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,
+1-320-848-6231
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