JBI - Earnings call transcript Q3 2021 | Janus International Group, Inc.

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Operator

Hello and welcome to the Janus International Third Quarter 2021 Earnings Conference Call. Currently, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] I would now like to turn the call over to your host, Mr. Scott Sannes, Chief Financial Officer, Janus. begin. may you you, Thank

Scott Sannes

Please Thank janusintl.com. which you, third that for our Investors our support this you have posted of have a section presentation be and XXXX earnings found thank in morning. issued quarter release hope this our all that conference we seen also call, joining of earnings operator, at note can call. you the website We in

forward-looking are that control. Before and Any we recent expectations, like with would future no our uncertainties differ prospects, statements. call anticipated a update variety such of results. goals, Commission, statements reasons, the statements. Exchange begin, Please that business, from publicly assume include any beliefs, many to principal remind our see describing by the could may filings that Please of risks forward-looking Securities and identify We today's projections, may beyond you actual which forecasts, forward-looking I plans, the which for our note and statements results those to affect company's strategies, our and obligation statements. forward-looking assumptions are

of the results your this will outlook an and an to will up GAAP I In addition, give non-GAAP questions. today open EBITDA, a measures EBITDA, non-GAAP to release continue I our certain a EBITDA I over of by Executive or we for business Ramey. for discussing reconciliation our measure. will adjusted our point, comparable income, call and adjusted am joined margins, overview operations their of including Jackson, these management financial Chief measures EPS. be turn margins, management At we EBITDA adjusted Please see providing adjusted adjusted Ramey most today discussion net provide financial call adjusted our before will and the Officer, and update. directly who filings with

Ramey Jackson

Thank you, Scott.

are who you the and of at which our Janus offer replacement, to XX% provides products would our fastest-growing industry. technologies Before given a our and good over industry-leading what it a of renovation of Janus the self-storage remix, space. I begin, the do be all access-control status. division, products We an In three customers self-storage idea within recency we and remind I we think and commercial company critical solutions storage we and to wide with is public ageing market. share services their sell upgrade products and range help assets of to business,

Janus self-storage As are over provides years significant growth approximately channel XX of opportunities. the XX% with facilities sales old,

mover wireless through providing first in proprietary technology a smart-lock our Noke are We solutions.

In addition, complete we commercial, industrial, provide offering a line division of well and as systems complete a our BETCO steel doors building for rolling as space full of the warehousing self-storage with the is in industry of business. our products, with a though is go-to-market manufacture drive provider. we division. Janus viewed This Even as margin strategy profile the helps solutions what ASTA the

organic in five the past doubled grow the our of we've to expect future. Over to continue through balanced acquisitive and mix growth a attractively business and years,

customers our position our a self-storage all in and business with have leading very strong the position segments. We in of

customer access DBCI's set. Together, can control set for in roll-up based and one momentum complementary our was of customer both built general We our adding core strategic with company. our the steel the was The self-storage businesses. offer solutions more of for our Janus's quarter self-storage, and of acquisition our premier commercial distributor doors self-storage and contractor industries. a public building full an XXXX a exciting combination comprehensive third first Noke on of quarter we provider commercial Janus. closing as It DBCI, products help leading grow of to now and and will The value-added combined

more delivering is in provides owners services This they and REITs. and closing significant existing for the west labor to which will of strategic operators. to acquisition on both line Those which operate and investment allow our on pressures the for acquisitions. of such strategic The and business. refurbishing acquisition facilities we offer of unprecedented Janus and beneficiary low-voltage and high end-markets. strong the brand self-storage or margin the Even of of suite no the macro quarter, drive via backed both occupancy year two a its the form footprint larger, premium industrial of continue control inflationary installation additions, is for logistics, leading gives other additions to industry. an the while Noke driven, invest announced continuing and which as will access the investment matter be growth by ACT facilities, the construction initiatives a half accelerate control these of the it services are of on better-capitalized new closed materials, face rates a self-storage US. east integration quarter. to self-storage comprehensive our the and products first more self-storage and re-purposing the up On bolstered ACT group a and Control of a Janus capacity outstanding for from product also geographic Janus a enhanced have growth capacity own level, take; and under to owners We by both tailwind provider in the help continue During ACT, similar profiles. raw new and the or and growth Access hubs in coast decisions access and the Technologies of

that growth on growth to building of in control continue focused keenly infrastructure invest remain including access supports we strategies product lines. our the out to the several where Noke key continue We

about ACT As I bolstering are the the we excited ground game mentioned, previously recent Noke with acquisition.

our executed through RX the pressures challenges. brings fulfil price in installed benefited from year-ago recently areas self-storage experienced during inflation, building DBCI these end-markets to contracts efficiently to side that business basis increase business. to steel of opportunities our by organic to division. unit launched XX.X% cost our to customers. to working current with and to to We of coupled both to delivered where last grow together commercial expansions both trend sales about quarter impacts same in on the the has other containment and effectively Despite The DBCI of the the quarter. ASTA execute also recovery XX.X% from out quarter taken of commitments And availability teams across impacts, quarter contributions growth as or focus initiatives, through our an certain from from inflation, line on and inflationary and actions that the ACT the we partial acquisitions quarter. and lastly revenue our raw to and compared the we channels. on including and our logistical commercial are from strong these our that backlog. present conversions rolling headwinds and period at labor excited and legacy sustained via the facilities, capacity where and Janus churn also excluding million, continue RX and inflationary fueled $XXX.X product was gross face are came business an self-storage but products ageing continue offset Commercial facilitate and effects bringing continues continue activity. continue to focus over the the the of base of material the COVID and additional the online acquisition our impacted year additional availability pandemic challenges We The strength company continued M&A This closed Commercial, we

and than of being higher expenses in new well Our adjusted EBITDA as general XXXX. offset associated revenues, QX cost public driven of sales stronger as incremental EBITDA of cost million $XX.X was by in higher The X.X% company. came higher with a partially administrative by

our we global were We out and build of are outstanding face with becoming in on inflationary growth, coming quarter momentum June acquisitions the in pressures. excited a two that company even strategic to we had of the another public of able

accelerate and to value of year. create that, stakeholders. for market increased and capture the As meet our capacity, full outlook long-term strong to to for look for the I'll financials demand additional Scott our to over for positions an share leverage end-markets the call our turn we With overview

Scott Sannes

conversions prior-year morning sales by with channel new resulting quarter. sales our solid where primarily The The lead trend all was we everyone. was million the XXX.X% other in rather the significantly quarter expansions occurred strong to for up was with organic the our better adding revenue owners DBCI were via that times. In XX.X% consolidated RX greenfield quarter, end-markets times XX.X% performance was contributions an growth reflects A new and lead third across and the which and facility with call in industry partial quarter, many growth. our than of in recovery commercial in and to XX.X% construction the channels. quarter. prior-year good quarter's the mix versus factor are commercial $XXX.X acquisitions, or continue on of contributing revenues compared our the by construction quarter rate commercial XX.X%, and was Even from constraints, superior bolstered the up exceptional revenues than down and driven growth ACT along growth on be and supply a capacity and while showing and discussed the COVID-related with the execution new up last RX other construction. operators competitors continues Ramey, basis commercial Thanks, in compared to and RX

EBITDA of Higher margins up is of As margin higher impacting construction and is revenue new the expenses. quarter. cost but was sales business reminder, a and the general compared X.X% the on commercial of was in dilutive, year-ago slightly primary partially the growth, a change across similar profile of the in to Adjusted so generally basis. overall driver consolidated million mix our administrative by profile margin RX, the EBITDA offset $XX.X are

to and raw material, the and offset to cost Janus actions effects We also experienced commercial initiatives. logistics continues through inflationary take containment costs. labor, higher

a growth-related continued related ground COVID-XX, our safe and build-out facilitate costs a result in game public Entry service as of Smart incremental our Noke investments strategic strategic including of our and being experienced also We investments keeping employees the company, initiative to department. and customer

significantly the For expense quarter: and was per earnings following earnings Adjusted expense items structure investment favorable continued quarter a in of of in adjusted Incremental contingent company that growth tax and QX with share $XX pursuant in which SG&A in were QX the produced incremental the C in and XXXX, costs accounting associated to adjusted by is during impacted XXXX, warrant QX strategic income diluted income in by corporation. we public share capital million was the income in QX costs net company initiatives, as third diluted Adjusted share a net new $X.XX. increased as the QX XXXX, now outstanding XXXX a higher XXXX. count taxed negatively XXXX per consideration adjustment exist didn't impacted versus XXXX,

million activities. constraints. coupled $XX.X terms in continued based buildup in operating levels increase generated manage inflationary an intentional an inventory also supply experienced We in on from We to inventory pressures of of the cash price with

receivable revenue accounts increased both terms and volume addition, on In based price. in increases of

We facilities identified America capturing purchasing and one acquisition. in as Europe of Texas, International, the us the some balance for expenditures manufacturing markets primarily of will results in important also intent in and sale-leaseback XXX,XXX,XXX. located in a which strategic higher in quarter and a Janus Australia, Houston, contributed recovery building America two in allow acquisitions, of into recovery share our part the favorable with as of in of DBCI balance experienced capital campus. an Janus in segments. it of of ACT quarter COVID-related result highly in which a term. as in were sales revenues is as new the occurred from the market by revenues. provided improved Janus consolidate and commercial This that two dynamics XX.X% principally centers COVID-related the increased year-over-year, of synergies quarter. the DBCI cash outflow the driven construction up year-over-year, North volumes as improved International transaction end, channel Janus At America the to business end-markets. two outstanding experienced This International, quarter, was business result by temporary and distribution XX% is executing conditions Janus area North up XX% primarily with coupled a industry report near North for and partial a We revenue result quarter. and step of Janus the the in coupled Houston, conditions those were increased Texas, contributions the primarily with the the result of driven RX revenues sales volumes the sells

North to three for Now categories. results into channel break We revenues the sales our American segment. moving

and as self-storage, New expansions favoring been the the new the self-storage continued quarter have the was revenue. the in in and in In in we Other. year and an construction our prior-year self-storage conversions expecting sales, the and where along to This gains from construction XX.X% the XX.X% decrease XX.X% versus down business new XX.X% and contribution in in the in quarter, line in in Commercial we towards steel XX% capacity experienced increase of construction. rolling product RX commercial were existing driven greenfield up XX.X% self-storage, represents from North self-storage RX and sales, the steel where trend by revenue Commercial continues margins America, XX.X% move gains approximately movement, derive and door in operations, prior-year roll-up approximately and of new sales, was from industry quarter revenue. quarter approximately fourth RX of the XX% shared of experienced launch The quarter. quarter. with was prior-year the an market, similar other in increase DBCI other a in an of XX% commercial e-commerce facilities after mix the shift up delivered of last

the this addition revenue XXXX XXXX million guidance. a to primarily range Turning and of adjusted from full-year contribute year which driven the the the organic DBCI Management including last results. by of versus a of X.X% in to and and to the addition represents million. the results, full-year of compared DBCI and growth the ACT. pleased be third outlook I'm be increase periods $XXX results. in XXXX to we revenues XX.X% of $XXX this following began in combination organic recovery million. midpoint, is wise, increase to provide At higher both range saw At full-year to midpoint, for $XXX million to of Growth ACT a COVID-impacted EBITDA $XXX the to the represents quarter, to expected

continue the time headwinds. represent to and their of lag through in in majority that pressure. we over perspective, by contributions related worsened expect which the Steel We and supply indicated nature materials, improve inflationary been we the raw business we The to a we cost synergies. profitability constraints previously. their labor, the integrate forecasted From as commercial to material to raw we battle initiatives cost-saving and realize QX, but logistics of also addressing inflationary vast factors navigating as tend have prices the these continued successful these challenges are

now continue the through I contracts to we executed you. work back Ramey, legacy-priced backlog. for products in to remarks. closing Lastly, will turn via Thank call

Ramey Jackson

Great, thank you Scott. again,

Janus since how are company. quarter We during again once public the of proud becoming performed a

the that margin our addressing and the term. seen earnings forward in and the growth the across this us. ability to I positive to look industry. over strategic Our and long Thank power and were please. joining you deliver end pressures deliver through acquisitions even performance business two begun beyond. believe again now quarter of open the momentum of can delivered another Operator, growth while organization our outstanding we up I Q&A, to results for continuing positive lines XXXX for of as cost completing have we firmly strong

Operator

Jeff Please Capital from Hammond is question Markets. first Our with Instructions] your proceed question. [Operator with KeyBanc

Jeff Hammond

kind trough think 'XX? guide, actions, into to look margins cost, inflation, pressure is? are of you the there think more or in a and you I'm is do at XQ. look your first the wondering like XQ pricing further we as the where if the it sequentially you Is just the So pressured half it little be of going looks at

Ramey Jackson

Yes, question, Jeff. good

QX, rate I we've if again have will, legacy-priced the the to that So increases is pressure, through. of labor, some you in if to again logistics cost you and the with terms and that contractually think been way this in products, coupled largely continued burn that as do see continues due backlog the modeled churn executed we continued of material, will,

in that we're further next of at the call. earnings be ends that As far 'XX, we'll kind where our to 'XX our able in process midst of as provide and for on budget up guidance

Jeff Hammond

can what quarter then will the And give in think price the was be and what it us you XQ? you in

Ramey Jackson

the of split terms kind between of In and price volume?

Jeff Hammond

Yes.

Ramey Jackson

little kind so So XX% and bit in probably an product churning versus or I'll slightly probably maybe that's through that two-third incremental what priced price, we some QX again, of in to QX, circa one-third; or and being by in again was was QX. from reduction XX% in around volume, QX, again QX. would in a percent legacy - call driven QX price acceleration expect largely be backlog reduced something And

Jeff Hammond

you Okay. And that just versus versus guidance then the between the revenue, last can acquisitions price in on change in one, coming split volume? incremental incremental

Ramey Jackson

Yes.

so the So something somewhere be organic organic, split. circa or that then it inorganic, XX% then of it XX% - slightly would and again split XX-XX organic guess call in I versus inorganic, the just terms below XX-XX

Operator

Our next question Josh with with Pokrzywinski question. Please your Morgan proceed from Stanley. is

Joshua Pokrzywinski

a respecting price. in out Jeff's backlog there Just price the just we follow-up in you would XQ on question around in understand I that of sort wrap dynamics of kind had kind If already. the the and of announced book of what may based XQ on 'XX Yes, issues? anniversaried, like right those be the point backlog not some legacy launch carryover pricing should how seems it what's of about we yet has already been given not been because think kind on

Ramey Jackson

Yes.

question. good again, So

additional there be i.e. churn some XXXX. in will that legacy think through priced definitely contracts backlog will I

working of some still overhang, will, half the into we're So, But we're there that 'XX. of you as midst still as bleed will if budget process. first far again be that our through - XXXX will guidance, but in

Joshua Pokrzywinski

of the here do more what's or something to philosophy, on of or happening surcharges are some or for that sides protection both with the is more going then of kind And route? list to on endeavor price sort indexing the guys pricing try offers you

Scott Sannes

Yes.

and just increases more committed, keeps that forward. legacy contracts typically, escalation based were the refer get obviously language allow for to to from the we've guess to the pricing. market it's clauses the moving today. contracts we amended Going price list into percentage happens orders are of Since then prices executed. of the costs put are important I were But environment note that inflationary - relates that when raising we'll contractual route, that strictly Those we us as it what that

Joshua Pokrzywinski

And on just last one, new conversion I versus may, construction. if

think the mentioned of of to an that conversion? more, would kind you change difference else in similar abate I that kind little those versus throughput there revenue anything markets able up a margin-wise. pick new appreciable are of mix construction? or issues kind You've in Is maybe that as bit

Scott Sannes

Yes.

dollar So content versus increases as to kind the foot new square of projects. greenfield it per our construction specifically, relates tremendously conversion a

So, $X with I about construction on foot potentially square $XX think conversions. foot per and circa then new per circa square

Operator

Our question. your is next Benchmark proceed with Please Reuben with The Garner question from Company.

Reuben Garner

is successful, is And greenfield I forward? expect the Noke, versus predominantly extent guess, out, that just two then in used cases? tie-in RX. or dynamic follow-up the the sounds a it a between this new RX of It Maybe delta is of going space more the on product should is are played something in like the we the expecting that the maybe you just sort that

Ramey Jackson

construction. and relates industry the at very mix on you quickly when as look Yes, RX it being of bring I indicative think is occupancy we're our as look, and high, seeing to trying rates what to of kind capacity I that's XX%, possible, as market north of the new think

as relates the really Our conversions Then customers it through choosing construction, into capacity get to and to when constraints. supply chain expansions. new you are that's add

of kind will. we're downstream, So you if

schedule. We are construction at the very end of a

they a to And construction you're slower so, is us, from lot than compound why delays all historically. the a chain have supply of seeing contracts kind perspective of new blow which

market-driven. more it's So,

new as it largest installations, the moving that's think as the while that look so construction. to We relates of doors Noke. relates Noke when kind million opportunity is probably forward expect really there the but on chain there between and the technologies supply balance opportunity, of the the the that we're RX then the it to far and relates at new acceleration as kind waiting marketplace, you And as as to question for in and and of in expansion at opportunity construction of a the no as seeing kind new RX look I opportunity, marketplace. relief it access And control it conversion customers existing is we XX

Reuben Garner

inflationary you're then - and you position And helpful. pick share through you with of in allow working how gains. the share think your be share up take your guys and able that than you - I mean about you are to mentioned you you customers, sort advantage times, these environment? talk What That's up Can doing can competitors? to Are to business? that your environment will exactly incremental this you more going pick of

Ramey Jackson

a That's great question.

in the business robust than peers and commercial our very construction able higher we're specifically business. - but certainly up you the manufacturing competitors, That shorter accommodate our you around when pick up at the new to of We're new that's our market with steel most allowing spot and warehousing, puts which we're us customers. if the end-market is look deliver at customers. to able times very allowing believe share, is our steel, said, to lead better situation and to than in position buys think And look us able of to lead I like competitors marketplace, side on of access advantage competitive pick like. would times, in to that I to take us suppliers. are a than we of then terms our a meaningful customer we I albeit

Reuben Garner

in metropolitan out Anything Are of one areas? in else right. that seeing sneak stands you all you? terms you Geographically, growth you more the if to to meaningful smaller are are in markets? Are factoring rates? major - going anything that's seeing am I what they

Ramey Jackson

Yes.

But where kind Texas; moved, look the you states, trend that others. we're great picked of terms the states I up really of of top MSAs, question. the that people obviously capacity or construction would of than additional suburbs certain new But suburbs; on really the follow there focused just capacity in of quicker if all in Florida, adding terms think - obviously but think COVID are additions. really I at I are kind

Operator

Our next is from Hammond Please with Capital with question your proceed KeyBanc Jeff Markets. question.

Jeff Hammond

Just here. closing of thinking I of you a follow-ups know about warrant the dilution days update us kind couple Any as on a or give few we're you're share redemption? can of count out from a and new kind result. how

Ramey Jackson

Scott?

Scott Sannes

question, Yes, good so Jeff.

think gave I've vast we correct, The can option the think are seen I What majority of data cut-off warrant tell at a exercise. most current that either the basis. or I cashless o'clock. Friday holders I is believe cash the X the you on cashless is, the proceeding of I a points with you're preponderance

going rate - conversion X.X. I modeling dilution, of the be to So it's guess from was a a

end, think I be lower the if terms dilution will, you of modeling. at So, that of the would in

Jeff Hammond

And then, structure seen? of as kind contracts the we've about lingering in - given all terms this place, contracts that you are just or in about contracts of you of contract are these talk just learnings thinking differently inflation anything

Ramey Jackson

the I legacy but from escalation Yes, existing not did it's it little are a more bit, clauses. contracts been that a great allow hit have specifically contracts the the question. on beginning,

adds that us of contracts in these that amended protects and back gone language, types we've environments. So,

ago. legacy contracts was kind a experience being dealt us perspective of a tied we to issue again. few an of issue legally It's legacy from this this shouldn't with that's behind and months now So,

Operator

closing to you. time. There Jackson over Ramey the back are any comments. this Thank to I no like questions would floor further at for turn

Ramey Jackson

today. joining a your forward appreciate updating Yes. of progress. look to our Janus support We Thank for and everyone you great day. International us on you Have

Operator

concludes conference. today's This

your You participation. Thank may lines time. for you this disconnect at your

Scott Sannes	CFO
Ramey Jackson	CEO and Director
Jeff Hammond	KeyBanc Capital Markets
Josh Pokrzywinski	Morgan Stanley
Reuben Garner	The Benchmark Company
Jeff Hammond	KeyBanc Capital Markets

Janus International (JBI) 13 Nov 212021 Q3 Earnings call transcript