Janus International Group, Inc.

Hello and welcome to the Janus International Group fourth quarter and full year 2021 earnings conference call. Currently, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, you may press star then zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Mr. Scott Sanis, Chief Financial Officer of Janus. Thank you, sir. You may begin.

Thank you, operator, and thank you all for joining our earnings conference call. I am joined today by our Chief Executive Officer, Ramey Jackson. We hope that you have seen our earnings release issued this morning. Please note that we have also posted a presentation in support of this call which can be found in the Investors section of our website at janisintl.com. Before we begin, I would like to remind you that today's call may include forward-looking statements. Any statements made describing our beliefs, goals, plans, strategies, expectations, projections, forecasts, and assumptions are forward-looking statements. Please note that the company's actual results made different from those anticipated by such forward-looking statements for a variety of reasons, many of which are beyond our control. Please see our recent filings with the Securities and Exchange Commission, which identify the principal risks and uncertainties that could affect our business, prospects, and future results. We assume no obligation to update publicly any forward-looking statements and any forward-looking statement made by us during this call is based only on information currently available to us and speaks only as of the date when it was made. In addition, we will be discussing or providing certain non-GAAP financial measures today, including adjusted EBITDA, adjusted EBITDA margins, management adjusted EBITDA, management adjusted EBITDA margins, adjusted net income, and adjusted EPS. Please see our release and filings for a reconciliation of these non-GAAP measures to their most directly comparable GAAP measure. On today's call, Ramey will provide an overview of our business and give an operations update. I will continue with the discussion of our financial results for the fourth quarter and full year 2021 as well as our 2022 outlook before we open up the call for your questions. At this point, I will turn the call over to Ramey.

Thank you, Scott. Before I get into a discussion about our strong fourth quarter results, I'd like to take a minute to recap the highlights and accomplishments of 2021, a transformative year which we ended on a strong note with plenty of momentum. We couldn't be prouder of our employees' dedication, execution, and contributions to this fantastic results. In June, we became a public company. In August, we closed on the acquisition of DBCI and ACT. In November, we simplified our capital structure through the redemption of all of our warrants. And finally, we delivered strong financial results, exceeding our most recently issued financial guidance for both revenue and management adjusted EBITDA, all while combating the cost structure challenges of labor shortages, inflationary cost pressures, supply chain constraints, and other pandemic-related impacts. The acquisition of DBCI had an immediate impact on our business and our results. The complementary combination of DBCI's core contractor and distributor base is helping us grow our self-storage, commercial, and no key access control business. A significant part of the cost synergy plan from the DBCI acquisition involved consolidating two manufacturing facilities and two distribution centers into a single campus in the Houston, Texas area, which we completed during the first quarter of 2022. We continue to be excited about our NOKI business. Its open orders have more than doubled over the past 12 months, and the pipeline of opportunities continue to grow. We continue to build out the NOKI ground game and expect the integration of ACT, which we acquired in August, to be an important part of supporting this rapid growth. ACT is a low-voltage security system integrator that specializes in self-storage and multifamily industries. With dedicated installation and service division, ACT has one of the largest geographic footprints in technology in the self-storage industry and therefore is a natural fit to accelerate adoption of our Nokia offering. We're thrilled by the early success as well as the current trajectory of NOKI as it becomes an increasing part of our offering to our customers and contributor to our financial results. With these two acquisitions, we now offer more comprehensive and value-added solutions to our combined customer set. We expect to unlock further value as we complete the integration. On a macro level, high occupancy rates and strong revenue growth rates of our primary customers are driving capital investment for additional capacity in the self-storage industry. Today, those investment decisions are being made by a larger, more sophisticated and better capitalized group of developers and owners of self-storage facilities, including the self-storage REITs and other institutional investors. The result is a significant tailwind for our business in terms of both new construction and the refurbishment or repurposing of existing structures as Janus is a leading beneficiary of capacity additions, no matter which form those capacity additions take. This dynamic is highlighted by our ability to grow our backlog by roughly 65% during 2021. In addition, we have a pipeline that is near historic highs, which positions us well for 2022. For the year, gross revenues of $750.2 million increased 36.6%, as compared to 2020, including 30% organically. Full-year adjusted EBITDA was $148.2 million, which was up 17.2% versus 2020, and represented an adjusted EBITDA margin of 19.8%. For the fourth quarter, gross revenue of $235.4 million increased 58.4% versus the prior year quarter. including 40.2% organically. Commercial and other led the way and was up 64.4%, R3 was up 58.4%, and new construction was up 54.2% versus the prior year quarter. Adjusted EBITDA of $43.3 million was 26.7% greater than the prior year quarter. Now let me give you additional color around our sales channel results for the quarter. R3 and commercial and other continue to generate strong growth consistent with prior quarters, while new construction saw significant acceleration in the fourth quarter following months of project delay related to pandemic and other economic factors. Today, facility owners, developers, and operators add new capacity via conversions and onsite expansions at higher rate than through greenfield construction. We expect this trend to continue. which will further accelerate our R3 business, where we derive similar margins as new construction segment. The gains in commercial and other were driven by the continued e-commerce movement. Share gains in both commercial steel roll-up door market and the rolling steel door market, and the contribution of DBCI in the quarter. Even with the industry supply constraints, our lead times continue to be better than many of our competitors, resulting in superior growth. We have worked hard over the past several years ensuring the business has qualified secondary and tertiary suppliers, and those efforts continue to pay off today. We've also grown inventories to combat higher logistic costs and better serve customers. These proactive efforts, coupled with our industry-leading market share and self-storage, are positioning us to capture increased market share against this difficult supply chain backdrop. We are excited we were able to continue building on our momentum with the solid results and cash flow, while also simplifying our capital structure via the redemption of all of our warrants during the quarter. As our end markets accelerate to meet increased demand for capacity, we look to leverage our strong market position to capture additional share and create long-term value for all of our stakeholders. With that, I'll turn the call over to Scott for an overview of the financials and outlook for 2022.