JBI - Earnings call 3 2023 | Janus International Group, Inc.

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Operator

Hello, and welcome to the Janus International Third Quarter 2023 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded.

I would now like to turn the call over to your host, Mr. John Rohlwing, Vice President of Investor Relations, FP&A and M&A. you. Thank

Mr. begin, Rohlwing. may You

John Rohlwing

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

future are plans As we statements company's company's a periodic update reminder, that regarding we earnings on from anticipated. important Factors based factors contained the cause filings materially may the conference undertake is results those could release to results Securities you note to to and company's carefully. prospects. forward-looking and with include and our today's call related Commission, results duty and Exchange to the and actual them. expectations, are those It may differ review actual in encourage differ that anticipated Statements the current no from

filings these be we their measures. Please adjusted EBITDA, a directly financial non-GAAP today, measures net addition, providing release certain of to comparable discussing adjusted In margins, earnings and our and reconciliation adjusted including adjusted see non-GAAP income EPS. measures EBITDA or GAAP for most will

questions. Anselm and outlook joined by call an before Officer, update will give who up business an operations the Executive your and Financial our of Officer, Chief overview Ramey our continue I'm our we the today discussion financial Wong, of provide Jackson, for who with will and results a open Chief

over to the At this Ramey. call point, I turn will

Ramey Jackson

you, Thank Good John. everyone. morning,

the years third since the in public became established results foundation ago. company we almost financial quarter built a record on X.X Our

us top solid execute rapid growth, allocation to flows deliver our position that deleveraging while to strategy. and seen [ generating capital strong cash ] continue profitability We line

our months the position industry demand capacity mid-cycle customers driving to The Self-storage fundamentals first the deliver backdrop against above drive from occupancy across rates a economic performance us uncertainty. that platform. owners. year remain remain of of resilient geopolitical new business Our outstanding results well and for through X and another levels, our

Our markets without year us to our revenue was outlook positions whom end to our success our confidence all longer-term I employees visibility backlog thank gives raise growth again the our and goals once would achieve for margins. and of and like to possible. into our for us

and that well Now in turning customers year-over-year and the decisions thoughts needed specific to some add fundamentals solid much through cash throughout strong the inherent both industry construction happening operational as capacity deleveraging are margin and The Janus' around results revenues, new record as gains quarter by included quarter. generation. expansions. significant further to our third improvement, conversions investment financial fuel

Prior benefactor the favored of brick RX greater to the customer construction. Over was part and has spending the new space of retail X last repurposing. quarters, the availability unused or more in driven trend that, by

there are project Demand ebb we while drivers our our self-storage between patterns strong, economics comprehensive may that of with types. remain for solutions means customers comparable flow new for construction and our customer platform both and for business buying RX,

over approximately for Our the system our of the representing as ended quarter end expand market XX% to penetration. XXXX. Entry and strong units, continue from ramp quarter our third up growth XX% another Noke growth approximately order Smart we capabilities of We total had second XXX,XXX and installed

keypad graphic like in display customizable and Screen additional and one announced facilities. that a to the controller of anticipated exciting Noke full over number base During in a expansion is a a digital XXX the features in post all major our combines an security and we design the line reinstalled products device. latest single award-winning the Bluetooth and Screen line Noke of product Entry WiFi quarter, Smart screen Noke for design connectivity smart access in of the

To have leverage migration approximately bring of XXX and have security availability AWS, Amazon access Web Noke Noke to to management AWS, real-time capabilities. enabling AI global quarter facilities. we to user and IoT, By us back-end to Smart on And announced end digital experience. Services, over-the-air Technology parted industrial end, owner-operator the us and Noke's we running allowing is complete improve and reach, increased date, and the they subsequent to

store. our Our in headlined accelerated we future industry the remote about the represent to continue be use has and of has suite offer, technologies Noke by in it to both adoption best access the excited its and

Now $XXX.X We of organic. approximately to revenue shifting entirely last the that's year, X.X% compared as increase quarter. highlights period for to delivered of consolidated the financial million, an same

construction which and the being lower, games driver commercial the of New other offset XX.X%, than RX and XX.X% more in was for respectively. X.X%

XXX $XX.X in which an Our XXXX, basis of year-over-year. than adjusted QX represents margin adjusted XX.X% EBITDA higher of of XX.X% and million came points approximately EBITDA improvement an

productivity logistics. favorable we in and higher more quarter, initiatives particularly commercial experience of and the mix costs labor parts offset to business, During actions, our continue many than

be cash generator. to flow company Our a continues positive

third past flow of cash the net through conversion our months the Over adjusted XX income was quarter, end of the XXX%. free

on identify value, over We sheet we while firepower opportunities putting the enhancing to preserving to conversion them. preserve M&A maintaining to as solid expect us a secure in cash a also remain time, focus position balance

points, regard that net I'm at X.Xx to to sheet, were debt quarter XX-month trailing basis extremely adjusted XX reduce net this quarter proud leverage we able to putting at the end. balance us by EBITDA our With

our just and execution XX below represents testament continued fundamentals. of a X.X range Now our to business X in last sound to This Xx. months, target deleveraging of the turns

organic about X% to revenue line year to I'd in to towards out update months our call. Anselm, progress X of average objectives longer-term like The laid Before it you target on growth. our over QX earnings exceed hand growth our XXXX once range first to XXXX of the puts I our the track for long-term again top X%

well well within the results Our of positions the our EBITDA margins quarter us target average achieving XX%. long-term to third of XX% and for XXXX range towards X months

well months the XX% XXXX sets Our of XXX%. to us free of long-term to conversion of X flow strong target net up against range adjusted average cash our conversion income first in

I our leverage As our range. is already target net mentioned below earlier,

Our look leverage long-term continue all for and at ways end remain to we resilient, value create markets leadership to additional to and strong position our and capture share stakeholders.

to outlook With I'll over updated the that, year. call and turn our of the the overview for financials Anselm for full an

Anselm Wong

morning, everyone. the the Thanks, X.X% quarter, revenue million of was Ramey, to third good and year quarter. compared up $XXX.X In prior

and RX construction the New while other prior versus lower way, commercial and the were year led quarter.

as and growth, revenue our construction mix our offerings quarters. good by consistent stability from evidenced diversity by a show to continue We led new recent of in

timing in we While of significant the see outperformance well free projects, may given revenues be across quarter to continue sales channels XX-month our based segment on balanced during over period. a a

channels. into deeper sales diving the Now

in up XXXX primarily XXXX which taken pressures a many construction was from the offset to of on year-over-year. of inputs overall commercial result quarter strength key of came and actions improvement new The volume as Our growth. well XX.X% was early inflationary in the combined impact as our

The a timing X.X%. of due in the they quarter revenues on was projects up of XXXX. self-storage the Our produce throughout expected our third consistently segments well the to of to projects. are timing the primarily the Year-to-date, continue strong lower of past as business the X/X X.X% RX RX as Fluctuations years. of as quarter, year few RX for between based and is have roughly construction segment

XX.X%. we In were a resulted which difficult other, decline commercial of strong and up year-over-year to particularly a comes in against quarter, XXXX

high normalize, we to continue an of all-time in for have which years. markets As lines, certain couple demand seen the during last product were at shifts

Our share We continued as gains a broad fuels in well products for are increased margin over of in hotels, end pharmacies, markets, commercial and used warehouses, many and as potential improvement range others. time. see including other

of than labor Entry from combination well to SG&A. growth, EBITDA XXX XX.X%, Adjusted was initiatives for the increases investments and revenues higher XX.X% in of the the and roughly savings compared for up additional margin ago $XX.X our year continued more work solid to offset favorable commercial including Higher ago points cost as EBITDA we million basis operational continues year offset Noke the actions shift business in labor to as scale Smart The demand, of quarter was as an help quarter. quarter. Adjusted for costs mix increase systems.

while As our resulting reminder, a commercial and somewhat outperformance higher in similar, shift in sales to RX mix over favorable a our profile quarter, other lower. trend the margin is typically roughly new relative is in helped RX for the the new trucks relative margin. and commercial drive construction to Due

quarter, projects. timing to during particularly the saw of in the infrastructure we some highest work and In from our strong certain contribution of a and RX due margin nature addition,

normal more to margin expect revenue consistent the revert our time, ] mix with outlook. longer-term [ to over We levels

quarter net of per the XXXX, of the adjusted which up income $XX from compared had adjusted For million, quarter cash third $X.XX another We diluted was year-ago share solid XXXX, in of to $X.XX third of quarter quarter. flow earnings generation. produced we XX.X%

flow free $XX trend approximately our flow, of to free the cash light XX-month income. activities to multiyear adds each cash representing conversion operating our cash highlights flow cash of of was This from The businesses. adjusted adjusted flow strong $XX.X operating and CapEx income was trailing flow quarter conversion million, million. a also of XXX% in free of net free Third cash cash net approximately conversion of to strong

us on flow our the outlook year. full position We period add incremental of and continue XX% results for capacity to for the of free a the suite our expected the of and is West XXX% production as to deliver next on begun year. target have to expand conversion the we which Europe Year-to-date year in of Coast remainder cash CapEx to growth over offerings,

improve We continue strengthen metrics. to initiatives focus on capital our to and working

and by first we lien loan $XX term balance the a third leading of syndicate their quarter, national during debt ] perspective, paid From hand a facility, on supported million refinance using banks. down sheet cash of [

a and of a this of trailing to and folding a X.Xx model. rate second months of million of facility of quarter end credit XX and with that the from of in million strength the despite total We indication business the XXXX not the in net previous equivalents $XXX.X our changed clear the of quarter $XXX the X.Xx ended at debt, X.Xx EBITDA. at market, have has deterioration We adjusted debt from leverage year. cash end net Down

be primarily and full billion, combination of a year actions in a XXXX the revenue organic by commercial X.X% to end range billion turning outlook. results, third again once We for markets, our pleased backlog and continued and full are our Now to visibility outlook year-to-date raise we adjusted to strong quarter driven of at compared increase EBITDA. on the growth. expect XXXX $X.XX now Based midpoint and to to our $X.XX XXXX year results our revenue of volume-related

the X We reflect growth we sales see channels. in expect across XXXX to all underlying strong fundamentals

business adjusted increase objectives solid our representing margins are reflect EBITDA We pursue full we $XXX the of of long-term XX% raising our expectations full our year year million midpoint versus XX%. a attractive our the our results a year to in margin consistent range for framework. at results. growing the as improvement XXXX, long-term be flow range we in expect XX.X% Overall, XXXX our average million, margin of we deliver delivering expect adjusted EBITDA and to to Into $XXX cash to with in to continue and to

will back Ramey for I now you. Thank closing call remarks. to the turn

Ramey Jackson

you Great. Anselm. again, Thank

the expectations. quarter exceeded for our results Our

of and suite once strong fundamentals strong Looking to EBITDA our year, remains the revenues, continue generation. like backlog of at deliver improved we robust expect offerings end to best-in-class I'd cash the please. for as us. long-term balance entire and build margins to the now flow of can the our we to we our the of stakeholders. thank Janus all you continue again our value open for their execution for Q&A, lines joining unwavering Thank up and relentless team again for Operator, focus markets,

Operator

be will now Instructions]. [Operator conducting question-and-answer We a session.

Your first question Research. from Wolfe with comes Hewitt Brad

Bradley Hewitt

everyone. Thanks. Good morning,

year could relative So And the your looks revenue thoughts maybe and to about for XXXX? pipeline I'm on talk of curious to if any long-term target. growth your how you X% for X% kind framework what like backlog next trending is

Ramey Jackson

speaks the don't We backlog detail, that pipeline. new it speak and the know, you construction to both backlog the to and pipeline. as and but remains and I'll strong, Yes, give RX

nothing over So changed strength quarter, has both. in but the

Anselm Wong

guidance in this we haven't XXXX time. And at Brad, yet Yes. point provided

to I point best we're it kind learn is of is framework our look at seeing at now. think the how this right to

Bradley Hewitt

up M&A to above about right the think along? lowered term? whether to of kind of should terms in range we X to capital through then their the of And deal helpful. acquisitions That's prices target curious Okay. sellers the near also, if kind your active how And lever just willingness start comes strategic that Xx more in asking enough you're landscape, being deploying have looking

Ramey Jackson

Yes.

you look, right to the focused So were on I'll can speak -- M&A, M&A no, part. But we cut we're Anselm, leverage now.

have As there. you and growth of finding know, a returning history assets outsized to we long shareholders

] in a terms [ there a give pricing, we're the targets diverse group currently of of there's So on. in bit of marketplace, is and that little focused

Anselm Wong

a as we And is strategic saw in a it's is position, to changed pretty we ratio deal have in that quick lever that below Yes. plan I good strong sense guided great the this said of I terms real we you before, bring our range At guidance think up we a our if then in of leverage, of focus period actually time. the And numbers, leverage big went to like think the above down we that for the would we're back company, had. actually would our we've it point, a higher end range. makes don't

think a I take So actually meaningful that. would us bring above it to deal

Operator

Moore you. next question, with Thank Securities. CJS Daniel

Dan Moore

starting but customers strength. self-storage significant perhaps are growth from public CapEx not plans are strong not What players. construction, healthy, seeing the indicative in of obviously from larger that of and remain necessarily these your to the with as They reflected mean which types spending I seen show here. we've really continues new you

would gains? is more Any might from aggressive So helpful. color be customers? you really small, it Is it share have deployment midsized

Ramey Jackson

in the mentioned a our they're We of revenue. small that you Look, if in game. But now, terms industry balance you're entire and listen But is capacity. of Yes. still portion is calls, two. the RX going accelerate. sheet Great in going in mean, will in pause topic continue represent to one growth the flex on construction for REIT pay to I particular sector some sector. a the to think hit of new as terms long or question. if to a year is self-storage, of right you I hot bringing spending look, it on a it there's

So the investment space. is also seeing metrics you're the cuts is the we're the putting of our in having indicative and the that that resiliency the market are conversations into

Anselm Wong

Yes.

I through think, to what add project in that backlog. X as I'd months Dan, that, our you any news, know, get XX is it's for

reminder, they in timing But REITs there. what some our there's we our people they customers, advantage or even solution, well say I look advantage might funded, and happening if capitalized think terms our they're key helps So regular institutional and costs. at customer obviously no ROI of of some what's an upper as running improve a well their in of if take it them have set, terms our because

industry blend So us. of and both that still for strong a I is the keeping there's happening think

Dan Moore

we then are customer but bit And might Very great large from What Are the any two? question, it's folks to a conversions. you helpful. obviously, a Noke with one a seeing was that crystal rollout. others see in the of the more we've it you one of see -- obviously, result seen seeing larger increased one ball pushing another or maybe effect dialogues on little a as accelerate, snowball

Ramey Jackson

Great. Great question.

reduce at in in helps solutions for the will as site. the past, that And amount really that #X, think is #X what that because a I any more costs cost costs? of lot obviously, do solution of obviously, labor a with that pressure labor coming them is Our Noke their a are looking is one facilities, seeing Noke up need reduce or do you them lot on the and you you're their big customers help cost. so said what even in there's them

of discussion tell I that. that lot -- a And past, even solution savings. would in leverage what those get think we hey, discussion I there's you So this do actually on more about, how to

Dan Moore

one, flexibility. positioned a else All strength lot jump given own you and allocation in obviously, might more perspective, cash Is on shares? right. way consider a that a the and the something I'll on out. Anything the work from Last generation, color well? in of valuation with significant appreciate your M&A. capital leverage you're as the the I But

Anselm Wong

Yes.

that everything I we've the said. table think on always is

M&A us. want restress I think is I to priority for a

deals like realistic on racing. starting expectations we are bit come earlier, with more think, said to I a

come find through target. can the we'll job see those we hopefully, know hopefully, And pipeline have. executing So that a actually we some It's down the do more we we one of where once we of that great right execute. things

happen. that will hopefully, So

Operator

with Hammond Markets. KeyBanc Next question, Jeff Capital

David Tarantino

David a of sounds like was in mix applies XQ, some Jeff. is it in like strong back on margins. looks This Tarantino bit Maybe -- the start unusually and guidance little for on step the it these there then sustainability that, on maybe this year? kind Is of into implying you on rolls can levels maybe of this going off kind in next the self-storage. margin just gross particular XQ? of about talk And It into

Ramey Jackson

question. Great Yes.

think said and that I still off. said, We a mix. there's some that you prior growth small seeing quarter, favorable mix self-storage we like there. saw higher We between a had of had roll

I one those further said up, we're factories already we'll that X productivity. and are X once on we're always we've there. And think not putting up productivity, at go sustainability, for constantly yet. get working are looking in they of place long-term things that still the a is opportunities,

them think continue So more margin there's I definitely productivity sustained improvement. help to

David Tarantino

'XX? into RX. how on bit back. have was Okay. timing. think Maybe a step Great. construction of And this the a about put might to like surprisingly a mean the modest been just took for then new strong just we maybe little finer XXXX seems in should RX It construction I point and and of this rest

Anselm Wong

timing. It's definitely Yes.

customers, construction at in They do time. If new generally. types the RX be can doing you construction of look they at both same obviously, our

want construction done they that new earlier. dictates timing just the sometimes And

right as way you If -- all seeing the and it's now. at total two, the in see with is blend it self-storage spend of kind robust can we're side. the I we that's and the So customer looking look just you other us strong very at

David Tarantino

if forward? Could on of color one how about compares, maybe should this what us going thinking you we commercial, be strong And really I bit in. Great. more could declined give sneak little a maybe against obviously, was

Anselm Wong

Yes.

we strong continue strong I really also, just was prior still in number. think commercial had year. a of of the will that thing. some that Definitely type growth last is said said really back It what we of to comparables year strong same ] the through that the end business had [ normal segment we

get we we past a once end of of by QX, So more normal back growth be [ that commercial had business. ] that kind strong rate the in apparel to it the should

Operator

Next question, with Stanley Stifel. Elliott

Andrew Maser

Andrew Stanley. is This Maser for on

growth you services like On adjacent in and existing we if performs thoughts if the year-to-date. you posted and Or also, were business was how this driven services that's have I offerings? wondering to you the revenue, product do expanding on slow? by sales are any nice into quarter services, see

Anselm Wong

All right.

like to full for you'll account said we you're sometimes service Just the the a at [ and looking a piece like than we other stronger we quarters, customers. products services be between it's timing the the to split general, we how it. just piece. sell solution comment In ] And products our said, services, in piece, on of bit see

the in fairly still But So overall, product between in one quarter timing the both. the see and again, long happens self-storage, for some the time, general, other. in two, strong piece dictates what you'll especially for sometimes

full time, RX it's see see still But on much your on question the going well right construction offering. both. solution now, insourced they're would how same split to if again, based based backlog, the at both kind generally, as is slowdown, about may to it's as new when the to what again, happen a strong we of for in it versus because it or policy, right, And As between on a timing the be fairly you products. happens

Andrew Maser

foresee you if quarter commercial quarter, I year? two? your on still seeing where you bit the the fourth the could are next a expand do you on in little guide, the And more need year And for inflation? was guess, actions additional I then wondering outlook And next incrementals for in into fourth or

Anselm Wong

Sure. guidance Yes, we haven't but next I'll provided you year, for little color. give a

this with our driver going if Obviously, way. couple at look seeing for other is that the year could at look the track better would inflation. it you -- anyone component you was you wish tell of If I down. weeks forecast is I than is we you beginning steel but commodity. steel biggest use. else, up back that until But last And we're it, now, I if it

we think commercial the have is to way thing do way. from if that a I need construction, levers we key sustains the one So other

where high now, at right the to point. kind think going cash it's back look the if average kind at I latest you says, almost of of the

we're So yet. there past not

need So costs the have I somewhere at then to continue think action we're it's -- watch be ]. to going appropriate it's and have to we to city just if [

Operator

Lovallo question Next John UBS. with

Spencer Kaufman

This John. Spencer results. Nice for Kaufman is actually on

or volume? up few that for your pricing to sales in of the year tie more on over and bit coming it last First is getting X% about the to weeks? you comments most in of how trying then this a kind pricing little And question, two, in steel quarter. next fair the quarter mostly actions back volatile thinking overall were guys the Is are assume

Anselm Wong

Yes.

average, the if still if I increases, even we still about is steel commercial but volatile, you're our with it's the where announcement think, again, steel the price you look you average that did been more recent last an of average of it's at -- did kind actions.

matching kind point, our now is right to. coming in that price again, on average. action we where now But wouldn't you need if do probably of not saying it that, it cost look at where we we you'd this is if assume at So

a in mix. kind And saw of terms volume, in of you what it's

the side, at lot look that If growth a the decent look side. self-storage yes, on pricing. it of we're is at if volume the you split self-storage between and amount seeing there's you of But overall, the commercial a

Spencer Kaufman

Okay. That sense. makes

update market how coming a us talked fairly you give competitor on the dynamics think in I newer you Can Noke's seeing recently. business? an that you're into just about

Anselm Wong

early the I I just or in good because there. Still our far, market the think it's right to now. from But definitely seen have say I think at we've in competitors kind challenger it's and seen to, to view least, of implementations still there. what think, so of we amount haven't of And anyone to deals putting close another obviously, that out we're there's

Noke think offerings if let's of at out initial doing more we our our I value-added offerings solutions just be how you that customers. what there, there'll more out with look constantly of say because and the solution what coming offer that looking learned we've since there. had that to to we're add and we've improve at

Ramey Jackson

new The our thing. their more bat behind several where we for lot, are right customers are learning adapting actual just at one been off a very years, this stand generations We've needs. today. into the integrated Yes, entrants, to

the we starting we're bring products. new see mind, extremely this that And AWS doors We hallways. was with in beneficial, the in and and partnership continue The to integrate to productivity our keep out solution. with

going we're #X in And space. to competitors be of to match just for the value the So difficult it's provider that proposition. kind

Spencer Kaufman

Right.

super now target one as to versus here. right in capacity where more That's I just thoughts utilization squeeze helpful. If could industry Okay. is Any a XX%.

Ramey Jackson

Yes.

have are reported low depending lower heard report mid right REITs I to on around ones in the mid- that XXs now, -- the all think think haven't of to it's yet, the we XX%. I but

Operator

closing I would floor for no Ramey further remarks. like over to the are There questions.

Ramey Jackson

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

Operator

concludes today's teleconference. This

participation. You may thank disconnect your lines you and your at for time, this

Janus International (JBI) 6 Nov 232023 Q3 Earnings call transcript