With a proxy battle behind it and longtime executives out of office, Spokane-based travel provider Ambassadors Group Inc. believes it will stem a five-year decline and start to build up its traveler volumes again.

Meanwhile, interim CEO Anthony Dombrowik says, the company is taking steps to "right size" its operations and to adjust to handling smaller numbers of travelers—what it calls delegates—than it did in the early and mid-2000s.

Coming off of its peak summer season, the company says it expects to finish the year with about 18,000 delegates this year, down 14 percent from about 21,000 travelers in 2012. The company has been averaging a 20 percent decline in annual traveler volume since the onset of the recession in 2008, Dombrowik says.

In its Student Ambassador Program, an international travel program for youth ages 10-17 that typically accounts for 85 percent of the company's annual revenue, about 14,000 delegates traveled this summer. That's down 20 percent from about 17,400 delegates who traveled as part of that program last year.

Prior to the recession, Dombrowik says, more than 20,000 delegates traveled with the Student Ambassadors Program each year.

"I could see us growing back to that in the next few years," he says.

Dombrowik says Ambassadors expects it has reached its bottom and is projecting that its traveler counts will level out or show modest growth in 2014.

As the company hopes its volume levels out, Dombrowik says, it continues to cut expenses to bring them more in line with revenues. He says the company cut $5.5 million in expenses last year and likely will cut something similar to that this year.

"We've been profitable and want to make sure that continues," he says.

The company announced late last month second-quarter net income of $8.1 million, or 48 cents a diluted share, down from income of $14.2 million, or 81 cents a share, in the year-earlier period. For full-year 2012, the company reported net income or $1.7 million, or 10 cents a share, compared with $3 million, or 17 cents a share, in 2011.

Most of the cuts have involved reductions in personnel. The company currently has 205 full-time, year-round employees, down from almost 300 in 2008. Dombrowik says the company doesn't expect further staff reductions in the near future.

Some of those staff reductions have occurred as the company has moved away from more labor-intensive practices. For example, Ambassadors Group used to market heavily through direct-mail advertisements. Eric Anderson, the company's vice president of marketing, says the company still does some direct mailing, but it relies more on its multiple marketing channels, specifically through the Web. Consequently, it no longer handles mailing in house and doesn't need the staff that once handled that.

The reduction in its mailing operations is one reason the company is using only about half of the corporate headquarters building it constructed in 2007 at 1956 Ambassador Way, on the West Plains. The company put the 133,000-square-foot building, called the Dwight D. Eisenhower Building, on the market in the spring of 2012 and is still marketing it at $13.3 million.

Dombrowik says the company would like to move into smaller quarters, likely closer to the city's core, once it finds a buyer. The company also would be open to subleasing the space itself—or subleasing the warehouse/light-industrial space there to a tenant. Regardless of what happens with the real estate, though, the company expects to remain based in Spokane.

As the company works to bring its expenses in line with present revenue, Dombrowik says it isn't looking to change the core offering in its programs. Its travel offerings through the Student Ambassador Program cost on average $6,500 per delegate and involve three-week trips to Australia, Great Britain, Italy, and other international destinations.

"First-blush responses from our most recent season are looking really good," Dombrowik says. "It's a well-loved product."

Anderson says that while the program is staying the same, the company has started to group delegates from different parts of the U.S. to travel together in order to be more efficient. Ambassadors' travel groups typically include 40 youths and a half-dozen adults, and grouping students is one way to reach the maximum on each trip.

Also, Anderson says, Ambassadors has extended its sales cycle from what was previously a relatively narrow window. He says the company previously did a big push each fall to fill trips for the following summer. It's still doing that, but it also is marketing year-round and selling trips farther in advance.

With the added flexibility to the sales model and the grouping of travelers from different places in the U.S., the company can start looking at offering travel to more exotic locations.

"Something that wasn't available locally is possible now that we have national delegations," Anderson says.

Other programs that contribute the remaining 15 percent to Ambassadors' revenue stream are Leadership Ambassadors, a domestic travel program for youths; Citizens Ambassadors, industry-specific travel programs for professionals; and Discovery Student Adventures, environment-related trips for youths. The company also operates a program for students traveling to the U.S. from other countries and operates Book Rags, an online educational resource.

"Those programs round us out as a brand," Dombrowik says.

Dombrowik assumed the position of interim CEO after longtime CEO Jeff Thomas and his wife, company executive vice president Margaret Thomas, stepped down in February. Dombrowik had served as the company's senior vice president and chief financial officer.

Ambassadors' board of directors currently is conducting a national search for a permanent CEO and publicly has encouraged Dombrowik to apply for the position. He says he has done so, and his understanding is that he remains a candidate for the position.

The Thomases' resignations came less than a year after a public proxy fight in which some shareholders said they had lost confidence in the company's leadership.