Filed Pursuant to Rule 424(b)(3)

Registration No. 333-257731

PROSPECTUS SUPPLEMENT NO. 5

(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, filed with the Securities and Exchange Commission on November 9, 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 is listed on the New York Stock Exchange (“NYSE”) under the symbol “JBI.” On November 12, 2021, the closing sale price of our Common Stock was $13.25. Our Warrants were listed on NYSE under the symbol “JBI WS” until November 11, 2021. On November 11, 2021, the closing sale price of our Warrants was $3.80. As of 5:00 p.m., Eastern Time, on November 12, 2021, all of our outstanding Warrants have been redeemed.

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 58 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 November 15, 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 September 25, 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 (State or other jurisdiction of incorporation or organization)		86-1476200 (I.R.S. Employer Identification No.)
135 Janus International Blvd. Temple, GA (Address of principal executive offices)		30179 (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 Warrants, each to purchase one share of Common Stock		JBI JBI WS		New York Stock Exchange New York Stock Exchange

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 November 5, 2021, 142,936,580 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			26
Item 3.		Quantitative and Qualitative Disclosures About Market Risk			55
Item 4.		Controls and Procedures			56
PART II—OTHER INFORMATION					58
Item 1.		Legal Proceedings			58
Item 1A.		Risk Factors			58
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			58
Item 3.		Defaults upon Senior Securities			58
Item 4.		Mine Safety Disclosures			58
Item 5.		Other Information			58
Item 6.		Exhibits			58
SIGNATURES					61

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Janus International Group, Inc.

Consolidated Balance Sheets

 

 

		September 25,				December 26,
		2021				2020
		(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents		$	9,221,607			$	45,254,655
Accounts receivable, less allowance for doubtful accounts; $4,366,000 and $4,485,000, at September 25, 2021 and December 26, 2020, respectively			101,680,287				75,135,295
Costs and estimated earnings in excess of billing on uncompleted contracts			23,602,670				11,398,934
Inventory, net			52,830,737				25,281,521
Prepaid expenses			8,851,831				5,949,711
Other current assets			3,505,602				5,192,386
Total current assets		$	199,692,734			$	168,212,502
Property and equipment, net			49,786,563				30,970,507
Customer relationships, net			319,339,643				309,472,398
Tradename and trademarks			107,958,402				85,597,528
Other intangibles, net			18,380,776				17,387,745
Goodwill			369,607,198				259,422,822
Deferred tax asset, net			63,616,900				—
Other assets			1,992,783				2,415,243
Total assets		$	1,130,374,999			$	873,478,745
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable		$	56,817,373			$	29,889,057
Billing in excess of costs and estimated earnings on uncompleted contracts			25,759,923				21,525,319
Current maturities of long-term debt			8,111,212				6,523,417
Other accrued expenses			62,209,935				37,164,627
Total current liabilities		$	152,898,443			$	95,102,420
Line of credit			19,350,803				—
Long-term debt, net			706,927,275				617,604,254
Deferred tax liability, net			—				15,268,131
Derivative warrant liability			35,525,000				—
Other long-term liabilities			4,234,276				4,631,115
Total liabilities		$	918,935,797			$	732,605,920
STOCKHOLDERS’ EQUITY
Common Stock, 825,000,000 shares authorized, $.0001 par value, 138,384,360 and 66,145,633 shares issued and outstanding at September 25, 2021 and December 26, 2020, respectively			13,838				6,615
Additional paid in capital			231,407,780				189,298,544
Accumulated other comprehensive loss			(1,123,039	)			(227,160	)
Accumulated deficit			(18,859,377	)			(48,205,174	)
Total stockholders’ equity		$	211,439,202			$	140,872,825
Total liabilities and stockholders’ equity		$	1,130,374,999			$	873,478,745

See accompanying Notes to the Unaudited Consolidated Financial Statements

 

3

Janus International Group, Inc.

Consolidated Statements of Operations and Comprehensive Income

 

 

		Three Months Ended								Nine Months Ended
		September 25, 2021				September 26, 2020				September 25, 2021				September 26, 2020
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
REVENUE
Sales of product		$	155,669,772			$	113,511,689			$	417,922,304			$	317,048,413
Sales of services			32,120,153				26,827,369				96,874,278				83,334,062
Total revenue			187,789,925				140,339,058				514,796,582				400,382,475
Cost of Sales			125,551,395				87,574,908				340,070,342				254,755,038
GROSS PROFIT			62,238,530				52,764,150				174,726,240				145,627,437
OPERATING EXPENSE
Selling and marketing			12,065,859				7,823,145				31,906,155				25,800,711
General and administrative			24,947,491				18,309,277				78,318,621				52,875,943
Contingent consideration and earnout fair value adjustments			—				(2,875,248	)			686,700				(2,875,248	)
Operating Expenses			37,013,350				23,257,174				110,911,476				75,801,406
INCOME FROM OPERATIONS			25,225,180				29,506,976				63,814,764				69,826,031
Interest expense			(7,663,536	)			(8,768,791	)			(23,265,333	)			(27,447,267	)
Other income (expense)			90,873				319,091				(2,387,997	)			418,302
Change in fair value of derivative warrant liabilities			3,552,500				—				1,624,000				—
Other Expense, Net			(4,020,163	)			(8,449,700	)			(24,029,330	)			(27,028,965	)
INCOME BEFORE TAXES			21,205,017				21,057,276				39,785,434				42,797,066
Provision for Income Taxes			3,527,275				284,282				6,265,664				1,054,574
NET INCOME		$	17,677,742			$	20,772,994			$	33,519,770			$	41,742,492
Other Comprehensive Income (Loss)			(1,169,565	)			3,339,777				(895,879	)			(418,283	)
COMPREHENSIVE INCOME		$	16,508,177			$	24,112,771			$	32,623,891			$	41,324,209
Net income attributable to common stockholders		$	17,677,742			$	20,772,994			$	33,519,770			$	41,742,492
Weighted-average shares outstanding, basic and diluted (Note 15)
Basic			138,384,284				65,875,152				95,179,726				65,773,907
Diluted			142,840,792				65,875,152				97,828,380				65,773,907
Net income per share, basic and diluted (Note 15)
Basic		$	0.13			$	0.32			$	0.35			$	0.63
Diluted		$	0.10			$	0.32			$	0.33			$	0.63

See accompanying Notes to the Unaudited Consolidated Financial Statements.

 

4

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 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
Vesting of Midco LLC class B units			—				—				—				—				177,426				18				60,593				—				—				60,611
Distributions to Janus Midco LLC Class A unitholders			—				—				—				—				—				—				—				—				(35,797,005	)			(35,797,005	)
Cumulative translation adjustment			—				—				—				—				—				—				—				3,339,777				—				3,339,777
Net income			—				—				—				—				—				—				—				—				20,772,994				20,772,994
Balance as of September 26, 2020, as adjusted			—				—				—				—				66,052,578				6,606				189,246,676				(2,570,968	)			(50,482,577	)			136,199,737

 

5

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
Warrant Redemption			—				—				—				—				110				—				1,265				—				—				1,265
Cumulative translation adjustment			—				—				—				—				—				—				—				(1,169,565	)			—				(1,169,565	)
Net income			—				—				—				—				—				—				—				—				17,677,742				17,677,742
Balance as of September 25, 2021			—				—				—				—				138,384,360				13,838				231,407,780				(1,123,039	)			(18,859,377	)			211,439,202

See accompanying Notes to the Unaudited Consolidated Financial Statements

 

6

Janus International Group, Inc.

Consolidated Statements of Cash Flows

 

		Nine Months Ended
		September 25, 2021				September 26, 2020
		(Unaudited)				(Unaudited)
Cash Flows Provided By Operating Activities
Net income		$	33,519,770			$	41,742,492
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation			4,677,954				4,270,649
Intangible amortization			21,851,717				20,287,353
Deferred finance fee amortization			2,286,480				2,419,061
Share based compensation			2,111,099				118,270
Loss on extinguishment of debt			2,414,854				(257,545	)
Change in fair value of contingent consideration and earnout			686,700				(2,875,248	)
Loss on sale of assets			43,091				22,595
Change in fair value of derivative warrant liabilities			(1,624,000	)			—
Undistributed (earnings) losses of affiliate			75,565				(12,685	)
Deferred income taxes			(767,658	)			237,359
Changes in operating assets and liabilities
Accounts receivable			(16,942,650	)			571,872
Costs and estimated earnings in excess of billings and billings in excess of costs and estimated earnings on uncompleted contracts			(12,101,214	)			1,392,227
Prepaid expenses and other current assets			(4,488,285	)			(2,846,461	)
Inventory			(18,474,167	)			1,033,221
Accounts payable			18,409,091				1,011,609
Other accrued expenses			29,127,435				7,728,116
Other assets and long-term liabilities			(1,122,518	)			2,068,168
Net Cash Provided By Operating Activities			59,683,264				76,911,053
Cash Flows Used In Investing Activities
Proceeds from sale of equipment			79,409				7,348
Purchases of property and equipment			(15,930,575	)			(4,936,347	)
Cash paid for acquisitions, net of cash acquired			(179,713,814	)			(4,472,105	)
Net Cash Used In Investing Activities			(195,564,980	)			(9,401,104	)
Cash Flows Provided by (Used In) Financing Activities
Net borrowings on line of credit			19,350,803				—
Distributions to Janus Midco LLC unitholders			(4,173,973	)			(36,136,986	)
Principal payments on long-term debt			(64,824,518	)			(6,623,601	)
Proceeds from issuance of long term debt			155,000,000				—
Proceeds from merger			334,873,727				—
Proceeds from PIPE			250,000,000				—
Payments for transaction costs			(44,489,256	)			—
Payments to Janus Midco, LLC unitholders at the business combination			(541,710,278	)			—
Proceeds from warrant redemption			1,265				—
Payment of contingent consideration			—				(3,923,271	)
Payments for deferred financing fees			(4,320,821	)			—
Cash Provided By (Used In) Financing Activities		$	99,706,948			$	(46,683,858	)
Effect of exchange rate changes on cash and cash equivalents			141,720				(1,003,090	)
Net (Decrease) Increase in Cash and Cash Equivalents		$	(36,033,048	)		$	19,823,001
Cash and Cash Equivalents, Beginning of Fiscal Year		$	45,254,655			$	19,905,598
Cash and Cash Equivalents as of September 25, 2021 and September 26, 2020		$	9,221,607			$	39,728,599
Supplemental Cash Flows Information
Interest paid		$	19,226,554			$	20,231,744
Income taxes paid		$	1,509,592			$	848,831

See accompanying Notes to the Unaudited Consolidated Financial Statements

 

7

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 Group 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 & Steel Storage 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.”

On August 18, 2021, the Group, through its wholly owned subsidiary Janus Core acquired 100% of the equity interests of DBCI, LLC f/k/a Dingo NewCo, LLC (“DBCI”), a company incorporated in Delaware as more fully described in Note 9 – “Business Combinations.”

On August 31, 2021, the Group, through its wholly owned subsidiary Janus Core acquired 100% of the equity of Access Control Technologies, LLC (“ACT”), a company incorporated in North Carolina. Through this acquisition, the Group also acquired all assets and certain liabilities of Phoenix Iron Worx, LLC (“Phoenix”), a company incorporated in North Carolina 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 Core together with each of its operating subsidiaries BETCO, NOKE, ASTA, DBCI, ACT, Janus Door, LLC (“Janus Door”) and Steel Door Depot.com, LLC.

As of 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 – “Business Combinations” for further discussion on the Business Combination.

 

 

8

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

 

 

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 under the symbols “JBI” and “JBI WS”, respectively.

Assets held at foreign locations were approximately $56,439,000 and $53,424,000 as of September 25, 2021 and December 26, 2020, respectively. Revenues earned at foreign locations totaled approximately $17,824,000 and $12,621,000 for the three months ended September 25, 2021 and September 26, 2020 and $48,729,000 and $32,165,000 for the nine months ended September 25, 2021 and September 26, 2020, respectively.

2. Summary of Significant Accounting Policies

Unaudited Interim Financial Statements

The accompanying consolidated balance sheet as of September 25, 2021, consolidated statements of operations and comprehensive income and consolidated statements of stockholders’ equity for the three and nine months ended September 25, 2021 and September 26, 2020, respectively and consolidated statements of cash flows for the nine months ended September 25, 2021 and September 26, 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 September 25, 2021, and its results of operations, including its comprehensive income and stockholders’ equity for the three and nine months ended September 25, 2021 and September 26, 2020, and its cash flows for the nine months ended September 25, 2021 and September 26, 2020. The results for the three and nine months ended September 25, 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 Form S-1 (as amended), initially filed with the Securities and Exchange Commission (the “SEC”) on July 7, 2021 and declared effective by the staff of the SEC on August 6, 2021, including the final prospectus dated August 6, 2021 (including supplements to the prospectus filed from time to time).

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, completed as of June 7, 2021, 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 in the Combined Company. 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 49.2% voting interest compared to Janus Midco’s 50.8% 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. 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 three and nine months ended September 26, 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 to reflect the exchange ratio established in the Business Combination Agreement.

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. The costs 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.

 

9

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

 

 

Principles of Consolidation

The consolidated financial statements include the accounts of the Group 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.

Reclassification

In the third quarter of 2021, the Group reclassified the change in fair value of earnout recorded in June 2021 from general and administrative expense to contingent consideration and earnout fair value adjustments within operating expenses in the Consolidated Statements of Operations and Comprehensive Income.

Reorganization

As of June 7, 2021, Midco transferred its wholly owned direct subsidiary Janus Core, 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 fair value of contingent consideration, the fair value of assets and liabilities related to acquisitions, the derivative warrant liability, the recognition of the valuations and 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

The 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 September 25, 2021. Events and changes in circumstances arising after September 25, 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 $8,562,000 and $5,993,000 and $24,136,000 and $17,729,000 for the three and nine months ended September 25, 2021 and September 26, 2020, respectively.

 

10

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

 

 

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 September 25, 2021 and December 26, 2020. The Company has recorded a reserve for inventory obsolescence as of September 25, 2021 and December 26, 2020, of approximately $1,672,000 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.

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 as of September 25, 2021 consists primarily of other receivables and net VAT taxes of approximately $3,506,000. As of December 26, 2020, other current assets consists primarily of other receivables, net VAT taxes and deferred transaction costs associated with the Business Combination with Juniper of approximately $3,444,000.

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; and

 

•

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 within Level 1 of the Fair Value hierarchy. The fair value of the Company’s debt approximates its carrying amount as of September 25, 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 falls within Level 2 of the Fair Value hierarchy. As of September 25, 2021, the public warrants were valued at market price. The fair value of the private warrants contains significant unobservable inputs including the expected term and volatility. Therefore, the private warrant liabilities were evaluated to be a Level 3 fair value measurement. The fair value of private warrants is estimated using a Binomial Lattice in a risk-neutral framework. Specifically, the future stock price of the Company is modeled assuming a Geometric Brownian Motion (GBM) in a risk-neutral framework. For each modeled future price, the warrant payoff is calculated based on the contractual terms, and then discounted at the term-matched risk-free rate. Finally, the value of the private warrants was calculated as the probability-weighted present value over all future modeled payoffs. The following assumptions were used for the valuation of the private warrants:

 

Warrant term (yrs.)			4.7
Volatility			30.4	%
Risk-free rate			0.91	%
Dividend yield			—	%

The change in the fair value of warrant liabilities is as follows:

 

Balance at June 26, 2021		$	39,077,500
Change in fair value of warrants			(3,552,500	)
Balance at September 25, 2021		$	35,525,000

 

11

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

 

 

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 component 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. On October 13, 2021, the Group announced that the Company will redeem all of its outstanding warrants which is further discussed in Note 18 – “Subsequent Events.”

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 (Topic 326), 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 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 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 ASU 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, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842) which deferred the effective date for ASC 842, Leases, for one year. 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 ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): 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 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 the consolidated financial statements.

 

12

Janus International Group, Inc.

Notes to Unaudited Consolidated 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 :

 

		September 25,				December 26,
		2021				2020
Raw materials		$	38,852,320			$	17,431,731
Work-in-process			838,389				637,109
Finished goods			13,140,028				7,212,681
		$	52,830,737			$	25,281,521

4. Property and Equipment

Property, equipment, and other fixed assets as of September 25, 2021 and December 26, 2020 are as follows:

 

		September 25,				December 26,
		2021				2020
Land		$	4,501,295			$	3,361,295
Manufacturing machinery and equipment			34,913,905				26,446,933
Leasehold improvements			5,204,632				5,127,065
Construction in progress			11,127,210				2,170,193
Other			12,725,431				8,084,391
		$	68,472,473			$	45,189,877
Less accumulated depreciation			(18,685,910	)			(14,219,370	)
		$	49,786,563			$	30,970,507

5. Acquired Intangible Assets and Goodwill

Intangible assets acquired in a business combination (see Note 9 – “Business Combinations”) are recognized at fair value and amortized over their estimated useful lives. The carrying basis and accumulated amortization of recognized intangible assets at September 25, 2021 and December 26, 2020, are as follows:

 

		September 25,												December 26,
		2021												2020
		Gross Carrying Amount				Accumulated Amortization				Average Remaining Life in Years				Gross Carrying Amount				Accumulated Amortization
Intangible Assets
Customer relationships		$	410,021,868			$	90,682,225				12			$	380,862,639			$	71,390,241
Noncompete agreements			411,010				238,732				6				412,949				151,028
Tradenames and trademarks			107,958,402				—				Indefinite				85,597,528				—
Other intangibles			61,831,402				43,622,904				6				58,404,905				41,279,081
		$	580,222,682			$	134,543,861							$	525,278,021			$	112,820,350

Changes to gross carrying amount of recognized intangible assets due to translation adjustments include an approximate $369,000 and $997,000 loss for the period ended September 25, 2021 and December 26, 2020, respectively. Amortization expense was approximately $8,229,000 and $6,892,000 and $21,852,000 and $20,287,000 for the three and nine months ended September 25, 2021 and September 26, 2020, respectively.

 

13

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

 

 

The changes in the carrying amounts of goodwill for the period ended September 25, 2021 were as follows:

 

Balance as of December 26, 2020		$	259,422,822
Goodwill acquired during the period			110,641,756
Changes due to foreign currency fluctuations			(457,380	)
Balance as of September 25, 2021		$	369,607,198

6. Accrued Expenses

Accrued expenses are summarized as follows:

 

		September 25,				December 26,
		2021				2020
Sales tax payable		$	2,132,147			$	1,324,696
Interest payable			6,576,691				4,832,590
Contingent consideration payable - short term			4,000,000				4,000,000
Other accrued liabilities			1,998,182				5,294,414
Employee compensation			10,088,860				6,090,304
Customer deposits and allowances			25,179,906				10,780,783
Other			12,234,149				4,841,840
Total		$	62,209,935			$	37,164,627

Other accrued liabilities consist primarily of deferred transaction costs of $0 and $3,337,000 as of September 25, 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. In August 2021, the Company increased the available line of credit from $50,000,000 to $80,000,000, incurred additional fees for this amendment of $425,000 and extended the maturity date from February 18, 2023 to August 12, 2024. The current line of credit facility is for $80,000,000 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 September 25, 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 has incurred deferred loan costs in the amount of $1,483,000 which are being amortized over the term of the facility that expires on August 12, 2024, 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 September 25, 2021 and December 26, 2020 was approximately $740,000 and $448,000, respectively. There was $19,350,803 and $0 outstanding balance on the line of credit as of September 25, 2021 and December 26, 2020, respectively.

 

14

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

 

 

8. Long-Term Debt

Long-term debt consists of the following:

 

		September 25,				December 26,
		2021				2020
Note payable—First Lien		$	—			$	562,363,000
Note payable—First Lien B2			—				73,875,000
Note payable—Amendment No. 4 First Lien			726,413,482				—
Notes payable—Auto Loans			92,684				—
			726,506,166				636,238,000
Less unamortized deferred finance fees			11,467,679				12,110,329
Less current maturities			8,111,212				6,523,417
Total long-term debt		$	706,927,275			$	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 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

As of 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 were 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 was 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 was to be repaid on a quarterly basis of 0.25% of the original balance beginning the last day of September 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 September 25, 2021). The debt was secured by substantially all business assets.

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.

As of June 7, 2021 and 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.

Notes Payable – Amendment No. 4 First Lien

On August 18, 2021, the Company completed a refinancing of its First Lien Amendment No. 3, in which the principal terms of the amendment were new borrowings of $155,000,000 which was used to fund the DBCI acquisition. The Amendment No. 4 First Lien is comprised of a syndicate of lenders originating on August 18, 2021 in the amount of $726,413,000 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 September 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 September 25, 2021). The debt is secured by substantially all business assets. Unamortized debt issuance costs are approximately $11,468,000 at September 25, 2021. This refinancing amendment was accounted for as modification and as such no gain or loss was recognized for this transaction and any third party fees were expensed with bank fees, original issue discount and charges capitalized and are being amortized as a component of interest expense over the remaining loan term.

 

15

Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

 

 

Notes Payable – Auto Loans

With the acquisition of ACT (see Note 9 – “Business Combinations”), the Group acquired various loans secured by automobiles used by ACT to service customers. The loans outstanding balances at September 25, 2021 are approximately $93,000 and have interest rates ranging from 4.29% to 8.35%, are secured by the individual vehicles and have remaining terms of 1 to 4 years. The loans have approximate monthly payments ranging from $400 to $1,200.

As of September 25, 2021, and December 26, 2020, the Company maintained one letter of credit totaling approximately $400,000 and $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 $800,000 and $810,000 and $2,286,000 and $2,419,000 was recognized for the three and nine months ended September 25, 2021 and September 26, 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 September 25, 2021, are:

 

2021		$	2,029,869
2022			8,106,224
2023			8,090,601
2024			6,063,807
2025			702,215,665
Total		$	726,506,166

9. Business Combinations

Access Control Technologies, LLC Acquisition

On August 31, 2021, Janus Core acquired 100% of the equity interests of ACT and all assets and certain liabilities of Phoenix for total consideration of approximately $10,733,000 which was comprised of approximately $9,383,000 of cash plus $1,350,000 of hold back liability. The hold back liability will be trued up and settled upon the finalization of the closing statement.

The assets and liabilities of the acquisitions have been recorded based upon management’s estimates of their fair market values as of each respective date of acquisition. The following tables summarize the fair values of consideration transferred and the fair values of identified assets acquired, and liabilities assumed at the date of acquisition:

 

Fair Value of Consideration Transferred
Cash			9,383,460
Hold Back Liability			1,350,000
Total Fair Value of Consideration Transferred		$	10,733,460
Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed
Cash			169,485
Accounts receivable			1,100,533
Other current assets			102,521
Property and equipment			196,561
Identifiable intangible assets
Customer relationships			2,470,000
Backlog			280,000
Trademark			1,450,000
Recognized amounts of identifiable liabilities assumed
Accounts payable			(473,353	)
Accrued expenses			(152,191	)
Other liabilities			(1,395,911	)
Total identifiable net assets			3,747,645
Goodwill			6,985,815

The fair values of assets acquired and liabilities assumed, including current and noncurrent income taxes payable and deferred taxes, may be subject to change as additional information is received and certain tax returns are finalized. Accordingly, the provisional measurements of fair value of income taxes payable and deferred taxes are subject to change. We expect to finalize the valuation as soon as practicable, but not later than one year from the acquisition date.

The goodwill balance of $6,986,000 is attributable to the expansion of our product offerings and expected synergies of the combined workforce, products and technologies with ACT. All of the goodwill was assigned to the Janus North America segment of the business and is deductible for income tax purposes.

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:

 

		Fair Value				Useful Lives
Customer Relationships		$	2,470,000				15 Years
Backlog			280,000				3 Months
Trade Name			1,450,000				Indefinite
Identifiable Intangible Assets		$	4,200,000

Customer relationships represent the fair values of the underlying relationships with ACT’s customers. Unbilled contracts (“Backlog”) represent the fair value of ACT’s contracts that have yet to be billed. Trade names represent ACT’s trademarks, which consumers associate with the source and quality of the products and services they provide.

The weighted-average amortization of acquired intangibles is 8.8 years

During 2021, the Company incurred approximately $284,000 of third-party acquisition costs. These expenses are included in general and administrative expense in the Company’s Consolidated Statement of Operations and Comprehensive Income for the three and nine months ended September 25, 2021.

The amounts of revenue and net income of ACT included in the results from the transaction date of August 31, 2021 through September 25, 2021 are as follows:

 

		Periods from September 1, 2021 through September 25, 2021
Revenue		$	981,976
Net Income			26,038

DBCI, LLC Acquisition

On August 17, 2021, Janus Core acquired 100% of the equity interests of DBCI for total cash consideration of approximately $169,173,000.

 

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