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Hello and welcome to the Janus International Group Third Quarter 2026 Earnings Conference Call. Currently, all participants are in a listen-only mode. The 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, Ms. Sara Macioch, Senior Director, Investor Relations of Janus. Thank you. You may begin, Ms. Macioch.

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, Anselm 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 janisintl.com. Our remarks in the press release presentation and on this call contain forward-looking statements regarding the company's business, strategy, operations and financial performance. Please review the forward-looking statements section in today's press release and in our SEC filings for various factors that could cause our actual results to differ materially from our forward-looking statements and projections. The company expressly disclaims any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. Additionally, non-GAAP financial measures will be referenced in this call. A reconciliation of these measures to the most directly comparable GAAP financial measure can be found in our earnings press release and presentation. On today's call, Ramey will provide an overview of our business. Anselm will continue with the discussion of our financial results and revised 2026 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.

Thanks, Sara, and good morning, everyone. Third quarter results reflected continued pressure, particularly within North American self-storage. While we remain focused on execution and serving our customers, the pace of self-storage development continue to lag our expectations. During the quarter, increases in interest rates and steel costs have added further pressure to project economics and customer investment decisions against an already uncertain market backdrop. At the same time, longer lease-up periods at existing facilities caused certain customers to delay the start of new development projects. Together, these factors created a sequentially more challenging operating environment and contributed to lower volumes in subdued project activity, resulting in total revenues of $213.1 million and adjusted EBITDA of $34 million. While these dynamics impacted Kiwi II construction during the quarter, Our long-term view of the business remains intact, supported by continued customer engagement, the project pipeline, and a strategic fit with a focus on increasing facility content. Based on our year-to-date performance and current expectations for the remainder of the year, we are revising our full-year outlook. We believe our guidance appropriately reflects the operating environment we are seeing today and provides a realistic framework for the balance of the year. Anselm will provide additional detail on our updated guidance and underlying assumptions shortly. As we navigate the current environment, we remain focused on the factors within our control. Our business continues to generate significant free cash flow and combined with our strong balance sheet, this provides us with the financial flexibility to take actions to improve operating efficiencies and better align our cost structure with the current demand. As disclosed in our recent 8K, the actions we have already taken this year are expected to generate approximately $10.8 million of annualized cost savings once fully implemented. While lower volumes have muted those benefits in the near term, we believe these actions represent structural improvements that will strengthen profitability and create a more efficient and resilient organization. The prolonged market softness is also putting increased pressure on certain market participants across the competitive landscape. We believe our scale, financial flexibility, breadth of capabilities, and ability to consistently support our customers continue to differentiate Janus in this environment. We continually evaluate opportunities to simplify the business, improve efficiency, and align our resources with the areas of the portfolio that offer the most attractive long-term opportunities. This includes regularly assessing our operations, manufacturing footprint, cost structure, and business unit organization to determine where we can improve performance and streamline our go-to-market approach. This ongoing discipline is an integral part of how we manage the business. As we optimize the business not only for the current demand environment, but also for the future ahead, our long-term strategic priorities remain unchanged. We continue to believe in the opportunities to increase our content within self-storage, expand adoption of our smart security solutions, strengthen our position in commercial markets, and create value through disciplined capital allocation. Importantly, we do not believe the factors affecting our revised outlook alter the long-term opportunity associated with these priorities. Rather, the actions we are taking are intended to improve our execution against them. while strengthening our operating model and competitive positioning over time. With that in context, I'd like to briefly discuss our progress against our growth strategic priorities, beginning with greater penetration of self-storage. We continue to expand and refine our product offering in order to adapt to our customer changing needs. This approach allows us to serve a broader portion of the market, increase our content opportunities, and provide solutions that align with a range of customer budgets and project requirements while maintaining our commitment to quality and performance. Next, ramping smart security solutions through our Nokia Smart Entry platform remains a central pillar of our long-term growth strategy. As our first mover in bringing the technology-enabled access control to self-storage, we continue to see meaningful opportunities to improve the way facilities are operated and secured. At the end of the third quarter, we had 524,000 connected devices, up 19.4% year over year. Earlier this month at MSM's The Show, we announced a major enhancement to the Nokia app design to further improve the customer experience. As the platform scales, our focus remains on driving adoption, expanding recurring revenue opportunities, and improving profitability. The third priority of our growth strategy is outperforming in the commercial market. While the commercial sheet door market remains challenged, we are encouraged by demand improvements across our rolling steel and carport and shed categories, and we continue to target growth and expansion opportunities, including data centers. Our final priority is winning through disciplined strategic acquisitions. M&A remains an important component of our long-term growth strategy, and our approach continues to be selective and disciplined. Importantly, we believe our scalable operating platform, strong cash flow profile, and Integration Experience position us well to create value from acquisitions over time. As we look ahead, our immediate priority is executing against the revised expectations we are establishing today. We remain focused on serving our customers, continuing to align our cost structure to dynamic market conditions, improving operating performance, and allocating capital reasonably. With that, I'll turn the call over to Anselm to review our third quarter financial performance and the drivers of our revised outlook.

Thank you, Ramey. Ramey spoke to our strategy and results at a high level, and I will focus my remarks on our financial performance in the third quarter and our updated 2026 guidance. For the third quarter, consolidated revenue of $213.1 million decreased 2.8% as compared to the prior year. Integrating revenues for the quarter were $10.7 million, reflecting contributions from Kiwi II Construction. At the sales channel level, our self-storage business was down 5%, new construction decreased 1.6%, while R3 was down 10.6% for the quarter. The decrease in revenues for new construction was driven by continuous offices in North America, which offset contributions from Kiwi II Construction and strengthened our international business. On an organic basis, new construction revenues were down 12.5% compared to the prior year. The decline in R3 revenue was driven by decreases in door replacement, renovation, and conversion and expansion activity. In the third quarter, total revenues in our international segment increased to $30 million, up 6% compared to the prior year period, driven by growth in new construction and market share gains. For the quarter, revenue in our commercial and other sales channels increased by 2.3%. The increase was primarily driven by contributions from our freight terminal business, partially offset by continued softness in demand for commercial sheet doors. Third quarter adjusted EBITDA of $34 million was down 22% compared to the third quarter of 2025. This resulted in an adjusted EBITDA margin of 16%, a decrease of approximately 390 basis points from the prior year period. The decrease in margins year-over-year is primarily attributable to volume declines as well as product and sales channel mix. For the third quarter, we produced adjusted net income of $10.8 million compared to adjusted net income of $22.6 million in the prior year period. Adjusted diluted EPS for the quarter was $0.08. We generated cash from operating activities of $34 million and free cash of $31.5 million in the quarter. On a trailing 12-month basis, this represents a free cash flow conversion of adjusted net income of 203% and a strong free cash flow yield. Capital expenditures in the quarter were $2.5 million. We ended the quarter with $173.7 million in total liquidity, including $100 million of cash and equivalents on the balance sheet. Our total outstanding long-term debt at quarter end was $518 million, and net leverage was 2.9 times, within our target range of 2 to 3 times. Our liquidity levels provide us flexibility in our capital allocation priorities. During the quarter, we made a voluntary prepayment of $30 million on our first lien, term loan, and repurchased approximately 5 million shares of our common stock for a total of $25.3 million. Year-to-date, we have repurchased approximately 8.2 million shares of our common stock for a total of $42.9 million. We had $38.1 million remaining on our share repurchase authorization at quarter end. Now moving to our 2026 guidance. The primary change to our outlook since last quarter is lower expected volumes within self-storage. The macroeconomic environment became incrementally more challenging during the quarter, as increases in interest rates and steel costs added further pressure to project economics and customer investment decisions. Combined with longer lease-up periods at existing facilities, these factors have added pressure to project economics and contributed to delays in project starts. This has been particularly impactful to our Kiwi II construction business. Reflecting these updated assumptions, we are revising our expectations for the year. We now expect full revenue in the range of $855 million to $865 billion. We also now anticipate inorganic revenues from Kiwi II construction to be approximately $55 million to $60 million. From a profitability standpoint, we are taking actions to improve our cost structure. As is closed in our recent 8K, these actions are expected to generate approximately $10.8 million of annualized cost savings once fully implemented. While we are beginning to realize those benefits, continued volume pressure and lower fixed cost absorption have offset a portion of the savings in the near term. As a result, 2026 adjusted EBITDA is now expected to be in the range of $127 million to $133 million. This reflects an adjusted EBITDA margin of 15.1% at the midpoint. Our revised guidance reflects the operating environment we are seeing today and does not assume an improvement in these conditions. While near-term demand remains a challenge, we continue to generate healthy cash flow, maintain financial flexibility, and realize benefits from the cost action implemented throughout the year. While it's still too early to provide specific guidance for next year, based on current market conditions and what we are hearing from our customers, We have not yet seen evidence of an improvement in demand. As a result, we expect headwinds to continue, and we are not currently assuming any improvements to the macro in the immediate future. Please refer to the presentation we have posted for additional details on key planning and subjects for 2026. Thank you all for your time. I will now turn the call over to Ramey for his closing remarks. Ramey?

Thank you, Anselm. We recognize that our third quarter performance and revised outlook are disappointing. Self-storage volumes have remained below our expectations, and the delayed timing of development projects, particularly within Kiwi II construction, have affected our results and expectations for the year. At the same time, we are taking tangible actions to strengthen the business. We also continue to make progress in areas that are important to our long-term strategy. NOKI adoption continues to advance. R3 provides meaningful exposure to facility maintenance and modernization. and our international business expands our participation in developing self-storage markets. We are not relying on a market recovery to drive our near-term actions. We remain focused on serving our customers, continuing to align our cost structure to anticipated market conditions, managing the business with discipline, and allocating capital responsibly. Supported by a strong balance sheet and healthy cash generation, we believe Janus is positioned to navigate the current environment and create long-term value for our shareholders. In closing, I'd like to thank our employees for their continued dedication and our customers and shareholders for their support. We appreciate your participation on today's call. Operator, we would now like to open the lines for Q&A.

Thank you. If you'd like to ask a question, press star 1 on your keypad. To leave the queue at any time, press star 2. Again, that is star 1 for your questions. We'll take our first question from Dan Moore with CJS Securities. Your line is open.

Hi, morning all. This is Justin Ages on for Dan. Can you dig a little deeper into what you're seeing at Kiwi? What does the annualized run rate revenue in EBITDA look like at this stage? and what caught you most off guard since the acquisition?

Thanks for the question. I think if you look at the runway, obviously, it's kind of what our current line shows, right, in terms of that roughly in that 60-ish million range. I think what we're seeing there is just more the same, that customers are really pushing out projects and delaying the decisions to move forward and even ongoing projects. If you look at the macro trend, you see an interest rate continue to rise. You see steel price continue to increase. So you're getting a lot of hesitation from our customers just designed to delay and stretch out projects. And unfortunately, that's what we're seeing in that business.

Yeah, let me add to that. Thanks for the question, Justin. Just to add to that, excuse me, the macro has gotten worse, not better. And I want to leave you with a couple of data points. You know, interest rates have increased. and still has increased 58% year over year and 21% increased quarter over quarter. So it's decreasing margins on storage deals, which is causing additional pause.

That's helpful. Thank you. And then one more, you know, with shares trading at a fraction of their value, or at least by our view, at what point does the board more seriously contemplate strategic alternatives?

Look, I appreciate the question. It's not something that I'm prepared to comment on, but certainly the board's doing its job, and as a fiduciary, we'll certainly look at all options. But thanks for the question.

All right. Thank you for taking the questions.

We'll take our next question from Phil Ng with Jefferies. Your line is open.

Hey, guys. Appreciate all the color. If I assume pricing tracks reasonably close in terms of the 3Q run rate, it implies your fourth quarter volumes could be down as much as call it 20%, which is a pretty substantial drawdown from 3Q in the first half. So my question is really, how much of this is just you curtailing production at the inventory level and your customers versus project delays, cancellations? If it's a D-stock, any perspective on how long it's going to take to flush it out?

Yeah, I think Phil, thanks for the question. I think the bigger issue is just on the storage side that we've been talking about is that people are, the macro has just gotten worse and people are really just holding off on decisions to invest in self-storage, whether or not it's new construction or R3. Just keep in mind, like steel price going up, like Ramey said, 20% sequentially, that impacts affordability for all projects. So that's what we're unfortunately seeing further pressure on decision making there. And that's, unfortunately, if you do the math, like you said, You're going to see further pressure on the quarter.

Okay. Ramey, did I hear you correctly, or maybe it was Anselm's comment? Even ongoing projects for Kiwi, you're seeing that halt, meaning people are walking away from projects that have started?

Not that have started, no. Actually, once a project, once dirt's starting to move around, they'll certainly complete the projects. It's really the planning of the next projects that it's halted.

Okay. On the R3 side, I was a little more surprised just given, I mean, I appreciate you're laughing and tough for comp. That business tends to be fairly stable because it's more of a replacement repair kind of situation and you got decent momentum with some of your larger re-customers. Are you seeing any pullback even there from your large institutional customers? Is this more deferring discretionary replacement? Just give us a little more perspective on on the R3 side of things. I appreciate the conversion piece is a little more cyclical and lumpy, but what are you seeing in terms of how your mix of customers on R3 are behaving in this environment?

Yeah, I think so. I think the REAN and large institutions, they seem to be fairly steady in terms of R3. What you're seeing is the discretionary piece, like you identified, that people are just making hard, really contemplating before they actually make the call and stuff. And that's what we're, unfortunately, we're seeing that pressure in that other customer segment.

And then can you size up how big R3, the piece that's more discretionary in nature, like percentage-wise?

If you look at R3 generally, it's all discretionary generally, right? Because you're making a decision to either upgrade or improve your facilities, so that's still a normal investment decision that you have. I think the ones you're probably referring to is more when there's an acquisition, then you see a bit more steady business, but that's only when there's a major acquisition. Generally, all general R3 is discretionary. Okay.

Appreciate the color, guys. Thank you.

We'll take our next question from Ruben Garner with Stonex. Your line is open.

Thank you. Good morning, everybody. In terms of the outlook for next year, I know it's early, but are you kind of implying that the run rate from the second half of this year is the right way to think about it? Meaning if we annualize the What is it? 55 or so million of second half EBITDA. That's a reasonable starting point for next year. And I guess, can you remind us what kind of normal seasonality looks like? I think the second half is roughly 55% or so, but we don't have that many years of history. So any help there would be?

Yeah, I think the answer to the easy one is there hasn't been normal seasonality since we've gone public. As you've seen, it's really fluctuated a lot. I think in terms of next year, obviously it's too early to guide this point, but I would say what we want to tell you is the trend is not improving at this point. So I would not expect a recovery going into next year at this point. So I think that's kind of what we want to at least provide some insight into, that it's just the market has not improved.

And your comments about the non-discretionary piece of R3 being kind of acquisitions, there has been a decent amount of those in recent kind of the last 12 to 24 months. Are you seeing those projects delayed and pushed off, some of the things that normally happen, the refreshes and the renovations that come with those?

We've always talked about in the past, whenever there's a major acquisition, there's a structured planning phase and timing of when they do the whole process of upgrading the facility, signage, office, et cetera. So that's just regular timing that is planned. We haven't seen any change to that.

And then how do you think about new construction versus R3? I mean, is there a concern that R3 can deteriorate faster because they're smaller projects at times. And, you know, if you run out of backlog, could we see an acceleration in the declines in new construction to come? Or, you know, how do you think about the backlog there or any other insights you have to new construction versus R3?

One of the things, like we mentioned, steel has continued to rise and that's impacted affordability. We're not standing here waiting. One of the things we're doing is re-looking at the product line to adjust it to maybe de-feature, de-content some things to provide more optionality to our customers. So I think that's the one thing that we can do to help our customers. But I think nothing's changed in terms of how we approach the market. We just said, look, we've got to look at what makes sense for our customers to help them improve their profitability.

Got it. Thank you, guys, and good luck. Thanks. Thanks.

We'll take our next question from John Lovallo with UBS. Your line is open.

Hi. Good morning. I just wanted to ask on gross margin. So that came in about 33.1%, which was down, I think, about like 600 basis points year over year. So I was just going to ask, like in North America specifically, could you help us frame how much of that decline was due to like mixed versus Kiwis? versus price, cost, and anything else in general? And how does that compare to margins pre-COVID?

All right, that's a lot there to unpack there. Just at a high level, I think, as we always talked about, unfortunately, our highest margin business is our North American self-storage piece of our business. And that's the client, as you've seen in the release, meaningfully. So it's a large chunk of what you're seeing is mixed. Blaney into lowering the gross margin, the blended gross margin among other businesses. So that's really the biggest impact you're seeing. You can see in the block price is minimal. So it's really all coming down to mix of what we're selling in the higher margin stuff that unfortunately is a lot lower.

Okay, got it. Also, by the way, this is for John. And then second, I just wanted to quickly ask on capital allocation. So this quarter, you guys announced that you repurchased five million shares for about $25 billion and also paid down about $30 million of debt. And net leverage, I think, came in about 2.9 times, which is at the high end of the range of, I think, two to three times your target range. So I was just going to ask, how are you thinking about share purchases, debt repayment, and capital allocation in general as you look into Q4 and beyond?

Sure, yeah, and like we've always said, we're really mindful of kind of where the net leverage number is, and we balance between all the different choices we have. I think this past quarter, you saw us pull the trigger on buybacks as well as debt paydown. I think, look, all three, including acquisition, are always in play in terms of what makes sense strategically for the company. What I would say in the immediate quarter is that obviously we're near the higher end of the range, so that would just dictate kind of some of the things that we can or can't do there, but I think we've always managed to keep it within the range.

Okay, got it. Thank you.

And we'll take our next question from Jeffrey Hammond with KeyBank Capital Markets. Your line is open.

Hey, everyone. Good morning. This is Mitch Moore on for Jeff. My first question, just on some of the restructuring and cost actions, how much of these actions are reflected in the current run rate? What remains incremental for 2027? Could you give us a breakdown of those actions, what the annual cost savings for each of these actions are? And are you contemplating any further actions with the macro interest rates kind of trending the wrong direction? Thanks.

Jared, no, thanks for the question. I think, as we indicated, The annualized announced savings of about $10.8 million. We'll probably realize we said roughly about half of it this year, roughly half next year. To your question about further, yes, I think as Ramey said in his remarks, we're always constantly reviewing the portfolio of the company based on where the volume sits and where the potential volume is. And we're not ready to announce it, but there is further cost savings that we can see in the coming quarters that we'll announce.

Great, that's helpful. And then just briefly, could you talk about what triggered the goodwill impairment on Kiwi and Vetco?

Thank you. You can see the forecast. It's really a matter of the forecast dropped meaningfully for the first year. And, you know, obviously, we're required to assess kind of the valuation of the Kiwi business at that point in time. We still think positively about the strategic rationale for buying that business long term. but unfortunately with the short-term action, short-term jobs and forecasts, that required us to reassess it and that's what drove the impairment there.

Okay, great.

Thanks for taking my questions.

Thank you. At this time, there are no further questions in queue. I would now like to hand it back to Ramey for any additional or closing remarks.

Okay, thank you all for joining us today. We appreciate your support of Janice and look forward to updating you on our progress. Have a great day.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.