The company, known as CBiz, reported that net income fell to $0.02 per share, down from $0.15 a share for the same period last year, while operating income tumbled to $23 million, compared to $30.8 million in 1999. The results were in line with expectations CBiz announced at the beginning of July.

While the fact that the firm met its pre-earnings announcement goals is a good sign, according to Jim Macdonald, an analyst who follows the stock for First Analysis Securities Corp. in Chicago, CBiz should be focusing on growth, rather than cost-cutting.

"I'm more interested in seeing growth than in cutting expenses," Macdonald said. "While cutting expenses is necessary - they're operating expenses have gotten ridiculous -- I don't see cost cutting as a vision to move ahead."

CBiz's second quarter revenue rose to $148.3 million, up 12 percent from $132.3 million last year. The firm said a change in the period used to amortize goodwill in the fourth quarter of 1999 from 40 to 15 years negatively affected earnings per share in the second quarter of 2000 by $0.04 compared with the second quarter of 1999.

For the six months ended in June, revenue grew 18 percent to $320.4 million, up from $270.6 million last year. Operating income was $62.5 million, off from $64.6 million for the first six months of 1999, CBiz said. The firm reported internal growth of 3.4 percent for the quarter, and 8.2 percent for the year-to-date.

The one-time darling of the rollup firms, which gave the firms it acquired stock as part of the deals, burst onto the scene with a number of rapid-fire accounting and tax firm acquisitions during 1997 and 1998 that propelled it to its ranking as the industry's seventh largest firm and made it the largest of the accounting firm consolidators. CBiz ranked seventh nationally again this year, with $460 million in revenue.

The firm's fall from grace began when it said in December it would miss Wall Street's fourth quarter earning expectations. Its stock price, which hit just over $25 at its peak, slipped to around $10 a share. At the end of January, after a failed plan in which the firm hired Merrill Lynch to help it find a buyer or strategic partner, CBiz's stock price continued its downward spiral, chief executive Fred Winkler resigned, and CBiz posted dismal fourth quarter results. Even decent first quarter results failed to rebound CBiz's stock price. Earlier this week, the stock hovered around $2 a share.

The firm has been focusing on cost cutting measures to reduce operating expenses, and announced a goal to cut costs by $50 million annually. In a conference call earlier this week, lead director Joseph Plumeri said CBiz expects to realize 20 percent of that goal by the end of the year. The firm in June sold off its risk-bearing insurance division for $31 million, which the firm said it would use to reduce debt.

The firm has also moved to implement a new regional structure, and has put in place directors in each of its six regions to oversee field operations and act as a liaison between corporate and the field.

CBiz is optimistic it will see bottom-line improvements in the second half, said president and chief operating officer Jerome Grisko in a statement.

-- Melissa Klein

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