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TIE/COMMUNICATIONS TO SELL CANADIAN DISTRIBUTION BUSINESS

 TIE/COMMUNICATIONS TO SELL CANADIAN DISTRIBUTION BUSINESS
 SEYMOUR, Conn., Aug. 10 /PRNewswire/ -- TIE/communications, Inc. (AMEX: TIE) today said it reached an agreement to sell its Canadian key system distribution business to Nitsuko America Corporation in a cash transaction scheduled for completion on Aug. 31, 1992. The transaction does not affect the continuing direct sales and service business of TIE/telecommunications Canada Limited, TIE's 63 percent-owned subsidiary.
 Terms of the transaction were not immediately disclosed. George N. Benjamin III, TIE's president and chief executive officer, said the gain would be reported in the company's third quarter earnings report.
 Following the transaction, TIE Canada will be a mirror image of its U.S. parent, which sold its U.S. distribution business to Nitsuko America on July 1, 1991. The transaction eliminates dual and sometimes competing sales networks for TIE products -- one through a network of distributors and another through the company's own efforts to market its products and services directly to its small and medium-sized business customers.
 In addition to TIE Canada's direct sales and service operation -- the 12-branch TIE network -- the company will also continue to operate its repair, refurbishing and peripheral products unit, TAI. All but a few TIE Canada employees who now work in the distribution business will be employed by Nitsuko, Benjamin said.
 "The divestiture of a conflicting channel of distribution within our Canadian subsidiary will provide the same favorable results to TIE in Canada as it did in the U.S.," said Benjamin. "It allows us to refocus our Canadian company as a direct sales and service organization concentrating on business communications products and services."
 The Nitsuko Corporation, founded in 1918, has provided TIE/communications with communications products for 20 years. With the acquisition of the U.S. TIE distribution in 1991, Nitsuko America has added a dynamic distribution network to market Nitsuko products.
 "The acquisition of TIE's key system distribution business provides Nitsuko with an immediate presence in the Canadian market for our advanced telecommunications products and further expands our North American distribution. Our 20-year relationship with TIE continues to be a strong and mutually beneficial one, and we look forward to continuing to supply TIE with state-of-the-art key systems," said Naoki Kiyomine, president of Nitsuko America.
 TIE, with 68 branch offices across North America, is a major marketer of business communications products and services, including digital telephone equipment, Mitel PBX systems, TIE System 4002 and 5002 Plus Voice Mail systems, On-Hold Marketing Services, LAN/WAN and PC management products and services, long-distance products, customized security services and other business products and services. Following a series of product and service enhancements, the company recently reported second quarter net income of 6 cents a share, its most profitable quarter from operations since the fourth quarter of 1984.
 TIE/telecommunications Canada Limited, based in Markham, Ontario, recently reported second quarter net income of 2 cents a share, down from net income of 5 cents a share in the same quarter in 1991. The company cited unfavorable comparisons with one-time 1991 gains and the weak Canadian economy for the decline and noted that its gross margin percentage was unchanged from the previous year, a consequence of vigorous cost cutting.
 TIE, based in Seymour, is a member of the Marmon Group of companies, an international association of more than 60 autonomous manufacturing and service companies with sales of nearly $4 billion. Shares of TIE/telecommunications Canada Limited are traded on the Toronto and Montreal stock exchanges.
 -0- 8/10/92
 /CONTACT: George N. Benjamin III, president and chief executive officer of TIE/communications, 203-888-8001, or Naoki Kiyomine, president of Nitsuko America, 203-926-5406; or Steve Weiner, 708-771-9101, for TIE/communications/
 (TIE) CO: TIE/communications, Inc. ST: Connecticut IN: TLS SU: TNM


CK-TS -- NY036 -- 8490 08/10/92 11:47 EDT
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Publication:PR Newswire
Date:Aug 10, 1992
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