JBI - Earnings call 4 2023 | Janus International Group, Inc.

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Operator

Hello, and welcome to the Janus International Group Fourth Quarter and Full Year 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, Investor Relations, FP&A and M&A of Janus. you. Thank

begin. may You

John Rohlwing

Wong. and I'm all Chief joined and Officer, Ramey operator, earnings Executive joining conference Jackson; Anselm Financial Chief call. today our thank you, for you our Officer, Thank by our

this We hope that of a note of have the seen this posted website call we also janusintl.com. in be our morning. found Investors release have in our that presentation Please earnings you issued support which at can section

Securities recent today's would obligation date which plans, company's like statements. include our during statements to risks could statements a forecasts us Before call uncertainties we this those of that principal only that filings made currently Commission, goals, results. may that actual many statements. you [indiscernible], Please and see beyond begin, from for made on differ available based strategy, variety reasons, speaks anticipated and statements Any with the call it the assume are information made. the is business, as future I the us which control. when any to may only identified Please by forward-looking note and forward-looking forward-looking our such remind by update statements and publicly projections, of results assumptions and describing We are expectations, our of and affect forward-looking Exchanges is prospects to no forward-looking

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

million. program no has stock repurchase We that repurchase the approved Today, any we of that [indiscernible]. Board is make announced assurances a $XXX

business, today's for the and call some introduce this Ramey questions. overview before financial point, of I discussion provide open XXXX to our call, the up the call will our we will shares Ramey. closing results of thoughts, and will with turn Anton continue guidance a an In Ramey At over

Ramey Jackson

leverage off is recap like today proved I'd momentum. and financial, John. for employees' year I effort, we dedication, a professionalism. net accomplishments. EBITDA cash and hard net in range and comments a converted that year my operational X.X% our adjusted raising year-end stated flow XX.X% free increase financial drove the We to with to team strong since was We financial on another be and you, be the a prouder Janus' outstanding $XXX X and income our revenue. to year million. guidance to Thank target down of Janus going delivered adjusted work of public X.Xx to during couldn't of X.Xx, at of Xx. achieve and kick Everything below XXX% exceeding and strategic XXXX low highlights record full at throughout a another of results, This year up over long-term delivered

higher sales percentage new makes core is X/X consists of a EBITDA. and revenue up Our self-storage, of our construction roughly Combined, of rebuild, restore business self-storage RX replace, our and even channel. our which

As we needed much similar. to of the profiles the us have Making capacity. components across to seek add our previously margin two said, customers how self-storage agnostic are

across our to a lumpiness smooth we each helps commercial specifics the the given of two while along the self-storage out timing. total for channel, the discussion And report with project noise other will of segments and segments, quarterly

our has last greenfield the which XX.X% and when more over self-storage full demand which while focused was saw XXXX a For pre basis, new sites. fundamentals year XX.X%, RX on increased self-storage combined on for up to X.X%. we by Industry quarters several projects. in channel sales drive capacity, up driven the investment continue XXXX, construction, Compared to was

full the lines. Results for year Commercial year. demand and certain period in challenging well off comps reflected for decline ago product as the for was as XX.X% other

our various to tremendous broaden reach continue to order the innovate markets side. in commercial and to on We access potential untapped

are our solutions excited had our decline, year innovative adoption. very opportunities about remote Despite quarter off there. access of Noke, and of the capabilities year-over-year suite another top line to expansion and top customer we a strong

For of Services, we expansion the migration back-end system Noke installed by to increased we year, this October, in XX.X% In the $XXX,XXX. of complete announced Entry Amazon or Web units number AWS. the Noke Smart of to support

lead up their software, self-storage. to ability further opens security business, positioning the AI our enterprise digital to scale AWS to leveraging in Moving innovation and us and capabilities

global experience enhanced customers and both user their have improved reach for both our and We tenants.

software our capabilities business which us demand. for Atlanta continued scale We also Noke strong gives to expanded opened center, the

more announced and beyond installed to we a facilities, Noke than that followed expand installed to Access their its Smart our facilities. its customer that Digital across January, expand intends across above Locks to additional our Noke of announcement base major Screen for intends its XXX XXX date. a XX This In facilities REIT base September

So see, to can we excited Janus. for future what Noke and the mean as it be you of can continue about

milestone front, new facility for fourth facility our Janus. also Poland. market. located strategically On recently reach in opened the is This quarter to European serve The operations we first manufacturing saw a our European major

public Board became its from doubled their sponsor sold As position we the nearly liquidity. dramatically and our public, of partner This when and seats. financial our stock flow stepped improved Clearlake, down last our

adherence with directors. highly addition January, announced objectives governance of accomplished the In our independent we three in

repurchase expansion we today results, the multiple basis only repurchase initiatives commitment $XXX cash of the and pursuing are strong The solid shares value enhancing robust organic while to to exceptional announce flu by of the sheet. prudently our of profile, balance through to On plan value generation sheet, a expanded record authorized to through desire shareholder pleased ability balance and Board. our adds share million pads, maintaining M&A, leveraged create

additional over record a company. call our look capture to year and I'll and to of cash are our With position our we overview expanding further the with market to another able In were for strong flow of value we long-term in strong beyond. XXXX for momentum our XXXX of Anselm? to turn summary, results results initial stakeholders guidance. that Anselm our forward on create the share all We that, while build with along excited in XXXX, further to deleveraging

Anselm Wong

Thanks, success. Ramey, fourth success focus sheet deleveraging good us and balance generating morning, everyone. and my XXXX and our growing our proud during comments will business. flow am I on our position our quarter first results to for I record performance. in our strong cash of

strength by our a $XXX.X more self-service the other commercial total sales offset decline to as In X.X% channel. million off the prior than and revenue quarter, in fourth compared was of quarter consolidated as year in

result growth Together, up continued of in X.X% for quarter our the customers Within the with self-storage as XX.X%, business continue quarter. construction add strong was year new to capacity. its New greenfield self-source,

X.X% a year. of or The quarter three, was decline of of our conversion for as the storage self-storage business in a to result to compared prior retail other portion activity

basis of which compared channel. our performance favorable a the the Commercial all-time EBITDA saw XX% last higher-margin was on EBITDA quarter, in Others commercial profitability is strong prior XX.X% mix businesses than offset in result an up as adjusted decline to the from Our revenue from XXX lines This to and a the year operational continued in and up self-storage adjusted $XX.X year margin particularly certain were Fourth comps driven fourth other segment million at compared solid year and focus produced of And that improvements, product an pie. our by a quarter points quarter. improvement shift demand This of level. decline. ago sales for X.X% and more

fourth Adjusted million, impacted produced share drivers the cost net and adjusted income was improvement quarter a during covered, favorable X.X% quarter the XXXX, For initiatives. $X.XX. by net adjusted of income ] of containment we [ already including of year-over-year mix earnings per and diluted $XX.X

from $XX.X in [indiscernible], expenditures were Looking operating we in the the of from continuing robust Capital fourth profile full business. generation million activities at year, the of million, $XXX the the XXXX. up demonstrate for including million year cash $X.X to quarter, cash generated

at of Poland to and order within new this roll build-out formers to projects capital the lead year process Growth Dynamics. Microsoft enhancements included additions Betco factory our

cash are which of results. our proud financial of free strength flow our profile, the We reflects

generated of liquidity, including total about represented of flow million. For conversion net of $XXX a cash balance million This we million XXX%. free of We sheet. income finished equipment the and of cash $XXX.X the flow year, $XXX.X the adjusted free full cash with year on

at balance sheet enact debt year-end cash combination us our and outstanding repurchase in put total M&A to X.Xx. share million a strength Our newly and pursue of and was position authorized net liquidity, leverage $XXX program. strong The targets generation was continued our

we XXXX reporting from year. and to add have focus that material on continued remaining of as like all of part our also of the the as fiscal end governance operations I'd remediated prior weaknesses our best-in-class

building our guidance, Now of moving midpoint in revenue of XXXX the produced by X% last XXXX. and is $X.XXX Full year current off representing backlog XXXX at billion of we the pipeline. the to year be expected to to billion, range $X.XXX organic momentum growth and our supported versus

$XXX XX.X%. to and of in reflects a million return is increase and adjusted prior the million. be expected of and a for an this We expect the range to grow margin to total self-storage EBITDA represents the X.X% to growth commercial midpoint $XXX other. at versus continue EBITDA to At midpoint, year Adjusted

a and second now We Ramey? of portion large and over revenues Thank to seasonality expect will where quarter Ramey for closing fourth XXXX first turn call his to the see normal a the and third return I you. comprised to to quarter. in remarks. the compared

Ramey Jackson

the income. adjusted for margins we to laid year and years, of longer-term to at that in the the cash Building off Xx X company to then, next positioned that free X annual grow be for again, a the told XX% and flow we ago. to you year out with revenues organically Adjusted Anselm. XX% leverage to EBITDA of strong Thank exciting a X of consistent foundation, are net we to X% XXXX. you expect another to Back vision to over we well One be range net this in of the course rate. is XXX% X% XX%

our you those beat see met As of XXXX results, from targets. in can or all

remain year on objectives to based the feature of performance. And we laid intact. expect exceptional long-term another Anselm Our guidance XXXX out,

in the owners relationships, leader with strong among operators. particularly are industry best solutions the capitalized We and customer self-storage

line our company public growth acquired strong delivered have margins, EBITDA throughout and and top net time have our flow and conversion a as dramatically cash We improved organic leverage.

we sheet value-enhancing new to expanded allocation to balance come fruition, program have opportunities we the now up $XXX in dry our include the Thank of the on us. share powder all for for repurchase continuing program. please. and for shareholder million the to M&A expertise forward we to have capital accretive creation value can And execute our As long-term now beyond XXXX look open joining our drive positive momentum again we lines and I stakeholders. as you Q&A, Operator, deals.

Operator

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

Securities. Your comes Moore with first question CJS from Daniel

Dan Moore

on Maybe Thanks to obviously for really finished really, stood what with the commercial, start was softer a strong quarter. and in year. a congrats this little out color

mentioned bit? from that on all-time maybe elaborate from You products highs. declines Can you certain a

And year or a simply remarks growth mentioned positive return Anselm, to at 'XX. I expect to growth for think growth in kind your you of expect to you full that you commercial point? return Do some in in the

Ramey Jackson

Great question.

shed we've staying the folks really couple carports the of look, a when during were accelerated market, and past the which been which at talking end segment is home. So commercial quarters the about pandemic about within business,

I'll miss that let really that's of So driver in kind then of commercial. answer... biggest And the

Anselm Wong

seeing Yes.And business, basically, you sales if saw again of said within of there. and expect And the in why have category rolling decent of back segment, would segment we've the of kind our coverage QX Part shed you talked growth commercial we at pushing and -- look commercial we've [indiscernible] commercial look now. a segment would that's business. we have at quarter that the sheds, is we we you our throughout that steel backed year. that last the business, at there. growth is some that And if been be kind look XXXX, normalize about we're carport to you when normal What what of out

bullish us of the get growth part we're So will on the commercial again. that that help

Dan Moore

to move as improved That's year-over-year through the helpful. QX, talk basis. move the And maybe as and we We're the a year-over-year a declines comps I kind little bit then just worst of about expect year through of growth we on really of already? cadence

Anselm Wong

Yes.

what we at of the seeing So if we're look a you what Dan, bit quarter. of so normalization saw, is

of So weather, normal why transcript it that's like the because QX mentioned is the earlier present I and stuff in that that. quarters seasonality, usually lower QX a

that when of that. falls some see areas, construction into to your slower in better expecting QX kind bring you'll start we're where then you're be into So to of summer normal the and it's back going see

construction think one I the are this that we is a -- always business. is reminder

by does it impacted get So weather.

there's So here there when impacted of course as flooding on the a well. been West number Coast, our that's some jobs

first QX. I then the So what normal that just QX of big back growth to quarter think our and we'll to QX and slower as see in well quarters is

Dan Moore

then And to helpful. shifting Very self-storage.

for Your backlog would or always strong next maybe how opportunities pipeline you quarters. XXXX really that, few the to describe entering visibility new provides the ago? XX compared beyond of XX months just

Anselm Wong

don't we strong. But remains of in construction. kind it still backlog. can RX what the give on say Look, directionally new really detail Yes. and both I is

. there. optimistic very we're So

Dan Moore

you the out. see partly quarter. long-term in the favorable had this longer I'll one year more, target margin and those Maybe is you've high XX% before. your traction. end and particularly gain but to to you to Again, but term, QX Noke jump this do mix starts XX%. Already and then And is accelerate this that heard above projections know there upside Clearly, year, in at there, mix over a I Excellent. question as

Anselm Wong

thanks question, for Daniel. No, Yes. the

term, absolutely. Longer right. yes, You're

think part productivity normal see that a further some constantly Noke the there our bigger in we're we improvement improvement. business well the as as mix I at becomes looking as of

upside. but short-term hey, in think that think we're the I I So mix at what from then there's got longer there's will is definitely the normalize looking in just, term, a XXXX, QX, we benefit

Operator

KeyBanc Next with question, Capital Hammond Markets. Jeff

Jeffrey Hammond

Yes.

maybe staying consolidation talk new, clearly construction self and move some RX big backlog seeing how the RX. just about had mix seemed of you catch you're in of can know you like in So storage, there's just you up, kind new on as some I into it

if RX the wondering more balanced. there's if rate it's in or just on optimism little So a pretty growth

Ramey Jackson

it. the of that that think off I fall we by that bucket, Look, way kind start manage within saying Yes. conversions RX

out we So just the consistently conversions RX. of reported

So see in we and to as also RX growth consolidate do industry the age. continues

there. So we're optimistic

things is RX. out, that seeing the when of you'll the mentioned strip availability then the construction conversions kind retail the same front, in remains on that or the slower. One thing. we're in see past new But brick-and-mortar, we've of you is And the It of brick-and-mortar strong. growth

ramping move kind of lot and post secondary markets up. folks pandemic. That's of a think where the tertiary are I of kind

there. So we're seeing a lot of runway

Jeffrey Hammond

XX% then And you're for last on guide of Okay. margins, kind quarters back the versus above XX%. X the just at

So upside margin just normalization. are mix maybe wondering what the that and guide outside downside risks to some of

Anselm Wong

Yes.

I think biggest mix the organization. the is thing

the think I been fairly of and has saw our -- guide. higher year we're on the end consistent you past all quarters this

segment the storage. we'll we little sales, just Commercial XXXX, think at to as look it's Car, Housing, see more the come commercial I -- normalized growth in as our than is back lower a

stays seen recent consistent, quarters. So that that brings the think But range be within that it we've if back everything I we'll in down there. still

Jeffrey Hammond

maybe gap. business, commercial update to you're the doing that close on just how kind of margin just And Okay. us on

of that progress a up. there. the those give us was sense target to eventually kind of I Maybe pull think just

Anselm Wong

that we Carolina our get different. products the model sites as don't build so I'll Coast operations a and still Yes. distribution side. solution ship our commercial from, actually of will working versus is a storage a it or bit say of commercial to commercial our It's well be up But area, as the the North business West consolidating lot what out north on been say, opening of full we've there. model well to have Georgia is

But be of because ramped lower that think it of that terms it's some it's business -- a up. versus longer type as solution margin a distribution a will term, improvements as full just show still not minor gets will I So in business.

Operator

Brad Research. question, Next Hewitt with Wolfe

Bradley Hewitt

commercial. revenue you additional another was down color guidance? about self-storage Wondering QX revenue what any we in It could step if versus sequentially. prior looks saw on provide the drove down like X% the shortfall And

talked carport quarter curious relative guidance. shed, were other any moving pieces there You in but headwinds and about the just the to the if in

Anselm Wong

thought Yes. going worse be of and Commercial was the was how normalization carport much would shed in we was to the than be. it little a -- terms

saw that side, when is storage bit printed. more on we still And piece think of -- again, I projects a in some backlog And outs. I little it like the is it a push saw think business. what looking you the there. we in delays Ramey but said, The saw construction it's

flooding the of you California that So the able country, look impacts region deliver. saw to when weather the at does to our the you impact some sites in be to

weather we'll QX of some normal of some see Hopefully, of the construction. related to business in we'll when get normalized, kind back that. terms items did we of So get in go through

Bradley Hewitt

Okay. capital allocation. to That's helpful. And then switching

down balancing M&A. kind forward? buybacks absence the versus balanced capital is how Given priority buybacks that of of with allocation think about you the leverage Or filling going to M&A now the is do more see Is share you X.Xx, do in of M&A? gap

Anselm Wong

see No, way thing. it M&A it. We see I you hit we the think the first is

definitely We market realistic to back terms are is looking think targets always so do. least the as expectation And level. in we get I at of a actually at to normalizing pricing

the some we're that of exactly is hopeful And execute we're right, looking you're that the I So glad the that think share get we're we at. buyback. ones approval can for we on

So we M&A have on. up the lever. in execute terms of if In slows the side to meantime, another something

Operator

Next with Lovallo question, John UBS. .

John Lovallo

if X% maybe driving terms the apologize this. volume? outlook, expected revenue my X%, that of midpoint. covered if over looks revenue on the up a at you a at What's you is lack go expected in of it the like line But sort leverage X.X% EBITDA this, As little by midpoint, to there's the I did in so I of increase cover apologize dropped, well. --

Anselm Wong

Yes.

what XXXX, talked public a finance legal, back the been at We and what HR, adding of et we half needed, the actually in meaning back the cost company look those the added most to you functions really about only had as requirements. all office If the to started year. in support the in costs we've we cetera, of

So you'll there. the cost impacts ability year savings get of to there an impact of full the get that

to all term, won't example, Chief the we're et which Accounting that I fixed get normal that we have cost because is once place, longer on cetera. last need for improvement another leverage focused think in IT, another Officer, we should hire treasurer, area I

of those costs -- So that resources the it's just to and getting adding of all matter needed timing support a business. we

John Lovallo

made And actions quantify we have commercial guys you taken. already opportunity what incremental are the Can in sort Understood. you the expected nice as from some the and then help on the that cost productivity. really us through kind through progress And just come to of savings move is actions XXXX of XXXX?

Anselm Wong

Yes.

start for some some , place factories in put haven't new from we -- seeing we some think seeing that of we'll our I we'll well disclosed, had as of that start in buys benefits equipment think I the but the there. Poland we factory as

So that from benefits as well. decent I'm disclosing expecting some without

what longer improvements looking I consolidation term, at always we're think like is do. we actually further in

looking looking at We're footprint. we're at make we things. So the always where

West as us. some things more volume actually add there well. a is improved demand So to that looking to we The coming guided for had capacity that, out has new there. one that and of the there Coast we're And operations is

out further that there. a improve think more bit and us I will So efficient help be

ship into have that the of things don't we country. to area So

Ramey Jackson

opportunistic Yes. I'll steel we'll bonds. And be our add that one thing is more on

being be of focused fluctuates, that commodity there. we'll kind on As opportunistic keenly

Operator

you. Thank

follow-up Daniel a CJS have from Moore with Securities. We

Dan Moore

the just M&A pulling string of that's on guess, priority. since I the

at? kind typical of a are valuation opportunity, remind looking us In range like? what's deal sizes And just terms of what looks range of we

Anselm Wong

probably XX-month will But think of size don't As to that, period range you of smaller us in, of but tell I the acquisitions areas looking help there, what the we're for that the certain what know, at makes on that be kind sense think within midsize but that's deals, at. accelerate I are we're we you some I deals is we're accretive disclose the us area is we the expect of that kind can than can disclose metrics. that kind hopefully, again, you faster what for don't looking of looking

Dan Moore

relative last in larger up Noke, X to last have about see then, dialogues, of the sort obviously the And And the well to all? XX. REITs as Helpful. at prior announced, those that continue cadence good installs. of to with you both independents talk two others terms just and traction maybe months of deals as Has woken X

Ramey Jackson

No. Look, investing cost of that those now, kind snowball that to as the are, Very of the still a of center conversations proud make can in partnerships. issues we effect stage. and end, those the there's to When when you the solution having, it where announcements with vertical continue we see, the at market in you on back operators. right innovate puts heavily they're kind largest see labor certainly

So yes, innovate. we're excited about the momentum and continue to

where happy are now. we So right

Dan Moore

Ramsey, Helpful. cash flow, one for this exceptional maybe obviously, year. just And more

capital Just and like? you're about talk outlook look working 'XX about thinking CapEx cash potential flow your can and free for what for how

Ramey Jackson

I we were did and cash of looked at what you ] happy think XXXX what did in with very flow. capital [ working we in terms if

what But impact than sizable what that not have it. think a in 'XX. operation, higher little else West saw mentioned would the outside anything I it outside will we CapEx about that that, there's probably of I Coast that's of

our think other that of I receivables continue amount think capital that of get improvement good we'll I improve. to in some terms there the year think area continue trend can But got of is this there's that working on we thing on. we're the focus a terms and to still stay we in working and that improvement I

Dan Moore

forward you to so. Look in down good. a a or seeing tempo Got month it. Very

Operator

like the Ramey for call to closing over would Jackson to turn I remarks.

Ramey Jackson

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

Operator

This concludes teleconference. today's

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

Janus International (JBI) 28 Feb 242023 Q4 Earnings call transcript