acquisition costs. These expenses are included in general and administrative expense in the Company’s Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income for the three and nine months ended September 25, 2021.
The amounts of revenue and net income of ACT included in the results from the transaction date of August 31, 2021 through September 25, 2021 are as follows:
Periods from September 1, 2021 through September 25, 2021
Revenue$981,976 
Net Income26,038 
DBCI, LLC (“DBCI”) Acquisition
On August 17, 2021, Janus Core acquired 100% of the equity interests of DBCI from Cornerstone Building Brands, Inc. (“Cornerstone”) for total cash consideration of approximately $169,173,000.$169,173.
The assets and liabilities of the acquisitions have been recorded based upon management's estimates of their fair market values as of each respective date of acquisition. The following tables summarize the fair value of consideration transferred and the fair value of identified assets acquired, and liabilities assumed at the date of acquisition:


15

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Fair Value of Consideration Transferred
Cash$169,172,537169,173 
Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed
Cash207,655208 
Accounts receivable8,501,8108,502 
Inventories9,075,0499,075 
Property and equipment7,802,7207,803 
Other assets29,28029 
Identifiable intangible assets
Customer relationships26,320,00026,320 
Backlog3,130,0003,130 
Trademark20,850,00020,850 
Recognized amounts of identifiable liabilities assumed
Accounts payable(8,011,998)(8,012)
Accrued expenses(571,375)(571)
Other liabilities(887,271)(888)
Total identifiable net assets66,445,870$66,446 
Goodwill102,726,667$102,727 

The fair values of assets acquired and liabilities assumed, including current and noncurrent income taxes payable and deferred taxes, may be subject to change as additional information is received and certain tax returns are finalized. Accordingly, the provisional measurements of fair value of income taxes payable and deferred taxes are subject to change. We expect to finalize the valuation as soon as practicable, but not later than one year from the acquisition date.
The goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of DBCI and Janus Core. All of the goodwill was assigned to the Janus North America segment and is deductible for income tax purposes.
The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:

Fair ValueUseful Lives
Customer Relationships$26,320,00026,320 P15Y15 Years
Backlog3,130,0003,130 P4M4 Months
Trade Name20,850,00020,850 Indefinite
Identifiable Intangible Assets$50,300,00050,300 

Customer relationships represent the fair values of the underlying relationships with DBCI’s customers. Unbilled contracts (“Backlog”) represent the fair value of DBCI’s contracts that have yet to be billed. Trade names represent DBCI’s trademarks, which consumers associate with the source and quality of the products and services they provide.
The weighted-average amortization of acquired intangibles is 7.9 years.
During 2021, the Company incurred approximately $2,685,000$2,685 of third-party acquisition costs. These expenses are included in general and administrative expense in the Company’s Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income for the three and nine months ended September 25, 2021.



Janus International Group, Inc.
Notes to Unaudited Consolidated Financial Statements
On January 21, 2022, in response to the Company’s submission of its proposed purchase price calculations and preliminary supporting documentation (the “Closing Statement”), Cornerstone delivered a Purchase Price Dispute Notice (“Dispute Notice”) to the Company. On February 26, 2022, the Company delivered its response to the Dispute Notice, and subsequent extensions were permitted between the parties to analyze the Closing Statement in an effort to mutually resolve the matter. The amountsClosing Statement analysis is unresolved and pending as of revenuethe Form 10-Q filing date. Given the number of Closing Statement items currently in dispute, which result in a material difference between Janus’ and net incomeCornerstone’s position of DBCI includedthe purchase price, the Company is unable to reasonably estimate the contingency loss or gain. The Company will continue to monitor the progress of the dispute and will recognize the respective gain or loss through earnings in the Consolidated Statements of Operations and Comprehensive Income from the transaction date of August 17, 2021 through September 25, 2021 are as follows:

Period from August 18, 2021 through September 25, 2021
Revenue$8,456,455 
Net Income565,265 
appropriate period.

Pro Forma Financial Information
The following unaudited pro forma information is based on estimates and assumptions that the Company believes to be reasonable. However, this information is not necessarily indicative of the Company’s consolidated results of income in future periods or the results that actually would have been realized had the Company and DBCI and ACT been combined companies during the periods presented. These pro forma results exclude any savings or synergies that would have resulted from these business combinations had they occurred on December 29, 2019. 27, 2020
16

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
This unaudited pro forma supplemental information includes incremental asset amortization, accounting policy alignment, nonrecurring transaction costs, and other charges as a result of the acquisitions, net of the related tax effects.
The following unaudited pro forma information has been prepared as if the DBCI and ACT acquisitions had taken place on December 29, 2019.27, 2020. The Company prepared the table based on certain estimates and assumptions. These estimates and assumptions were made solely for the purposes of developing such unaudited pro forma information and have not been adjusted to provided period over period comparability.

Three Months Period EndedNine Months Period Ended
September 25, 2021September 25, 2021
Revenue$199,314 $574,135 
Net Income$17,097 $35,273 
Three Months Period EndedNine Months Period Ended
September 25,September 26,September 25,September 26,
2021202020212020
Revenue$199,314,429 $160,977,239 $574,135,446 $468,372,347 
Net Income17,097,308 19,848,627 35,272,653 43,221,338 

The Business Combination with Juniper Industrial Holdings, Inc.
On June 7, 2021, Juniper consummated a business combination with Midco pursuant to the Business Combination Agreement.Agreement (the “Business Combination”). Pursuant to ASC 805, for financial accounting and reporting purposes, Midco was deemed the accounting acquirer and Juniper was treated as the accounting acquiree, and the Business Combination was accounted for as a reverse recapitalization. Accordingly, the Business Combination was treated as the equivalent of Midco issuing equity for the net assets of Juniper, accompanied by a recapitalization. Under this method of accounting, the consolidated financial statements of Midco are the historical financial statements of Janus International Group, Inc. The net assets of Juniper were stated at historical costs, with no goodwill or other intangible assets recorded in accordance with U.S. GAAP, and are consolidated with Midco’s financial statements on the Closing Date.closing date. The shares and net income (loss) per share available to holders of the Company’s common stock, prior to the Business Combination, have been retroactively restated to reflect the exchange ratio established in the Business Combination Agreement.
As a result of the Business Combination, Midco’s unitholders received aggregate consideration of approximately $1.2 billion,$1,200,000, which consisted of (i) $541.7 million$541,700 in cash at the closing of the Business Combination and (ii) 70,270,400 shares of common stock valued at $10.00 per share, totaling $702.7 million.$702,700.
In connection with the closing of the Business Combination, Juniper Industrial Sponsor, LLC (the “Sponsor”) received 2,000,000 shares of Janus’s Common StockJanus’ common stock (pro rata among the Sponsor shares and shares held by certain affiliates) (the “Earnout Shares”) contingent upon achieving certain market share price milestone as outlined in the Business Combination Agreement. The vesting of the Earnout Shares occurred automatically as of the close of the trading on June 21, 2021 in accordance with the terms of the Earnout Agreement, entered into by and between the Company and the Sponsor at the closing of the Transaction. All contingent consideration shares were issued or released during the six months ended June 26, 2021.transaction.
Concurrently with the execution and delivery of the Business Combination Agreement, certain institutional accredited investors (the “PIPE
Investors”), entered into subscription agreements (the “PIPE Subscription Agreements”) pursuant to which the PIPE Investors purchased an aggregate of 25,000,000 shares of Common StockJanus’ common stock (the “PIPE Shares”) at a purchase price per share of $10.00 (the “PIPE Investment”). One of the Company’s directors also purchased an aggregate of 1,000,000 of the PIPE Shares as part of the PIPE Investment. The PIPE Investment was closed on June 7, 2021 and the issuance of an aggregate of 25,000,000 shares of Common Stockcommon stock occurred concurrently with the consummation of the Business Combination.


Janus International Group, Inc.
Notes to Unaudited Consolidated Financial Statements
In connection with the Business Combination, the Group incurred direct and incremental costs of approximately $44.5 million$44,500 related to the equity issuance, consisting primarily of investment banking, legal, accounting and other professional fees, which were recorded to additional paid-in capital as a reduction of proceeds.fees. In addition, the Company incurred $4,468,000$4,468 in transaction bonuses paid to key employees and $5,210,000$5,210 in non-cash share-based compensation expense due to the accelerated vesting of Midco’s legacy share-based compensation plan. The transaction bonuses and share-based compensation are included in general and administrative expense on our consolidated statement of operations and comprehensive income for nine months ended September 25, 2021. See Note 10 - “Equity Incentive Plan and Unit Option Plan”Compensation” for additional information.

G & M&M Stor-More Pty Ltd Acquisition
On January 19, 2021, the Company, through its wholly owned subsidiary Steel Storage Australia Pty Ltd. (“Steel Storage”) acquired 100% of the net assets of G&M Stor-More Pty Ltd. for total cash consideration of approximately $1,739,000.$1,739. In aggregate, approximately $814,000$814 was attributed to intangible assets, approximately $929,000$929 was attributable to goodwill, and approximately $(4,000)$(4) was attributable to net liabilities assumed. The goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of the Company and Steel Storage. All of the goodwill was assigned to the Janus International segment of the business and is not deductible for income tax purposes.
The weighted-average amortization of acquired intangibles is 11.6 years.
During 2021, the Company incurred approximately $105,000$105 of third-party acquisition costs. These expenses are included in general and administrative expense of the Company’s Consolidated Statementconsolidated statement of Operationsoperations and Comprehensive Incomecomprehensive income for the nine months ended September 25, 2021.
Pro forma results of operations for this acquisition have not been presented because the historic results of operations for G&M Stor-More Pty Ltd. are not material to the consolidated results of operations in the prior year.
17

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
10. Equity Incentive Plan and Unit Option PlanCompensation
2021 EquityOmnibus Incentive Plan
Effective June 7,The Company maintains its 2021 Group implemented an equity incentive program designedOmnibus Incentive Plan (the “Plan”) under which it grants stock-based awards to enhance the profitability and value of its investment for the benefit of its shareholders by enabling Group to offer eligible directors, officers and employees equity-based incentives in order to attract, retain and reward such individuals and strengthen the mutuality of interest between such individuals and the Group’s shareholders.stockholders. The Plan allows to issue and grant 15,125,000 shares.
The Company measures compensation expense for stock-based awards in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). During the nine months ended October 1, 2022, the Company granted stock-based awards including restricted stock units (“RSUs”) and stock options under the Plan. The grant date fair value of RSUs are 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”, 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. As of September 25, 2021, no awards were granted to any individuals under the Plan.
Restricted Stock Unit Grants
RSUs are subject to one or four years’ service vesting period. RSUs activity for the nine months ended October 1, 2022 is as follows:

Nine Months Ended October 1, 2022
RSUsWeighted-Average Grant Date Fair Value
Outstanding at January 1, 2022275,370 $11.9 
Granted375,255 9.9 
Vested(85,543)11.5 
Forfeited(25,711)10.5 
Outstanding at October 1, 2022539,371 $10.6 
Unvested at October 1, 2022539,371 $10.6 

Stock-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 $581 and $1,860 for the three and nine months ended October 1, 2022, respectively. As of October 1, 2022, there was an aggregate of $4,791 of unrecognized expense related to the restricted stock units granted, which the Company expects to amortize over a weighted-average period of 3.2 years.
Stock Options
Stock options are granted by applying a valuation method to determine the grant date fair value for each stock option award. Stock option awards typically vest in 25% annual installments on each of the first four anniversaries of the vesting commencement date and expire ten years from the grant date. The fair value of each option is estimated using a Black-Scholes option valuation model using the independent valuations of the Company’s stock.
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:

Nine Months Ended October 1, 2022
Expected life of option (years)6.25
Risk-free interest rate2.9% - 3.0%
Expected volatility of the Company’s stock45 %
Expected dividend yield on the Company’s stock— %
18

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Stock option activity for the nine months ended October 1, 2022 is as follows:

Nine Months Ended October 1, 2022
Stock OptionsWeighted-Average Grant Date Fair ValueWeighted Average Remaining Contractual Life (in years)Intrinsic value
Outstanding at January 1, 2022— $— $— 
Granted736,106 4.5 9.8— 
Vested— — — 
Forfeited(35,376)4.5 — 
Outstanding at October 1, 2022700,730 $4.5 9.8$— 
Unvested at October 1, 2022700,730 $4.5 9.8$— 
Stock-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 $191 and $286 for the three and nine months ended October 1, 2022. Total unamortized stock-based compensation expense related to the unvested stock options was approximately $2,842, which the Company expects to amortize over a weighted-average period of 3.8 years.
Midco - CommonClass B Unit Incentive Plan
Prior to the Business Combination, commencing inon March 15, 2018, the Board of Directors of Midco approved the Class B Unit Incentive Plan (the “Class B Plan”), which was a form of long-term compensation that provided for the issuance of ownership units to employees for purposes of retaining them and enabling such individuals to participate in the long-term growth and financial success of Midco.
As a result of the Business Combination, the Board of Directors approved an accelerationaccelerated vesting for 16,079 units (equivalent to 4,012,873 shares of the awardsGroup common stock) granted in connection with the Class B Plan, to allow accelerated vesting of the units upon consummation of the Business Combination. On the date of the Closing, theThe accelerated vesting for 16,079 units (equivalent to 4,012,873 shares of Group common stock) resulted in $5.2 million of non-cash share-based compensation expense recorded to general and administrative expense in consolidated statementthe Unaudited Condensed Consolidated Statement of operationsOperations and comprehensive incomeComprehensive Income for the three and nine months ended September 25, 2021. Effective June 7, 2021, as a result of the Business Combination, the Class B Plan was terminated.




Janus International Group, Inc.
Notes to Unaudited Consolidated Financial Statements


11. Stockholders’ Equity
On June 7, 2021, the Group’s common stock began trading on the NYSE under the symbol “JBI”. Pursuant to the terms of the Amended and Restated Certificate of Incorporation, the Company is authorized and has available 825,000,000 shares of common stock with a par value of $0.0001 per share. Immediately following the Business Combination, there were 138,384,250 shares of common stock with a par value of $0.0001 outstanding. As discussed in Note 9 — “Business Combinations,”Business Combination, the Company has retroactively adjusted the shares issued and outstanding prior to June 7, 2021 to give effect to the exchange ratio established in the Business Combination Agreement to determine the number of shares of common stock into which they were converted.
Preferred Stock
Our certificate of incorporation authorizes the issuance of 1,000,000 shares of preferred stock with a par value of $0.0001 per share. As of September 25, 2021 the numberOctober 1, 2022, zero shares of preferred stock were issued and outstanding, sharesand no designation of rights and preferences of preferred stock had been adopted. Our preferred stock is 138,384,360. The increase in sharesnot quoted on any market or system, and there is not currently a result of warrant redemptions during the nine months ended September 25, 2021.

market for our preferred stock.
Rollover Equity
At the closing date of the business combination,Business Combination, each outstanding unit of Midco’s Class A Preferred and Class B Common converted into our common stock at the then-effective conversion rate. Each unit of Midco Class A Preferred was converted into approximately 343.983 shares of our common stock, and each unit of Midco Class B Common was converted into approximately 249.585 shares of our common stock. There are 70,270,400 shares held by Midco equityholders.

stock based on the determined exchange ratio.
PIPE Investment
Concurrently with the execution and delivery of the Business Combination Agreement, the PIPE Investors entered into the PIPE Subscription Agreements pursuant to which the PIPE Investors purchased an aggregate of 25,000,000 PIPE Shares at a purchase price per share of $10.00. One of the Company’s directors purchased an aggregate of 1,000,000 of the PIPE Shares as part of the PIPE Investment.
The PIPE Investment was closed on June 7, 2021 and the issuance of an aggregate of 25,000,000 shares of Common Stockcommon stock occurred concurrently with the consummation of the Business Combination. The sale and issuance was made to accredited investors in reliance on Rule 506 of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”).

19

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Founder Shares
In August 2019, the Sponsor purchased 8,625,000 shares of Class B common stock (the “founder shares”) of Juniper Industrial Holdings, Inc. (“JIH”)JIH for an aggregate purchase price of $25,000 in cash, or approximately $0.003 per founder share. By virtue of the consummation of the Business Combination, the Sponsor’s Class BA common stock was converted into the right to receive an equivalent number of shares of Common Stock,common stock, 2,000,000 of which (pro rata among the Sponsor shares and shares held by certain affiliates) was subject to the terms of the Earnout Agreement. The vesting of the Earnout Shares occurred automatically as of the close of the trading on June 21, 2021 in accordance with the terms of the Earnout Agreement. The table below represents the approximate common stock holdings of the Group immediately following the Business Combination.


Shares%
Janus Midco, LLC unitholders70,270,400 50.8 %
Public stockholders43,113,850 31.2 %
PIPE Investors25,000,000 18.0 %
Total138,384,250 100.0 %

Warrants
The Sponsor purchased 10,150,000 warrants to purchase Class A common stock of JIH (the “private placement warrants”) for a purchase price of $1.00 per whole private placement warrant, or $10,150,000$10,150 in the aggregate, in private placement transactions that occurred simultaneously with the closing of the Juniper IPO and the closing of the over-allotment option for the Juniper IPO (the “private placement”). Each private placement warrant entitled the holder to purchase one share of Class A common stock of JIH at $11.50 per share. The private placement warrants were only exercisable for a whole number of shares of Class A common stock of JIH. The Sponsor transferred 5,075,000 of its private placement warrants to Midco’s equityholdersequity holders as part of the consideration for the Business Combination. Immediately after giving effect to the Business Combination, there were 10,150,000 issued and outstanding private placement warrants. In third quarter of 2021, 2,237,500 warrants were reclassified from private placement warrants to public warrants. As of September 25, 2021, there were 7,912,500 issued and outstanding private placement warrants. The private placement warrants are liability classified.
Immediately after giving effect to the Business Combination, there were 17,249,995 issued and outstanding public warrants. As of September 25, 2021, there are 19,487,495 issued and outstanding public warrants. The public warrants arewere equity classified. The private placement warrants and public warrants were all exercised or redeemed on November 18, 2021.

Dividend Policy

We have never declared or paid, and do not anticipate declaring or paying, any cash dividends on our common or preferred stock in the foreseeable future. It is presently intended that we will retain our earnings for use in business operations and, accordingly, it is not anticipated that the Board of Directors will declare dividends in the foreseeable future. In addition, the terms of our credit facilities include restrictions on our ability to issue and pay dividends.


Janus International Group, Inc.
Notes to Unaudited Consolidated Financial Statements
12. Related Party Transactions
Prior to the Business Combination, Jupiter Intermediate Holdco, LLC, on behalf of the Janus Core, has entered into a Management and Monitoring Services Agreement (MMSA)(“MMSA”) with the Class A Preferred Unit holders group. As a result of the Business Combination the MMSA was terminated effective June 7, 2021. Janus Core paid management fees of $— and $3,039 to the Class A Preferred Unit holders group for the three and nine months ended September 25, 2021, and September 26, 2020 of approximately $0 and $1,632,000 and $1,124,000 and $5,241,000, respectively. Approximately $869,000 of theThere were no Class A Preferred Unit holders group management fees were accrued and unpaid as of December 26, 2020October 1, 2022 and no fees were accrued and unpaid as of September 25, 2021. As a result of the Business Combination the MMSA was terminated effective June 7, 2021.
For the three and nine months ended September 25, 2021 and September 26, 2020, there were no related party sales from the Group to its Mexican Joint Venture. For the three and nine months ended September 25, 2021 and September 26, 2020 there were no related party sales from the Mexican Joint Venture.January 1, 2022.
Janus Core leases a manufacturing facility in Butler, Indiana, from Janus Butler, LLC, an entity wholly owned by a former member of the boardBoard of directorsDirectors of Group.the Company. Effective October 20, 2021, the member resigned from the Board of Directors of the Company. Rent payments paid to Janus Butler, LLC for the three months ended October 1, 2022 and September 25, 2021 were approximately $37 and $37, respectively. Rent payments paid to Janus Butler, LLC for the nine months ended October 1, 2022 and September 25, 2021 and September 26, 2020, were approximately $37,000$112 and $37,000 and $123,000 and $109,000,$123, respectively. The original lease extendsextended through October 31, 2021 and on November 1, 2021 the lease was extended to October 31, 2026, with monthly payments of approximately $13,000$13 with an annual escalation of 1.5%.
Janus Core iswas previously a party to a lease agreement with 134 Janus International, LLC, which is an entity majority owned by a former member of the boardBoard of directorsDirectors of Group.the Company. In December 2021, the leased premises in Temple, Georgia were sold by the former director to a third party buyer, resulting in an assignment of the lease to said third-party buyer and an extension of the lease to November 30, 2031. Rent payments paid to 134 Janus International, LLC in the three and nine months ended October 1, 2022 and September 25, 2021 and September 26, 2020, were approximately $114,000$— and $112,000 and $343,000 and $335,000,$114, respectively. On September 27, 2021, the lease was extended from September 30, 2021 to December 30, 2021, with monthly payments of approximately $38,000 per month with an annual escalation of 2.5%.
The Group leases a distribution center in Fayetteville, Georgia from French Real Estate Investments, LLC, an entity partially owned by a shareholder of the Group. Rent payments paid to French Real Estate Investments,134 Janus International, LLC forin the three and nine months ended October 1, 2022 and September 25, 2021 and September 26, 2020, were approximately $26,000$— and $26,000 and $79,000 and $79,000,$343, respectively. The lease extends through July 31, 2022, with monthly payments of approximately $9,000 per month.
The Group additionally acquiredis a party to a lease agreement with ASTA Investment, LLC, for a manufacturing facility in Cartersville, Georgia with ASTA Investment, an entity partially owned by a shareholderstockholder of the Company. The original lease term began on April 1, 2018 and extended through March 31, 2028 and was amended in June 2020March 2021 to extend the term until March 1, 2030, with monthly lease payments of $66,000$68 per month with an annual escalation of 2.0%. Rent payments to ASTA Investment, LLC for the three and nine months ended September 25, 2021October 1, 2022 and September 26, 2020, were approximately $201,000 and $197,000 and $599,000 and $425,000, respectively.
The Group leases office space for ACT from an entity owned and controlled by the president of ACT. Rent payments paid to BSU Management, Ltd for the three and nine months ended September 25, 2021 were $20,000. In additionapproximately $205 and $201, respectively. Rent payments to the lease payment, ACT also paid a security deposit of $20,000ASTA Investment, LLC for the three and nine months period ended October 1, 2022 and September 25, 2021. The lease extends through August 31, 2026 with an option to renew for an additional 5 years2021 were approximately $544 and monthly payments are approximately $20,000 per month with an annual escalation of approximately 1.5%.$599, respectively.
20

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
13. 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.
Contract Balances
Contract assets are the rights to consideration in exchange for goods or services that the Company has transferred to a customer when that right is conditional on something other than the passage of time. Contract assets primarily result from contracts that include installation which are billed via payment requests that are submitted in the month following the period during which revenue was recognized. Contract liabilities are recorded for any services billed to customers and not yet recognizable if the contract period has commenced or for the amount collected from customers in advance of the contract period commencing. Contract assets are disclosed as costs and estimated earnings in excess of


Janus International Group, Inc.
Notes to Unaudited Consolidated Financial Statements
billings on uncompleted contracts, and contract liabilities are disclosed as billings in excess of costs and estimated earnings on uncompleted contracts in the consolidated balance sheet.Unaudited Condensed Consolidated Balance Sheet. Contract balances as of September 25, 2021for the nine months ended October 1, 2022 and January 1, 2022 were as follows:
September 25, 2021
Contract assets, beginning of the period$11,398,934 
Contract assets, end of the period$23,602,670 
Contract liabilities, beginning of the period$21,525,319 
Contract liabilities, end of the period$25,759,923 
October 1, 2022January 1, 2022
Contract assets, beginning of the period$23,121 $11,399 
Contract assets, end of the period30,831 23,121 
Contract liabilities, beginning of the period23,207 21,525 
Contract liabilities, end of the period$27,235 $23,207 
During the three and nine months ended September 25, 2021,October 1, 2022, the Company recognized revenue of approximately $848,000$1,434 and $17,780,000,$16,627, respectively, related to contract liabilities at December 26, 2020. There wereJanuary 1, 2022. This reduction was offset by new billings of approximately $22,015,000$5,461 and $20,655 for product and services for which there were unsatisfied performance obligations to customers and revenue had not yet been recognized as of September 25, 2021.for the three and nine month periods ended October 1, 2022, 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 nine months ended October 1, 2022 and September 25, 2021 and September 26, 2020:2021:
Revenue by Timing of Revenue Recognition
Three Months EndedNine Months EndedThree Months EndedNine Months Ended
Reportable Segments by Sales Channel Revenue RecognitionSeptember 25, 2021September 26, 2020September 25, 2021September 26, 2020
Reportable Segments by Timing of Revenue RecognitionReportable Segments by Timing of Revenue RecognitionOctober 1, 2022September 25, 2021October 1, 2022September 25, 2021
Janus North AmericaJanus North AmericaJanus North America
Goods transferred at a point in timeGoods transferred at a point in time$154,631,784 $110,370,452 $414,713,892 $310,647,036 Goods transferred at a point in time$232,207 $154,632 $648,229 $414,714 
Services transferred over timeServices transferred over time24,487,323 22,127,171 75,184,879 69,200,338 Services transferred over time24,529 24,487 75,225 75,185 


179,119,107 132,497,623 489,898,771 379,847,374 

$256,736 $179,119 $723,454 $489,899 
Janus InternationalJanus InternationalJanus International
Goods transferred at a point in timeGoods transferred at a point in time10,191,505 7,920,469 27,039,893 18,031,237 Goods transferred at a point in time$9,789 $10,192 $32,763 $27,040 
Services transferred over timeServices transferred over time7,632,830 4,700,198 21,689,399 14,133,724 Services transferred over time7,170 7,633 22,434 21,689 
17,824,335 12,620,667 48,729,292 32,164,961 $16,959 $17,825 $55,197 $48,729 
EliminationsEliminations(9,153,517)(4,779,232)(23,831,481)(11,629,860)Eliminations$(11,148)$(9,154)$(38,870)$(23,832)
Total RevenueTotal Revenue$187,789,925 $140,339,058 $514,796,582 $400,382,475 Total Revenue$262,547 $187,790 $739,781 $514,796 
21

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Revenue by SaleSales Channel Revenue Recognition
Three months EndedNine Months EndedThree Months EndedNine Months Ended
Reportable Segments by Sales Channel Revenue RecognitionReportable Segments by Sales Channel Revenue RecognitionSeptember 25, 2021September 26, 2020September 25, 2021September 26, 2020Reportable Segments by Sales Channel Revenue RecognitionOctober 1, 2022September 25, 2021October 1, 2022September 25, 2021
Janus North AmericaJanus North AmericaJanus North America
Self Storage-New ConstructionSelf Storage-New Construction$54,506,607 $67,675,747 $157,120,551 $184,898,993 Self Storage-New Construction$65,880 $54,507 $212,240 $157,121 
Self Storage-R3Self Storage-R357,141,059 30,663,566 151,563,398 98,645,228 Self Storage-R384,893 57,141 215,896 151,563 
Commercial and OthersCommercial and Others67,471,441 34,158,310 181,214,822 96,303,153 Commercial and Others105,963 67,471 295,318 181,215 


179,119,107 132,497,623 489,898,771 379,847,374 

$256,736 $179,119 $723,454 $489,899 
Janus InternationalJanus InternationalJanus International
Self Storage-New ConstructionSelf Storage-New Construction$12,435,987 $7,874,084 $34,186,904 $19,903,835 Self Storage-New Construction$13,187 $12,436 $39,969 $34,187 
Self Storage-R3Self Storage-R35,388,348 4,692,451 14,542,388 12,206,994 Self Storage-R33,772 5,389 15,228 14,542 
Commercial and Others— 54,132 — 54,132 
17,824,335 12,620,667 48,729,292 32,164,961 $16,959 $17,825 $55,197 $48,729 
EliminationsEliminations(9,153,517)(4,779,232)(23,831,481)(11,629,860)Eliminations$(11,148)$(9,154)$(38,870)$(23,832)
Total RevenueTotal Revenue$187,789,925 $140,339,058 $514,796,582 $400,382,475 Total Revenue$262,547 $187,790 $739,781 $514,796 

14. Leases
On January 2, 2022, the Group adopted ASU 2016-02, Leases, using the optional transition method. Under this method, the Group has recognized the cumulative effect adjustment to the opening balance of retained earnings. The Group has elected to adopt the package of practical expedients which apply to leases that commenced before the adoption date. By electing the package of practical expedients, the Group did not reassess whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases, and the initial direct costs for any existing 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 Group has elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. The Group 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 Group uses the non-cancellable lease term unless it is reasonably certain that a renewal or termination option will be exercised. When available, the Group 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 Group will estimate the incremental borrowing rate to discount the lease payments. The Group estimates the incremental borrowing rate based on the rates of interest that the Group 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 Group 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 ClassificationOctober 1, 2022
Assets:
Operating lease assetsRight-of-use assets, net$44,283 
Finance lease assetsRight-of-use assets, net1,246 
Total leased assets$45,529 
Liabilities:
Current:
OperatingOther accrued expenses$5,293 
FinancingCurrent maturities of long-term debt312 
Noncurrent:
OperatingOther long-term liabilities$41,688 
FinancingLong-term debt948 
Total lease liabilities$48,241 
The components of lease expense were as follows:
22

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Three Months EndedNine Months Ended
(in thousands)October 1, 2022October 1, 2022
Operating lease cost$2,078 $6,083 
Short-term lease cost— 60 
Finance lease cost:
Amortization of right-of-use assets$62 $128 
Interest on lease liabilities27 
Total lease cost$2,147 $6,298 

Other information related to leases was as follows:
October 1, 2022
Weighted Average Remaining Lease Term
Operating Leases9.79
Finance Leases3.61
Weighted Average Discount Rate
Operating Leases7.0%
Finance Leases6.8%
As of October 1, 2022, future minimum lease payments under noncancellable operating leases with initial or remaining lease terms in excess of one year were as follows:
(in thousands)
2022$1,915 
20238,278 
20247,481 
20256,470 
20265,938 
Thereafter36,944 
Total future lease payments$67,026 
Less imputed interest$(20,045)
Present value of future lease payments$46,981 
As of October 1, 2022, future minimum repayments of finance leases were as follows:
(in thousands)
2022$96 
2023385 
2024385 
2025385 
2026161 
Thereafter10 
Total future lease payments$1,422 
Less imputed interest$(162)
Present value of future lease payments$1,260 
23

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
14.15. Income Taxes
(Restated)
Prior to June 7, 2021, the Company was a limited liability company taxed as a partnership for U.S. federal income tax purposes. The Company was generally not directly subject to income taxes under the provisions of the Internal Revenue Code and most applicable state laws. Therefore, taxable income or loss was reported to the members for inclusion in their respective tax returns.
After June 7, 2021, the Group is taxed as a Corporation for U.S. income tax purposes and similar sections of the state income tax laws .laws. The Group’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, Australia, and Singapore as necessary. For tax reporting purposes, the taxable income or loss with respect to the 45% ownership in the joint venture operating in Mexico will be reflected in the income tax returns filed under that country’s jurisdiction. The Group’s provision 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 nine months ended October 1, 2022 and September 25, 2021 and September 26, 2020 includes amounts related to entities within the group taxed as corporations in the United States, United Kingdom, France, Australia, and Singapore. 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 income tax effects of significant unusual or infrequently occurring items are recognized entirely within the interim period in which the event occurs.
During the three months ended October 1, 2022 and September 25, 2021, and September 26, 2020, the Company recorded a total income tax provision of approximately $3,382,000$10,575 and $284,000$3,382 on pre-tax income of approximately $18,923,000$42,974 and $21,057,000$18,924 resulting in an effective tax rate of 17.9%24.6% and 1.3%17.9%, respectively. During the nine months ended October 1, 2022 and September 25, 2021, and September 26, 2020, the Company recorded a total income tax provision of approximately $5,787,000$24,984 and $1,055,000$5,787 on pre-tax income of approximately $34,353,000$99,924 and $42,797,000$34,353 resulting in an effective tax rate of 16.8%25.0% and 2.5%16.8%, respectively. The three and nine months ended October 1, 2022 effective tax rates for these periodswere primarily impacted by the change in statutory rate differentials, changes in estimated tax rates, and permanent differences. The three and nine months ended September 25, 2021 effective rates were primarily impacted by the change in tax status of the Group, statutory rate differentials, changes in estimated tax rates, and permanent differences.
15.16. Net Income Per Share
Prior to the Business Combination, and prior to effecting the reverse recapitalization, the Company’s pre-merger LLC membership structure included two classes of units: Class A preferred units and Class B common units. The Class A preferred units were entitled to receive distributions prior and in preference on Class A preferred unit unpaid cumulative dividends (“Unpaid Preferred Yield”) followed by Class A preferred unit capital contributions that have not been paid back to the holders (the “Unreturned Capital”). Vested Class B common units participate in the remaining distribution on a pro-rata basis with Class A preferred units if they have met the respective Participation Threshold and, if applicable, the Target Value defined in the respective Unit Grant Agreement. The Class A preferred and Class B common units fully vested at the Business Combination date.
Pursuant to the Restated and Amended Certificate of Incorporation and as a result of the reverse recapitalization, the Company has retrospectively adjusted the weighted average shares outstanding prior to June 7, 2021 to give effect to the exchange ratio used to determine the number of shares of common stock into which they were converted. 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. Dilutive potential common shares include stock purchase warrants and contingently issuable shares attributable to the earn-out consideration.
The following table sets forth the computation of basic and diluted EPS attributable to common stockholders for the three and nine months ended October 1, 2022 and September 25, 2021 (in thousands, except share and September 26, 2020:per share data):

24

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Three Months EndedNine Months EndedThree Months EndedNine Months Ended
9/25/20219/26/20209/25/20219/26/2020October 1, 2022September 25, 2021October 1, 2022September 25, 2021
(Restated)(Restated)
Numerator:Numerator:Numerator:
Net income attributable to common stockholdersNet income attributable to common stockholders15,541,623 20,772,994 28,566,297 41,742,492 Net income attributable to common stockholders$32,399 $15,542 $74,940 $28,566 
Adjustment for Warrants - gain on value of private warrants(1,270,875)— 657,625 — 
Net Income as adjusted14,270,748 20,772,994 29,223,922 41,742,492 
Adjustment for (gain) loss on value of private warrantsAdjustment for (gain) loss on value of private warrants$— $(1,271)$— $658 
Net income as adjustedNet income as adjusted$32,399 $14,271 $74,940 $29,224 
Denominator:Denominator:Denominator:
Weighted average number of shares:Weighted average number of shares:Weighted average number of shares:
BasicBasic138,384,284 65,875,152 95,179,726 65,773,907 Basic146,639,452 138,384,284 146,592,296 95,179,726 
Adjustment for Warrants - Treasury stock method4,456,508 — 2,648,654 — 
Adjustment for dilutive securitiesAdjustment for dilutive securities78,465 4,456,508 79,213 2,648,654 
DilutedDiluted142,840,792 65,875,152 97,828,380 65,773,907Diluted146,717,917 142,840,792 146,671,509 97,828,380
Basic net income per share attributable to common stockholdersBasic net income per share attributable to common stockholders$0.11 $0.32 $0.30 $0.63 Basic net income per share attributable to common stockholders$0.22 $0.11 $0.51 $0.30 
Diluted net income per share attributable to common stockholdersDiluted net income per share attributable to common stockholders$0.10 $0.32 $0.30 $0.63 Diluted net income per share attributable to common stockholders$0.22 $0.10 $0.51 $0.30 
16.17. Segments Information
The Company operates its business and reports its results through 2two 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 EndedNine Months Ended
September 25,September 26,September 25,September 26,
2021202020212020
(Restated)(Restated)
Revenue
Janus North America$179,119,107 $132,497,623 $489,898,771 $379,847,374 
Janus International17,824,334 12,620,668 48,729,292 32,164,961 
Intersegment(9,153,516)(4,779,233)(23,831,481)(11,629,860)
Consolidated Revenue$187,789,925 $140,339,058 $514,796,582 $400,382,475 
Income From Operations
Janus North America$24,381,786 $28,108,223 $64,878,335 $67,754,630 
Janus International819,333 1,362,916 (4,263,137)1,980,835 
Eliminations24,061 35,837 48,796 90,566 
Total Segment Operating Income$25,225,180 $29,506,976 $60,663,994 $69,826,031 
Depreciation Expense
Janus North America$1,590,238 $1,329,258 $4,357,148 $3,960,580 
Janus International108,380 108,690 320,806 310,069 
Consolidated Depreciation Expense$1,698,618 $1,437,948 $4,677,954 $4,270,649 
Amortization of Intangible Assets
Janus North America$7,876,571 $6,415,681 $20,692,679 $19,244,828 
Janus International352,189 475,904 1,159,038 1,042,525 
Consolidated Amortization Expense$8,228,760 $6,891,585 $21,851,717 $20,287,353 

25

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
September 25,December 26Three Months EndedNine Months Ended
20212020October 1,September 25,October 1,September 25,
Identifiable Assets
2022202120222021
RevenueRevenue
Janus North AmericaJanus North America$1,074,290,055 $820,259,539 Janus North America$256,736 $179,119 $723,454 $489,899 
Janus InternationalJanus International56,084,944 53,219,206 Janus International16,959 17,825 55,197 48,729 
Consolidated Assets$1,130,374,999 $873,478,745 
IntersegmentIntersegment(11,148)(9,154)(38,870)(23,832)
Consolidated RevenueConsolidated Revenue$262,547 $187,790 $739,781 $514,796 
Income From OperationsIncome From Operations
Janus North AmericaJanus North America$53,060 $24,382 $126,088 $64,878 
Janus InternationalJanus International790 821 2,740 (4,263)
EliminationsEliminations47 23 31 49 
Total Segment Operating IncomeTotal Segment Operating Income$53,897 $25,226 $128,859 $60,664 
Depreciation ExpenseDepreciation Expense
Janus North AmericaJanus North America$1,796 $1,590 $5,261 $4,357 
Janus InternationalJanus International186 109 556 321 
Consolidated Depreciation ExpenseConsolidated Depreciation Expense$1,982 $1,699 $5,817 $4,678 
Amortization of Intangible AssetsAmortization of Intangible Assets
Janus North AmericaJanus North America$7,105 $7,877 $21,315 $20,693 
Janus InternationalJanus International303 352 963 1,159 
Consolidated Amortization ExpenseConsolidated Amortization Expense$7,408 $8,229 $22,278 $21,852 
Capital ExpendituresCapital Expenditures
Janus North AmericaJanus North America$2,140 $9,995 $6,813 $12,648 
Janus InternationalJanus International448 1,943 1,043 3,282 
Consolidated Capital ExpendituresConsolidated Capital Expenditures$2,588 $11,938 $7,856 $15,930 
October 1,January 1
20222022
Identifiable Assets
Janus North America$1,194,034 $1,063,563 
Janus International55,368 58,439 
Consolidated Assets$1,249,402 $1,122,002 
17. Significant Estimates18. Commitments and ConcentrationsContingencies
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.

As described in the Business Combination footnote, the Company has yet to resolve the outstanding Closing Statement dispute with Cornerstone regarding the DBCI acquisition. As a result, the Company is unable to reasonably estimate the contingency loss or gain as of the Form 10-Q filing date. The Company will continue to monitor the progress of the dispute and recognize the related gain or loss through earnings in the appropriate period.
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 $200,000$200 as of September 25, 2021October 1, 2022 and December 26, 2020,January 1, 2022, respectively. 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 $246,000$452 and $391,000$383 as of September 25, 2021,October 1, 2022, and December January 1, 2022,
26 2020,

Janus International Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
respectively. The amount of actual losses incurred could differ materially from the estimates reflected in these consolidated financial statements.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 $250,000$275 and $250,000$275 as of September 25, 2021October 1, 2022 and December 26, 2020,January 1, 2022, respectively. 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 $793,000$1,731 and $916,000$1,539 as of September 25, 2021October 1, 2022 and December 26, 2020,January 1, 2022, respectively. The amount of actual losses incurred could differ materially from the estimates reflected in these consolidated financial statements.Unaudited Condensed Consolidated Financial Statements.
18.19. Subsequent Events
For the interim consolidated financial statementsUnaudited Condensed Consolidated Financial Statements as of September 25, 2021,October 1, 2022, the Company has evaluated subsequent events through the financial statements issuance ofdate, and concluded that no subsequent events have occurred that would require recognition in the financial statements.
On October 13, 2021, Janus announced that it will redeem all of its outstanding warrants to purchase shares of Janus’s common stock that were issued pursuantstatements or disclosure in the notes to the Warrant Agreement, dated as of June 7, 2021 by and between Janus and Continental Stock Transfer & Trust Company (the “Warrant Agent”) and the Warrant Agreement, dated as of July 15, 2021, by and between Janus and the Warrant Agent, for a redemption price of $0.10 per Warrant (the “Redemption Price”), that remain outstanding at 5:00 p.m. New York City time on November 12, 2021 (the “Redemption Date”).
On October 22, 2021, the Company announced that David Curtis has resigned from the Board of Directors (the “Board”) due to health reasons, effective October 20, 2021. Mr. Curtis did not serve on any committees of the Board. A replacement director has not been identified at this time.

financial statements.





27


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

JANUS’SJANUS’ MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis provides information which Janus’sJanus’ 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’sJanus’ financial condition and results of operations in conjunction with the consolidatedUnaudited Condensed Consolidated financial statements and notes thereto contained in this Quarterly report on Form 10-Q/A.10-Q (the “Form 10-Q”).
Certain information contained in this discussion and analysis or set forth elsewhere in this Quarterly report on Form 10-Q/A,10-Q, including information with respect to plans and strategy for Janus’sJanus’ 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’sJanus’ 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 Quarterly report on Form 10-Q/A.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’sJanus’ Management’s Discussion and Analysis of Financial Condition and Results of Operations section to “Midco”“Midco,” “Janus,” “we,” “us,” “our,” and other similar terms refer to Midco and its subsidiaries prior to the Business Combination and to Janus International Group Inc. (Parent) and its consolidated subsidiaries after giving effect to the Business Combination.
Percentage amounts included in this Quarterly report on Form 10-Q/A10-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 Quarterly report on Form 10-Q/A10-Q may vary from those obtained by performing the same calculations using the figures in our consolidated financial statementsUnaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly report on Form 10-Q/A.
10-Q. Certain other amounts that appear in this Quarterly report on Form 10-Q/A10-Q may not sum due to rounding.
Introduction
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is a supplement to the accompanying restated and unaudited consolidated financial statements, as described in Note 2Unaudited 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 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 were prepared.
Results of Operations: This section provides an analysis of our unaudited results of operations for the three and nine months periods ended October 1, 2022 and September 25, 2021 and September 26, 2020, respectively.2021.
Liquidity and Capital Resources: This section provides a discussion of our financial condition and an analysis of our unaudited cash flows for the three and nine months periods ended October 1, 2022 and September 25, 2021 and September 26, 2020, respectively.2021. This section also provides a discussion of our contractual obligations, other purchase commitments and customer credit risk that existed at September 25, 2021,October 1, 2022, 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 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 leading global manufacturer and supplier of turn-key self-storage, commercial and industrial building solutions including: roll up and swing doors, hallway systems, relocatable storage units, and facility and door automation technologies with manufacturing operations in Georgia, Texas, Arizona, Indiana, North Carolina, United Kingdom, Australia, and Singapore. 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.
28


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 Janus International Europe Holdings Ltd. (UK),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 Core, BETCO, NOKE, ASTA, DBCI, ACT,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.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 storage unit doors, optimizing unit mix and idle land, 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 also 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 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, commercial slat doors, heavy duty service doors, fire doors, fire rated counter shutters, insulated service doors, counter shutters and grilles.
Executive Overview
Janus’sJanus’ 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 not only products, but solutions that generate a favorable financial outcome for our clients.

During the last two years,2021, we have acquired Steel Storage Asia, PTI Australasia Pty Ltd., G&M, DBCI, and ACT to expand geographically.market share. Our M&A activity has collectively enhanced our growth trajectory, technology and global footprint, while providing us access to highly attractive adjacent categories.
Total revenue was $262.5 million and $739.8 million for the three and nine months periods ended October 1, 2022, respectively, representing an increase of 39.8% and 43.7% from $187.8 million and $514.8 million for the three and nine months periodperiods ended September 25, 2021, representing an increase of 33.8% and 28.6% from $140.3 million and $400.4 million forrespectively.
Revenues increased in the three and nine months periodperiods ended September 26, 2020.
Revenues increased in the third quarter of 2021October 1, 2022 as compared to the third quarter of 2020,three and nine months periods ended September 25, 2021, largely due to continued strong performance within both the R3 and Commercial and Otherall three sales channels and $9.4$8.7 million and $56.6 million of the inorganic growth as a result of the DBCI and ACT acquisitions, respectively, coupled with the COVID-19 pandemic impacting prior year revenueimpact from the commercial actions taken in the third quarter of 2020.2021. The same trends were generally present in both the Janus North America segment as well as the Janus International segment, indicativewith the exception of a worldwide continued recovery from the COVID-19 pandemic.fact that the international segment does not sell into the Commercial sales channel.
Adjusted EBITDA was $63.3 million and $158.7 million for the three and nine months periods ended October 1, 2022, respectively, representing a 74.3% and 51.3% increase from $36.3 million and $104.9 million for the three and nine months periodperiods ended September 25, 2021, representing a 2.9% and 13.7% increase from $35.3 million and $92.2 million for the three and nine months period ended September 26, 2020.respectively.

Adjusted EBITDA as a percentage of revenue was 24.1% and 21.4% for the three and nine months periods ended October 1, 2022, respectively, representing an increase of 4.8% and 1.0% from 19.3% and 20.4% for the three and nine months periodperiods ended September 25, 2021 representing a decrease of 5.8% and 2.7% from 25.1% and 23.0% for the three and nine months period ended September 26, 2020.respectively. The reductionincrease in Adjusted EBITDA margins is a direct result of increased revenue primarily due to commercial actions taking full effect in third quarter of 2022 which was partially offset by the inflationary increases in raw material, labor and logistics costs impacting the business in advance of price increasescommercial actions taking full effect. In addition to the inflationary cost pressures, Janus also experienced incremental costs as a public company and incremental headcount costs associated with strategic investmentsthe robust pace of activity for the balance of the year and investing in both our Facilitate division coupled with our continued build out of our Noke Smart entry ground game and customer service department.service.
Information regarding use of Adjusted EBITDA, a non-GAAP measure, and a reconciliation of Adjusted EBITDA to net income, the most comparable GAAP measure, is included in “Non-GAAP Financial Measures.”


29



On August 18, 2021, the Company completed a refinancing of its First Lien Amendment No. 3, in which the principal terms of the amendment were new borrowings of $155.0 million which were used to fund the DBCI acquisition. In addition, the Company increased the available line of credit from $50.0 million to $80.0 million and extended the maturity date. There was a $19.4 million increase on the line of credit during the three months period ended September 25, 2021. (See “Liquidity and Capital Resources” section.)

The Business Combination
On June 7, 2021, Juniper Industrial Holdings, Inc. (“Juniper” or “JIH”) consummated a business combination with Midco pursuant to the Business Combination Agreement. Pursuant to ASC 805, for financial accounting and reporting purposes, Midco was deemed the accounting acquirer and Juniper was treated as the accounting acquiree, and the Business Combination was accounted for as a reverse recapitalization. At the closing date of the business combination,Business Combination, each outstanding unit of Midco’s Class A Preferred and Class B Common converted into our common stock at the then-effective conversion rate. Immediately upon the completion of the Business Combination, Juniper and Midco became wholly-owned subsidiaries of Janus International Group, Inc. The shares of common stock and warrants of the Company areis currently traded on the NYSE under the symbols “JBI” and “JBI WS”, respectively.
As a result of the Business Combination, equityholdersequity holders of Midco received aggregate consideration with a value equal to $1.2 billion which consisted of (i) $541.7 million in cash and (ii) $702.7 million in shares of our Common Stock,common stock, or 70,270,400 shares based on an assumed stock price of $10.00 per share. In connection with the closing of the Business Combination, the Sponsor received 2,000,000 shares of our Common Stockcommon stock (pro rata among the Sponsor shares and shares held by certain affiliates) (the “Earnout Shares”) contingent upon achieving certain market share price milestone as outlined in the Business Combination Agreement. The vesting of the Earnout Shares occurred as of the close of the trading on June 21, 2021.
Part of the proceeds from the merger were used to pay a non-liquidating cash distribution to Janus Midco unitholders’ in the amount of $541.7 million and partial payment to Note Payableon the note payable in the amount of $61.6 million. (See(See “Liquidity and Capital Resources” section.)section).
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 and building components used primarily by owners or builders of self-storage facilities and also offers installation services along with the products. Janus North America represented 90.5%, 90.5%, 91.0%93.5% and 92.0% of Janus’s revenue92.5% for the three months and nine months period ended October 1, 2022 respectively, and 90.5% and 90.5% for the three months and nine months period ended September 25, 2021, and September 26, 2020, respectively.
Janus International is comprised solely of one operating segment, Janus International Europe Holdings Ltd (UK). The Janus International segment produces and provides similar products and services as Janus North America but largely in Europe as well as Australia. Janus International represented 9.5%, 9.5%, 9.0%,6.5% and 8.0%7.5% of Janus’sJanus’ revenue for the three and nine months period ended October 1, 2022, respectively, and 9.5% and 9.5% for the three and nine months period ended September 25, 2021, and September 26, 2020, respectively.
Acquisitions
Our highly accretive M&A strategy focuses on (i) portfolio diversification into attractive and logical adjacencies, (ii) geographic expansion, and (iii) technological innovation.
Inorganic growth, through acquisitions, serves to increase Janus’sJanus’ strategic growth. Since 2020,2021, Janus has completed fivethree acquisitions which contributedattributed a combined $18.9$93.2 million inorganic revenue increase from December 29, 201926, 2020 through September 25, 2021.October 1, 2022. Refer to the “Risk Factors” section of our registration statement filed on Form S-1 (as amended) on July 7, 2021 for further information on the risks associated with integration of these acquisitions. Janus acquired the following sixthree companies to fuel the inorganic growth of its manufacturing capabilities, product offerings, and technology solutions provided to customers.
On January 2, 2020, Janus’s wholly-owned subsidiary, JIE purchased 100% of the outstanding shares of Steel Storage Asia Pte Ltd. and Steel Storage Australia Pty Ltd. (collectively “Steel Storage” or “SSA”) for $6.5 million. The rationale for the Steel Storage acquisition was geographic expansion. The Steel Storage acquisition specifically expanded Janus’s global presence.
On March 31, 2020, Janus’s wholly-owned subsidiary, Steel Storage Australia Pty Ltd. purchased 100% of the assets of PTI Australasia Pty Ltd., a provider of access control security in the self-storage design and commercial industries in Australia, New Zealand and surrounding regions, for $0.032 million. The PTI Australasia Pty Ltd. acquisition specifically bolstered the adoption of Nokē Smart Entry Systems in Australia and New Zealand.



On January 18, 2021, the Company, through its wholly owned subsidiary Steel Storage Australia Pty Ltd. acquired 100% of the net assets of G & M&M Stor-More Pty Ltd. for approximately $1.74 million. G & M&M Stor-More Pty Ltd. has over 23 years’ experience in self-storage building, design, construction and consultation. As a result of the acquisition, the Company will have an opportunity to increase its customer base of the self-storage industry and expand its product offerings in the Australian market.
On August 18, 2021, the Group, through its wholly owned subsidiary Janus Core acquired 100% of the equity interests of DBCI, a company incorporated in Delaware, for approximately $169.2 million. DBCI is a manufacturer of exterior building products in North America, with over 25 years’ servicing commercial, residential and repair markets. As a result of the acquisition, the Company will have an opportunity to increase its customer base of both the commercial and self-storage industries and expand its product offerings in the North American market.
On August 31, 2021, the Group, through its wholly owned subsidiary Janus Core acquired 100% of the equity of ACT, a company incorporated in North Carolina, for $10.7$10.3 million. Through this acquisition, the Group also acquired all assets and certain liabilities of Phoenix Iron Worx, LLC, a company incorporated in North Carolina. ACT has specialized in protecting critical assets in the self-storage and industrial building industries for over 7 years’.seven years. The ACT team is comprised of security industry experts who continually train to be at the forefront of emerging industry trends, technological advancements, and new security vulnerabilities or hazards that threaten their clients. As a result of the acquisition, the Company will have an opportunity to expand its Nokē Smart Entry ground game.
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Impact of Brexit

The U.K. exit from the European Union on January 31, 2020, commonly referred to as Brexit, has caused, and may continue to cause, uncertainty in the global markets. Political and regulatory responses to the withdrawal are still developing, and we are in the process of assessing the impact that the withdrawal may have on our business as more information becomes available. Any impact from Brexit on our business and operations over the long term will depend, in part, on the outcome of tariff, tax treaties, trade, regulatory, and other negotiations the U.K. conducts.

Impact of COVID-19 and the CARES Act
In early 2020, the Coronavirus (COVID-19) swiftly began to spread globally, and the World Health Organization (WHO) subsequently declared COVID-19 to be a public health emergency of international concern on March 11, 2020. The COVID-19 outbreak has resulted in travel restrictions and in some cases, prohibitions of non-essential activities, disruption and shutdown of certain businesses and greater uncertainty in global financial markets. The full extent to which COVID-19 impacts Janus’s business, results of operations and financial condition are dependent on the further duration and spread of the outbreak mainly within the United States, Europe, and Australia.
To aid in combating the negative business impacts of COVID-19, the federal government enacted the “Coronavirus Aid, Relief, and Economic Security (CARES) Act” on March 27, 2020. Under the CARES Act, Janus deferred $2.6 million in payroll taxes of which half of the balance is due December 31, 2021 and the remaining balance is due December 31, 2022.
As a result of COVID-19 and in support of continuing its manufacturing efforts, Janus has undertaken a number of steps to protect its employees, suppliers and customers, as their safety and well-being is one of our top priorities. Janus has taken several safety measures including implementing social distancing practices and requiring employees to wear masks. There was $1.0 million and $1.2 million in COVID-19 related expenses in the three and nine months period ended September 25, 2021 primarily related to COVID-19 PPE supplies and COVID tests.
Notwithstanding our continued operations and performance, the COVID-19 pandemic may continue to have negative impacts on our operations, supply chain, transportation networks, and customers, which may compress our margins as a result of preventative and precautionary measures that Janus, other businesses, and governments are taking. Any resulting economic downturn could adversely affect demand for our products and contribute to volatile supply and demand conditions affecting prices and volumes in the markets for our products, services and raw materials. The progression of this matter could also negatively impact our business or results of operations through the temporary closure of our operating locations or those of our customers or suppliers, among others. In addition, the ability of our employees and our suppliers’ and customers’ employees to work may be significantly impacted by individuals contracting or being exposed to COVID-19, or as a result of the control measures noted above, which may significantly hamper our production throughout the supply chain and constrict sales channels. The extent to which the COVID-19 pandemic may adversely impact our business depends on future developments, which are highly uncertain and unpredictable, including new information concerning the severity of the pandemic and the effectiveness of actions globally to contain or mitigate its effects.
Our unaudited condensed consolidated financial statements and discussion and analysis of financial condition and results of operations reflect estimates and assumptions made by management as of September 25, 2021.for the three and nine months ended October 1, 2022. Events and changes in circumstances arising after September 25, 2021,October 1, 2022, including those resulting from the impacts of the COVID-19 pandemic, will be reflected in management’s estimates for future periods.
Management continues to monitor the impact of the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce.



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 is reflective of the health of Janus indicative of an expansion or contraction of the overall business. We expect to continue to increase headcount in the future as we grow our business. Moreover, we expect that we will continueneed to hire additional accounting, finance, and other personnel in connection with our becoming, and our efforts to comply with the requirement of being a public company.
The following table sets forth key performance measures for the periods ended October 1, 2022 and September 25, 2021 and September 26, 2020(dollar amounts in thousands):

Three MonthsVariance
Period ended
September 25, 2021
Period ended
September 26, 2020
$%Three Months EndedVariance
(Restated)October 1, 2022September 25, 2021$%
Total RevenueTotal Revenue$187,789,925$140,339,058$47,450,867 33.8 %Total Revenue$262,547 $187,790 $74,757 39.8 %
Adjusted EBITDAAdjusted EBITDA$36,308,668$35,283,414$1,025,254 2.9 %Adjusted EBITDA$63,303 $36,310 $26,993 74.3 %
Adjusted EBITDA (% of revenue)Adjusted EBITDA (% of revenue)19.3%25.1%(5.8)%Adjusted EBITDA (% of revenue)24.1 %19.3 %4.8 %

Nine MonthsVariance
Period ended
September 25, 2021
Period ended
September 26, 2020
$%Nine Months EndedVariance
(Restated)October 1, 2022September 25, 2021$%
Total RevenueTotal Revenue$514,796,582$400,382,475$114,414,107 28.6 %Total Revenue$739,781 $514,796 $224,985 43.7 %
Adjusted EBITDAAdjusted EBITDA$104,857,783$92,210,886$12,646,897 13.7 %Adjusted EBITDA$158,652 $104,858 $53,794 51.3 %
Adjusted EBITDA (% of revenue)Adjusted EBITDA (% of revenue)20.4%23.0%(2.7)%Adjusted EBITDA (% of revenue)21.4 %20.4 %1.0 %

As of October 1, 2022, and September 25, 2021, and September 26, 2020, the headcount was 1,6012,321 (including 486695 temporary employees) and 1,2312,087 (including 300486 temporary employees), respectively.

Total revenue increased by $47.5$74.8 million and $114.4$225.0 million or 33.8%39.8% and 28.6%43.7% for the three and nine months period ended October 1, 2022 compared to the three and nine months period ended September 25, 2021, compared to the three and nine months period ended September 26, 2020respectively, primarily due to increased volumes and improved market conditions, commercial actions instituted in 2021 asand increased volumes partially related to pull through of the COVID-19 pandemic significantly impacted revenue in the third quarter of 20202021 new construction pent up demand coupled with a $9.4$8.7 million and $56.6 million increase in inorganic revenue growth, for the three and nine month periods ended October 1, 2022, respectively, as a result of the DBCI and ACT acquisitions. In addition, we beganThe Company expects that these trends will continue to see a more meaningful impact from our commercial actions in the later partCompany's results for the remainder of the third quarter of 2021. (See “Results of Operations” section.)fiscal 2022.
Adjusted EBITDA increased by $1.0$27.0 million and $12.6$53.8 million or 2.9%74.3% and 13.7%51.3% from the three and nine months period ended September 25, 2021October 1, 2022 compared to the three and nine months periods ended September 26, 202025, 2021 primarily due to increased revenue which was partially offset by increased cost of sales and general and administrative expenses.

Adjusted EBITDA as a percentage of revenue decreased 5.8%increased 4.8% and 2.7%1.0%, respectively, for the three and nine months period ended September 25, 2021October 1, 2022 primarily due to increased revenue due to commercial actions taking full effect in third quarter 2022 which was partially offset by
31


inflationary increases toin raw material, labor and logistics costs in advance of commercial and cost containment actions taking full effect. In addition to the inflationary cost pressures, Janus also experienced incremental costs as a public company and incremental headcount costs associated with strategic investmentsthe robust pace of activity for the balance of the year and investing in both our Facilitate division coupled with our continued build out of our Nokē Smart entry ground game and customer service department. service. ((See “Non-GAAPNon-GAAP Financial Measures” section.)section).
Basis of Presentation
The unaudited consolidated financial statementsUnaudited Condensed Consolidated Financial Statements have been derived from the accounts of Janus and its wholly owned subsidiaries. Janus’sJanus’ 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.week.
We have presented results of operations, including the related discussion and analysis for the following periods:for:
the three and nine months period ended September 25, 2021October 1, 2022 compared to the three and nine months period ended September 26, 2020.25, 2021.



Components of Results of Operations
Sales of productsproducts. . Sale of products represents 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 (Janus Core) and at the point of shipping (all other operating segments). We expect our product revenue may vary from period to period 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, Self-Storage New Construction, Self-Storage R3, and Commercial and Other.
Sales of servicesservices. . Service revenue reflects 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.
Cost of salessales. . Our cost of sales consists of the cost of products and cost of services. Cost of products 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. Cost of services includes third-party installation subcontractor costs directly associated with the installation of our products. Our cost of sales 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 cost of sales to increase in absolute dollars in future periods as we expect our revenues to continue to grow.
Selling and marketing expenseexpense. . Selling expenses consist primarily of compensation and benefits of employees engaged in selling activities as well as related travel, advertising, trade shows/conventions, meals and entertainment expenses. 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. General and administrative (“G&A”) expenses are comprised primarily of expenses relating to 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. We also expect G&A expenses to increase in the near term as a result of operating as a public company, including expenses associated with compliance with the rules and regulations of the Commission, and an increase in legal, audit, insurance, investor relations, professional services and other administrative expenses.
Interest expenseexpense. . Interest expense consistsConsists of interest expense on short-term and long-term debt and amortization on deferred financing fees.fees (see (See “Long Term“Long-Term Debt” section.)section).
Factors Affecting the Results of Operations
Key Factors Affecting the Business and Financial Statements
Janus’sJanus’ management believes theirour performance and future growth depends on a number of factors that present significant opportunities but also pose risks and challenges.
Factors Affecting Revenues
Janus’sJanus’ 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.
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Janus periodically modifies sales prices of their 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 because ofdue to project pricing, competitive reactions and changing market conditions. 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, best in-class service, and a reputation for high quality products.
Factors Affecting Growth Through Acquisitions
Janus’sJanus’ business strategy involves growth through, among other things, the acquisition of other companies. Janus tries to evaluate 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, 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), and it may also pay fees and expenses associated with financing acquisitions to investment banks and other advisors. Any 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. While Janus retains third-party advisors to consult on potential liabilities related to these acquisitions, there can be no assurances that all potential liabilities will be identified or known to it. If there are unknown liabilities or other obligations, Janus’sJanus’ business could be materially affected.
Seasonality
Generally, Janus’sJanus’ sales tend to be the slowest in January due to more unfavorable weather conditions, customer business cycles and the timing of renovation and new construction project launches.
Factors Affecting Operating Costs
Janus’sJanus’ operating expenses are comprised of direct production costs (principally raw materials, labor and energy), manufacturing overhead costs, freight, costs to purchase sourced products and selling, general, and administrative (“SG&A”) expenses.
Janus’sJanus’ largest individual raw material expenditure is steel coils. Fluctuations in the prices of steel coil are generally beyond Janus’sJanus’ control and have a direct impact on the financial results. In 20202021 and 2021,2022, Janus entered into agreements with threetwo of its largest suppliers in order to lock in steel coil prices for part of Janus’sJanus’ production needs and partially mitigate the potential impacts of short-term steel coil price fluctuations. This arrangement allowsThese arrangements allow Janus to purchase quantities of product within specified ranges as outlined in the contracts.
Freight costs are driven by Janus’sJanus’ volume of sales of products 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. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this document. We have derived this data from our unaudited consolidated financial statements included elsewhere in this Quarterly report on Form 10-Q/A.
The following tables set forth our results of operations for the periods presented in dollars and as a percentage of total revenue.

33


Results of Operations

For the three and nine months period ended September 25, 2021October 1, 2022 compared to the period ended September 26, 202025, 2021 (dollar amounts in thousands):
Three Months EndedVariance
October 1, 2022September 25, 2021$%
REVENUE
Sales of products$230,847 $155,670 $75,177 48.3 %
Sales of services31,700 32,120 (420)(1.3)%
Total revenue$262,547 $187,790 $74,757 39.8 %
Cost of Sales165,755 125,551 40,204 32.0 %
GROSS PROFIT$96,792 $62,239 $34,553 55.5 %
OPERATING EXPENSE
Selling and marketing14,477 12,066 2,411 20.0 %
General and administrative28,418 24,947 3,471 13.9 %
Operating Expenses$42,895 $37,013 $5,882 15.9 %
INCOME FROM OPERATIONS$53,897 25,226 $28,671 113.7 %
Interest expense(10,979)(7,664)(3,315)43.3 %
Other income (expense)56 91 (35)(38.5)%
Change in fair value of derivative warrant liabilities— 1,271 (1,271)(100.0)%
INCOME BEFORE TAXES$42,974 $18,924 $24,050 127.1 %
Provision for Income Taxes10,575 3,382 7,193 212.7 %
NET INCOME$32,399 $15,542 $16,857 108.5 %

Three MonthsVariance
Period ended September 25, 2021Period ended
September 26, 2020
$%
(Restated)(Restated)
REVENUE
Sales of products$155,669,772 $113,511,689 $42,158,083 37.1 %
Sales of services32,120,153 26,827,369 5,292,784 19.7 %
Total revenue187,789,925 140,339,058 47,450,867 33.8 %
Cost of Sales125,551,395 87,574,908 37,976,487 43.4 %
GROSS PROFIT62,238,530 52,764,150 9,474,380 18.0 %
OPERATING EXPENSE
Selling and marketing12,065,859 7,823,145 4,242,714 54.2 %
General and administrative24,947,491 18,309,277 6,638,214 36.3 %
Contingent consideration and earnout fair value adjustments— (2,875,248)2,875,248 100.0 %
Operating Expenses37,013,350 23,257,174 13,756,176 59.1 %
INCOME FROM OPERATIONS25,225,180 29,506,976 (4,281,796)(14.5)%
Interest expense(7,663,536)(8,768,791)1,105,255 (12.6)%
Other income (expense)90,873 319,091 (228,218)(71.5)%
Change in fair value of derivative warrant liabilities1,270,875 — 1,270,875 — %
Other Expense, Net(6,301,788)(8,449,700)2,147,912 (25.4)%
INCOME BEFORE TAXES18,923,392 21,057,276 (2,133,884)(10.1)%
Provision for Income Taxes3,381,769 284,282 3,097,487 1089.6 %
NET INCOME$15,541,623 $20,772,994 $(5,231,371)(25.2)%
Nine MonthsVarianceNine Months EndedVariance
Period ended
September 25, 2021
Period ended
September 26, 2020
$%October 1, 2022September 25, 2021$%
(Restated)(Restated)
REVENUEREVENUEREVENUE
Sales of productsSales of products$417,922,304 $317,048,413 $100,873,891 31.8 %Sales of products$642,122 $417,922 $224,200 53.6 %
Sales of servicesSales of services96,874,278 83,334,062 13,540,216 16.2 %Sales of services97,659 96,874 785 0.8 %
Total revenueTotal revenue514,796,582 400,382,475 114,414,107 28.6 %Total revenue739,781 514,796 $224,985 43.7 %
Cost of SalesCost of Sales340,070,342 254,755,038 85,315,304 33.5 %Cost of Sales482,439 340,070 142,369 41.9 %
GROSS PROFITGROSS PROFIT174,726,240 145,627,437 29,098,803 20.0 %GROSS PROFIT$257,342 $174,726 $82,616 47.3 %
OPERATING EXPENSEOPERATING EXPENSEOPERATING EXPENSE
Selling and marketingSelling and marketing31,906,155 25,800,711 6,105,444 23.7 %Selling and marketing42,216 31,906 10,310 32.3 %
General and administrativeGeneral and administrative81,469,391 52,875,943 28,593,448 54.1 %General and administrative86,267 81,469 4,798 5.9 %
Contingent consideration and earnout fair value adjustmentsContingent consideration and earnout fair value adjustments686,700 (2,875,248)3,561,948 123.9 %Contingent consideration and earnout fair value adjustments— 687 (687)(100.0)%
Operating ExpensesOperating Expenses114,062,246 75,801,406 38,260,840 50.5 %Operating Expenses$128,483 $114,062 $14,421 12.6 %
INCOME FROM OPERATIONSINCOME FROM OPERATIONS60,663,994 69,826,031 (9,162,037)(13.1)%INCOME FROM OPERATIONS$128,859 $60,664 $68,195 112.4 %
Interest expenseInterest expense(23,265,333)(27,447,267)4,181,934 (15.2)%Interest expense(28,622)(23,265)(5,357)23.0 %
Other income (expense)Other income (expense)(2,387,997)418,302 (2,806,299)(670.9)%Other income (expense)(313)(2,388)2,075 (86.9)%
Change in fair value of derivative warrant liabilitiesChange in fair value of derivative warrant liabilities(657,625)— (657,625)— %Change in fair value of derivative warrant liabilities— (658)658 (100.0)%
Other Expense, Net(26,310,955)(27,028,965)718,010 (2.7)%
INCOME BEFORE TAXESINCOME BEFORE TAXES34,353,039 42,797,066 (8,444,027)(19.7)%INCOME BEFORE TAXES$99,924 $34,353 $65,571 190.9 %
Provision for Income TaxesProvision for Income Taxes5,786,742 1,054,574 4,732,168 448.7 %Provision for Income Taxes24,984 5,787 19,197 331.7 %
NET INCOMENET INCOME$28,566,297 $41,742,492 $(13,176,195)(31.6)%NET INCOME$74,940 $28,566 $46,374 162.3 %

34


Revenue (dollar amounts in tables in thousands)

Three Months Ended
Revenue Variance
Breakdown
Variance
%
Domestic Acquisitions
        Organic
Growth
Organic
Growth
%
October 1, 2022September 25, 2021Variances
Sales of products$230,847 $155,670 $75,177 48.3 %$7,791 $67,386 43.3 %
Sales of services31,700 32,120 (420)(1.3)%955 (1,375)(4.3)%
Total$262,547 $187,790 $74,757 39.8 %$8,746 $66,011 35.2 %
Three Months
Revenue Variance
Breakdown
Variance
%
Domestic Acquisitions
     Organic
Growth
Organic
Growth
%
Period ended September 25, 2021Period ended September 26, 2020Variances
Sales of products$155,669,772 $113,511,689 $42,158,083 37.1 %$8,220,713 $33,937,370 29.9 %
Sales of services32,120,153 26,827,369 5,292,784 19.7 %1,217,718 4,075,066 15.2 %
Total$187,789,925 $140,339,058 $47,450,867 33.8 %$9,438,431 $38,012,436 27.1 %
Nine Months
Revenue Variance
Breakdown
Nine Months Ended
Revenue Variance
Breakdown
Variance
%
Domestic Acquisitions
        Organic
Growth
Organic
Growth
%
Variance
%
Domestic Acquisitions
        Organic
Growth
Organic
Growth
%
Period ended September 25, 2021Period ended September 26, 2020VariancesOctober 1, 2022September 25, 2021Variances
Sales of productsSales of products$417,922,304 $317,048,413 $100,873,891 31.8 %$8,220,713 $92,653,178 29.2 %Sales of products$642,122 $417,922 $224,200 53.6 %$51,665 $172,535 41.3 %
Sales of servicesSales of services96,874,278 83,334,062 13,540,216 16.2 %1,217,718 12,322,498 14.8 %Sales of services97,659 96,874 $785 0.8 %4,923 (4,138)(4.3)%
TotalTotal$514,796,582 $400,382,475 $114,414,107 28.6 %$9,438,431 $104,975,676 26.2 %Total$739,781 $514,796 $224,985 43.7 %$56,588 $168,397 32.7 %
The $47.5$74.8 million and $114.4$225.0 million revenue increase for the three and nine months period ended September 25, 2021October 1, 2022 compared to the three and nine months period ended September 26, 202025, 2021 is primarily attributable to increased volumes as a result of favorable industry dynamics in both theall three sales channels, positive impact from commercial and R3 sales channelsactions taken in 2022, coupled with inorganic growth of $9.4$8.7 million and $56.6 million as a result of the DBCI and ACT acquisitions. In addition, we beganacquisitions for the three and nine months ended October 1, 2022, respectively. The Company expects that these trends will continue to see a more meaningful impact from our commercial actions in the third quarterCompany's results for the remainder of 2021. The inorganic growth as a result of the PTI Australasia Pty Ltd. and G&M Stor-More Pty Ltd. acquisitions are not separately stated above as these amounts were not significant.fiscal 2022.

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

Three MonthsThree MonthsVarianceThree Months EndedVariance
ConsolidatedConsolidatedPeriod ended September 25, 2021% of sales
Period ended
September 26, 2020
% of sales$%ConsolidatedOctober 1, 2022% of salesSeptember 25, 2021% of sales$%
New Construction - Self StorageNew Construction - Self Storage$65,934,280 35.1 %$74,520,022 53.1 %$(8,585,742)(11.5)%New Construction - Self Storage$75,056 28.6 %$65,934 35.1 %$9,121 13.8 %
R3 - Self StorageR3 - Self Storage59,247,787 31.6 %35,136,858 25.0 %$24,110,929 68.6 %R3 - Self Storage88,368 33.6 %59,248 31.6 %29,120 49.1 %
Commercial and OtherCommercial and Other62,607,858 33.3 %30,682,178 21.9 %31,925,680 104.1 %Commercial and Other99,123 37.8 %62,608 33.3 %36,515 58.3 %
TotalTotal$187,789,925 100.0 %$140,339,058 100.0 %$47,450,867 33.8 %Total$262,547 100.0 %$187,790 100.0 %$74,757 39.8 %
Nine MonthsNine MonthsVarianceNine Months EndedVariance
ConsolidatedConsolidated
    Period ended
    September 25, 2021
% of sales
Period ended
September 26, 2020
% of sales$%ConsolidatedOctober 1, 2022% of salesSeptember 25, 2021% of sales$%
New Construction - Self StorageNew Construction - Self Storage$187,874,566 36.5 %$200,455,652 50.1 %$(12,581,086)(6.3)%New Construction - Self Storage$233,150 31.5 %$187,875 36.5 %$45,275 24.1 %
R3 - Self StorageR3 - Self Storage157,766,343 30.6 %110,852,222 27.7 %46,914,121 42.3 %R3 - Self Storage230,343 31.2 %157,766 30.6 %72,577 46.0 %
Commercial and OtherCommercial and Other169,155,673 32.9 %89,074,601 22.2 %80,081,072 89.9 %Commercial and Other276,288 37.3 %169,155 32.9 %107,133 63.3 %
TotalTotal$514,796,582 100.0��%$400,382,475 100.0 %$114,414,107 28.6 %Total$739,781 100.0 %$514,796 100.0 %$224,985 43.7 %
New construction sales decreasedincreased by $8.6$9.1 million or 11.5%13.8% and decreased by $12.6$45.3 million or 6.3%24.1% for the three and nine months period ended October 1, 2022 compared to the three and nine months period ended September 25, 2021, compared to the three and nine months period ended September 26, 2020, respectively. The decreaseincrease in the three and nine months period ended September 25, 2021October 1, 2022 is primarily due to commercial initiatives and strong growth related to the continued delays2021 pent up demand in greenfield projects caused by permitting delays associated with the COVID-19 global pandemic coupled withcontinuing to ship in 2022. The Company expects that these trends will continue to impact the continued trendCompany’s results for the remainder of new self-storage capacity being brought online through conversions and expansions, which roll up under R3.fiscal 2022.
R3 sales increased by $24.1$29.1 million and $46.9$72.6 million or 68.6%49.1% and 42.3%46.0% for the three and nine months period ended October 1, 2022 compared to the three and nine months period ended September 25, 2021, compared to the three and nine months period ended September 26, 2020respectively, due to the increase of conversions and expansions as more self-storage capacity continues to be brought online through R3 as opposed to greenfield sites coupled with the positive impacts from commercial actions.



The Company expects that these trends will continue to impact the Company's results for the remainder of fiscal 2022.
Commercial and other sales increased by $31.9$36.5 million and $80.1$107.1 million or 104.1%58.3% and 89.9%63.3% for the three and nine months period ended October 1, 2022 compared to the three and nine months period ended September 25, 2021, compared to the three and nine months period ended September 26, 2020respectively, due to Janus Core and ASTA experiencing favorable market gains due to the continued e-commerce movement coupled with share gains in both the commercial steel roll up door market fromand ASTA’s launch of the rolling steel product line in the fourth quarter of 2020.line. In addition, we beganthe commercial and other sales channel continued to see a more meaningful impactbenefit from our the
35


commercial actions instituted in 2021. The Company expects that these trends will continue to impact the quarter.Company’s results for the remainder of fiscal 2022.
Cost of Sales and Gross Margin
Gross margin decreasedincreased by 4.5%3.8% and 2.5%0.9% to 36.9% and 34.8% for the three and nine months period ended October 1, 2022, respectively, from 33.1% and 33.9% for the three and nine months period ended September 25, 2021, from 37.6% and 36.4% for the three and nine months period ended September 26, 2020respectively. This increase is primarily due primarily to continued increased raw material, labor and logistics costs in advance ofwhich was offset by the commercial and cost containment initiatives taking effect.effect in third quarter 2022.

Three MonthsCost of Sales Variance
Breakdown
Period ended September 25, 2021Period ended September 26, 2020Variance
Variance
%
Domestic AcquisitionsOrganic Growth
Organic
Growth
%
Cost of Sales$125,551,39587,574,908 $37,976,48743.4 %$6,601,554$31,374,93335.8%
(Dollar amounts in tables in thousands)
Nine MonthsCost of Sales Variance
Breakdown
Period ended
September 25, 2021
Period ended September 26, 2020Variance
Variance
%
Domestic AcquisitionsOrganic Growth
Organic
Growth
%
Cost of Sales$340,070,342254,755,038 $85,315,30433.5 %$6,601,554$85,315,30433.5%
Three Months EndedCost of Sales Variance
Breakdown
October 1, 2022September 25, 2021Variance
Variance
%
Domestic AcquisitionsOrganic Growth
Organic Growth
%
Cost of Sales$165,755$125,551 $40,20432.0 %$7,405$32,79926.1%
Nine Months EndedCost of Sales Variance
Breakdown
October 1, 2022September 25, 2021Variance
Variance
%
Domestic AcquisitionsOrganic Growth
Organic Growth
%
Cost of Sales$482,439$340,070 $142,36941.9 %$43,682$98,68729.0%
The $38.0 million and $85.3 million or 43.4% and 33.5% increase in cost of sales increase of $40.2 million and $142.4 million or 32.0% and 41.9% for the three and nine months period ended September 25, 2021October 1, 2022 compared to the three and nine months periodperiods ended September 26, 202025, 2021, respectively, is primarily attributable to increased rawan increase in material and direct labor costs of $34.8 million and logistics costs on a global basis, revenue increases$96.7 million for the three and nine month periods ended October 1, 2022, respectively, coupled with the inorganic growth of $6.6$7.4 million and $43.7 million as a result of the DBCI and ACT acquisitions.acquisitions for the three and nine months ended October 1, 2022, respectively. The Company expects that these trends will continue to impact the Company's results for the remainder of fiscal 2022.
Operating Expenses - Selling and marketing
Selling and marketing expense increased $4.2$2.4 million and $6.1$10.3 million or 54.2%20.0% and 23.7%32.3% from the three and nine months period ended September 25, 2021 compared to the three and nine months period ended September 26, 2020October 1, 2022, respectively. This is primarily due to increased marketing, trade showtravel and payroll related costs for additional headcount to support revenue growth coupled with limited travel marketing and trade show costs in the prior year due to the pandemic. In addition, there was an increase in selling and marketing expenses of $0.4$0.2 million and $2.3 million as a result of the DBCI and ACT acquisitions.acquisitions for the three and nine months ended October 1, 2022, respectively.
Operating Expenses - General and administrative
(Restated)
General and administrative expenses increased $6.6 million and $28.6$3.5 million or 36.3%13.9% and 54.1%$4.8 million or 5.9% from the three and nine months period ended September 26, 2020 compared to the three and nine months period ended September 25, 2021 compared to the three and nine months period ended October 1, 2022, respectively. The increase for the three and nine months period is primarily due to an increase in general liability and health insurance costs, professional fees and payroll related costs for additional headcount to support the continued top line revenue growth coupled with the transition to a public company which was partially offset by transaction related costs incurred in conjunction with the June 2021 Business Combination of approximately $10.4 million which is not present in 2022. In addition, there was an increase in general and $1.9administrative expenses of $0.4 million and $6.2 million as a result of the DBCI and ACT acquisitions. In addition,acquisitions for the Company incurred transaction related costs in conjunction with the June 2021 business combination of approximately $10.4 million which is further discussed in Non-GAAP Financial Measures section.three and nine months ended October 1, 2022, respectively.

Operating Expenses - Contingent considerationConsideration and earnout fair value adjustmentsEarnout Fair Value Adjustments
Contingent consideration and earnout fair value adjustments increased $2.9 million and $3.6decreased $0.7 million or 100.0% and 123.9% from the three and nine months period ended September 25, 2021 compared to the three and nine months period ended September 26, 2020. The increase to the three month period ended September 25, 2021 related solely to the $(2.9) million contingent consideration fair value adjustment related to the acquisition of BETCO which was recorded in the third quarter of 2020. The increase to the nine month period ended September 25, 2021October 1, 2022, respectively, and were related to the change in fair value of the earnout of the 2,000,000 common stock shares that were issued and released on June 21, 2021 and the $(2.9) million contingent consideration fair value adjustment related to the acquisition of BETCO which was recorded in the third quarter of 2020.2021.
Interest Expense
Interest expense decreased $1.1increased $3.3 million and $4.2$5.4 million or 12.6%43.3% and 15.2%23.0% from the three and nine months period ended September 26, 2020 compared to the three and nine months period ended September 25, 2021 compared to the three and nine months period ended October 1, 2022, respectively, primarily due to a lower interest rate environment coupled with a $2.0 million debt prepayment in July 2020. In addition, the Company entered into a Debt Modification agreement in February 2021 which consolidated the prior two outstanding tranches into a single tranche and resulted in a reduction in the overall interest rate. In conjunction with the business combination on June 7, 2021, the Company made a $61.6 million prepayment on debt. On August 18, 2021, the Company



completed a refinancing of its First Lien Amendment No. 3, in which the principal terms of the amendment were new borrowings of $155.0 million which partially offset this decrease in theAugust 2021 and an increase in interest expense for the three months period ended September 25, 2021. rates in 2022. ((See “Liquidity and Capital Resources” section.)section).
Other Income (Expense)
Other income (expense) decreased by $0.2$— million and $2.8$2.1 million or 71.5%38.5% and 670.9%86.9% from $0.3 and $0.4 million of other income for the three and nine months period ended September 26, 2020 to $0.1 million of other income and $2.4 million of other expense for the three and nine months period ended September 25, 2021. The decrease for the three months period ended is primarily due2021, respectively, to a$0.1 million of other income and $0.3 million gain on extinguishment of debt included in the three months period ended September 26, 2020, but not present in the three months period ended September 25, 2021. The increase in other (expense) for the three and nine months periodperiods ended isOctober 1, 2022, respectively, primarily due to a $2.4 million loss on extinguishment of debt included in the nine months period ended September 25, 2021 but not present in the three and nine months period ended September 26, 2020.October 1, 2022.
Change in fair value of derivative warrant liabilities
36

(Restated)
The change in fair value of derivative warrant liabilities resulted in income of $1.3 million for the three months ended September 25, 2021 and a loss of $0.7 million for the nine months ended September 25, 2021. The change over prior year is due to the fair value of warrant adjustments not present in prior year financials.

Income Taxes
(Restated)
Income tax expense increased by $3.1$7.2 million and $4.7$19.2 million or 1089.6%212.7% and 448.7%331.7% from $0.3 million and $1.1 million for the three and nine months period ended September 26, 2020 to $3.4 million and $5.8 million expense for the three and nine months period ended September 25, 2021, respectively, to $10.6 million and $25.0 million expense for the three and nine months period ended October 1, 2022, respectively, due to a tax structure change from a limited liability company that was considered a disregarded entity for tax purposes to a Corporation as a result of the Business Combination that occurred on June 7, 2021.
Net Income
(Restated)
The $5.2$16.9 million and $13.2$46.4 million or 25.2%108.5% and 31.6% decrease in net income162.3% increase for the three and nine months periodsperiod ended September 25, 2021October 1, 2022 as compared to the three and nine months period ended September 26, 202025, 2021, respectively, is largely due to an increase in raw material, labor and logistics costs coupled with increased selling,revenue offset by an increase in general and administrative expenses.expenses for the three and nine months period ended October 1, 2022.
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, Self-Storage 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 Segmentsegment 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 Net earnings.Results of Operations.



Results of Operations - Janus North America
For the three and nine months period ended October 1, 2022 compared to the three and nine months period ended September 25, 2021 compared to the period ended September 26, 2020(dollar amounts in thousands):

Three Months
Period ended
September 25, 2021
Period ended
September 26, 2020
Variance
$%
REVENUE
Sales of products$154,631,783 $110,370,452 $44,261,331 40.1%
Sales of services24,487,324 22,127,171 2,360,153 10.7%
Total revenue179,119,107 132,497,623 46,621,484 35.2%
Cost of Sales121,480,502 83,687,988 37,792,514 45.2%
GROSS PROFIT57,638,605 48,809,635 8,828,970 18.1%
OPERATING EXPENSE
Selling and marketing10,956,479 7,746,220 3,210,259 41.4%
General and administrative22,300,340 15,830,440 6,469,900 40.9%
Contingent consideration and earnout fair value adjustments— (2,875,248)2,875,248 100.0%
Operating Expenses33,256,819 20,701,412 12,555,407 60.7%
INCOME FROM OPERATIONS$24,381,786 $28,108,223 $(3,726,437)(13.3)%
Nine MonthsThree Months Ended
Period ended
September 25, 2021
Period ended
September 26, 2020
VarianceOctober 1, 2022September 25, 2021Variance
$%$%
(Restated)(Restated)
REVENUEREVENUEREVENUE
Sales of productsSales of products$414,713,892 $310,647,036 $104,066,856 33.5%Sales of products$232,207 $154,632 $77,575 50.2%
Sales of servicesSales of services75,184,879 69,200,338 5,984,541 8.6%Sales of services24,529 24,487 42 0.2%
Total revenueTotal revenue489,898,771 379,847,374 110,051,397 29.0%Total revenue$256,736 $179,119 $77,617 43.3%
Cost of SalesCost of Sales328,593,737 243,878,508 84,715,229 34.7%Cost of Sales164,689 121,481 43,208 35.6%
GROSS PROFITGROSS PROFIT161,305,034 135,968,866 25,336,168 18.6%GROSS PROFIT$92,047 $57,638 $34,409 59.7%
OPERATING EXPENSEOPERATING EXPENSEOPERATING EXPENSE
Selling and marketingSelling and marketing29,123,707 23,569,694 5,554,013 23.6%Selling and marketing13,809 10,956 2,853 26.0%
General and administrativeGeneral and administrative66,616,292 47,519,790 19,096,502 40.2%General and administrative25,178 22,300 2,878 12.9%
Contingent consideration and earnout fair value adjustments686,700 (2,875,248)3,561,948 123.9%
Operating ExpensesOperating Expenses96,426,699 68,214,236 28,212,463 41.4%Operating Expenses$38,987 $33,256 $5,731 17.2%
INCOME FROM OPERATIONSINCOME FROM OPERATIONS$64,878,335 $67,754,630 $(2,876,295)(4.2)%INCOME FROM OPERATIONS$53,060 $24,382 $28,678 117.6%

37


Revenue
Nine Months Ended
October 1, 2022September 25, 2021Variance
$%
REVENUE
Sales of products$648,229 $414,714 $233,515 56.3%
Sales of services75,225 75,185 40 0.1%
Total revenue$723,454 $489,899 $233,555 47.7%
Cost of Sales480,897 328,594 152,303 46.3%
GROSS PROFIT$242,557 $161,305 $81,252 50.4%
OPERATING EXPENSE
Selling and marketing40,070 29,124 10,946 37.6%
General and administrative76,399 66,616 9,783 14.7%
Contingent consideration and earnout fair value adjustments— 687 (687)100.0%
Operating Expenses$116,469 $96,427 $20,042 20.8%
INCOME FROM OPERATIONS$126,088 $64,878 $61,210 94.3%

Revenue (dollar amounts in tables in thousands)
Three MonthsVariances
Variance
%
Revenue Variance
Breakdown
Three Months EndedVariances
Variance
%
Revenue Variance
Breakdown
Period ended
    September 25, 2021
Period ended
September 26, 2020
Domestic AcquisitionsOrganic
Growth
Organic
Growth
%
October 1, 2022September 25, 2021Domestic AcquisitionsOrganic
Growth
Organic
Growth
%
Sales of productsSales of products$154,631,783 $110,370,452 $44,261,331 40.1 %$8,220,713 $36,040,618 32.7 %Sales of products$232,207 $154,632 $77,575 50.2 %$7,791 $69,784 45.1 %
Sales of servicesSales of services24,487,324 22,127,171 2,360,153 10.7 %1,217,718 1,142,435 10.7 %Sales of services$24,529 $24,487 $42 0.2 %$955 $(913)(3.7)%
TotalTotal$179,119,107 $132,497,623 $46,621,484 35.2 %$9,438,431 $37,183,053 28.1 %Total$256,736 $179,119 $77,617 43.3 %$8,746 $68,871 38.4 %
Nine MonthsVariances
Variance
%
Revenue Variance
Breakdown
Nine Months EndedVariances
Variance
%
Revenue Variance
Breakdown
Period ended
    September 25, 2021
Period ended
September 26, 2020
Domestic AcquisitionsOrganic
Growth
Organic
Growth
%
October 1, 2022September 25, 2021Domestic AcquisitionsOrganic
Growth
Organic
Growth
%
Sales of productsSales of products$414,713,892 $310,647,036 $104,066,856 33.5 %$8,220,713 $95,846,143 30.9 %Sales of products$648,229 $414,714 $233,515 56.3 %$51,665 $181,851 43.8 %
Sales of servicesSales of services75,184,879 69,200,338 5,984,541 8.6 %1,217,718 4,766,823 8.6 %Sales of services$75,225 $75,185 $40 0.1 %$4,923 $(4,882)(6.5)%
TotalTotal$489,898,771 $379,847,374 $110,051,397 29.0 %$9,438,431 $100,612,966 26.5 %Total$723,454 $489,899 $233,555 47.7 %$56,588 $176,969 36.1 %
The $46.6$77.6 million and $110.1$233.6 million or 35.2%43.3% and 29.0%47.7% revenue growth increase is primarily attributable to increased volumes as a result of favorable industry dynamics in both theall three sales channels, positive impact from commercial and R3 sales channelsactions taken in 2021, coupled with inorganic growth of $9.4$8.7 million and $56.6 million as a result of the DBCI and ACT acquisitions. In addition, we beganacquisitions for the three and nine months ended October 1, 2022, respectively. The Company expects that these trends will continue to see a more meaningful impact from our commercial actions in the quarter.Company's results for the remainder of fiscal 2022.

The following table and discussion compares Janus North America sales by sales channel.channel (dollar amounts in thousands).
Three Months Ended
October 1, 2022
% of Total
Sales
September 25, 2021
% of Total
Sales
Variance
$%
New Construction - Self Storage$65,880 25.6 %$54,507 30.4 %$11,373 20.9 %
R3 - Self Storage$84,893 33.1 %$57,141 31.9 %$27,752 48.6 %
Commercial and Other$105,963 41.3 %$67,471 37.7 %$38,492 57.0 %
Total$256,736 100.0 %$179,119 100.0 %$77,617 43.3 %
38


Three Months
Period ended
September 25, 2021
% of total
sales
Period ended
September 26, 2020
% of total
sales
Variance
$%
New Construction - Self Storage$54,506,607 30.4 %$67,675,747 51.1 %$(13,169,140)(19.5)%
R3 - Self Storage57,141,059 31.9 %30,663,566 23.1 %26,477,493 86.3 %
Commercial and Other67,471,441 37.7 %34,158,310 25.8 %33,313,131 97.5 %
Total$179,119,107 100.0 %$132,497,623 100.0 %$46,621,484 35.2 %
Nine MonthsNine Months Ended
Period ended
 September 25, 2021
% of total
sales
Period ended
September 26, 2020
% of total
sales
VarianceOctober 1, 2022
% of Total
Sales
September 25, 2021
% of Total
Sales
Variance
$%$%
New Construction - Self StorageNew Construction - Self Storage$157,120,551 32.1 %$184,898,993 48.7 %$(27,778,442)(15.0)%New Construction - Self Storage$212,240 29.3 %$157,121 32.1 %$55,119 35.1 %
R3 - Self StorageR3 - Self Storage151,563,398 30.9 %98,645,228 26.0 %52,918,170 53.6 %R3 - Self Storage$215,896 29.9 %$151,563 30.9 %$64,333 42.4 %
Commercial and OtherCommercial and Other181,214,822 37.0 %96,303,153 25.4 %84,911,669 88.2 %Commercial and Other$295,318 40.8 %$181,215 37.0 %$114,103 63.0 %
TotalTotal$489,898,771 100.0 %$379,847,374 100.0 %$110,051,397 29.0 %Total$723,454 100.0 %$489,899 100.0 %$233,555 47.7 %
New Construction sales decreasedincreased by $13.2$11.4 million and $27.8$55.1 million or 19.5%20.9% and 15.0%35.1% for the three and nine months period ended October 1, 2022 compared to the three and nine months period ended September 25, 2021, respectively, primarily due to commercial initiatives and strong growth related to shipments on the pent up demand in greenfield projects caused by permitting delays associated with the COVID-19 global pandemic that negatively impacted the first and second quarters of 2021. The Company expects that these trends will continue to impact the Company's results for the remainder of fiscal 2022.
R3 sales increased by $27.8 million and $64.3 million or 48.6% and 42.4% for the three and nine months period ended October 1, 2022 compared to the three and nine months period ended September 26, 2020 due to continued delays in projects associated with the COVID-19 global pandemic, coupled with the continued trend of new self-storage capacity being brought online through conversions and expansions, which are included in R3 sales.
R3 sales increased by $26.5 million and $52.9 million or 86.3% and 53.6% for the three and nine months period ended September 25, 2021, compared to the three and nine months periods ended September 26, 2020respectively, primarily due primarily to the continued trend of new self-storage capacity being brought online through conversions and expansions coupled with the positive impacts from commercial actions. The Company expects that these trends will continue to impact the Company's results for the remainder of fiscal 2022.
Commercial and Other sales increased by $33.3$38.5 million and $84.9$114.1 million or 97.5%57.0% and 88.2%63.0% for the three and nine months period ended October 1, 2022 compared to the three and nine months period ended September 25, 2021, compared to the three and nine months period ended September 26, 2020respectively, due to increases in both Janus Core and ASTA commercial steel roll up door market, from continued strong momentum with the launch of the ASTA rolling steel product line in the fourth quarter of 2020 and commercial initiatives implemented to offset the inflationary increases of raw materials, labor, and logistics costs.



Cost of Sales and Gross Margin
Gross Margin decreasedincreased by 4.7%3.7% and 2.9%0.6% to 35.9% and 33.5% for the three and nine months period ended October 1, 2022, from 32.2% and 32.9% for the three and nine months period ended September 25, 2021 from 36.0% and 35.2% for the three and nine months period ended September 26, 2020is primarily due primarily to continued increased raw material, labor and logistics costs in advance ofwhich was offset by the commercial and cost containment initiatives taking effect.effect in third quarter 2022.

Three MonthsVariance
Variance
%
Cost of Sales Variance Breakdown
Period ended
September 25, 2021
Period ended
September 26, 2020
Domestic AcquisitionsOrganic Growth
Organic
Growth
%
Cost of Sales$121,480,502$83,687,988 $37,792,51445.2 %$6,601,554$31,190,96037.3%
(Dollar amounts in tables in thousands)
Nine MonthsVariance
Variance
%
Cost of Sales Variance Breakdown
Period ended
 September 25, 2021
Period ended
September 26, 2020
Domestic AcquisitionsOrganic Growth
Organic
Growth
%
Cost of Sales$328,593,737$243,878,508 $84,715,22934.7 %$6,601,554$78,113,67532.0%
Three Months EndedVariance
Variance
%
Cost of Sales Variance Breakdown
October 1, 2022September 25, 2021Domestic AcquisitionsOrganic Growth
(Reduction)
Organic
Growth
%
Cost of Sales$164,689$121,481 $43,20835.6 %$7,405$35,80329.5%
Nine Months EndedVariance
Variance
%
Cost of Sales Variance Breakdown
October 1, 2022September 25, 2021Domestic AcquisitionsOrganic Growth
(Reduction)
Organic
Growth
%
Cost of Sales$480,897$328,594 $152,30346.3 %$43,682$108,62133.1%
The $37.8$43.2 million and $84.7$152.3 million or 45.2%35.6% and 34.7%46.3% increase in cost of sales for the three and nine months period ended September 25, 2021October 1, 2022 compared to the three and nine months period ended September 26, 202025, 2021, respectively, is primarily due to increased revenue coupled with an increase in raw material, labor, and logistics costs. In addition, there was an inorganic increase of $6.6$7.4 million and $43.7 million for the three and nine months period ended October 1, 2022, respectively, as a result of the DBCI and ACT acquisitions.
Operating Expenses - Selling and marketing
Selling and marketing expenses increased $3.2$2.9 million and $5.6$10.9 million or 41.4%26.0% and 23.6%37.6% from $7.7 million and $23.6 million for the three and nine months period ended September 26, 2020 to $11.0 million and $29.1 million for the three and nine months period ended September 25, 2021 to $13.8 million and $40.1 million for the three and nine months period ended October 1, 2022 primarily due to increased marketing and trade showtravel and payroll related costs for additional headcount to support revenue growth coupled with lower spend onlimited travel marketing and trade showscosts in the prior year due to the pandemic. In addition, there was an increase in selling and marketing expenses of $0.4$0.2 million and $2.3 million as a result of the DBCI and ACT acquisitions.
Operating Expenses - General and administrative
(Restated)
General and administrative expenses increased $6.5 million and $19.1 million or 40.9% and 40.2% from $15.8 million and $47.5 millionacquisitions for the three and nine months period ended September 26, 2020 toOctober 1, 2022, respectively.
Operating Expenses - General and administrative
General and administrative expenses increased $2.9 million and $9.8 million or 12.9% and 14.7% from $22.3 million and $66.6 million for the three and nine months period ended September 25, 2021 to $25.2 million and $76.4 million for the three and nine months period ended October 1, 2022. The increase for the three and nine months period is primarily due to an increase in general liability and health insurance costs, professional fees and payroll related costs for additional headcount to support the incrementalcontinued top line revenue growth coupled with the transition to a public company which was partially offset by transaction related costs incurred in conjunction with the June 2021 Business Combination of
39


approximately $10.4 million which is not present in 2022. In addition, there was an increase in general and $1.9administrative expenses of $0.4 million and $6.2 million as a result of the DBCI and ACT acquisitions. In addition,acquisitions for the Company incurred transaction related costs in conjunction with the June 2021 business combination of approximately $10.4 million which is further discussed in Non-GAAP Financial Measures section.three and nine months period ended October 1, 2022, respectively.
Operating Expenses - Contingentcontingent consideration and earnout fair value adjustments
Contingent consideration and earnout fair value adjustments increased $2.9 million and $3.6decreased $0.7 million or 100.0% or 123.9% from the three and nine months period ended September 25, 2021 compared to the three and nine months period ended September 26, 2020. The increase to the three month period ended September 25, 2021 related solely to the $(2.9) million contingent consideration fair value adjustment related to the acquisition of BETCO which was recorded in the third quarter of 2020. The increase to the nine month period ended September 25, 2021October 1, 2022 related to the change in fair value of the earnout of the 2,000,000 common stock shares that were issued and released on June 21, 2021 and the $(2.9) million contingent consideration fair value adjustment related to the acquisition of BETCO which was recorded in the third quarter of 2020.2021.
Income from Operations
(Restated)
Income from operations decreasedincreased by $3.7$28.7 million and $2.9$61.2 million or 13.3%117.6% and 4.2%94.3% from $28.1 million and $67.8 million for the three and nine months period ended September 26, 2020 to $24.4 million and $64.9 million for the three and nine months period ended September 25, 2021, respectively, to $53.1 million and $126.1 million for the three and nine months period ended October 1, 2022, respectively, primarily due to an increase in revenue, partially offset by an increase in cost of sales, selling and general and administrative expenses, partially offset by an increase in revenue.



expenses.
INTERNATIONAL
Results of Operations - Janus International- For the three and nine months period ended October 1, 2022 compared to the three and nine months period ended September 25, 2021 compared to the period ended September 26, 2020(dollar amounts in thousands):

Three Months Ended
Three MonthsOctober 1, 2022September 25, 2021Variance
Period ended
September 25,
2021
Period ended
September 26,
2020
Variance$%
$%
REVENUEREVENUEREVENUE
Sales of products Sales of products$10,191,505 $7,920,469 $2,271,036 28.7 % Sales of products$9,788 $10,192 $(404)(4.0)%
Sales of servicesSales of services7,632,830 4,700,198 2,932,632 62.4 %Sales of services7,171 7,633 (462)(6.1)%
Total revenueTotal revenue17,824,335 12,620,667 5,203,668 41.2 %Total revenue$16,959 $17,825 $(866)(4.9)%
Cost of SalesCost of Sales13,248,470 8,701,990 4,546,480 52.2 %Cost of Sales12,261 13,248 (987)(7.5)%
GROSS PROFITGROSS PROFIT4,575,865 3,918,677 657,188 16.8 %GROSS PROFIT$4,698 $4,577 $121 2.6 %
OPERATING EXPENSEOPERATING EXPENSEOPERATING EXPENSE
Selling and marketingSelling and marketing1,109,381 76,925 1,032,456 1342.2 %Selling and marketing668 1,109 (441)(39.8)%
General and administrativeGeneral and administrative2,647,151 2,478,837 168,314 6.8 %General and administrative3,240 2,647 593 22.4 %
Operating ExpensesOperating Expenses3,756,532 2,555,762 1,200,770 47.0 %Operating Expenses$3,908 $3,756 $152 4.0 %
INCOME FROM OPERATIONS$819,333 $1,362,915 $(543,582)(39.9)%
LOSS FROM OPERATIONSLOSS FROM OPERATIONS$790 $821 $(31)3.8 %
Nine MonthsNine Months Ended
Period ended
September 25,
2021
Period ended
September 26,
2020
VarianceOctober 1, 2022September 25, 2021Variance
$%$%
(Restated)(Restated)
REVENUEREVENUEREVENUE
Sales of products Sales of products$27,039,893 $18,031,237 $9,008,656 50.0 % Sales of products$32,763 $27,040 $5,723 21.2 %
Sales of servicesSales of services21,689,399 14,133,724 7,555,675 53.5 %Sales of services22,434 21,689 745 3.4 %
Total revenueTotal revenue48,729,292 32,164,961 16,564,331 51.5 %Total revenue$55,197 $48,729 $6,468 13.3 %
Cost of SalesCost of Sales35,356,883 22,596,956 12,759,927 56.5 %Cost of Sales40,444 35,357 5,087 14.4 %
GROSS PROFITGROSS PROFIT13,372,409 9,568,005 3,804,404 39.8 %GROSS PROFIT$14,753 $13,372 $1,381 10.3 %
OPERATING EXPENSEOPERATING EXPENSEOPERATING EXPENSE
Selling and marketingSelling and marketing2,782,448 2,231,017 551,431 24.7 %Selling and marketing2,146 2,782 (636)(22.9)%
General and administrativeGeneral and administrative14,853,098 5,356,153 9,496,945 177.3 %General and administrative9,867 14,853 (4,986)(33.6)%
Operating ExpensesOperating Expenses17,635,546 7,587,170 10,048,376 132.4 %Operating Expenses$12,013 $17,635 $(5,622)(31.9)%
INCOME (LOSS) FROM OPERATIONSINCOME (LOSS) FROM OPERATIONS$(4,263,137)$1,980,835 $(6,243,972)(315.2)%INCOME (LOSS) FROM OPERATIONS$2,740 $(4,263)$7,003 (164.3)%

40


Revenue (dollar amounts in tables in thousands)

Three MonthsVariances
Variance
%
Revenue Variance
Breakdown
Three Months EndedVariances
Variance
%
Revenue Variance
Breakdown
Period ended September 25, 2021Period ended
September 26, 2020
Organic
Growth
Organic
Growth
October 1, 2022September 25, 2021Organic
Growth
Organic
Growth
Sales of productsSales of products$10,191,505 $7,920,469 $2,271,036 28.7 %$2,271,036 28.7 %Sales of products$9,788 $10,192 $(404)(4.0)%$(404)(4.0)%
Sales of servicesSales of services7,632,830 4,700,198 2,932,632 62.4 %2,932,631 62.4 %Sales of services$7,171 $7,633 $(462)(6.1)%$(462)(6.1)%
TotalTotal$17,824,335 $12,620,667 $5,203,668 41.2 %$5,203,668 41.2 %Total$16,959 $17,825 $(866)(4.9)%$(866)(4.9)%
Nine MonthsVariances
Variance
%
Revenue Variance
Breakdown
Nine Months EndedVariances
Variance
%
Revenue Variance
Breakdown
Period ended September 25, 2021Period ended
September 26, 2020
Organic
Growth
Organic
Growth
October 1, 2022September 25, 2021Organic
Growth
Organic
Growth
Sales of productsSales of products$27,039,893 $18,031,237 $9,008,656 50.0 %$9,008,656 50.0 %Sales of products$32,763 $27,040 $5,723 21.2 %$5,723 21.2 %
Sales of servicesSales of services21,689,399 14,133,724 7,555,675 53.5 %7,555,674 53.5 %Sales of services$22,434 $21,689 $745 3.4 %$745 3.4 %
TotalTotal$48,729,292 $32,164,961 $16,564,331 51.5 %$16,564,330 51.5 %Total$55,197 $48,729 $6,468 13.3 %$6,468 13.3 %
The $5.2$0.9 million revenue decrease and $16.6$6.5 million revenue increase includes a 41.2%4.9% and 51.5%13.3% increase in organic growth driven by increased sales volumes due to improved market conditions primarilyand commercial actions instituted in the second and third quarter of 2021. The inorganic growth as a result of the PTI Australasia Pty Ltd. and G&M Stor-More Pty Ltd. are not separately stated above as these amounts were not significant.
The following table illustrates the sales by channel for the three and nine months period ended October 1, 2022 and September 25, 2021 and September 26, 2020.2021.

Three Months

% of total
sales
Variance
Period ended
September 25, 2021

% of total
sales
Period ended
September 26,
2020
$%
New Construction - Self Storage$12,435,987 69.8%$7,874,084 62.4 %$4,561,90357.9 %
R3 - Self Storage5,388,348 30.2 %4,692,451 37.2 %695,89714.8 %
Commercial and Other— — %54,132 0.4 %(54,132)(100.0)%
Total$17,824,335 100.0 %$12,620,667 100.0 %$5,203,66841.2 %
(Dollar amounts in tables in thousands)
Nine Months

% of total
sales
VarianceThree Months Ended

% of Total
Sales
Variance
Period ended
September 25,
2021

% of total
sales
Period ended
September 26,
2020
$%October 1, 2022

% of Total
Sales
September 25, 2021$%
New Construction - Self StorageNew Construction - Self Storage$34,186,904 70.2%$19,903,835 61.9 %$14,283,06971.8 %New Construction - Self Storage$13,187 77.8 %$12,43669.8 %$7516.0%
R3 - Self StorageR3 - Self Storage14,542,388 29.8 %12,206,994 38.0 %2,335,39419.1 %R3 - Self Storage3,772 22.2 %$5,38930.2 %$(1,617)(30.0)%
Commercial and Other—  %54,132 0.2 %(54,132)(100.0)%
TotalTotal$48,729,292 100.0 %$32,164,961 100.1 %$16,564,33151.5 %Total$16,959 100.0 %$17,825100.0 %$(866)(4.9)%
Nine Months Ended

% of Total
Sales
Variance
October 1, 2022

% of Total
Sales
September 25, 2021$%
New Construction - Self Storage$39,969 72.4 %$34,18770.2 %$5,78216.9 %
R3 - Self Storage$15,228 27.6 %$14,54229.8 %$6864.7 %
Total$55,197 100.0 %$48,729100.0 %$6,46813.3 %
New Construction sales increased by $4.6$0.8 million and $14.3$5.8 million or 57.9%6.0% and 71.8%16.9% to $13.2 million and $40.0 million from $12.4 million and $34.2 million for the three and nine months period ended October 1, 2022 and September 25, 2021 from $7.9 million and $19.9 million for the three and nine months period ended September 26, 2020 due to increased volumes, commercial actions, and improved market conditions as the international market continues to open up after the COVID-19 pandemic.
R3 sales decreased by $1.6 million or 30.0% to $3.8 million for the three months period ended October 1, 2022 from $5.4 million for the three months period ended September 25, 2021 primarily due to project timing and mix factors affecting the third quarter of 2022. R3 sales increased by $0.7 million and $2.3or 4.7% to $15.2 million or 14.8% and 19.1% to $5.4 million andfor the nine months period ended October 1, 2022 from $14.5 million for the three and nine months period ended September 25, 2021 from $4.7 millionprimarily due to increased volumes, commercial actions, and $12.2 million forimproved market conditions as the three and nine months period ended September 26, 2020 due primarilyinternational market continues to project mix fluctuations.open up after the COVID-19 pandemic.
Cost of Sales and Gross Margin
Gross Margin increased by 2.0% and decreased by 5.4%0.7% to 27.7% and 2.3% to26.7% for the three and nine months period ended October 1, 2022, from 25.7% and 27.4% for the three and nine monthsmonth period ended September 25, 2021, from 31.0% and 29.7% for the period ended September 26, 2020.2021. The declineincrease in the three andmonths period ended October 1, 2022 is due primarily to increased revenue resulting in improved absorption. The decline for the nine months period ended September 25, 2021October 1, 2022 is the result of higher raw material, labor and logistics costs and an increase in mezzanine product sales which have a lower margin profile than



typical product offerings as these products are buy-resale, coupled with increased overhead costs as the business continues to add infrastructure to support the strategic growth plan.
41



Three MonthsVariance
Variance
%
Cost of Sales Variance Breakdown
Period ended
 September 25, 2021
Period ended
September 26, 2020
Organic
Growth
Organic
Growth
%
Cost of Sales$13,248,470 $8,701,990 $4,546,480 52.2 %$4,546,480 52.2 %
(Dollar amounts in tables in thousands)
Nine MonthsVariance
Variance
%
Cost of Sales Variance Breakdown
Period ended
 September 25, 2021
Period ended
September 26, 2020
Organic
Growth
Organic
Growth
%
Cost of Sales$35,356,883 $22,596,956 $12,759,927 56.5 %$12,759,927 56.5 %
Three Months EndedVariance
Variance
%
Cost of Sales Variance Breakdown
October 1, 2022September 25, 2021Organic
Growth
Organic
Growth
%
Cost of Sales$12,261 $13,248 $(987)(7.5)%$(987)(7.5)%
Nine Months EndedVariance
Variance
%
Cost of Sales Variance Breakdown
October 1, 2022September 25, 2021Organic
Growth
Organic
Growth
%
Cost of Sales$40,444 $35,357 $5,087 14.4 %$5,087 14.4 %
Cost of sales decreased by $1.0 million and increased by $4.5 million and $12.8$5.1 million or 52.2%(7.5%) and 56.5%14.4% from $8.7 million and $22.6 million, for the three and nine months period ended September 26, 2020, to $13.2 million and $35.4 million, for the three and nine months period ended September 25, 2021, in lineto $12.3 million and $40.4 million for the three and nine months period ended October 1, 2022 with a 41.2% and 51.5%13.3% increase in revenues coupled with an increase in raw material labor and logistics costs andrelated to an increase in mezzanine product sales.
Operating Expenses - Selling and marketing
Selling and marketing expense increaseddecreased by $1.0$0.4 million and $0.6 million or 1342.2%(39.8%) and 24.7%(22.9%) from $0.1 million and $2.2 million for the three and nine months period ended September 26, 2020 to $1.1 million and $2.8 million for the three and nine months period ended September 25, 2021 primarily due to an increase in commission expense as a result of higher sales coupled with an increase in travel and marketing costs in 2021 compared to prior year as these expenses were significantly cut back due to the COVID-19 global pandemic.
Operating Expenses - General and administrative
(Restated)
General and administrative expenses increased $0.2$0.7 million and $9.5 million or 6.8% and 177.3% from $2.5 million and $5.4$2.1 million for the three and nine months period ended September 26, 2020 toOctober 1, 2022.
Operating Expenses - General and administrative
General and administrative expenses increased by $0.6 million and decreased by $5.0 million or 22.4% and (33.6%) from $2.6 million and $14.9 million for the period ended September 25, 2021 primarily due to the continued investment in personnel and infrastructure to support the strategic growth objectives of the international business operations coupled with lower costs in 2020 associated with the pandemic.
Income (Loss) from Operations
(Restated)
Income (loss) from operations decreased by $0.5 million and $6.2 million or 39.9% and 315.2% from $1.4 million and $2.0 million for the three and nine months period ended September 26, 2020 to $0.8 million and $(4.3) million for the three and nine months period ended September 25, 2021.2021 to $3.2 million and $9.9 million for the period ended October 1, 2022. The declinedecrease for the nine months period is primarily due to bonus expense related to the Business Combination that are not present in the current periods.
Income from Operations
Income from operations was flat from $0.8 million in income from operations for the three months period ended September 25, 2021 was primarily due to an increase$0.8 million in raw material, labor, logistics and selling expenses. The declineincome from operations for the three months period ended October 1, 2022. Income from operations increased by $7.0 million or 164.3% from $4.3 million in loss from operations for the nine months period ended September 25, 2021 wasto $2.7 million in income from operations for the nine months period ended October 1, 2022 primarily due to an increase in revenue which was offset by increased raw material, labor, logistics, selling and a decrease in general and administrative expenses.
Non-GAAP Financial MeasuresMeasure
Janus uses measures of performance that are not required by or presented in accordance with GAAP in the United States. Non-GAAP financial performance measures are used to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures should not be considered in isolation or as a substitute for the relevant GAAP measures and should be read in conjunction with information presented on a GAAP basis.
Janus 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’sJanus’ 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’sJanus’ 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.

42


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 to Adjusted EBITDA for the periods indicated:indicated (dollar amounts in tables in thousands):
Three Months Ended
October 1, 2022September 25, 2021Variance
$%
Net Income$32,399 $15,542 $16,857 108.5%
Interest Expense10,979 7,664 3,315 43.3%
Income Taxes10,575 3,382 7,193 212.7%
Depreciation1,982 1,699 283 16.7%
Amortization7,408 8,229 (821)(10.0)%
EBITDA$63,343 $36,516 $26,827 73.5%
Loss (gain) on extinguishment of debt(1)
— — — 100.0%
COVID-19 related expenses(2)
— 1,030 (1,030)(100.0)%
Transaction related expenses(3)
— — — 100.0%
Facility relocation(4)
— 35 (35)(100.0)%
Share-based compensation(5)
— — — 100.0%
Acquisition expense(6)
(40)— (40)100.0%
 Severance and transition costs (7)
— 100.0%
Change in fair value of contingent consideration(8)
— — — 100.0%
Change in fair value of derivative warrant liabilities(9)
— (1,271)1,271 (100.0)%
Adjusted EBITDA$63,303 $36,310 $26,993 74.3%
43


Three Months
Period ended September 25, 2021Period ended
September 26, 2020
Variance
$%
(Restated)(Restated)
Net Income$15,541,623 $20,772,994 $(5,231,371)(25.2)%
Interest Expense7,663,536 8,768,791 (1,105,255)(12.6)%
Income Taxes3,381,769 284,282 3,097,487 1089.6%
Depreciation1,698,618 1,437,948 260,670 18.1%
Amortization8,228,760 6,891,586 1,337,174 19.4%
EBITDA$36,514,306 $38,155,601 $(1,641,295)(4.3)%
Loss (gain) on extinguishment of debt(2)
— (257,545)257,545 —%
COVID-19 related expenses(3)
1,030,415 260,606 769,809 295.4%
Transaction related expenses(4)
— — — —%
Facility relocation(5)
34,823 — 34,823 —%
Share-based compensation(6)
— — — —%
Change in fair value of contingent consideration and earnout(7)
— (2,875,248)2,875,248 —%
Change in fair value of derivative warrant liabilities(8)
(1,270,875)— (1,270,875)—%
Adjusted EBITDA$36,308,669 $35,283,414 $1,025,255 2.9%
Nine Months
Period ended
September 25, 2021
Period ended
September 26, 2020
Variance
$%
(Restated)(Restated)
Net Income$28,566,297 $41,742,492 $(13,176,195)(31.6)%
Interest Expense23,265,333 27,447,267 (4,181,934)(15.2)%
Income Taxes5,786,742 1,054,574 4,732,168 448.7%
Depreciation4,677,954 4,270,649 407,305 9.5%
Amortization21,851,717 20,287,353 1,564,364 7.7%
EBITDA$84,148,043 $94,802,335 $(10,654,292)(11.2)%
BETCO transition fee(1)
15,000(15,000)(100.0)%
Loss (gain) on extinguishment of debt(2)
2,414,854 (257,545)2,672,399 (1037.6)%
COVID-19 related expenses(3)
1,239,678526,344713,334 135.5%
Transaction related expenses(4)
10,398,42310,398,423 —%
Facility relocation(5)
102,467102,467 —%
Share-based compensation(6)
5,209,993  5,209,993 —%
Change in fair value of contingent consideration and earnout(7)
686,700 (2,875,248)3,561,948 (123.9)%
Change in fair value of derivative warrant liabilities(8)
657,625 — 657,625 —%
Adjusted EBITDA$104,857,783 $92,210,886 $12,646,897 13.7%
Nine Months Ended
October 1, 2022September 25, 2021Variance
$%
Net Income$74,940 $28,566 $46,374 162.3%
Interest Expense28,622 23,265 5,357 23.0%
Income Taxes24,984 5,787 19,197 331.7%
Depreciation5,817 4,678 1,139 24.3%
Amortization22,278 21,852 426 1.9%
EBITDA$156,641 $84,148 $72,493 86.1%
Loss (gain) on extinguishment of debt(1)
— 2,415 (2,415)(100.0)%
COVID-19 related expenses(2)
109 1,240 (1,131)(91.2)%
Transaction related expenses(3)
— 10,398(10,398)(100.0)%
Facility relocation(4)
620 102518 507.8%
Share-based compensation(5)
— 5,210 (5,210)(100.0)%
Acquisition expense(6)
782 — 782 100.0%
 Severance and transition costs (7)
500 — 500 100.0%
Change in fair value of contingent consideration(8)
— 687 (687)(100.0)%
Change in fair value of derivative warrant liabilities(9)
— 658 (658)(100.0)%
Adjusted EBITDA$158,652 $104,858 $53,794 51.3%
(1)Retainer fee paid to former BETCO owner, during the transition to a new President to run the business and related one-time-consulting fee.
(2)Adjustment for loss (gain) on extinguishment of debt regarding the write off of unamortized fees and third-party fees as a result of the debt modification completed in February 2021 and the prepayment of debt in the amount of $61.6 million that occurred on June 7, 2021 in conjunction with the Business Combination. In July 2020, Janus repurchased approximately $2.0 million of principal amount of the 1st Lien at an approximate $0.3 million discount, resulting in a gain on the extinguishment of debt. See Liquidity and Capital Resources Resources” section.
(3)(2)Expenses which are one-timeAdjustment consists of signage, cleaning and non-recurring relatedsupplies to maintain work environments necessary to adhere to CDC guidelines during the COVID-19 pandemic. See Impact of COVID-19 sectionCOVID-19” .section.
(4)(3)Transaction related expenses incurred as a result of the Business Combination on June 7, 2021 which consist of employee bonuses and the transaction cost allocation.
(5)(4)Expenses related to the facility relocation for Steel Storage.ASTA and Janus Core.
(6)(5)Share-based compensation expense associated with Midco, LLC Class B Common units that fully vested at the date of the Business Combination.

(6)


Expenses related to the transition services agreement for the DBCI acquisition which closed August 18, 2021.
(7)Reflects one-time costs associated with our strategic transformation, including executive leadership team changes, strategic business assessment and transformation projects.
(8)Adjustment related to the change in fair value of contingent consideration related to the earnout of the 2,000,000 common stock shares that were issued and released on June 21, 2021. Contingent consideration adjustment related to the acquisition of BETCO and NOKE in the period ended September 26, 2020.
(8)(9)Adjustment related to the change in fair value of derivative warrant liabilities for the private placement warrants.
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’sJanus’ 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
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. 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.
Cash Management
Janus manages its operating cash management activities through banking relationships for the domestic entities and international entities. Domestic subsidiaries monitor cash balances on a monthly basis and excess cash is transferred to Janus to pay down intercompany debt,
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interest on the intercompany debt and intercompany sales of products and materials and other services. International subsidiaries monitor excess cash balances on a periodic basis and transfer excess cash flow to Janus in the form of a dividend. Janus compiles a monthly standalone business unit and consolidated 13-week cash flow forecast to monitor various cash activities and forecast cash balances to fund operational activities.
Holding Company Status
Janus International Group, Inc.The Company was formed to consummate the business combinationBusiness Combination and act as a holding company of the Group,Janus Core, as such it owns no material assets and does not conduct any business operations of its own. As a result, Janus International Group, Inc.the Company is largely dependent upon cash dividends and distributions and other transfers from its subsidiaries to meet obligations. The agreements governing the indebtedness of our subsidiaries impose restrictions on our subsidiaries’ ability to pay dividends or make other distributions to us.
Foreign Exchange
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.
LIBOR Reform
In connection with the potential transition away from the use of the LIBOR as an interest rate benchmark, we are currently in the process of identifying and managing the potential impact to Janus. The majority of Janus’sJanus’ exposure to LIBOR relates to the Amendment No. 4 1st Lien note payable which is discussed further below.



Debt Profile (dollar amounts in table in thousands)
Principal
Amount
Issuance DateMaturity DateInterest RateNet Carrying ValuePrincipal AmountIssuance DateMaturity DateInterest RateNet Carrying Value
September 25,
2021
December 26,
2020
October 1, 2022January 1, 2022
Notes Payable - 1st Lien$470,000,000 February 2018/
August 2019
February 1,
2025
4.75%1
$— $562,363,000 
Notes Payable - 1st Lien B2$75,000,000 March 1, 2019February 1,
2025
5.50%2
— 73,875,000 
Notes Payable - Amendment No. 4 1st LienNotes Payable - Amendment No. 4 1st Lien$726,413,482 February 1, 2021February 1,
2025
4.25%3
726,413,482 — Notes Payable - Amendment No. 4 1st Lien$726,413 February 12, 2018February 12,
2025
6.37%1
$716,329 $722,379 
Notes Payable - Auto Loans$92,684 variousvarious4.29% to 8.35%92,684 — 
Financing leasesFinancing leases1,260 — 
Total principal debtTotal principal debt726,506,166 636,238,000 Total principal debt717,589 722,379 
Less unamortized deferred finance feesLess unamortized deferred finance fees11,467,679 12,110,329 Less unamortized deferred finance fees8,021 10,594 
Less: current portion of long-term debt8,111,212 6,523,417 
Less current portion of long-term debtLess current portion of long-term debt8,379 8,067 
Long-term debt, net of current portionLong-term debt, net of current portion$706,927,275 $617,604,254 Long-term debt, net of current portion$701,189 $703,718 
(1)The interest rate on the 1st Lien term loan as of December 26, 2020, was 4.75%, which is a variable rate based on LIBOR, subject to a 1.00% floor, plus an applicable margin percent of 3.75%
(2)The interest rate on the 1st Lien B2 term loan as of December 26, 2020, was 5.50%, which is a variable rate based on LIBOR, subject to a 1.00% floor, plus an applicable margin percent of 4.50%
(3)The interest rate on the Amendment No. 4 1st Lien term loan as of September 25, 2021,October 1, 2022, was 4.25%6.37%, which is a variable rate based on LIBOR, subject to a 1.00% floor, plus an applicable margin percent of 3.25%.
As of September 25, 2021,October 1, 2022 and December 26, 2020,January 1, 2022, the Company maintained one letter of credit totaling approximately $400,000$0.4 million and $295,000,$0.4 million, respectively, on which there were no balances due.
In conjunction with the Business Combination with Juniper, Janus pre-paid approximately $61.6 million of existing 1st Lien Term Loan Debt upon the closing of the Transactions and the business becoming a public company. As a result of the prepayment a loss on extinguishment of debt of approximately $1.0 million was recognized. The loss is included in Other income (expense) on the Consolidated Statements of Operations and Comprehensive Income.
On February 12, 2018, Janus was acquired by a private equity group. As a result of the acquisition, Janus originated a 1st Lien notes payable with a syndicate of lenders in the original amount of $470.0 million with interest payable in arrears. The interest rate on the facility was based on a Base Rate, unless a LIBOR Rate option was chosen by Janus. If the LIBOR Rate was elected, the interest computation was equal to the LIBOR Rate, subject to a 1.00% floor, plus the LIBOR Rate Margin. If the Base Rate was elected, the interest computation was equal to the Base Rate plus the Base Rate Margin. The outstanding loan balance was to be repaid on a quarterly basis of 0.25% of the original balance beginning the last day of June 2018 with the remaining principal due on the maturity date of February 12, 2025. The 1st Lien loan bore interest, as chosen by Janus, at a floating rate per annum consisting of the LIBOR, subject to a 1.00% floor, plus an applicable margin percent (total rate of 4.75% as of December 26, 2020).
On August 9, 2019, the 1st Lien notes payable was amended to increase the notes payable by $106.0 million. Interest on the 1st lien was payable in arrears, and the interest rate on the facility was based on a Base Rate, unless a LIBOR Rate option was chosen by Janus. If the LIBOR Rate was elected, the interest computation was equal to the LIBOR Rate, subject to a 1.00% floor, plus the LIBOR Rate Margin. If the Base Rate was elected, the interest computation was equal to the Base Rate plus the Base Rate Margin. Previous to the amendment of the 1st Lien, the 1st Lien notes payable outstanding loan balance was to be repaid on a quarterly basis of 0.25% of the original balance beginning the last day of June 2018 with the remaining principal due on the maturity date of February 12, 2025. The 1st Lien loan bore interest, as chosen by Janus, at a floating rate per annum consisting of the London InterBank Offered Rate plus an applicable margin percent (total rate was 4.75% as of December 26, 2020).
On July 21, 2020, Janus repurchased approximately $2.0 million of principal amount of the 1st Lien at an approximate $0.3 million discount, resulting in a gain on the extinguishment of debt of approximately $0.3 million.
On March 1, 2019, the 1st Lien B2 notes payable was originated in the amount of $75.0 million comprised of a syndicate of lenders, with interest payable in arrears. The interest rate on the facility was based on a Base Rate, unless a LIBOR Rate option is chosen by Janus. If the LIBOR Rate was elected, the interest computation was equal to the LIBOR Rate, subject to a 1.00% floor, plus the LIBOR Rate Margin. If the Base Rate was elected, the interest computation was equal to the Base Rate plus the Base Rate Margin. The outstanding loan balance was to be repaid on a quarterly basis of 0.25% of the original balance beginning the last day of June 2019 with the remaining principal due on



the maturity date of February 12, 2025. The 1st Lien B2 loan bore interest, as chosen by Janus, at a floating rate per annum consisting of the LIBOR plus an applicable margin percent (total rate of 5.50% as of December 26, 2020).
On February 5, 2021, the Company completed a repricing of its First Lien and First Lien B2 Term Loans. The Amended debt is comprised of a syndicate of lenders originating on February 5, 2021 in the amount of $634.6 million with interest payable in arrears. The interest rate on the facility is based on a base rate, unless a LIBOR Rate option is chosen by the Company. If the LIBOR Rate is elected, the interest computation is equal to the LIBOR Rate plus the LIBOR Rate Margin. If the base rate is elected, the interest computation is equal to the base rate plus the base rate margin. The outstanding loan balance is to be repaid on a quarterly basis of 0.25% of the original balance beginning the last day of March 2021 with the remaining principal due on the maturity date of February 12, 2025. As chosen by the Company, the Amended loan bears interest at a floating rate per annum consisting of LIBOR plus an applicable margin percent (total rate of 4.25% as of September 25, 2021). The debt is secured by substantially all business assets.
On August 18, 2021, the Company completed a refinancing in the form of itsthat certain First Lien Amendment No. 3,4, in which the principal terms of the amendment were a reduction in the overall interest rate based upon the loan type chosen, new borrowings of $155.0 million and a consolidation of the prior outstanding tranches into a single tranche of debt with the syndicate. The Amendment No. 4No.4 First Lien is comprised of a syndicate of lenders originating on August 18, 2021 in the amount of $726.4 million with interest payable in arrears. The outstanding loan balance is to be repaid on a quarterly basis of 0.25% of the original balance beginning the last day of September 30, 2021 with the remaining principal due on the maturity date of February 12, 2025. As chosen by the Company, the amended loan bears interest at a floating rate per annum consisting of LIBOR, plus an applicable margin percent (total(effective rate of 4.25%6.37% as of September 25, 2021)October 1, 2022). The debt is secured by substantially all business assets. Unamortized debt issuance costs are approximately $11.5$8.0 million at September 25, 2021.October 1, 2022. This refinancing amendment was accounted for as modification of existing terms and as such no gain or loss was recognized for this transaction and any third partparty fees were expensed with bank fees, original issue discount and charges capitalized and are being amortized as a component of interest expense over the remaining loan term.
On February 12, 2018,5, 2021, Janus entered intocompleted a revolving linerepricing of credit facility with a domestic bank replacing the Predecessor revolving lineits First Lien and First Lien B2 Term Loans in order to take advantage of credit.available lower interest rates. The line of credit facility is for $50.0 million with interest payments due in arrears that matures on February 12, 2023. The interest rate on the facility is based on a Base Rate, unless a LIBOR Rate option is chosen by Janus. If the LIBOR Rate is elected, the interest computation is equal to the LIBOR Rate, subject to a 1.00% floor, plus the LIBOR 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.
On August 18, 2021,repricing allowed the Company increasedto combine the available line of credit 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 18, 2023 to August 12, 2024. There was $19.4 and $0.0 outstanding balance on the line of credit as of September 25, 2021 and December 26, 2020. As of September 25, 2021 and December 26, 2020 the interest rate in effect for the facility was 3.50% and 3.50%, respectively. The line of credit is secured by accounts receivable and inventories.two First Lien Term Loans into one Term Loan.
The revolving line of credit facility 1st Lien note payable, 1st Lien B2 note payable, and Amendment No. 4 1st Lien note payable contain affirmative and negative covenants, including limitations on, subject to certain exceptions, the incurrence of 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.
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The line of credit facility 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) $5.0 million. In such circumstances, we would be required to maintain a minimum fixed charge coverage ratio for the trailing four quarters equal to at least 1.0 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 September 25, 2021,October 1, 2022, we were compliant with our covenants under the agreements governing our outstanding indebtedness.

On August 18, 2021, the Company increased the available line of credit 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 $— and $6.4 million outstanding balance on the line of credit as of October 1, 2022 and January 1, 2022, respectively. The interest rate on the facility is based on a Base Rate, unless a LIBOR Rate option is chosen by Janus. If the LIBOR Rate is elected, the interest computation is equal to the LIBOR Rate, subject to a 1.00% floor, plus the LIBOR 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 October 1, 2022 and January 1, 2022 the interest rate in effect for the facility was 6.5% and 3.5%, respectively. The line of credit is secured by accounts receivable and inventories.
On February 12, 2018, Janus entered into a revolving line of credit facility with a domestic bank replacing the predecessor revolving line of credit. The line of credit facility was originally for $50.0 million with interest payments due in arrears that matures on February 12, 2023. The available line of credit and maturity date was amended on August 18, 2021 to August 12, 2024.
Statement of Cash Flowscash 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 Condensed Consolidated Statements of Cash Flows in the Unaudited Condensed Consolidated Financial Statements.
Nine month period ended September 25, 2021October 1, 2022 compared to the nine month period ended September 26, 2020:25, 2021:
September 25,
2021
September 26,
2020
Variance
$%
Net cash provided by operating activities$59,683,264 $76,911,053 $(17,227,789)(22.4)%
Net cash used in investing activities(195,564,980)(9,401,104)(186,163,876)1980.2 %
Net cash provided by (used in) financing activities99,706,949 (46,683,858)146,390,807 (313.6)%
Effect of foreign currency rate changes on cash141,720 (1,003,090)1,144,810 (114.1)%
Net (decrease) increase in cash and cash equivalents$(36,033,047)$19,823,001 $(55,856,048)(281.8)%
(dollar amounts in thousands)



October 1, 2022September 25, 2021Variance
$%
Net cash provided by (used in) operating activities$62,591 $59,683 $2,908 4.9 %
Net cash provided by (used in) investing activities(7,789)(195,565)187,776 (96.0)%
Net cash provided by (used in) financing activities(12,557)99,707 (112,264)(112.6)%
Effect of foreign currency rate changes on cash(102)142 (244)(171.8)%
Net increase (decrease) in cash and cash equivalents$42,143 $(36,033)$78,176 (217.0)%
Net cash provided by operating activities
(Restated)
Net cash provided by operating activities decreasedincreased by $17.2$2.9 million to $62.6 million for the nine month period ended October 1, 2022 compared to $59.7 million for the nine month period ended September 25, 2021 compared to $76.9 million for the period ended September 26, 2020.2021. This was primarily due to an decreaseincrease of $0.2$47.9 million to net income adjusted for non-cash items and an investment in net working capital of $13.4$43.3 million to continue to support revenue growth, which was driven by a $1.6 million decline in prepaid and other current assets, $19.5 million increase in inventory to ensure supply to our plants in the current raw material constrained environment coupled with raw material inflation, $31.0$24.6 million increase in accounts receivable and deferred revenue asoffset by a result of increased sales volume$4.0 million improvement in prepaid and commercial initiatives, $17.4other current assets, $6.0 million deteriorationimprovement in inventory, $17.6 million decrease in accounts payable and a $21.4$11.0 million deteriorationdecrease in other accrued expenses. Additionally, there was a $3.5$1.7 million improvementdecrease in other assets and long-term liabilities.
Net cash used in investing activities
(Restated)
Net cash used in investing activities increaseddecreased by $186.2$187.8 million for the nine month period ended October 1, 2022 as compared to the nine month period ended September 25, 2021 as compared to the period ended September 26, 2020.2021. This increasedecrease was driven primarily by the acquisitionsacquisition of DBCI, ACT and ACTG&M Stor-More Pty Ltd. with the net payments of $169.0 million, $9.2 million and $9.2$1.6 million, respectively, and an increase in capital expenditures predominately related to a purchase of a new Texas building for $9.0 million to continue to support our strategic growth initiatives present in 2021, which was partially offset by the acquisition of Steel Storagea $1.0 million increase in January of 2020 with the net payment of $4.6 million as compared with the net payment of $1.6 million for the G&M Stor-More Pty Ltd. acquisition made in January 2021capital expenditures for the period ended September 25, 2021October 1, 2022 as compared with the period ended September 26, 2020.25, 2021 to continue to support our strategic growth initiatives.
Net cash provided by (used in)used in financing activities
(Restated)
Net cash provided byused in financing activities increaseddecreased by $146.4$112.3 million for the period ended September 25, 2021October 1, 2022 as compared to the period ended September 26, 2020.25, 2021. This increasedecrease was driven primarily by a decrease of $155.0 million in proceeds from issuance of long-term debt as a result ofrelated to the DBCI acquisition, $19.3 million of net borrowings on the line of credit and a decrease of $3.9 million of payments of contingent consideration which was partially offset by an increase of $58.2$58.8 million in principal payments of long-term debt, $25.7 million in the line of credit and a $4.3$4.2 million increasedecrease in deferred financing fees.net distributions paid to members. The increasedecrease in the principal payments of long-term debt was primarily attributed to the prepayment of approximately $61.6 million of existing 1st Lien Term Loan Debt upon the closing of the Business Combination.Combination in June 2021. As a result of the business combination,Business Combination, the Company received $334.9 million related to proceeds from the merger and $250.0 million in proceeds from PIPE.the PIPE Investment. In addition, the Company paid $541.7 million to Midco, LLC unitholders and $44.5 million in transaction costs.
46


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 the Janus’sJanus’ Board of Directors and will depend upon many factors, including, but not limited to, Janus’sJanus’ 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.
Contractual Obligations
Summarized below are our approximate contractual obligations as of September 25, 2021October 1, 2022 and their expected impact on our liquidity and cash flows in future periods:periods (dollar amounts in thousands):
TotalLess than 1 year1-3 years3-5 yearsThereafter
Long Term Debt Obligations$726,506,000 $2,030,000 $16,197,000 $708,279,000 $— 
Operating Leases40,407,000 6,274,000 10,313,000 6,375,000 17,445,000 
Long Term Supply Contracts (1)
6,940,000 6,940,000 — — — 
Other Long Term Liabilities (2)
2,542,000 411,000 1,647,000 242,000 242,000 
Total$776,395,000 $15,655,000 $28,157,000 $714,896,000 $17,687,000 
TotalLess than 1 year1-3 years3-5 yearsThereafter
Long-Term Debt Obligations$717,589 $2,102 $14,801 $700,678 $
Long-Term Supply Contracts (1)
45,781 45,781 — — — 
Other Long-Term Liabilities (2)
46,981 1,342 11,046 8,697 25,896 
Total$810,351 $49,225 $25,847 $709,375 $25,904 
(1)Long TermLong-Term Supply Contracts relate to the multiple fixed price agreements.
(2)Other Long-Term Liabilities relate to operating lease liabilities.
Long-Term Debt Obligations is comprised of an Amendment No 4 First Lien Term Loan (see Note 8 to our Unaudited Condensed Consolidated Financial Statements in this Form 10-Q for a further discussion) that expires on February 12, 2025. The Company’s intention is to amend and extend or refinance this loan well in advance of the current maturity date. In addition, the Company has finance lease liabilities included in long-term debt.

Other Long-Term Liabilities consist of operating lease liabilities for real and personal property leases with various lease expiration dates (see Note 14 to our Unaudited Condensed Consolidated Financial Statements in this Form 10-Q for a further discussion). The amount listed in the thereafter category is primarily consistscomprised of FICA deferral under the CARES Act due in 1-3 years and additional deferred leasing obligations.five 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 will be funded and because this liability is considered immaterial.
In addition to the contractual obligations and commitments listed and described above, Janus also had another commitment for which it is contingently liable as of September 25, 2021October 1, 2022 and January 1, 2022 consisting of an outstanding letter of credit of $0.4 million.



Off-Balance Sheet Arrangements
As of September 25, 2021, we did not have any off-balance sheet arrangements that are material or reasonably likely to be material to our financial condition or results of operations.
Related Party Transactions
Prior to the Business Combination, Jupiter Intermediate Holdco, LLC, on behalf of the Janus Core, has entered into a Management and Monitoring Services Agreement (MMSA) with the Class A Preferred Unit holders group. Janus Core paid management fees to the Class A Preferred Unit holders group for the three and nine months ended September 25, 2021 and September 26, 2020 of approximately $0 and $1,632,000 and $1,124,000 and $5,241,000 respectively. Approximately $0.9 million of the Class A Preferred Unit holders group management fees were accrued and unpaid as of December 26, 2020 and no fees were accrued and unpaid as of September 25, 2021. As a result of the Business Combination the MMSA was terminated effective June 7, 2021.

For the three and nine months ended September 25, 2021 and September 26, 2020, there were no related party sales from the Group to its Mexican Joint Venture. For the three and nine months ended September 25, 2021 and September 26, 2020, there were no related party sales from the Mexican Joint Venture.

Janus Core leases a manufacturing facility in Butler, Indiana, from Janus Butler, LLC, an entity wholly owned by a former member of the board of directors of Group. Rent payments paid to Janus Butler, LLC for the three and nine months ended September 25, 2021 and September 26, 2020, were approximately $37,000 and $37,000 and $123,000 and $109,000, respectively. The lease extended through October 31, 2021 and on November 1, 2021 the lease was extended to October 31, 2026, with monthly payments of approximately $13,000 with an annual escalation of 1.5%.

Janus Core is a party to a lease agreement with 134 Janus International, LLC, an entity majority owned by a former member of the board of directors of Group. Rent payments paid to 134 Janus International, LLC in the three and nine months ended September 25, 2021 and September 26, 2020, were approximately $114,000 and $112,000 and $343,000 and $335,000, respectively. On September 27, 2021, the lease was extended from September 30, 2021 to December 30, 2021, with monthly payments of approximately $38,000 per month with an annual escalation of 2.5%.

The Group leases a distribution center in Fayetteville, Georgia from French Real Estate Investments, LLC, an entity partially owned by a shareholder of the Group. Rent payments paid to French Real Estate Investments, LLC for the three and nine months ended September 25, 2021 and September 26, 2020, were approximately $26,000 and $26,000 and $79,000 and $79,000, respectively. The lease extends through July 31, 2022, with monthly payments of approximately $9,000 per month. The Group additionally acquired a lease agreement with ASTA Investment, LLC, for a manufacturing facility in Cartersville, Georgia an entity partially owned by a shareholder of the Company. The original lease term began on April 1, 2018 and extended through March 31, 2028 and was amended in September 2020 to extend the term until March 1, 2030, with monthly lease payments of $66,000 per month with an annual escalation of 2.0%. Rent payments to ASTA Investment, LLC for the three and nine months ended September 25, 2021 and September 26, 2020, were approximately $201,000 and $197,000 and $599,000 and $425,000, respectively.
The Group leases office space for ACT from an entity owned and controlled by the president of ACT. Rent payments paid to BSU Management, Ltd for the three and nine months ended September 25, 2021 were $20,000. In addition to the lease payment, ACT also paid a security deposit of $20,000 for the three and nine months period ended September 25, 2021. The lease extends through August 31, 2026 with an option to renew for an additional 5 years and monthly payments are approximately $20,000 per month with an annual escalation of approximately 1.5%.

See Note 12 – “Related Party Transactions” in the accompanying interim Consolidated Financial Statements, respectively.
Subsequent Events

See Note 18 – “Subsequent Events” in the accompanying interim restated unaudited Consolidated Financial Statements, respectively.

Critical Accounting Policies and Estimates
For the critical Accounting Policies and Estimates used in preparing Janus’s unaudited consolidated financial statements,Janus’ 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 unaudited consolidatedCompany’s critical accounting estimates requiring significant judgement that could materially impact the Company's results of operations, financial statements have been preparedposition and cash flows are described in accordance with GAAP. To prepare these financial statements, Janus makes estimates, assumptions,Management’s Discussion and judgments that affect what Janus reports as its assetsAnalysis of Financial Condition and liabilities, what Janus discloses as



contingent assets and liabilities atResults of Operations included in the Company’s Annual Report on Form 10-K for the year ended January 1, 2022. Since the date of the unaudited consolidated financial statements, andCompany’s most recent Annual Report, there have been no material changes in the reported amounts of revenues and expenses during the periods presented.
In accordance with Janus’s policies, Janus regularly evaluates its estimates, assumptions, and judgments, including, but not limited to, those concerning revenue recognition, inventory, accounts receivable, depreciation and amortization, contingencies, goodwill and other long lived asset impairment, unit-based compensation, derivative warrant liability, contingent consideration, and income taxes, and bases its estimates, assumptions, and judgments on its historical experience and on factors Janus believes reasonable under the circumstances. The results involve judgments about the carrying values of assets and liabilities not readily apparent from other sources. If Janus’s assumptions or conditions change, the actual results Janus reports may differ from these estimates. Janus believes the followingCompany’s critical accounting policies affectestimates or assumptions other than the more significant estimates, assumptions, and judgments Janus uses to prepare these consolidated financial statements.following.
Emerging Growth Company Status
Pursuant to the JOBS Act, an emerging growth company is provided the option to adopt new or revised accounting standards that may be issued by the FASB or the SEC either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. Janus qualifies as an emerging growth company. Janus intends to take advantage of the exemption for complying with new or revised accounting standards within the same time periods as private companies. Accordingly, the information contained herein may be different than the information you receive from other public companies.
Revenue Recognition
Under ASC 606, a performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. Our performance obligations include material, installation, and software support fees for the Nokē Smart Entry solution. Material revenue is recognized at a point in time when the product is transferred to the customer which is at the time of a customer pickup or when the delivery of the material to the customer takes place. Installation services are a separate single performance obligation and revenue is recognized over time based upon appropriate input measures. Revenue for software support fees is recognized over time for the period the software support revenue covers. For contracts with multiple performance obligations, the standalone selling price is readily observable. Our revenues are generated from contracts with customers and the nature, timing, and any uncertainty in the recognition of revenues is not affected by the type of good, service, customer or geographical region to which the performance obligation relates. Payment terms are short-term, are customary for our industry and in some cases, early payment incentives are offered.
Contract assets are disclosed as costs and estimated earnings in excess of billings on uncompleted contracts, and contract liabilities are disclosed as billings in excess of costs and estimated earnings on uncompleted contracts in the consolidated balance sheet.
Contracts that include installation are billed via payment requests (normally The American Institute of Architects (AIA) standard construction documents) instead of Company-generated invoices. The pay requests will often be submitted during the month following the period in which the revenues have been recognized, resulting in unbilled accounts receivable (costs and estimated earnings in excess of billings on uncompleted contracts) at the end of any given period. Accounts receivable also include any retention receivable under contracts.
Janus elected to apply an accounting policy election which permits an entity to account for shipping and handling activities as fulfillment activities rather than a promised good or service when the activities are performed, even if those activities are performed after the control of the good has been transferred to the customer. Therefore, Janus expenses shipping and handling costs at the time revenue is recognized. Janus classifies shipping and handling expenses in Cost of Sales in the Consolidated Statements of Operations and Comprehensive Income.
Janus elected a practical expedient which allows an entity to recognize the promised amount of consideration without adjusting for the time value of money if the contract has a duration of one year or less, or if the reason the contract extended beyond one year is because the timing of delivery of the product is at the customer’s discretion. Janus’s contracts typically are less than one year in length and do not have significant financing components.
Janus has not experienced significant returns, price concessions or discounts to give rise to any portfolio having variable consideration. Based on this, Janus has concluded the returns, discounts and concessions are not substantive and do not materially impact the adoption and continued application of ASC 606.
Allowance for Doubtful Accountscredit losses
Based upon review of the outstanding receivables, historical collection information and existing economic conditions, Janus has established an allowance for doubtful accounts and other returns not yet processed. Janus has incorporated a general and specific reserve component which are reviewed and updated monthly. Janus does not typically charge interest on past due accounts.
Inventories
Inventory is costed based on management estimates associated with material costs and allocations of certain labor and overhead cost pools for which a portion is ultimately captured within inventory costs. Inventories are measured using the first-in, first-out (FIFO) method.



Labor and overhead costs associated with inventory produced by Janus are capitalized. Inventories are stated at the lower of cost or net realizable value.
Janus maintains a reserve with general and specific components for inventory obsolescence. The general component of the reserve is updated monthly whereas the specific component is adjusted on a periodic basis to ensure that all slow moving and obsolete inventory items are appropriately accrued for. At the end of each quarter, management within each business entity, performs a detailed review of its inventory on an item by item basis and identifies which products are believed to be obsolete, excess or slow moving. Management assesses the need for and the amount of any obsolescence write-down based on customer demand for the item, the quantity of the item on hand and the length of time the item has been in inventory.
Property and Equipment
Property and equipment acquired in business combinations are recorded at fair value, when material, as of the acquisition date and are subsequently stated less accumulated depreciation. Property and equipment otherwise acquired are stated at cost less accumulated depreciation. Depreciation is charged to expense on the straight-line basis over the estimated useful life of each asset. Leasehold Improvements are amortized over the shorter of the lease term or their respective useful lives. Maintenance and repairs are charged to expense as incurred.
The estimated useful lives for each major depreciable classification of property and equipment are as follows:
Manufacturing machinery and equipment3-7 years
Office furniture and equipment3-7 years
Vehicles3-5 years
Leasehold improvementsOver the shorter of the lease term or respective useful life
Goodwill
Janus reviews goodwill for impairment on an annual basis or more frequently whenever events or changes in circumstances indicate that its more likely than not that the goodwill may be impaired. If such circumstances or conditions exist, management applies the two step process under ASC 350-20; first,On January 2, 2022, the Company compares the fair value of the reporting unit with its carrying amount, and second, if the fair value of the reporting is less than its carrying amount, the Company compares the implied fair value of the reporting unit’s goodwill with its carrying amount and records an impairment charge to the extent the carrying amount of the goodwill exceeds its implied fair value. We evaluate goodwill at the reporting unit level (operating segment or one level below an operating segment).
Janus measures the fair value of the reporting units to which goodwill is allocated using an income based approach, a generally accepted valuation methodology, using relevant data available through and as of the impairment testing date. Under the income approach, fair value is determined using a discounted cash flow method, projecting future cash flows of each reporting unit, as well as a terminal value, and discounting such cash flows at a rate of return that reflects the relative risk of the cash flows. The key estimates and factors used in this approach include, but are not limited to, revenue growth rates and profit margins based on internal forecasts, a weighted average cost of capital used to discount future cash flows, and a review with comparable market multiples for the industry segment as well as our historical operating trends, all of which are subject to uncertainty. Future adverse developments relating to such matters as the growth in the market for our reporting units, competition, general economic conditions, and the market appeal of products or anticipated profit margins could reduce the fair value of the reporting units and could result in an impairment of goodwill in the reporting unit.
Intangible Assets
Fair values assigned to the definite life intangible assets, consisting of customer relationships, noncompete agreements, backlog and other intangibles (i.e., software) are amortized on the straight-line basis over estimated useful lives less than 15 years. Such assets are periodically evaluated as to the recoverability of their carrying values. In determining the impairment of intangible assets, management considers an analysis under ASC 360-10-35-21. If an intangible asset is tested for recoverability and the undiscounted estimated future cash flows to which the asset relates is less than the carrying amount of the asset, the asset costs is adjusted to fair value and an impairment loss is recognized as the amount by which the carrying amount of the intangible asset exceeds its fair value.

Trade names and trademarks have been identified as indefinite-lived intangible assets and are not amortized, but instead are tested for impairment annually or when indicators of impairment exist.
The estimated useful lives for each major classification of intangible asset are as follows:



Trademark and Trade NameIndefinite
Customer Relationships10-15 years
Non-Competition Agreement3-8 years
Software10 years
BacklogLess than 1 year
Significant judgment is also required in assigning the respective useful lives of intangible assets. Our assessment of intangible assets that have a finite life is based on a number of factors including the competitive environment, market share, brand history, underlying product life cycles, churn rate, operating plans, cash flows (i.e., economic life based on the discounted and undiscounted cash flows), future usage of intangible assets, and the macroeconomic environment. The costs of finite-lived intangible assets are amortized to expense over the estimated useful life.
Potential changes in the underlying judgments, assumptions, and estimates used in our valuations of acquired intangible assets could result in different estimates of the future fair values. A potential increase in discount rates, a reduction in projected cash flows or a combination of the two could lead to a reduction in estimated fair values, which may result in impairment charges that could materially affect our financial statements in any given year.
The approaches used for determining the fair value of the trade names, customer relationships, non-compete agreements, and other intangibles acquired depends on the circumstances and can include the following:
The income approach (within the income approach, various methods are available such as multi-period excess earnings, with and without, incremental and relief from royalty methods).
In each method, a tax amortization benefit is included, which represents the tax benefit resulting from the amortization of that intangible asset depending on the tax jurisdiction where the intangible asset is held.
The cost approach – this approach estimates the cost to recreate the intangible assets and is used when cash flows about the intangible asset are not easily available.
Long-Lived Asset Impairment
Janus evaluates the recoverability of the carrying value of long-lived assets whenever events or circumstances indicate the carrying amount may not be recoverable. If a long-lived asset is tested for recoverability and the undiscounted estimated future cash flows to which the asset relates is less than the carrying amount of the asset, the asset cost is adjusted to fair value and an impairment loss is recognized as the amount by which the carrying amount of a long-lived asset exceeds its fair value. No such charges were recognized during the periods presented.
Using a discounted cash flow method involves significant judgment and requires Janus to make significant estimates and assumptions, including long-term projections of cash flows, market conditions and appropriate discount rates. Judgments are based on historical experience, current market trends, consultations with external valuation specialists and other information. If facts and circumstances change, the use of different estimates and assumptions could result in a materially different outcome. Janus generally develops these forecasts based on recent sales data for existing products, acquisitions, and estimated future growth of the market in which Janus operates.
Income Taxes
Prior to June 7, 2021, the Company was a limited liability company taxed as a partnership for U.S. federal income tax purposes. The Company was generally not directly subject to income taxes under the provisions of the Internal Revenue Code and most applicable state laws. Therefore, taxable income or loss was reported to the members for inclusion in their respective tax returns.
After June 7, 2021, the Group is taxed as a Corporation for U.S. income tax purposes and similar sections of the state income tax laws . The Group’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, Australia, and Singapore as necessary. For tax reporting purposes, the taxable income or loss with respect to the 45% ownership in the joint venture operating in Mexico will be reflected in the income tax returns filed under that country’s jurisdiction. The Group’s provision for income taxes consists of provisions for federal, state, and foreign income taxes.
The provision for income taxes for the three and nine months ended September 25, 2021 and September 26, 2020 includes amounts related to entities within the group taxed as corporations in the United States, United Kingdom, France, Australia, and Singapore. 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 income tax effects of significant unusual or infrequently occurring items are recognized entirely within the interim period in which the event occurs.
Management of Janus is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which includes federal and certain states. Based on Janus’s evaluation, Janus has concluded that there are no significant uncertain tax



positions requiring recognition in its financial statements. Tax penalties and interest, if any, would be accrued as incurred and would be classified as tax expense on the consolidated statements of operations.
Janus recognizes accrued interest associated with uncertain tax positions as part of interest expense and penalties associated with uncertain tax positions as part of other expenses.
Business Combinations
Under the acquisition method of accounting, Janus recognizes tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. Janus records the excess of the fair value of the purchase consideration, plus fair value of noncontrolling interest, plus fair value of preexisting interest in the acquiree over the value of the net assets acquired as goodwill. The accounting for business combinations requires us to make significant estimates and assumptions, especially with respect to intangible assets and the fair value of contingent payment obligations. Janus uses a variety of information sources to determine the value of acquired assets and liabilities including: third-party appraisers for the values and lives of property, identifiable intangibles and inventories; and legal counsel or other advisors to assess the obligations associated with legal, environmental or other claims. Critical estimates in valuing customer relationships, noncompete agreements, trademarks and tradenames, and other intangible assets (e.g., backlog, software, and technology) acquired, include future cash flows that we expect to generate from the acquired assets. If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and projections used to develop these values, we could experience impairment charges which could be material.
We record contingent consideration resulting from a business combination at its fair value on the acquisition date. We generally determine the fair value of the contingent consideration using the Monte Carlo simulation, and Probability-Weighted Payment method. Each reporting period thereafter, we revalue these obligations and record increases or decreases in their fair value as an adjustment to operating expenses within the Consolidated Statements of Operations and Comprehensive Income. Changes in the fair value of the contingent consideration can result from changes in assumed discount periods and rates, and from changes pertaining to the achievement of the defined milestones. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, future business and economic conditions, as well as changes in any of the assumptions described above, can materially impact the amount of contingent consideration expense we record in any given period.
Equity Incentive Plan and Unit Option Plan
2021 Equity Incentive Plan
Effective June 7, 2021, Group implemented an equity incentive program designed to enhance the profitability and value of its investment for the benefit of its shareholders by enabling Group to offer eligible directors, officers and employees equity-based incentives in order to attract, retain and reward such individuals and strengthen the mutuality of interest between such individuals and the Group’s shareholders. As of September 25, 2021 no awards were granted to any individuals under the Plan.
2018 Equity Incentive Plan
After being acquired by CCG on February 12, 2018, Intermediate implemented a new equity incentive program (the “2018 Plan”) on March 15, 2018 designed to enhance the profitability and value of its investment for the benefit of its members by enabling Janus to offer eligible individuals equity-based incentives in order to attract, retain and reward such individuals and strengthen the mutuality of interest between such individuals and the Parent’s members. Under the 2018 Plan, incentive units are issued in the form of Class B Common Unit awards that are subject to either service condition (the “Time Vesting Units”) or market and implied performance vesting conditions (the “Performance Vesting Units”). Implied performance condition, which is a liquidity event such as an IPO or change in control, exists as the achievement of the market condition is only likely upon the occurrence of such liquidity events. Janus measures and recognizes compensation expense for all incentive units granted based on the estimated fair values on the date of grant. The compensation expense is recognized on a straight-line basis over the requisite service period for Time Vesting Units while compensation expense for Performance Vesting Units are not recognized until the implied performance condition is achieved. If the market condition is not yet achieved at the time that performance condition is achieved, the proportionate amount of compensation expense recognized on a straight-line basis over the derived service period will be recognized and the remaining compensation cost will be recognized on a straight-line basis over the remaining derived service period regardless of whether the market condition is ultimately achieved. Forfeitures are recognized as they occur.
For Time Vesting Units granted in fiscal 2018, Janus used a market approach, specifically the subject company transaction method (the “Backsolve” method), weighted on the probability of Janus’s Performance Vesting Units achieving the vesting conditions to estimate the fair value of Janus’s equity. Monte Carlo simulations were used to determine the probability. The Backsolve method was used since it is based on the terms of the then-recent acquisition of Janus by CCG in February 2018, representing the most reliable indication of value. The Black-Scholes option pricing model (“BSOPM”) was used to allocate the equity value to different classes of equity, with inputs for unit value of Janus, term to exit, risk-free rate, expected volatility, and exercise price. For Performance Vesting Units granted in fiscal 2018, Janus used a combination of probability analysis and Monte Carlo Simulation to estimate the fair value with inputs for Janus’s equity value, risk-free rate, expected volatility, expected tax and non-tax distributions, probability of merger and acquisition, expected term of the awards, and expected timing of achieving the vesting conditions. Discount for lack of marketability was applied in the valuation of all grants.
For Time Vesting Units granted in fiscal 2019 and fiscal 2020, Janus used a combination of the income and market approach, guideline public company method and comparable transaction method equally to estimate the fair value of Janus’s equity. Key inputs and



assumptions to the valuation include income tax rate estimate, revenue, capital expenditure, change in net working capital, operating expense, and depreciation forecasts. BSOPM was used to allocate the equity value to different classes of equity, with inputs for unit value of Janus, term to exit, risk-free rate, expected volatility, and exercise price. For Performance Vesting Units granted in fiscal 2019 and fiscal 2020, Janus used a combination of probability analysis and Monte Carlo Simulation to estimate the fair value with inputs for Janus’s equity value, risk-free rate, expected volatility, expected tax and non-tax distribution, probability of merger and acquisition, expected term of the award, and expected timing of achieving the vesting condition. Discount for lack of marketability was applied in the valuation of all grants.
The assumptions underlying these valuations represent management’s best estimates, which involve inherent uncertainties and the application of management judgment. As a result, if factors or expected outcomes change and we use significantly different assumptions or estimates, our share-based compensation expense could be materially different. See Note 10 - “Equity Incentive Plan and Unit Option Plan” of the accompanying unaudited consolidated financial statements for more information. Effective June 7, 2021 this plan was terminated as a result of the Business Combination transaction closing.
Recently Issuedadopted Accounting Standards
In June 2016, the Financial Accounting Standards Board Update (“FASB”ASU”) issued ASU 2016-13, Financial Instruments—Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326) (“CECL”), which changes the impairment model for most financial assets. The new model uses a forward- lookingforward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. ASU 2016-13, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates for fiscal years beginning after December 15, 2022 and for interim periods within those fiscal years. The Company is currently evaluatingselected the impact of this standard to the consolidated financial statements.
In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This update removes Step 2 of the goodwill impairment test under current guidance, which requires a hypothetical purchase price allocation. The new guidance requires an impairment chargeloss-rate method to be recognizedused in the CECL analysis for the amount by which the carrying amount exceeds the reporting unit’s fair value. Upon adoption, the guidance is to be applied prospectively. ASU 2017-04 is effective for Emerging Growth Companies in fiscal years beginning after December 15, 2021, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. trade receivables and contract assets.

The Company is currently evaluatingdetermined that pooling accounts receivable by business units was the impact of the adoption of ASU 2017-04 on the consolidated financial statements and does not expect a significant impact of the standard on the consolidated financial statements.
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. This standard provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is effective and may be applied beginning March 12, 2020, and will apply through December 31, 2022. Janus is currently evaluating the impact this adoption will have on Janus’s consolidated financial statements. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”). The amendments in ASU 2021-01 provide optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the LIBOR or another reference rate expected to be discontinuedmost appropriate because of the reference rate reform. The provisions must be applied at a Topic, Subtopic, or Industry Subtopic level for all transactions other than derivatives, which may be applied at a hedging relationship level.
In June 2020, the FASB issued ASU 2020-05, Revenue from Contracts with Customers (Topic 606)similarity of risk characteristics within each line such as customers and Leases (Topic 842) which deferred the effective date for ASC 842, Leases, for one year. The leasing standard will be effective for fiscal years beginning after December 15, 2021,services offered. Historical losses and interim periods within fiscal years beginning after December 15, 2022. Early adoption would continue to be allowed. The Company is evaluating the impact the standard will have on the consolidated financial statements; however, the standard is expected to have a material impact on the consolidated financial statements due to the recognition of additional assets and liabilities for operating leases.
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain convertible instruments, amends guidance on derivative scope exceptions for contracts in an entity’s own equity, and modifies the guidance on diluted earnings per share (EPS) calculations as a result of these changes. The standard will be effective for Janus beginning February 7, 2022 and can be applied on either a fully retrospective or modified retrospective basis. Early adoption is permitted for fiscal years beginning after December 15, 2020. Janus is currently evaluating the impact of this standard on the consolidated financial statements.
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. ASU 2021-04 addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. ASU 2021-04 is effective for fiscal years beginning after December 15, 2021 and interim periods within those fiscal years, with early adoption permitted. The Group does not expect adoption of the new guidance to have a significant impact on our financial statements.customer-specific reserve information that are

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Although thereused to calculate the historical loss rates are several other new accounting pronouncements issued or proposed byavailable for each business unit. During the FASB, whichpooling process, the Company identified two distinct customer types: commercial and self-storage. As these customer types have been adopted or will be adopted as applicable, management does not believe anydifferent risk characteristics, the Company concludes to pool the financial assets at this level within each business unit.

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.
See Note 2 to our Unaudited Condensed Consolidated Financial Statements for further discussion of allowance for credit losses.
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 and adopted accounting pronouncements has had or will have a material impact on the Group’s consolidated financial position or results of operations.pronouncements.

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Item 3.    Quantitative and Qualitative Disclosures About Market Risk
Foreign currency
There have been no material changes in exposures
We are exposed to foreign currency exchangemarket risk relatedsince January 1, 2022. For information regarding our exposure to currency translation exposure because the operations of our subsidiaries are measured in their functional currency, which is the currency of the primary economic environment in which the subsidiary operates; particularly, the United Kingdomcertain market risks, see Item 7A, “Quantitative and Australia. Any currency balances that are denominated in currencies other than the functional currency of the subsidiary are re-measured into the functional currency, with the resulting gain or loss recorded in other income (expense)Qualitative Disclosures About Market Risk,” in our income statement. In turn, subsidiary income statement balances that are denominated in currencies other than the U.S. dollar are translated into U.S. dollars, our functional currency, in consolidation using the average exchange rate in effect during each fiscal month during the period, with any related gain or loss recorded as foreign currency translation adjustments in other comprehensive income (loss). The assets and liabilities of subsidiaries that use functional currencies other than the U.S. dollar are translated into U.S. dollars in consolidation using period end exchange rates, with the effects of foreign currency translation adjustments included in accumulated other comprehensive income (loss).
We seek to naturally hedge our foreign exchange transaction exposure by matching the transaction currenciesAnnual Report on Form 10-K for our cash inflows and outflows and maintaining access to credit in the principal currencies in which we conduct business. We do not currently hedge our foreign exchange transaction or translation exposure but may consider doing so in the future.
Other comprehensive income (loss) includes foreign currency translation adjustments.
Commodity/raw material price exposures and concentration of supplier risk
Our biggest commodity group spend is steel coils, which is subject to price volatility due to external factors, and comprises approximately, 66.7%, 65.4% and 61.3% of commodity spend on a consolidated level for the Combined 2018 Predecessor Period and Successor Period, the fiscal year ended December 28, 2019 and the fiscal year ended December 26, 2020, respectively. For the period ended September 25, 2021 and period ended September 26, 2020, steel coils comprised approximately, 62.1% and 61.3% of commodity spend, respectively. Historically, exposures associated with these costs were primarily managed through terms of the sales and by maintaining relationships with multiple vendors. Prices for spot market purchases were negotiated on a continuous basis in line with the market at the time. Other than short term supply contracts and occasional strategic purchases of larger quantities of certain raw materials, we generally buy materials on an as-needed basis. In early 2020, we entered into multiple fixed price agreements to combat fluctuations in the price of steel locking in prices and will continue to do so in the future. These fixed price agreements expect to cover 35.0% of estimated steel purchases for fiscal year end 2021. We have not entered into hedges with respect to our raw material costs at this time, but we may choose to enter into such hedges in the future.
Interest rate exposure
Our outstanding borrowing under our credit facilities includes the Amendment No. 4 to 1st Lien term loan for $724.3 million. These borrowings accrue interest at our option of (i) a LIBOR rate, subject to a 1.00% floor, plus the applicable margin or (ii) a base rate (i.e., prime rate or federal funds rate) plus the applicable margin.
We also have a $80.0 million credit facility, which has a $19.4 million outstanding balance as of September 25, 2021, that accrues interest at our option of (i) a LIBOR rate plus the applicable margin or (ii) a base rate plus the applicable margin.
We experience risk related to fluctuations in the LIBOR rate and base rate at any given time. The interest rate on the Amendment No. 4 to 1st Lien term loan was the LIBOR rate plus 3.25% on September 25, 2021.
Taking into account the LIBOR floor of 1.0%, a hypothetical increase or decrease in 100 basis points of the LIBOR rate on the amounts outstanding under the Amendment No. 4 to 1st Lien term loan as of September 25, 2021, would have led to an approximate $0.6 million increase and no decrease in the interest expense of the Amendment No. 4 to 1st Lien term loan on an annual basis. Historically, our management entered into interest rate hedges, but has not done so within the periods presented. Management would consider using such mitigating strategy in the future to combat potential exposure.
Credit risk
As of September 25, 2021, our cash and cash equivalents were maintained at major financial institutions in the United States, Europe, Singapore, and Australia, and our current deposits are likely in excess of insured limits. We believe these institutions have sufficient assets and liquidity to conduct their operations in the ordinary course of business with little or no credit risk to us.
Our accounts receivable primarily relate to revenue from the sale of products and services to established customers. To mitigate credit risk, ongoing credit evaluations of customers’ financial condition are performed, deposits are required for select customers, and lien rights on any jobs in which we provide subcontracted installation services are available. As of September 25, 2021, our top 10 customers represented less than 30% of our gross trade accounts receivable.January 1, 2022.


Item 4.    Controls and Procedures




Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q/A.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 2021 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 26, 2020.
Based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q/A,10-Q, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were ineffective due to the existence of the material weaknesses discussed further below.
Changes in Internal Control Over Financial Reporting
Other than the remediation activities described below, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q/A,10-Q, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal controls over financial reporting despite the fact that most of our employees are working remotely due to the COVID-19 outbreak. We are continually monitoring and assessing the COVID-19 situation and our internal controls to minimize any impact on their design and operating effectiveness.
Remediation Efforts to Addressof Material Weaknesses in Internal Control Over Financial Reporting
As discussed in the Risk Factors of our registration statement filed on Form S-4 on March 22, 2021, the Company identified an unremediated material weakness 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 26, 2020.
The material weakness relates to the lack of manual and information technology controls necessary to achieve complete, accurate, and timely financial accounting, reporting, and disclosures within various financial statement accounts. As a result, monitoring was not at a sufficient level of precision to provide for the appropriate level of oversight of activities related to the Company’s internal control in connection with its financial reporting.
In addition, as further described in Note 2 to these unaudited consolidated financial statements, during the preparation of the 2021 Annual Report on Form 10-K, the Company determined that certain transaction bonuses relating to the Business Combination should have been recorded as a component of general and administrative expense instead of as a component of stockholder’s equity for the nine months ended September 25, 2021 and the private placement warrants should have been reclassified from liability-classified instruments to equity-classified instruments and remeasured to fair value at the date of the reclassification for the three and nine months ended September 25, 2021.In addition, the Company determined that certain other transaction bonuses related to the Business Combination should have been recorded in the Janus International segment instead of the Janus North American segment. The errors related to the transaction bonuses impacted the presentation of our segment reporting for the nine months ended September 25, 2021. In light of this determination, the Company restated its unaudited consolidated financial statements for the three and nine months period ended September 25, 2021, as contained in this Form 10-Q/A. As result of the restatement, we identified an additional material weakness in our internal controls over financial reporting. The material weakness relates to the inadequate design and operation of management review controls over complex non-routine transactions.
Remediation of the identified material weaknesses and strengthening our internal control environment is a priority for usus.Management is actively engaged in 2022. In responsethe implementation of remediation plans to address the control deficiencies contributing to the material weaknesses,weaknesses. The remediation actions include, but are not limited to, the following:
Entity Level Controls – In an effort to provide additional support, oversight and accountability over the performance of controls, the Company hasrecently hired a Tax Director and a SEC Reporting Manager and is actively recruiting for other key financial reporting positions. Management will continue to assess the composition of its resource needs, both internal and external, which may include adding additional accounting and compliance resources at both the corporate and subsidiary levels. Management may also consider engaging additional third-party advisors when necessary to supplement its existing resources.
As previously disclosed, the Company hired a Director of Internal Audit and has engaged third partythird-party consultants to assessmanage the Company’s SOX 404 assessment of internal control over financial reporting as well as monitoring management’s remediation efforts.
Further, the Company has increased our personnel resources and technical accounting expertise within the accounting function with the hiring of a new Chief Financial Officer as of July 1, 2022, as disclosed on Form 8-K filed with the Securities and Exchange Commission. Further, we’ve hired additional personnel for the accounting and information technology function in order to address inadequate segregation of duties and provide proper oversight in connection with financial reporting. Specific corrective actions are also underway to address the deficiencies related to the material weaknesses. We have also entered into an agreement and are currently working with a third-party consultant to assist with the efforts to effectively remediate the identified material weaknesses.
Information Technology General Controls - User access assessments for logical security (roles and privileges) are being performed and periodic user access reviews for key IT systems are being implemented.All IT processes will be centrally managed and IT Management will transition certain hosting and administration responsibilities from third-parties.
Management Review Controls – Management is enhancing the design of and implementationimplementing controls around the rigor of the review process over revenue, income taxes, complex non-routine transactions, and other business processes.
Financial Reporting – Management is enhancing the design of controls over the processes and disclosures of amounts in the financial reporting. statements including the review of the completeness and accuracy of the underlying support of amounts contained in the financial statements.
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The Company has undertaken an initial assessment of the design and implementation of controls over financial reporting. The initial assessment, which is still underway, has identified additional control gaps within business process level and information technology controls. The assessment has also identified the need for additional controls, and improved documentation and defined levels of precision in existing controls and execution of controls.
Specific corrective actions are also underway to address the deficiencies related to the material weaknesses. The material weaknesses cannot be considered remediated until the applicable controls have been identified 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.

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PART II—OTHER INFORMATION


Item 1.    Legal Proceedings
As of
See Note 18 to the date of this Quarterly Report on Form 10-Q/A, we were not party to any material legal proceedings. In the future, we may become party to legal matters and claims arising in the ordinary course of business, the resolution ofConsolidated Financial Statements, which we do not anticipate would have a material adverse impact on our financial position, results of operations or cash flows.is incorporated herein by reference.

Item 1A.    Risk Factors
There
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 2021 Annual Report on Form 10-K for the fiscal year ended January 1, 2022. Except for the risk factor below, there have been no material changes to the risk factors disclosed in the “Risk Factors” sectionPart I, Item 1A of our Registration Statement2021 Annual Report on Form S-1,10-K.

The ongoing conflict between Russia and Ukraine may adversely affect our business and results of operations
Due to the international scope of our operations, political, economic, and other conditions in foreign countries and regions, including geopolitical risks such as amended (No. 333-257731), which we initially filed with the SEC on July 7, 2021current conflict between Russia and was declared effective by the staffUkraine, may adversely affect our business and results of operations. As a result of the SECRussia-Ukraine conflict and related sanctions, energy and commodity prices have spiked upwards, and foreign trade transactions and supply chains have been severely affected. Some of our logistics suppliers and suppliers of component parts have increased their prices as well, and prices charged by any alternative suppliers may not be as favorable as those we had obtained in the past. At this time, we cannot reasonably estimate the full impact of the conflict between Russia and Ukraine on August 6, 2021.the global economy and our business. However, ensuing economic conditions may negatively affect potential and existing customers in certain of our end markets, which could potentially result in declines in demand for our products. If the Russia-Ukraine conflict and related political tensions escalate, our business, financial position, results of operations and cash flows may further be adversely affected.


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

None.

Item 3.    Defaults upon Senior Securities.

None.

Item 4.    Mine Safety Disclosures.

Not applicable.

Item 5.    Other Information.

None.


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Item 6.    Exhibits.
Exhibit NumberDescription
2.1
2.2
3.1
3.2
4.1
4.2
4.3
4.4
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
31.1*
31.2*
32.1*
32.2*
101.INSInline XBRL Instance Document



101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
*    These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

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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:April 20,November 10, 2022By:/s/ Scott SannesAnselm Wong
Name:Scott SannesAnselm Wong
Title:Chief Financial Officer

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