Filed Pursuant to Rule 424(b)(3)

Registration No. 333-257731

PROSPECTUS SUPPLEMENT NO. 1

(to Prospectus dated August 6, 2021)

 

JANUS INTERNATIONAL GROUP, INC.

Up to 114,045,400 Shares of Common Stock

Up to 10,150,000 Warrants

Up to 10,150,000 Shares of Common Stock Underlying Warrants

 

 

This prospectus supplement supplements the prospectus dated August 6, 2021 (the “Prospectus”), which forms a part of our registration statement on Form S-1 (No. 333-257731). This prospectus supplement is being filed to update and supplement the information in the Prospectus with the information contained in our quarterly report on Form 10-Q for the quarter ended June 26, 2021, filed with the Securities and Exchange Commission on August 10, 2021 (the “Quarterly Report”). Accordingly, we have attached the Quarterly Report to this prospectus supplement.

The Prospectus and this prospectus supplement relate to resale from time to time of up to 114,045,400 shares of our common stock, par value $0.0001 per share (the “Common Stock”), 10,150,000 warrants to purchase Common Stock of the Company (the “Warrants”) and 10,150,000 shares of Common Stock issuable upon exercise of the Warrants by the selling securityholders named in the Prospectus (each a “Selling Securityholder and collectively, the “Selling Securityholders”). The Common Stock may be offered from time to time up to specified limits by one or more of the Selling Securityholders identified in the Prospectus or in any supplement to the Prospectus. See the sections of the Prospectus entitled “Selling Securityholders” and “Plan of Distribution.”

Our Common Stock and Warrants are listed on the New York Stock Exchange (“NYSE”) under the symbols “JBI” and “JBI WS,” respectively. On August 13, 2021, the closing sale prices of our Common Stock and Warrants were $14.66 and $4.50, respectively.

This prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus and if there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement.

 

 

Investing in our Common Stock and Warrants involves risks that are described in the “Risk Factors” section beginning on page 7 of the Prospectus and under similar headings in any further amendments or supplements to the Prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if the Prospectus or this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus supplement is August 16, 2021.

 

 

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

OR

 

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

For the transition period from                to                

Commission file number: 001-40456

 

 

JANUS INTERNATIONAL GROUP, INC.

(Exact name of registrant as specified in its charter)

 

 

 

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.

 

Large accelerated filer		☐		Accelerated filer		☐
Non-accelerated filer		☒		Smaller reporting company		☒
				Emerging growth company		☒

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ☐    No  ☒

As of August 10, 2021, 138,384,250 shares of Class A Common Stock, par value $0.0001, were issued and outstanding.

 

 

 

JANUS INTERNATIONAL GROUP, INC.

Quarterly Report on Form 10-Q

Table of Contents

 

				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

PART I—FINANCIAL INFORMATION

 

Item 1.

Financial Statements.

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

 

4

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 15)
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.

 

5

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 27, 2020, as adjusted			—			$	—				—			$	—				65,875,152			$	6,588			$	189,186,083			$	(5,910,745	)		$	(35,458,566	)		$	147,823,360

 

6

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

 

7

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

 

8

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

1. 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.

 

9

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.

 

10

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.

 

11

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

 

12

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

 

13

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

 

14

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 26, 2021 and December 26, 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 26, 2021 and December 26, 2020 was approximately $342,000 and $448,000, respectively. There was no outstanding balance on the line of credit as of June 26, 2021 and December 26, 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

 

15

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

 

16

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 25,000,000 shares of Common Stock (the “PIPE Shares”) at a purchase price per share of $10.00 (the “PIPE Investment”). One of the Company’s directors also purchased an aggregate of 1,000,000 of the PIPE Shares as part of the PIPE Investment. The PIPE Investment closed on June 7, 2021 and the issuance of an aggregate of 25,000,000 shares of Common Stock occurred concurrently with the consummation of the Business Combination.

In connection with the Business Combination, the Company incurred direct and incremental costs of approximately $44.5 million related to the equity issuance, consisting primarily of investment banking, legal, accounting and other professional fees, which were recorded to additional paid-in capital as a reduction of proceeds. In addition, the Company incurred $4,468,000 in transaction bonuses paid to key employees and $2,059,000 in non-cash share-based compensation expense due to the accelerated vesting of Midco’s legacy share-based compensation plan. The transaction bonuses and share-based compensation are included in general and administrative expense on our consolidated statement of operations and comprehensive income for six months ended June 26, 2021. See Note 10 Equity Incentive Plan for additional information.

G & M Stor-More Pty Ltd Acquisition

On January 19, 2021, the Company, through its wholly owned subsidiary Steel Storage Australia Pty Ltd. acquired 100% of the net assets of G & M Stor-More Pty Ltd. for total cash consideration of approximately $1,739,000. In aggregate, $814,000 was attributed to intangible assets, $929,000 was attributable to goodwill, and $(4,000) was attributable to net liabilities assumed. The goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of the Company and Steel Storage. All of the goodwill was assigned to the Janus International segment of the business and is not deductible for income tax purposes.

The weighted-average amortization of acquired intangibles is 11.6 years.

During 2021, the Company incurred approximately $105,000 of third-party acquisition costs. These expenses are included in general and administrative expense of the Company’s Consolidated Statement of Operations and Comprehensive Income for the six months ended June 26, 2021.

 

17

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

 

Pro forma results of operations for this acquisition have not been presented because the acquisition occurred at the beginning of this reporting period and the historic results of operations for G & M Stor-More Pty Ltd. are not material to the consolidated results of operations in the prior year.

10. Equity Incentive Plan and Unit Option Plan

2021 Equity Incentive Plan

Effective June 7, 2021, Group implemented an equity incentive program designed to enhance the profitability and value of its investment for the benefit of its shareholders by enabling Group to offer eligible directors, officers and employees equity-based incentives in order to attract, retain and reward such individuals and strengthen the mutuality of interest between such individuals and the Group’s shareholders. As of June 26, 2021, no awards were granted to any individuals under the Plan.

Midco—Common B Unit Incentive Plan

Prior to the Business Combination, commencing in March 15, 2018, the Board of Directors of Midco approved the Class B Unit Incentive Plan (the “Class B Plan”), which was a form of long-term compensation that provided for the issuance of ownership units to employees for purposes of retaining them and enabling such individuals to participate in the long-term growth and financial success of Midco. As a result of the Business Combination, the Board of Directors approved an acceleration of the awards granted in connection with the Class B Plan, to allow accelerated vesting of the units upon consummation of the Business Combination. On the date of the Closing, the accelerated vesting for 16,079 units (equivalent to 4,012,873 shares of Group common stock) resulted in $2.1 million of non-cash share-based compensation expense recorded to general and administrative expense in consolidated statement of operations and comprehensive income for the three and six months ended June 26, 2021.

 

18

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

 

11. Stockholders’ Equity

On June 7, 2021, Group’s common stock began trading on the NYSE under the symbol “JBI”. Pursuant to the terms of the Amended and Restated Certificate of Incorporation, the Company is authorized and has available 825,000,000 shares of common stock with a par value of $0.0001 per share. Immediately following the Business Combination, there were 138,384,250 shares of common stock with a par value of $0.0001 outstanding. As discussed in Note 9 Business Combination, the Company has retroactively adjusted the shares issued and outstanding prior to June 7, 2021 to give effect to the exchange ratio established in the Business Combination Agreement to determine the number of shares of common stock into which they were converted.

Rollover Equity

At the closing date of the business combination, each outstanding unit of Midco’s Class A Preferred and Class B Common converted into our common stock at the then-effective conversion rate. Each unit of Midco Class A Preferred was converted into approximately 343.983 shares of our common stock of the Group, and each unit of Midco Class B Common was converted into approximately 249.585 shares of our common stock based on the determined exchange ratio. There are 70,270,400 shares held by Midco equityholders.

PIPE Investment

Concurrently with the execution and delivery of the Business Combination Agreement, the PIPE Investors entered into the PIPE Subscription Agreements pursuant to which the PIPE Investors purchased an aggregate of 25,000,000 PIPE Shares at a purchase price per share of $10.00. One of the Company’s directors purchased an aggregate of 1,000,000 of the PIPE Shares as part of the PIPE Investment.

The PIPE Investment closed on June 7, 2021 and the issuance of an aggregate of 25,000,000 shares of Common Stock occurred concurrently with the consummation of the Business Combination. The sale and issuance was made to accredited investors in reliance on Rule 506 of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”).

Founder Shares

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

 

		Shares				%
Janus Midco, LLC unitholders		$	70,270,400				50.8	%
Public stockholders			43,113,850				31.2	%
PIPE Investors			25,000,000				18.0	%
Total		$	138,384,250				100.0	%

Warrants

The Sponsor purchased 10,150,000 warrants to purchase Class A common stock of JIH (the “private placement warrants”) for a purchase price of $1.00 per whole private placement warrant, or $10,150,000 in the aggregate, in private placement transactions that occurred simultaneously with the closing of the Juniper IPO and the closing of the over-allotment option for the Juniper IPO (the “private placement”). Each private placement warrant entitled the holder to purchase one share of Class A common stock of JIH at $11.50 per share. The private placement warrants were only exercisable for a whole number of shares of Class A common stock of JIH. The Sponsor transferred 5,075,000

 

19

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

 

of its private placement warrants to Midco’s equityholders as part of the consideration for the Business Combination. The private placement warrants are liability classified. Immediately after giving effect to the Business Combination there are 17,249,995 issued and outstanding public warrants. The public warrants are equity classified.

 

20

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

 

12. Related Party Transactions

Jupiter Intermediate Holdco, LLC, on behalf of the Janus Core has entered into a Management and Monitoring Services Agreement (MMSA) with the Class A Preferred Unit holders group. Janus Core paid management fees to the Class A Preferred Unit holders group for the three and six months ended June 26, 2021 and June 27, 2020 of approximately $1,124,000 and $1,763,000 and $3,739,000 and $3,692,000, respectively. Approximately $869,000 of the Class A Preferred Unit holders group management fees were accrued and unpaid as of December 26, 2020 and no fees were accrued and unpaid as of June 26, 2021. As a result of the Business Combination the MMSA was terminated effective June 7, 2021.

As of June 27, 2020, there were related party sales of approximately $1,000 from the Company to its Mexican Joint Venture and no related party sales as of June 26, 2021. For the three months ended June 26, 2021 and June 27, 2020 there were no related party sales to the Mexican Joint Venture.

Janus Core leases a manufacturing facility in Butler, Indiana, from Janus Butler, LLC, an entity wholly owned by a member of the board of directors of Group. Rent payments paid to Janus Butler, LLC for the three and six months ended June 26, 2021 and June 27, 2020, were approximately $37,000 and $36,000 and $86,000 and $73,000, respectively. The lease extends through July 31, 2021, with monthly payments of approximately $12,000 with an annual escalation of 1.5%.

Janus Core is a party to a lease agreement with 134 Janus International, LLC, an entity majority owned by a member of the board of directors of Group. Rent payments paid to 134 Janus International, LLC in the three and six months ended June 26, 2021 and June 27, 2020, were approximately $114,000 and $112,000 and $229,000 and $223,000, respectively. The lease extends through September 30, 2021, with monthly payments of approximately $38,000 per month with an annual escalation of 2.5%.

The Group leases a distribution center in Fayetteville, Georgia from French Real Estate Investments, LLC, an entity partially owned by a shareholder of the Group. Rent payments paid to French Real Estate Investments, LLC for the three and six months ended June 26, 2021 and June 27, 2020, were approximately $26,000 and $26,000 and $53,000 and $53,000, respectively. The lease extends through July 31, 2022, with monthly payments of approximately $9,000 per month. The Group additionally acquired a lease agreement with ASTA Investment, LLC, for a manufacturing facility in Cartersville, Georgia an entity partially owned by a shareholder of the Company. The original lease term began on April 1, 2018 and extended through March 31, 2028 and was amended in June 2020 to extend the term until March 1, 2030, with monthly lease payments of $66,000 per month with an annual escalation of 2.0%. Rent payments to ASTA Investment, LLC for the three and six months ended June 26, 2021 and June 27, 2020, were approximately $199,000 and $197,000 and $397,000 and $346,000, respectively.

13. Revenue Recognition

The Company accounts for a contract with a customer when both parties have approved the contract and are committed to perform their respective obligations, each party’s rights and payment terms can be identified, the contract has commercial substance, and it is probable that the Company will collect substantially all of the consideration to which it is entitled. Revenue is recognized when, or as, performance obligations are satisfied by transferring control of a promised good or service to a customer.

Contract Balances

Contract assets are the rights to consideration in exchange for goods or services that the Company has transferred to a customer when that right is conditional on something other than the passage of time. Contract assets primarily result from contracts that include installation which are billed via payment requests that are submitted in the month following the period during which revenue was recognized. Contract liabilities are recorded for any services billed to customers and not yet recognizable if the contract period has commenced or for the amount collected from customers in advance of the contract period commencing. Contract assets are disclosed as costs and estimated earnings in excess of billings on uncompleted contracts, and contract liabilities are disclosed as billings in excess of costs and estimated earnings on uncompleted contracts in the consolidated balance sheet. Contract balances for the six months ended June 26, 2021 were as follows:

 

		June 26, 2021
Contract assets, beginning of the period		$	11,398,934
Contract assets, end of the period		$	16,614,552
Contract liabilities, beginning of the period		$	21,525,319
Contract liabilities, end of the period		$	21,612,809

 

21

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

 

During the three and six months ended June 26, 2021, the Company recognized revenue of approximately $2,816,000 and $16,932,000, respectively, related to contract liabilities at December 26, 2020. This reduction was offset by new billings of approximately $17,019,000 for product and services for which there were unsatisfied performance obligations to customers and revenue had not yet been recognized as of June 26, 2021.

Disaggregation of Revenue

The principal categories we use to disaggregate revenues are by timing and sales channel of revenue recognition. The following disaggregation of revenues depict the Company’s reportable segment revenues by timing and sales channel of revenue recognition for the three and six months ended June 26, 2021 and June 27, 2020:

Revenue by Timing of Revenue Recognition

 

		Three Months Ended								Six Months Ended
Reportable Segments by Sales Channel Revenue Recognition		June 26, 2021				June 27, 2020				June 26, 2021				June 27, 2020
Janus North America
Goods transferred at a point in time		$	139,188,949			$	95,751,111			$	260,082,109			$	200,276,584
Services transferred over time			25,056,299				23,167,477				50,697,555				47,073,167
			164,245,248				118,918,588				310,779,664				247,349,751
Janus International
Goods transferred at a point in time			9,775,323				3,618,698				16,848,388				10,110,767
Services transferred over time			8,569,784				3,636,331				14,056,570				9,433,526
			18,345,107				7,255,029				30,904,958				19,544,293
Eliminations			(8,407,966	)			(3,943,994	)			(14,677,965	)			(6,850,626	)
Total Revenue		$	174,182,389			$	122,229,623			$	327,006,657			$	260,043,418

Revenue by Sale Channel Revenue Recognition

 

		Six Months Ended								Six Months Ended
Reportable Segments by Sales Channel Revenue Recognition		June 26, 2021				June 27, 2020				June 26, 2021				June 27, 2020
Janus North America
Self Storage-New Construction		$	55,600,871			$	55,763,077			$	104,301,403			$	117,223,246
Self Storage-R3			52,182,213				30,411,543				91,513,670				67,981,662
Commercial and Others			56,462,164				32,743,968				114,964,591				62,144,843
			164,245,248				118,918,588				310,779,664				247,349,751
Janus International
Self Storage-New Construction		$	9,775,323			$	3,618,698				23,778,978				11,771,203
Self Storage-R3			8,569,784				3,636,331				7,125,980				7,773,090
			18,345,107				7,255,029				30,904,958				19,544,293
Eliminations			(8,407,966	)			(3,943,994	)			(14,677,965	)			(6,850,626	)
Total Revenue		$	174,182,389			$	122,229,623			$	327,006,657			$	260,043,418

14. Income Taxes

Prior to June 7, 2021, the Company was a limited liability company taxed as a partnership for U.S. federal income tax purposes. The Company was generally not directly subject to income taxes under the provisions of the Internal Revenue Code and most applicable state laws. Therefore, taxable income or loss was reported to the members for inclusion in their respective tax returns.

After June 7, 2021, the Group is taxed as a Corporation for U.S. income tax purposes and similar sections of the state income tax laws . The Group’s effective tax rate is based on pre-tax earnings, enacted U.S. statutory tax rates, non-deductible expenses, and certain tax rate differences between U.S. and foreign jurisdictions. The foreign subsidiaries file income tax returns in the United Kingdom, France, Australia, and Singapore as necessary. For tax reporting purposes, the taxable income or loss with respect to the 45% ownership in the joint venture operating in Mexico will be reflected in the income tax returns filed under that country’s jurisdiction. The Group’s provision for income taxes consists of provisions for federal, state, and foreign income taxes.

 

22

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

 

The provision for income taxes for the three and six months ended June 26, 2021 and June 27, 2020 includes amounts related to entities within the group taxed as corporations in the United States, United Kingdom, France, Australia, and Singapore. The Company determines its provision for income taxes for interim periods using an estimate of its annual effective tax rate on year to date ordinary income and records any changes affecting the estimated annual effective tax rate in the interim period in which the change occurs. Additionally, the income tax effects of significant unusual or infrequently occurring items are recognized entirely within the interim period in which the event occurs.

During the three months ended June 26, 2021 and June 27, 2020, the Company recorded a total income tax provision of approximately $2,875,000 and $400,000 on pre-tax income of approximately $4,016,000 and $11,417,000 resulting in an effective tax rate of 71.6% and 3.5%, respectively. During the six months ended June 26, 2021 and June 27, 2020, the Company recorded a total income tax provision of approximately $2,738,000 and $770,000 on pre-tax income of approximately $18,580,000 and $21,740,000 resulting in an effective tax rate of 14.7% and 3.5%, respectively The effective tax rates for these periods were primarily impacted by the change in tax status of the Group, statutory rate differentials, changes in estimated tax rates, and permanent differences.

15. Net Income Per Share

Prior to the Business Combination, and prior to effecting the reverse recapitalization, the Company’s pre-merger LLC membership structure included two classes of units: Class A preferred units and Class B common units. The Class A preferred units were entitled to receive distributions prior and in preference on Class A preferred unit unpaid cumulative dividends (“Unpaid Preferred Yield”) followed by Class A preferred unit capital contributions that have not been paid back to the holders (the “Unreturned Capital”). Vested Class B common units participate in the remaining distribution on a pro-rata basis with Class A preferred units if they have met the respective Participation Threshold and, if applicable, the Target Value defined in the respective Unit Grant Agreement. The Class A preferred and Class B common units fully vested at the Business Combination date.

Pursuant to the Restated and Amended Certificate of Incorporation and as a result of the reverse recapitalization, the Company has retrospectively adjusted the weighted average shares outstanding prior to June 7, 2021 to give effect to the exchange ratio used to determine the number of shares of common stock into which they were converted. Basic net income per share is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is computed based on the weighted average number of common shares outstanding plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include stock purchase warrants and contingently issuable shares attributable to the contingency consideration and earn-out consideration.

The following table sets forth the computation of basic and diluted EPS attributable to common stockholders for the three and six months ended June 26, 2021 and June 27, 2020:

 

		Three Months Ended								Six Months Ended
		June 26, 2021				June 27, 2020				June 26, 2021				June 27, 2020
Numerator:
Net income attributable to common stockholders		$	1,123,207			$	11,017,468			$	15,842,028			$	20,969,499
Denominator:
Weighted average number of shares:
Basic			81,009,261				65,819,588				73,577,447				66,876,683
Adjustment for Warrants—Treasury stock method			615,235				—				302,404				—
Diluted			81,624,496				65,819,588				73,879,851				66,876,683
Basic net income per share attributable to common stockholders		$	0.01			$	0.17			$	0.22			$	0.31
Diluted net income per share attributable to common stockholders		$	0.01			$	0.17			$	0.21			$	0.31

 

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