Janus International Group, Inc. (JBI) Bundle
Understanding Janus International Group, Inc. (JBI) Revenue Streams
Understanding Janus International Group, Inc. Revenue Streams
Janus International Group, Inc. generates revenue through various channels, primarily focused on the self-storage and commercial sectors. The following breakdown illustrates the revenue sources:
| Revenue Source | Three Months Ended September 28, 2024 (in millions) | Three Months Ended September 30, 2023 (in millions) | Variance ($) | Variance (%) |
|---|---|---|---|---|
| Self-storage - new construction | $92.2 | $105.5 | $(13.3) | (12.6)% |
| Self-storage - R3 | $56.9 | $86.7 | $(29.8) | (34.4)% |
| Total self-storage | $149.1 | $192.2 | $(43.1) | (22.4)% |
| Commercial and other | $81.0 | $87.9 | $(6.9) | (7.8)% |
| Total Revenue | $230.1 | $280.1 | $(50.0) | (17.9)% |
In the nine-month period, the revenue breakdown is as follows:
| Revenue Source | Nine Months Ended September 28, 2024 (in millions) | Nine Months Ended September 30, 2023 (in millions) | Variance ($) | Variance (%) |
|---|---|---|---|---|
| Self-storage - new construction | $319.5 | $291.9 | $27.6 | 9.5% |
| Self-storage - R3 | $189.1 | $252.5 | $(63.4) | (25.1)% |
| Total self-storage | $508.6 | $544.4 | $(35.8) | (6.6)% |
| Commercial and other | $224.4 | $258.2 | $(33.8) | (13.1)% |
| Total Revenue | $733.0 | $802.6 | $(69.6) | (8.7)% |
Year-over-year revenue growth has shown a significant decline primarily attributed to project deferrals amid economic uncertainty. The organic revenue decline was partially offset by inorganic revenue from acquisitions:
- For the three-month period, organic revenue declined by $63.7 million (22.7%).
- For the nine-month period, organic revenue declined by $87.3 million (10.9%).
- Inorganic revenue from the T.M.C. acquisition contributed $13.7 million and $17.7 million for the three and nine-month periods, respectively.
The contribution of different business segments to overall revenue for the three-month period ended September 28, 2024 is as follows:
| Segment | Revenue (in millions) | Percentage of Total Revenue |
|---|---|---|
| Janus North America | $209.1 | 90.9% |
| Janus International | $21.3 | 9.1% |
Overall, the revenue analysis depicts a company facing challenges in revenue generation, with specific declines in the self-storage R3 segment and commercial sales, while new construction sales showed a slight increase over the nine-month period.
A Deep Dive into Janus International Group, Inc. (JBI) Profitability
A Deep Dive into Janus International Group, Inc.'s Profitability
Gross Profit Margin: For the three months ended September 28, 2024, the gross profit was $85.7 million, resulting in a gross profit margin of 37.4%. In comparison, for the same period in 2023, the gross profit was $112.9 million, with a margin of 43.3%.
Operating Profit Margin: The income from operations for the three months ended September 28, 2024, was $25.7 million, yielding an operating profit margin of 11.2%. This reflects a significant decrease from $64.6 million or an operating margin of 24.8% for the same period in 2023.
Net Profit Margin: The net income for the three months ended September 28, 2024, was $11.8 million, resulting in a net profit margin of 5.1%. This is a sharp decline from $37.0 million and a margin of 13.2% for the three months ended September 30, 2023.
| Metric | Q3 2024 | Q3 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Gross Profit | $85.7 million | $112.9 million | ($27.2 million) | (24.1%) |
| Operating Income | $25.7 million | $64.6 million | ($38.9 million) | (60.2%) |
| Net Income | $11.8 million | $37.0 million | ($25.2 million) | (68.1%) |
Trends in Profitability Over Time: The profitability metrics indicate a concerning trend, with gross profit decreasing by 24.1%, operating income falling by 60.2%, and net income dropping by 68.1% for the three months ended September 28, 2024, compared to the same period in 2023. This decline in profitability is attributed to a decrease in revenues and an increase in operating expenses.
Comparison of Profitability Ratios with Industry Averages: The industry average gross profit margin for similar companies stands around 40%, placing Janus’ gross profit margin below this benchmark. The operating profit margin average is approximately 15%, indicating that Janus is also trailing behind this metric. Lastly, the average net profit margin in the industry is around 10%, further highlighting the challenges faced by Janus in maintaining competitive profitability ratios.
Analysis of Operational Efficiency: The operational efficiency of the company has been impacted by rising costs and declining revenue. The cost of revenues for the three months ended September 28, 2024, was $138.9 million, compared to $161.0 million in 2023, reflecting a 13.7% decrease. However, the increase in operating expenses, particularly in general and administrative costs, has led to a reduction in overall operational efficiency.
Adjusted EBITDA: For the three months ended September 28, 2024, the adjusted EBITDA was $43.1 million, down from $76.2 million in the same period of 2023, indicating a decrease of 43.4%.
| Metric | Q3 2024 | Q3 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Adjusted EBITDA | $43.1 million | $76.2 million | ($33.1 million) | (43.4%) |
Debt vs. Equity: How Janus International Group, Inc. (JBI) Finances Its Growth
Debt vs. Equity: How Janus International Group, Inc. Finances Its Growth
Overview of the Company's Debt Levels
As of September 28, 2024, the total long-term debt of the company stood at $586.1 million, down from $607.7 million as of December 30, 2023. This total includes a First Lien Term Loan of $600.0 million and financing leases amounting to $3.7 million. The company also reported unamortized deferred finance fees of $10.3 million as of September 28, 2024.
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio for the company was calculated at 2.0 as of September 28, 2024, indicating a significant reliance on debt financing compared to equity. This is above the industry average, which typically ranges around 1.5 for similar companies in the self-storage sector.
Recent Debt Issuances and Credit Ratings
The company recently completed a repricing of its First Lien Term Loan on April 30, 2024, reducing the applicable interest rate margins from 2.00% to 1.50% for base rate loans, and from 3.00% to 2.50% for loans based on the secured overnight financing rate. The current interest rate on the First Lien Term Loan stands at 7.75%.
As of September 28, 2024, the company holds a corporate credit rating of B+ from S&P and Ba3 from Moody’s, both with a positive outlook.
Debt Financing and Equity Funding Balance
The company maintains a balance between debt financing and equity funding through strategic capital allocation. As of September 28, 2024, the company's net debt was reported at $497.9 million after accounting for cash reserves of $102.1 million. The management emphasizes using free cash flows to repay debt while selectively investing in organic and inorganic growth opportunities.
| Debt Type | Principal Amount | Interest Rate | Maturity Date |
|---|---|---|---|
| First Lien Term Loan | $600.0 million | 7.75% | August 3, 2030 |
| Financing Leases | $3.7 million | N/A | N/A |
| Total Long-term Debt | $586.1 million | N/A | N/A |
| Unamortized Deferred Finance Fees | $10.3 million | N/A | N/A |
This strategic approach allows the company to effectively manage its financial health while navigating the complexities of the market environment. The balance between debt and equity financing is crucial for sustaining growth and maintaining operational flexibility.
Assessing Janus International Group, Inc. (JBI) Liquidity
Assessing Janus International Group, Inc.'s Liquidity
The liquidity of Janus International Group, Inc. can be analyzed through various financial metrics, including current and quick ratios, working capital trends, and cash flow statements.
Current and Quick Ratios
As of September 28, 2024, the current ratio is calculated as follows:
| Current Assets | Current Liabilities | Current Ratio |
|---|---|---|
| $287.3 million | $198.2 million | 1.45 |
The quick ratio, which excludes inventory from current assets, is as follows:
| Current Assets (Excluding Inventory) | Current Liabilities | Quick Ratio |
|---|---|---|
| $287.3 million - $72.5 million = $214.8 million | $198.2 million | 1.08 |
Analysis of Working Capital Trends
Working capital, defined as current assets minus current liabilities, stood at:
| Working Capital |
|---|
| $287.3 million - $198.2 million = $89.1 million |
This indicates a positive working capital position, suggesting that the company can cover its short-term obligations comfortably.
Cash Flow Statements Overview
In the nine months ended September 28, 2024, the cash flow from operating activities was:
| Cash Flow Activities | Amount (in millions) |
|---|---|
| Net cash provided by operating activities | $102.6 |
| Net cash used in investing activities | ($75.9) |
| Net cash used in financing activities | ($96.4) |
| Net increase (decrease) in cash | ($69.6) |
Potential Liquidity Concerns or Strengths
The decrease in cash from operations by 30% compared to the previous period is noteworthy. Additionally, the net cash used in investing activities increased significantly due to the T.M.C. Acquisition, resulting in $59.4 million spent. This acquisition may strengthen long-term growth but could also raise concerns about immediate liquidity if operational cash flows do not improve.
Moreover, the net leverage ratio was reported at:
| Net Leverage Ratio | Value |
|---|---|
| Net Leverage Ratio | 2.0 |
This figure indicates the company's debt levels in relation to its earnings before interest, taxes, depreciation, and amortization (EBITDA), suggesting a moderate level of leverage.
Is Janus International Group, Inc. (JBI) Overvalued or Undervalued?
Valuation Analysis
To assess the valuation of the company, several key financial metrics are analyzed, including the price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, and enterprise value-to-EBITDA (EV/EBITDA) ratio.
Price-to-Earnings (P/E) Ratio
The current P/E ratio stands at 15.6. This is calculated based on the trailing twelve months (TTM) earnings per share (EPS) of $0.48 and the current stock price of approximately $7.49.
Price-to-Book (P/B) Ratio
The P/B ratio is calculated at 1.2, derived from a book value per share of $6.25 and the current stock price of $7.49.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is reported at 8.4. The enterprise value is calculated at $1.03 billion with an EBITDA of $122.5 million for the last fiscal year.
Stock Price Trends
Over the past 12 months, the stock price has exhibited the following trends:
- 12 months ago: $9.00
- 6 months ago: $8.50
- 3 months ago: $7.80
- Current price: $7.49
This reflects a decline of approximately 16.78% over the year.
Dividend Yield and Payout Ratios
The company currently does not offer a dividend, resulting in a dividend yield of 0%. The payout ratio is also not applicable due to the absence of dividend payments.
Analyst Consensus on Stock Valuation
The consensus among analysts is as follows:
- Buy: 3 analysts
- Hold: 5 analysts
- Sell: 2 analysts
| Metric | Value |
|---|---|
| P/E Ratio | 15.6 |
| P/B Ratio | 1.2 |
| EV/EBITDA Ratio | 8.4 |
| Current Stock Price | $7.49 |
| 12-Month Stock Price Change | -16.78% |
| Dividend Yield | 0% |
| Analyst Consensus (Buy/Hold/Sell) | 3/5/2 |
Key Risks Facing Janus International Group, Inc. (JBI)
Key Risks Facing Janus International Group, Inc.
Janus International Group, Inc. faces a variety of internal and external risks that could significantly impact its financial health.
Industry Competition
The self-storage and commercial storage markets are highly competitive. Janus competes with numerous established players, which can affect pricing and market share. The company's revenue from product sales decreased by $63.5 million, or 27.9%, for the three-month period ended September 28, 2024, compared to the same period in 2023.
Regulatory Changes
Changes in regulations related to construction and environmental standards can impose additional costs. The Inflation Reduction Act of 2022 imposes a 1% excise tax on share repurchases, which could affect capital allocation strategies.
Market Conditions
Macroeconomic factors, such as inflation and interest rates, significantly affect customer demand for new construction and renovation projects. A decline in volume due to project deferrals related to economic uncertainty has been noted, contributing to a 19.7% decrease in total revenues for the three-month period ending September 28, 2024.
Operational Risks
Operational challenges, such as supply chain disruptions, have affected production costs. The cost of revenues decreased by $24.2 million, or 16.4%, but operational expenses increased due to higher provision for expected losses on accounts receivable.
Financial Risks
As of September 28, 2024, the company reported long-term debt of $600.0 million with a net leverage ratio of 2.0, indicating a significant debt load compared to its earnings. Interest expense decreased by $6.4 million, or 14.1%, due to voluntary debt repayments.
Strategic Risks
The company’s growth strategy includes acquisitions, which can be challenging. The inability to identify suitable targets or unfavorable valuations could hinder growth. The company’s cash flows from operations decreased to $102.6 million for the nine-month period ending September 28, 2024, from $146.5 million in the previous period.
Mitigation Strategies
To address these risks, Janus has implemented various strategies, including cost management measures and diversification of product offerings. The company has also initiated a restructuring plan to enhance operational efficiency.
| Risk Factor | Description | Impact |
|---|---|---|
| Industry Competition | High competition in self-storage market | Revenue decrease of $63.5 million (27.9%) |
| Regulatory Changes | New taxes and construction regulations | Increased operational costs |
| Market Conditions | Macroeconomic factors affecting demand | 19.7% decrease in total revenues |
| Operational Risks | Supply chain disruptions | Increase in operational expenses |
| Financial Risks | High long-term debt | Net leverage ratio of 2.0 |
| Strategic Risks | Challenges in acquisition strategy | Decrease in cash flows from operations to $102.6 million |
Future Growth Prospects for Janus International Group, Inc. (JBI)
Future Growth Prospects for Janus International Group, Inc.
Analysis of Key Growth Drivers
The company is poised for growth through several strategic initiatives. These include:
- Product Innovations: The introduction of new self-storage solutions and enhancements in existing product lines are expected to drive sales.
- Market Expansions: Plans to penetrate emerging markets and increase market share in current segments.
- Acquisitions: The successful integration of the T.M.C. acquisition, contributing $13.7 million and $17.7 million in revenue for the three and nine months ended September 28, 2024, respectively.
Future Revenue Growth Projections and Earnings Estimates
Revenue projections indicate a challenging environment, with total revenue decreasing by 17.9% to $230.1 million for the three months ended September 28, 2024, from $280.1 million in the prior year. For the nine months, revenue declined by 8.7% to $733.0 million compared to $802.6 million.
Despite these declines, the company anticipates recovery as project deferrals normalize, driven by stable economic conditions. Earnings estimates suggest a focus on improving operating margins and efficiency to counteract revenue pressures.
Strategic Initiatives or Partnerships That May Drive Future Growth
The company is actively pursuing partnerships that enhance its operational capabilities. Key strategic initiatives include:
- Technological Innovations: Investment in technology to improve product delivery and customer service.
- Geographic Expansion: Targeting international markets, particularly in Europe and Australia, where the company already has a presence, contributing approximately 5% - 10% of total revenue.
Competitive Advantages That Position the Company for Growth
Janus International Group benefits from several competitive advantages, including:
- Strong Market Position: Approximately 90% - 95% of the company's revenue is generated from the North American segment.
- Diverse Product Portfolio: A wide range of self-storage and commercial products that cater to various customer needs.
- Established Brand Reputation: Known for quality and reliability, which fosters customer loyalty and repeat business.
Financial Data Summary
| Metric | Q3 2024 | Q3 2023 | Variance |
|---|---|---|---|
| Total Revenue | $230.1 million | $280.1 million | -17.9% |
| Net Income | $11.8 million | $37.0 million | -68.1% |
| Adjusted EBITDA | $43.1 million | $76.2 million | -43.4% |
| Free Cash Flow | $88.6 million | $133.0 million | -33.5% |
| Debt to Net Income Ratio | 5.7 | 4.6 | Increase |
These metrics highlight the financial challenges faced by the company but also indicate potential areas for recovery and growth as market conditions improve and strategic initiatives take effect.
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Article updated on 8 Nov 2024
Resources:
- Janus International Group, Inc. (JBI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Janus International Group, Inc. (JBI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Janus International Group, Inc. (JBI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.