Pancake House eyes Yellow Cab purchase

August 24, 2011 11:33am

Lorenzo-owned restaurant operator Pancake House is exploring the possibility of acquiring the
Yellow Cab pizza chain.
In a statement to the Philippine Stock Exchange on Wednesday, Pancake House said it is
"continuously identifying investment opportunities in the casual dining segment."
"Yellow Cab Food Corp. is one of the many that Pancake House finds great interest in due to the
strong brand it owns, the premium products it serves and its impeccable financial growth since
inception. The company has conducted exploratory talks with the owners of Yellow Cab,
however, neither arrangements nor agreements had been made relating to an acquisition,"
Pancake House said.
Yellow Cab has grown from 15 employees in 2001 to more than 1,500 presently, with
operations in five countries, information posted at its website said.
Pancake House has earlier disclosed that its earnings in the year's first half barely grew from
P24.76 million to P25.46 million.
Pancake House operates 178 restaurants in the country. Besides Pancake House, other brands
are Dencio's, Teriyaki Boy, Sizzlin' Pepper Steak, Le Couer de France and The Chicken Rice Shop.
Pancake House also operates in Malaysia and is in negotiation "with certain parties to establish
an outlet in Singapore." --CMA/OMG, GMA News

Pancake House signs deal to buy Yellow Cab for P800M

By Doris C. Dumlao |
Philippine Daily Inquirer
4:28 pm | Wednesday, August 31st, 2011
Read more: http://business.inquirer.net/16049/pancake-house-signs-deal-to-buy-yellow-cabfor-p800m#ixzz3AEJ38l8i
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MANILA, PhilippinesRestaurant chain operator Pancake House entered into a deal to acquire
100 percent of pizza chain Yellow Cab Foods Corp. for P800 million on Wednesday, beefing up
its casual dining business.
The acquisition will bring to the Pancake House group 82 additional stores under the Yellow Cab
brand, 69 of which are company owned. The deal is seen boosting consolidated system sales to
over the P4 billion-mark via a network of 270 stores.
Yellow Cab is a top quality pizza chain that perfectly complements our other brands and is
aligned with our strategic directions. We view it as an established top of mind, premium pizza
brand and a profitable business in its own short-term and sustainable growth over the medium
to long term, said Pancake House chair Martin Lorenzo.
The deal is seen bringing consolidated turnover to P3.7 billion and cash flow based on earnings
before interest, taxes, depreciation and amortization to P524 million for 2012, up by 10-13
percent from levels expected this year.
The publicly listed Pancake House operates under the trade names Pancake House,
Dencios, Teriyaki Boy, Sizzlin Pepper Steak and Le Coeur de France. It also owns
upstart restaurants Kabisera and Chicken Rice.
Pancake House will pay for the acquisition in cash. The deal is expected to be closed in 30 days.

Pancake House buys Yellow Cab pizza chain

abs-cbnNEWS.com
Posted at 08/31/2011 4:55 PM | Updated as of 08/31/2011 4:55 PM
MANILA, Philippines - Pancake House Inc. on Wednesday announced it is acquiring pizza chain
Yellow Cab Pizza Co. for P800 million.
In a press conference, Pancake House chairman Martin P. Lorenzo said the company had signed
a memorandum of agreement to purchase Yellow Cab. .
"The acquisition of Yellow Cab is projected to propel the Pancake House Group's consolidated
system sales to over the P4 billion mark, sales and turnover of P3.7 billion, and Ebitda (earnings
before interest, taxes, depreciation and amortization) of P524 million for 2012," he said.
With the Yellow Cab acquisition, Lorenzo said the group will end the year with 290 stores and
310 by 2012. He also noted the pizza chain perfectly complements the group's other brands.
"We view it as an established top of mine, premium pizza brand and a profitable business in its
own right, yet we also see much more potential for increased synergy in the short term and
sustainable growth over the medium to long term," he added.
Funding for the acquisition will primarily come from internally generated funds, although the
company has secured an P800 million term loan facility from Metropolitan Bank and Trust Co.
The transaction is expected to be completed in 30 days.
Yellow Cab was established in 2001 and specializes in New York-style pizza. It now has more
than 1,500 employees and restaurants in Qatar, Malaysia, Guam and the mainland US. At
present, Yellow Cab has 87 outlets, of which 69 are owned by the company.
Aside from its flagship brand Pancake House, the Lorenzo-led group currently owns and
operates Teriyaki Boy, Dencio's, Kabisera, Sizzlin Pepper, Chinese Rice Shop, Singkit and Le
Couer de France.

Pancake House buys Yellow Cab for P800 million

EARL VICTOR ROSERO, GMA News August 31, 2011 9:33pm
Pancake House Inc. (PHI) approved Wednesday the memorandum of agreement covering its
purchase, for P800 million, of all the 500,000 issued and outstanding shares of Yellow Cab Food
Corporation, according to its disclosure to the Philippine Stock Exchange.
The deal expands the reach of Pancake House network with the addition of Yellow Cabs 82
outlets, including 13 franchise branches. [See related story here.]
Pancake Houses board of directors also approved a note facility agreement with the
Metropolitan Bank and Trust Company and First Metro Investment Corporation for the
provision of credit facilities on a clean basis" to cover the P800 million needed to close the
purchase in 30 days.
Cecile Macaalay, PHI director for corporate planning and finance of Pancake House, said Yellow
Cab has a strategic fit into the basket of brands and products that the Pancake House Group
has in its portfolio."
In that basket are Teriyaki Boy, 88 Just Asian, Le Coeur de France, The Chicken Rice Shop, and
the Phi Culinary Arts and Food Services Institute, Inc.
Macaalay added that the new acquisition will boost PHI system sales to over the P4 billion
mark.
Yellow Cab, according to its 2010 audited financial statements, had net sales of P1.32 billion,
operating income of P296 million and net income of P31.62 million.
Pancake House, based on its latest financials, had first half 2011 sales of P900.18 million, nearly
74 percent of which were restaurant sales. KBK, GMA News

Philippine Stocks Movers: Apex Mining Co., Pancake House

Inc.
By Ian C. Sayson Sep 2, 2011 12:28 PM GMT+0800

Shares of the following companies had unusual moves in Philippine trading. Stock symbols are
in parentheses and prices are as of the noon close in Manila.
The Philippine Stock Exchange Index increased 0.6 percent to 4,392.91. The measure rounded a
2 percent gain this week, its sharpest weekly advance since June 24.
Apex Mining Co.s Class B shares (APXB PM), which have no ownership restrictions, rose 2.4
percent to 4.30 pesos, the highest close since Aug. 24. The company said its board approved a
merger with Teresa Crew Gold Philippines Inc.
Pancake House Inc. (PCKH PM), a Manila-based company operator of restaurants, increased 4.8
percent to 11 pesos, the highest close since Oct. 19. The company said its ready to open a
high-end restaurant next year to be located within the nations upscale shopping malls.

Pancake House pays P800 million to acquire Yellow Cab

See
more
at:
cab/#sthash.CLrUvpQq.dpuf

http://www.pinoymoneytalk.com/pancake-house-buys-yellow-

September 5, 2011 / Philippine Business News

Yellow Cab pizza franchiseThe Yellow Cab pizza chain is now owned by the Pancake House
Group.
Most Filipinos would probably be surprised about the news because a lot of people thought
Yellow Cab is an international brand. In reality, though, Yellow Cab is a Philippine pizza chain
that merely successfully marketed itself as a New York City-based franchise.
Now, Yellow Cab is a wholly-owned subsidiary of the Pancake House Group (Stock Code: PCKH)
after the latter paid the owners of the local pizza company a total of P800 million.
The acquisition adds 82 outlets of Yellow Cab to the Pancake House network, currently totaling
174 branches nationwide of Dencios, Le Coeur de France, Teriyaki Boy, Sizzlin Pepper Steak,
Singkit, 88 Just Asian, The Chicken Rice Shop and Kabisera.
According to the company, Yellow Cab will most probably expand to the provinces in the next
3-5 years, particularly in cities such as Baguio, Subic, Pangasinan, Cavite, and La Union. The
expansion plan is expected to generate additional revenues to the Pancake House Group at the
earliest by the end of the year.
In 2010, Yellow Cab booked total sales of P1.32 billion, operating income of P296 million and
net income of P31.62 million.
The Pancake House Group in 2010, meanwhile, registered consolidated sales of P1.84 billion,
operating income of P56.5 million and net income of P110.7 million. Net income increased due
to a one-time gain of P74.8 million resulting from the sale of two company-owned outlets
operating under the Dencios trade name.

Pancake closes deal to buy Yellow Cab

By Doris C. Dumlao |
Philippine Daily Inquirer
1:02 am | Saturday, September 10th, 2011

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more:
http://business.inquirer.net/17945/pancake-closes-deal-to-buy-yellowcab#ixzz3AEJkEE8X
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Restaurant chain operator Pancake House has closed an P800-million deal to take over Yellow
Cab Pizza using funds from the Metrobank group.
In a disclosure to the Philippine Stock Exchange on Friday, Pancake House said the food retailer
had consummated its purchase of 500,000 or 100 percent of the shares of Yellow Cab Foods
Corp.
The company added that the purchase was funded by the P800-million note facility agreement
with Metropolitan Bank and Trust Co., which acted as facility agent and paying agent.
Metrobank was also an initial noteholder while its investment house unit First Metro
Investment Corp. was arranger and initial noteholder.
The acquisition effectively scaled up the Pancake groups casual dining business and diversified
its product line. It added 82 additional stores under the Yellow Cab brand, 69 of which are
company-owned.
The deal is seen boosting consolidated system sales to over P4 billion by 2012, the first full year
of integration.
The deal is seen bringing the groups consolidated turnover to P3.7 billion and cash flow based
on earnings before interest, taxes, depreciation and amortization (EBITDA) to P524 million for
2012, up by 10 to 13 percent from respective levels expected for this year. The acquisition was
priced at about 4.6 times Yellow Cabs EBITDA.
The publicly listed Pancake House operates under the trade names Pancake House,
Dencios, Teriyaki Boy, Sizzlin Pepper Steak and Le Coeur de France. It also owns
Kabisera and Chicken Rice.
The group now has a network of around 270 stores serving around 400,000 regular customers.

http://www.pancakehouse.com.ph/investor/05.html
RESULTS OF OPERATIONS AND FINANCIAL CONDITION FOR 2011 EXECUTIVE SUMMARY
Pancake House, Inc. confirms the success of its recent strategic acquisition in September 2011.
The Company's Consolidated Net Income increased by 26% to P44 million from P35 million for
the same period last year. Meanwhile, recurring Consolidated Net Income increased by 53% to
P53 million, all derived from the restaurant, commissary and franchising income. The significant
improvement is attributed to the increase in Revenues by Pancake House by 11% for the 9month period and the contribution of the Group's latest business acquisition of Yellow Cab by
8% or P116 million for the month of September 2011.
The Company managed to mitigate increasing Consolidated Labor and Operating Costs as these
improved by a total of 3.7% despite increases in government mandated labor cost and higher
occupancy costs. However, Cost of Sales increased by 3.8% due to higher food cost in the 1Q in
Pancake House and the higher food cost structure in Yellow Cab for the month of September.
All these are to be addressed when corporate synergies have been fully implemented.
Meanwhile, the recurring Consolidated EBITDA declined slightly by 1.5% to P192 million from
P195 million due to increased cash expenses as compared to non-cash costs add-back.
Furthermore, the continued consolidation of the net losses from the Group's investment in the
Culinary School and the incidental and financing costs relating to the acquisition of Yellow Cab
resulted to the decline of the Consolidated EBITDA by 8% to P179 million.
Results of Operations
The Group posted an increase in consolidated revenues by 9% or P1,484.01 million during the
nine months ended September 30, 2011, higher than last year's P1,363.85 million. These are
attributable to increased Restaurant Sales by P27.97 million or 2.61%. The growth was primarily
driven by the increase in Pancake House sales and the contribution of Yellow Cab amounting to
P107.84 or 9.81% to the total Restaurant Sales. Meanwhile, Commissary Sales increased by
34.92%, to P310.29 million in the current period from P229.99 million of same period last year
due to increased in number of franchisees. Furthermore, Franchise revenues (continuing
royalty and franchise fees) significantly increased by 11.89 million or 18.85%.
Combined restaurant and commissary costs of sales increased from last year's of 36.7% to this
year's 40.5% due to increase in costs of raw materials and higher cost structure of Yellow Cab
brand.
The Group's Cost of Labor for the nine months ended September 30, 2011 dropped to 14.8%
from last year's 15.5% despite government-mandated wage increases implemented during the
period, partly due to more efficient manning for the restaurants and the commissaries of all the
brands. The Group continues to bring the cost of labor ratio down by increasing sales and by
enhancing the efficiencies in both the commissary and restaurant outlets.
Consolidated operating expenses for the current period significantly improved to 31.3% from
34.3% of the same period last year as a result of a more focused and cost effective alternative
programs in the production and operations. Consolidated sales and marketing expenses
amounted to P34.00 million, slightly higher than last year's P30.59 million due to escalation on
billboard rentals and production of new menu.

Consolidated administrative expenses slightly increased to 11.0% or P163.03 from 10.8% or

P147.60 million for the same period of 2011. Net other charges of P16.47 million for the nine
months ended September 30, 2011 decreased by P3.76 million or 22.84% from net other
charges of P16.47 million in the same period last year primarily due to recognition of delivery
income and decreased interest expense this year as compared with last year. The group posted
a net income of P43.79 million (P37.98 million attributable to equity holders of the Parent) or
3.0% of Consolidated Revenues, slightly increased from last year's 2.5% or P34.75 million
(P29.85 million attributable to equity holders of the Parent).
Consolidated EBITDA amounted to P179.06 million (P152.82 million attributable to equity
holders of the Parent) for the nine months ended September 30, 2011 with a margin of 12%.
The decrease in EBITDA margin compared to the same period last year of 14.3% is due to the
continued consolidation of the net losses from the Group's investment in the Culinary School
and the incidental and financing costs relating to the acquisition of Yellow Cab resulted to the
decline of the Consolidated EBITDA by 8% to P179 million
Financial Condition, Liquidity and Capital Resources
Financial Condition
As of September 30, 2011, consolidated assets amounted to P2.50 billion, significantly
increased from P1.5 billion as of December 31, 2010. The increase in was mainly brought about
by assets recognized arising from the business combination. Consolidated liabilities increased
from P639 million in 2010 to P1,617.16 million in 2011 due to the issuance of the P800M
Corporate Notes to First Metro Investment Corp. and Metropolitan Bank & Trust Company.
Total Stockholder's Equity went up by P24.1 million, from P857.87 million in 2010 to P881.97
million during the current period. The increase was attributed from earnings during the current
year and additional capital contribution of minority interest in joint venture companies,
reduced by the cash dividend paid during the year.
Liquidity Position
As of September30, 201As of December, 2010 The Group's current ratio significantly improved
to 1.06:1 as of September 30, 2011 from 0.99:1 as of September 30, 2011. Total debt to asset
ratio and total debt to equity ratio went up from 0.43:1 and 0.74:1, respectively as of December
31, 2010 to 0.65:1 and 1.83:1, respectively, as of September 30, 2011.