Hello, and welcome to the Janus International Group Second Quarter 2025 Earnings Conference Call. [Operator Instructions] 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. Sara E.

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 Investors section of our website at janusintl.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, adjusted EPS and net leverage. 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, Ramey will provide an overview of our business. Anselm will continue with a discussion of our financial results and 2025 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, Sara. Good morning, everyone. Thank you all for joining us today. Janus delivered results for the quarter that were above our expectations, and I'm pleased with our team's continued strong execution in a dynamic operating environment. The resiliency of our business model and our diversified product offerings have enabled us to weather these challenging macroeconomic conditions as we work to position the business for long-term success. With that as a backdrop, I'd like to highlight a few key themes related to the quarter. First, we saw market recovery in both our commercial sales channel and our International segment. Second, our backlog and pipeline remains stable. Third, we continue to strengthen our leadership team and unveil new offerings to better support our customers and meet their evolving needs. And finally, we continue to demonstrate financial strength with robust cash generation and disciplined capital allocation, positioning us well to capitalize on the attractive long-term fundamentals of the market we serve. Beginning with our results for the second quarter of 2025, we delivered revenue of $228.1 million, down 8.2% compared to the second quarter of 2024. Total self-storage saw a decrease of 14.8% on the new construction side. This was driven by volume declines resulting from uncertainty in the economic and interest rate environment. In our R3 sales channel, the decrease was primarily due to continued declines in big box retail conversions and expansion activity. While customers remain cautious with regard to their liquidity and capital deployment, we are confident in the underlying long-term fundamentals of self-storage market. The softness in our North American self-storage business was partially offset by a recovery in the international markets we serve as macro conditions in these areas improve. Our commercial and other sales channel increased 6.7%, driven by contributions from our TMC acquisition completed in May of 2024, coupled with the growth in rolling steel doors and recovery in demand for carports and sheds. We are also beginning to realize the benefits of our multiyear efforts to get specified for certain architectural requirements in the commercial space, and we believe this more comprehensive suite of offering we have worked to develop is also allowing us to gain share in the market. Our Noke Smart Entry System continues to gain traction with 409,000 installed units at quarter end, representing growth of 6.5% sequentially and 26.6% year-over-year. We're pleased with the momentum we're building in this business, and we continue to see opportunities for further growth as customer adoption of Noke Ion continues in 2025 and beyond. During the quarter, we welcomed Jason Williams as the President of Janus or Janus Core. In his new role, Jason is responsible for the Janus Core strategy, overseeing sales, marketing, financial performance and product development for the self-storage and commercial door and hallway business. Jason joins us with extensive experience in senior leadership roles at technologically advanced industrial companies, and we look forward to his contributions. In the second quarter, Janus continued to invest in digital innovation, brand expansion and structural manufacturing to drive long-term growth across our portfolio. Reflecting this continued momentum, Janus was named a 2025 Inside Self-Storage Best of Business winner in 3 categories: Best Self-Storage Door, Best Retrofitting and Refurbishing and Best Technology Innovation. This marks the 15th consecutive year we have received recognition for best self-storage door by Inside Self- Storage. BETCO was also recognized by Inside Self-Storage as a 2025 Best of Business winner in the category of Best Development Consulting. Switching gears, I'd like to take a brief moment to share our updated expectations with regard to tariffs and their potential expense impact to Janus. As a reminder, while the bulk of our steel and material inputs are sourced domestically, we do have some exposure to components sourced from countries that we anticipate will be impacted by the tariffs. For 2025, we continue to estimate the total potential expense impact related to tariffs will be in the low single-digit millions. Beyond 2025, we now estimate the potential ongoing unmitigated annual impacts to be in the range of $6 million to $8 million at the current expected tariff rates compared to $10 million to $12 million previously. We are working to secure alternative sourcing for components we historically source from impacted regions and anticipate that our productivity and commercial actions will offset much of our exposure. From a financial standpoint, our resilient business model, strong liquidity and robust cash generation allow us to execute on our capital allocation priorities. To that end, during the quarter, we repurchased 1.2 million shares for $10.1 million under our share repurchase program. I'm also pleased to share that our Board of Directors expanded our existing share repurchase program during the second quarter, authorizing the repurchase of up to an additional $75 million of common stock. This additional authorization reflects the Board's confidence in our business and extends our ability to return capital to shareholders. As we look ahead, we are confident in the long-term fundamentals of our business. We believe the self-storage industry will continue to benefit from strong underlying demand driven by our recurring life events. Our R3 business also has significant opportunity as consolidation increases across self-storage industry. More than 60% of the self-storage facilities in the U.S. are over 20 years old, which we believe will encourage customers to focus their capital allocation on existing properties. Taken together, we believe that we are well positioned to deliver long-term shareholder value given our strong balance sheet, consistent cash flow generation and position as the market leader in self-storage and commercial solutions. With that, I'll turn the call over to Anthem for a further review of our financial results and updates to our 2025 guide. Anselm?

Thanks, Ramey, and good morning, everyone. As Ramey highlighted, we continue to execute against a challenging macroeconomic backdrop and are pleased to deliver results ahead of our expectations. In the second quarter, consolidated revenue of $228.1 million was 8.2% lower as compared to the prior year quarter. Together, our self-storage business was down 14.8%. New construction was down 15.2%, while R3 decreased 14% for the quarter. The decline in revenues for new construction was primarily driven by declines in volume associated with continued macroeconomic uncertainty and sustained high interest rates impacting our smaller customers' liquidity. The decrease in R3 revenue was driven by continued declines in retail big box conversion and facility expansion activity, partially offset by increases in door replacement and renovation activity. In the second quarter, our International segment saw total revenues increase to $28.4 million, up $10.4 million or 58% compared to prior year. The increase was driven by higher volumes as demand continues to normalize following the U.K. recessionary period that impacted performance beginning in late fiscal 2023 through the bulk of fiscal 2024. We are pleased margins in our International business have been increasing as volumes return. In the second quarter, our Commercial and Other segment increased by 6.7% in total, including 1.7% of organic growth. Inorganic revenue totaled $3.8 million, reflecting a partial quarter of contribution from TMC, which was acquired in May 2024. The organic growth was driven by strength in rolling steel doors as well as recovery in demand for carports and sheds. As Ramey noted, we are seeing green shoots from our efforts to secure specifications on select architectural projects as well as benefits from our distribution facility in Mt. Airy, North Carolina that opened last year. On a consolidated basis, the impact to organic revenues for the quarter was roughly 25% price and 75% volume. Second quarter adjusted EBITDA of $49 million was down 24% compared to the second quarter of 2024. This resulted in an adjusted EBITDA margin of 21.5%, a decrease of approximately 450 basis points from the prior year period. The decrease in profit was due to lower volumes impacting our ability to leverage fixed costs as well as impact of geographic segment and sales channel mix. In the quarter, we realized approximately $2.7 million in savings associated with the previously announced cost reduction program, reaching the full run rate at the end of Q2 as anticipated. As a reminder, we expect to realize approximately $10 million to $12 million in annual pretax cost savings by the end of 2025. For the second quarter, we produced adjusted net income of $28.2 million, a decrease of 21.9% from the prior year and adjusted EPS of $0.20. We generated cash from operating activities of $51.4 million and free cash flow of $44.6 million in the quarter. On a trailing 12-month basis, this represents a free cash flow conversion of adjusted net income of 211%. Capital expenditures in the quarter were $6.8 million. We ended the quarter with $244.3 million in total liquidity, including $173.6 million of cash and equivalents on the balance sheet. Our total outstanding long-term debt at quarter end was $556 million, and net leverage was 2.3x within our target range of 2 to 3x. This liquidity level, particularly given current market conditions, gives us a great deal of flexibility across our capital allocation priorities. As we said in the past, M&A is part of our DNA and will remain a focus going forward. Additionally, we continue to return capital to our shareholders as demonstrated by our repurchase of 1.2 million shares for $10.1 million as part of our share repurchase program. With the additional $75 million share repurchase authorization approved by the Board of Directors in the second quarter, the company had $81.3 million remaining on our share repurchase authorization at quarter end. Now moving to our 2025 guidance. Based on our year-to-date results, current visibility into our backlog and end markets and business trends and conditions as of today, we are reaffirming our full year 2025 guidance for revenue and adjusted EBITDA. We continue to expect revenues to be in the range of $860 million to $890 million and adjusted EBITDA to be in the range of $175 million to $195 million, reflecting an adjusted EBITDA margin of 21.1% at the midpoint. From a cadence perspective, we expect the back half of 2025 to be relatively flat to the first half of revenues and expect EBITDA margins to improve as we move through the final 2 quarters of the year. Results are expected to follow the typical seasonality of our business with third quarter being larger than the fourth quarter. We anticipate the commercial sales channel and International segment will continue to recover in the back half of 2025. New construction is expected to remain soft for the balance of the year as customer project time lines remain extended. As a reminder, the margin profile for new construction and R3 are similar, so we are agnostic about moves between the 2 sales channels. We now anticipate the free cash flow conversion of adjusted net income will be above the target range of 75% to 100% for 2025. Please refer to the presentation we have posted for additional details on our key planning assumptions for 2025. Thank you. I will now turn the call over to Ramey for his closing remarks. Ramey?

Thank you, Anselm. I'm proud of our team's execution. Our strong balance sheet and cash flow foundation provide us ample flexibility to expand our suite of offerings and capabilities to drive growth and invest in our future. Our reaffirmed 2025 guidance is underpinned by a resilient business model and industry leadership position. Despite near-term challenges and market fluctuations, I'm encouraged by the improvement we delivered in commercial and international and remain confident in our ability to deliver long-term value for our shareholders. To close, I'd like to thank our team, customers and shareholders for all of your support. Thank you again for being with us today. Operator, we would now like to open up the lines for Q&A, please.

[Operator Instructions] We will take our first question from Jeff Hammond with KeyBanc.

So just within the mix of self-storage, I was a little surprised new was more resilient and R3 a little bit lighter, just given that you've been talking about R3 kind of carrying the day. So just wanted to know what's going on within that? And what should we expect in terms of the mix into the second half?

Yes. No, Jeff, great question. I think we've always talked about we do what our customers kind of want to lead us to. And right now, what we're seeing is that they still want a bit of a new construction to complete those projects. So we're not seeing as fast of a conversion to R3 even though we're seeing the pipeline and the backlog build for R3, we're just seeing the choice of completing a lot of the new construction projects right now as a preference.

Okay. And then I think you had said the projects were kind of loading more to 3Q. Obviously, you have a nice beat, no change to the guide. Just wondering if you feel better within the range kind of after the first half or if there were some stuff that maybe got pulled forward from 3Q to 2Q? And within that, how do we think about trends into 3Q?

Yes. I think the way we're looking at it, it's still an uncertain market out there. I think you would have expected interest rates to adjust and we haven't seen anything there yet. So it's just more being realistic about what we can see. We've refined our tool to look at timing of projects. So we're just reflecting what we're seeing in the pipeline, the backlog data that we have.

So does 3Q still feel like the best quarter of the year?

The way we're looking at it, at least from the new construction side and the project we have good visibility to, it looks like it could be flat to slightly above for Q3, but it will depend on timing on some of those projects.

We'll take our next question from Dan Moore with CJS Securities.

This is Will on for Dan. Commercial revenue rebounded nicely in the quarter. Can you add some more color to the drivers there and where you've seen the biggest participation gains? And then also talk about your confidence in the sustainability of that growth for the remainder of the year.

That's a good question. I'll put it in 3 buckets. Number one, ASTA rolling steel. As we've mentioned in the past, we've invested heavily in product diversification. We're adding some more products, just kind of rounding out the suite of products that our customers have to sell. Number two, the architectural efforts in terms of getting the product specified. And we've always said, look, we're a small part of that commercial piece. And regardless of the end market, we still have share gains that are available to us, and we're executing on that. Second would be the carport and shed business. As you know, we've invested in kind of brick-and-mortar distribution center in the hub of where that product is distributed in Mt. Airy. And so those efforts are paying off. That market is rebounding. We're adding content to the solution. We're more than just doors in that space. And then secondly, our TMC acquisition is performing as expected. And so we're happy with the growth we're seeing there.

And then can you provide an update on the progress you're making with Noke across channels? It looks like adoption among smaller self-storage players continues to stay pace. Are we closer today than we were 6 to 12 months ago to any of the larger REITs adopting it in a meaningful way?

Yes. We won't really specify on the REITs in particular. I won't call them out. But what I can tell you is the models that we're running and the tests that we're running continue to progress. And outside of the REITs, a lot of the larger institutional customers are showing great interest in it. I think it's really a couple of things. Number one, the Ion product that we released, the stability, the inherent stability to it being a wired solution is meaningful and then also the price point as well.

We'll take our next question from Phil Ng with Jefferies.

This is Fiona on for Phil. Congrats on the solid quarter.

Thank you, Fiona.

In terms of pricing, yes, pricing is holding up pretty well and better than expected. So just curious on your thoughts and how should we think about pricing on the second half? Is down mid-single digit for the upcoming quarters still a good guidance?

Yes. Pricing, it's just really the timing. I think like we talked about it is as we deliver the projects, the older ones would have the higher price and then the newer ones will be the lower price. So it's still coming in -- came a bit slower than we expect in terms of the timing of it. But I think it will be slightly better from a pricing point of view as we go in. Just as an update, when we looked at it, there's that blended number seeing is storage and commercial. And we had already said that commercial was holding up a bit better than the self-storage side of the house, and that's what you're seeing, especially with the mix of commercial being a bit stronger than self-storage that you'll see a bit better blend so then the pricing net will be a bit better.

Got it. And assuming pricing is going to be better than expected in the second half, how should we be thinking about margins in the third quarter and maybe also in the fourth quarter?

Margins is improving as we talked about and as we planned, right? As you look at a couple of things. Pricing will be a little lever there. But the bigger thing that we talked about is that, hey, our steel cost is blending in at the lower cost as it blends into the back of the year, but also our cost actions at the end of Q2 got to what we said we would get to. And there actually is more that is coming that we're working on. So a lot of these levers are coming into play that we talked about that would help get the margin back in the range we talked about to get to the full year margin rate.

Okay, good luck.

Thank you.

We'll take our next question from Reuben Garner.

This is John McGlade on for Reuben. Congrats on the quarter, guys. I just wanted to ask if you could maybe provide some color on the replacement and renovation activity increases you saw in R3 during the quarter. Is that a sign of new business wins or maybe you have some customers who put projects off who just can't afford to wait any longer?

Great question. I would answer that, it's a blend. I mean, obviously, the -- some of the larger consolidation activity that's happened in previous quarters is driving that revenue in -- yes, I mean...

Positive momentum. I think, again, we talked about it is that people are starting to look at their assets and say, "Hey, we got to reinvest to really improve it." I'm sure you can get on some of the public earnings calls from our customers to see what they're doing. But I think it's going down, like Ramey said, acquisitions are forefront for them as well as improving the asset base that they have.

Okay. And then additionally, just with Noke, do you have any additional color you might be able to provide on the runway there? Maybe there's an element of the macro slowdown that helps accelerate adoption at some point?

Yes. No, no, we definitely feel that it's one of the key levers for all our customers to improve their cost position. We've always said that is that Noke allows you to go into that virtual management. You no longer have to use as much labor to actually support your storage facility. So we're seeing a lot of our customers take advantage of that solution to improve their cost position.

And we will take a follow-up from Jeff Hammond with KeyBanc.

Yes. So I think you said -- you characterized backlog and pipeline as stable. I think some of the industry data out there kind of points to lower development as we move into next year. And I know we're pretty far away from that. But just wondering what the disconnect is? Is that share gain? Is that a better R3 pipeline mix? Just any color as you think a little further out?

No, I think you hit the nail on the head, Jeff. It's -- we are taking share and have been for the past, call it, 3 quarters. So that's certainly one of them and then mix has a lot to do with it as well.

And the mix being R3 kind of filling the holes.

Yes, like we said, we're starting to see an increase of the R3 pipeline in the backlog as a lot of our customers are starting to look at upgrades to their facilities to improve occupancy rates as well as the market gets a bit more competitive to have that more up-to-date facility.

And we currently have no further questions in the queue. I will turn the program back over to Ramey Jackson for any additional or closing remarks.

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

Thank you. This does conclude today's meeting. Thank you for your participation. You may disconnect at any time, and have a wonderful day.