HECTOR, Minn., Nov. 7 /PRNewswire-FirstCall/ -- Hector
Communications Corporation (AMEX:HCT) today reported operating
results for its third quarter and nine month periods ended
September 30, 2005. Revenues were $8,133,000 for the three months
ended September 30, 2005, an increase of 4% from $7,806,000 in
2004. The revenue increase was mainly due to cost study settlement
payments from NECA and revenues from new access agreements
negotiated with wireless carriers. Operating income increased 8% to
$2,078,000 compared to $1,923,000 in 2004. Income from the
Company's investment in Midwest Wireless Holdings LLC was
$1,238,000 in the 2005 period compared to $843,000 in 2004. Net
income was $1,677,000 or $.41 per diluted share in 2005 compared to
$1,294,000 or $.32 per diluted share in 2004. Revenues were
$23,640,000 for the nine months ended September 30, 2005, down a
fraction of a percent from $23,743,000 in 2004. Operating income
increased 5% to $5,607,000 compared to $5,356,000 in 2004. Income
from the Company's investment in Midwest Wireless Holdings LLC was
$3,605,000 in the 2005 period compared to $2,151,000 in 2004. Net
income was $4,556,000 or $1.12 per diluted share in 2005 compared
to $3,442,000 or $.87 per diluted share in 2004. Curtis A. Sampson,
Chairman and Chief Executive Officer, said, "Our outlook on our
industry has not changed. Our core business, wireline telephone
service in rural communities, will continue to face significant
challenges. Hector's investment in Midwest Wireless is the engine
that has driven the Company's earnings growth for several years and
especially in 2005. Recently, Midwest Wireless announced that it is
engaged in a process that could lead to the sale of the Company. If
a sale occurs, Hector's share of the sale proceeds will give us
unprecedented ability to reward our shareholders and/or make
strategic investments. The management and Board of Directors of the
Company continue to assess all strategic options available to us as
we await the results of the Midwest Wireless sales process." 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 29,060 telephone
access lines, 7,950 cable television subscribers and 11,040
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 Nine Months Ended September 30 September 30 2005 2004
2005 2004 Revenues $8,133,329 $7,805,590 $23,640,418 $23,743,249
Operating income 2,077,838 1,923,268 5,607,368 5,356,219 Other
income (expense): Income from investments: Midwest Wireless
Holdings, LLC 1,238,173 842,842 3,605,391 2,151,089 Other
unconsolidated affiliates 91,461 52,003 135,890 231,444 Interest
and dividend income 166,494 75,043 553,539 191,575 Interest expense
(748,016) (728,323) (2,223,363) (2,216,200) Gain on sale of
business 12,805 41,395 Net other income 748,112 254,370 2,071,457
399,303 Income before income taxes 2,825,950 2,177,638 7,678,825
5,755,522 Income tax expense 1,149,000 884,000 3,123,000 2,314,000
Net Income $1,676,950 $1,293,638 $4,555,825 $3,441,522 Basic net
income per common share $.44 $.35 $1.21 $.95 Diluted net income per
share $.41 $.32 $1.12 $.87 Hector Communications Corporation and
Subsidiaries Condensed Balance Sheet September 30 December 31 2005
2004 Cash and cash equivalents $25,238,604 $19,980,506 Other
current assets 4,971,085 8,032,610 Property, plant and equipment,
net 37,032,019 40,040,493 Excess of cost over net assets acquired
30,921,094 30,921,094 Investment in Midwest Wireless Holdings, LLC
17,514,420 15,380,543 Investments in other unconsolidated
affiliates 3,294,339 3,304,726 Other investments 8,138,543
6,880,549 Other assets 350,890 382,322 Total Assets $127,460,994
$124,922,843 Notes payable and current portion of long-term debt
$6,481,500 $6,352,000 Other current liabilities 4,454,508 4,060,611
Long-term debt, less current portion 50,351,244 54,084,480 Deferred
taxes and credits 5,983,462 5,463,894 Deferred compensation 740,342
749,128 Stockholders' equity 59,449,938 54,212,730 Total
Liabilities and Stockholders' Equity $127,460,994 $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
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