jbi-20240928

egment

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 28, 2024


☐			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

________________________

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 October 25, 2024, 141,074,679 shares of the Registrant’s common stock were outstanding.

JANUS INTERNATIONAL GROUP, INC.

Quarterly Report on Form 10-Q

Table of Contents



			Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			3
PART I--FINANCIAL INFORMATION			5
Item 1. Condensed Consolidated Financial Statements			5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			30
Item 3. Quantitative and Qualitative Disclosures About Market Risk			51
Item 4. Controls and Procedures			51
PART II--OTHER INFORMATION			52
Item 1. Legal Proceedings			52
Item 1A. Risk Factors			52
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			52
Item 3. Defaults upon Senior Securities			52
Item 4. Mine Safety Disclosures			52
Item 5. Other Information			52
Item 6. Exhibits			54
SIGNATURES			55

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements contained in this Quarterly Report on Form 10-Q (this “Form 10-Q”) that reflect our current views with respect to future events and financial performance, business strategies, expectations for our business and any other statements of a future or forward-looking nature, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

These forward-looking statements include, but are not limited to, statements about our financial condition, results of operations, earnings outlook and prospects or regarding our or our management’s expectations, beliefs, intentions or strategies regarding the future, including our expectations regarding our revenues, cost of revenues, operating expenses, other operating results, and other key metrics, and our ability to meet previously announced earnings guidance with respect to the Company and/or its individual segments. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those contemplated in the forward-looking statements, including, without limitation, the risks set forth in Part II, Item 1A, “Risk Factors” in this Form 10-Q and in our other filings with the Securities and Exchange Commission (the “SEC”). We do not assume any obligation to update any forward-looking statements after the date of this Report, except as required by law.

In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would”, and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on us. We cannot assure you that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to:

•changes adversely affecting the business in which we are engaged;

•geopolitical risks and changes in applicable laws or regulations;

•the possibility that Janus may be adversely affected by other economic, business, and/or competitive factors;

•operational risk;

•any failure to effectively manage, and receive anticipated returns from, acquisitions, divestitures, investments, joint ventures and other portfolio actions;

•fluctuations in the demand for our products and services;

•the impact of supply chain disruptions and inflation and our ability to recoup rising costs in the rates we charge to our customers;

•the possibility that our long-lived assets and other assets, including inventory, property, plant, and equipment, intangibles, and investments in unconsolidated affiliates may become impaired;

•our ability to maintain the listing of our securities on a national securities exchange;

•the possibility of significant changes in foreign exchange rates and controls;

•litigation and regulatory enforcement risks, including the diversion of management’s time and attention and the additional costs and demands on Janus’s resources;

•general economic conditions, including the capital and credit markets, and adverse macroeconomic conditions, including unemployment, inflation, fluctuating interest rates, changes in consumer practices due to slower economic growth, and regional or global liquidity constraints;

•the possibility of political instability, war or acts of terrorism in any of the countries where we operate; and

•other risks detailed from time to time in our filings with the SEC, press releases, and other communications, including those set forth under “Risk Factors” included in our 2023 Annual Report on Form 10-K for the year ended December 30, 2023, and in the documents incorporated by reference herein and therein.

All subsequent written and oral forward-looking statements concerning the matters addressed in this Form 10-Q and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Form 10-Q. Except to the extent required by applicable law or regulation we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect the occurrence of unanticipated events.

PART I--FINANCIAL INFORMATION

Item 1. Financial Statements


Janus International Group, Inc.

Condensed Consolidated Balance Sheets
(amounts in millions, except share and per share data - Unaudited)


	September 28, 2024		December 30, 2023
ASSETS
Current Assets
Cash and cash equivalents	$	102.1	$	171.7
Accounts receivable, less allowance for credit losses of $11.9 and $3.6, as of September 28, 2024 and December 30, 2023, respectively	160.8		174.1
Contract assets	25.3		49.7
Inventories	54.5		48.4
Prepaid expenses	9.0		8.4
Other current assets	23.6		10.8
Total current assets	$	375.3	$	463.1
Property, plant and equipment, net	58.4		52.4
Right-of-use assets, net	51.1		50.9
Intangible assets, net	392.0		375.3
Goodwill	383.9		368.6
Deferred tax assets, net	28.9		36.8
Other assets	5.4		2.9
Total assets	$	1,295.0	$	1,350.0
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	52.1	$	59.8
Contract liabilities	21.1		26.7
Current maturities of long-term debt	7.3		7.3
Accrued expenses and other current liabilities	53.7		80.3
Total current liabilities	$	134.2	$	174.1
Long-term debt, net	586.1		607.7
Deferred tax liabilities, net	1.8		1.7
Other long-term liabilities	46.3		46.9
Total liabilities	$	768.4	$	830.4
STOCKHOLDERS’ EQUITY
Common stock, 825,000,000 shares authorized, $0.0001 par value, 147,234,872 and 146,861,489 shares issued as of September 28, 2024 and December 30, 2023, respectively	$	—	$	—
Treasury stock, at cost, 6,160,579 and 34,297 shares as of September 28, 2024 and December 30, 2023, respectively	(72.5)		(0.4)
Additional paid-in capital	296.2		289.0
Accumulated other comprehensive loss	(1.1)		(2.9)
Retained earnings	304.0		233.9
Total stockholders’ equity	$	526.6	$	519.6
Total liabilities and stockholders’ equity	$	1,295.0	$	1,350.0

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements


Janus International Group, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income
(amounts in millions, except share and per share data - Unaudited)


	Three Months Ended				Nine Months Ended
	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
REVENUES
Product revenues	$	175.9	$	237.8	$	596.8	$	686.0
Service revenues	54.2		42.3		136.2		116.6
Total revenues	$	230.1	$	280.1	$	733.0	$	802.6
Product cost of revenues	102.6		129.7		332.5		380.4
Service cost of revenues	36.3		31.3		89.9		86.9
Cost of revenues	$	138.9	$	161.0	$	422.4	$	467.3
GROSS PROFIT	$	91.2	$	119.1	$	310.6	$	335.3
OPERATING EXPENSES
Selling and marketing	17.1		17.7		51.8		49.2
General and administrative	44.6		34.9		122.2		104.3
Impairment	2.8		$	—	2.8		$	—
Operating expenses	$	64.5	$	52.6	$	176.8	$	153.5
INCOME FROM OPERATIONS	$	26.7	$	66.5	$	133.8	$	181.8
Interest expense, net	(11.6)		(14.5)		(38.9)		(45.3)
Loss on extinguishment and modification of debt	—		(3.9)		(1.7)		(3.9)
Other income	—		1.3		0.2		1.1
INCOME BEFORE TAXES	$	15.1	$	49.4	$	93.4	$	133.7
Provision for income taxes	3.3		12.4		23.3		33.7
NET INCOME	$	11.8	$	37.0	$	70.1	$	100.0
Other comprehensive income (loss)	2.2		(1.7)		1.8		(0.4)
COMPREHENSIVE INCOME	$	14.0	$	35.3	$	71.9	$	99.6

Weighted-average shares outstanding, basic and diluted (Note 14)
Basic	143,666,406		146,827,175		145,376,074		146,765,567
Diluted	144,281,252		146,993,865		145,920,863		146,839,308
Net income per share, basic and diluted (Note 14)
Basic	$	0.08	$	0.25	$	0.48	$	0.68
Diluted	$	0.08	$	0.25	$	0.48	$	0.68

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements


Janus International Group, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity
(amounts in millions, except share data - Unaudited)


	Class A Preferred Units (1,000,000 shares authorized par value of .0001)			Common Stock			Treasury Stock			Additional paid-in capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total
	Shares	Amount		Shares	Amount		Shares	Amount
Balance as of December 31, 2022	—	$	—	146,703,894	$	—	—	$	—	$	281.9	$	(4.8)	$	98.2	$	375.3
Issuance of restricted units	—	—		58,790	—		—	—		—		—		—		—
Shares withheld for taxes upon vesting of restricted units	—	—		(18,520)	—		18,520	(0.2)		—		—		—		(0.2)
Share-based compensation	—	—		—	—		—	—		1.8		—		—		1.8
Foreign currency translation adjustment	—	—		—	—		—	—		—		0.7		—		0.7
Net income	—	—		—	—		—	—		—		—		26.0		26.0
Balance as of April 1, 2023	—	$	—	146,744,164	$	—	18,520	$	(0.2)	$	283.7	$	(4.1)	$	124.2	$	403.6
Issuance of restricted units	—	—		81,448	—		—	—		—		—		—		—
Shares withheld for taxes upon vesting of restricted units	—	—		(118)	—		118	—		—		—		—		—
Share-based compensation	—	—		—	—		—	—		1.8		—		—		1.8
Foreign currency translation adjustment	—	—		—	—		—	—		—		0.6		—		0.6
Net income	—	—		—	—		—	—		—		—		37.0		37.0
Balance as of July 1, 2023	—	$	—	146,825,494	$	—	18,638	$	(0.2)	$	285.5	$	(3.5)	$	161.2	$	443.0
Issuance of restricted units	—	—		3,733	—		—	—		—		—		—		—
Shares withheld for taxes upon vesting of restricted units	—	—		(1,195)	—		1,195	—		—		—		—		—
Share-based compensation	—	—		—	—		—	—		1.8		—		—		1.8
Foreign currency translation adjustment	—	—		—	—		—	—		—		(1.7)		—		(1.7)
Net income	—	—		—	—		—	—		—		—		37.0		37.0
Balance as of September 30, 2023	—	$	—	146,828,032	$	—	19,833	$	(0.2)	$	287.3	$	(5.2)	$	198.2	$	480.1


Janus International Group, Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(amounts in millions, except share data - Unaudited)


	Class A Preferred Units (1,000,000 shares authorized par value of .0001)			Common Stock			Treasury Stock			Additional paid-in capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total
	Shares	Amount		Shares	Amount		Shares	Amount
Balance as of December 30, 2023	—	$	—	146,861,489	$	—	34,297	$	(0.4)	$	289.0	$	(2.9)	$	233.9	$	519.6
Repurchase of common shares	—	—		(1,019,889)	—		1,019,889	(15.3)		—		—		—		(15.3)
Issuance of restricted units	—	—		163,309	—		—	—		—		—		—		—
Shares withheld for taxes upon vesting of restricted units	—	—		(57,696)	—		57,696	(0.9)		—		—		—		(0.9)
Share-based compensation	—	—		—	—		—	—		1.9		—		—		1.9
Foreign currency translation adjustment	—	—		—	—		—	—		—		(0.6)		—		(0.6)
Net income	—	—		—	—		—	—		—		—		30.7		30.7
Balance as of March 30, 2024	—	$	—	145,947,213	$	—	1,111,882	$	(16.6)	$	290.9	$	(3.5)	$	264.6	$	535.4
Repurchase of common shares	—	—		(753,667)	—		753,667	(10.1)		—		—		—		(10.1)
Issuance of restricted units	—	—		133,774	—		—	—		—		—		—		—
Issuance of common stock on exercise of stock options				2,069	—		—	—		—		—		—		—
Shares withheld for taxes upon vesting of restricted units	—	—		(20,679)	—		20,679	(0.2)		—		—		—		(0.2)
Share-based compensation	—	—		—	—		—	—		3.4		—		—		3.4
Foreign currency translation adjustment	—	—		—	—		—	—		—		0.2		—		0.2
Net income	—	—		—	—		—	—		—		—		27.6		27.6
Balance as of June 29, 2024	—	$	—	145,308,710	$	—	1,886,228	$	(26.9)	$	294.3	$	(3.3)	$	292.2	$	556.3
Repurchase of common shares	—	—		(4,265,363)	—		4,265,363	(45.5)		—		—		—		(45.5)
Issuance of restricted units	—	—		39,934	—		—	—		—		—		—		—
Shares withheld for taxes upon vesting of restricted units	—	—		(8,988)	—		8,988	(0.1)		—		—		—		(0.1)
Share-based compensation	—	—		—	—		—	—		1.9		—		—		1.9
Foreign currency translation adjustment	—	—			—		—	—		—		2.2		—		2.2
Net income	—	—		—	—		—	—		—		—		11.8		11.8
Balance as of September 28, 2024	—	$	—	141,074,293	$	—	6,160,579	$	(72.5)	$	296.2	$	(1.1)	$	304.0	$	526.6

Total shares issued are the aggregate of Common Stock outstanding and Treasury Shares.

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements


Janus International Group, Inc.
Condensed Consolidated Statements of Cash Flows
(amounts in millions - Unaudited)


	Nine Months Ended
	September 28, 2024		September 30, 2023
Operating activities
Net income	$	70.1	$	100.0
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation of property, plant and equipment	8.9		6.6
Noncash lease expense	5.6		4.7
Provision for inventory obsolescence	0.2		1.4
Amortization of intangibles	23.7		22.3
Deferred income taxes	7.9		—
Deferred finance fee amortization	1.9		3.1
Provision for expected losses on accounts receivable	8.6		(0.7)
Share-based compensation	7.2		5.4
Impairment	2.8		—
Loss on extinguishment of debt	—		1.6
Loss on equity investment	—		0.1
Loss on sale of property, plant, and equipment	—		0.1
Changes in operating assets and liabilities, excluding effects of acquisition
Accounts receivable	7.3		(14.9)
Contract assets	24.5		(12.1)
Prepaid expenses and other current assets	(13.3)		9.8
Inventories	(5.7)		12.0
Other assets	0.4		0.1
Accounts payable	(8.6)		3.6
Contract liabilities	(6.3)		(3.6)
Accrued expenses and other current liabilities	(27.5)		11.0
Other long-term liabilities	(5.1)		(4.0)
Net cash provided by operating activities	$	102.6	$	146.5
Investing activities
Purchases of property, plant, and equipment	$	(14.0)	$	(13.5)
Cash paid for acquisitions, net of cash acquired	(59.4)		(1.0)
Payment for equity-method investment	(2.5)		—
Proceeds from sale of property, plant and equipment	—		0.1
Net cash used in investing activities	$	(75.9)	$	(14.4)
Financing activities
Principal payments on long-term debt	$	(23.4)	$	(426.9)
Proceeds from long-term debt	—		337.6
Principal payments under finance lease obligations	(1.4)		(0.5)
Payments for deferred financing fees	(0.2)		(11.2)
Cash paid for common stock withheld for taxes	(1.2)		—
Repurchase of common stock	(70.2)		—
Net cash used in financing activities	$	(96.4)	$	(101.0)
Effect of exchange rate changes on cash	$	0.1	$	0.2
Net (decrease) increase in cash	$	(69.6)	$	31.3
Cash, beginning of period	$	171.7	$	78.4
Cash, end of period	$	102.1	$	109.7
Supplemental cash flows information
Interest paid	$	47.5	$	38.9
Income taxes paid	$	26.5	$	22.5
Cash paid for operating leases included in operating activities	$	6.6	$	6.2
Non-cash investing and financing activities:
Right-of-use assets obtained in exchange for operating lease obligations	$	4.2	$	4.5
Right-of-use assets obtained in exchange for finance lease obligations	$	1.6	$	2.4
RSU shares withheld included in accrued employee taxes	$	0.1	$	0.2
Excise taxes from common share repurchase included in accrued expenses	$	0.7	$	—
Capital expenditures in accounts payable	$	0.2	$	—

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

1.Nature of Operations

Janus International Group, Inc. is a holding company incorporated in Delaware. References to “Janus,” “Group,” “Company,” “we,” “our” or “us” refer to Janus International Group, Inc. and its consolidated subsidiaries. The Company is a global manufacturer, supplier, and provider of turn-key self-storage, commercial, and industrial building solutions. The Company provides roll up and swing doors, hallway systems, and relocatable storage “MASS” (Moveable Additional Storage Structures) units, among other solutions, and works with its customers throughout every phase of a project by providing solutions including facility planning and design, construction, technology, and the restoration, rebuilding, and replacement (“R3”) of self-storage facilities. Additionally, the Company provides facility and door automation and access control technologies.

The Company is headquartered in Temple, GA with operations in the United States of America (“United States” or “U.S.”), United Kingdom (“U.K.”), Australia, France, Canada, and Poland. The Company provides products and services through its two operating and reportable segments, which are based on the geographic region of its operations: (i) Janus North America and (ii) Janus International. The Janus North America segment is comprised of all the other entities including Janus International Group, LLC (“Janus Core”), together with each of its operating subsidiaries, Betco, Inc. (“BETCO”), Nokē, Inc. (“NOKE”), Asta Industries, Inc. (“ASTA”), Access Control Technologies, LLC (“ACT”), U.S. Door & Building Components, LLC (“U.S. Door”), Janus Door, LLC (“Janus Door”) Steel Door Depot.com, LLC (“Steel Door Depot”), Janus International Canada, Ltd. (“Janus Canada”), and Terminal Door, LLC (“Terminal Door”). The Janus International segment is comprised of Janus International Europe Holdings Ltd. (U.K.) (“JIE”), whose production and sales are largely in Europe and Australia. The Company’s common stock is currently traded on the New York Stock Exchange under the symbol “JBI”.

The dollar amounts in the notes are shown in millions of dollars and rounded to the nearest tenth of a million, unless otherwise noted, except for share and per share amounts.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the applicable rules and regulations of the SEC. In the opinion of the Company’s management, the Unaudited Condensed Consolidated Financial Statements include all adjustments necessary for the fair presentation of the Company’s balance sheet as of September 28, 2024, and its results of operations, including its comprehensive income and stockholders’ equity for the three and nine month periods ended September 28, 2024 and September 30, 2023. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but may not include all disclosures required by U.S. GAAP. This Quarterly Report on Form 10-Q should be read in conjunction with the Audited Consolidated Financial Statements and notes that are included in the Company’s Annual Report on Form 10-K, for the year ended December 30, 2023.

Principles of Consolidation

The Unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. The Company’s joint ventures are accounted for under the equity method of accounting. All significant intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications and Adjustments

Certain items have been reclassified in the prior year financial statements to conform to the presentation and classifications used in the current year. These reclassifications had no effect on our previously reported results of operations or retained earnings.

In addition, for the nine month period ended September 28, 2024, the Company recorded a $2.5 out of period adjustment as a reduction in service cost of revenues with an offset to accounts payable, to adjust estimated contract costs to actual costs incurred on installation projects which were completed during the years 2017 to 2023. No adjustments were recorded for the three month period ended September 28, 2024.

Use of Estimates in the Consolidated Financial Statements

The preparation of Unaudited Condensed 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.

Items subject to such estimates and assumptions include, but are not limited to, income taxes and the effective tax rates, inventory basis adjustments, the fair value of assets and liabilities, and assumptions related to business combinations, the recognition and valuation of unit-based compensation arrangements, the useful lives of property and equipment, the commencement date of leases, the incremental borrowing rate used to calculate lease liabilities, estimated progress toward completion for certain revenue contracts, allowance for credit losses, fair values and impairment of intangible assets and goodwill.


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

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 and cash equivalents, accounts receivable less allowance for credit losses, and accounts payable approximate the carrying amounts due to the short-term maturities of these instruments. The fair value of the Company’s debt is estimated using fair value based risk measurements that are indirectly observable, such as credit risk that fall within Level 2 of the Fair Value hierarchy. The Company’s debt approximates its carrying amount as of September 28, 2024 and December 30, 2023 due to its variable interest rate that is tied to the current Secured Overnight Financing Rate (“SOFR”) rate plus an applicable margin (see Notes 8 and 9 to our Unaudited Condensed Consolidated Financial Statements in this Form 10-Q for a further discussion of the Company’s debt). Cash equivalents are highly liquid investments purchased three months or less from maturity.

Significant Accounting Policies

The Company’s significant accounting policies have not changed materially from those described in its Annual Report on Form 10-K for the fiscal year ended December 30, 2023.

Cash and Cash Equivalents

Cash and Cash Equivalents include short-term highly liquid investments that are readily convertible to known amounts of cash and have maturities of three months or less from the date of purchase. The Company has short-term, highly liquid investments classified as cash and cash equivalents. Interest income on cash equivalents are offset against Interest expense on the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income. Interest income was $0.8 and $1.2 for the three and nine month periods ended September 28, 2024, respectively.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable primarily arise from the sale of products and services to customers. Accounts receivable are recorded at the invoiced amount and do not bear interest. Additionally, accounts receivable are stated at estimated net realizable value, net of allowance for credit losses, which is based on the Company’s assessment of the collectability of customer accounts.

During the third quarter, we received notice that a customer was planning to file a petition for bankruptcy. In addition, given the overall change in market conditions and a higher interest rate environment, we experienced certain payment delays from a number of customers, yielding an additional increase in the provision for expected losses, totaling $8.1 and $8.6 for the three and nine months ending September 28, 2024, respectively.

The activity for the allowance for credit losses during the nine month periods ended September 28, 2024 and September 30, 2023, is as follows:


(dollar amounts in millions)
Balance at December 30, 2023	$	3.6
Write-offs	(0.3)
Provision for expected credit losses, net	8.6
Balance at September 28, 2024	$	11.9



Balance at December 31, 2022	$	4.5
Write-offs	—
Provision for expected credit losses, net	(0.7)
Balance at September 30, 2023	$	3.8


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Product Warranties

The Company records a liability for product warranties at the time of the related sale of goods. The liability is estimated using historical warranty experience, projected claim rates and expected costs per claim. The Company adjusts its liability for specific warranty matters when they become known and the exposure can be estimated. Product failure rates as well as material usage and labor costs incurred in correcting a product failure affect the Company's warranty liabilities. If actual costs differ from estimated costs, the Company must make a revision to the warranty liability. Generally, the Company offers warranties ranging between one and three years for our products with the exception of warranties for roofing at one of our business units, where we offer warranties of up to 10 years.

The activity related to product warranty liabilities recorded in Accrued expenses and other current liabilities during the nine month periods ended September 28, 2024 and September 30, 2023, is as follows:

(dollar amounts in millions)


Balance at December 30, 2023	$	2.3
Aggregate changes in the product warranty liability	—
Balance at September 28, 2024	$	2.3


Balance at December 31, 2022	$	0.9
Aggregate changes in the product warranty liability	1.0
Balance at September 30, 2023	$	1.9

Treasury Stock

We account for treasury stock under the cost method pursuant to the provisions of ASC 505-30, Treasury Stock. Under the cost method, the gross cost of the shares reacquired is charged to a contra equity account, treasury stock. The equity accounts that were originally credited for the original share issuance, common stock and additional paid-in capital, remain intact.

If the treasury shares are ever reissued in the future at a price higher than its cost, the difference will be recorded as a component of additional paid-in capital in our Unaudited Condensed Consolidated Balance Sheets. When treasury stock is re-issued at a price lower than its cost, the difference will be recorded as a component of additional paid-in capital to the extent that there are previously recorded gains to offset the losses. If there are no treasury stock gains in additional paid-in capital, the losses upon re-issuance of treasury stock are recorded as a reduction of retained earnings in our Unaudited Condensed Consolidated Balance Sheets. If treasury stock is reissued in the future, a cost flow assumption will be adopted to compute excesses and deficiencies upon subsequent share re-issuance.

Concentrations of Risk

Financial instruments that are potentially subject to concentration of credit risk consist primarily of cash and accounts receivable. The Company maintains cash in bank deposit accounts that, at times, may exceed the insured limits of the local country. The Company has not experienced any losses in such accounts. The Company sells its products and services mainly in the United States and European regions. The Company performs ongoing evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary. The Company generally does not require its customers to provide collateral or other security to support accounts receivable. As of September 28, 2024, no customer accounted for more than 10% of the accounts receivable balance or more than 10% of revenues. For the three and nine month periods ended September 28, 2024, the Company had one vendor that accounted for 16% and 17%, respectively, of all raw material and finished goods purchases. This vendor provides raw-materials to the Company which can be sourced by alternative vendors should the need arise.

Segments

The Company manages its operations through two operating and reportable segments: Janus North America and Janus International. These segments align the Company’s products and service offerings based on the geographic location between North America and International locations, which is consistent with how the Company’s Chief Operating Decision Maker (“CODM”) reviews and evaluates the Company’s operations. The CODM allocates resources and evaluates the financial performance of each operating segment. The Company’s segments are strategic businesses that are managed separately because each one develops, manufactures and markets distinct products and services. Refer to Note 16, Segments Information, for further details.


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Recently Adopted Accounting Pronouncements

On January 1, 2023, the Company adopted ASU 2021-08, Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which amends ASC 805, Business Combinations (Topic 805), to add contract assets and contract liabilities to the list of exceptions to the recognition and measurement principles that apply to business combinations and to require that an acquiring entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers (Topic 606) (“ASC 606”). Janus will be applying the pronouncement prospectively to business combinations occurring on or after the adoption date.

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 and subsequent amendment to the initial guidance, ASU 2021-01, Reference Rate Reform (Topic 848): Scope (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. ASU 2022-06 defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024. Effective April 2, 2023, the Company transitioned its credit agreements from LIBOR to the SOFR. The Company adopted this guidance prospectively on April 2, 2023, and the adoption did not have a material impact on the Consolidated Condensed Financial Statements.

Recently Issued Accounting Pronouncements

On August 23, 2023, the FASB issued ASU 2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement, under which an entity that qualifies as either a joint venture or a corporate joint venture as defined in the FASB ASC master glossary is required to apply a new basis of accounting upon the formation of the joint venture. Specifically, the ASU provides that a joint venture or a corporate joint venture (collectively, “joint ventures”) must initially measure its assets and liabilities at fair value on the formation date. The amendments are effective for all joint venture formations with a formation date on or after January 1, 2025. Early adoption and retrospective application of the amendments are permitted. The Company does not believe this will have a material impact on the Company’s consolidated financial position or results of operations.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. The update will be effective for annual periods beginning after December 15, 2023. We are assessing the effect of this update on our Consolidated Condensed Financial Statements and believe the adoption of this standard could add material additional segment disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in a public entity’s income tax rate reconciliation table and other disclosures regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2024. We are assessing the effect of this update on our Unaudited Condensed Consolidated Financial Statements and related disclosures.

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 Company’s consolidated financial position or results of operations.


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

3. Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined using actual costs or standard costs (that approximate actual cost) determined on a first-in, first-out basis or average cost. Labor and overhead costs associated with inventory produced by the Company are capitalized into inventories. The major components of inventories as of September 28, 2024 and December 30, 2023 are as follows:


(dollar amounts in millions)	September 28, 2024		December 30, 2023
Raw materials	$	40.0	$	31.0
Work-in-process	0.5		1.4
Finished goods	14.0		16.0
Inventories	$	54.5	$	48.4

4. Property, Plant, and Equipment

Property, plant, and equipment as of September 28, 2024 and December 30, 2023 are as follows:


(dollar amounts in millions)	Useful Life	September 28, 2024		December 30, 2023
Land	Indefinite	$	4.5	$	4.5
Building	39 years	2.5		2.5
Manufacturing machinery and equipment	3-7 years	50.2		43.5
Leasehold improvements	Over the shorter of the lease term or respective useful life	12.7		11.4
Computer and software	3 years	16.5		14.5
Furniture and fixtures, and vehicles	3-7 years	6.1		4.9
Construction in progress	—	9.6		6.2
		$	102.1	$	87.5
Less: accumulated depreciation		(43.7)		(35.1)
		$	58.4	$	52.4

Depreciation expense included in cost of revenues, was approximately $2.0 and $1.7 for the three month periods ended September 28, 2024 and September 30, 2023, respectively, and $5.7 and $5.1 for the nine month periods ended September 28, 2024 and September 30, 2023, respectively. Depreciation expense included in operating expenses was $1.0 and $0.5 for the three month periods ended September 28, 2024 and September 30, 2023, respectively and $3.2 and $1.5 for the nine month periods ended September 28, 2024 and September 30, 2023, respectively.

5. Business Combination

Terminal Door Asset Acquisition

On May 17, 2024, the Company, through its wholly owned subsidiary Terminal Door, acquired 100% of the business operations (the “T.M.C. Acquisition”) of Smith T.M.C., Inc., a Georgia corporation, Jerry O. Smith Company, LLC, a Georgia limited liability company, and J.O.S. Realty, Inc., a Georgia corporation (collectively, the “T.M.C. Sellers”). Pursuant to the asset purchase agreement for such acquisition, Terminal Door acquired substantially all assets of the T.M.C. Sellers related to the business of trucking terminal renovation, construction, remodeling, and maintenance. The Company accounted for this acquisition as a business combination.

For the nine months ended September 28, 2024, the Company incurred approximately $1.1 of third-party acquisition costs in connection with the T.M.C. Acquisition. These expenses are included in general and administrative expense in the accompanying Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income.

The Company is continuing its review of the fair value estimates for certain assets acquired in connection with the T.M.C. Acquisition, including intangible assets, and liabilities assumed. The final determination of the purchase price is pending calculations of working capital and other adjustments, and as such, the Company has not yet finalized its allocation of the purchase price.


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The following tables summarize the fair value of consideration transferred and the recognized amount of identified assets acquired, and liabilities assumed at the date of acquisition:


(dollar amounts in millions)
Segment	North America
Consideration transferred
Cash paid	$	59.4
Total purchase consideration	$	59.4
Recognized amounts of identifiable assets acquired
Accounts receivable	$	2.5
Inventory	0.2
Property and equipment	0.4
Identifiable intangible assets	42.5
Recognized amounts of identifiable liabilities assumed
Accounts payable	(0.4)
Contract liabilities	(0.5)
Total identifiable net assets	44.7
Goodwill	14.7
Total net assets acquired	$	59.4

The Company recognized goodwill related to the T.M.C. Acquisition of $14.7. The goodwill recognized in this acquisition was attributable to the acquired assembled workforce, expected synergies and economies of scale, none of which qualify for recognition as a separate intangible asset. The goodwill is expected to be deductible for tax purposes.

The following table sets forth the components of identifiable intangible assets acquired as of the date of the T.M.C. Acquisition, and the related weighted average amortization period:


(dollar amounts in millions)	Fair Value		Weighted-Average Amortization Period (years)
Customer relationships	$	38.1	15
Tradename	1.7		5
Non-compete agreement	2.7		5
Identifiable intangible assets	$	42.5

Results of Acquired Operations

The results of the acquired operations of Terminal Door have been included in the Unaudited Condensed Consolidated Financial Statements of the Company since the acquisition date of May 17, 2024.

For the three month period ended September 28, 2024, Terminal Door contributed revenues of $13.7 and net income of $2.4. For the period from May 17, 2024 through September 28, 2024, Terminal Door contributed revenues of $17.7 and net income of $2.9.


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

6. Acquired Intangible Assets and Goodwill

Intangible assets acquired in a business combination are recognized at fair value and amortized over their estimated useful lives. The carrying amount and accumulated amortization of recognized intangible assets at September 28, 2024 and December 30, 2023, are as follows:


(dollar amounts in millions)			September 28, 2024						December 30, 2023
	Original Useful Life (years)	Weighted-Average Amortization period (years)	Gross Carrying Amount 1		Accumulated Amortization		Net Amount		Gross Carrying Amount		Accumulated Amortization		Net Amount
Customer relationships	10-15	8.9	$	447.5	$	176.4	$	271.1	$	409.0	$	154.1	$	254.9
Tradenames and trademarks	Indefinite	Indefinite	105.0		—		105.0		107.5		—		107.5
Tradename	5	4.6	1.7		0.1		1.6		—		—		—
Software	10-15	8.4	20.3		8.6		11.7		20.3		7.5		12.8
Noncompete agreements	3-8	4.4	3.0		0.4		2.6		0.3		0.2		0.1
			$	577.5	$	185.5	$	392.0	$	537.1	$	161.8	$	375.3

1) Gross carrying amounts as of September 28, 2024 are presented net of the indefinite-lived tradenames and trademarks impairment. Refer to “Impairment of Indefinite-Lived Tradenames and Trademarks” below for further details.

Changes to gross carrying amount of recognized intangible assets due to translation adjustments include a gain of $0.7 and $0.8 for the periods ended September 28, 2024 and December 30, 2023, respectively. The amortization of intangible assets is included in the general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income. Amortization expense was approximately $8.2 and 7.4 for the three month periods ended September 28, 2024 and September 30, 2023, respectively, and $23.7 and $22.3 for the nine month periods ended September 28, 2024 and September 30, 2023, respectively.

Impairment of Indefinite-Lived Tradenames and Trademarks

We account for business acquisitions in accordance with ASC 805, “Business Combinations”. This standard requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities assumed in the transaction and establishes the acquisition date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination. Goodwill and Indefinite-Lived Tradenames and Trademarks are recognized as a result of business combinations the company has made. ASC 350, “Intangibles – Goodwill and Other” requires us to perform qualitative assessments to determine whether it is more likely than not that the fair value of an asset exceeds its carrying amount. If a qualitative assessment determines an impairment is more likely than not, the Company is required to perform a quantitative impairment test. Otherwise, no further analysis is required. Alternatively, the Company may elect to proceed directly to the quantitative impairment test. In conducting a qualitative assessment, the Company analyzes actual and projected growth trends for revenue and margin, as well as historical performance versus plan and the results of prior quantitative tests performed. Additionally, the Company assesses factors that may impact its business, including macroeconomic conditions and the related impact, market-related exposures, plans to market for sale all or a portion of the business, competitive changes, new or discontinued product lines, changes in key personnel, and any potential risks to projected financial results.

During the three months ended September 28, 2024, the Company has experienced a revenue decline relative to expectations, historical performance, and strategic plans. This decrease was primarily driven by soft demand resulting from elevated interest rates and broader macroeconomic uncertainties, as well as a decline in stock price. Given these qualitative factors, the Company determined it was more likely than not that the fair value of the acquired assets could be impaired. Consequently, the Company performed a quantitative test of goodwill and indefinite-lived tradenames and trademarks as of September 28, 2024, ahead of the scheduled annual impairment test on September 29, 2024. This test applied a 50/50 weighting to both the discounted cash flow and guideline public company methods.

The quantitative test indicated that the carrying value of the DBCI tradename exceeded its fair value, leading the Company to record a non-cash impairment of $2.8 for the three and nine month periods ended September 28, 2024. The impairment was recorded in the caption “Impairment” in our Condensed Consolidated Statements of Operations and Comprehensive Income. No other impairments were identified in the quantitative test performed.

If assumptions or estimates with respect to future performance vary from what is expected, including those assumptions related to revenue, margins, and economic indicators such as inflation and interest rates, it could result in a decline in fair value that may trigger future impairments.


(dollar amounts in millions)	Tradenames and Trademarks
Balance as of December 30, 2023	$	107.5
Foreign Currency Translation Adjustment	0.3
Impairment	$	(2.8)
Balance as of September 28, 2024	$	105.0


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Goodwill

The changes in the carrying amounts of goodwill for the period ended September 28, 2024 were as follows:


(dollar amounts in millions)	Janus North America		Janus International		Consolidated
Balance as of December 30, 2023	$	357.0	$	11.6	$	368.6
Terminal Door Asset Acquisition	14.7		—		14.7
Foreign Currency Translation Adjustment	—		0.6		0.6
Balance as of September 28, 2024	$	371.7	$	12.2	$	383.9

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities, as of September 28, 2024 and December 30, 2023 are summarized as follows:


(dollar amounts in millions)	September 28, 2024		December 30, 2023
Customer deposits	$	18.5	$	29.6
Employee compensation	12.5		20.2
Interest payable	3.9		13.2
Current operating lease liabilities	6.2		5.4
Sales tax payable	3.0		3.4
Accrued professional fees	0.5		0.7
Product warranties	2.3		2.3
Accrued freight	0.2		0.8
Other liabilities(1)	6.6		4.7
Total	$	53.7	$	80.3

(1) Other liabilities as of September 28, 2024 and December 30, 2023 consists of property tax, credit card and various other accruals.


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

8. Line of Credit

Amendment No. 3 to the ABL Credit and Guarantee Agreement - On April 10, 2023, the Company entered into Amendment Number Three (the “LOC Amendment No. 3”) to that certain ABL Credit and Guarantee Agreement, dated as of February 12, 2018 (the “2018 LOC Agreement”). The LOC Amendment No. 3, among other things, (i) replaced the interest rate based on the LIBOR and related LIBOR-based mechanics applicable to borrowings under the 2018 LOC Agreement with an interest rate based on the SOFR and related SOFR-based mechanics and (ii) updated certain other provisions of the 2018 LOC Agreement to reflect the transition from LIBOR to SOFR. The LOC Amendment No. 3 provided for a revolving line of credit of $80.0 with interest payments due in arrears. The interest rate on the facility is based on a base rate, unless a SOFR Rate (as defined in the 2018 LOC Agreement) option is chosen by the Company.

2023 ABL Credit and Guarantee Agreement - On August 3, 2023, the Company refinanced the revolving credit facility, pursuant to a new ABL Credit and Guarantee Agreement (the “2023 LOC Agreement”). The 2023 LOC Agreement, among other things (i) increased the previous aggregate commitments from $80.0 to $125.0, (ii) updated the manner in which the previous borrowing base under the 2023 LOC Agreement was determined, and (iii) replaced the administrative agent with a new administrative agent. Interest payments with respect to the 2023 LOC Agreement are due in arrears. The maturity date is August 3, 2028.

The interest rate on the facility is based on a base rate, unless an Adjusted Term SOFR Rate (as defined in the 2023 LOC Agreement) option is chosen by the Company. If the Adjusted Term SOFR Rate is elected, the interest computation is equal to the Adjusted Term SOFR Rate, which is subject to a 10 basis points flat credit spread adjustment (“CSA”) plus the SOFR Margin (as defined in the 2023 LOC Agreement) of either 1.25%, 1.50%, or 1.75%, based on excess availability (as of September 28, 2024, the SOFR Margin Rate was 1.25%). As of September 28, 2024 and December 30, 2023, the interest rate in effect for the facility was 6.60% and 6.76%, respectively. The line of credit is collateralized by accounts receivable and inventories. The Company accrues an unused commitment fee to the administrative agent at the varying rate of 0.25% to 0.38%, based on the unused portion of the maximum commitment, as defined in the 2023 LOC agreement.

The Company incurred $1.3 of debt issuance costs, which were capitalized and are being amortized over the term of the facility that expires on August 3, 2028, using the straight-line method, and are presented as part of other assets within our Unaudited Condensed Consolidated Balance Sheet. The amortization of the deferred loan costs is included in interest expense, net on the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income.

Amortization of approximately $0.1 was recognized for both the three month periods ended September 28, 2024 and September 30, 2023, and $0.2 was recognized for both the nine month periods ended September 28, 2024 and September 30, 2023. The unamortized portion of the fees as of September 28, 2024 and December 30, 2023, was approximately $0.9 and $1.1, respectively. There were no borrowings outstanding on the line of credit as of September 28, 2024 and December 30, 2023.

As of September 28, 2024 and December 30, 2023, the Company maintained one letter of credit totaling approximately $0.4 on which there were no balances due. The amount available on the line of credit as of both September 28, 2024 and December 30, 2023 was approximately $124.6.


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

9. Long-Term Debt

Long-term debt consists of the following:


(dollar amounts in millions)	September 28, 2024		December 30, 2023
Note payable - First Lien	$	600.0	$	623.4
Financing leases	3.7		3.4
	$	603.7	$	626.8
Less: unamortized deferred finance fees	10.3		11.8
Less: current maturities	7.3		7.3
Total long-term debt	$	586.1	$	607.7

Notes Payable - First Lien - As a result of a credit rating upgrade in March 2024, the First Lien term loan allowed the previous applicable margin rate to decrease from 3.25% to 3.00%. On April 18, 2024, the Company made a voluntary prepayment of $21.9 toward the First Lien Credit and Guarantee Agreement, dated as of February 12, 2018 (as amended to date, the “First Lien Term Loan”). As a result of the prepayment, the Company expensed an additional $0.4 for pro-ration of the unamortized debt issuance costs that was amortizing over the expected life of the borrowing. The Company used cash on hand to make the voluntary prepayment.

On April 30, 2024, the Company completed a repricing pursuant to Amendment No. 7 (the “Repricing Amendment”) to the First Lien Term Loan. The Repricing Amendment reduced the applicable interest rate margins on the $600.0 First Lien Term Loan from 2.00% to 1.50% for the term loans bearing interest at rates based on the base rate, and from 3.00% to 2.50% for the term loans bearing interest at rates based on the secured overnight financing rate. In addition to the change in the applicable margin rate, the Company is no longer subject to a CSA rate of 0.1%. Interest is payable in arrears (with respect to Base Rate loans) or at the end of an interest period selected by the Company (with respect to SOFR loans). The outstanding loan balance is to be repaid on a quarterly basis in an amount equal to 0.25% of the original balance of the amended loan, with the remaining principal due on the maturity date of August 3, 2030. The debt was secured by substantially all of the Company’s business assets. There are no prepayment penalties if the Company makes voluntary prepayments on the outstanding principal balance. The interest rate on the First Lien Term Loan as of September 28, 2024 was 7.75%, which is a variable rate based on Adjusted Term SOFR and includes an applicable margin percentage of 2.50%.

The Repricing Amendment was accounted for in accordance with ASC 470-50, “Debt - Modification and Extinguishment.” The First Lien Term Loan consists of a syndicate of lenders which were evaluated, for accounting purposes, as individual lenders. Certain lenders exited the Term Loan credit facility in connection with the Repricing Amendment, which resulted in extinguishment accounting. There were $599.0 of borrowings held by lenders in the First Lien Term Loan as amended by the Repricing Amendment, that were also held by lenders in the First Lien Term Loan prior to the Repricing Amendment.

As a result, the Company wrote off an immaterial portion of unamortized debt financing costs associated with the First Lien Term Loan prior to the Repricing Agreement, that was deemed extinguished and recognized within “Loss on extinguishment and modification of debt” on the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income. In conjunction with the Repricing Amendment, the Company incurred $1.7 of costs from third parties that did not qualify for capitalization of deferred finance costs, and were expensed within Loss on extinguishment and modification of debt on the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income.

In conjunction with the Repricing Amendment, the Company incurred $0.2 of capitalizable deferred finance costs, which will be amortized over the remaining term of the modified loan. Amortization of deferred loan costs is included in interest expense on the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income. Amortization of approximately $0.5 and $0.8 was recognized for the three month periods ended September 28, 2024 and September 30, 2023, respectively, and $1.8 and $2.9 was recognized for the nine month periods ended September 28, 2024 and September 30, 2023, respectively.


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

10. Leases

The Company primarily leases certain office and manufacturing facilities, as well as vehicles, copiers, and other equipment. These leases generally have an original lease term between 1 year and 20 years, and some include options to extend (generally 5 to 10 years). Lease agreements generally do not include material variable lease payments, residual value guarantees, or restrictive covenants.

The components of right-of-use (“ROU”) assets and lease liabilities were as follows:


(dollar amounts in millions)	Balance Sheet Classification	September 28, 2024		December 30, 2023
Assets:
Operating lease assets	Right-of-use assets, net	$	47.3	$	47.6
Finance lease assets	Right-of-use assets, net	3.8		3.3
Total leased assets		$	51.1	$	50.9
Liabilities:
Current:
Operating	Accrued expenses and other current liabilities	$	6.2	$	5.4
Financing	Current maturities of long-term debt	1.3		1.0
Noncurrent:
Operating	Other long-term liabilities	46.3		46.9
Financing	Long-term debt	2.4		2.4
Total lease liabilities		$	56.2	$	55.7

The components of lease expense were as follows:


	Three Months Ended				Nine Months Ended
(dollar amounts in millions)	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
Operating lease cost	$	2.6	$	2.2	$	7.5	$	6.5
Variable lease cost	0.3		0.2		0.6		0.5
Short-term lease cost	—		—		0.6		—
Finance lease cost:
Amortization of right-of-use assets	0.4		0.2		1.0		0.5
Interest on lease liabilities	0.1		0.1		0.2		0.1
Total lease cost	$	3.4	$	2.7	$	9.9	$	7.6

Other information related to leases was as follows:


	September 28, 2024	December 30, 2023
Weighted Average Remaining Lease Term (in years)
Operating Leases	8.2	8.9
Finance Leases	3.0	3.4
Weighted Average Discount Rate
Operating Leases	7.6%	7.6%
Finance Leases	7.9%	8.4%


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

As of September 28, 2024, future minimum lease payments under noncancellable operating leases with initial or remaining lease terms in excess of one year were as follows:


(dollar amounts in millions)
2024	$	2.5
2025	9.8
2026	9.5
2027	8.4
2028	8.2
Thereafter	33.1
Total future lease payments	$	71.5
Less: imputed interest	$	(19.0)
Present value of future lease payments	$	52.5

As of September 28, 2024, future minimum repayments of finance leases were as follows:


(dollar amounts in millions)
2024	$	0.4
2025	1.6
2026	1.0
2027	0.8
2028	0.4
Thereafter	—
Total future lease payments	$	4.2
Less: imputed interest	$	(0.5)
Present value of future lease payments	$	3.7

11. Income Taxes

The Company is taxed as a Corporation under Subchapter C, for U.S. income tax purposes and similar sections of the state income tax laws. The Company’s effective tax rate is based on pre-tax earnings, enacted U.S. statutory tax rates, non-deductible expenses, and certain tax rate differences between U.S. and foreign jurisdictions. The foreign subsidiaries file income tax returns in the United Kingdom, France, Poland, Canada and Australia, as necessary, and are included on the U.S. tax returns as pass-through entities, with the exception of Poland and Canada, which are shown on the U.S. tax return as a corporation and are not taxed in the U.S. The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes” (“ASC 740”). The Company determines its provision for income taxes for interim periods using an estimate of its annual effective tax rate on year to date ordinary income and records any changes affecting the estimated annual effective tax rate in the interim period in which the changes occur. The Company’s provision for income taxes consists of provisions for federal, state, and foreign income taxes. Deferred tax liabilities and assets attributable to different tax jurisdictions are not offset.

During the three month periods ended September 28, 2024 and September 30, 2023, the Company recorded a total income tax provision of approximately $3.3 and $12.4 on pre-tax income of $15.1 and $49.4 resulting in an effective tax rate of 21.9% and 25.1%, respectively. During the nine month periods ended September 28, 2024 and September 30, 2023, the Company recorded a total income tax provision of approximately $23.3 and $33.7 on pre-tax income of $93.4 and $133.7 resulting in an effective tax rate of 24.9% and 25.2%, respectively. For the three and nine month periods ended September 28, 2024, effective tax rates were primarily impacted by the change in statutory rate differentials, changes in estimated state income tax and apportionment rates, and permanent differences. For the three and nine month periods ended September 30, 2023, effective rates were primarily impacted by statutory rate differentials, changes in estimated tax rates, and permanent differences.


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

12. Revenue Recognition

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

Contract Balances

Contract assets are the rights to consideration in exchange for goods and services that the Company has transferred to a customer. Revenues in excess of billings result from revenues recognized over time. Unbilled receivables result from revenues recognized point in time and represent an unconditional right to payment for earned revenues and result from timing differences between when revenues are earned and billed for. Unbilled receivables are recognized as accounts receivable when they are billed. Contract liabilities result from revenues recognized over time and represent cash received in excess of revenue earned on active projects. Where the Company receives a down-payment from the customer, it is recorded in customer deposits within accrued expenses and other current liabilities until the project becomes active.

Contract balances as of September 28, 2024 were as follows:


(dollar amounts in millions)
Revenues in excess of billings at September 28, 2024	$	19.3
Unbilled receivables at September 28, 2024	6.0
Contract assets at September 28, 2024	$	25.3

Revenues in excess of billings at December 30, 2023	$	17.8
Unbilled receivables at December 30, 2023	31.9
Contract assets at December 30, 2023	$	49.7

Contract liabilities at December 30, 2023	$	26.7
Contract liabilities at September 28, 2024	$	21.1

During the three and nine month periods ended September 28, 2024, the Company recognized revenue of approximately $0.2 and $22.6, respectively, related to contract liabilities at December 30, 2023.

Disaggregation of Revenue

The principal categories we use to disaggregate revenues are by timing and sales channel of revenue recognition. The following disaggregation of revenues depict the Company’s reportable segment revenues by timing and sales channel of revenue recognition for the three and nine month periods ended September 28, 2024 and September 30, 2023:

Revenue by Timing of Revenue Recognition


(dollar amounts in millions)	Three Months Ended				Nine Months Ended
Reportable Segments by Timing of Revenue Recognition	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
Janus North America
Product revenues transferred at a point in time	$	141.9	$	199.1	$	484.8	$	562.0
Product revenues transferred over time	22.6		28.9		81.9		89.5
Service revenues transferred over time	44.6		32.5		113.6		89.1
	$	209.1	$	260.5	$	680.3	$	740.6
Janus International
Product revenues transferred at a point in time	$	11.8	$	10.5	$	31.5	$	35.7
Service revenues transferred over time	9.5		9.9		22.6		27.5
	$	21.3	$	20.4	$	54.1	$	63.2
Eliminations	$	(0.3)	$	(0.8)	$	(1.4)	$	(1.2)
Total Revenue	$	230.1	$	280.1	$	733.0	$	802.6


Janus International Group, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Revenue by Sales Channel


(dollar amounts in millions)	Three Months Ended				Nine Months Ended
Reportable Segments by Sales Channel Revenue Recognition	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
Janus North America
Self-storage - new construction	$	74.0	$	86.7	$	273.7	$	236.0
Self-storage - R3	53.8		85.1		180.8