Janus International Group, Inc. (NYSE:JBI) is a global manufacturer and supplier of turn-key self-storage, commercial and industrial building solutions. The company's comprehensive offerings include roll-up and swing doors, hallway systems, relocatable storage units, and facility and door automation technologies. Janus's business is operated through two geographic regions that comprise its two reportable segments: Janus North America and Janus International.
Business Overview
The self-storage industry is comprised of institutional and non-institutional facilities. Janus is highly integrated with customers at every phase of a project, including facility planning/design, construction, access control and restore, rebuild, replace (R3) of self-storage facilities. The company's business is comprised of three primary sales channels: New Construction-Self-storage, R3-Self-storage (R3), and Commercial and Other.
Financials
Janus's financials reflect the result of the execution of its operational and corporate strategy to penetrate the self-storage, commercial and industrial storage markets, as well as capitalizing on the aging self-storage facilities, while continuing to diversify its products and solutions. In the fiscal year ended December 30, 2023, the company reported annual revenue of $1,066.4 million and net income of $135.7 million. The company also generated annual operating cash flow of $215.0 million and free cash flow of $196.0 million.
For the first quarter of 2024, Janus reported revenue of $254.5 million, up 1.0% from the prior year period. Net income for the quarter was $30.7 million, while adjusted EBITDA grew 8.3% to $66.3 million. The company's strong cash generation continued, with $28.6 million in operating cash flow and $24.0 million in free cash flow.
Self-Storage Business
Janus's largest business is providing comprehensive solutions in self-storage, which consists of the New Construction and R3 sales channels. Combined, self-storage makes up roughly two-thirds of the company's revenue and an even higher percentage of its EBITDA, with similar margin profiles across the two channels.
In the first quarter of 2024, total self-storage revenue was up 11%, driven by a 40.2% increase in New Construction. Industry fundamentals continue to favor investment in self-storage capacity, which has focused on greenfield sites over the last several quarters. The R3 sales channel, which includes remodeling, upgrading and adding security solutions to existing self-storage facilities, saw a 17.3% increase in the quarter.
Commercial and Other Business
The company's Commercial and Other sales channel, which includes light-duty steel roll-up doors and rolling steel doors for commercial applications, declined 19.2% in the first quarter compared to the prior year period. This was due to a continued shift in demand for certain product lines affecting the commercial steel roll-up door market.
Noke Smart Entry System
Janus's Noke Smart Entry System, which provides mobile access for tenants and remote monitoring and tracking for operators, continued to see strong momentum. The company increased the number of installed Noke units to 300,000 as of the end of the first quarter, up from 276,000 at the end of 2023, representing sequential growth of 8.7%. In early April, Janus announced the launch of the Noke Ion, an inside-the-door magnetic, hardwired smart locking system that expands the capabilities of the Noke platform.
Profitability
The company's first quarter adjusted EBITDA margin expanded 180 basis points to 26.1%, driven by favorable geographic and sales channel mix, as well as declines in material costs, partially offset by increased operating expenses to support continued growth. Janus's North America segment, which accounts for over 90% of revenue, has a higher margin profile than the International segment.
Liquidity
Janus's balance sheet and liquidity position remain strong, with $178.4 million in cash and $303 million in total liquidity as of March 30, 2024. The company's net leverage ratio improved to 1.5x, down from 1.6x at the end of 2023 and below the company's long-term target range of 2x to 3x.
During the first quarter, Janus repurchased 1.02 million shares for $15.3 million. Subsequent to the quarter, the company made a voluntary debt prepayment of $21.9 million and repriced its first lien term loan, reducing the interest rate by 50 basis points.
Outlook
Looking ahead, Janus reiterated its full-year 2024 guidance, expecting revenue in the range of $1.092 billion to $1.125 billion, representing organic growth of 4% at the midpoint, and adjusted EBITDA between $286 million and $310 million, implying a margin of 26.9% at the midpoint. The company expects continued strength in total self-storage, with a return to growth in the Commercial and Other segment in the back half of the year. Janus also anticipates the International segment to see stronger performance in the latter part of 2024 as market conditions normalize.
Conclusion
Janus's strong market position, innovative product offerings, and robust financial profile position the company well to capture additional share and create long-term value for its stakeholders. The company's balanced capital allocation strategy, including strategic M&A, share repurchases, and debt management, further enhances its ability to drive sustainable growth and profitability.