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Kash n' Karry posts loss for year

Kash n' Karry Food Stores Inc., laden with debt from a 2-year-old management buyout financed with junk bonds, reported a loss of $25.6-million for its fiscal year ended July 29. In the prior fiscal year, the Tampa-based supermarket chain reported a loss of $17-million.

Revenues rose 56 percent in the period, from $883-million to $1.38-billion. Rising sales are critical to leveraged-buyout concerns, which need cash to pay off high-interest bonds.

Ray Springer, Kash n' Karry's chief financial officer, said Wednesday the figures are not directly comparable because the company's most recent fiscal year had 52 weeks and the prior year included only 42 weeks.

The loss was expected. Because of the debt from the leveraged buyout, Kash n' Karry expects to lose money for the next several years, which is typical in such transactions.

The good news, officials said, is that operating cash flow for the period, $55.6-million, exceeded management's expectations.

"It's not smoke and mirrors," said Springer.

Nevertheless, Springer said, the company did not reduce its long-term debt over the year, which rose less than 1 percent to $322-million.

That's largely because of the cost of opening new stores, Springer said. Over the year, Kash n' Karry opened four stores and closed eight. The company now operates 113 stores, more than half of which are in the Tampa Bay area.

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