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NUI Downsizes, Streamlines Operations
NUI Corp., parent company of six eastern gas local distributioncompanies, announced a restructuring plan designed to streamlinethe company in preparation for a more competitive marketplace. Theplan includes greater emphasis on nonregulated business operationsand a voluntary early retirement program offered to 88 of its 1,161employees, including four members of NUI’s executive managementteam, among them Lyle Motley, president of the company’s southerndivision. Further downsizing is expected once the companydetermines where it can achieve greater efficiencies in its effortto generate higher revenues from its nonregulated businesses.
It is estimated that the cost of the initial early retirementprogram combined with displacements will result in a one-timecharge of $10 million, or $0.48 per share, which will be recordedduring 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 ofour industry and the increased competition that would follow. Atthat time, we began segmenting our traditional utility operationsinto three primary business lines – distribution, service andcommodity. Now we are taking the next logical step to allow us toretain our competitive edge and maximize our profits from each ofour 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 operationsto gain more flexibility in the way they operate and in theproducts and services they offer their customers.”
The companies management structure also will be “streamlined toallow us to make decisions faster, clarify lines of responsibilityand accountability, and reduce our cost of delivering services toexisting and new customers,” Kean said. The restructuring willconsolidate all of NUI’s marketing efforts to place greater focuson promoting all NUI products and services to all customeraudiences, Kean added. The organizational details of NUI’srestructuring will be finalized during the next six-to-eight weeks.Regulatory approvals will be necessary in order to fully implementthe restructuring plan.
NUI, based in Bedminster, NJ, is a multi-state energy sales,services and distribution company. The company’s utility divisionsserve approximately 370,000 customers in six states along theeastern seaboard and comprise Elizabethtown Gas (NJ), City GasCompany of Florida, North Carolina Gas, Valley Cities Gas (PA),Elkton Gas (MD) and Waverly Gas (NY). NUI also has a number ofenergy services affiliates, including NUI Energy and NUI EnergyBrokers
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