ex99-1.htm

Exhibit 99.1

FOR IMMEDIATE RELEASE	Contacts: David Christensen, CFO
	507-387-3355
	Jennifer Spaude, Investor Relations
	507-386-3765

HickoryTech Reports Fourth Quarter and Full-Year 2009 Results

Strong Fiber and Data Growth, Debt Reduced, Strategic Investments for Growth

MANKATO, Minn., March 1, 2010—HickoryTech Corporation (Nasdaq: HTCO) today reported fourth quarter revenue of $38.3 million, up 2 percent from the $37.7 million a year ago and up $3.4 million sequentially. Net income for the fourth quarter totaled $1.4 million, or 11 cents per diluted share, a 15 percent decrease from the $1.7 million, or 13 cents per diluted share, reported in the comparable quarter in 2008.

“The economic recovery has been slow; however, we are pleased with our strong growth in Enventis fiber and data services and encouraged by the increases in the past two consecutive quarters of Enventis equipment sales and three consecutive quarters of increases in Enventis services,” said John Finke, HickoryTech’s president and chief executive officer. “Our Telecom Sector continues to produce steady revenue and cash flow, with virtually no decline in net cash flow during the year. We are a strong, competitive company focused on expanding our network and growing our business-to-business services.”

The Company’s debt position as of Dec. 31, 2009 was $120.5 million, down $4.4 million from Sept. 30, 2009 and $6.5 million from Jan. 1, 2009.

Capital expenditures in the fourth quarter totaled $6.6 million, of which $3.8 million was invested in the Enventis Sector and $2.7 million in the Telecom Sector. Additionally, HickoryTech has added sales staff and plans to operate in several new markets in 2010.

“We have the financial resources and a strategic plan for growth, particularly in our Enventis Sector,” Finke said. “We have been able to pursue these growth opportunities while maintaining a stable level of operating metrics on a year-over-year basis.”

Enventis Sector (before inter-segment eliminations)

Enventis Sector revenue before eliminations totaled $20.9 million, an increase of $1.3 million, or 7 percent, compared to the same quarter in 2008. Costs and expenses in the Enventis Sector totaled $19.7 million, an increase of 6 percent from the comparable quarter of 2008. Enventis Sector net income totaled $800,000 in the fourth quarter 2009, versus $900,000 in the fourth quarter in 2008. The decrease in 2009 net income of the Enventis Sector from 2008 was the result of decreases in the segment’s income tax reserve in the fourth quarter of 2008; operating income was relatively flat between 2008 and 2009.

Fiber and Data services (formerly ETS services) revenue for the fourth quarter 2009 totaled $9.5 million, up $3.0 million, or 45 percent, over the comparable quarter last year. The increase in revenue was the result of strong sales of transport services and the addition of CP Telecom, which HickoryTech acquired in August 2009. Excluding the CP Telecom business, fiber and data services revenue would have increased 14 percent as a result of organic growth initiatives.

·	Equipment (formerly ENS equipment) sales for the fourth quarter of 2009 totaled $9.1 million, an increase of $200,000, or 2 percent from the comparable quarter last year.

Equipment Services (formerly ENS services) revenue, which includes professional services and maintenance contracts, totaled $2.3 million, down $1.8 million, or 44 percent compared to one year ago. The fourth quarter of 2008 included a higher level of professional services and large maintenance contracts, adding to service revenues in that period. Equipment services revenue was up 6 percent on a sequential basis from the third quarter 2009.

Enventis product lines were profitable on an operating basis for the years ended Dec. 31 in 2009 and 2008. Fiber and Data operating income increased 59 percent in the fourth quarter and 26 percent in fiscal 2009. Equipment and Services generated an operating profit for the year ended Dec. 31, 2009, although in the fourth quarter Equipment and Services did experience a small operating loss due to the economic slowdown.

Telecom Sector (before inter-segment eliminations)

Telecom Sector revenue totaled $17.9 million, a decrease of $400,000 or 2 percent. Telecom Sector results continue to be affected by declines in network access and local service revenue, partially offset by broadband growth. Costs and expenses totaled $14.8 million for the fourth quarter, down 3 percent year-over-year. Telecom Sector net income for the fourth quarter totaled $1.9 million, a 17 percent decrease versus the comparable quarter in 2008. Net income was down from 2008 as a result of decreases in income tax reserves in the fourth quarter 2008. Operating income for the sector was relatively unchanged comparing 2009 to 2008.

·	Broadband revenue totaled $3.2 million, up 10 percent versus $2.9 million in the fourth quarter of 2008. Broadband revenue includes DSL, Data and Digital TV services. DSL subscribers increased 3 percent from a year ago, totaling 19,346, and Digital TV subscribers increased 15 percent to 9,663.

·	Network access revenue was $6.0 million, down 5 percent from the comparable period in 2008.

·	Local service revenue totaled $3.8 million, down 6 percent, and local access lines declined 6 percent, both the result of competition in our telecom markets.

Consolidated results for fiscal 2009

·	Revenue for fiscal 2009 totaled $139.1 million, down 9 percent from the previous year.

Net Income for fiscal 2009 totaled $11.3 million, up 40 percent. Excluding the income tax reserve release, which added $4.4 million of net income in third quarter 2009, net income would have declined 15 percent from the previous year. This decline is driven by lower Equipment and Services revenue related to the economy, and due to this reason is not a source of concern for management.

·	Operating income for fiscal 2009 was $18.6 million, down 8 percent from the previous year.

·	Enventis Sector revenue totaled $68.7 million in fiscal 2009, down 14 percent. Enventis Fiber and Data services revenue grew 30 percent in fiscal 2009, and Equipment sales were down 36 percent due to the economic slowdown.

·	Telecom Sector revenue totaled $70.4 million in fiscal 2009, down 4 percent from the previous year. Telecom Broadband services grew 10 percent year over year, and Local Service and Network Access revenues declined 6 percent and 7 percent, respectively.

Capital Expenditures, Debt and Cash Position

Capital expenditures totaled $6.6 million for the fourth quarter of 2009 and $17.9 million for fiscal 2009. Capital expenditures in the fourth quarter were $1.3 million more than the comparable period in 2008 and essentially the same as fiscal 2008. HickoryTech reduced its long-term and current debt balance by $4.4 million from Sept. 30, 2009. Debt totaled $120.5 million as of Dec. 31, 2009, down $6.5 million year-over-year. The Company’s cash position as of Dec. 31, 2009 totaled $2.4 million versus $1.6 million at Jan. 1, 2009.

“We’re especially pleased with our balance sheet and cash generation performance in 2009,” Finke said. “We were able to both reduce debt and increase cash while also launching new growth initiatives and funding capital expenditures. In addition, during the year we acquired CP Telecom in an all-cash transaction.”

2010 Expectations

HickoryTech announced the following fiscal 2010 consolidated expectations:

·	Revenue is targeted in the range of $150 million to $158 million.

·	Net Income is targeted in the range of $8.2 million to $9.1 million.

·	Capital spending is targeted in the range of $22 million to $26 million.

·	EBITDA is targeted in the range of $40.5 million to $43 million.

·	A year-end debt balance is targeted in the range of $117 million to $119 million.

“Despite the slow economic recovery, we have been able to continue to grow our Enventis Fiber and Data services and our Telecom broadband services,” Finke said. “We are investing in additional growth opportunities and in expanding our network. We remain confident our business plan will deliver long-term shareholder value.”

Conference Call and Webcast

HickoryTech will host a conference call and webcast on Tuesday, March 2, 2010 at 9 a.m. CT. The dial-in number for the call is 877-774-2369 (U.S. and Canada) and the participant pass code is 51854327. A simultaneous webcast of the call and downloadable presentation will be available through a link on the Investor Relations page at http://investor.hickorytech.com.

About HickoryTech

HickoryTech Corporation (dba HickoryTech and Enventis) is a leading integrated communications provider in the markets it serves. With headquarters in Mankato, Minn., the corporation has approximately 450 employees and a regional fiber network with facilities-based operations in Minnesota and Iowa. Enventis serves businesses of all sizes across a five-state region with IP-based voice, data and network solutions. HickoryTech provides bundled residential and business services including high-speed Internet, Digital TV and voice services in its legacy telecom markets. The Company trades on the Nasdaq Stock Exchange (symbol: HTCO) and is a member of the Russell 2000 index. For more information, visit www.hickorytech.com.

Non-GAAP Measures

To supplement the Company’s financial statements presented in accordance with GAAP, the Company provides certain non-GAAP financial measures of financial performance. These non-GAAP measures include earnings before interest, income taxes, depreciation and amortization, and net income without release of income tax reserve. The Company’s reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, or superior to, GAAP results. These non-GAAP measures are provided to enhance investors’ overall understanding of the Company’s current financial performance and ability to generate cash flows. In many cases non-GAAP financial measures are used by analysts and investors to evaluate the Company’s performance. Reconciliation to the nearest GAAP measure included in this press release can be found in the financial table included below.

Forward looking statement

Certain statements included in this press release that are not historical facts are "forward-looking statements." Such forward-looking statements are based on current expectations, estimates and projections about the industry in which HickoryTech operates and management's beliefs and assumptions. The forward-looking statements are subject to uncertainties. These statements are not guarantees of future performance and involve certain risks, uncertainties and probabilities. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they were made. HickoryTech undertakes no obligation to update any of its forward-looking statements, except as required by law.

Consolidated Statement of Operations

(unaudited)

	Three Months Ended December 31						%			Twelve Months Ended December 31						%
(Dollars in thousands, except share data)	2009			2008			Change			2009			2008			Change
Revenue:
Enventis Sector
Equipment	$	9,069		$	8,912			2	%	$	27,857		$	43,514			-36	%
Services		11,741			10,610			11	%		40,826			36,462			12	%
Total Enventis Sector		20,810			19,522			7	%		68,683			79,976			-14	%

Telecom Sector		17,520			18,148			-3	%		70,419			73,199			-4	%
Total revenue		38,330			37,670			2	%		139,102			153,175			-9	%

Costs and Expenses:
Cost of sales, excluding depreciation and amortization		8,500			7,750			10	%		24,869			37,355			-33	%
Cost of services, excluding depreciation and amortization		14,394			14,244			1	%		52,211			52,004			0	%
Selling, general and administrative expenses		5,881			6,198			-5	%		22,260			22,984			-3	%
Depreciation		5,209			5,108			2	%		20,176			19,479			4	%
Amortization of intangibles		302			264			14	%		1,001			1,127			-11	%
Total costs and expenses		34,286			33,564			2	%		120,517			132,949			-9	%

Operating income		4,044			4,106			-2	%		18,585			20,226			-8	%

Interest and other income		50			12			317	%		105			93			13	%
Interest expense		(1,763	)		(1,821	)		-3	%		(6,918	)		(6,870	)		1	%
Income before income taxes		2,331			2,297			1	%		11,772			13,449			-12	%
Income taxes		907			618			47	%		499			5,420			-91	%

Net income	$	1,424		$	1,679			-15	%	$	11,273		$	8,029			40	%


Basic earnings per share	$	0.11		$	0.13			-15	%	$	0.86		$	0.61			41	%

Basic weighted average common shares outstanding		13,095,628			13,012,619						13,061,266			13,248,731

Diluted earnings per share	$	0.11		$	0.13			-15	%	$	0.86		$	0.61			41	%

Diluted weighted average common and equivalent shares outstanding		13,100,015			13,015,211						13,061,861			13,259,933

Dividends per share	$	0.13		$	0.13			0	%	$	0.52		$	0.49			6	%

Consolidated Balance Sheet

(unaudited)

(Dollars and Share Data in Thousands)	December 31, 2009			December 31, 2008
ASSETS
Current assets:
Cash and cash equivalents	$	2,420		$	1,626
Receivables, net of allowance for doubtful accounts of $643 and $905		19,729			26,292
Inventories		5,069			8,674
Income tax receivable		-			566
Deferred income taxes		2,423			2,064
Prepaid expenses		1,751			1,409
Other		1,039			1,114
Total current assets		32,431			41,745

Investments		4,306			4,066

Property, plant and equipment		357,607			338,510
Accumulated depreciation		(204,129	)		(187,157	)
Property, plant and equipment, net		153,478			151,353

Other assets:
Goodwill		27,423			25,239
Intangible assets, net		3,025			856
Deferred costs and other		1,820			2,249
Total other assets		32,268			28,344

Total assets	$	222,483		$	225,508

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Extended term payable	$	6,788		$	10,474
Accounts payable		2,883			3,133
Accrued expenses and other		7,792			8,001
Accrued income taxes		642			-
Deferred revenue		6,016			6,205
Current maturities of long-term obligations		620			1,621
Total current liabilities		24,741			29,434

Long-term liabilities:
Debt obligations, net of current maturities		119,871			125,384
Financial derivative instruments		1,908			3,286
Accrued income taxes		3,218			7,517
Deferred income taxes		21,895			18,282
Deferred revenue		2,095			1,646
Accrued employee benefits and deferred compensation		14,209			10,210
Total long-term liabilities		163,196			166,325

Total liabilities		187,937			195,759

Commitments and contingencies

Shareholders' equity:
Common stock, no par value, $.10 stated value
shares authorized: 100,000
Shares issued and outstanding: 13,101 in 2009 and 12,992 in 2008		1,310			1,299
Additional paid-in capital		12,975			11,504
Retained earnings		24,687			20,199
Accumulated other comprehensive (loss)		(4,426	)		(3,253	)
Total shareholders' equity		34,546			29,749

Total liabilities and shareholders' equity	$	222,483		$	225,508

Enventis Sector Recap

(unaudited)

	Three Months Ended December 31				%			Twelve Months Ended December 31				%
(Dollars In thousands)	2009		2008		Change			2009		2008		Change
Revenue before intersegment eliminations
Equipment	$	9,069	$	8,912		2	%	$	27,857	$	43,514		-36	%
Services		2,306		4,152		-44	%		9,579		12,387		-23	%
Equipment and Services		11,375		13,064					37,436		55,901

Fiber and Data		9,435		6,458		46	%		31,247		24,075		30	%
Intersegment		111		111		0	%		500		515		-3	%
Total Enventis Revenue	$	20,921	$	19,633		7	%	$	69,183	$	80,491		-14	%

Total Enventis revenue before intersegment eliminations
Unaffiliated customers	$	20,810	$	19,522				$	68,683	$	79,976
Intersegment		111		111					500		515
	$	20,921	$	19,633				$	69,183	$	80,491

Cost of sales (excluding depreciation and amortization)		8,500		7,750		10	%		24,869		37,355		-33	%
Cost of services (excluding depreciation and amortization)		6,786		6,877		-1	%		23,050		21,894		5	%
Selling, general and administrative expenses		2,785		2,650		5	%		10,224		9,801		4	%
Depreciation and amortization		1,604		1,214		32	%		5,413		4,417		23	%
Total costs and expenses		19,675		18,491		6	%		63,556		73,467		-13	%

Operating income	$	1,246	$	1,142		9	%	$	5,627	$	7,024		-20	%
Net income	$	762	$	916		-17	%	$	3,362	$	4,369		-23	%

Capital expenditures	$	3,847	$	2,093		84	%	$	8,738	$	6,408		36	%

Enventis Equipment and Services Product Line

	Three Months Ended December 31					%			Twelve Months Ended December 31				%
(Dollars in thousands)	2009			2008		Change			2009		2008		Change
Revenue before intersegment eliminations
Equipment	$	9,069		$	8,912		2	%	$	27,857	$	43,514		-36	%
Services		2,306			4,152		-44	%		9,579		12,387		-23	%
Total revenue	$	11,375		$	13,064		-13	%	$	37,436	$	55,901		-33	%

Cost of sales (excluding depreciation and amortization)		8,496			7,749		10	%		24,923		37,342		-33	%
Cost of services (excluding depreciation and amortization)		1,817			3,429		-47	%		7,082		10,102		-30	%
Selling, general and administrative expenses		1,046			1,437		-27	%		4,848		5,264		-8	%
Depreciation and amortization		107			149		-28	%		414		515		-20	%
Total costs and expenses		11,466			12,764		-10	%		37,267		53,223		-30	%

Operating income	$	(91	)	$	300		-130	%	$	169	$	2,678		-94	%
Net income	$	(34	)	$	276		-112	%	$	122	$	1,670		-93	%

Capital expenditures	$	204		$	16		1175	%	$	528	$	468		13	%

Enventis Fiber and Data Product Line

	Three Months Ended December 31				%			Twelve Months Ended December 31					%
(Dollars in thousands)	2009		2008		Change			2009			2008		Change
Revenue before intersegment eliminations:
Services	$	9,435	$	6,458		46	%	$	31,247		$	24,075		30	%
Intersegment		111		111		0	%		500			515		-3	%
Total revenue	$	9,546	$	6,569		45	%	$	31,747		$	24,590		29	%

Cost of sales (excluding depreciation and amortization)		4		1		300	%		(54	)		13		-515	%
Cost of services (excluding depreciation and amortization)		4,969		3,448		44	%		15,968			11,792		35	%
Selling, general and administrative expenses		1,739		1,213		43	%		5,376			4,537		18	%
Depreciation and amortization		1,497		1,065		41	%		4,999			3,902		28	%
Total costs and expenses		8,209		5,727		43	%		26,289			20,244		30	%

Operating income	$	1,337	$	842		59	%	$	5,458		$	4,346		26	%
Net income	$	796	$	640		24	%	$	3,240		$	2,699		20	%

Capital expenditures	$	3,643	$	2,077		75	%	$	8,210		$	5,940		38	%

Telecom Sector Recap

	Three Months Ended December 31				%			Twelve Months Ended December 31				%
(Dollars in thousands)	2009		2008		Change			2009		2008		Change
Revenue
Local Service	$	3,763	$	4,000		-6	%	$	15,322	$	16,296		-6	%
Network Access		5,999		6,330		-5	%		24,157		25,859		-7	%
Long Distance		861		1,079		-20	%		3,791		4,563		-17	%
Broadband		3,174		2,882		10	%		12,114		10,983		10	%
Internet		1,236		1,245		-1	%		4,975		4,723		5	%
Directory		929		1,034		-10	%		4,000		4,119		-3	%
Bill Processing		872		768		14	%		3,351		3,325		1	%
Intersegment		373		179		108	%		1,217		644		89	%
Other		686		810		-15	%		2,709		3,331		-19	%
Total Telecom Revenue	$	17,893	$	18,327		-2	%	$	71,636	$	73,843		-3	%

Total Telecom revenue before intersegment eliminations
Unaffiliated Customers	$	17,520	$	18,148				$	70,419	$	73,199
Intersegment		373		179					1,217		644
		17,893		18,327					71,636		73,843
Costs and expenses
Cost of services, excluding depreciation and amortization		8,046		7,691		5	%		30,730		31,141		-1	%
Selling, general and administrative expenses		2,883		3,446		-16	%		11,639		13,521		-14	%
Depreciation and amortization		3,877		4,143		-6	%		15,680		16,136		-3	%
Total costs and expenses		14,806		15,280		-3	%		58,049		60,798		-5	%

Operating income	$	3,087	$	3,047		1	%	$	13,587	$	13,045		4	%
Net income	$	1,869	$	2,256		-17	%	$	8,068	$	8,104		0	%

Capital expenditures	$	2,693	$	3,020		-11	%	$	9,068	$	11,102		-18	%

Key Metrics
Business access lines		25,133		25,274		-1	%
Residential access lines		30,197		33,757		-11	%
Total access lines		55,330		59,031		-6	%
Long distance customers		36,107		38,458		-6	%
DSL customers		19,346		18,696		3	%
Digital TV customers		9,663		8,368		15	%

Reconciliation of Non-GAAP Measures

	Three Months Ended December 31				Twelve Months Ended December 31
(Dollars in thousands)	2009		2008		2009		2008
Reconciliation of net income to EBITDA:
Net income	$	1,424	$	1,679	$	11,273	$	8,029
Add:
Depreciation		5,209		5,108		20,176		19,479
Amortization of intangibles		302		264		1,001		1,127
Interest expense		1,763		1,821		6,918		6,870
Income tax expense		907		618		499		5,420
EBITDA1	$	9,605	$	9,490	$	39,867	$	40,925

Reconciliation of net income to net income without
release of income tax reserve:
Net income	$	1,424	$	1,679	$	11,273	$	8,029
Deduct: Income tax reserve release		-		-		4,454		-
Net income excluding income tax reserve release	$	1,424	$	1,679	$	6,819	$	8,029



	Year Ending
	December 31, 2010
(Dollars in thousands)	Guidance Range
Reconciliation of net income to 2010 EBITDA guidance:	Low		High
Projected net income	$	8,200	$	9,100
Add back:
Depreciation and amortization		21,300		21,900
Interest expense		5,100		5,400
Income tax expense		5,900		6,600
Projected EBITDA1 Guidance	$	40,500	$	43,000

1EBITDA, as defined by our debt agreement