NUI Downsizes, Streamlines Operations
NUI Corp., parent company of six eastern gas local distribution
companies, announced a restructuring plan designed to streamline
the company in preparation for a more competitive marketplace. The
plan includes greater emphasis on nonregulated business operations
and a voluntary early retirement program offered to 88 of its 1,161
employees, including four members of NUI's executive management
team, among them Lyle Motley, president of the company's southern
division. Further downsizing is expected once the company
determines where it can achieve greater efficiencies in its effort
to generate higher revenues from its nonregulated businesses.
It is estimated that the cost of the initial early retirement
program combined with displacements will result in a one-time
charge of $10 million, or $0.48 per share, which will be recorded
during the fourth quarter ending Sept. 30. But annual savings of
$10 million are expected in fiscal 1999.
"In 1995, NUI began planning for the approaching deregulation of
our industry and the increased competition that would follow. At
that time, we began segmenting our traditional utility operations
into three primary business lines - distribution, service and
commodity. Now we are taking the next logical step to allow us to
retain our competitive edge and maximize our profits from each of
our business functions," said John Kean Jr., NUI President and CEO.
"Traditional utility functions will be broken off into independent,
competitively-driven businesses. This will enable these operations
to gain more flexibility in the way they operate and in the
products and services they offer their customers."
The company's management structure also will be "streamlined to
allow us to make decisions faster, clarify lines of responsibility
and accountability, and reduce our cost of delivering services to
existing and new customers," Kean said. The restructuring will
consolidate all of NUI's marketing efforts to place greater focus
on promoting all NUI products and services to all customer
audiences, Kean added. The organizational details of NUI's
restructuring will be finalized during the next six-to-eight weeks.
Regulatory approvals will be necessary in order to fully implement
the restructuring plan.
NUI, based in Bedminster, NJ, is a multi-state energy sales,
services and distribution company. The company's utility divisions
serve approximately 370,000 customers in six states along the
eastern seaboard and comprise Elizabethtown Gas (NJ), City Gas
Company of Florida, North Carolina Gas, Valley Cities Gas (PA),
Elkton Gas (MD) and Waverly Gas (NY). NUI also has a number of
energy services affiliates, including NUI Energy and NUI Energy
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