Portillo’s(PTLO) - 2024 Q4 - Annual Report

Financial Performance - Total revenues for the fiscal year ended December 29, 2024, increased to $710,554,000, up 4.9% from$ 679,905,000 in the previous year[356]. - Net income attributable to Portillo's Inc. for the fiscal year 2024 was $29,517,000, representing a 60.1% increase from$ 18,424,000 in 2023[356]. - Basic earnings per share increased to $0.48 in 2024, compared to$ 0.34 in 2023, reflecting a 41.2% growth[356]. - For the fiscal year ended December 29, 2024, Portillo's reported a net income of $35,076,000, an increase of 41.3% compared to$ 24,818,000 in 2023[362]. - The total income tax expense for the fiscal year ended December 29, 2024 was $6.8 million, up from$ 3.2 million in 2023, indicating a 109.0% increase[508]. - The effective income tax rate for the year ended December 29, 2024 was 16.2%, compared to 11.5% in 2023, primarily due to an increase in the Company's ownership interest in Portillo's OpCo[508]. - The weighted-average number of common shares outstanding for basic earnings per share increased to 61.1 million in 2024 from 53.8 million in 2023, a growth of 13.5%[522]. Assets and Liabilities - Total current assets rose to $52,651,000 in 2024, a 25.7% increase from$ 41,919,000 in 2023[355]. - Total liabilities increased to $1,009,983,000 in 2024, up 9.1% from$ 925,431,000 in 2023[355]. - Total stockholders' equity attributable to Portillo's Inc. grew to $401,061,000 in 2024, a 24.4% increase from$ 322,379,000 in 2023[355]. - Long-term debt, net of current portion, decreased to $275,422,000 in 2024 from$ 283,923,000 in 2023, a decline of 3.0%[355]. - The Company reported total equity of $490,103,000 as of December 29, 2024, compared to$ 460,110,000 as of December 31, 2023, indicating an increase of 6.5%[360]. - The total debt as of December 29, 2024, was $311,672 thousand, which includes$ 288,750 thousand from the 2023 Term Loan and $25,000 thousand from the 2023 Revolver Facility[449]. Cash Flow and Expenditures - The company generated net cash provided by operating activities of$ 98,040,000 in 2024, up from $70,781,000 in 2023, reflecting a 38.5% increase[362]. - Portillo's incurred capital expenditures of$ 88,191,000 in 2024, slightly higher than $87,918,000 in 2023[362]. - Cash and cash equivalents increased significantly to$ 22,876,000 in 2024, compared to $10,438,000 in 2023, marking a 119.1% rise[355]. - Interest paid by the company in 2024 was$ 19,445,000, a decrease from $28,282,000 in 2023[363]. Tax and Agreements - The company has entered into a Tax Receivable Agreement (TRA) requiring it to pay 85% of cash savings from tax benefits realized post-IPO[348]. - The Company made payments of$ 4.4 million under the Tax Receivable Agreement (TRA) during the year ended December 29, 2024, with an estimated future obligation of $324.6 million[520]. - The TRA liability calculation involves significant future events and assumptions, making it complex and requiring auditor judgment[351]. Operational Metrics - As of December 29, 2024, Portillo's operated 93 restaurants, an increase from 83 restaurants as of December 31, 2023, representing a growth of 12.0%[366]. - The Company operates fast-casual restaurants in the United States and has two food production commissaries in Illinois[526]. - The Company has one operating segment and one reportable segment[526]. Risk Management - The company utilizes various risk management strategies to mitigate commodity price risks, including purchasing contracts and pricing arrangements[332]. - The company employs strategies to combat inflation, including operational efficiencies and strategic menu price increases[335]. - Labor costs are impacted by increases in minimum wage and competitive market pressures, which may adversely affect overall labor expenses[338]. Stock and Compensation - Approximately 7.1 million shares of Class A common stock were authorized for awards under the 2021 Equity Incentive Plan[490]. - The total unrecognized compensation cost related to unvested RSUs was$ 7.0 million, expected to vest over a weighted-average period of 2.0 years[491]. - The total equity-based compensation expense for the fiscal year ended December 29, 2024, was $11.151 million, a decrease from$ 15.542 million in the previous year[505]. Accounting and Compliance - The company’s financial statements have been audited and present a fair view of its financial position as of December 29, 2024[343]. - The Company is currently evaluating the effect of adopting recently issued accounting standards, including ASU 2023-09 and ASU 2024-03[421][423]. - The Company was in compliance with all covenants in the 2023 Credit Agreement as of December 29, 2024[469].