Janus International Group, Inc.

Hello and welcome to the Janus International Group third quarter 2024 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's assistance during the conference, you may press star then zero on your telephone keypad. As a reminder, this conference is being recorded. I'll now turn I'd like to turn your call over to your host, Ms. Sarah Macioc, Senior Director, Investor Relations of Janus. Thank you, and you may begin, Ms. Macioc.

Thank you, Operator, and thank you all for joining our earnings conference call. I am joined today by our Chief Executive Officer, Ramey Jackson, and our Chief Financial Officer, Ansem Wong. We hope that you have seen our earnings release issued this morning. We have also posted a presentation in support of this call, which can be found in the investor section of our website at janiceintl.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, plans, strategies, expectations, projections, and assumptions are forward-looking statements. The company's actual results may differ 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 is made. In addition, we will be discussing or providing certain non-GAAP financial measures today, including adjusted EBITDA, adjusted EBITDA margin, 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, Ramy will provide an overview of our business. Ansem will continue with the discussion of our financial results and 2024 guidance before Ramey shares some closing thoughts and we open up the call for your questions. At this point, I will turn the call over to Ramey.

Thank you, Sarah. Good morning, everyone, and thank you for joining us. Janus has built an industry-leading self-storage and commercial solutions business that is resilient and delivers long-term value for our stakeholders. We are proud of all the developments we've made thus far, and of the collective efforts of the entire Janus team. As I go through my prepared remarks, I'd like you to focus on some key things. First, we are experiencing a persistent period of market uncertainty that is causing continued delays with our customers' projects. Second, we are taking proactive, cost-cutting measures to better align the company with current market conditions while remaining agile and well-positioned to capitalize on market recovery when it occurs. As we look to 2025, we see a number of catalysts that gives us optimism. And finally, our balance sheet remains robust with the strength and reliability of our cash flows we are well positioned to execute against our capital allocation plans. During the third quarter, deferrals continued as a number of factors impacted demand. Anticipation of multiple rate cuts have developers waiting for better borrowing conditions. while uncertainty around the election has also given our customers pause. We are seeing this primarily with our mid-level, non-institutional customers that make up a sizable portion of our base. As we deliver against the existing orders, that slowdown is causing what we expect to be near-term decline in our backlog. Self-storage is a long-term business, and our customers invest in the long-term future of their assets. In order to improve profitability, we have announced our structural cost reduction plan, which includes actions designed to improve margins, simplify and streamline our organizational structure, and enhance flexibility and effective efficiencies. To achieve these goals, we have evaluated our ongoing labor needs, driving savings in our SG&A expense, and rationalizing our real estate holdings. The focus is on rightsizing the organization while maintaining key resources to remain agile when market dynamics shift. Together, we expect these actions to generate approximately $8 million to $12 million of annual pre-tax cost savings. In connection with the plan, we expect to record total estimate one-time pre-tax charges of $2 million to $4 million. As we look ahead into 2025, we are encouraged by a number of factors. We are reassured by the results of our beta testing and customer interest we are seeing in Nokia Ion offering, which was rolled out in early October. We expect continued industry consolidation to drive R3 activity, and in 2025, we will have a full-year contribution from TMC in our commercial and other sales channel. We are confident in the long-term fundamentals of the business, despite the near-term challenges we face today. Now let me provide some high-level thoughts on our performance in the third quarter. Our financial results in the third quarter included revenue that was down across all three of our sales channels, reflective of general market conditions. Not surprisingly, the decline in revenues weighed on adjusted EBITDA margin performance. The resilience of our business model allowed us to still deliver solid cash flow generation despite the decrease in revenues. Our balance sheet remains stable, with net leverage at the end of the third quarter at 2.0 times, which is within our stated long-term target range of two to three times. Turning to the performance of our sales channels, which Ansem will expand upon shortly, total self-storage was down 22.4%. Tighter borrowing standards and elevated interest rates continue to cause operators and developers to delay projects until economic conditions get more clarity. Our commercial and other sales channel was down 7.8% for the quarter relative to the third quarter of last year, reflecting decreased demand for carports and sheds, which was partially offset by the strength in TMC. Now turning to Nokia. Our innovative suite of remote access solutions expected new installs from Nokia One slowed slightly in the quarter as customers held out for the Nokia Ion rollout in early October. As a result, The number of installed units increased to 346,000 from 323,000 at the end of the third quarter, representing a sequential growth of 7.1%. With its unique and flexible customization capabilities and updated pricing structure, we anticipate healthy demand for Nokia ION. Our combination of strong liquidity and continued solid cash generation put us in a position to be active in our capital allocation activities for the quarter. For the third quarter, we repurchased 4.3 million shares for a total cost of $45.5 million as part of our previously announced $100 million share repurchase program. In summary, despite near-term challenges, we remain encouraged by the fundamentals that we expect will drive long-term growth for our company. We are focused on the things we can control, safely and reliably delivering services and solutions for our customers. We are the premier provider for self-storage industry, and we will continue to innovate and evolve the business as the market changes. We look forward to expanding our strong market position and creating long-term value for all of our stakeholders in 2024 and beyond. With that, I'll turn the call over to Ansem for a further overview of our results, along with updates to our 2024 guidance. Ansem?