Hector Communications Corporation Reports Revenues and Earnings for
2005 First Quarter HECTOR, Minn., May 3 /PRNewswire-FirstCall/ --
Hector Communications Corporation (AMEX:HCT) today reported
operating results for its first quarter ended March 31, 2005.
Revenues were $7,649,000 for the three months ended March 31, 2005,
a decrease of 4% from $7,946,000 in 2004. The revenue decrease was
mainly due to lower access revenues from long distance and wireless
carriers. Operating income decreased 8% to $1,813,000 compared to
$1,981,000 in 2004. Income from the Company's investment in Midwest
Wireless Holdings LLC was $1,070,000 in the 2005 period compared to
$682,000 in 2004. Net income was $1,386,000 or $.34 per diluted
share in 2005 compared to $1,194,000 or $.31 per diluted share in
2004. Curtis A. Sampson, Chairman and Chief Executive Officer,
said, "While growth in income from our investment in Midwest
Wireless has softened the impact of declining access revenues on
our net income in the past several quarters, we expect that the
Company's core business, wireline telephone service in rural
communities, will continue to face significant challenges. In
addition to the loss of access revenue due to the impact of the
dramatic growth in wireless telephony, these challenges include the
emergence of Voice over Internet Protocol (VoIP) and possible
changes to the level of regulatory support for rural
telecommunications. The management and Board of Directors of the
Company continue to assess all strategic options and are currently
in the process of hiring an investment banking firm to assist in
this effort." Hector Communications Corporation is a
telecommunications holding company that, through its subsidiaries,
provides local telephone, video and high-speed Internet service in
rural communities in Minnesota, Wisconsin and North Dakota. The
Company serves 29,400 telephone access lines, 7,900 cable
television subscribers and 10,700 Internet customers and has
minority ownership interests in other telecommunications companies.
From time to time in reports filed with the Securities and Exchange
Commission, in press releases, and in other communications to
shareholders and the investing public, the Company may make
statements regarding the Company's future financial performance.
Such forward looking statements are subject to risks and
uncertainties, including but not limited to, the effects of the
Telecommunications Act, new technological developments which may
reduce barriers for competitors entering the Company's local
exchange or cable television markets, higher than expected expenses
and other risks involving the telecommunications industry
generally. All such forward-looking statements should be considered
in light of such risks and uncertainties. Hector Communications
Corporation and Subsidiaries Earnings Summary Three Months Ended
March 31 2005 2004 Revenues $7,648,997 $7,945,653 Operating income
1,813,311 1,981,193 Other income (expense): Income (loss) from
investments: Midwest Wireless Holdings, LLC 1,070,343 682,129 Other
unconsolidated affiliates (2,201) 45,186 Interest and dividend
income 184,781 53,526 Interest expense (730,172) (771,469) Net
other income 522,751 9,372 Income from continuing operations before
income taxes 2,336,062 1,990,565 Income tax expense 950,000 797,000
Net Income $1,386,062 $1,193,565 Basic net income per common share:
$.37 $.34 Diluted net income per share $.34 $.31 Hector
Communications Corporation and Subsidiaries Condensed Balance Sheet
March 31 December 31 2005 2004 Cash $21,575,280 $19,980,506 Other
current assets 8,587,348 8,032,610 Property, plant and equipment,
net 38,553,049 40,040,493 Excess of cost over net assets acquired
30,921,094 30,921,094 Investment in Midwest Wireless Holdings, LLC
15,990,252 15,380,543 Investments in other unconsolidated
affiliates 3,264,818 3,304,726 Other investments 7,581,441
6,880,549 Other assets 371,724 382,322 Total Assets $126,845,006
$124,922,843 Notes payable and current portion of long-term debt
$6,652,000 $6,352,000 Other current liabilities 4,680,446 4,060,611
Long-term debt, less current portion 53,842,643 54,084,480 Deferred
taxes and credits 5,458,420 5,463,894 Deferred compensation 746,200
749,128 Stockholders' equity 55,465,297 54,212,730 Total
Liabilities and Stockholders' Equity $126,845,006 $124,922,843
DATASOURCE: Hector Communications Corporation CONTACT: Curtis A.
Sampson, Chairman and Chief Executive Officer, Steven H. Sjogren,
President, or Paul N. Hanson, Vice President and Treasurer, all of
Hector Communications Corporation, +1-320-848-6611 Web site:
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