Janus International (JBI) - 2022 Q4 - Annual Report

Cautionary Note Regarding Forward-Looking Statements This section clarifies that the Form 10-K contains forward-looking statements about future events and financial performance, which are subject to risks and uncertainties that could cause actual results to differ materially Forward-Looking Statements Disclosure This section clarifies that the Form 10-K contains forward-looking statements about future events and financial performance, which are subject to risks and uncertainties that could cause actual results to differ materially. The company does not undertake to update these statements unless required by law - Statements in this Form 10-K regarding future events, financial performance, business strategies, and expectations are considered 'forward-looking statements' under federal securities laws[14] - These statements involve risks and uncertainties, including those detailed in 'Part I, Item 1A, "Risk Factors"', which could cause actual results to differ materially from those contemplated[15] - The company does not assume any obligation to update forward-looking statements after the report date, except as required by law[15] Summary Risk Factors This section outlines key risks impacting Janus's business and common stock ownership, including operational challenges, market competition, acquisition integration, raw material price volatility, and public company obligations Risks Relating to Janus's Business Janus's business faces risks including dependence on qualified personnel, intense competition, challenges in integrating acquisitions, volatility in raw material prices (especially steel coil), potential litigation, and exposure to complex privacy and environmental regulations. Cybersecurity threats and economic downturns also pose significant risks to operations and financial results - Janus's success is dependent on its ability to hire, retain, and utilize qualified personnel, facing a competitive market for talent[23] - The company operates in a highly competitive and fragmented business, which can lead to downward pressure on contract prices and profit margins[23] - Acquisitions are a key growth strategy, but they present risks related to integration, achieving synergies, identifying suitable opportunities, and assuming unknown liabilities[23] - Dependence on raw materials like steel coil and purchased components exposes the company to price fluctuations and supply disruptions, which can adversely affect financial results if cost increases cannot be passed to customers[23] - The company is subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data protection, and environmental matters, creating uncertainty about future expenditures and liabilities[23] - Significant disruptions or unauthorized access to computer systems (cybersecurity risks) could lead to service degradation, data disclosure, intellectual property theft, and harm to reputation and financial condition[23] - Economic uncertainty or downturns, particularly impacting specific industries like self-storage and commercial markets, could adversely affect demand for products and services, leading to reduced spending and increased bad debts[23] Risks Relating to Ownership of our Common Stock Risks for common stock ownership include potential dilution from future equity issuances, dependence on subsidiary profits for dividends, anti-takeover provisions, and increased costs and obligations as a public company. Material weaknesses in internal controls and the restatement of financial statements also pose risks to investor confidence and stock price - The company's only significant asset is its ownership interest in Janus Core, making it dependent on its subsidiaries' profits for distributions and to meet financial obligations[23] - Provisions in the company's certificate of incorporation and Delaware law, such as a staggered Board and authorized preferred stock, may inhibit takeovers and entrench management, potentially limiting the future price of common stock[23] - As a public company, Janus incurs increased costs and obligations related to compliance with SEC and NYSE rules, which may divert management's attention and reduce profitability[23] - The company has identified material weaknesses in its internal control over financial reporting as of December 31, 2022, which could affect the accuracy and timeliness of financial reporting and investor confidence[24] - The restatement of interim financial statements has exposed the company to additional risks, including increased professional costs and the possibility of legal proceedings[24] - Future issuance of additional common stock or other equity securities without stockholder approval could dilute existing ownership interests and depress the market price of the Common Stock[24] Part I Item 1. Business Janus International Group, Inc. is a global manufacturer and supplier of turn-key self-storage, commercial, and industrial building solutions. The company offers a comprehensive suite of products and services, including door automation, access control, roll-up and swing doors, hallway systems, and relocatable storage units, serving customers from facility planning to restoration. Key strengths include strong market share in self-storage, mission-critical solutions, a complete product offering, proprietary technology, an experienced management team, and a disciplined acquisition strategy - Janus International Group, Inc. is a leading global manufacturer, supplier, and provider of turn-key self-storage, commercial, and industrial building solutions[26] - The company offers facility and door automation, access control technologies, roll-up and swing doors, hallway systems, and relocatable storage units, supporting customers through all project phases[26] - Competitive strengths include a strong market share (over 50% for interior building solutions in self-storage), mission-critical products representing a small fraction of facility costs, a complete product and service offering, proprietary high-ROI technology solutions (like Nokē Smart Entry), and a proven, experienced management team[28][29][30][31][32] - Janus's acquisition strategy focuses on portfolio diversification, geographic expansion, and technological innovation, as evidenced by recent acquisitions of ACT, DBCI, and G&M Stor-More[33][34][35][36] Overview Janus International Group, Inc. is a global manufacturer and supplier of turn-key self-storage, commercial, and industrial building solutions, offering a comprehensive suite of products and services from facility planning to restoration - Janus International Group, Inc. is a leading global manufacturer, supplier, and provider of turn-key self-storage, commercial, and industrial building solutions, headquartered in Temple, Georgia[26] - The company offers facility and door automation, access control technologies, roll-up and swing doors, hallway systems, and relocatable storage units[26] - Janus provides solutions spanning facility planning, design, construction, technology, and restoration, rebuilding, and replacement (R3) of damaged or end-of-life products[26] Company History Founded in 2002, Janus has expanded globally over two decades, with its common stock now listed on the NYSE under 'JBI' - Founded in 2002, Janus has expanded its operations globally over 20 years[27] - The company's common stock is listed and traded on the New York Stock Exchange (NYSE) under the ticker symbol 'JBI'[27] Competitive Strengths Janus maintains a strong market position in self-storage with over 50% market share, offering mission-critical, comprehensive, and technologically advanced solutions supported by an experienced management team and a disciplined acquisition strategy - Janus holds a strong market share, estimated over 50% for interior building solutions in the self-storage market, serving both institutional REITs and non-institutional operators[28] - The company provides mission-critical solutions that are typically the last items installed before properties generate income, making reliability and efficiency highly valued by customers[29] - Janus offers a complete suite of products, solutions, and services, including maintenance, fabrication, and installation, through a large network of third-party installers and eleven manufacturing facilities in the U.S[30] - The company is a first-mover in proprietary high-ROI technology solutions, particularly in the self-storage sector, with its Nokē Smart Entry platform[31] - Janus is led by a proven and experienced management team with deep industry expertise and a track record of organic and inorganic growth[32] - The company employs a disciplined, highly accretive acquisition strategy focused on portfolio diversification, geographic expansion, and technological innovation[33] Acquisitions Janus strategically acquired ACT, DBCI, and G & M Stor-More Pty Ltd. in 2021 to expand its installation network, customer base, product offerings, and geographical reach in self-storage and commercial markets - In August 2021, Janus acquired ACT (Access Control Technologies), a low-voltage/security systems integrator specializing in self-storage and multi-family industries, to expand its Nokē Smart Entry installation network[34] - Also in August 2021, Janus acquired DBCI, a North American manufacturer of exterior building products, to increase its customer base and expand product offerings in commercial and self-storage markets[35] - In January 2021, Janus acquired G & M Stor-More Pty Ltd. to increase its self-storage customer base and expand geographical reach in the Australian market[36] Industry Overview Janus's sales are primarily driven by the self-storage market (63% of total sales), which benefits from favorable macroeconomic trends and high occupancy rates, alongside a growing commercial industrial door market (**37% of total sales