Southern Union to take charge, cuts 400 jobs
International energy distributor Southern Union Co. said it expected to take a $30-$35 million one-time charge for the quarter ending Sept. 30 and will eliminate 400 jobs at the Austin, Tex., company as part of a corporate reorganization.
By the OGJ Online Staff
HOUSTON, Aug. 17 -- International energy distributor Southern Union Co. Friday said it expected to take a $30-$35 million one-time charge for the quarter ending Sept. 30 and will eliminate 400 jobs at the Austin, Tex., company as part of a corporate reorganization.
Thomas Karam, president, said the action is being taken to improve cash flow and achieve better financial results for investors. He said it should result in savings of $35-$40 million/year.
The charge will include costs associated with early retirement programs, corporate reorganization and restructuring, costs connected with redundant computer systems, and certain other related costs. Southern Union said the charge could be lower subject to favorable regulatory treatment of the retirement costs in certain operating divisions.
In connection with the corporate reorganization and restructuring, the company said it will decentralize some corporate management functions and will transfer them to its divisions in Texas, Missouri, Pennsylvania, and New England.
Excluding a $43.7 million one-time gain on the sale of a portion of its Capstone Turbine Corp. holdings, the company reported net earnings of $13.6 million or 25¢/share for the fiscal year ended June 30, compared to 21¢/share in the prior year.
The Austin company has been on a acquisition spree, buying Valley Resources Inc., Providence Energy Corp., and Fall River Gas Co. last year.
While the acquisitions helped core utility operations, the company said it also experienced significant write off due to the past winter's "unprecedented" high gas costs. Southern Union is an international energy distribution company serving nearly 1.6 million customers in Texas, Missouri, Pennsylvania, Rhode Island, Massachusetts, Florida, and Mexico.