UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549 
 FORM 10-Q (Mark One)x
  QUARTERLY
  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE QUARTERLY PERIOD ENDED March 31, 2001ORo
  TRANSITION
  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD FROMTO Commission file number0-13721 HICKORY TECH CORPORATION(Exact name of registrant as specified in its charter)Minnesota
  41-1524393(State or other
  jurisdiction of incorporation or organization)
  (I.R.S. Employer
  Identification No.)221 East Hickory StreetMankato, Minnesota
  56002-3248(Address of principal
  executive offices)
  (zip code)(800) 326-5789(Registrants
  telephone number, including area code)(Former name, former
  address and former fiscal year, if changed since last report)
 Indicate by check mark whether the Registrant (1) has
filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.      YesxNoo The total number of shares of the registrant's common
stock outstanding as of March 31, 2001: 
13,891,804. 
 
 HICKORY TECH
CORPORATIONMarch 31, 2001



PART I. FINANCIAL INFORMATION



ITEM 1.   FINANCIAL STATEMENTS



CONSOLIDATED STATEMENTS OF INCOME(UNAUDITED)


(In Thousands
  Except Per Share Amounts)
  For
  Three Months Ended3/31/2001
  3/31/2000OPERATING REVENUES:Telephone
  $14,059
  $12,511Communications Services
  2,625
  1,618Wireless Services
  4,404
  4,394Information Solutions
  978
  1,037Enterprise Solutions
  5,165
  4,286TOTAL OPERATING REVENUES
  27,231
  23,846COSTS AND EXPENSES:Operating Expenses
  17,326
  15,076Depreciation
  2,946
  2,604Amortization of Intangibles
  831
  737TOTAL COSTS AND EXPENSES
  21,103
  18,417OPERATING INCOME
  6,128
  5,429OTHER INCOME (EXPENSE):Equity in Net Income (Loss) of Investees
  (7)
  14Interest and Other Income
  37
  47Interest Expense
  (2,830)
  (2,027)TOTAL OTHER INCOME (EXPENSE)
  (2,800)
  (1,966)INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING
  CHANGE
  3,328
  3,463INCOME TAXES
  1,365
  1,388INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE
  1,963
  2,075CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET OF TAX BENEFIT OF
  $14
  -
  (20)NET INCOME
  $1,963
  $2,055Basic Earnings Per Share
  $0.14
  $0.15Dividends Per Share
  $0.11
  $0.11Weighted Average Common Shares Outstanding
  13,885
  13,797Diluted Earnings Per Share
  $0.14
  $0.15Weighted Average Common and Equivalent Shares Outstanding
  13,996
  13,840The
accompanying notes are an integral part of the consolidated financial
statements.

HICKORY TECH CORPORATIONMarch 31, 2001



CONSOLIDATED BALANCE SHEETS
(UNAUDITED)


(In Thousands
  Except  Share and Per Share Amounts)
  3/31/2001
  12/31/2000ASSETSCURRENT ASSETS:Cash and Cash Equivalents
  $914
  $1,190Receivables, Net of Allowance for Doubtful Accounts of $1,199 and $961
  15,648
  16,137Income Taxes Receivable
  -
  670Inventories
  4,652
  4,585Deferred Income Taxes
  1,404
  1,404Other
  1,345
  1,423TOTAL CURRENT ASSETS
  23,963
  25,409INVESTMENTS
  10,512
  10,361PROPERTY, PLANT AND EQUIPMENT
  208,746
  203,362Less ACCUMULATED DEPRECIATION
  89,603
  86,672PROPERTY, PLANT AND EQUIPMENT, NET
  119,143
  116,690OTHER ASSETS:Intangible Assets, Net
  101,285
  100,603Deferred Costs and Other
  2,443
  2,424TOTAL OTHER ASSETS
  103,728
  103,027TOTAL ASSETS
  $257,346
  $255,487LIABILITIES
  & SHAREHOLDERS' EQUITYCURRENT LIABILITIES:Accounts Payable
  $6,718
  $10,791Income Taxes Payable
  695
  -Accrued Interest
  543
  108Advanced Billings and Deposits
  3,784
  4,411Current Maturities of Long-Term Debt
  1,218
  1,217TOTAL CURRENT LIABILITIES
  12,958
  16,527LONG-TERM DEBT, Net of Current
  Maturities
  152,128
  147,433DEFERRED INCOME TAXES
  9,417
  9,417DEFERRED COMPENSATION AND OTHER
  2,804
  2,932DEFERRED REVENUE
  1,836
  1,821TOTAL LIABILITIES
  179,143
  178,130SHAREHOLDERS' EQUITY:Common Stock, no par value, $.10 stated valueShares authorized: 100,000,000Shares outstanding: 2001, 13,891,804; 2000, 13,878,568
  1,389
  1,388Additional Paid-In Capital
  5,883
  5,473Retained Earnings
  70,931
  70,496TOTAL SHAREHOLDERS' EQUITY
  78,203
  77,357TOTAL LIABILITIES &
  SHAREHOLDERS' EQUITY
  $257,346
  $255,487The accompanying notes are an
integral part of the consolidated financial statements.

HICKORY TECH CORPORATIONMarch 31, 2001



CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)


For
  Three Months EndedIn Thousands
  3/31/2001
  3/31/2000CASH FLOWS FROM OPERATING
  ACTIVITIES:Net Income
  $1,963
  $2,055Adjustments to Reconcile Net Income to NetCash Provided by Operating Activities:Depreciation and Amortization
  3,777
  3,341Stock-Based Compensation
  272
  225Equity in Net Loss (Income) of Investees
  7
  (14)Cumulative Effect of Accounting Change
  -
  34Provision for Losses on Accounts Receivable
  238
  40Changes in Operating Assets and Liabilities:Receivables
  1,049
  1,601Inventories
  (67)
  (120)Accounts Payable and Accrued Expenses
  (2,875)
  (5,657)Advance Billings and Deposits
  (627)
  203Deferred Revenue and Compensation
  (113)
  208Other
  59
  (372)Net Cash Provided By Operating Activities
  3,683
  1,544CASH FLOWS FROM INVESTING
  ACTIVITIES:Additions to Property, Plant and Equipment
  (5,400)
  (2,397)Additions to Capitalized Software Development Costs
  (1,513)
  (190)Increase in Investments
  (285)
  (59)Proceeds from Sale of Assets
  1
  8Net Cash Used In Investing Activities
  (7,197)
  (2,638)CASH FLOWS FROM FINANCING
  ACTIVITIES:Decrease in Cash Overdraft
  -
  (3,552)Repayments of Debt
  (54)
  (52)Borrowings on Line of Credit
  5,000
  6,000Repayments on Line of Credit
  (250)
  -Proceeds from Issuance of Common Stock
  69
  65Dividends Paid
  (1,527)
  (1,518)Net Cash Provided By Financing Activities
  3,238
  943NET DECREASE IN CASH AND CASH
  EQUIVALENTS
  (276)
  (151)CASH AND CASH EQUIVALENTS AT
  BEGINNING OF PERIOD
  1,190
  2,708CASH AND CASH EQUIVALENTS AT END
  OF PERIOD
  $914
  $2,557The accompanying notes are an integral part of the consolidated
financial statements.

HICKORY
TECH CORPORATION
MARCH 31, 2001PART 1. FINANCIAL INFORMATIONITEM 1.           
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.NOTE
1. BASIS OF PRESENTATIONThe accompanying unaudited
condensed consolidated financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information necessary for a fair
presentation of results of operations, financial position, and cash flows in
conformity with accounting principles generally accepted in the United States
of America. In the opinion of management, the condensed consolidated financial
statements reflect all adjustments (consisting only of normal recurring
adjustments) considered necessary for a fair presentation of Hickory Tech
Corporations (HickoryTech) results for the periods presented.  Operating results for interim periods are
not necessarily indicative of results that may be expected for the fiscal year
as a whole. The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America  requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues,
expenses, and related disclosures at the date of the financial statements and
during the reporting period. Actual results could differ from these estimates.
These unaudited interim condensed consolidated financial statements should be
read in conjunction with HickoryTechs Annual Report on Form 10-K for the year
ended December 31, 2000.The
consolidated financial statements of HickoryTech include Hickory Tech
Corporation and its subsidiaries in the following five business segments: (i)
Telephone Sector, (ii) Communications Services Sector, (iii) Wireless Services
Sector, (iv) Information Solutions Sector and (v) Enterprise Solutions Sector.
An investment in an unconsolidated partnership for the Information Solutions
Sector is accounted for using the equity method. All intercompany transactions
have been eliminated from the consolidated financial statements.Operating
expenses include all costs related to delivery of HickoryTechs communications
services and products. These costs include all selling, general and
administrative costs and all costs of performing services and providing related
products, except for costs associated with the depreciation and amortization of
property, plant and equipment and intangible assets.All
revenues and expenses related to Internet services which were reported in the
Telephone Sector in 2000 have been reclassified to the Communications Services
Sector to conform to the 2001 presentation. 
These reclassifications reduced Telephone Sector revenue and increased
Communications Services Sector revenue by $360,000 and reduced Telephone Sector
operating expenses and increased Communications Services Sector operating
expenses by $323,000 for the three months ended March 31, 2000.  In addition, cost of sales of $3,003,000
related to Enterprise Solutions Sector sales that were reported separately in
2000 have been reclassified to include them in operating expenses to conform to
the 2001 presentation.  These
reclassifications had no effect on previously reported consolidated operating
income, net income or cash flows.NOTE 2. EARNINGS AND CASH DIVIDENDS PER COMMON SHAREBasic
earnings per share is computed by dividing net income by the weighted average
number of shares of common stock outstanding during the quarter. Shares used in
the diluted earnings per share computation are based on the weighted average
number of shares of common stock outstanding during the quarter increased by
potentially dilutive common shares. Potentially dilutive common shares include
stock options and stock issued under the employee stock purchase plan (ESPP).For
  Three Months Ended3/31/01
  3/31/00Weighted Average
  Shares Outstanding
  13,885,453
  13,796,549Stock Options
  (dilutive only)
  101,766
  29,812Weighted Average Stock
  Subscribed (ESPP)
  9,261
  13,771Weighted Average
  Dilutive Shares Outstanding
  13,996,480
  13,840,132Cash
dividends are based on the number of common shares outstanding at the
respective record dates. Listed below are the number of shares outstanding as
of the record date for the first quarter of 2001 and 2000.Shares Outstanding on Record Date
  2001
  2000First Quarter (Feb. 15)
  13,886,669
  13,799,056Dividends
per share reflect dividends declared during the applicable quarter divided by
the weighted average common shares outstanding during the period.During
the first three months of 2001, shareholders have elected to reinvest $62,000
of dividends into HickoryTech common stock pursuant to the HickoryTech Dividend
Reinvestment Plan.NOTE 3. COMPREHENSIVE INCOMEFor the
three months ended March 31, 2001 and 2000, comprehensive income was comprised
solely of net income.NOTE 4. INVENTORIESInventories
at March 31, 2001 and December 31, 2000 consist of raw materials and supplies.NOTE 5. PLANNED DISPOSITIONOn
July 21, 2000, HickoryTech announced plans to sell its local telephone exchange
in Amana, Iowa.  The Amana operation,
known as Amana Colonies Telephone Company (ACTC), serves approximately 1,500
access lines in the seven communities of the Amana Colonies in east central
Iowa.  The sale is subject to approval
by the Federal Communications Commission. HickoryTech expects that the sale
will occur in the second quarter of 2001. 
The operations of ACTC are included in the Telephone Sector.  For the three months ended March 31, 2001
and 2000, ACTC generated revenues of $341,000 and $356,000 and generated
operating income (loss) of ($21,000) and $4,000, respectively.NOTE 6. 
QUARTERLY SECTOR FINANCIAL SUMMARY(In Thousands)
  
  Comm.
  Wireless
  Information
  Enterprise
  Corporate and
  HickoryTechTelephone
  Services
  Services
  Solutions
  Solutions
  Eliminations
  ConsolidatedThree Months
  Ended 3/31/01Operating Revenue from Unaffiliated Customers
  $14,059
  $2,625
  $4,404
  $978
  $5,165
  $-
  $27,231Intercompany Revenues
  924
  219
  -
  1,303
  -
  (2,446)
  -Total
  14,983
  2,844
  4,404
  2,281
  5,165
  (2,446)
  27,231Depreciation and Amortization
  2,140
  287
  1,061
  100
  85
  104
  3,777Operating Income/(Loss)
  7,135
  (1,488)
  214
  562
  367
  (662)
  6,128Net Income/(Loss)
  4,164
  (889)
  98
  322
  205
  (1,937)
  1,963Total Assets
  111,653
  32,155
  85,253
  5,215
  8,656
  14,414
  257,346Property, Plant and Equip.,Net
  69,360
  30,406
  16,140
  1,936
  668
  633
  119,143Capital Expenditures
  1,118
  3,805
  408
  31
  5
  33
  5,400Three Months
  Ended 3/31/00Operating Revenue from Unaffiliated Customers
  $12,511
  $1,618
  $4,394
  $1,037
  $4,286
  $-
  $23,846Intercompany Revenues
  700
  231
  -
  1,052
  -
  (1,983)
  -Total
  13,211
  1,849
  4,394
  2,089
  4,286
  (1,983)
  23,846Depreciation and Amortization
  1,999
  116
  1,025
  61
  84
  56
  3,341Operating Income/(Loss)
  6,391
  (1,244)
  673
  129
  (162)
  (358)
  5,429Net Income/(Loss)
  3,752
  (740)
  386
  82
  (116)
  (1,309)
  2,055Total Assets
  99,049
  13,360
  84,204
  4,035
  9,992
  3,784
  214,424Property, Plant and Equip.,Net
  58,951
  12,435
  13,252
  2,093
  784
  457
  87,972Capital Expenditures
  1,808
  381
  112
  55
  32
  9
  2,397NOTE 7. SUBSEQUENT EVENTOn
April 26, 2001, HickoryTech signed a definitive agreement to purchase two
digital personal communications services (PCS) licenses from McLeodUSA
Incorporated for $11,100,000 in cash. The PCS licenses being purchased by
HickoryTech include the Minnesota Basic Trading Areas (BTAs) of
Mankato-Fairmont and Rochester-Austin-Albert Lea, an area covering a population
of approximately 493,000 people. The acquisition will be a purchase of the
licenses only. There are no customers, existing revenue stream or physical
property and equipment included with this acquisition as the BTAs are undeveloped.  The acquisition is anticipated to close by
the end of the second quarter of 2001.ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION.FORWARD-LOOKING
STATEMENTSThis Form 10-Q contains forward-looking
statements that are based on managements current expectations, estimates and
projections about the industry in which HickoryTech operates, managements
beliefs and assumptions. Such forward-looking statements are subject to
important risks and uncertainties that could cause HickoryTechs future actual
results to differ materially from such statements. These statements are not
guarantees of future performance and involve certain risks, uncertainties and
probabilities, which are difficult to predict. Therefore, actual outcomes and
results may differ materially from what is expressed or forecasted in such
forward-looking statements, whether as a result of new information, future
events or otherwise.  Factors that might
cause such a difference include, but are not limited to, those contained in
this Managements Discussion and Analysis (Item 2) and Exhibit 99 to
HickoryTechs Annual Report on Form 10-K for the year ended December 31, 2000,
which is incorporated herein by reference. 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 for
any reason.BUSINESSESThe
business segments of HickoryTech are:TELEPHONE SECTORHickoryTechs
Telephone Sector provides local exchange telephone service and owns and
operates fiber optic cable facilities. There are four incumbent local exchange
carriers (ILECs) in this sector. Two ILECs provide telephone service in south
central Minnesota, specifically, Mankato (population 42,000) and eleven
communities surrounding Mankato. One Iowa ILEC provides telephone service for
eleven communities in northwest Iowa and another Iowa ILEC provides telephone
service for the seven communities of the Amana Colonies in east central Iowa.
HickoryTech also owns and operates fiber optic cable facilities in Minnesota,
which are used to transport interexchange communications as a service to
telephone exchange companies. HickoryTechs Minnesota ILECs and its
Communications Services Sector are the primary users of the fiber optic cable
facilities.COMMUNICATIONS SERVICES SECTORThis
sector provides telephone services as a competitive local exchange carrier
(CLEC) to customers in towns in Minnesota and Iowa not currently in
HickoryTechs Telephone Sectors service area. HickoryTechs CLEC currently
offers local dial tone, long distance and local call Internet access services
as an alternative choice for local telecommunications service to the incumbent
local exchange carrier. This alternative service is currently offered by
HickoryTechs CLEC to customers in eight communities in Minnesota and six
communities in Iowa. Additional opportunities are being pursued in communities
in Minnesota and Iowa. This sector also provides long distance service and
Internet access to HickoryTechs southern Minnesota and northern Iowa
subscribers.WIRELESS SERVICES SECTORHickoryTechs Wireless Services
Sector owns and operates cellular telephone businesses in south central
Minnesota and in the Minneapolis/St. Paul area. In south central Minnesota, the
sector provides cellular service for Minnesotas Rural Service Area (RSA) 10,
under the business name of HickoryTech Wireless. This business holds 100% of
the A-side FCC cellular license for seven counties in south central
Minnesota. The area overlaps and is larger than the telephone line service area
of HickoryTechs Minnesota ILEC and CLEC service areas and serves a population
of approximately 230,000. This business also holds the Minneapolis/St. Paul
Metro A-2 (Metro A-2) cellular license. The Metro A-2 property surrounds the
metropolitan Twin Cities area and is located in five Minnesota counties and in
one Wisconsin county. Metro A-2 provides service to an area with a population
of approximately 170,000.INFORMATION SOLUTIONS SECTORHickoryTechs
Information Solutions Sector provides data processing and related services,
principally for HickoryTech, other ILECs, CLECs, interexchange network carriers,
wireless companies, municipalities and utilities. HickoryTechs Information
Solutions Sectors principal activity is the provision of monthly batch
processing of computerized data. In the fourth quarter of 1999, HickoryTech
implemented a new billing product (WRITE2K) for HickoryTechs Wireless Services
Sector. Currently, this sector is working on the next evolution of this
product, to be called SuiteSolution. HickoryTech considers the wireless market,
as well as the CLEC market, important components in the future of
telecommunications. SuiteSolution should enable HickoryTech to become a
full-service billing provider for all aspects of the telecommunications
industry.ENTERPRISE SOLUTIONS SECTORThe
Enterprise Solutions Sectors activities are focused on the sale, installation
and service of business telephone systems and data communications equipment to
companies based in metropolitan Minneapolis/St. Paul, Minnesota.  HickoryTech also applies this business telephone
system expertise to its ILEC and CLEC operations in Minnesota and Iowa.RESULTS OF OPERATIONS:CONSOLIDATED OPERATING RESULTSThe
following is a summarized discussion of consolidated results of operations.
More detailed discussion of operating results by segment follows this
discussion.OPERATING
REVENUES- Consolidated
operating revenues were 14.2% higher for the three months ended March 31, 2001
than for the three months ended March 31, 2000. The revenue increase was
primarily due to a 22.2% increase in HickoryTechs total customer base in its
Telephone, Communications Services and Wireless Sectors, in addition to a 20.5%
increase in revenues from its Enterprise Solutions Sector.OPERATING EXPENSES- Operating expenses for the three months ended March
31, 2001 increased $2,250,000 or 14.9% compared with the same period in 2000.
The increase in operating expenses was primarily due to higher customer
acquisition costs, primarily advertising and promotions, in the Communications
Services and Wireless Sectors. A further cause for the increase in operating
expenses was the higher employee count maintained by HickoryTech to service its
expanding customer base.Included
in operating expenses were cost of sales of HickoryTechs Enterprise Solutions
Sector of $3,401,000 and $3,003,000 for the three months ended March 31, 2001
and 2000, respectively. The increase in cost of sales from this sector of
$398,000 or 13.3% was primarily due to its increase in revenues.DEPRECIATION
AND AMORTIZATION - Depreciation expense for the three months ended March
31, 2001 was $342,000 or 13.1% higher than for the same period in 2000. The
capital expenditures in the emerging CLEC and fiber optic networks account for
the increase in depreciation expense. Amortization expense for the three months
ended March 31, 2001 was $94,000 or 12.8% higher than for the same period in
2000. The amortization of capitalized software development costs related to the
Information Solutions Sectors WRITE2K billing software was the primary reason
for the increase in amortization expense            .OPERATING
INCOME- Operating income was
12.9% higher for the three months ended March 31, 2001 than for the three
months ended March 31, 2000. The increase in operating income primarily
reflects the impact of the increase in operating revenues for this period,
partially offset by the increase in customer acquisition costs and higher
depreciation expense related to building out the infrastructure of the CLEC
business.

INTEREST EXPENSE- Interest expense increased $803,000 or 39.6% for the
three months ended March 31, 2001, compared to the same period in 2000. The
increase in interest expense was due to an increase in long term debt of
$36,037,000 as of March 31, 2001, compared to March 31, 2000, as well as an
increase in the weighted average interest rate on the revolving credit facility
of 8.02% on March 31, 2001 as compared to 7.68% on March 31, 2000. The
outstanding balance of the revolving credit facility was $152,750,000 on March
31, 2001.  HickoryTech expects interest
expense to increase in future periods given higher levels of borrowing expected
to fund capital expenditures in its emerging businesses.NET
INCOME- Consolidated net income for the three months
ended March 31, 2001 was 4.5% lower than the comparable period in 2000. The
three months ended March 31, 2000 included a $20,000 after-tax charge for the
cumulative effect of a change in accounting principle related to the adoption
of Staff Accounting Bulletin (SAB) No. 101. 
Without the effects of this change in accounting principle, net income
would have decreased 5.4% for the three months ended March 31, 2001 compared to
the same period in 2000. The primary reason for the decrease in net income for
HickoryTech was the increase in interest expense due to funds borrowed for
capital expenditures required to expand the CLEC business.OPERATING STATISTICS3/31/01
  3/31/00Local Telephone Access Lines
  67,305
  65,305Local CLEC Access Lines
  9,427
  4,977Wireless Customers
  26,470
  20,972Long Distance Customers
  19,901
  13,557Internet Customers
  12,869
  6,446SECTOR RESULTS
OF OPERATIONSTELEPHONE
- Operating revenues for the three months ended March 31, 2001 increased
$1,548,000 or 12.4% compared with the same period in 2000. An increase in total
access revenues of $862,000 was the primary reason for the increase in
operating revenues. Access revenues were bolstered by a continuing demand for
special circuits and a 5.2% increase in minutes of use in the first three
months of 2001 over the first three months of 2000. Access revenue in the first
quarter of 2001 was also aided by $200,000 of retroactive billing of special
access circuit revenue from interexchange carriers, which is a nonrecurring
event. Access line growth and vertical service penetration accounted for the
remaining revenue increase in the first three months of 2001.Operating
income increased $744,000 or 11.6% for the three months ended March 31, 2001
compared with the same period in 2000. The increase in operating income was due
primarily to the increase in operating revenues.COMMUNICATIONS
SERVICES  - For the three months
ended March 31, 2001, operating revenues were $1,007,000 or 62.2% higher than
the three months ended March 31, 2000. This increase was primarily attributable
to increased market share and customer penetration. The Communications Services
Sector had a count of 42,000 in combined access lines, long distance customers
and Internet customers at March 31, 2001 (including approximately 5,000
Internet customers acquired in October 2000) compared to 25,000 combined
customer units at March 31, 2000.Despite the increase in revenues, the emerging
Communications Services Sector reported a loss for the quarter, as it has since
its inception in 1998, due to significant fixed cost components of operating
expenses, primarily administrative, and depreciation expense related to
significant capital expenditures made to build the CLEC network. For the three
months ended March 31, 2001, the operating loss increased $244,000 or 19.6%
over the comparable period in 2000. This sector continues to be in its start-up
phase, and is experiencing great growth in its customer base. In order to
service this growing customer base, this sector has increased its employee
count and experienced higher operating expenses, resulting in an increase in
operating expenses of $1,239,000 or 40.1% for the three months ended March 31,
2001 over the comparable period in 2000.WIRELESS
SERVICES - Operating revenues for
the three months ended March 31, 2001 increased $10,000 or 0.2% compared with
the same period in 2000.  Local service
revenues increased 22.3% in the first three months of 2001 compared to 2000, as
a result of retail customers at March 31, 2001 growing 26.2% over the March 31,
2000 customer base. The increased revenue from the increase in the number of retail
customers was offset by a decrease in roaming rates, along with a decrease in
roaming minutes, particularly in the Minneapolis/St. Paul ring where
technological changes among other wireless providers has diminished the roaming
minutes on wireless service towers.For
the three months ended March 31, 2001, operating income was $459,000 or 68.2%
lower than the comparable period in 2000. The decrease in operating income for
the three months ended March 31, 2001 as compared to the three months ended
March 31, 2000 was primarily due to the moderation of wireless revenue, as
discussed above, the increase in depreciation expense related to the build-out
of the cellular network and higher customer acquisition costs.INFORMATION SOLUTIONS -
Operating revenues from unaffiliated customers for the three months ended March
31, 2001 decreased $59,000 or 5.7% compared with the same period in 2000.As
the Information Solutions Sector develops its new convergent billing system, SuiteSolution, the first users of the billing
system will be internal customers. A predecessor to SuiteSolution called WRITE2K was implemented in the Wireless
Services Sector in November 1999. There have been no revenues recognized from
SuiteSolution in HickoryTechs consolidated financial statements from
unaffiliated customers.Operating income increased $433,000
or 335.7% in the three months ended March 31, 2001 as compared to the same
period in 2000. The increase in operating
income was attributable to operating expense controls as well as an increase in
the capitalization of software development costs related to the development of
SuiteSolution.ENTERPRISE
SOLUTIONS  Operating revenues for the three months ended March 31, 2001
increased $879,000 or 20.5% compared with the same period in 2000. The primary
reason for the increase in operating revenues was a 36.1% increase in sales and
installations of PBX and small business systems in the first three months of
2001 compared to the same period of 2000.Operating
income increased $529,000 to $367,000 for the three months ended March 31, 2001
compared to a loss of $162,000 for the three months ended March 31, 2000. The
increase in operating income was attributable to the increase in operating
revenues, along with an increase in the proportion of more profitable
installation contracts.LIQUIDITY AND CAPITAL RESOURCESCAPITAL
STRUCTURE  The total long-term capital structure (long-term debt plus
shareholders equity) for HickoryTech was $230,331,000 at March 31, 2001,
reflecting 34.0% equity and 66.0% debt. This compares to a capital structure of
$224,790,000 at December 31, 2000, reflecting 34.4% equity and 65.6% debt.
Management believes adequate internal and external resources are available to
finance ongoing operating requirements, including capital expenditures,
business development, debt service and the payment of dividends for at least
the next twelve months.CASH FLOWS Cash provided by operations was $3,683,000 for the
three-month period ended March 31, 2001 compared to $1,544,000 for the three-month
period ended March 31, 2000.  Cash flows
from operations for the three months ended March 31, 2001 and 2000 were
primarily attributable to net income plus non-cash expenses for depreciation
and amortization and a decrease in receivables, partially offset by decreases
in accounts payable related to timing of payments.Cash
flows used in investing activities were $7,197,000 for the three months ended
March 31, 2001 compared to $2,638,000 for the same period in 2000. Capital
expenditures relating to ongoing businesses were $5,400,000 during the first
three months of 2001 as compared to $2,397,000 for the same period in 2000.
Capital expenditures were incurred primarily to construct additional network
facilities to provide CLEC services. Also included in cash flows used in
investing activities for the three months ended March 31, 2001 were additions
to capitalized software development costs for the Information Solutions
Sectors SuiteSolution billing product of $1,513,000, compared to $190,000 for
the same period in 2000.Cash
flows provided by financing activities was $3,238,000 for the three-month
period ended March 31, 2001 compared to $943,000 for the three-month period
ended March 31, 2000.  Included in cash
flows from financing activities are debt borrowings, debt repayments, and
dividend payments. During the first three months of 2001, HickoryTech borrowed
$5,000,000 under its revolving credit facility to cover cash requirements,
primarily for capital expenditures. During the first three months of 2000,
HickoryTech borrowed $6,000,000 under the revolving credit facility, primarily
for capital expenditures and to fund operations. Dividend payments for the
first three months of 2001 were $1,527,000 compared to $1,518,000 for the same
period in 2000.WORKING
CAPITAL  Working capital was $11,005,000 as of March 31, 2001, compared to
working capital of $8,882,000 as of December 31, 2000. The increase is
primarily due to the decrease in accounts payable.  The ratio of current assets to current liabilities was 1.8:1.0 as
of March 31, 2001 and 1.5:1.0 as of December 31, 2000.LONG-TERM
DEBT - HickoryTechs long-term debt as of March 31, 2001 was $152,128,000.
In September 2000, HickoryTech obtained a $225,000,000 credit facility with a
syndicate of banks.  The credit facility
is comprised of a $125,000,000 revolving credit facility and a $100,000,000
term loan facility.  The available line
of credit on the $125,000,000 revolving credit facility decreases in increments
beginning in March 2004 with a final maturity date in September 2008.  The term loan requires equal quarterly
principal payments of $250,000 during the period March 2001 to December 2008,
and $23,000,000 of principal payments per quarter in 2009.  The weighted average interest rate associated
with this credit facility varies with LIBOR and certain other rates and was
8.02% at March 31, 2001.  The
$100,000,000 term loan component has a provision whereby HickoryTech
periodically receives patronage capital refunds depending on the amount of interest
paid. As of March 31, 2001, HickoryTech had drawn $152,750,000 on this credit
facility and had $72,250,000 of available credit.OTHER-HickoryTech has not conducted a public
equity offering. It operates with original equity capital, retained earnings
and recent additions to indebtedness in the form of bank term and revolving
lines of credit. HickoryTech believes its current level of debt to total
capital is acceptable for ongoing operations, including the recently announced
PCS license acquisition.Cash provided by operations and access to new debt
continue to be HickoryTechs primary sources of funds. HickoryTechs financial
strength continues to be supported by its current ratio (1.8 to 1), cash flows
generated by operations, and borrowings under the credit facility described
above.HickoryTech
primarily uses variable interest rate financial instruments as of March 31,
2001. HickoryTech continually monitors the interest rates on its bank loans. A
higher level of interest expense is likely to occur because of expanded use of
the credit facility for additional capital expenditures in the Communications
Services Sector.On
July 21, 2000, HickoryTech announced plans to sell its local telephone exchange
in Amana, Iowa. This sale is anticipated to occur in the second quarter of
2001. Refer to Note 5 for further discussion of this disposition.On April 26, 2001, HickoryTech announced that it had
signed a definitive agreement to purchase two digital personal communications
services (PCS) licenses from McLeodUSA Incorporated for $11,100,000 in
cash.  Refer to Note 7 for further
discussion of this acquisition.

ITEM 3. QUANTATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISKHickoryTech does not have operations subject to risks of
foreign currency fluctuations, nor does HickoryTech use derivative financial
instruments in its operations or investment portfolio. HickoryTechs earnings
are affected by changes in interest rates as a portion of its long-term debt
has variable interest rates based on LIBOR. If interest rates for the portion
of HickoryTechs long-term debt based on variable rates had averaged 10% more
for the entire quarter ended March 31, 2001, HickoryTechs interest expense
would have increased $317,000 for the three months ended March 31, 2001. In
case of a change of such magnitude, management would likely act to mitigate its
exposure to the change.

PART II. OTHER
INFORMATIONItem 1.
  Legal Proceedings.NoneItem 2.
  Changes in Securities.NoneItem 3.
  Default Upon Senior Securities.None.Item 4.
  Submission of Matters to a Vote of Security Holders.NoneItem 5.
  Other Information.NoneItem 6.
  Exhibits and Reports of Form 8-K.(a)
  ExhibitsNone(b)
  No reports on Form 8-K were filed during the quarter
  ended March 31, 2001.SIGNATURESPursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.Dated:
  May 9, 2001
  HICKORY TECH CORPORATIONBy:
  /s/ Robert D. Alton, Jr.Robert D. Alton, Jr., Chief Executive OfficerBy:
  /s/ David A. ChristensenDavid A. Christensen, Chief Financial Officer.