Nynex Corp is not the only company to be suffering from the protracted Communications Workers of America strike (it has suffered the ultimate indignity for a telephone company of having its credit ratings reduced – see this page) – and Executone Information Systems Inc, Darien, Connecticut warns that it now expects to report a loss for the quarter to December 31, blaming in part the strike at Nynex. Executone, the office telephone systems company formed from the merger of the original Executone with Vodavi Technology Corp, also blames production delays by one of its Korean suppliers, and reduced orders from independent distributors, some of which may have be caused by the production delay. The company says that although the strike at Nynex has now been settled, a backlog of work exists that impacts the company’s fourth quarter new system installations. The company is not clear whether its business with distributor will continue at the current lower levels, or pick up again, but says that orders from its direct sales offices – which are the primary revenue source for the company – have not decreased, but the lower distributor sales, the higher costs incurred to move inventory which is available and a shift in revenue to lower margin sales will cause the loss, despite relatively stable turnover as compared with the third quarter. The company is optimistic that its business will pick up as the industry continues to consolidate and larger companies decide that the game is not worth the candle in the low end of the market where Executone operates – it serves companies with under 200 desktops, as it quaintly puts it. US West Inc has just announced that it is abandoning the lower end of the key systems and PABX market.
