Hector Communic (AMEX:HCT)
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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: