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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
Executone Information Systems, Inc.
(Name of Issuer)
Common Stock
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(Title of Class of Securities)
301607107
(CUSIP Number)
Andrew E. Shapiro, Manager Christopher J. Rupright, Esq.
Lawndale Capital Management, LLC Shartsis Friese & Ginsburg LLP
One Sansome Street, Suite 3900 One Maritime Plaza, 18th Floor
San Francisco, CA 94104 San Francisco, CA 94111
(415) 288-2330 (415) 421-6500
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August 24, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box / /.
`
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
Potential persons who are to respond to the collection of information
contained in this form are not required to respond unless the form displays
a currently valid OMB control number.
SEC 1746 (10-97)
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CUSIP No. 301607107 Page 2 of 11 pages
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1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Lawndale Capital Management, LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / X /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(E) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
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NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 3,425,604
REPORTING --------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH -0-
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,425,604
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,425,604
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.9
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14 TYPE OF REPORTING PERSON*
OO and IA
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CUSIP No. 301607107 Page 3 of 11 pages
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1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Andrew E. Shapiro
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(E) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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NUMBER OF 7 SOLE VOTING POWER
SHARES 11,757
BENEFICIALLY --------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 3,425,604
REPORTING --------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 11,757
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,425,604
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,437,361
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.9
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14 TYPE OF REPORTING PERSON*
IN
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CUSIP No. 301607107 Page 4 of 11 pages
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1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Diamond A Partners, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(E) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
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NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 2,905,304
REPORTING --------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH -0-
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,905,304
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,905,304
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.8
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14 TYPE OF REPORTING PERSON*
PN
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CUSIP No. 301607107 Page 5 of 11 pages
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1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Diamond A Investors, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(E) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
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NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 520,300
REPORTING --------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH -0-
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
520,300
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
520,300
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.0
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14 TYPE OF REPORTING PERSON*
PN
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CUSIP No. 301607107 Page 6 of 11 pages
ITEM 1. SECURITY AND ISSUER.
This statement relates to Common Stock (the "Stock") of Executone
Information Systems, Inc. ("XTON"). The principal executive office of XTON
is located at 478 Wheelers Farms Road, Milford, CT 06460.
ITEM 2. IDENTITY AND BACKGROUND.
The persons filing this statement and the persons enumerated in Instruction
C of Schedule 13D and, where applicable, their respective places of
organization, general partners, directors, executive officers and
controlling persons, and the information regarding them, are as follows:
(a) Lawndale Capital Management, LLC, a California limited liability
company ("LCM"); Diamond A Partners, L.P., a California limited partnership
("DAP"); Diamond A Investors, L.P., a California limited partnership
("DAI"); and Andrew E. Shapiro ("Shapiro").
(b) The business address of LCM, DAP, DAI and Shapiro is One Sansome
Street, Suite 3900, San Francisco, California 94104.
(c) LCM is the investment adviser to and general partner of DAP and DAI,
which are investment limited partnerships. Shapiro is the sole manager of
LCM.
(d) During the last five years, none of such persons has been convicted in
a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, none of such persons was a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
(f) Shapiro is a citizen of the United States of America.
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CUSIP No. 301607107 Page 7 of 11 pages
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The source and amount of funds used in purchasing the Stock were as
follows:
Purchaser Source of Funds Amount
LCM Funds Under Management(1) $7,542,010.22
DAP Working Capital $6,406,195.32
DAI Working Capital $1,135,814.90
Shapiro Personal Funds $ 35,095.63
(1) Includes funds of DAP and DAI invested in Stock.
ITEM 4. PURPOSE OF TRANSACTION.
XTON parts worth more than whole.
The Reporting Persons ("Lawndale") acquired the Stock solely for investment
purposes because it believes that the value of the Stock in the public
market does not adequately reflect the value of XTON's underlying
businesses and assets.
Unistar Spinoff.
On August 12, 1998, XTON announced that it intends to separate its UniStar
subsidiary, which is engaged in the management of internet and telephone-
based national lotteries from its core computer telephony and healthcare
communications businesses through a rights distribution to its common
shareholders.
Lawndale is optimistic about XTON's future prospects due primarily to this
upcoming separation of UniStar from XTON, the recent hiring of a new
Chairman and CEO and the company's increased focus on improving its
computer telephony business.
Additional Transactions Necessary.
However, Lawndale believes that, after the separation of the Unistar
business, XTON's Board must take additional actions to maximize shareholder
value, including but not limited to, separating the remaining computer
telephony and healthcare communications businesses. In this regard,
Lawndale incorporates by reference its Item 4 disclosure from its Schedule
13-D filed 6/15/98.
In addition, Lawndale believes that implementing a Stock buy-back plan
would be appropriate under current market conditions.
Lawndale has introduced XTON management to prospective customers and
transaction partners for both its computer telephony and healthcare
communications businesses.
Lawndale has also been in contact with XTON's management, members of XTON's
Board of Directors and other significant shareholders of XTON regarding the
alternatives XTON plans to employ to maximize shareholder value.. Lawndale
may continue such activities.
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CUSIP No. 301607107 Page 8 of 11 pages
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The beneficial ownership of the Stock of the persons named in Item 2 of
this statement is as follows at the date hereof:
Aggregate
Beneficially
Owned Voting Power Dispositive
Power
Name Number Percent Sole Shared Sole
Shared
LCM 3,425,604 6.9 -0- 3,425,604 -0- 3,425,604
Shapiro 3,437,361 6.9 11,757 3,425,604 11,757 3,425,604
DAP 2,905,304 5.8 -0- 2,905,304 -0- 2,905,304
DAI 520,300 1.0 -0- 520,300 -0- 520,300
The persons filing this statement effected the following transactions in
the Stock on the dates indicated, and such transactions are the only
transactions in the Stock by the persons filing this statement since June
24, 1998:
Purchase Number Price
Name or Sale Date of Shares Per Share
DAP P 06/24/98 4,300 $1.906
DAI P 06/24/98 700 $1.906
DAP P 06/25/98 8,800 $1.969
DAI P 06/25/98 1,200 $1.969
DAI P 06/29/98 1,000 $2.000
DAI P 06/29/98 20,000 $2.023
DAP P 06/30/98 4,800 $2.000
DAI P 06/30/98 5,300 $2.000
DAP P 07/01/98 10,000 $1.969
DAP P 07/02/98 4,100 $1.938
DAP P 07/02/98 10,000 $1.969
DAP P 07/06/98 4,000 $1.938
DAP P 07/06/98 10,000 $2.000
DAP P 07/09/98 2,500 $2.000
DAP P 07/15/98 1,000 $2.000
DAP P 07/15/98 5,000 $2.000
DAP P 07/17/98 12,400 $2.000
DAP P 07/24/98 14,400 $1.918
DAP P 07/24/98 8,700 $1.969
DAI P 07/24/98 1,300 $1.969
DAP P 07/27/98 5,400 $1.912
DAI P 07/27/98 600 $1.912
DAP P 07/28/98 8,200 $1.906
DAI P 07/28/98 1,800 $1.906
DAP P 07/29/98 3,900 $1.813
DAI P 07/29/98 700 $1.813
DAP P 07/31/98 5,200 $1.844
DAP P 07/31/98 7,700 $1.844
DAP P 07/31/98 8,500 $1.813
DAI P 07/31/98 2,300 $1.844
DAI P 07/31/98 1,500 $1.813
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CUSIP No. 301607107 Page 9 of 11 pages
DAP P 08/04/98 5,000 $1.750
DAP P 08/04/98 5,100 $1.781
DAI P 08/04/98 1,900 $1.781
DAP P 08/05/98 2,500 $1.719
DAP P 08/06/98 800 $1.750
DAP P 08/06/98 8,700 $1.781
DAI P 08/06/98 1,300 $1.781
DAP P 08/07/98 6,600 $1.781
DAI P 08/07/98 900 $1.781
DAP P 08/11/98 800 $1.750
DAP P 08/11/98 5,000 $1.781
DAI P 08/11/98 1,700 $1.750
DAP P 08/12/98 3,700 $1.719
DAI P 08/12/98 300 $1.719
DAP P 08/13/98 13,000 $1.658
DAI P 08/13/98 2,300 $1.658
DAP P 08/14/98 7,200 $1.750
DAP P 08/14/98 10,000 $1.750
DAI P 08/14/98 2,800 $1.750
DAP P 08/17/98 19,600 $1.577
DAI P 08/17/98 2,500 $1.531
DAI P 08/17/98 1,400 $1.577
DAP P 08/18/98 8,800 $1.563
DAI P 08/18/98 1,200 $1.563
DAP P 08/19/98 3,500 $1.531
DAP P 08/19/98 5,000 $1.531
DAI P 08/19/98 1,500 $1.531
DAP P 08/20/98 5,000 $1.500
DAP P 08/20/98 1,000 $1.563
DAI P 08/20/98 1,000 $1.563
DAP P 08/21/98 4,400 $1.531
DAI P 08/21/98 800 $1.531
DAP P 08/24/98 21,900 $1.469
DAI P 08/24/98 3,600 $1.469
DAP P 08/25/98 8,500 $1.375
DAI P 08/25/98 1,500 $1.375
DAP P 08/26/98 23,300 $1.210
DAI P 08/26/98 4,100 $1.210
Shapiro P 08/26/98 (1)
(1) On 8/26/98, Shapiro purchased $20,000 principal amount of XTON 7.5%
Convertible Subordinated Debentures, due 3/15/2011, for a price of $11,050.
The Debentures are convertible into Stock at $10.625 per share, for a total
of 1882 shares of Stock.
All transactions were executed through the Nasdaq National Market System.
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CUSIP No. 301607107 Page 10 of 11 pages
ITEM. 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
LCM is the general partner of DAP and DAI pursuant to limited partnership
agreements providing to LCM the authority, among other things, to invest
the funds of DAP and DAI in Stock, to vote and dispose of Stock and to file
this statement on behalf of DAP and DAI. Pursuant to such limited
partnership agreements, the general partner of DAP and DAI is entitled to
allocations based on assets under management and realized and unrealized
gains.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
A. Agreement Regarding Joint Filing of Statement on Schedule 13D or 13G.
SIGNATURES
After reasonable inquiry and to the best of my knowledge, I certify
that the information set forth in this statement is true, complete and
correct.
DATED: August 27, 1998.
DIAMOND A PARTNERS, L.P. DIAMOND A INVESTORS, L.P.
By: Lawndale Capital Management, LLC By: Lawndale Capital Management,
LLC
General Partner General Partner
By: /s/ Andrew E. Shapiro By: /s/ Andrew E. Shapiro
Andrew E. Shapiro Andrew E. Shapiro
Manager Manager
LAWNDALE CAPITAL MANAGEMENT, LLC
By: /s/ Andrew E. Shapiro /s/ Andrew E. Shapiro
Andrew E. Shapiro Andrew E. Shapiro
Manager
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CUSIP No. 301607107 Page 11 of 11 pages
EXHIBIT A
AGREEMENT REGARDING JOINT FILING
OF STATEMENT ON SCHEDULE 13D OR 13G
The undersigned agree to file jointly with the Securities and Exchange
Commission (the "SEC") any and all statements on Schedule 13D or Schedule
13G (and any amendments or supplements thereto) required under section
13(d) of the Securities Exchange Act of 1934, as amended, in connection
with purchases by the undersigned of Common Stock of Executone Information
Systems, Inc. For that purpose, the undersigned hereby constitute and
appoint Lawndale Capital Management, LLC, a California limited liability
company, as their true and lawful agent and attorney-in-fact, with full
power and authority for and on behalf of the undersigned to prepare or
cause to be prepared, sign, file with the SEC and furnish to any other
person all certificates, instruments, agreements and documents necessary to
comply with section 13(d) and section 16(a) of the Securities Exchange Act
of 1934, as amended, in connection with said purchases, and to do and
perform every act necessary and proper to be done incident to the exercise
of the foregoing power, as fully as the undersigned might or could do if
personally present.
DATED: June 15, 1998.
DIAMOND A PARTNERS, L.P. DIAMOND A INVESTORS, L.P.
By: Lawndale Capital Management, LLC By: Lawndale Capital Management,
LLC
General Partner General Partner
By: /s/ Andrew E. Shapiro By: /s/ Andrew E. Shapiro
Andrew E. Shapiro Andrew E. Shapiro
Manager Manager
LAWNDALE CAPITAL MANAGEMENT, LLC
By: /s/ Andrew E. Shapiro /s/ Andrew E. Shapiro
Andrew E. Shapiro Andrew E. Shapiro
Manager
