Boot up the bottom line.

• Author: Davis, Lisa
• Position: Broadway and Seymour Inc.

Winning new business has never been a problem for Broadway & Seymour. Making money on it has.

I'll never forget that day," Bill Neal says. Monday, Oct. 23, 1995: Broadway & Seymour Inc.'s CEO had bad news for analysts and investors. "We announced that we were going to have a weaker fourth quarter than they expected and we were going to have a restructuring charge. They said, 'How big is it?' and I said, 'I don't know.'"

The stock dropped about 25% that week, to $18. "They were killing us," he says.

Neal and his board huddled to get the Charlotte-based company back on track. They hired Goldman Sachs & Co., he says, "for strategic advice," leading some in the computer-software and -services industry to speculate Broadway & Seymour might be sold. In February it reported a $16.7 million loss for fourth-quarter 1995. For the year, it lost $11.4 million on sales of $114.7 million. And the market kept twisting the knife. In March the stock fell as low as $9.50.

"I think we've been through the valley of the shadow of death here," Neal says.

But even as its financials fizzled and its stock sank, the company was winning some high-profile business: long-term deals with credit-card processor First Data Corp. and computer company Unisys Corp., plus big contracts with Allstate Corp., Nations-Bank and others.

"They've been very good at winning business," says analyst Alfred Tobia Jr. of Montgomery Securities in San Francisco. "They've been very bad at turning that into earnings per share."

Going against such giants as Andersen Consulting and IBM, Broadway & Seymour built a reputation filling the software and systems-integration needs of financial-services companies, including some of the nation's largest banks, as well as lawyers and other professionals. But the company hadn't solved its own biggest problem - managing success.

It has had trouble pricing projects, controlling expenses and making efficient use of high-priced programmers. Eleven acquisitions in five years created a scattershot operation. Turnover in top management has been high. "They are in a lot of businesses, so it's a tough company to manage," says Tobia, who followed Broadway & Seymour when he was with another company. "And they've done a poor job of managing it."

"It wasn't that we didn't recognize the problem," Neal says. "It was just damn hard to work out of it until we went through this."

This is a total reorganization, engineered by President Alan Stanford, who is expected to replace Neal, 64, as CEO this year. The former Ernst & Young executive was brought in in September as the nuts-and-bolts man to tighten up operations.

His most dramatic move: selling Broadway & Seymour's trust-accounting business to mutual-fund giant Fidelity Investments for more than $30 million in April. Just last August the two companies had launched an alliance to market their trust-processing and investment services to the trust departments of midsize banks. "I just basically had to make the business call that it's a great idea," he says, "but it's the wrong business for us to be in."

Stanford, 55, says he's taking the company back to basics. "We were kind of in the strategic merger-and-acquisitions and deal business. Now everything we do is focused on core operations." And pursuing markets that are a better fit, he says, such as its growing customer call-center business - in which it...