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NUI Downsizes, Streamlines Operations

June 8, 1998
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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 Brokers

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