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Private Companies in Deep Debt

Following is a rundown of Florida private companies on Moody’s debt-troubled list for the first quarter. Included is information from the companies’ own reports on some of the circumstances that have contributed to their difficulties.

CCS Medical Holdings (unranked)

CCS Medical HoldingsClearwater — Fifteen-year-old CCS Medical distributes medical products and provides services to people with chronic health conditions, including diabetes. Owned since 2005 by Warburg Pincus private equity firm, in 2007 CCS Medical filed a registration statement for an initial public offering. The company withdrew the offering last June citing market conditions. In its IPO registration, the company said that as of December 2006 it had almost $500 million in long-term debt.

ClairesClaire’s Stores (No. 17)

Pembroke Pines — Trendy teens turn to this shopping mall retail chain for the latest inexpensive jewelry and fashion accessories. But the recession has taken a toll on sales, which fell 6.5% to $1.4 billion in 2008. Same-store sales dropped 6.9% in 2008 and 7.2% in the fourth quarter, which ended Jan. 31. Two years ago, an affiliate of leveraged buyout firm Apollo Management took the company private. As of the end of January, Claire’s long-term debt totaled $2.4 billion.

Anthony Shalom
Anthony Shalom
Michael Shalom
Michael Shalom

Intcomex (No. 22)

Miami — The wholesaler of computer information products sells to distributors and retailers in Latin America and the Caribbean. In its 2008 annual report, the company — owned by Citigroup Venture Capital International and company founders Anthony and Michael Shalom — said it expected to have enough available capital to meet its needs for the next 12 months. But it added that Intcomex’s substantial debt, totaling $136.9 million, could limit the cash flow available for operations. For 2008, revenue was $1.07 billion, up from $1.04 billion in 2007. The company had a 2008 net loss of $35 million compared to a net profit of $12.6 million a year earlier.

ION Media Networks (unranked)

West Palm Beach — Once known as Paxson Communications, the company owns 60 broadcast stations as well as the independent television network Ion Television. Ion voluntarily delisted from the American Stock Exchange and went private in early 2008. Boston Legal

(It was among the top 100 public companies in 2006 before it went private.) The company’s broadcast cash flow declined 72% for the first nine months of 2008, down to $19.8 million from $69.7 million for the first nine months of 2007. In April, ION reported it was in talks with lenders to convert its $2.7 billion in debt to equity.

Lazydays R.V. SuperCenter (No. 51)

RVTampa — For more than 30 years, affluent road warriors have made their way to this Tampa motor home dealer, which bills itself as the largest single-site RV dealer in the nation. But the recession has sideswiped demand for recreational vehicles and pushed a number of RV makers into bankruptcy. In November, in order to preserve liquidity, Lazydays chose not to pay the interest on its $138.7 million in unsecured debt and instead begin negotiations with its lenders on modifying requirements of its loans.

Neff Corp. (unranked)

Miami — Once owned by south Florida’s prominent Mas family, this Miami heavy-equipment rental company was acquired in 2007 by New York private equity firm Lightyear Capital. Neff has been hit by the downturn in non-residential construction, resulting in lower demand and a decrease in rental rates, particularly for earth-moving equipment in Florida and California.

Outback bagOSI Restaurant Partners (No. 10)

Tampa — Diners at Outback Steakhouse are being offered a new, lower-priced menu as Tampa Bay’s homegrown restaurant chain struggles to attract tightfisted customers. OSI, which, also owns Bonefish Grill, Carrabba’s Italian Grill and several other restaurant chains, is saddled with $1.8 billion in debt and lost $739.4 million in 2008 compared to a loss of $22.6 million in 2007 and a profit of more than $100 million in 2006.

?Mergers and Acquisitions

Products from Stiefel LabsStiefel Laboratories (No. 25)

Those with skin problems likely know Duac, Olux and Soriatane. Behind them: Stiefel Laboratories, a Coral Gables family company dating to Germany in 1847, before there even was a Germany. The Stiefels agreed to sell out to GlaxoSmithKline this year for $3.6 billion, ending the company’s run on our private company list. CEO Charles W. Stiefel takes over a combined Stiefel-GSK dermatology unit.

Kraft Construction (No. 107)

Naples-based Kraft Construction, No. 46 on the 2008 private company list, merged last year with the Manhattan Construction Group, based in Tulsa, Okla.

ConstructionPeter R. Brown Construction (No. 113)

Peter R. Brown Construction in Tampa was sold to PBSJ (No. 40) in December for $16 million.