Hawker Beechcraft has reached the right number of workers for the current market, CEO Bill Boisture told analysts in a conference call Tuesday.
"We think it's going to be a rough year, and we think we have the company correctly sized in terms of work force and production rates to work our way through this year," he said.
The company delivered 34 aircraft other than its military trainer during the first quarter, down from 57 in the same quarter of 2009, although jet sales remained nearly even.
But the company continues to seek to cuts costs with a re-examination of its operations and supply chain through Project Challenge. As an example, Boisture pointed to a new 8,000-square-foot work force training center inside the buildings as improving quality at a low cost.
Eventually, the company expects to further cut its facility footprint, he said.
The company has reported sales of $568.2 million in the first quarter, an increase of 5.7 percent above the $537.6 million in the first quarter of 2009.
Although its non-trainer aircraft sales were down 8.7 percent to $343.7 million, that was more than offset by a strong increase in military trainer sales and a small increase in aircraft services.
The company recorded a net loss for the quarter of $63.4 million.
Boisture said he has seen hints the market is improving: used aircraft inventory is down, prices for used aircraft have stabilized, and utilization rates for aircraft are up modestly.
And, said chief financial officer Sid Anderson, new orders of $315 million in the first quarter outpaced cancellations of $195 million. Aside from the cancellation of a $2.6 billion order by Netjets, new orders have exceeded cancellations for four quarters.
That gives the company a backlog of $3.1 billion at the end of the quarter, compared with $3.5 billion at the end of 2009.
Boisture noted that the company's cash position, with $300.1 million, was "solid" and showed the company can remain liquid even with the operating losses.
Despite the hopeful signs, Boisture said, 2010 is expected to be difficult.
"It feels like, at this point, a continuation of 2009," he said.