HECTOR, Minn., March 6 /PRNewswire-FirstCall/ -- Hector
Communications Corporation (AMEX:HCT) today reported operating
results for its fourth quarter and twelve-month periods ended
December 31, 2005. Revenues were $8,733,000 for the three months
ended December 31, 2005, an increase of 12% from $7,827,000 in
2004. The revenue increase was mainly due to favorable cost study
settlements, higher access revenues from NECA and higher internet
revenues. Operating income increased 47% to $2,382,000 compared to
$1,626,000 in 2004. Income from the Company's investment in Midwest
Wireless Holdings LLC was $1,076,000 in the 2005 period compared to
$615,000 in 2004. Net income was $2,012,000 or $.48 per diluted
share in 2005 compared to $1,203,000 or $.30 per diluted share in
2004. Revenues for the 2005 twelve months were $32,373,000, an
increase of 3% from $31,570,000 in 2004. Operating income increased
14% to $7,990,000 in 2005 from $6,982,000 in 2004. Income from the
Company's investment in Midwest Wireless Holdings LLC increased 69%
to $4,682,000 in 2005 from $2,766,000 in 2004. Net income was
$6,567,000 or $1.61 per diluted share in 2005 compared to
$4,644,000 or $1.17 per diluted share in 2004. Curtis A. Sampson,
Chairman and Chief Executive Officer, said, "Hector's 2005
operating results were very gratifying. Hector achieved increases
in revenues and operating income in a very challenging and
competitive operating environment. 2006 will be a year of great
change in our business. The completion of the Midwest Wireless
acquisition by Alltel and the redemption of our Rural Telephone
Bank stock will greatly increase Hector's liquidity. The management
and Board of Directors of the Company continue to assess all
strategic options available to us. We expect to be able to report
the results of our assessment to our shareholders prior to the 2006
annual meeting." 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 29,400
telephone access lines, 7,900 cable television subscribers and
11,200 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 2005
2004 Revenues $8,733,057 $7,826,521 Operating income 2,382,345
1,625,961 Other income (expense): Income from investments: Midwest
Wireless Holdings, LLC 1,076,497 614,798 Other unconsolidated
affiliates 63,572 251,403 Interest and dividend income 465,102
253,758 Interest expense (734,007) (650,935) Gain on sale of cable
television systems and other business 43,876 Net other income
(expense) 871,164 512,900 Income before income taxes 3,253,509
2,138,861 Income tax expense (1,242,000) (936,000) Net Income
$2,011,509 $1,202,861 Basic net income per common share $.51 $.32
Diluted net income per share $.48 $.30 Dividends per share $.10
$.05 Twelve Months Ended December 31 2005 2004 Revenues $32,373,475
$31,569,770 Operating income 7,989,713 6,982,180 Other income
(expense): Income (loss) from investments: Midwest Wireless
Holdings, LLC 4,681,888 2,765,887 Other unconsolidated affiliates
199,462 482,847 Interest and dividend income 1,018,641 445,333
Interest expense (2,957,370) (2,867,135) Gain on sale of cable
television systems and other business 85,271 Net other income
(expense) 2,942,621 912,203 Income before income taxes 10,932,334
7,894,383 Income tax expense (4,365,000) (3,250,000) Net Income
$6,567,334 $4,644,383 Basic net income per common share $1.72 $1.28
Diluted net income per share $1.61 $1.17 Dividends per share $.28
$.05 Hector Communications Corporation and Subsidiaries Condensed
Balance Sheet December 31 December 31 2005 2004 Cash $25,245,358
$19,980,506 Other current assets 4,477,313 8,032,610 Property,
plant and equipment, net 37,381,570 40,040,493 Excess of cost over
net assets acquired 30,921,094 30,921,094 Investment in Midwest
Wireless Holdings, LLC 18,067,471 15,380,543 Investments in other
unconsolidated affiliates 3,307,593 3,304,726 Other investments
8,037,986 6,880,549 Other assets 315,906 382,322 Total Assets
$127,754,291 $124,922,843 Notes payable and current portion of
long-term debt $6,527,400 $6,352,000 Other current liabilities
4,214,147 4,060,611 Long-term debt, less current portion 49,456,138
54,084,480 Deferred taxes and credits 5,308,790 5,463,894 Deferred
compensation 802,116 749,128 Stockholders' equity 61,445,700
54,212,730 Total Liabilities and Stockholders' Equity $127,754,291
$124,922,843 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, all at
+1-320-848-6611
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