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Operator: Hello, and welcome to the Janus International First Quarter 2023 Earnings Conference Call. Currently, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would like to now turn the call over to your host, Mr. John Rohlwing, Vice President of Investor Relations and FP&A. Thank you. You may begin, Mr. Rohlwing.

John Rohlwing: Thank you, operator, and thank you all for joining our first quarter 2023 earnings conference call. 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 janusintl.com. As a reminder, today’s conference call may include forward-looking statements regarding the company’s future plans and prospects. These statements are based on our current expectations, and we undertake no duty to update them. It is important to note that the company’s actual results may differ materially from those anticipated. Factors that could cause actual results to differ from anticipated results are contained in the company’s latest earnings release and periodic filings with the Securities and Exchange Commission, and we encourage you to review those factors carefully.

In addition, we will be discussing or providing certain non-GAAP financial measures today, including adjusted EBITDA, adjusted EBITDA margins, adjusted net income and adjusted EPS. Please see our earnings release and filings for a reconciliation of these non-GAAP measures to their most directly comparable GAAP measure. I’m joined today by our Chief Executive Officer, Ramey Jackson, who will provide an overview of our business and given operations update; and our Chief Financial Officer, Anselm Wong, who will continue with a discussion of our financial results and outlook before we open up the call for your questions. At this point, I’ll turn the call over to Ramey.

Ramey Jackson: Thank you, John. Good morning, everyone. Building on our record financial and operational momentum achieved in 2022, we delivered another quarter of outstanding results to start 2023. Notable considering the first quarter is typically our softest of the year. Customer demand continues to be robust as the long-term bullish fundamentals we see across our end markets remain largely insulated from the broader macroeconomic uncertainty. Our customers, in particular, in self-storage, are enjoying high demand and strong business fundamentals that should drive a sustained period of investment in facilities and our best-in-class products and solutions are well-positioned to help them achieve their goals. Once again, I would like to thank all of our employees without whom our continued strong performance and success wouldn’t be possible.

Now turning to some specific thoughts around the quarter. Janus once again produced outstanding operational and financial results that included solid year-over-year gains in revenues, strong margin improvement, further deleveraging and solid cash generation. We’ve told you repeatedly how fundamentals inherent throughout the industry are fueling investment decisions by our customers to add much needed capacity through either new construction or conversions and expansions and that our margin profile is similar regardless of the path they take. The particular strength this quarter from R3 continues the recent trend of new capacity coming via conversions and expansions. Noke had another strong quarter as we continue to ramp up our capabilities and expand our market penetration as we discussed on our fourth quarter call, at year-end, there were approximately 106,000 total installed units and during the first quarter, we grew to 204,000 total installed units.

Our remote access control technologies, particularly Noke represent the best our industry has to offer, and we’re excited about both the accelerating adoption of its use in the future it has in store. Now shifting to the financial highlights for the quarter. We delivered consolidated revenues of $251.9 million, an increase of nearly 10% as compared to the same period last year. This growth comes across all sales channels with particular strength in our R3 segment that was up 26.9% year-over-year as well as low-single digit increases in both new construction and commercial. Our adjusted EBITDA of $61.2 million came in at 37% higher than Q1 2022, which represents an adjusted EBITDA margin of 24.3%, an improvement of 480 basis points year-over-year.

During the quarter, productivity initiatives and commercial actions more than offset higher cost we continue to experience in many parts of our business, particularly labor and logistics. Our company continues to generate strong cash flows, which Anselm will discuss in further detail shortly. Over the past 12 months through the end of the first quarter, our free cash flow conversion of adjusted net income was 88%. We expect cash conversion to remain solid over time, putting us in a strong position to focus on maintaining a robust balance sheet while also being flexible to respond to value-enhancing M&A opportunities as we identify them. Speaking of the balance sheet, our net leverage remains a key focus for our Board and our management team.

I’m extremely proud that we were able to reduce our net leverage this quarter by nearly half a turn, putting us at 2.4 times net debt to trailing 12-month adjusted EBITDA at quarter end and well within our target range of 2 to 3 times. Solid execution, strong underlying fundamentals and prudent uses of cash put us in this enviable position today, allowing us to run the business with a healthy balance sheet while being able to analyze both organic and inorganic growth opportunities. Before I hand it over to Anselm, I’d like to talk about our progress towards our long-term objectives laid out on our last earnings call. We are driving towards achieving all these targets by expanding our industry-leading positions in our end markets, growing Nokē adoption with our self-storage customers, driving efficiencies across the platform and executing value-accretive M&A.

With respect to our stated long-term goals, our top line growth to start the year, which is all organic at this point as DBCI and ACT were acquired in 2021 positions us well to achieve our full year target range of 4% to 6% organic revenue growth. Our EBITDA margins of 24.3%, which were up dramatically year-over-year, are trending well towards our long-term target range of 25% to 27%. Our strong conversion of adjusted net income to free cash flow to start the year sets us up to achieve our target conversion range of 75% to 100% for full year. And as I mentioned earlier, our net leverage is comfortably inside our target range. Our end markets remain strong and resilient, and we look to leverage our leadership position to capture additional share and create long-term value for all of our stakeholders.

With that, I’ll turn the call over to Anselm for an overview of the financials and our updated outlook for the full year.

Anselm Wong: Thanks, Ramey, and good morning, everyone. In the first quarter, revenue of $251.9 million was up 9.8% compared to the prior year quarter, driven by solid demand in all three of our sales channels. R3 led the way and was up 26.9%, while new construction and commercial and other were both around 2% to 3% higher versus the prior year quarter. The diversity and stability of our offering is particularly evident when you look at our revenue mix for the quarter, which was almost perfectly split into third across our three sales channels. The impressive growth from our R3 segment in the quarter continues to be bolstered by new capacity additions in the form of conversions and expansions. Our customers’ focus on adding new capacity remains weighted towards our R3 offerings as opposed to greenfield new construction site, driven by the availability of idle brick-and-mortar retail capacity to our customers.

In new construction, growth was slower than in the previous year as first quarter 2022 was positively impacted by pent-up demand that occurred during pandemic impacted 2021. In the first quarter, we continue to see construction times elongate as [indiscernible] and other delays persist. In Commercial and other, growth has started to normalize compared to a very strong first quarter of 2022, which included benefits from commercial actions and market share gains. Our products are used in a broad range of end markets, including hotels, warehouses, pharmacy, schools and many others. We see continued potential for growth in commercial and other. Adjusted EBITDA of $61.2 million was up 37% compared to the year ago quarter. The combination of solid demand, commercial actions and cost-saving initiatives continues to help offset increases in labor as we work to scale the business for continued growth, including additional investments in Nokē driving us closer to the margin profile we view as more representative of our business.

Adjusted EBITDA margin for the quarter was 24.3%, an increase of 480 basis points from the year ago quarter. Our contracts today and going forward are designed with flexibility to accommodate moves in our input costs by design, eliminating prolonged lag in the cost recovery in times of high inflationary impacts. For the first quarter 2023, we produced adjusted net income of $26.4 million, which was up 31.6% from first quarter 2022. Adjusted diluted earnings per share of $0.18 compared to $0.14 in the year-ago quarter. We had another solid quarter of cash flow generation. First quarter cash from operating activities was approximately $50.2 million and free cash flow was approximately $44.2 million. This adds to our multiyear trend of strong conversion of adjusted net income to free cash flow, representing a trailing 12-month free cash flow conversion of 88% of adjusted net income.

We continue to focus on initiatives to improve working capital and strengthen our metrics. From a balance sheet perspective, we closed the quarter with $658.4 million of total debt, $69.6 million of cash and equivalents and a net leverage of 2.4 times net debt to adjusted trailing 12-month EBITDA, down from 2.8 times at the end of 2022. Our performance demonstrates our ability to delever quickly, and we remain focused on maintaining our leverage within our target range of 2.0 to 3.0 times. Interest expense in the first quarter was $16 million. During the quarter, we paid down $50 million of our first lien term loan facility using cash on hand, which should help us partially offset the adverse impacts of rising rates in 2023. We were pleased to see that our credit rating was upgraded at Moody’s two weeks ago, reflective of the strong efforts we have made.

Now turning to our 2023 outlook. Based on our solid first quarter results, continued strong backlog and current visibility of end markets, we are raising our full year 2023 outlook for revenue and adjusted EBITDA. We now expect revenue to be in the range of $1.06 billion to $1.08 billion, a 5% increase at the midpoint compared to our full year 2022 results, driven primarily by a combination of commercial actions and volume-related organic growth. We expect growth in 2023 to reflect the strong underlying fundamentals we see across all three sales channels. We are raising our expectations for adjusted EBITDA to be in the range of $253 million to $278 million, representing a 17% increase at the midpoint versus our full year 2022 results. Given the strength in our margins in the first quarter, we expect the second half March to be balanced with the first half margin.

We expect full year results to reflect a solid year of margin improvement in our business as we pursue our long-term objective to deliver healthy adjusted EBITDA margin in the range of 25% to 27% over the next several years Thank you. I will now turn the call back to Ramey for closing remarks.

Ramey Jackson: Great. Thank you again, Anselm. We executed well in the first quarter, setting the table to deliver on our increased full year outlook while advancing our plans to achieve our longer-term objectives. We are in the early innings of what we believe is a strong multiyear demand environment, one that should drive record revenues, improved EBITDA margins and strong cash flow generation, all while maintaining a more conservative balance sheet. The continued strength in our results is directly attributable to the outstanding execution by our team and the fundamentals in our end market. I expect we will build on this momentum across 2023 as we drive towards another record year. Thank you, again, for joining us. Operator, we can now open up the lines for Q&A, please.

Operator: Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question comes from Daniel Moore with CJS Securities. Please proceed with your question.

Operator: Thank you. Our next question is from Stanley Elliott with Stifel. Please proceed with your question.

Operator: Thank you. Our next question is from Jeff Hammond with KeyBanc. Please proceed with your question.

Operator: Thank you. Our next question comes from John Lovallo with UBS. Please proceed with your question.

Operator: Thank you. [Operator Instructions] Thank you. Our next question comes from Cullen Rose with Stoic Point. Please proceed with your question.

Operator: There are no further questions at this time. I would like to turn the floor back over to Ramey Jackson for closing comments.

Ramey Jackson: Okay. Great. Thank you, everyone, for joining us today. We appreciate your support of Janus International and look forward to updating you on our progress. Have a great day.

Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.