10-Q

Large accelerated filer

Accelerated filer

Non-accelerated
filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark One)

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

For the quarterly period ended June 26, 2021

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

For the transition period from to

Commission file number:

001-40456

JANUS INTERNATIONAL GROUP, INC.

(Exact name of registrant as specified in its charter)


Delaware		86-1476200
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

135 Janus International Blvd. Temple, GA		30179
(Address of principal executive offices)		(Zip Code)

(866)

562-2580

(Registrant’s telephone number, including area code)

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


Title of Each Class:	Trading Symbol(s)	Name of Each Exchange on Which Registered:
Common Stock, par value $0.0001 per share	JBI	The New York Stock Exchange
Warrants, each to purchase one share of Common Stock	JBI WS	The New York Stock Exchange

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

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit 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.

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act). Yes ☐ No ☒

As of August

, 2021, 138,384,250 shares of Class A Common Stock, par value $0.0001, were issued and outstanding.

Janus International Group, Inc.

Consolidated Balance Sheets


	June 26,			December 26,
	2021			2020
	(Unaudited)
ASSETS
Current Assets
Cash	$	15,287,621		$	45,254,655
Accounts receivable, less allowance for doubtful accounts; $3,819,000 and $4,485,000, at June 26, 2021 and December 26, 2020, respectively		79,557,005			75,135,295
Costs and estimated earnings in excess of billing on uncompleted contracts		16,614,552			11,398,934
Inventory, net		36,289,253			25,281,521
Prepaid expenses		8,443,195			5,949,711
Other current assets		2,322,802			5,192,386

Total current assets	$	158,514,428		$	168,212,502
Property and equipment, net		31,682,826			30,970,507
Customer relationships, net		297,563,142			309,472,398
Tradename and trademarks		85,819,442			85,597,528
Other intangibles, net		16,627,892			17,387,745
Goodwill		260,275,193			259,422,822
Deferred tax asset		78,435,843			—
Other assets		1,759,222			2,415,243

Total assets	$	930,677,988		$	873,478,745

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	45,316,067		$	29,889,057
Billing in excess of costs and estimated earnings on uncompleted contracts		21,612,809			21,525,319
Current maturities of long-term debt		6,346,071			6,523,417
Other accrued expenses		48,357,979			37,164,627

Total current liabilities	$	121,632,926		$	95,102,420
Long-term debt, net		557,574,245			617,604,254
Deferred tax liability		14,577,682			15,268,131
Derivative warrant liability		39,077,500			—
Other long-term liabilities		2,885,875			4,631,115

Total liabilities	$	735,748,228		$	732,605,920

STOCKHOLDERS’ EQUITY
Common Stock, 825,000,000 shares authorized, $.0001 par value, 138,384,250 and 66,145,633 shares issued and outstanding at June 26, 2021 and December 26, 2020, respectively		13,838			6,615
Additional paid in capital		231,406,515			189,298,544
Accumulated other comprehensive income (loss)		46,526			(227,160	)
Accumulated deficit		(36,537,119	)		(48,205,174	)

Total stockholders’ equity	$	194,929,760		$	140,872,825

Total liabilities and stockholders’ equity	$	930,677,988		$	873,478,745

See accompanying Notes to the Unaudited Consolidated Financial Statements

Janus International Group, Inc.

Consolidated Statements of Operations and Comprehensive Income


	Three Months Ended						Six Months Ended
	June 26, 2021			June 27, 2020			June 26, 2021			June 27, 2020
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
REVENUE
Sales of product	$	140,556,306		$	95,425,815		$	262,252,532		$	203,536,725
Sales of services		33,626,083			26,803,808			64,754,124			56,506,693

Total revenue		174,182,389			122,229,623			327,006,657			260,043,418
Cost of Sales		114,987,977			77,449,920			214,518,947			167,180,130

GROSS PROFIT		59,194,412			44,779,703			112,487,710			92,863,288
OPERATING EXPENSE
Selling and marketing		10,382,169			7,717,283			19,840,296			17,977,566
General and administrative		34,471,523			16,931,440			54,057,831			34,566,666

Operating Expenses		44,853,692			24,648,723			73,898,127			52,544,232

INCOME FROM OPERATIONS		14,340,720			20,130,980			38,589,583			40,319,056
Interest expense		(7,475,727	)		(8,737,328	)		(15,601,797	)		(18,678,476	)
Other income (expense)		(920,003	)		23,883			(2,478,869	)		99,211
Change in fair value of derivative warrant liabilities		(1,928,500	)		—			(1,928,500	)		—

Other Expense, Net		(10,324,230	)		(8,713,445	)		(20,009,166	)		(18,579,265	)

INCOME BEFORE TAXES		4,016,490			11,417,535			18,580,417			21,739,791
Provision for Income Taxes		2,893,283			400,067			2,738,389			770,292

NET INCOME	$	1,123,207		$	11,017,468		$	15,842,028		$	20,969,499

Other Comprehensive Income (Loss)		(37,082	)		(226,575	)		273,686			(3,758,060	)

COMPREHENSIVE INCOME	$	1,086,125		$	10,790,893		$	16,115,714		$	17,211,439

Net income attributable to common stockholders	$	1,123,207		$	11,017,468		$	15,842,028		$	20,969,499

Weighted-average shares outstanding, basic and diluted (Note 15)
Basic		81,009,261			65,819,588			73,577,447			66,876,683
Diluted		81,624,496			65,819,588			73,879,851			66,876,683
Net income per share, basic and diluted (Note 1 5 )
Basic	$	0.01		$	0.17		$	0.22		$	0.31
Diluted	$	0.01		$	0.17		$	0.21		$	0.31

See accompanying Notes to the Unaudited Consolidated Financial Statements.

Janus International Group, Inc.

Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)


	Class B Common						Class A Preferred Units						Common Stock				Additional paid-in capital		Accumulated Other Comprehensive Income (Loss)			Accumulated Equity (Deficit)			Total
	Unit			Amount			Unit			Amount			Shares		Amount
Balance as of December 28, 2019		2,599		$	91,278			189,044		$	189,043,734			—	$	—	$	—	$	(2,152,685	)	$	(56,088,082	)	$	130,894,245

Retroactive application of the recapitalization		(2,599	)		(91,278	)		(189,044	)		(189,043,734	)		65,676,757		6,568		189,128,444	$	—		$	—		$	—
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

Vesting of Midco LLC class B units		—			—			—			—			93,054		9		27,683		—			—			27,692
Distributions to Janus Midco LLC Class A unitholders		—			—			—			—			—		—		—		—			(54,484	)		(54,484	)
Cumulative translation adjustment		—			—			—			—			—		—		—		(3,531,485	)		—			(3,531,485	)
Net income		—			—			—			—			—		—		—					9,952,030			9,952,030

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

Vesting of Midco LLC class B units		—			—			—			—			105,341		11		29,956		—			—			29,967
Distributions to Janus Midco LLC Class A unitholders		—			—			—			—			—		—		—		—			(285,498	)		(285,498	)
Cumulative translation adjustment		—			—			—			—			—		—		—		(226,575	)		—			(226,575	)
Net income		—			—			—			—			—		—		—		—			11,017,468			11,017,468

Balance as of June 2 7 , 2020, as adjusted		—		$	—			—		$	—			65,875,152	$	6,588	$	189,186,083	$	(5,910,745	)	$	(35,458,566	)	$	147,823,360

Janus International Group, Inc.

Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)


	Class B Common Units						Class A Preferred Units						Common Stock				Additional paid-in capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Equity (deficit)			Total
	Unit			Amount			Unit			Amount			Shares		Amount

Balance as of December 26, 2020		4,478		$	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

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

See accompanying Notes to the Unaudited Consolidated Financial Statements

Table of Contents

Janus International Group, Inc.

Consolidated Statements of Cash Flows


	Six Months Ended
	June 26, 2021			June 27, 2020
	(Unaudited)			(Unaudited)
Cash Flows Provided By Operating Activities
Net income	$	15,842,028		$	20,969,499
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		2,979,336			2,832,701
Intangible amortization		13,622,957			13,395,767
Deferred finance fee amortization		1,486,634			1,609,125
Share based compensation		2,111,099			57,659
Loss on extinguishment of debt		2,414,854			—
Change in fair value of contingent consideration		686,700			—
Loss on sale of assets		43,091			18,487
Change in fair value of derivative warrant liabilities		1,928,500			—
Undistributed (earnings) losses of affiliate		(105,107	)		12,125
Deferred income taxes		(767,658	)		—
Changes in operating assets and liabilities
Accounts receivable		(4,421,710	)		2,114,772
Costs and estimated earnings in excess of billings and billings in excess of costs and estimated earnings on uncompleted contracts		(5,215,618	)		8,717,983
Prepaid expenses and other current assets		(2,945,823	)		(2,498,675	)
Inventory		(11,007,730	)		(655,990	)
Accounts payable		15,393,047			441,237
Other accrued expenses		14,116,513			2,076,616
Other assets and long-term liabilities		(1,338,231	)		1,442,694

Net Cash Provided By Operating Activities	$	44,822,882		$	50,534,000

Cash Flows Used In Investing Activities
Proceeds from sale of equipment		79,409			6,083
Purchases of property and equipment		(3,992,533	)		(3,801,552	)
Cash paid for acquisition, net of cash acquired		(1,564,957	)		(4,592,779	)

Net Cash Used In Investing Activities		(5,478,081	)		(8,388,248	)

Cash Flows Used In Financing Activities
Distributions to Janus Midco LLC unitholders		(4,173,973	)		(339,982	)
Principal payments on long-term debt		(63,238,000	)		(4,205,693	)
Proceeds from merger		334,873,727			—
Proceeds from PIPE		250,000,000			—
Payments for transaction costs, net		(44,489,256	)		—
Payments to Janus Midco, LLC unitholders at the business combination		(541,710,278	)		—
Payments for deferred financing fees		(765,090	)		—

Cash Used In Financing Activities	$	(69,502,870	)	$	(4,545,675	)

Effect of exchange rate changes on cash and cash equivalents		191,035			(1,091,444	)

Net (Decrease) Increase in Cash and Cash Equivalents	$	(29,967,034	)	$	36,508,633

Cash and Cash Equivalents, Beginning of Fiscal Year	$	45,254,655		$	19,905,598

Cash and Cash Equivalents as of June 26, 2021 and June 27, 2020	$	15,287,621		$	56,414,231

Supplemental Cash Flows Information
Interest paid	$	16,847,651		$	12,233,825
Income taxes paid	$	773,608		$	537,810
Fair value of earnout	$	686,700		$	—
Fair value of warrants	$	1,928,500		$	—

See accompanying Notes to the Unaudited Consolidated Financial Statements

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

Nature of Operations

Janus International Group, Inc. (“Group” or “Janus”) is a holding company. 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 Group. These entities are all incorporated in the state of Delaware. The Company 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, 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 & 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.

The Group’s 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 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 International Group, LLC (together with each of its operating subsidiaries, Janus Core, BETCO, NOKE, ASTA, Janus Door, LLC (“Janus Door”) and Steel Door Depot.com, LLC.

On 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”), 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 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 (“NYSE”) under the symbols “JBI” and “JBI WS”, respectively.

Assets held at foreign locations were approximately $56,116,000 and $53,424,000 as of June 26, 2021 and December 26, 2020, respectively. Revenues earned at foreign locations totaled approximately $18,345,000 and $7,255,000 for the three months ended June 26, 2021 and June 27, 2020 and $30,905,000 and $19,544,000 for the six months ended June 26, 2021 and June 27, 2020, respectively.

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

2. Summary of Significant Accounting Policies

Unaudited Interim Financial Statements

The accompanying consolidated balance sheet as of June 26, 2021, consolidated statements of operations and comprehensive income and consolidated statements of stockholders’ equity for the three and six months ended June 26, 2021 and June 27, 2020, respectively and consolidated statements of cash flows for the six months ended June 26, 2021 and June 27, 2020, are unaudited.

These financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) 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 consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet as of June 26, 2021, and its results of operations, including its comprehensive income, stockholders’ equity for the three and six months ended June 26, 2021 and June 27, 2020, and its cash flows for the six months ended June 26, 2021 and June 27, 2020. The results for the three and six months ended June 26, 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

S-1/A

form filed with the Securities and Exchange Commission (the “SEC”) on July 19, 2021.

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.

The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, JIH 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. 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 48.6% voting interest compared to Janus Midco’s 51.4% 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.

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; cost 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.

In connection with the Business Combination, outstanding units of Midco were converted into common stock of the Company, par value $0.0001 per share, representing a recapitalization, and the net assets of Juniper were acquired at historical cost, with no goodwill or 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 quarter ended March 28, 2021 and June 27, 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 as shares reflecting the exchange ratio established in the Business Combination Agreement.

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

Principles of Consolidation

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

Reorganization

On June 7, 2021 Midco transferred its wholly owned direct subsidiary Janus International Group, LLC 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 Consolidated Financial Statements

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

Significant items subject to such estimates and assumptions include, but are not limited to, the derivative warrant liability, the recognition of the valuations of unit-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

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 June 26, 2021. Events and changes in circumstances arising after June 26, 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 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 $8,471,000 and $5,813,000 and $15,575,000 and $11,736,000 for the three and six months ended June 26, 2021 and June 27, 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 June 26, 2021 and December 26, 2020. The Company has recorded a reserve for inventory obsolescence as of June 26, 2021 and December 26, 2020, of approximately $1,478,000 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.

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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 equipment			3-7 years
Office furniture and equipment			3-7 years
Vehicles			3-10 years
Leasehold improvements			3-20 years

Other Current Assets

Other current assets consist primarily of deferred transaction costs associated with the Business Combination with Juniper of $0 and $3,444,000 as of June 26, 2021 and December 26, 2020, respectively.

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;

•

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 with Level 1 of the Fair Value hierarchy. The fair value of the Company’s debt approximates its carrying amount as of June 26, 2021 and December 26, 2020 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 fall within Level 2 of the Fair Value hierarchy. The fair value of the warrants contain significant unobservable inputs including the expected term and the share 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. As of June 26, 2021, the fair value of the private and public warrants were valued at market price.

Warrant Liability

The Company classifies Private Placement Warrants (defined and discussed in Note 11—Stockholders’ Equity) as liabilities. At the end of each reporting period, changes in fair value during the period are recognized as a components of other income (expense), net 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.

Recently Issued Accounting Pronouncements Not Yet Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU

2016-13,

Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments, 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 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 charge to be recognized for the amount by which the carrying amount exceeds the

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Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

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

No. 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 Accounting Standards Update

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,

which deferred the effective date for ASC 842, Leases, for one year. For private companies, 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 Accounting Standards Update

2020-06,

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 Janus’s consolidated financial statements.

In May 2021, the FASB issued ASU

No. 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.

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.

3. Inventories

The major components of inventories at :


	June 26,		December 26,
	2021		2020
Raw materials	$	26,360,134	$	17,431,731
Work-in-process		552,000		637,109
Finished goods		9,377,119		7,212,681

	$	36,289,253	$	25,281,521

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Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

4. Property and Equipment

Property, equipment, and other fixed assets as of June 26, 2021 and December 26, 2020 are as follows:


	June 26,			December 26,
	2021			2020
Land	$	3,361,295		$	3,361,295
Manufacturing machinery and equipment		28,718,274			26,446,933
Leasehold improvements		4,882,855			5,127,065
Construction in progress		1,666,709			2,170,193
Other		9,576,318			8,084,391

	$	48,205,451		$	45,189,877
Less accumulated depreciation		(16,522,625	)		(14,219,370	)

	$	31,682,826		$	30,970,507

5. Acquired Intangible Assets and Goodwill

Intangible assets acquired in a business combination are recognized at fair value and amortized over their estimated useful lives. The carrying basis and accumulated amortization of recognized intangible assets at June 26, 2021 and December 26, 2020, are as follows:


	June 26,						December 26,
	2021						2020
	Gross Carrying Amount		Accumulated Amortization		Average Remaining Life in Years		Gross Carrying Amount		Accumulated Amortization
Intangible Assets
Customer relationships	$	381,758,525	$	84,195,383		12	$	380,862,639	$	71,390,241
Noncompete agreements		417,471		192,736		6		412,949		151,028
Tradenames and trademarks		85,819,442		—		Indefinite		85,597,528		—
Other intangibles		58,455,001		42,051,844		7		58,404,905		41,279,081

	$	526,450,439	$	126,439,963			$	525,278,021	$	112,820,350

Changes to gross carrying amount of recognized intangible assets due to translation adjustments include an approximate $361,000

gain and $

997,000

loss for the period ended June 26, 2021 and December 26, 2020, respectively. Amortization expense was approximately $

6,791,000

and $

6,686,000

and $

13,623,000

and $

13,396,000

for the three and six months ended June 26, 2021 and June 27, 2020, respectively.

The changes in the carrying amounts of goodwill for the period ended June 26, 2021 were as follows:


Balance as of December 26, 2020	$	259,422,822

Goodwill acquired during the period		929,276
Changes due to foreign currency fluctuations		(76,905	)

Balance as of June 26, 2021	$	260,275,193

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Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

6. Accrued Expenses

Accrued expenses are summarized as follows:


	June 26,		December 26,
	2021		2020
Sales tax payable	$	1,660,907	$	1,324,696
Interest payable		2,100,101		4,832,590
Contingent consideration payable—short term		4,000,000		4,000,000
Other accrued liabilities		1,991,116		5,294,414
Employee compensation		6,409,603		6,090,304
Customer deposits and allowances		22,145,120		10,780,783
Other		10,051,132		4,841,840

Total	$	48,357,979	$	37,164,627

Other accrued liabilities consist primarily of deferred transaction costs of $0 and $3,337,000 as of June 26, 2021 and December 26, 2020, respectively. Other consists primarily of property tax, freight accrual, Federal and State income taxes, legal, accounting and other professional fees.

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. The line of credit facility is for

50,000,000

with interest payments due 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

. 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 June

2021

and December

2020

, the interest rate in effect for the facility was

3.5

The line of credit is collateralized by accounts receivable and inventories.

The Company incurred deferred loan costs in the amount of $

1,058,000

which are being amortized over the term of the facility that expires on

February 12, 2023

, using the effective interest method. The amortization of the deferred loan costs is included in interest expense on the consolidated statements of operations and comprehensive income. The unamortized portion of the fees as of June

2021

and December

2020

was approximately $

342,000

and $

448,000

, respectively. There was

outstanding balance on the line of credit as of June

2021

and December

2020

8. Long-Term Debt

Long-term debt consists of the following:


	June 26,		December 26,
	2021		2020
Note payable—First Lien	$	—	$	562,363,000
Note payable—First Lien B2		—		73,875,000
Note payable—Amendment No. 3 First Lien		573,000,000		—

		573,000,000		636,238,000
Less unamortized deferred finance fees		9,079,684		12,110,329
Less current maturities		6,346,071		6,523,417

Total long-term debt	$	557,574,245	$	617,604,254

Notes Payable – First Lien and First Lien B2 –

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 amendment 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

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

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.

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—

On 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 was 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 is 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 is to be repaid on a quarterly basis of 0.25% of the original balance beginning the last day of

June 26, 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 June 26, 2021). The debt is secured by substantially all business assets. Unamortized debt issuance costs are approximately $9,080,000 at June 26, 2021.

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.

On June 7, 2021, 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.

As of June 26, 2021, and December 26, 2020, the Company maintained one letter of credit totaling approximately $295,000, on which there were no balances due.

In connection with the Company entering into the debt agreements 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 $640,000 and $634,000 and $1,487,000 and $1,609,000 was recognized for the three and six months ended June 26, 2021 and June 27, 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 June 26, 2021, are:


2021	$	4,759,554
2022		6,346,071
2023		6,346,071
2024		6,346,071
2025		549,202,233

Total	$	573,000,000

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

9. Business Combination

Business Combination with Juniper Industrial Holdings, Inc.

On June 7, 2021, Juniper 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. 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. 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, which consisted of (i) $541.7

million 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.

In connection with the closing of the Business Combination, the Juniper Industrial Sponsor, LLC (the “Sponsor”) received

2,000,000

shares of our 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.

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


		Page

PART I—FINANCIAL INFORMATION			3

Item 1.	Financial Statements		3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		27

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		55

Item 4.	Controls and Procedures		56

PART II—OTHER INFORMATION			57

Item 1.	Legal Proceedings		57

	Item 1A. Risk Factors		57

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		67

Item 3.	Defaults upon Senior Securities		67

Item 4.	Mine Safety Disclosures		67

Item 5.	Other Information		67

Item 6.	Exhibits		68

SIGNATURES			70