Form S-1

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

S-1 1 d382690ds1.htm FORM S-1 Form S-1

As filed with the Securities and Exchange Commission on August 8, 2022

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Portillo’s Inc.

(Exact name of registrant as specified in its charter)


Delaware	5812	87-1104304
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

2001 Spring Road, Suite 400

Oak Brook, IL 60523

(630) 954-3773

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Michelle G. Hook

Chief Financial Officer

2001 Spring Road, Suite 400

Oak Brook, IL 60523

(630) 954-3773

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

Copies to:

Alexander D. Lynch, Esq.

Merritt S. Johnson, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8000 (Phone)

(212) 310-8007 (Fax)

Susan B. Shelton, Esq.

General Counsel and Secretary

2001 Spring Road, Suite 400

Oak Brook, IL 60523

(630) 954-3773

Marc D. Jaffe, Esq.

Ian D. Schuman, Esq.

Adam J. Gelardi, Esq.

Latham & Watkins LLP

1271 Avenue of Americas

New York, New York 10020

(212) 906-1200

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, Dated August 8, 2022

PRELIMINARY PROSPECTUS

8,000,000 Shares

LOGO

Portillo’s Inc.

Class A Common Stock

We are offering 8,000,000 shares of our Class A common stock.

Our Class A common stock is listed on Nasdaq Global Select Market (the “Nasdaq”) under the symbol “PTLO.” On August 5, 2022, the last sale price of our Class A common stock as reported on Nasdaq was $26.58 per share. We intend to use all of the net proceeds from this offering to purchase LLC Units (as defined herein) from certain Continuing Pre-IPO LLC Members (as defined herein) and to repurchase shares of Class A common stock from the Reorganization Parties (as defined herein) (together such Continuing Pre-IPO LLC Members and such Reorganization Parties, the “selling stockholders”) in a “synthetic secondary” transaction, at a price per LLC Unit or share of Class A common stock, as applicable, equal to the public offering price per share of Class A common stock in this offering, less the underwriting discounts and commissions and any withholding taxes. As a result, Portillo’s OpCo will not receive any proceeds from this offering. See “Use of Proceeds” and “Certain Relationships and Related Party Transactions.”

We have two classes of common stock: Class A common stock and Class B common stock. Each share of Class A common stock and Class B common stock entitles its holder to one vote on all matters presented to our stockholders generally. All of our Class B common stock is held by the Continuing Pre-IPO LLC Members on a one-to-one basis with the number of LLC Units they own. See “Description of Capital Stock” and “Organizational Structure—Holding Company Structure and the Tax Receivable Agreement.” As a result, the Reorganization Parties and Continuing Pre-IPO LLC Members, together, control any action requiring the general approval of our stockholders, including the election of our Board of Directors (the “Board”), the adoption of amendments to our certificate of incorporation and bylaws and the approval of any merger or sale of the Company or substantially all of our assets.

We are an “emerging growth company” as defined under the federal securities laws and, as such, will be subject to reduced public company reporting requirements. See “Prospectus Summary—Implications of Being an Emerging Growth Company.” We are currently a “controlled company” within the meaning of the corporate governance standards of the Nasdaq.

Investing in our Class A common stock involves a high degree of risk. See “Risk Factors” on page 30.


	Per Share	Total
Public offering price	$	$
Underwriting discount(1)	$	$
Proceeds, before expenses, to us	$	$

(1)	See “Underwriting” for additional information regarding underwriter compensation.

We have granted the underwriters an option to purchase up to an additional 1,200,000 shares to cover over-allotments from us at the public offering price less the underwriting discount at any time within 30 days from the date of this prospectus.

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares against payment in New York, New York on , 2022.


Jefferies		Morgan Stanley		BofA Securities		Piper Sandler

The date of this prospectus is , 2022.

LOGO

TABLE OF CONTENTS


	Page
PROSPECTUS SUMMARY		1
SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL AND OTHER DATA		24
RISK FACTORS		30
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		35
ORGANIZATIONAL STRUCTURE		37
USE OF PROCEEDS		40
DIVIDEND POLICY		41
CAPITALIZATION		42
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION		43
PRINCIPAL STOCKHOLDERS		53
DESCRIPTION OF MATERIAL INDEBTEDNESS		55
DESCRIPTION OF CAPITAL STOCK		58
SHARES ELIGIBLE FOR FUTURE SALE		64
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS		67
UNDERWRITING		70
LEGAL MATTERS		80
EXPERTS		80
WHERE YOU CAN FIND MORE INFORMATION		80
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE		81

You should rely only on the information contained in this prospectus or in any free writing prospectus we may specifically authorize to be delivered or made available to you. Neither we, the selling stockholders nor the underwriters (or any of our or their respective affiliates) have authorized anyone to provide any information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. Neither we, the selling stockholders nor the underwriters (or any of our or their respective affiliates) take any responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We, the selling stockholders and the underwriters (or any of our or their respective affiliates) are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus or any free writing prospectus is accurate only as of its date, regardless of its time of delivery or the time of any sale of shares of our Class A common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

For investors outside the United States: We, the selling stockholders and the underwriters have not done anything that would permit this offering or the possession or distribution of this prospectus or any free writing prospectus we may provide to you in connection with this offering in any jurisdiction where action for purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of Class A common stock and the distribution of this prospectus outside the United States. See “Underwriting.”

As permitted under the rules of the SEC, this prospectus incorporates important business information about Portillo’s OpCo that is contained in documents that we file with the SEC, but that is not included in or delivered with this prospectus. You may obtain copies of these documents, without charge, from the website maintained by the SEC at www.sec.gov, as well as from other sources. See “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference” in this prospectus.

Basis of Presentation

We use a 52- or 53-week fiscal year ending on the Sunday prior to December 31, effective beginning with the first quarter of 2019. In a 52-week fiscal year, each quarterly period is comprised of 13 weeks. The additional week in a 53-week fiscal year is added to the fourth quarter. We believe the difference in reporting periods does not have a material impact on comparability. Fiscal 2022 will consist of 52 weeks and Fiscal 2021, 2020 and 2019 each consisted of 52 weeks.

Trademarks and Trade Names

We own or have the rights to use various trademarks, trade names and service marks, including “Portillo’s” and various logos used in association with our name. Solely for convenience, any trademarks, trade names, service marks or copyrights referred to or used herein are listed without the applicable ©, ® or ^™ symbol, but such references or uses are not intended to indicate, in any way, that we, or the applicable owner, will not assert, to the fullest extent under applicable law, our or their, as applicable, rights to these trademarks, trade names, service marks and copyrights. Other trademarks, trade names, service marks or copyrights of any other company appearing in this prospectus are, to our knowledge, the property of their respective owners.

Market and Industry Information

Unless otherwise indicated, market data and industry information used throughout this prospectus is based on management’s knowledge of the industry and the good faith estimates of management. We also relied, to the extent available, upon management’s review of independent industry surveys and publications and other publicly available information prepared by a number of sources, including Service Management Group (“SMG”), Technomic, The NPD Group, Inc. (“The NPD Group”), and Socialinsider. All of the market data and industry information used in this prospectus involves a number of assumptions and limitations and you are cautioned not to give undue weight to such estimates. Although we believe that these sources are reliable, neither we nor the underwriters can guarantee the accuracy or completeness of this information and neither we nor the underwriters have independently verified this information. Additionally, from time to time, these sources may change their input information or methodologies, which may change the related results. While we believe the estimated market position, market opportunity and market size information included in this prospectus is generally reliable, such information, which is derived in part from management’s estimates and beliefs, is inherently uncertain and imprecise. Projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements” and elsewhere in this prospectus. These and other factors could cause results to differ materially from those expressed in our estimates and beliefs and in the estimates prepared by independent parties. In addition, certain market and industry data has been derived from research and “whitespace” modeling prepared for us in 2020 by Forum Analytics, a leading real estate analytics firm (“Forum Analytics”). We engaged Forum Analytics to prepare a “whitespace” analysis to identify the Company’s potential new unit expansion opportunity in the United States. Additionally, certain information included herein is derived from a consumer survey of NPS scores powered by Dynata LLC (“Dynata”), a global online market research firm, which we commissioned in 2021.

Certain Definitions

As used in this prospectus, unless otherwise noted or the context requires otherwise:

•

“Amended LLC Agreement” refers to the limited liability company agreement of Portillo’s OpCo.

•

“Berkshire” refers to Berkshire Partners LLC, a private equity firm.

•

“Blocker Companies” refers to entities treated as corporations for U.S. tax purposes that held LLC Units prior to the Reorganization Transactions (as defined herein) (individually, each a “Blocker Company”).

•

“Continuing Pre-IPO LLC Members” refers to the Pre-IPO LLC Members who retained their equity ownership in Portillo’s OpCo in the form of LLC Units immediately following the consummation of the Reorganization Transactions.

•

“IPO” has the meaning given in “Prospectus Summary—Organizational Structure.”

•

“LLC Units” has the meaning given in “Prospectus Summary—Organizational Structure.”

•

“Mergers” has the meaning given in “Prospectus Summary—Organizational Structure.”

•

“Pre-IPO LLC Members” refers to the pre-IPO owners that directly (or indirectly through a Blocker Company) held LLC Units immediately prior to the consummation of the Reorganization Transactions.

•

“Portillo’s,” the “Company,” “our company,” “we,” “us” and “our” refer (i) prior to the consummation of the Reorganization Transactions described under “Organizational Structure—The Reorganization Transactions,” to Portillo’s OpCo and its subsidiaries and (ii) after the Reorganization Transactions described under “Organizational Structure—The Reorganization Transactions,” to Portillo’s Inc., Portillo’s OpCo and their subsidiaries.

•

“Portillo’s OpCo” refers to PHD Group Holdings LLC, a Delaware limited liability company, and, following the Reorganization Transactions, a subsidiary of Portillo’s Inc.

•

“Reorganization Parties” has the meaning given in “Prospectus Summary—Organizational Structure.”

•

“Reorganization Transactions” has the meaning given in “Prospectus Summary—Organizational Structure.”

•

“selling stockholders” refers to, collectively, the Continuing Pre-IPO LLC Members and the Reorganization Parties electing to sell LLC Units or shares of our Class A common stock, as applicable, in the synthetic secondary transaction.

•

“Sponsor” refers to Berkshire.

•

“Tax Receivable Agreement” refers to the tax receivable agreement entered into with the TRA Parties.

•

“TRA Parties” refers to, collectively, the Continuing Pre-IPO LLC Members, the Reorganization Parties, and any future party to the Tax Receivable Agreement.

Non-GAAP Financial Measures

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We also supplement our consolidated financial statements with the following non-GAAP financial measures in this prospectus: Adjusted EBITDA, Adjusted EBITDA Margin, Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin. See “Summary Historical and Pro Forma Consolidated Financial and Other Data.”

iii

Key Metrics

Same-Restaurant Sales

Same-restaurant sales is the percentage change in year-over-year revenue (excluding gift card breakage) for the comparable restaurant base, which is defined as the number of restaurants open for at least 24

full fiscal months (the “Comparable Restaurant Base”). At the end of fiscal 2021 and at the end of the quarter ended June 26, 2022, there were 61 restaurants in the Comparable Restaurant Base. The Comparable Restaurant Base excludes a restaurant that is owned by C&O Chicago, L.L.C. (“C&O”) of which Portillo’s owns 50% of the equity, as described in Note 7 - Equity Method Investment in the notes to the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 26, 2021 (the “Annual Report”).

An increase or decrease in same-restaurant sales is the result of changes in restaurant traffic and average guest check. We gather daily sales data and regularly analyze the restaurant traffic counts and the mix of menu items sold to aid in developing menu pricing, product offerings and promotional strategies designed to produce sustainable same-restaurant sales.

New Restaurant Openings

New restaurant openings are central to growing our footprint and executing our growth strategy. We have never closed a restaurant in our 59-year history.

Potential new restaurant sites are typically identified and evaluated at least 18 months prior to opening. New restaurant opening dates trigger advance staff recruiting and training, in addition to the relocation of experienced general managers from existing restaurants and other pre-opening expenses.

The total number of new restaurants per year and the timing of new restaurant openings has, and will continue to have, an impact on our results of operations.

Average Unit Volume (“AUV”)

AUV is the total revenue (excluding gift card breakage) recognized in the Comparable Restaurant Base, divided by the number of restaurants in the Comparable Restaurant Base during the period.

An increase or decrease in AUV is the result of changes in restaurant traffic and average guest check. We gather daily sales data and regularly analyze the restaurant traffic counts and the mix of menu items sold to aid in developing menu pricing, product offerings and promotional strategies designed to produce sustainable AUV. Historically, when opening restaurants in new markets outside of Chicagoland, we experience higher revenues in the first year of operation with a decline in revenues in the second year. After the second year, we have experienced growth in revenues in the third year and beyond as the restaurant and brand continue to grow awareness in those markets.

Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin

Restaurant-Level Adjusted EBITDA is defined as revenue, less restaurant operating expenses, which include cost of goods sold, excluding depreciation and amortization, labor expenses, occupancy expenses and other operating expenses. Restaurant-Level Adjusted EBITDA excludes corporate level expenses, pre-opening expenses and depreciation and amortization on restaurant property and equipment. Restaurant-Level Adjusted EBITDA Margin represents Restaurant-Level Adjusted EBITDA as a percentage of revenue. Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin are not required by, nor presented in accordance with GAAP. Rather, Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA

Margin are supplemental measures of operating performance of our restaurants. You should be aware that Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin are not indicative of overall results for the Company, and Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin do not accrue directly to the benefit of stockholders because of corporate-level expenses excluded from such measures. In addition, our calculations thereof may not be comparable to similar measures reported by other companies. We believe that Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin are important measures to evaluate the performance and profitability of our restaurants, individually and in the aggregate. Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin have limitations as analytical tools and should not be considered as a substitute for analysis of our results as reported under GAAP. For a reconciliation of operating income, the most directly comparable GAAP measure, to Restaurant-Level Adjusted EBITDA, see “Summary Historical and Pro Forma Consolidated Financial and Other Data” herein.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA represents net income (loss) before depreciation and amortization, interest expense and income taxes, adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing core operating performance as identified in the reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA, included in “Prospectus Summary—Summary Historical and Pro Forma Consolidated Financial and Other Data.” Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of total revenues. We use Adjusted EBITDA and Adjusted EBITDA Margin (i) to evaluate our operating results and the effectiveness of our business strategies, (ii) internally as benchmarks to compare our performance to that of our competitors and (iii) as factors in evaluating management’s performance when determining incentive compensation.

We believe that Adjusted EBITDA and Adjusted EBITDA Margin are important measures of operating performance because they eliminate the impact of expenses that do not relate to our core operating performance. Adjusted EBITDA and Adjusted EBITDA Margin are supplemental measures of operating performance and our calculations thereof may not be comparable to similar measures reported by other companies. Adjusted EBITDA and Adjusted EBITDA Margin have important limitations as analytical tools and should not be considered in isolation as substitutes for analysis of our results as reported under GAAP.

PROSPECTUS SUMMARY

This summary highlights selected information contained elsewhere in this prospectus or documents incorporated by reference herein, but it does not contain all of the information that you should consider before deciding to invest in our Class A common stock. You should read this entire prospectus carefully, including the matters discussed under the headings “Risk Factors,” “Unaudited Pro Forma Financial Information,” and the information that is incorporated in this prospectus by reference to our Annual Report (including, without limitation, matters discussed under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our consolidated financial statements and related notes), our Quarterly Report on Form 10-Q for the quarterly period ended June 26, 2022 (the “2022 Q2 Quarterly Report”) (including, without limitation, matters discussed under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our unaudited condensed consolidated financial statements and related notes) and the other the filings incorporated by reference herein. See “Incorporation of Certain Documents by Reference.” In addition, certain statements in this prospectus include forward-looking information that is subject to risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.”

LOGO

Portillo’s: Prepare to Get Obsessed

Portillo’s serves iconic Chicago street food through high-energy, multichannel restaurants designed to ignite the senses and create a memorable dining experience. Since our founding in 1963 in a small trailer which Dick Portillo called “The Dog House,” Portillo’s has grown to become a treasured brand with a passionate (some might say obsessed) nationwide following. Our diverse menu features all-American favorites such as Chicago-style hot dogs and sausages, Italian beef sandwiches, chopped salads, burgers, crinkle-cut french fries, homemade chocolate cake and milkshakes. We create a consumer experience like no other by combining the best attributes of fast casual and quick service concepts with an exciting energy-filled atmosphere and restaurant model capable of generating tremendous volumes. Nearly all of our restaurants were built with double lane drive-thrus and have been thoughtfully designed with a layout that accommodates a variety of access modes including dine-in, carryout/curbside, delivery and catering in order to quickly and efficiently serve our guests. As of June 26, 2022, we owned and operated 71 Portillo’s restaurants across nine states. According to publicly available information, our restaurants generated higher AUVs than any other public fast casual restaurant concept of $8.2 million in 2021.

No matter how our guests order from us, our highly productive kitchens and team members consistently serve high-quality food and deliver a memorable guest experience. We believe the combination of our craveable food, multichannel sales model, dedication to operational excellence, and a distinctive culture driven by our team members gives us a competitive advantage and allows us to generate the highest AUVs and

traffic per restaurant among fast casual and quick service restaurants. In 2020, 2021 and the twelve months ended June 26, 2022, the average Portillo’s restaurant generated:

•

Drive-thru sales of $4.6 million in 2020, $4.7 million in 2021 and $4.1 million in the twelve months ended June 26, 2022, more than double the throughput of McDonald’s average drive thru for each of those periods;

•

Dine-in sales of $1.9 million in 2020, $2.5 million in 2021 and $3.2 million in the twelve months ended June 26, 2022, approximately 90% of Chipotle’s 2020 total AUV, approximately equal to their 2021 total AUV of $2.5 million and approximately 115% of their twelve months ended second quarter of 2022 total AUV of $2.7 million; and

•

Delivery sales of nearly $800,000 in 2020, and $900,000 in 2021 and $1.0 million in the twelve months ended June 26, 2022, approximately equal to Domino’s 2020 average delivery volume, approximately 95% of their 2021 delivery volume and higher than their twelve months ended second quarter of 2022 delivery volume.

Each Portillo’s location on average served approximately 859,000 guests in 2021 and approximately 847,000 guests in the twelve months ended June 26, 2022, based on our average per-guest spend of approximately $9.49 for the twelve months ended February 28, 2022 and approximately $9.75 for the twelve months ended June 26, 2022 and our AUVs of approximately $8.2 million in 2021 and $8.3 million in the twelve months ended June 26, 2022. Our restaurants are buzzing with the energy and excitement of our team members and guests that bring everyone together, from single diners to large groups, around great food, drinks and fun. Our restaurants have attracted a growing cult-like following that has enabled us to thrive across a variety of suburban and urban trade areas around the country. All of our restaurants are profitable, and we are proud to have never closed a restaurant in our 59-year history.

LOGO

We believe our unique brand experience, passionate following, and compelling everyday value proposition drive strong operating results. As a result, we have been able to achieve the following:

•

Opened 19 new restaurants across 8 states from January 1, 2018 through June 26, 2022

•

Our industry-leading Restaurant-Level Adjusted EBITDA Margin was 24.1% for the twelve months ended June 26, 2022

•

Net loss was $16.0 million in the twelve months ended June 26, 2022

•

Adjusted EBITDA was $93 million in the twelve months ended June 26, 2022

During the quarter and two quarters ended June 26, 2022, we experienced unprecedented commodity inflation as well as higher labor expenses, which will continue to have an impact on Restaurant-Level Adjusted EBITDA and our other profitability metrics for the remainder of 2022. For more information, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Q2 2022 Quarterly Report, which is incorporated by reference in this prospectus.


($ in Millions)
Restaurants		Total Revenue


Operating Income		Restaurant-Level Adjusted EBITDA (Margin)*



Net Income		Adjusted EBITDA (Margin)*

(*)	Please see “Summary Historical and Pro Forma Consolidated Financial and Other Data” for a reconciliation of the above non-GAAP financial measures to their most directly comparable GAAP measure.

Our Competitive Strengths

We believe the following strengths separate us from our competitors and serve as the foundation for our continued growth:

Values-Driven, People-Centered Culture. People are the heart of Portillo’s. We hire and train great people who can turn their obsession into a profession. Our team members are passionate about our food, love our guests, and call their teammates “family.” Our people-centric culture is about working together to deliver an exceptional experience for our guests, while operating with the fun-loving energy that drives the exciting

atmosphere within our busy restaurants. Our Portillo’s team members bring our brand to life through their commitment to our values:

“Family” – We work together to make everyone feel at home, and we step up when someone needs help

“Greatness” – We are obsessed with being the best and work hard to continuously improve. Our greatness is rooted in Quality, Service, Attitude and Cleanliness (“QSAC”)

“Energy” – We move with urgency and passion, while maintaining attention to detail

“Fun” – We entertain our guests, we connect authentically, and we make each other smile

During the COVID-19 pandemic, we prioritized the health and safety of our team members who in turn helped our business not only survive but thrive. We chose to not lay off or furlough any team members, and instead invested in them with a focus on cross-training additional skills, which enabled us to increase capacity in our off-premises channels and drive operating efficiencies. We acted quickly to provide paid leave, personal protective equipment and setup a “Wellness Team” to advise on and monitor the well-being of our teams. Additionally, we provided 100% meal discounts and gift cards to every team member throughout the COVID-19 pandemic and funded bonuses to field managers. We also launched a Company foundation called “The Heart of Portillo’s Fund” to support team members facing challenging personal situations.

We work with each team member to build a personal development plan and a corresponding training plan to support their professional development at Portillo’s. We view this investment as a fundamental aspect of our company and key to our growth as it enables us to deliver a consistently memorable experience for our guests and build a pipeline of leaders to drive the success of our future restaurant openings.

We are proud that Portillo’s was ranked the #1 restaurant company on America’s 2021 Best Midsized Employers by Forbes magazine and #99 out of the 500 companies surveyed.

LOGO

An Iconic and Beloved Brand with Obsessed, Lifelong Fans. Portillo’s captures the hearts, minds and stomachs of its guests with every meal. In the 59 years since Dick Portillo opened his first hot dog stand, Portillo’s has grown to become an iconic restaurant brand with a national following. Our menu features something for everyone and appeals to a broad demographic that enables our restaurants to thrive across diverse trade areas and generate strong and

balanced volumes across multiple dayparts, weekdays and occasions. Our new restaurant openings draw massive crowds of passionate fans who line up overnight with lines stretching around the block. Additionally, we have received numerous accolades, including recognition as the “#1 Fast Casual Restaurant in the U.S.” by Trip Advisor in 2021.

We have a very engaged and passionate following on social media. As of August 3, 2022, our average Facebook post generates 26x more engagement than the average industry brand post, while our average Twitter post generates 46x more engagement than the average industry brand post based on industry benchmarks study conducted by Socialinsider in 2022. Many of our fans beg us through social media to bring a Portillo’s restaurant to their city (and we have received similar pleas from mayors), which we believe is indicative of the passion of our guests and the demand for more Portillo’s locations across the country. In a similar vein, we have operated a direct shipping business for over 20 years, shipping a select menu of our most popular offerings to all 50 states, which provides us with an additional channel to build our national brand presence. In the past five years we have shipped 2.7 million sandwiches (Italian beef, sausages and hot dogs) via our own direct-to-consumer direct shipping channel across all 50 states, creating fans all over the country. Based on a national survey powered by Dynata in July 2021, our nationwide net promoter score exceeded that of many notable fast casual competitors.

LOGO

Distinctive, Diverse High-Quality Menu. Our menu offers something for everyone. We obsess over each and every ingredient and curate our menu to ensure that each item receives high marks from our guests and meets our rigorous quality standards. Our Italian beef sandwiches feature high-quality beef slow roasted for four hours, thinly sliced, served on freshly baked Turano French bread and dipped in hot gravy with a proprietary blend of spices perfected over 50 years and designed to deliver an amazing flavor. Our Chicago-style hot dogs feature mustard, relish, freshly chopped onion, sliced red ripe tomatoes, a kosher pickle and sport peppers piled high onto a perfectly steamed poppy seed bun, all finished with a few shakes of savory celery salt. Guests also love our craveable crinkle-cut french fries that are cooked in beef tallow resulting in a perfectly salted, crispy outside with a soft inside. Lastly, for those craving something sweet, our famous homemade fluffy chocolate cakes are baked with love each morning in every restaurant and generously iced with rich chocolate frosting.

Everyone can be satisfied with a visit to one of our restaurants as demonstrated by our sales mix with no single menu category accounting for more than 26% of sales in 2021. As an example of how our guests order across our menu, we sold on average more than $600,000 worth of salad per restaurant in 2021. Menu variety is a major motivator for guests and the difference with Portillo’s is, no matter what someone is craving, we have something for them.

Menu Mix as % of 2021 Sales*

LOGO

Robust Multichannel Sales Capabilities. Our restaurants are designed to provide speed and convenience across multiple sales channels including drive-thru, dine-in, carryout/curbside, delivery and catering. We also serve guests outside our footprint through our website for direct shipping. In each restaurant, our high-energy, passionate team members deliver exceptional customer service to our guests whether they dine in one of our restaurants or order through the drive-thru where team members personally take and deliver orders car-side. At the onset of the COVID-19 pandemic, we quickly adapted to sales shifts and cross-trained our team members to allow us to significantly increase our drive-thru sales from $3.4 million per restaurant in 2019 to $4.6 million in 2020 and $4.7 million in 2021 and enhance our third-party delivery and self-delivery channels and capabilities. Our app and website, combined with our third-party delivery partnerships, resulted in approximately 20% of our sales being placed digitally during fiscal 2020 and fiscal 2021 and approximately 21% in the twelve months ended June 26, 2022. Since nearly all of our restaurants were purpose built with a double lane drive-thru and sizable parking areas to handle our large volumes, we were able to quickly respond to sales shifts without structural changes to our sites. Our ability to execute high sales volumes through our double drive-thrus combined with our robust digital capabilities enabled us to generate approximately 80% of our revenue through these order methods in fiscal 2020 and 74% in fiscal 2021. In a world where customers increasingly value convenience and optionality, our longstanding multichannel expertise positions Portillo’s to continue to succeed and grow market share.

Average Restaurant Sales by Channel ($ Millions)

LOGO

Note: Dine-in defined as any order served over the counter inside a restaurant, including dine-in-orders, orders that are “to go”, phone and online orders picked up inside the restaurant. Drive Thru includes all orders serviced outside the restaurant, including drive thru and curbside pickup. Direct-to-consumer shipping sales are not included in the above. Drive thru, Dine-In and Delivery sales per restaurant includes data from all restaurants open since the beginning of the measurement period.

Energetic Restaurant Atmosphere that Engages the Senses. While our operating model is focused on getting delicious, made-to-order food to our guests quickly, the Portillo’s atmosphere makes the experience even more than a delicious meal. When guests walk into a Portillo’s, they get an experience completely different than a typical chain restaurant visit. Our restaurants engage all the senses to create a fun, relaxed and memorable occasion.

Our dining areas evoke nostalgia and local influences. No two Portillo’s are alike. Each of our restaurants has its own themed décor ranging from a 1930’s prohibition motif to a 1950’s jukebox, to a 1960’s hippie bus. The period music ties to the theme, from ragtime to doo wop to disco. No detail is too small, be it lighting, signage or even the stars subtly sparkling on the ceiling. Each restaurant also draws design elements from the community. The layouts create spaces comfortable for individual diners, families, large groups, and even wedding parties.

Beyond the space itself, the energy of a Portillo’s is unique. Our guests can see into our huge, open kitchens, where their meals are prepared right before their eyes. The smells of burgers broiling, french fries frying, and beef simmering emanate from the kitchen. Each completed meal is announced with a fun rhyme (“Number two, we got you”; “Number seven, welcome to Portillo’s heaven”). But the most important element of

the energy is the enthusiasm of the scores of other guests who are all excited to be there and enjoying their Portillo’s. We want every guest that visits Portillo’s to leave with a memorable experience, a satiated appetite and a desire to return.

LOGO

An Incredible, Everyday Value Proposition. Portillo’s redefined the fast casual and quick service value propositions by combining high-quality, craveable food served at incredible speed with multichannel convenience all inside a differentiated, energy-filled atmosphere. We do not discount and rarely engage in price promotion of our products. Instead, we provide an exceptional value to our guests every day. We believe the combination of our craveable food made with high-quality ingredients, served fast however you want it, in an engaging atmosphere by our passionate team members—all at an affordable per-person spend of approximately $9.75—will continue to sustain and grow our volumes.

LOGO

Proven Portability and Strong Unit Economics. Our concept is successful across diverse markets throughout the United States. As of June 26, 2022, we had 71 restaurants open across nine states including Illinois, Arizona, Indiana, Florida, Iowa, Minnesota, Wisconsin, Michigan and California in a variety of urban and suburban trade areas. Our broadly appealing menu and everyday value caters to a variety of customers and occasions as evidenced by our balanced daypart mix with nearly equal lunch and dinner revenues, as well as a balanced weekday sales mix.

LOGO

As we increase our brand awareness and guest following outside Chicagoland, we believe our restaurants will be even better positioned to consistently grow volumes over time, as evidenced by the performance of our Chicagoland restaurants.

Our team members’ focus on operational excellence enables our restaurants to drive exceptional throughput, creating substantial volumes and profitability. Restaurants in our Chicagoland market had AUVs of approximately $8.7 million in 2020, $9.6 million in 2021 and $9.9 million in the twelve months ended June 26, 2022 and Restaurant-Level Adjusted EBITDA Margins of 31% in 2020, 31% in 2021 and 30% in the twelve months ended June 26, 2022. Restaurants outside of Chicagoland had AUVs of approximately $5.6 million in 2020, $5.8 million in 2021 and $5.8 million in the twelve months ended June 26, 2022 and Restaurant-Level Adjusted EBITDA Margins of 25% in 2020, 23% in 2021 and 19% in the twelve months ended June 26, 2022. When considering new restaurant locations each year as part of our growth strategy, we target cash-on-cash returns of approximately 25% in our third year of operation, which we calculate by dividing our Restaurant-Level Adjusted EBITDA in the third year of operation by our initial investment costs (net of tenant allowances and excluding pre-opening expenses). We are currently experiencing increased costs associated with building and opening new restaurant locations as a result of inflation.

Visionary Leadership Team. Our iconic brand, values-driven culture and growth strategies are guided by our highly experienced senior management team, led by our Chief Executive Officer Michael Osanloo. Mr. Osanloo joined Portillo’s in 2018 and has over 25 years of leadership experience, having previously served as CEO of P.F. Chang’s and EVP of Kraft Foods. In addition to Mr. Osanloo, we have a talented team of industry veterans leading the organization including Chief Financial Officer, Michelle Hook, previously VP of Finance,

FP&A and IR at Domino’s; Chief Operating Officer, Derrick Pratt whose prior experience includes VP-level operations roles at McDonald’s and Starbucks; and Chief Human Resource Officer, Jill Waite, former executive at 24 Hour Fitness and Sephora. Under Mr. Osanloo and the executive team’s leadership, we have made significant investments in our brand, people, culture, systems, and infrastructure. Under Mr. Osanloo and the executive team’s leadership, we have made significant investments in our brand, people, culture, systems, and infrastructure. We believe our experienced management team is a key driver of our success and positions us well for long-term growth.

Our Growth Strategies

We believe we are well-positioned to take advantage of significant growth opportunities due to our values-driven culture, highly-trained and passionate team members, differentiated brand experience and AUVs which are higher than other public fast casual restaurant concepts according to publicly available information, which drive impressive unit economics. We plan to expand our business by executing on the following growth strategies:

LOGO

Expand Our Restaurant Base. We are in the early stages of our nationwide growth with 71 locations across nine states as of June 26, 2022. From November 2020 through June 26, 2022, we opened nine new restaurants, including new locations in Illinois, Michigan, Florida, Arizona, Indiana and Wisconsin. Since 2015, we have opened new restaurants at a compound annual growth rate of approximately 8.7%. Over the long term, we plan to increase our number of restaurants by approximately 10% annually. Our near-term restaurant growth strategy is focused on leveraging our proven unit economic model primarily in adjacent and national markets outside Chicagoland with favorable macro-economic tailwinds where we already have a presence. We will also add select new restaurants in the Chicagoland market. We utilize a data driven approach with our real estate team to identify optimal sites and curate a high-quality restaurant pipeline. Given our leading volumes and the size of our restaurants, we typically do not compete for real estate with quick service or fast casual concepts and tend to be a tenant of choice by landlords due to the significant traffic going through our restaurants. People are key to our growth, which is why we have invested in creating professional development plans for our team members to ensure a steady flow of Portillo’s trained managers who are ready to staff our new restaurants. Additionally, we have established multiple new restaurant opening teams, which allow us to support our future pace of openings while driving new restaurant opening success. Based on a whitespace analysis prepared for us by Forum Analytics in 2020, we believe we have a substantial runway for growth with a long-term opportunity to grow to more than 600 restaurants domestically over the next 25 years and are well-positioned for global growth in the future. While we are optimistic about our ability to expand our restaurant base, we will continue evaluating the impact of the COVID-19 pandemic, which may continue to disrupt our business and affect our ability to execute our expansion strategy. For more information, see “Part I. Item 1A. Risk Factors—Risks Related to Our Business, Industry and Growth Strategies—Our financial condition and results of operations have been and may continue to be adversely affected by the COVID-19 pandemic or future pandemics or disease outbreaks” in our Annual Report which is incorporated by reference herein.

LOGO

Increase Our Same-Restaurant Sales. We aim to continue delivering an outstanding value proposition to our guests and enhance our experience to grow our volumes. We believe the following initiatives will drive same-restaurant sales growth:

•

Deliver a Consistently Outstanding Guest Experience. In our business, the best way to drive a return visit is to provide our guests a consistently fantastic experience when they visit our restaurants or eat our food. Therefore, our relentless focus on operational excellence enables us to drive significant throughput in our restaurants, provide a one-of-a-kind experience and a compelling everyday value proposition to our guests and thereby drive increased customer trial and frequency.

•

Purposeful Menu Enhancements. We are maniacal about quality and crave-ability when it comes to our menu. We are constantly studying ways to further enhance our existing offerings while thoughtfully adding new high-quality items. We are also disciplined in maintaining the number of options on our menu. When a new item earns its way onto our menu, we often replace an existing item to maintain our operational efficiency. We believe this purposeful enhancement drives increased guest frequency and reinforces our everyday value proposition that is key to our success.

•

Increase Brand Awareness Through Non-Traditional and Social Marketing. Portillo’s does not rely on mass media advertising or promotion to drive traffic to our restaurants. We actively engage our fans and guests through a dynamic social media effort that includes email, Twitter, Instagram, TikTok, Facebook, and other platforms. Our social media activity generates significant engagement with our guests and provides our most passionate fans an opportunity to share their enthusiasm with their followers. Portillo’s has dedicated Field Marketing Managers for each market that supplement our engaging social media efforts. These managers are involved in local restaurant marketing and assist in the preparation of new openings including coordinating “sneak peek” visits and organizing visits from “The Beef Bus,” our food truck, to create excitement and awareness, and donating meals to community members including first responders and coordinating events with local media. After opening, our operations and field marketing teams continue to support brand awareness and drive sales by developing local partnerships with sports teams, such as our vending partnership with the Tampa Bay Lightning and hosting local community events and fundraisers in our restaurants.

•

Enhance Our Off-Premises Guest Experience. We have always been committed to providing our guests with our delicious food however and whenever they want it. We are currently testing a third drive-thru lane for guests who have digitally pre-paid for their orders to enhance speed of service and further increase our capacity during peak times. We are also developing geo-fencing capabilities to support our curbside pick-up operations and provide additional convenience for our guests who place orders through our mobile app and website. Additionally, we will continue to invest in targeted digital advertising to drive demand and direct orders through our app and website to further drive sales across all channels.

LOGO

Leverage Our Infrastructure to Drive Profitability. Our attractive business model generates strong operating margins and cash flow. We constantly focus on restaurant-level operations while ensuring that we do not sacrifice the quality and experience for which we are known. Our AUVs, which were higher in fiscal 2021 than other public fast casual restaurant concepts based on publicly available information, and strong operational focus give us the ability to manage variable costs and leverage our fixed costs. We believe we will continue to grow revenue and system-wide profitability by executing our growth strategy and leveraging the experience of existing Portillo’s general managers to lead our new restaurants to drive successful and efficient new openings. Our investments to enhance our multichannel capabilities and drive a frictionless guest order experience are also expected to further leverage our fixed costs. We have made significant investments at the corporate level, which we believe we will leverage in the future, exclusive of the additional costs of operating as a public company.

Summary of Risk Factors

Our business is subject to numerous risks described in the section titled “Risk Factors” elsewhere in this prospectus and in the section titled “Part I. Item 1A. Risk Factors” included in our Annual Report, which is incorporated by reference herein. These risks represent challenges to the successful implementation of our strategy and the growth of our business. Some of these risks are:

Risks Related to this Offering and Ownership of Our Class A Common Stock

•

Future offerings of debt or equity securities by us may have a material adverse effect on the market price of our Class A common stock.

•

If the ownership of our Class A common stock continues to be highly concentrated, it may prevent you and other minority stockholders from influencing significant corporate decisions and may result in conflicts of interest.

•

As a controlled company, we will not be subject to all of the corporate governance rules of the Nasdaq.

•

Our financial condition and results of operations have been and may continue to be adversely affected by the COVID-19 pandemic or future pandemics or disease outbreaks.

•

We do not anticipate paying any dividends on our Class A common stock in the foreseeable future.

Risks Related to Our Business, Industry and Growth Strategies

•

Our financial condition and results of operations have been and may continue to be adversely affected by the COVID-19 pandemic or future pandemics or disease outbreaks.

•

We are vulnerable to changes in economic conditions, costs of food and consumer preferences.

•

We may be unsuccessful in opening new restaurants or establishing new markets and our new restaurants may not perform as well as anticipated, may not be profitable or may close.

•

Our plans to open new restaurants, and the ongoing need for capital expenditures at our existing restaurants, require us to spend capital.

•

Our same-restaurant sales may be lower than we expect in future periods.

•

Our marketing programs and any limited time or seasonal offerings may not be successful and could fail to meet expectations, and our new menu items, advertising campaigns, heavy reliance on social media and restaurant designs and remodels may not generate increased sales or profits.

•

Incidents involving food-borne illness and food safety, including food tampering or contamination could adversely affect our brand perception, business, financial condition and results of operations.

•

We face significant competition for guests, and our inability to compete effectively may affect our traffic, our sales and our operating profit margins, which could have a material adverse effect on our business, financial condition and results of operations.

•

Our restaurant base is geographically concentrated in the Midwestern United States, and we could be negatively affected by conditions specific to that region.

•

Damage to our reputation and negative publicity could have a material adverse effect on our business, financial condition and results of operations.

•

The digital and delivery business, and expansion thereof, is uncertain and subject to risk.

•

We have a limited number of suppliers and distributors for several of our frequently used ingredients. If our suppliers or distributors are unable to fulfill their obligations under our arrangements with them, we could encounter supply shortages and incur higher costs.

•

Any prolonged disruption in the operations of our two commissaries could harm our business.

•

We face potential liability with our gift cards under the property laws of some states.

•

We depend on our executive officers and certain other key team members, the loss of whom could have a material adverse effect on our business, financial condition and results of operations.

•

Our inability to identify qualified individuals for our workforce could slow our growth and adversely impact our ability to operate our restaurants.

•

Failure to maintain our corporate culture as we grow could have a material adverse effect on our business.

•

Matters relating to employment and labor law could have a material adverse effect, result in litigation or union activities, add significant costs and divert management attention.

•

Labor shortages or increased labor costs could have a material adverse effect.

•

We are exposed to risks associated with leasing property subject to long-term and non-cancelable leases and may be unable to renew leases at the end of their terms.

•

Our business is subject to risks related to our sale of alcoholic beverages.

•

An impairment in the carrying value of our goodwill, indefinite-lived intangible assets or long-lived assets could have a material adverse effect on our business.

Risks Related to Our Indebtedness

•

Our level of indebtedness could have a material adverse effect on our business and limit our ability to plan for or respond to changes in our business.

•

We may be unable to generate sufficient cash flow to satisfy our debt service obligations or experience a downgrade in our credit ratings, which would have a material adverse effect on our business.

Risks Related to Our Organizational Structure

•

The interests of Berkshire may conflict with our interests or the interests of the holders of our Class A common stock in the future.

•

Delaware law and our organizational documents, as well as our existing and future debt agreements, may impede or discourage a takeover, which could deprive our investors of the opportunity to receive a premium for their shares.

•

We are a holding company and our principal asset is our ownership of LLC Units in Portillo’s OpCo, and we are accordingly dependent upon distributions from Portillo’s OpCo to pay dividends, if any, and taxes, make payments under the Tax Receivable Agreement and pay other expenses.

•

In certain circumstances, Portillo’s OpCo will be required to make distributions to us and the other holders of LLC Units, and the distributions that Portillo’s OpCo will be required to make may be substantial.

•

The Tax Receivable Agreement with the TRA Parties requires us to make cash payments to them in respect of certain tax benefits to which we may become entitled, and we expect that the payments we are required to make will be substantial.

•

Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon the TRA Parties that will not benefit holders of our Class A common stock to the same extent that it will benefit the TRA Parties.

•

In certain cases, payments under the Tax Receivable Agreement to the TRA Parties may be accelerated or significantly exceed any actual benefits we realize in respect of the tax attributes subject to the Tax Receivable Agreement may impair our ability to consummate change of control transactions or negatively impact the value received by owners of our Class A common stock.

•

We will not be reimbursed for any payments made to the TRA Parties under the Tax Receivable Agreement in the event that any tax benefits are disallowed.

•

If we were deemed to be an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), as a result of our ownership of Portillo’s OpCo, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.

Risks Related to Intellectual Property, Information Technology, and Data Security

•

The failure to protect and maintain our intellectual property, including our trademarks, could have a material adverse effect.

•

Security breaches, system interruptions or a material failure could negatively impact our business by causing disruption to our operations, a compromise of confidential guest information or team member information and could subject us to loss and harm our business.

•

Failure to comply with existing or new federal and state laws and regulations relating to privacy, data protection, advertising and consumer protection could have a material adverse effect.

•

Litigation with respect to intellectual property, if decided against us, may result in competing uses or require adoption of new, noninfringing intellectual property, which may in turn adversely affect sales and revenues.

Risks Related to Legal and Regulatory Matters

•

We are subject to many federal, state and local laws with which compliance can be both costly and complex.

•

We could be party to litigation that could distract management, increase our expenses or subject us to material monetary damages or other remedies.

•

We can incur liabilities arising from environmental laws and compliance with environmental laws could increase our operating expenses.

•

If we fail to maintain effective internal controls over financial reporting, our ability to produce timely and accurate financial information or comply with Section 404 of the Sarbanes-Oxley Act of 2002 could be impaired, which could have a material adverse effect.

General Risks

•

Our management does not have experience managing a public company and our current resources may not be sufficient to fulfill our public company obligations.

•

Fluctuations in our tax obligations and effective tax rate and realization of our deferred tax assets may result in volatility of our results of operations.

•

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

•

Our insurance may not provide adequate levels of coverage against claims.

•

Changes in accounting principles applicable to us could have a material adverse effect.

•

Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions that may be initiated by our stockholders, and designates the federal district courts of the United States as the sole and exclusive forum for claims arising under the Securities Act, which, in each case could limit our stockholders’ ability to obtain a favorable judicial forum for certain disputes.

•

As a public company, we incur significant costs to comply with the laws and regulations affecting public companies which could harm our business and results of operations.

•

Our annual and quarterly results of operations may fluctuate, and if our operating and financial performance in any given period does not meet the guidance that we have provided to the public or the expectations of our investors and securities analysts, the trading price of our Class A common stock may decline.

For a discussion of these and other risks you should consider before making an investment in our Class A common stock, see the section entitled “Risk Factors.”

ORGANIZATIONAL STRUCTURE

We currently conduct our business through Portillo’s OpCo and its subsidiaries. Portillo’s Inc. is a holding company and its sole material asset is its ownership interest in Portillo’s OpCo.

In connection with the Reorganization Transactions (as defined herein), the amended and restated limited liability company agreement of Portillo’s OpCo was amended and restated to, among other things, convert all outstanding equity interests (except for those redeemable preferred units which were repaid in full in connection with the IPO (as defined herein)) into one class of non-voting common units (the “LLC Units”).

On October 25, 2021, the Company closed its initial public offering of 23,310,810 shares of Class A common stock (the “IPO”). In connection with the IPO, we entered into the following series of transactions to implement an internal reorganization, which we collectively refer to as the “Reorganization Transactions.”

•

Our amended and restated certificate of incorporation authorizes the issuance of two classes of common stock: Class A common stock and Class B common stock (collectively, our “common stock”). Each share of common stock entitles its holder to one vote per share on all matters submitted to a vote of our stockholders. The Class B common stock is not entitled to economic interests in Portillo’s Inc. See “Description of Capital Stock” elsewhere in this prospectus.

•

Portillo’s OpCo entered into the Amended LLC Agreement. Under the Amended LLC Agreement, holders of LLC Units (other than us and our wholly owned subsidiaries), including the Continuing Pre-IPO LLC Members, have the right to require Portillo’s OpCo to redeem all or a portion of their LLC Units for newly issued shares of Class A common stock on a one-for-one basis in accordance with the terms of the Amended LLC Agreement. Shares of Class B common stock will be cancelled on a one-for-one basis if we, following a redemption request from a holder of LLC Units, redeem or exchange LLC Units of such holder pursuant to the terms of the Amended LLC Agreement. Except for transfers to us or to certain permitted transferees pursuant to the Amended LLC Agreement, the LLC Units and corresponding shares of Class B common stock may not be sold, transferred or otherwise disposed of.

•

Prior to the closing of the IPO, we acquired, directly and indirectly, LLC Units through the mergers (the “Mergers”), in which certain Blocker Companies each merged with a merger subsidiary created by us (and survived such merger as a wholly owned subsidiary of Portillo’s Inc.), after which each Blocker Company immediately merged into Portillo’s Inc. The shareholders of the Blocker Companies (the “Reorganization Parties”), including affiliates of Berkshire, collectively held 12,496,361 shares of Class A common stock of Portillo’s Inc. upon completion of the IPO. The Reorganization Parties do not directly hold interests in Portillo’s OpCo.

•

Each Continuing Pre-IPO LLC Member was issued a number of shares of our Class B common stock in an amount equal to the number of LLC Units held by such Continuing Pre-IPO LLC Member.

•

We used the net proceeds from the IPO to acquire newly issued LLC Units from Portillo’s OpCo and used the additional net proceeds from the underwriters’ exercise of their option to purchase additional shares of Class A common stock to purchase LLC Units from certain Continuing Pre-IPO LLC Members and/or to repurchase shares of Class A common stock from the Reorganization Parties, in each case, at a purchase price per LLC Unit or share of Class A common stock equal to the initial public offering price of Class A common stock, after deducting the underwriting discounts and commissions.

•

We are party to a Tax Receivable Agreement that obligates us to make payments to the TRA Parties in the aggregate generally equal to 85% of the applicable cash savings that we actually realize, or in certain circumstances are deemed to realize, as a result of (i) our allocable share of existing tax basis in depreciable or amortizable assets relating to LLC Units acquired in the IPO, (ii) certain favorable tax attributes we acquired from the Blocker Companies in the Mergers, (iii) increases in our allocable share of then existing tax basis in depreciable or amortizable assets, and adjustments to the tax basis of the tangible and intangible assets, of Portillo’s OpCo and its subsidiaries, as a result of (x) sales or exchanges of interests in Portillo’s OpCo in connection with the IPO and (y) subsequent redemptions or exchanges of LLC Units by Continuing Pre-IPO LLC Members for cash or Class A common stock, including in connection with this offering, and (iv) certain other tax benefits related to entering into the Tax Receivable Agreement, including payments made under the Tax Receivable Agreement. We have the benefit of the remaining 15% of these tax savings. See “Organizational Structure—Holding Company Structure and the Tax Receivable Agreement” elsewhere in this prospectus.

In connection with this offering, we have entered into an agreement with the selling stockholders whereby we have agreed to use all of the net proceeds from this offering to purchase LLC Units from certain Continuing Pre-IPO LLC Members and to purchase shares of Class A common stock from the Reorganization Parties in a “synthetic secondary” transaction, at a price per LLC Unit or share of Class A common stock, as applicable, equal to the public offering price per share of Class A common stock in this offering, less the underwriting discounts and commissions and any withholding taxes.

Portillo’s Inc. is the sole managing member of Portillo’s OpCo. Because we manage and operate the business and control the strategic decisions and day-to-day operations of Portillo’s OpCo and because we also have a substantial financial interest in Portillo’s OpCo, we have consolidated the financial results of Portillo’s OpCo, and a portion of our net income will be allocated to the noncontrolling interest to reflect the entitlement of the Continuing Pre-IPO LLC Members to a portion of Portillo’s OpCo’s net income. In addition, because Portillo’s OpCo is under the common control of the Pre-IPO LLC Members before and after the Reorganization Transactions (both directly and indirectly through their ownership of the Company), we accounted for the Reorganization Transactions as a reorganization of entities under common control and initially measured the interests of the Continuing Pre-IPO LLC Members in the assets and liabilities of Portillo’s OpCo at their carrying amounts as of the date of the completion of the consummation of the Reorganization Transactions.

The following diagram depicts our organizational structure immediately following the IPO. This chart is provided for illustrative purposes only and does not purport to represent all legal entities within our organizational structure.

LOGO

*	Excludes shares of our Class A common stock underlying vested stock options granted to certain of our Continuing Pre-IPO LLC Members under the 2021 Plan.

Our corporate structure following the completion of the IPO, as described above, is commonly referred to as an umbrella partnership-C-corporation (or “Up-C”) structure, which is used by partnerships and limited liability companies when they undertake an initial public offering of their business. Our Up-C structure allows the Continuing Pre-IPO LLC Members to continue to realize tax benefits associated with owning interests in an entity that is treated as a partnership, or “pass-through” entity, for U.S. federal and applicable state and local income tax purposes following the IPO. One of these benefits is that taxable income of Portillo’s OpCo that is allocated to such owners will be taxed on a flow-through basis and, therefore, will generally not be subject to U.S. federal and applicable state and local income taxes at the entity level. Additionally, because the LLC Units that the Continuing Pre-IPO LLC Members hold are redeemable or exchangeable for newly issued shares of Class A common stock on a one-for-one basis in accordance with the terms of the Amended LLC Agreement, our “Up-C” structure also provides the Continuing Pre-IPO LLC Members with potential liquidity that holders of nonpublicly traded limited liability companies are not typically afforded. See “Organizational Structure” and “Description of Capital Stock” elsewhere in this prospectus.

We also hold LLC Units, and therefore receive the same benefits as the Continuing Pre-IPO LLC Members with respect to our ownership in an entity treated as a partnership, or “pass-through” entity, for U.S. federal and applicable state and local income tax purposes. The acquisition of LLC Units pursuant to the IPO (including the repayment of the redeemable preferred units), the Mergers and future taxable redemptions or exchanges by the Continuing Pre-IPO LLC Members for shares of our Class A common stock or cash are expected to result in favorable tax attributes that will be allocated to us. These tax attributes would not be available to us in the absence of those transactions and are expected to reduce the amount of tax that we would otherwise be required to pay in the future. In connection with the Reorganization Transactions, we entered into a Tax Receivable Agreement that obligates us to make payments to the TRA Parties in the aggregate generally equal to 85% of the applicable cash savings that we actually realize, or in certain circumstances are deemed to realize, as a result of these tax attributes and tax attributes resulting from certain payments made under the Tax Receivable Agreement. We retain the benefit of the remaining 15% of these tax savings. See “Organizational Structure—Holding Company Structure and the Tax Receivable Agreement” elsewhere in this prospectus.

Under the Amended LLC Agreement, we receive a pro rata share of any distributions, including tax distributions, made by Portillo’s OpCo to its members. Such tax distributions will be calculated based upon an assumed tax rate, which, under certain circumstances, may cause Portillo’s OpCo to make tax distributions that, in the aggregate, exceed the amount of taxes that Portillo’s OpCo would have paid if it were a similarly situated corporate taxpayer. Funds used by Portillo’s OpCo to satisfy its tax distribution obligations will not be available for reinvestment in our business. See the section entitled “Part I. Item 1A. Risk Factors—Risks Related to Our Organizational Structure” in our Annual Report.

Upon completion of this offering and the application of the Company’s net proceeds from this offering:

•

Portillo’s Inc., as the managing member of Portillo’s OpCo, will hold 42,111,955 LLC Units, constituting approximately 58.6% of the outstanding economic interests in Portillo’s OpCo (or 42,995,996 LLC Units, constituting approximately 59.8% of the outstanding economic interests in Portillo’s OpCo if the underwriters exercise their option to purchase additional shares of Class A common stock in full).

•

The Continuing Pre-IPO LLC Members will collectively hold (i) 29,779,721 LLC Units (or 28,895,680 LLC Units if the underwriters exercise their option to purchase additional shares of Class A common stock in full), which represents approximately 41.4% of the LLC Units of Portillo’s OpCo (or approximately 40.2% if the underwriters exercise their option to purchase additional shares of Class A common stock in full) and (ii) through their ownership of 29,779,721 shares of Class B common stock (or 28,895,680 shares of Class B common stock if the underwriters exercise their option to purchase additional shares of Class A common stock in full) approximately 41.4% of the voting power of our common stock (or approximately 40.2% if the underwriters exercise their option to purchase additional shares of Class A common stock in full).

•

The Reorganization Parties will collectively hold (i) 10,389,961 shares of our Class A common stock, representing approximately 14.5% of the combined voting power of our common stock (or 10,074,002 shares and 14.0%, respectively, if the underwriters exercise their option to purchase additional shares of Class A common stock in full) and (ii) through our ownership of LLC Units, indirectly will hold approximately 14.5% of the economic interest in Portillo’s OpCo (or approximately 14.0% if the underwriters exercise their option to purchase additional shares of Class A common stock in full).

•

The holders of our Class A common stock other than the Reorganization Parties will collectively hold (i) 31,721,994 shares of our Class A common stock, representing approximately 44.1% of the combined voting power of our common stock (or 32,921,994 shares and 45.8%, respectively, if the underwriters exercise their option to purchase additional shares of Class A common stock in

full) and (ii) through our ownership of LLC Units, indirectly will hold approximately 44.1% of the economic interest in Portillo’s OpCo (or approximately 45.8% if the underwriters exercise their option to purchase additional shares of Class A common stock in full).

See “Organizational Structure” and “Description of Capital Stock” elsewhere in this prospectus for more information on the rights associated with our common stock and the LLC Units.

Our Sponsor

Berkshire Partners has invested more than $16 billion in over 145 private equity investments and as of December 31, 2021, had $23.8 billion in assets under management within Berkshire Private Equity. Berkshire’s current private equity portfolio comprises investments across five sectors — business services & technology, consumer, communications, healthcare, and industrials. The Berkshire Partners team includes more than 65 investment professionals across North America.

In August 2014, we entered into a merger transaction through which we were acquired by funds affiliated with or managed by Berkshire (the “Berkshire Acquisition”).

Following the closing of this offering, funds managed by Berkshire are expected to own (i) approximately 52.7% of the combined voting power of our common stock (or approximately 51.1% of the combined voting power of our common stock, if the underwriters exercise their option to purchase additional shares of Class A common stock in full) and (ii) approximately 52.7% of the economic interest in Portillo’s OpCo (or approximately 51.1% of the economic interest in Portillo’s OpCo, if the underwriters’ option to purchase additional shares is fully exercised). In addition, following the closing of this offering, funds managed by Berkshire are expected to own approximately 38.4% of the LLC Units, or 37.2% if the underwriters’ option to purchase additional shares is fully exercised. As a result, Berkshire will be able to exercise significant voting influence over fundamental and significant corporate matters and transactions. See “Part I. Item 1A. Risk Factors—Risks Relating to This Offering and Ownership of Our Common Stock” in our Annual Report and “Principal Stockholders” elsewhere in this prospectus.

Corporate Information

Portillo’s Inc. was incorporated in Delaware on June 8, 2021. Our principal executive offices are located at 2001 Spring Road, Suite 400, Oak Brook, IL 60523, and our telephone number is (630) 954-3773. Our corporate website address is www.portillos.com. Our corporate website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this prospectus. You should not rely on any such information in making your decision whether to purchase our Class A common stock.

Implications of Being an Emerging Growth Company

As a company with less than $1.07 billion in gross revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”). An emerging growth company may take advantage of specified reduced reporting and other regulatory requirements for up to five years that are otherwise applicable generally to public companies. These provisions include, among other matters:

•

requirement to present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations;

•

exemption from the auditor attestation requirement on the effectiveness of our system of internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”);

•

exemption from the adoption of new or revised financial accounting standards until they would apply to private companies;

•

exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer;

•

an exemption from the requirement to seek non-binding advisory votes on executive compensation and golden parachute arrangements; and

•

reduced disclosure about executive compensation arrangements.

We will remain an emerging growth company until the last day of the fiscal year following the fifth anniversary of the completion of our initial public offering unless, prior to that time, we have more than $1.07 billion in annual gross revenue, have a market value for our common stock held by non-affiliates of more than $700 million as of the last day of our second fiscal quarter of the fiscal year and a determination is made that we are deemed to be a “large accelerated filer,” as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or issue more than $1.0 billion of non-convertible debt over a three-year period, whether or not issued in a registered offering. We have availed ourselves of the reduced reporting obligations with respect to audited financial statements and related Management’s Discussion and Analysis of Financial Condition and Results of Operations and executive compensation disclosure in this prospectus and expect to continue to avail ourselves of the reduced reporting obligations available to emerging growth companies in future filings.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards. An emerging growth company can, therefore, delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. As an emerging growth company, we elected to take advantage of the extended transition period provided in Section 13(a) of the Exchange Act, for complying with new or revised accounting standards.

As a result of our decision to avail ourselves of certain provisions of the JOBS Act, the information that we provide may be different than what you may receive from other public companies in which you hold an equity interest. In addition, it is possible that some investors will find our Class A common stock less attractive as a result of our elections, which may cause a less active trading market for our Class A common stock and more volatility in our stock price.

THE OFFERING

Issuer

Portillo’s Inc.

Class A common stock offered by us

8,000,000 shares of Class A common stock (9,200,000 shares if the underwriters exercise their option to purchase additional shares in full).

Option to purchase additional shares of Class A common stock

The underwriters have an option to purchase an additional 1,200,000 shares of Class A common stock from us to cover over-allotments. The underwriters can exercise this option at any time within 30 days from the date of this prospectus.

Class A common stock to be outstanding after this offering

42,111,955 shares of Class A common stock, representing approximately 58.6% of the combined voting power of our common stock (42,995,996 shares, representing approximately 59.8% of the combined voting power of our common stock if the underwriters exercise their option to purchase additional shares of Class A common stock in full).

Class B common stock to be outstanding after this offering

29,779,721 shares of Class B common stock, representing approximately 41.4% of the combined voting power of our common stock (28,895,680 shares, representing approximately 40.2% of the combined voting power of our common stock if the underwriters exercise their option to purchase additional shares of Class A common stock in full).

LLC Units to be held by us after this offering

42,111,955 LLC Units, representing an approximately 58.6% economic interest in Portillo’s OpCo (or 42,995,996 LLC Units, representing an approximately 59.8% economic interest in Portillo’s OpCo, if the underwriters exercise their option to purchase additional shares of Class A common stock in full). The LLC Units are not entitled to voting interests in Portillo’s OpCo.

Total LLC Units to be outstanding after this offering

71,891,676 LLC Units (or 71,891,676 LLC Units if the underwriters exercise their option to purchase additional shares of Class A common stock in full).

Ratio of shares of Class A Common stock to LLC Units

Our amended and restated certificate of incorporation requires that we maintain at all times a one-to-one ratio between the number of shares of Class A common stock issued by us and the number of LLC Units owned by us.

Ratio of shares of Class B Common stock to LLC Units

Our amended and restated certificate of incorporation requires that we maintain at all times a one-to-one ratio between the number of shares of Class B common stock issued by us and the number of LLC Units owned by holders of LLC Units (other than us and our wholly owned subsidiaries).

Permitted holders of shares of Class B common stock

Except for transfers in connection with the transfer of LLC Units, shares of Class B common stock may not be transferred.

Redemption rights of holders of LLC Units

Under the Amended LLC Agreement, holders of LLC Units (other than us and our wholly owned subsidiaries), including the Continuing Pre-IPO LLC Members, have the right to require Portillo’s OpCo to redeem all or a portion of their LLC Units for newly issued shares of Class A common stock on a one-for-one basis in accordance with the terms of the Amended LLC Agreement. Shares of Class B common stock will be cancelled on a one-for-one basis if we, following a redemption request from a holder of LLC Units, redeem or exchange LLC Units of such holder pursuant to the terms of the Amended LLC Agreement.

Use of proceeds

We estimate that the net proceeds from the sale of our Class A common stock in this offering, after deducting the estimated underwriting discount and estimated offering expenses payable by us, will be approximately $198.0 million (assuming the underwriters do not exercise their option to purchase additional shares) based on an assumed public offering price of $25.79 per share, the last reported share price of our Class A common stock on Nasdaq on August 4, 2022.

We intend to use all of the net proceeds from this offering to purchase LLC Units or shares of Class A common, as applicable, of the selling stockholders in a “synthetic secondary” transaction, at a price per LLC Unit or share of Class A common stock, as applicable, equal to the public offering price per share of Class A common stock in this offering, less the underwriting discounts and commissions. As a result, Portillo’s OpCo will not receive any proceeds from this offering. See “Use of Proceeds” elsewhere in this prospectus.

Dividend policy

We do not anticipate paying any dividends on our Class A common stock for the foreseeable future; however, we may change this policy in the future. See “Dividend Policy” elsewhere in this prospectus.

Voting Rights

Each share of our Class A common stock and Class B common stock entitles its holder to one vote on all matters to be voted on by stockholders generally.

Holders of outstanding shares of our Class A common stock and Class B common stock vote as a single class on all matters on which

stockholders are entitled to vote generally, except as otherwise required by law. See “Description of Capital Stock—Common Stock” elsewhere in this prospectus.

Risk Factors

Investing in our Class A common stock involves a high degree of risk. See the “Risk Factors” section of this prospectus beginning on page 30, as well as the risk factors included in “Part I. Item 1A. Risk Factors” in our Annual Report for a discussion of factors you should carefully consider before investing in our Class A common stock.

Listing

Our Class A common stock is listed on the Nasdaq under the symbol “PTLO.”

Except as otherwise indicated, the number of shares of our Class A common stock outstanding after this offering:

•

gives effect to the 7.4-to-1 reverse common unit split effected on October 20, 2021 in connection with the Reorganization Transactions;

•

excludes 35,673,321 shares of Class A common stock reserved for issuance upon redemption or exchange of LLC Units held by the Continuing Pre-IPO LLC Members prior to this offering on a one-for-one basis;

•

gives effect to the conversion of vested and unvested stock options awarded under our 2014 Equity Incentive Plan (the “2014 Plan”) into options on Class A common stock under the 2021 Plan (as defined herein) and excludes 6,426,041 shares of Class A common stock underlying such options;

•

excludes an aggregate of approximately 7,148,049 shares of our Class A common stock that will be available for future equity awards under the 2021 equity incentive plan (the “2021 Plan”) that we adopted at the time of the IPO;

•

excludes 2,665,579 shares of our Class A common stock underlying restricted stock units or issuable upon the exercise of stock options with an exercise price of $20.00, in each case, that we granted under the 2021 Plan; and

•

assumes no exercise of the underwriters’ option to purchase additional shares of Class A common stock.

Unless otherwise indicated or the context otherwise requires, references in this prospectus to the exercise of the underwriters’ option to purchase additional shares of Class A common stock give effect to the use of the net proceeds therefrom.

SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL AND OTHER DATA

The following tables present the summary historical consolidated financial and other data for Portillo’s Inc. and its subsidiaries and the summary pro forma consolidated financial and other data for Portillo’s Inc. PHD Group Holdings LLC is the predecessor of the issuer, Portillo’s Inc., for financial reporting purposes. The statements of operations data for the years ended December 26, 2021, December 27, 2020 and December 29, 2019 and balance sheet data as of December 26, 2021 has been derived from Portillo’s Inc.’s audited consolidated financial statements and the related notes thereto incorporated by reference from our Annual Report. The summary historical consolidated financial information as of June 26, 2022 and for the two quarters ended June 26, 2022 and June 27, 2021 have been derived from the unaudited condensed consolidated financial statements and the related notes thereto incorporated by reference from the 2022 Q2 Quarterly Report. The unaudited condensed consolidated financial statements have been prepared on a basis consistent with our audited financial statements and, in our opinion, contain all adjustments, consisting of only normal recurring adjustments, necessary for fair presentation of such financial data. Results for any interim period are not necessarily indicative of the results that may be expected for the full fiscal year or any future period.

Portillo’s Inc. was formed as a Delaware corporation on June 8, 2021 and prior to the IPO did not conduct any activities other than those incident to its formation, those in preparation for the Reorganization Transactions and preparation of the IPO. The summary historical financial and other data of Portillo’s Inc. has not been presented because Portillo’s Inc. was a newly incorporated entity, had no business transactions or activities, assets or liabilities during the periods presented. Immediately following the IPO, Portillo’s Inc. became a holding company with its sole material asset being a controlling equity interest in Portillo’s OpCo. Portillo’s Inc., through Portillo’s OpCo, operates and conducts our business. Portillo’s OpCo is considered our predecessor for accounting purposes and its consolidated financial statements are our historical financial statements.

The summary unaudited pro forma combined and consolidated financial data of Portillo’s Inc. presented below have been derived from our unaudited pro forma combined and consolidated financial statements included elsewhere in this prospectus. The unaudited pro forma consolidated statement of operations for the year ended December 26, 2021 gives effect to the pro forma adjustments related to the IPO and the Reorganization Transactions and this offering and the use of net proceeds therefrom as if all such transactions had been completed as of December 28, 2020. The unaudited pro forma consolidated statement of operations for the two quarters ended June 26, 2022 presents our consolidated results of income to give pro forma effect to this offering and use of net proceeds therefrom, as if all such transactions had been completed as of December 27, 2021. The summary unaudited pro forma consolidated balance sheet data as of June 26, 2022 gives effect to this offering and the use of the net proceeds therefrom, each as if they had occurred on June 26, 2022. The summary unaudited combined and consolidated pro forma financial data is presented for illustrative purposes only and is not necessarily indicative of the results of operations or financial position that would have occurred if the relevant transactions had been consummated on the dates indicated, nor is it indicative of future operating results or financial position. See “Unaudited Pro Forma Consolidated Financial Information” and “Organizational Structure” elsewhere in this prospectus.

Our historical results are not necessarily indicative of future results of operations. You should read the information set forth below together with “Organizational Structure,” “Unaudited Pro Forma Consolidated Financial Information,” “Capitalization” elsewhere in this prospectus as well as the audited consolidated financial statements and the related notes thereto included in our Annual Report and the unaudited condensed consolidated financial statements and the related notes thereto included in the 2022 Q2 Quarterly Report.


	Fiscal Years Ended									Two Quarters Ended
	Portillo’s Inc.			Portillo’s OpCo			Portillo’s OpCo			Portillo’s Inc.			Portillo’s OpCo			Portillo’s Inc. Pro Forma
	December 26, 2021			December 27, 2020			December 29, 2019			June 26, 2022			June 27, 2021			December 26, 2021			June 26, 2022
Consolidated Statement of Operations and Comprehensive Loss:
REVENUES, NET	$	534,952		$	455,471		$	479,417		$	285,105		$	258,041		$	534,952		$	285,105
COST AND EXPENSES:
Restaurant operating expenses:
Cost of goods sold, excluding depreciation and amortization		166,764			142,446			149,063			98,040			77,180			166,764			98,040
Labor		138,788			115,991			134,206			75,219			65,512			140,136			75,219
Occupancy		28,060			24,920			24,538			15,134			13,890			28,060			15,134
Other operating expenses		59,258			50,169			54,540			30,343			28,633			59,258			30,343

Total restaurant operating expenses		392,870			333,526			362,347			218,736			185,215			394,218			218,736
General and administrative expenses		87,089			39,854			43,118			31,126			24,005			93,039			31,126
Pre-opening expenses		3,565			2,209			2,834			979			1,960			3,565			979
Depreciation and amortization		23,312			24,584			24,364			10,514			12,709			23,312			10,514
Net income attributable to equity method investment		(797	)		(459	)		(766	)		(398	)		(359	)		(797	)		(398	)
Other income, net		(1,099	)		(1,537	)		(1,402	)		(105	)		(803	)		(1,099	)		(105	)

OPERATING INCOME		30,012			57,294			48,922			24,253			35,314			22,714			24,253
Interest expense		39,694			45,031			43,367			12,196			21,441			24,610			12,196
Loss on debt extinguishment		7,265			—			—			—			—			7,265			—
Tax Receivable Agreement liability adjustment		—			—			—			(1,754	)		—			—			(1,754	)

(LOSS) INCOME BEFORE INCOME TAXES		(16,947	)		12,263			5,555			13,811			13,873			(9,161	)		13,811
Income tax (benefit) expense		(3,531	)		—			—			2,505			—			1,219			2,933

NET (LOSS) INCOME		(13,416	)		12,263			5,555			11,306			13,873			(10,380	)		10,878
Less: Redeemable preferred units accretion		(21,176	)		(20,524	)		(18,424	)		—			(11,092	)		—			—

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON HOLDERS		(34,592	)		(8,261	)		(12,869	)		11,306			2,781			(10,380	)		10,878
Net income (loss) attributable to non-controlling interests		(19,408	)		—			—			6,001			—			(3,793	)		4,990

NET INCOME (LOSS) ATTRIBUTABLE TO PORTILLO’S INC.	$	(15,184	)	$	(8,261	)	$	(12,869	)	$	5,305		$	2,781		$	(6,587	)	$	5,888

Income (loss) per common share attributable to Portillo’s Inc.:
Basic	$	(0.42	)	$	(0.16	)	$	(0.25	)	$	0.15		$	0.05		$	(0.16	)	$	0.14
Diluted	$	(0.42	)	$	(0.16	)	$	(0.25	)	$	0.13		$	0.05		$	(0.16	)	$	0.13
Weighted-average common shares outstanding:
Basic		35,807,171			51,189,017			51,175,785			35,899,125			51,196,539			41,700,771			42,111,955
Diluted		35,807,171			51,189,017			51,175,785			39,839,292			51,563,292			41,700,771			46,052,122


	Fiscal Years Ended									Two Quarters Ended
	Portillo’s Inc.			Portillo’s OpCo			Portillo’s OpCo			Portillo’s Inc.			Portillo’s OpCo
	December 26, 2021			December 27, 2020			December 29, 2019			June 26, 2022			June 27, 2021
	(in thousands)
Net cash provided by operating activities	$	42,874		$	58,271		$	43,325		$	25,359		$	32,817
Net cash used in investing activities		(36,260	)		(21,420	)		(22,012	)		(13,910	)		(18,545	)
Net cash used in financing activities		(8,783	)		(18,048	)		(11,721	)		(982	)		(1,312	)

Net (decrease) increase in cash and cash equivalents and restricted cash		(2,169	)		18,803			9,592			10,467			12,960

Cash and cash equivalents and restricted cash at beginning of period		41,432			22,629			13,037			39,263			41,432
Cash and cash equivalents and restricted cash at end of period	$	39,263		$	41,432		$	22,629		$	49,730		$	54,392


	Fiscal Years Ended									Two Quarters Ended
	Portillo’s Inc.			Portillo’s OpCo			Portillo’s OpCo			Portillo’s Inc.			Portillo’s OpCo
	December 26, 2021			December 27, 2020			December 29, 2019			June 26, 2022			June 27, 2021
Other Data:
Total Restaurants(a)		69			64			62			71			67
Change in same-restaurant sales(b)		10.5	%		(7.7	)%		3.3	%		4.8	%		12.7	%
AUV (in millions)(a)		8.2			7.7			8.7			8.3			7.9
Adjusted EBITDA (in thousands)(c)	$	98,497		$	87,804		$	79,495		$	45,244		$	51,073
Adjusted EBITDA Margin(c)		18.4	%		19.3	%		16.6	%		15.9	%		19.8	%
Restaurant-Level Adjusted EBITDA (in thousands)(c)	$	142,082		$	121,945		$	117,070		$	66,369		$	72,826
Restaurant-Level Adjusted EBITDA Margin(c)		26.6	%		26.8	%		24.4	%		23.3	%		28.2	%


	Portillo’s Inc.			Portillo’s Inc.		Portillo’s Inc. Pro Forma
	As of December 26, 2021			As of June 26, 2022		June 26,
	Actual			Actual		2022
Consolidated Balance Sheet Data:
Cash and cash equivalents and restricted cash	$	39,263		$	49,730	$	48,630
Total assets		999,573			1,007,894		1,054,954
Total debt(e)		319,153			318,734		318,734
Total liabilities		576,167			564,082		618,673
Working capital(f)		(7,921	)		15,803		14,703
Total stockholders’ equity		423,406			443,812		436,281

(a)

Includes a restaurant that is owned by C&O of which Portillo’s owns 50% of the equity, as described in Note 7 – Equity Method Investment in the notes to the audited consolidated financial statements contained in our Annual Report. AUVs for the quarters ended June 26, 2022 and June 27, 2021 represent AUVs for the twelve months ended June 26, 2022 and June 27, 2021, respectively.

(b)	Excludes a restaurant that is owned by C&O of which Portillo’s owns 50% of the equity, as described in Note 7 – Equity Method Investment in the notes to the audited consolidated financial statements contained in our Annual Report.

(c)

Adjusted EBITDA and Adjusted EBITDA Margin as presented in this prospectus are supplemental measures of our performance that are neither required by, nor presented in accordance with GAAP. Adjusted EBITDA and Adjusted EBITDA Margin are not measurements of our financial performance under GAAP and should not be considered as an alternative to net income (loss), operating income, or any other performance measures derived in accordance with GAAP, or as alternatives to cash flow from operating activities as a measure of our liquidity. Adjusted EBITDA represents net income (loss) before depreciation and amortization, interest expense and income taxes, adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing core operating performance as identified in the reconciliation of net income (loss), the most directly comparable measure under GAAP, to Adjusted EBITDA. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of total revenues.

Management uses Adjusted EBITDA and Adjusted EBITDA Margin (i) to evaluate our operating results and the effectiveness of our business strategies, (ii) internally as benchmarks to compare our performance to that of our competitors and (iii) as factors in evaluating management’s performance when determining incentive compensation. The use of Adjusted EBITDA and Adjusted EBITDA Margin as performance measures permit a comparative assessment of our operating performance relative to our performance based on our GAAP results, while isolating the effects of some items that are either non-recurring in nature or vary from period to period without any correlation to our ongoing core operating performance.

Adjusted EBITDA and Adjusted EBITDA Margin or similar non-GAAP measures are frequently used by securities analysts, investors and other interested parties as supplemental measures of financial performance within our industry. Management believes that Adjusted EBITDA and Adjusted EBITDA Margin provide investors with additional transparency of our operations.

Our presentation of Adjusted EBITDA and Adjusted EBITDA Margin should not be construed to imply that our future results will be unaffected by these items that are excluded. Adjusted EBITDA and Adjusted EBITDA Margin are supplemental measures of operating performance and our calculations thereof may not be comparable to similar measures reported by other companies. Adjusted EBITDA and Adjusted EBITDA Margin have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Some of these limitations are:

•

Adjusted EBITDA and Adjusted EBITDA Margin do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

•

Adjusted EBITDA and Adjusted EBITDA Margin do not reflect changes in, or cash requirements for, our working capital needs;

•

Adjusted EBITDA and Adjusted EBITDA Margin do not adjust for all non-cash income or expense items that are reflected in our consolidated statement of cash flows;

•

although depreciation is a non-cash charge, the assets being depreciated will often have to be replaced in the future, Adjusted EBITDA and Adjusted EBITDA Margin do not reflect any cash requirements for such replacements;

•

Adjusted EBITDA and Adjusted EBITDA Margin do not reflect the impact of unit-based compensation on our results of operations;

•

Adjusted EBITDA and Adjusted EBITDA Margin do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt;

•

Adjusted EBITDA and Adjusted EBITDA Margin do not reflect our income tax expense (benefit) or the cash requirements to pay our income taxes; and

•

other companies in our industry may calculate Adjusted EBITDA and Adjusted EBITDA Margin differently than we do, limiting their usefulness as comparative measures.

In evaluating Adjusted EBITDA and Adjusted EBITDA Margin, you should be aware that in the future we may incur expenses similar to those adjusted for in the reconciliation of net income (loss), the most directly comparable GAAP measure to Adjusted EBITDA. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from such non-GAAP financial measures. We further compensate for the limitations in our use of non-GAAP financial measures by presenting comparable GAAP measures more prominently.

See below for a reconciliation of net income, the most directly comparable GAAP measure, to EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin:


	Portillo’s OpCo Fiscal Years Ended									Portillo’s OpCo Two Quarters Ended
	December 26, 2021			December 27, 2020			December 29, 2019			June 26, 2022			June 27, 2021
Net (loss) income	$	(13,416	)	$	12,263		$	5,555		$	11,306		$	13,873
Depreciation and amortization		23,312			24,584			24,364			10,514			12,709
Interest expense		39,694			45,031			43,367			12,196			21,441
Loss on debt extinguishment		7,265			—			—			—			—
Income tax expense (benefit)		(3,531	)		—			—			2,505			—

EBITDA		53,324			81,878			73,286			36,521			48,023
Deferred rent(1)		3,161			2,771			2,405			1,946			1,594
Equity-based compensation		30,708			960			1,286			7,649			273
Option holder payment and consulting fees(2)		7,744			2,000			2,000			—			1,000
Other income(3)		292			130			304			125			132
Transaction-related fees & expenses(4)		3,268			65			214			757			51
Tax Receivable Agreement liability adjustment(5)		—			—			—			(1,754	)		—

Adjusted EBITDA	$	98,497		$	87,804		$	79,495		$	45,244		$	51,073

Adjusted EBITDA Margin		18.4	%		19.3	%		16.6	%		15.9	%		19.8	%

(1)

Represents the difference between cash rent payments and the recognition of straight-line rent expense recognized over the lease term.

(2)

Represents consulting fees related to our former owner.

(3)

Represents loss on disposal of property and equipment.

(4)

Represents the exclusion of certain expenses that management believes are not indicative of ongoing operations, consisting primarily of certain professional fees.

(5)

Represents remeasurement of the Tax Receivable Agreement.

(d)

Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin are non-GAAP supplemental measures of operating performance of our restaurants that are neither required by, nor presented in accordance with GAAP, and should not be considered as a substitute for analysis of our results as reported under GAAP. Restaurant-Level Adjusted EBITDA represents revenue, less restaurant operating expenses, which include cost of goods sold, excluding depreciation and amortization, labor expenses, occupancy expenses, and other operating expenses. Restaurant-Level Adjusted EBITDA excludes corporate level expenses, pre-opening expenses and depreciation and amortization on restaurant property and equipment. Restaurant-Level Adjusted EBITDA Margin represents Restaurant-Level Adjusted EBITDA as a percentage of revenue.

Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin are important measures we use to evaluate the performance and profitability of our restaurants, individually and in the aggregate. Additionally, Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin or similar non-GAAP financial measures are frequently used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin, when used in conjunction with GAAP financial measures, provide useful information about our operating results, identify operational trends, and allow for greater transparency with respect to key metrics used by us in our financial and operational decision making. We use Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin to make decisions regarding future spending and other operational decisions. However, you should be aware that Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin are financial measures, which are not indicative of overall results for the Company, and Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin do not accrue directly to the benefit of stockholders because of corporate-level expenses excluded from such measures. In addition, our calculations of Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin thereof may not be comparable to similar measures reported by other companies, have limitations as analytical tools and should not be considered as a substitute for analysis of our results as reported under GAAP.

See below for a reconciliation of operating income, the most directly comparable GAAP measure, to Restaurant-Level Adjusted EBITDA.


	Portillo’s OpCo Fiscal Years Ended									Portillo’s OpCo Two Quarters Ended
	December 26, 2021			December 27, 2020			December 29, 2019			June 26, 2022			June 27, 2021
Operating income	$	30,012		$	57,294		$	48,922		$	24,253		$	35,314
Plus:
General and administrative expenses		87,089			39,854			43,118			31,126			24,005
Pre-opening expenses		3,565			2,209			2,834			979			1,960
Depreciation and amortization		23,312			24,584			24,364			10,514			12,709
Net income attributable to equity method investment		(797	)		(459	)		(766	)		(398	)		(359	)
Other income, net		(1,099	)		(1,537	)		(1,402	)		(105	)		(803	)

Restaurant-Level Adjusted EBITDA	$	142,082		$	121,945		$	117,070		$	66,369		$	72,826

Restaurant-Level Adjusted EBITDA Margin		26.6	%		26.8	%		24.4	%		23.3	%		28.2	%

(e)	Total debt includes unamortized debt discount and deferred issuance costs.

(f)	Working capital means current assets less current liabilities.

RISK FACTORS

An investment in our Class A common stock involves a high degree of risk. You should carefully consider each of the following risk factors, together with the other information contained in this prospectus and the information incorporated by reference in this prospectus, including the risk factors included in “Part I. Item 1A. Risk Factors” in our Annual Report and other reports we file with the SEC, our audited consolidated financial statements and related notes and our unaudited condensed consolidated financial statements and related notes, before investing in our Class A common stock. The occurrence of any of the following risks could materially and adversely affect our business, prospects, financial condition, results of operations and cash flow, in which case the trading price of our Class A common stock could decline and you could lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business, prospects, financial condition, results of operations and cash flow. See “Cautionary Note Regarding Forward-Looking Statements.”

Risks Related to this Offering and Ownership of Our Class A Common Stock

Future offerings of debt or equity securities by us may have a material adverse effect on the market price of our Class A common stock.

In the future, we may attempt to obtain financing or to further increase our capital resources by issuing additional shares of our Class A common stock or by offering debt or other equity securities, including senior or subordinated notes, debt securities convertible into equity or shares of preferred stock.

Any future debt financing could involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which might make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. Moreover, if we issue debt securities, the debt holders would have rights to make claims on our assets senior to the rights of our holders of our Class A common stock. The issuance of additional shares of our Class A common stock or other equity securities or securities convertible into equity may dilute the economic and voting rights of our existing stockholders or reduce the market price of our Class A common stock or both. Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity securities issuable upon conversion. Preferred shares, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our Class A common stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may have a material adverse effect on the amount, timing, or nature of our future offerings. Thus, holders of our Class A common stock bear the risk that our future offerings may reduce the market price of our Class A common stock and dilute their stockholdings in us.

matters requiring stockholder votes, including: the election of directors; mergers, consolidations and acquisitions; the sale of all or substantially all of our assets and other decisions affecting our capital structure; amendments to our certificate of incorporation or our bylaws; and our winding up and dissolution.

This concentration of ownership may delay, deter or prevent acts that would be favored by our other stockholders. The interests of Berkshire may not always coincide with our interests or the interests of our other stockholders. This concentration of ownership may also have the effect of delaying, preventing or deterring a change in control of us. Also, Berkshire may seek to cause us to take courses of action that, in its judgment, could enhance its investment in us, but which might involve risks to our other stockholders or adversely affect us or our other stockholders, including investors in this offering. As a result, the market price of our Class A common stock could decline or stockholders might not receive a premium over the then-current market price of our Class A common stock upon a change in control. In addition, this concentration of share ownership may adversely affect the trading price of our Class A common stock because investors may perceive disadvantages in owning shares in a company with significant stockholders. See “Principal Stockholders” and “Description of Capital Stock—Anti-takeover Provisions” elsewhere in this prospectus.

As a controlled company, we will not be subject to all of the corporate governance rules of the Nasdaq.

We currently qualify as a “controlled company” under the rules of the Nasdaq. Controlled companies are exempt from the Nasdaq corporate governance rules requiring that listed companies have (i) a majority of the Board consist of “independent” directors under the listing standards of the Nasdaq, (ii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting the Nasdaq requirements and (iii) a compensation committee composed entirely of independent directors and a written compensation committee charter meeting the requirements of the Nasdaq. We are currently not availing ourselves of these exemptions. Our Board is composed of a majority of independent directors and our Compensation Committee and our Nominating and Corporate Governance Committee is composed entirely of independent directors. If we choose to avail ourselves of these exceptions in the future, we may not have a majority of independent directors and our nomination and corporate governance committee and compensation committee may not consist entirely of independent directors and you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the Nasdaq.

We do not anticipate paying any dividends on our Class A common stock in the foreseeable future.

We do not expect to declare or pay any cash or other dividends in the foreseeable future on our Class A common stock because we intend to use cash flow generated by operations to grow our business. Our Credit Facilities do not restrict our ability to pay cash dividends on our Class A common stock but they may restrict the ability of certain subsidiaries of Portillo’s OpCo to pay such cash dividends to Portillo’s OpCo. We may also enter into other credit agreements or other borrowing arrangements in the future that restrict or limit our ability to pay cash dividends on our Class A common stock. As a result, you may not receive any return on an investment in our Class A common stock unless you sell our Class A common stock for a price greater than that which you paid for it. See “Dividend Policy” elsewhere in this prospectus.

Our quarterly results of operations may fluctuate significantly and could fall below the expectations of securities analysts and investors due to seasonality and other factors, some of which are beyond our control, resulting in a decline in our stock price.

Our quarterly results of operations may fluctuate due principally to seasonal factors and the timing of holidays. Accordingly, results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for any year and same-restaurant sales for any particular future period may decrease. In addition,

as we expand our number of restaurants in hot weather climates, the seasonality of our business may be amplified due to a portion of the population who lives elsewhere in the summer. Similarly, our plans to expand the number of restaurants in cold weather climate could be impacted by the population heading south for the summer. In the future, results of operations may fall below the expectations of securities analysts and investors. In that event, the price of our Class A common stock could be adversely impacted.

The market price and trading volume of our Class A common stock has been, and may in the future, be volatile, which could result in rapid and substantial losses for our stockholders, and you may lose all or part of your investment.

Shares of our Class A common stock sold in this offering may experience significant volatility on the Nasdaq. An active, liquid and orderly market for our Class A common stock may not be sustained, which could depress the trading price of our Class A common stock or cause it to be highly volatile or subject to wide fluctuations. The market price of our Class A common stock has fluctuated and may fluctuate or may decline significantly in the future and you could lose all or part of your investment. Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our Class A common stock include:

•

variations in our quarterly or annual results of operations;

•

changes in our earnings estimates (if provided) or differences between our actual results of operations and those expected by investors and analysts;

•

the contents of published research reports about us or our industry or the failure of securities analysts to cover our Class A common stock;

•

additions or departures of key management personnel;

•

any increased indebtedness we may incur in the future;

•

any issuances of additional shares of Class A common stock in the future or additional “synthetic secondary” transactions;

•

announcements by us or others and developments affecting us;

•

actions by institutional stockholders;

•

litigation and governmental investigations;

•

legislative or regulatory changes;

•

judicial pronouncements interpreting laws and regulations;

•

changes in government programs;

•

changes in market valuations of similar companies;

•

restaurant or dining area closures or modified operating hours due to the COVID-19 pandemic;

•

reduced guest traffic due to illness, quarantine or government or self-imposed restrictions placed on our restaurants’ operations;

•

changes in consumer spending behaviors (e.g., continued practice of social distancing, decrease in consumer confidence in general macroeconomic conditions and a decrease in consumer discretionary spending);

•

speculation or reports by the press or investment community with respect to us or our industry in general;

•

announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic relationships, joint ventures or capital commitments; and

•

general market, political and economic conditions, including local conditions in the markets in which we operate.

These broad market and industry factors may decrease the market price of our Class A common stock, regardless of our actual financial performance. The stock market in general has from time to time experienced extreme price and volume fluctuations, including recently. In addition, in the past, following periods of volatility in the overall market and decreases in the market price of a company’s securities, securities class action litigation

has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources, which could have a material adverse effect on our business, financial condition and results of operations.

The market price of our Class A common stock could be negatively affected by sales of substantial amounts of our Class A common stock in the public markets.

After this offering, we will have 42,111,955 shares of Class A common stock outstanding (or 71,891,676 shares of Class A common stock assuming that the Continuing Pre-IPO LLC Members redeem or exchange all of their LLC Units and shares of Class B common stock for newly issued shares of our Class A common stock on a one-for-one basis). Of our issued and outstanding shares, all the Class A common stock sold in this offering will be freely transferable, except for any shares held by our “affiliates,” as that term is defined in Rule 144 under the Securities Act. Following the closing of this offering, approximately 52.7% of our Class A common stock on an as-converted basis (or 51.1% if the underwriters’ option to purchase additional shares is fully exercised), will be beneficially owned by funds managed by Berkshire, and can be resold into the public markets in the future in accordance with the requirements of Rule 144. See “Shares Eligible For Future Sale” elsewhere in this prospectus.

The future issuance of additional Class A common stock in connection with any equity plans, acquisitions or otherwise will dilute all other stockholdings.

We may issue all these shares of Class A common stock without any action or approval by our stockholders, subject to certain exceptions. Any Class A common stock issued in connection with any equity incentive plan, the exercise of outstanding stock options, or otherwise, would dilute the percentage ownership held by the investors who purchase Class A common stock in this offering.

For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.

We are an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and we have elected to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. These provisions include, but are not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and of stockholder approval of any golden parachute payments not previously approved. We do not know if some investors will find our Class A common stock less attractive as a result of our decision to avail ourselves of certain of these exemptions. The result may be a less-active trading market for our Class A common stock and our stock price may be more volatile.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption and, therefore, we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

We could remain an emerging growth company for up to five years or until the earliest of (a) the last day of the first fiscal year in which our annual gross revenues exceed $1.07 billion, (b) the date that we become a large accelerated filer as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (c) the date on which we have issued more than $1 billion in non-convertible debt securities in the preceding three-year period.

The exact implications of the JOBS Act are still subject to interpretations and guidance by the SEC and other regulatory agencies, and we cannot assure you that we will be able to take advantage of all of the benefits of the JOBS Act. In addition, investors may find our Class A common stock less attractive to the extent we rely on the exemptions and relief granted by the JOBS Act. If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock and our stock price may decline or become more volatile.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods, or by the inclusion of forecasts or projections. Examples of forward-looking statements include, but are not limited to, statements we make regarding the outlook for our future business and financial performance.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions and the following:

•

continued adverse effects of the COVID-19 pandemic or future pandemics or disease outbreaks on our financial condition and results of operations;

•

our vulnerability to changes in consumer preferences and economic conditions;

•

increases in the cost of our frequently used food items or shortages or disruptions in the supply or delivery of frequently used food items;

•

our inability to open new restaurants in new and existing markets;

•

the number of visitors to areas where our restaurants are located may decline;

•

our inability to generate same-restaurant sales growth;

•

our marketing programs and limited-time or seasonal menu offerings may fail to generate profits;

•

incidents involving food-borne illness and food safety, including food tampering or contamination, which we may be unable to prevent;

•

our inability to compete successfully with other lunch and dinner restaurants;

•

our vulnerability to adverse geographic, demographic, unemployment, economic, regulatory and weather conditions;

•

damage to our reputation and negative publicity, even if unwarranted;

•

our vulnerability to changes in the digital and delivery business;

•

our inability or failure to recognize, respond to and effectively manage the accelerated impact of social media;

•

our reliance on a small number of suppliers and distributors for a substantial amount of our food and beverages;

•

our failure to effectively address environmental, social and other sustainability matters affecting our industry, or to set and meet relevant sustainability goals;

•

our level of indebtedness and our duty to comply with covenants under our Credit Facilities;

•

the interests of Berkshire may differ from those of our public stockholders;

•

our failure to adequately protect our network security;

•

compliance with federal and local environmental, labor, employment and food safety laws and regulations; and

•

our inability to effectively manage our internal controls over financial reporting.

See “Risk Factors” elsewhere in this prospectus and the documents incorporated by reference for a further description of these and other factors. For the reasons described above, we caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this prospectus. Any forward-looking statement made by us in this prospectus speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

ORGANIZATIONAL STRUCTURE

Structure Prior to the Reorganization Transactions

We currently conduct our business through Portillo’s OpCo and its subsidiaries. We are a holding company and our sole material asset is our ownership interest in Portillo’s OpCo. Portillo’s Inc. was incorporated as a Delaware corporation on June 8, 2021 to serve as the issuer of the Class A common stock in the IPO.

The Reorganization Transactions

In connection with the IPO, we entered into the Reorganization Transactions.

In connection with the Reorganization Transactions, Portillo’s Inc. became the sole managing member of Portillo’s OpCo. Because we manage and operate the business and control the strategic decisions and day-to-day operations of Portillo’s OpCo and because we also have a substantial financial interest in Portillo’s OpCo, we consolidated the financial results of Portillo’s OpCo, and a portion of our net income will be allocated to the noncontrolling interest to reflect the entitlement of the Continuing Pre-IPO LLC Members to a portion of Portillo’s OpCo’s net income. In addition, because Portillo’s OpCo is under the common control of the Pre-IPO LLC Members before and after the Reorganization Transactions (both directly and indirectly through their ownership of us), we have accounted for the Reorganization Transactions as a reorganization of entities under common control and measure the interests of the Continuing Pre-IPO LLC Members in the assets and liabilities of Portillo’s OpCo at their carrying amounts as of the date of the completion of the consummation of the Reorganization Transactions.

Our amended and restated certificate of incorporation authorizes the issuance of two classes of common stock: Class A common stock and Class B common stock. Each share of common stock will entitle its holder to one vote per share on all matters submitted to a vote of our stockholders. The Class B common stock is not entitled to economic interests in Portillo’s Inc. See “Description of Capital Stock” elsewhere in this prospectus.

Prior to the completion of the IPO, we acquired, directly and indirectly, LLC Units through the Mergers. Upon completion of the IPO, the Reorganization Parties collectively held 12,496,361 shares of Class A common stock of Portillo’s Inc. and did not directly hold interests in Portillo’s OpCo.

In connection with the Reorganization Transactions, each Continuing Pre-IPO LLC Member was issued a number of shares of our Class B common stock in an amount equal to the number of LLC Units held by such Continuing Pre-IPO LLC Member.

Portillo’s OpCo entered into the Amended LLC Agreement in connection with the Reorganization Transactions and the IPO. Under the Amended LLC Agreement, holders of LLC Units (other than us and our wholly owned subsidiaries), including the Continuing Pre-IPO LLC Members, have the right to require Portillo’s OpCo to redeem all or a portion of their LLC Units for newly issued shares of Class A common stock on a one-for-one basis in accordance with the terms of the Amended LLC Agreement. Shares of Class B common stock will be cancelled on a one-for-one basis if we, following a redemption request from a holder of LLC Units, redeem or exchange LLC Units of such holder pursuant to the terms of the Amended LLC Agreement. Except for transfers to us or to certain permitted transferees pursuant to the Amended LLC Agreement, the LLC Units and corresponding shares of Class B common stock may not be sold, transferred or otherwise disposed of.

In connection with the Reorganization Transactions and the IPO, we entered into a Tax Receivable Agreement that obligates us to make payments to the TRA Parties in the aggregate generally equal to 85% of the applicable cash savings that we actually realize, or in certain circumstances are deemed to realize, as a result of

(i) our allocable share of existing tax basis in depreciable or amortizable assets relating to LLC Units acquired in the IPO, (ii) certain favorable tax attributes we acquired from the Blocker Companies in the Mergers, (iii) increases in our allocable share of then existing tax basis in depreciable or amortizable assets, and adjustments to the tax basis of the tangible and intangible assets, of Portillo’s OpCo and its subsidiaries, as a result of (x) sales or exchanges of interests in Portillo’s OpCo in connection with the IPO and (y) subsequent redemptions or exchanges of LLC Units by Continuing Pre-IPO LLC Members for cash or Class A common stock, including in connection with this offering, and (iv) certain other tax benefits related to entering into the Tax Receivable Agreement, including payments made under the Tax Receivable Agreement. We retain the benefit of the remaining 15% of these tax savings.

Holding Company Structure and the Tax Receivable Agreement

We are a holding company and our sole material asset is our ownership interests in Portillo’s OpCo. The number of LLC Units that we own directly and indirectly in the aggregate at any time will equal the aggregate number of outstanding shares of our Class A common stock. The economic interest represented by each LLC Unit that we own directly and indirectly corresponds to one share of our Class A common stock, and the total number of LLC Units owned directly and indirectly by us and the holders of our Class B common stock at any given time equals the sum of the outstanding shares of all classes of our common stock.

Our Class B common stock is not listed (and we do not intend to list our Class B common stock) on any stock exchange.

We acquired certain favorable tax attributes from the Blocker Companies in the Mergers. In addition, acquisitions by us of LLC Units in connection with the IPO (including the repayment of the redeemable preferred units) and from Continuing Pre-IPO LLC Members in connection with subsequent redemptions or exchanges by the Continuing Pre-IPO LLC Members of LLC Units for shares of our Class A common stock or cash are expected to result in favorable tax attributes that will be allocated to us. These tax attributes would not be available to us in the absence of those transactions and are expected to reduce the amount of tax that we would otherwise be required to pay in the future.

We are party to the Tax Receivable Agreement with the TRA Parties. Under the Tax Receivable Agreement, we generally are required to pay to the TRA Parties, in the aggregate, 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that we actually realize, or in certain circumstances are deemed to realize, as a result of (i) our allocable share of existing tax basis in depreciable or amortizable assets relating to LLC Units acquired in the IPO, (ii) certain favorable tax attributes we acquired from the Blocker Companies in the Mergers, (iii) increases in our allocable share of then existing tax basis in depreciable or amortizable assets, and adjustments to the tax basis of the tangible and intangible assets, of Portillo’s OpCo and its subsidiaries, as a result of (x) sales or exchanges of interests in Portillo’s OpCo in connection with the IPO and (y) subsequent redemptions or exchanges of Units by Continuing Pre-IPO LLC Members for cash or Class A common stock, including in connection with this offering, and (iv) certain other tax benefits related to entering into the Tax Receivable Agreement, including payments made under the Tax Receivable Agreement.

Based on several assumptions, it was estimated that, as of June 26, 2022, our obligation for future payments under the Tax Receivable Agreement totaled $154.9 million. Amounts payable under the Tax Receivable Agreement are contingent upon, among other things, (i) generation of future taxable income over the term of the Tax Receivable Agreement and (ii) future changes in tax laws. If we do not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits, then we would not be required to make the related Tax Receivable Agreement payments. The payments that we are required to make will generally reduce the amount of overall cash flow that might have otherwise been available to us, but we expect the cash tax savings we will realize to fund the required payments. Assuming no material changes in relevant tax law and that we earn sufficient taxable income to realize all tax benefits that are subject to the Tax Receivable Agreement, we estimate that the tax savings associated with all tax attributes described above

would aggregate to approximately $182.2 million as of June 26, 2022. Under this scenario, we would be required to pay the TRA Parties approximately 85% of such amount, or $154.9 million, primarily over the next 15 years, substantially declining in year 16 through year 47. The actual amounts we will be required to pay may materially differ from these hypothetical amounts, because potential future tax savings that we will actually realize or be deemed to realize, and the Tax Receivable Agreement payments made by us, will be calculated based in part on the market value of our Class A common stock at the time of each exchange of an LLC Unit for a share of Class A common stock and the prevailing applicable federal tax rate (plus the assumed combined state and local tax rate) applicable to us over the life of the Tax Receivable Agreement and will depend on our generating sufficient taxable income to realize the tax benefits that are subject to the Tax Receivable Agreement.

Payments under the Tax Receivable Agreement will be based on the tax reporting positions we determine, and the IRS or another taxing authority may challenge all or part of the existing tax basis, deductions, tax basis increases, net operating losses or other tax attributes subject to the Tax Receivable Agreement, and a court could sustain such challenge. Payments we will be required to make under the Tax Receivable Agreement generally will not be reduced as a result of any taxes imposed on us, Portillo’s OpCo or any direct or indirect subsidiary thereof that are attributable to a tax period (or portion thereof) ending on or before the Mergers or the date of the completion of the IPO. Further, the TRA Parties will not reimburse us for any payments previously made if such tax attributes are subsequently challenged by a taxing authority and are ultimately disallowed, except that any excess payments made to a TRA Party will be netted against future payments otherwise to be made to such TRA Party under the Tax Receivable Agreement, if any, after our determination of such excess. As a result, in such circumstances we could make future payments under the Tax Receivable Agreement that are greater than our actual cash tax savings and may not be able to recoup those payments, which could negatively impact our liquidity. See “Part I. Item 1A. Risk Factors—Risks Related to Our Organizational Structure—We will not be reimbursed for any payments made to the TRA Parties under the Tax Receivable Agreement in the event that any tax benefits are disallowed” in our Annual Report which is incorporated by reference herein.

Our obligations under the Tax Receivable Agreement will also apply with respect to any person who is issued LLC Units in the future and who becomes a party to the Tax Receivable Agreement.

We are a holding company with no operations of our own and our ability to make payments under the Tax Receivable Agreement will depend on the ability of Portillo’s OpCo to make distributions to us. Deterioration in the financial condition, earnings, or cash flow of Portillo’s OpCo and its subsidiaries for any reason could limit or impair their ability to pay such distributions. To the extent that we are unable to make payments under the Tax Receivable Agreement for any reason, such payments generally will be deferred and will accrue interest until paid. Nonpayment for a specified period, however, may constitute a breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments due under the Tax Receivable Agreement (unless, generally, such nonpayment is due to a lack of sufficient funds) which could negatively impact our results of operations and could also affect our liquidity in periods in which such payments are made.

USE OF PROCEEDS

We estimate that the net proceeds to us from our sale of 8,000,000 shares of Class A common stock in this offering will be approximately $199.1 million, assuming an offering price of $25.79 per share, the last reported share price of our Class A common stock on Nasdaq on August 4, 2022, after deducting estimated underwriting discounts and commissions, but before deducting any estimated expenses payable by us in connection with this offering.

We intend to use all of the net proceeds from this offering to purchase or cancel, as the case may be, LLC Units, shares of Class A common stock or options under the 2021 Plan, as applicable, of the selling stockholders in a “synthetic secondary” transaction, at a price per LLC Unit, share of Class A common stock or cancelled option, as applicable, equal to the public offering price per share of Class A common stock in this offering, less the underwriting discounts and commissions, the exercise price of the cancelled option (if applicable) and any withholding taxes. As a result, Portillo’s OpCo will not receive any proceeds from this offering (other than the exercise price in connection with the cancellation of the options).

The underwriters also have an option to purchase up to an additional 1,200,000 shares of Class A common stock from us. We estimate that the net proceeds to us, if the underwriters exercise their right to purchase the maximum of 9,200,000 shares of Class A common stock from us, will be approximately $229.0 million, assuming an offering price of $25.79 per share, the last reported share price of our Class A common stock on Nasdaq on August 4, 2022, after deducting estimated underwriting discounts and commissions, but before deducting any estimated expenses payable by us in connection with this offering. We will use the additional net proceeds we receive pursuant to any exercise of the underwriters’ option to purchase additional LLC Units or shares of Class A common stock from certain selling stockholders.

We estimate that the offering expenses (other than the underwriting discount and commissions) will be approximately $1.1 million. All of such offering expenses will be paid for or otherwise borne by Portillo’s OpCo.

A $1.00 increase (decrease) in the assumed public offering price of $25.79 per share would increase (decrease) the amount of proceeds to us from this offering available by approximately $7.7 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts. An increase (decrease) of 1,000,000 shares from the expected number of shares to be sold by us in this offering, assuming no change in the assumed public offering price per share, would increase (decrease) the amount of proceeds to us from this offering available by approximately $24.9 million.

DIVIDEND POLICY

We do not currently intend to pay cash dividends on our Class A common stock in the foreseeable future. However, in the future, subject to the factors described below and our future liquidity and capitalization, we may change this policy and choose to pay dividends. Any determination to pay dividends in the future will be at the discretion of our Board and will depend upon our results of operations, cash requirements, financial condition, contractual restrictions, restrictions imposed by applicable laws and other factors that our Board may deem relevant.

We are a holding company that does not conduct any business operations of our own, and we have no material assets other than our ownership of LLC Units in Portillo’s OpCo. As a result, our ability to pay cash dividends on our common stock, if our Board determines to do so, will be dependent upon the ability of Portillo’s OpCo to pay cash dividends and distributions to us. The ability of Portillo’s OpCo to pay cash dividends and distributions to us is not restricted by the terms of our Credit Facilities but the ability of certain subsidiaries of Portillo’s OpCo to make such cash dividend and distributions to Portillo’s OpCo may be restricted by the terms of the Credit Facilities. See “Description of Material Indebtedness” elsewhere in this prospectus.

If Portillo’s OpCo makes such distributions, the holders of LLC Units will be entitled to receive equivalent distributions from Portillo’s OpCo. However, because we must pay taxes, make payments under the Tax Receivable Agreement and pay our expenses, amounts ultimately distributed as dividends to holders of our Class A common stock are expected to be less than the amounts distributed by Portillo’s OpCo to the other holders of LLC Units on a per share basis.

Under the Amended LLC Agreement, Portillo’s OpCo generally is required from time to time to make pro rata distributions in cash to us and the other holders of LLC Units at certain assumed tax rates in amounts that are intended to be sufficient to cover the income taxes payable on our and the other LLC Unit holders’ respective allocable shares of the taxable income of Portillo’s OpCo. We may receive tax distributions significantly in excess of our tax liabilities and obligations to make payments under the Tax Receivable Agreement. Our Board, in its sole discretion, will make any determination from time to time with respect to the use of any such excess cash so accumulated, which may include, among other uses, funding repurchases of shares of Class A common stock; acquiring additional newly issued LLC Units from Portillo’s OpCo at a per unit price determined by reference to the market value of the Class A common stock; paying dividends, which may include special dividends, on its shares of Class A common stock; or any combination of the foregoing. We will have no obligation to distribute such cash (or other available cash other than any declared dividend) to our stockholders. We also expect, if necessary, to undertake ameliorative actions, which may include pro rata or non-pro rata reclassifications, combinations, subdivisions or adjustments of outstanding LLC Units, to maintain one to one parity between LLC Units and shares of Class A common stock. See “Part I. Item 1A. Risk Factors—In certain circumstances, Portillo’s OpCo will be required to make distributions to us and the other holders of LLC Units, and the distributions that Portillo’s OpCo will be required to make may be substantial” in our Annual Report.

See “Organizational Structure,” “Description of Material Indebtedness,” “Description of Capital Stock” in this prospectus and “Part I. Item 1A. Risk Factors—Risks Related to this Offering and Ownership of Our Class A Common Stock—We do not anticipate paying any dividends on our Class A common stock in the foreseeable future” and “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” in our Annual Report which has been incorporated by reference herein.

CAPITALIZATION

The following table sets forth our cash and cash equivalents and our capitalization as of June 26, 2022:

•

on an actual basis for Portillo’s Inc.; and

•

on an as adjusted basis to give effect to this offering and the application of the net proceeds from this offering.

This table should be read in conjunction with “Use of Proceeds,” “Unaudited Pro Forma Consolidated Financial Information,” and “Description of Capital Stock” and the consolidated financial statements and notes thereto appearing elsewhere in this prospectus and with “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report which is incorporated by reference herein.


	Portillo’s Inc.
	As of June 26, 2022
	Actual			As Adjusted
	(in thousands)
Cash and cash equivalents and restricted cash	$	49,730		$	48,630

Debt:
Current portion of long-term debt		3,324			3,324
Long-term debt, net of current portion		315,410			315,410

Total debt(1)(2)		318,734			318,734
Equity:
Preferred stock, $0.01 par value per share, 10,000,000 shares authorized, 0 issued and outstanding		—			—
Class A common stock, $0.01 par value per share, 380,000,000 shares authorized, 36,218,355 and 42,111,955 shares issued and outstanding, actual and as adjusted		362			421
Class B common stock, $0.00001 par value per share, 50,000,000 shares authorized, 35,673,321 and 29,779,721 shares issued and outstanding, actual and as adjusted		—			—
Additional paid-in capital		192,862			230,429
Accumulated deficit		(10,645	)		(11,745	)

Total Stockholders’ Equity attributable to Portillo’s Inc.		182,579			219,105

Non-controlling interest(3)		261,233			217,176

Total Stockholders’ Equity		433,812			436,281

Total capitalization	$	762,546		$	755,015

(1)	Total debt includes unamortized debt discount and deferred issuance costs as of June 26, 2022.

(2)	For a description of our debt, see “Description of Material Indebtedness” elsewhere in this prospectus.

(3)	Represents Continuing Pre-IPO LLC Members’ LLC Units.

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

We have derived the unaudited consolidated pro forma statement of operations for the year ended December 26, 2021 set forth below by the application of pro forma adjustments to the audited consolidated financial statements of Portillo’s Inc. and its subsidiaries included in our Annual Report, which is incorporated by reference herein. We have derived the unaudited consolidated pro forma statement of operations for the two quarters ended June 26, 2022 set forth below by the application of pro forma adjustments to the unaudited consolidated financial statements of Portillo’s Inc. and its subsidiaries included in our 2022 Q2 Quarterly Report, which is incorporated by reference herein. We have derived the unaudited pro forma consolidated balance sheet as of June 26, 2022 set forth below by the application of pro forma adjustments to the unaudited consolidated financial statements of Portillo’s Inc. and its subsidiaries included in our 2022 Q2 Quarterly Report, which is incorporated by reference herein.

The following unaudited pro forma consolidated statement of operations for the year ended December 26, 2021 gives effect to the pro forma adjustments related to (i) the IPO and the Reorganization Transactions, which we refer to as the “IPO and Reorganization Transactions,” and (ii) the offering and sale of 8,000,000 shares of Class A common stock (excluding shares issuable upon exercise of the underwriters’ option to purchase additional shares) and the application of net proceeds in this offering, as if all such transactions had been completed as of December 28, 2020. The unaudited pro forma consolidated statement of operations for the two quarters ended June 26, 2022 presents our consolidated results of income to give pro forma effect unaudited pro forma to the offering and sale of 8,000,000 shares of Class A common stock (excluding shares issuable upon exercise of the underwriters’ option to purchase additional shares) and the application of net proceeds in this offering, as if all such transactions had been completed as of December 27, 2021. The unaudited pro forma balance sheet as of June 26, 2022 presents our financial position to give pro forma effect to the offering and sale of 8,000,000 shares of Class A common stock (excluding shares issuable upon exercise of the underwriters’ option to purchase additional shares) and the application of net proceeds in this offering, as if it had occurred on June 26, 2022.

The unaudited pro forma financial information has been prepared by our management and is based on Portillo’s Inc. historical financial statements and the assumptions and adjustments described in the notes to the unaudited pro forma financial information below. The presentation of the unaudited pro forma financial information is prepared in conformity with Article 11 of Regulation S-X rules effective January 1, 2021.

We based the pro forma adjustments on available information and on assumptions that we believe are reasonable under the circumstances in order to reflect, on a pro forma basis, the impact of the relevant transactions on the historical financial information of Portillo’s. See the notes to unaudited pro forma financial information below for a discussion of assumptions made. The unaudited pro forma financial information does not purport to be indicative of our results of operations or financial position had the relevant transactions occurred on the dates assumed and does not project our results of operations or financial position for any future period or date.

The IPO and Reorganization Transactions are described in the notes to the unaudited pro forma consolidated financial information and primarily include:

•

adjustments for the IPO and Reorganization Transactions, the entry into the Amended LLC Agreement and the entry into the Tax Receivable Agreement;

•

the issuance of shares of our Class A common stock to the purchasers in the IPO and Reorganization Transactions in exchange for net proceeds of approximately $437.1 million, after deducting underwriting discounts and commissions but before offering expenses (including exercise of the underwriters’ option to purchase additional shares);

•

the application by Portillo’s Inc. of the net proceeds from the IPO and Reorganization Transactions to acquire newly issued LLC Units from Portillo’s OpCo at a purchase price per LLC Unit equal to the initial public offering price of Class A common stock, net of underwriting discounts and commissions;

•

the application by Portillo’s OpCo of a portion of the proceeds of the sale of LLC Units to Portillo’s Inc. to repay the redeemable preferred units in full (including the redemption premium) and to repay all of the borrowings outstanding under the Second Lien Credit Agreement (including prepayment penalties), in each case, in the IPO and Reorganization Transactions;

•

a provision for federal, state and local income taxes of Portillo’s Inc. as a taxable corporation; and

•

the allocation of net income between non-controlling and Portillo’s Inc. based on Portillo’s Inc.’s 50.1% ownership of Portillo’s OpCo following the IPO and Reorganization Transactions.

The Offering Adjustments are described in the notes to the unaudited pro forma consolidated financial information and primarily include:

•

the offering and issuance of shares of 8,000,000 shares of Class A common stock (excluding shares issuable upon exercise of the underwriters’ option to purchase additional shares) in exchange for net proceeds of approximately $199.1 million, assuming an offering price of $25.79 per share, the last reported share price of our Class A common stock on Nasdaq on August 4, 2022, after deducting underwriting discounts and commissions but before offering expenses (and, unless otherwise indicated, assuming no exercise of the underwriters’ option to purchase additional shares);

•

the application by Portillo’s Inc. of the net proceeds from this offering to acquire newly issued LLC Units from Portillo’s OpCo at a purchase price per LLC Unit equal to the assumed offering price of Class A common stock net of underwriting discounts and commissions;

•

the application by Portillo’s OpCo of the proceeds of the sale of LLC Units to Portillo’s Inc. to purchase shares of Class A common stock, after deducting underwriting discounts and commissions, in this offering to purchase LLC Units from certain Continuing Pre-IPO LLC Members and to purchase shares of Class A common stock from the Reorganization Parties;

•

the application by Portillo’s OpCo of a portion of the proceeds of the sale of LLC Units to Portillo’s Inc., as well as cash on hand, to pay fees and expenses, including underwriting discounts and commissions, of approximately $8.3 million in connection with this offering;

•

the adjustment to the Tax Receivable Agreement liability and related deferred income taxes for the increase in expected tax benefits to be realized from the exchange of common units for a corresponding number of shares of Class A common stock in connection with this offering;

•

adjustments to the provision for income taxes and deferred income taxes reflecting the increased ownership of Portillo’s OpCo by Portillo’s Inc.; and

•

the allocation of net income between non-controlling interests and Portillo’s Inc. based on Portillo’s Inc. 58.6% ownership of Portillo’s OpCo following this offering.

The unaudited pro forma consolidated financial information is provided for informational purposes only and is not necessarily indicative of the operating results that would have occurred if the IPO and Reorganization Transactions or Offering Adjustments had been completed as of the dates set forth above, nor is it indicative of our future results. Additionally, the unaudited pro forma consolidated financial information does not give effect to the potential impact of any anticipated synergies, operating efficiencies, or cost savings that may result.

The unaudited pro forma consolidated financial information should be read together with “Organizational Structure,” “Capitalization” and our historical financial statements and related notes incorporated by reference in this prospectus.

UNAUDITED PRO FORMA CONSOLIDATED

STATEMENT OF OPERATIONS


	For the Year Ended December 26, 2021
	Portillo’s Inc		IPO and Reorganization Transactions		As Adjusted Before Offering		Offering Adjustments		Pro Forma Portillo’s Inc.
	(in thousands, except per share data)
REVENUES, NET	$	534,952	$	—	$	534,952	$	—	$	534,952

COST AND EXPENSES:

SEC Form S-1 filed by Portillo's Inc.