jbi-20210626

Segment

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

FORM 10-Q/A

Amendment No. 1

________________________

(Mark One)


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

For the quarterly period ended June 26, 2021


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

For the transition period from _________ to _________

Commission file number 001-40456

________________________

JANUS INTERNATIONAL GROUP, INC.

(Exact name of registrant as specified in its charter)

________________________


Delaware			86-1476200
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)
135 Janus International Blvd. Temple, GA			30179
(Address of Principal Executive Offices)			(Zip Code)

(866) 562-2580

(Registrant's telephone number, including area code)

________________________

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


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

EXPLANATORY NOTE

Janus International Group, Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-Q/A for the quarter ended June 26, 2021 (this “Form 10-Q/A”).

This Form 10-Q/A amends the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 26, 2021, as filed with the Securities and Exchange Commission (“SEC”) on August 10, 2021 (the “Original Filing”). This Form 10-Q/A is being filed to restate the Company’s unaudited Consolidated Financial Statements for the three and six months period ended June 26, 2021. The restatement reflects the reclassification and presentation of certain transaction bonuses related to the Business Combination from a component of stockholders’ equity to a component of general and administrative expenses for the three and six months period ended June 26, 2021, upon the closing of the Business Combination in June 2021. In addition, the Company determined that certain other transaction bonuses related to the Business Combination should have been recorded in the Janus International segment instead of the Janus North American segment. The errors related to the transaction bonuses impacted the presentation of our segment reporting for the same periods. See Note 2 to the unaudited Consolidated Financial Statements included in this Form 10-Q/A for further detailed information regarding this restatement.

The Company is filing this Form 10-Q/A to amend and restate the Original Filing with modifications as necessary to reflect the restatement. The following items have been amended to reflect the restatement:

Part I, Item 1: Financial Information and Financial Statements

Part I, Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations

Part I, Item 4: Controls and Procedures

Part II, Item 6: Exhibits

In addition, the Company’s Chief Executive Officer and Chief Financial Officer have provided new certifications dated as of the date of this Form 10-Q/A (Exhibits 31.1, 31.2, 32.1 and 32.2).

Except as described above and set forth in this Form 10-Q/A, this Form 10-Q/A does not amend or update any other information contained in the Original Filing. This Form 10-Q/A does not purport to reflect any information or events subsequent to the Original Filing, except as expressly described herein.

JANUS INTERNATIONAL GROUP, INC.

Quarterly Report on Form 10-Q/A

Table of Contents



			Page
PART I--FINANCIAL INFORMATION			4
Item 1. Financial Statements			4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			32
Item 3. Quantitative and Qualitative Disclosures About Market Risk			61
Item 4. Controls and Procedures			62
PART II--OTHER INFORMATION			64
Item 1. Legal Proceedings			64
Item 1A. Risk Factors			64
Item 2. Unregistered Sales of Equity and Use of Proceeds			71
Item 3. Defaults upon Senior Securities			72
Item 4. Mine Safety Disclosures			72
Item 5. Other Information			72
Item 6. Exhibits			73
SIGNATURES			75

PART I--FINANCIAL INFORMATION

Item 1. Financial Statements.


Janus International Group, Inc.

Consolidated Balance Sheets


	June 26,		December 26,
	2021		2020
	(Unaudited)
	(Restated)
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	48,024,563		37,164,627
Total current liabilities	$	121,299,510	$	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	$	735,414,812	$	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	234,557,285		189,298,544
Accumulated other comprehensive income (loss)	46,526		(227,160)
Accumulated deficit	(39,354,473)		(48,205,174)
Total stockholders’ equity	$	195,263,176	$	140,872,825
Total liabilities and stockholders’ equity	$	930,677,988	$	873,478,745

See accompanying Notes to the Unaudited Consolidated Financial Statements


Janus International Group, Inc.

Consolidated Statements of Operations and Comprehensive Income (Loss)


	Three Months Ended				Six Months Ended
	June 26, 2021		June 27, 2020		June 26, 2021		June 27, 2020
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
	(Restated)				(Restated)
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	36,935,593		16,931,440		56,521,901		34,566,666
Contingent consideration and earnout fair value adjustments	686,700		—		686,700		—
Operating Expenses	48,004,462		24,648,723		77,048,897		52,544,232
INCOME FROM OPERATIONS	11,189,950		20,130,980		35,438,813		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	865,720		11,417,535		15,429,647		21,739,791
Provision for Income Taxes	2,559,867		400,067		2,404,973		770,292
NET INCOME (LOSS)	$	(1,694,147)	$	11,017,468	$	13,024,674	$	20,969,499
Other Comprehensive Income (Loss)	(37,082)		(226,575)		273,686		(3,758,060)
COMPREHENSIVE INCOME (LOSS)	$	(1,731,229)	$	10,790,893	$	13,298,360	$	17,211,439
Net income (loss) attributable to common stockholders	$	(1,694,147)	$	11,017,468	$	13,024,674	$	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 (loss) per share, basic and diluted (Note 15)
Basic	$	(0.02)	$	0.17	$	0.18	$	0.31
Diluted	$	(0.02)	$	0.17	$	0.18	$	0.31

See accompanying Notes to the Unaudited Consolidated Financial Statements.


Janus International Group, Inc.

Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)


	Class B Common			Class A Preferred Units			Common Stock			Additional paid-in capital		Accumulated Other Comprehensive Income (Loss)		Accumulated 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


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 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

	Class B Common Units			Class A Preferred Units			Common Stock			Additional paid-in capital (Restated)		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit (Restated)		Total (Restated)
	Unit	Amount		Unit	Amount		Shares	Amount
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		5,209,592		—		—		5,209,993
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	—	—		—	—		—	—		—		—		(1,694,147)		(1,694,147)
Balance as of June 26, 2021	—	$	—	—	$	—	138,384,250	$	13,838	$	234,557,285	$	46,526	$	(39,354,473)	$	195,263,176

See accompanying Notes to the Unaudited Consolidated Financial Statements


Janus International Group, Inc.

Consolidated Statements of Cash Flows


	Six Months Ended
	June 26, 2021		June 27, 2020
	(Unaudited)		(Unaudited)
	(Restated)
Cash Flows Provided By Operating Activities
Net income	$	13,024,674	$	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	5,261,869		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	13,783,097		2,076,616
Other assets and long-term liabilities	(1,338,231)		1,442,694
Net Cash Provided By Operating Activities	44,822,882		50,534,000
Cash Flows Used In Investing Activities
Proceeds from sale of equipment	79,409		6,083
Purchases of property and equipment	(3,992,533)		(3,801,552)
Cash paid for acquisition, net of cash acquired	(1,564,957)		(4,592,779)
Net Cash Used In Investing Activities	(5,478,081)		(8,388,248)
Cash Flows Used In Financing Activities
Distributions to Janus Midco LLC unitholders	(4,173,973)		(339,982)
Principal payments on long-term debt	(63,238,000)		(4,205,693)
Proceeds from merger	334,873,727		—
Proceeds from PIPE	250,000,000		—
Payments for transaction costs, net	(44,489,256)		—
Payments to Janus Midco, LLC unitholders at the business combination	(541,710,278)		—
Payments for deferred financing fees	(765,090)		—
Cash Used In Financing Activities	$	(69,502,870)	$	(4,545,675)
Effect of exchange rate changes on cash and cash equivalents	191,035		(1,091,444)
Net (Decrease) Increase in Cash and Cash Equivalents	$	(29,967,034)	$	36,508,633
Cash and Cash Equivalents, Beginning of Fiscal Year	$	45,254,655	$	19,905,598
Cash and Cash Equivalents as of June 26, 2021 and June 27, 2020	$	15,287,621	$	56,414,231
Supplemental Cash Flows Information
Interest paid	$	16,847,651	$	12,233,825
Income taxes paid	$	773,608	$	537,810
Fair value of earnout	$	686,700	$	—
Fair value of warrants	$	1,928,500	$	—

See accompanying Notes to the Unaudited Consolidated Financial Statements


Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

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.


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.

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.

Reclassification

In the amended Form 10-Q/A, 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 (Loss).


Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

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.

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


Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

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 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.


Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements

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.

Restatement of Previously Reported Financial Statements

During the preparation of the 2021 Annual Report on Form 10-K, the Company determined that certain transaction bonuses related to the Business Combination should have been recorded as a component of general and administrative expense instead of a component of stockholders’ equity for the three and six months period ended June 26, 2021. In addition, the Company determined that certain other transaction bonuses related to the Business Combination in the amount of $4.0 million should have been recorded in the Janus International segment instead of the Janus North American segment. The errors related to the transaction bonuses impacted the presentation of our segment reporting for the same periods.

In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company determined that the unaudited consolidated financial statements for the three and six months period ended and June 26, 2021 were materially misstated and should be restated. The amounts and disclosures included in this Form 10-Q/A have been revised to reflect the corrected presentation.

Impact of the Restatement

The table below present the effects of the restatement on the Company's unaudited consolidated balance sheet as of June 26, 2021:


Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements


	June 26, 2021
	As Previously Reported		Adjustments		As Restated
ASSETS
Current Assets
Cash	$	15,287,621	$	—	$	15,287,621
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		—		79,557,005
Costs and estimated earnings in excess of billing on uncompleted contracts	16,614,552		—		16,614,552
Inventory, net	36,289,253		—		36,289,253
Prepaid expenses	8,443,195		—		8,443,195
Other current assets	2,322,802		—		2,322,802
Total current assets	$	158,514,428	$	—	$	158,514,428
Property and equipment, net	31,682,826		—		31,682,826
Customer relationships, net	297,563,142		—		297,563,142
Tradename and trademarks	85,819,442		—		85,819,442
Other intangibles, net	16,627,892		—		16,627,892
Goodwill	260,275,193		—		260,275,193
Deferred tax asset	78,435,843		—		78,435,843
Other assets	1,759,222		—		1,759,222
Total assets	$	930,677,988	$	—	$	930,677,988
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	45,316,067	$	—	$	45,316,067
Billing in excess of costs and estimated earnings on uncompleted contracts	21,612,809		—		21,612,809
Current maturities of long-term debt	6,346,071		—		6,346,071
Other accrued expenses	48,357,979		(333,416)		48,024,563
Total current liabilities	$	121,632,926	$	(333,416)	$	121,299,510
Long-term debt, net	557,574,245		—		557,574,245
Deferred tax liability	14,577,682		—		14,577,682
Derivative warrant liability	39,077,500		—		39,077,500
Other long-term liabilities	2,885,875		—		2,885,875
Total liabilities	$	735,748,228	$	(333,416)	$	735,414,812
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		—		13,838
Additional paid in capital	231,406,515		3,150,770		234,557,285
Accumulated other comprehensive income (loss)	46,526		—		46,526
Accumulated deficit	(36,537,119)		(2,817,354)		(39,354,473)
Total stockholders’ equity	$	194,929,760	$	333,416	$	195,263,176
Total liabilities and stockholders’ equity	$	930,677,988	$	—	$	930,677,988

The tables below present the effects of the restatement on the unaudited consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 26, 2021:


Janus International Group, Inc.

Notes to Unaudited Consolidated Financial Statements


	Three Months Ended June 26, 2021
	As Previously Reported		Adjustments		As Restated
REVENUE
Sales of product	$	140,556,306	$	—	$	140,556,306
Sales of services	33,626,083		—		33,626,083
Total revenue	174,182,389		—		174,182,389
Cost of Sales	114,987,977		—		114,987,977
GROSS PROFIT	59,194,412		—		59,194,412
OPERATING EXPENSE
Selling and marketing	10,382,169		—		10,382,169
General and administrative	33,784,823		3,150,770		36,935,593
Contingent consideration and earnout fair value adjustments	686,700		—		686,700
Operating Expenses	44,853,692		3,150,770		48,004,462
INCOME (LOSS) FROM OPERATIONS	14,340,720		(3,150,770)		11,189,950
Interest expense	(7,475,727)		—		(7,475,727)
Other income (expense)	(920,003)		—		(920,003)
Change in fair value of derivative warrant liabilities	(1,928,500)		—		(1,928,500)
Other Expense, Net	(10,324,230)		—		(10,324,230)
INCOME (LOSS) BEFORE TAXES	4,016,490		(3,150,770)		865,720
Provision (benefit) for Income Taxes