Ambassadors Group Inc., of Spokane, completed a downsizing last month when it reduced its payroll by about 40 people.

Their departure meant the company had cut its employment rolls by a net of 69 workers since the end of 2007, leaving Ambassadors with 228 full-time and temporary associates, Ambassadors announced.

"We're still profitable; we're still generating cash," says Chief Financial Officer Chadwick J. Byrd. "We need to 'rightsize' the organization for the number of people who are traveling."

As of Feb. 1, the company said it had 36,474 enrolled participants for its travel programs in 2009, down from 45,634 participants enrolled a year earlier for its 2008 programs.

"We are still marketing our programs for 2009 and will work to develop and convert every lead that we receive; however, the steady drumbeat of bad economic news is a strong headwind for us and our customers," Ambassadors President and CEO Jeff Thomas said Feb. 5 when the company announced its quarterly and annual results.

The company posted a fourth-quarter loss of $6.5 million, or 35 cents a share, compared with a loss of $7.4 million, or 39 cents a share, in the year-earlier period. The longtime Spokane company, which provides educational travel for students, athletes, and others, reported net income for all of 2008 of $18.5 million, or 97 cents a share, down sharply from $31 million, or $1.55 a share, in 2007.

"We are still seeing very high levels of interest in our programs. Families, however, are reluctant in these times to make a financial commitment to our programs," Thomas said. "We have many years of customer data in house, but the customer behavior is not following any trend or pattern we have seen in the past. For example, we are seeing a much higher rate of program withdrawal, although it is difficult to ascertain what the final numbers will be."

In a stock analyst's report a day after Ambassadors' earnings release, D.A. Davidson & Co., the Great Falls, Mont.-based regional brokerage with an office here, said it believes that foreign currency hedging investments Ambassadors made last year for its 2009 travel programs resulted in losses of $800,000 and cost the company 3 cents to 4 cents a share in fourth-quarter earnings.

Byrd says that after Ambassadors priced its 2009 travel programs in June, the company began entering into foreign currency trading contracts.

As December rolled around, its projected foreign currency needs declined along with its traveler counts, and overseas vendors also provided improved pricing, reducing the need for foreign currency further.

"We didn't need as much foreign currency as we had bought," he says. "Generally, we don't want to be taking foreign currency losses."

D.A. Davidson projects Ambassadors' 2009 per-share earnings at 69 cents to 71 cents, and has estimated the company's 2010 earnings at 84 cents a share.

"For 2010, we are assuming an improved economy and a rebound in annual delegates," the brokerage firm says.

"That is completely their estimate," Byrd says. "We haven't provided guidance for 2009."

D.A. Davidson says Ambassadors remains debt free and had a horde of $29.9 million in deployable cash as of Dec. 31.

"We think that having a strong balance sheet is very important," Byrd says. He adds, "We're also trying to become more efficient."

He says the company has invested heavily in technology, including an upgrade in its financial system and Internet technology, including tools that allow families to make payments online more easily.