Hector Communications Corporation Reports Revenues and Earnings for 2004 Fourth Quarter and Year

Hector Communications Corporation Reports Revenues and Earnings
for 2004 Fourth Quarter and Year 


HECTOR, Minn., March 10  /PRNewswire-FirstCall/ -- Hector Communications
Corporation (AMEX:HCT) today reported operating results for its fourth quarter
and twelve-month periods ended December 31, 2004. Revenues were $7,827,000 for
the three months ended December 31, 2004, a decrease of 4% from $8,128,000 in
2003. The revenue decrease was mainly due to lower access revenues from long
distance and wireless carriers.  Operating income decreased 26% to $1,626,000
compared to $2,184,000 in 2003. Income from the Company's investment in Midwest
Wireless Holdings LLC was $615,000 in the 2004 period compared to $245,000 in
2003. Net income was $1,203,000 or $.30 per diluted share in 2004 compared to
$1,267,000 or $.33 per diluted share in 2003.

Revenues from continuing operations for the 2004 twelve months were
$31,570,000, a decrease of 2% from $32,322,000 in 2003. Operating income from
continuing operations decreased 12% to $6,982,000 in 2004 from $7,957,000 in
2003. Income from the Company's investment in Midwest Wireless Holdings LLC
increased 29% to $2,766,000 in 2004 from $2,148,000 in 2003. The Company
recorded gains on sales of cable television systems totaling $1,081,000 ($.12
per diluted share net of income taxes and minority interest) in 2003.  Income
from continuing operations was $4,644,000 or $1.17 per diluted share in 2004
compared to  $4,297,000 or $1.14 per diluted share in 2003.  Income from
discontinued operations was $882,000 or $.23 per diluted share in 2003.

Curtis A. Sampson, chairman and chief executive officer, said, "The Company's
operating results continue to reflect the gains the wireless industry is making
in competition with wireline carriers.  Hector has a significant investment in
the wireless industry itself through its 8% ownership interest in Midwest
Wireless Holdings. The sharp increase in Midwest Wireless earnings and lower
borrowing costs offset the decrease in the Company's operating income in 2004.

Dividend

The Company's Board of Directors declared its second quarterly cash dividend of
$.05 per share.  The dividend will be paid on March 15, 2005 to shareholders of
record on February 25, 2005.

Hector Communications Corporation is a telecommunications holding company
which, through its wholly-owned and majority-owned subsidiaries, provides local
telephone service, video and high-speed internet service in rural communities
in Minnesota, Wisconsin and North Dakota.  The Company serves 29,600 telephone
access lines, 7,900 cable television subscribers and 10,600 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 December 31
                                                 2004              2003

  Revenues                                    $7,826,521        $8,128,433
  Operating income                             1,625,961         2,184,252
  Other income (expense):
    Income (loss) from investments:
      Midwest Wireless Holdings, LLC             614,798           245,354
      Other unconsolidated affiliates            251,403           172,203
    Interest and dividend income                 253,758           204,976
    Interest expense                            (650,935)         (671,053)
    Gain on sale of cable television
     systems and other business                   43,876

      Net other income (expense)                 512,900           (48,520)

  Income before income taxes                   2,138,861         2,135,732
  Income tax expense                            (936,000)         (869,000)

  Net Income                                  $1,202,861        $1,266,732


  Basic net income per common share                 $.32              $.36
  Diluted net income per share                       .30              $.33


            Hector Communications Corporation and Subsidiaries
                             Earnings Summary

                                            Twelve Months Ended December 31
                                                 2004              2003

  Revenues from continuing operations        $31,569,770       $32,322,428
  Operating income from continuing
   operations                                  6,982,180         7,956,646
  Other income (expense):
    Income (loss) from investments:
      Midwest Wireless Holdings, LLC           2,765,887         2,148,444
      Other unconsolidated affiliates            482,847            96,299
    Interest and dividend income                 445,333           391,897
    Interest expense                          (2,867,135)       (3,401,479)
    Gain on sale of cable television
     systems and other business                   85,271         1,080,723

      Net other income (expense)                 912,203           315,884

  Income from continuing operations
   before income taxes                         7,894,383         8,272,530
  Income tax expense                          (3,250,000)       (3,316,000)
  Minority interest in earnings of
   continuing operations of Alliance
   Telecommunications Corp.                                       (659,624)

  Income from continuing operations            4,644,383         4,296,906
  Income from discontinued operations                              881,854

  Net Income                                  $4,644,383        $5,178,760

  Basic net income per common share:
    Continuing operations                          $1.28             $1.23
    Discontinued operations                                            .25

                                                   $1.28             $1.48

  Diluted net income per share:
    Continuing operations                          $1.17             $1.14
    Discontinued operations                                            .23

                                                   $1.17             $1.37


            Hector Communications Corporation and Subsidiaries
                         Condensed Balance Sheet

                                              December 31       December 31
                                                  2004              2003

  Cash                                       $19,980,506       $16,581,315
  Other current assets                         8,032,610         8,609,295
  Property, plant and equipment, net          40,040,493        43,088,106
  Excess of cost over net assets acquired     30,921,094        31,691,927
  Investment in Midwest Wireless
   Holdings, LLC                              15,380,543        13,349,155
  Investments in other unconsolidated
   affiliates                                  3,304,726         2,796,035
  Other investments                            6,880,549         6,533,858
  Other assets                                   382,322           409,664

  Total Assets                              $124,922,843      $123,059,355


  Notes payable and current portion of
   long-term debt                             $6,352,000        $6,537,800
  Other current liabilities                    4,060,611         5,338,386
  Long-term debt, less current portion        54,084,480        57,529,378
  Deferred taxes and credits                   5,463,894         4,911,869
  Deferred compensation                          749,128           698,254
  Stockholders' equity                        54,212,730        48,043,668

  Total Liabilities and Stockholders'
   Equity                                   $124,922,843      $123,059,355


DATASOURCE: Hector Communications Corporation



CONTACT:  Curtis A. Sampson, Chairman and Chief Executive Officer, or

Steven H. Sjogren, President, or Paul N. Hanson, Vice President and Treasurer,

all of Hector Communications Corporation, [phone]

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