ATX Communications, Inc. Announces Financial Results for the Quarter Ended September 30, 2003.

Business Editors

BALA CYNWYD, Pa.--(BUSINESS WIRE)--Nov. 19, 2003

ATX Communications, Inc. ("ATX" or the "Company") (OTCBB:COMM), which, through its subsidiaries, is an integrated communications provider, today announced its consolidated operating results for the quarter ended September 30, 2003.

OPERATING HIGHLIGHTS

Subscriber data

ATX had the following subscribers as of September 30, 2003:

----------------------------------------------------------
Business Local Access Lines                   248,800
----------------------------------------------------------
Residential Local Access Lines                 42,800
----------------------------------------------------------
Toll-related Access Line Equivalents          523,000
----------------------------------------------------------
Internet Subscribers                          254,800
----------------------------------------------------------
Other Data Customers (1)                       37,700
----------------------------------------------------------

(1) Other data customers included Point-to-point Data, Frame Relay,
    Web Development, Web Hosting, E-commerce, Co-location, and other
    related customers.

Revenue Breakdown

ATX's revenues for the quarter ended September 30, 2003 were attributable to the following service categories:

                                              Q3 2003
                                          ----------------
Local Exchange Services                        32.7%
Internet, Data and Web-related Services        30.0%
Toll-related Telephony Services                26.2%
Other Revenue(1)                               11.1%
                                          ----------------
     Total                                      100%
                                          ================

(1) Other includes carrier access billing, reciprocal compensation,
    wireless, paging, and information services.

Other Initiatives

ATX has completed numerous operational initiatives, including the establishment of many representative customer relationships and other key advancements, including:

-- Public Financial Management, a leading independent financial

advisory firm with more than 20 offices nationwide, has

continuously been ranked by Securities Data Corporation (SDC)

as one of the nation's leading financial advisors. Recently,

ATX extended its relationship with Public Financial Management

for the fourth consecutive term as the company's

telecommunications provider of choice. ATX will continue to

provide PFM with its ATX CoreConnect(SM) solution for frame

relay, data redundancy, and business continuity, along with

local exchange and inter-exchange carrier services.

-- The Diocese of Pittsburgh, serving six counties in

southwestern Pennsylvania, is utilizing ATX SmartPack(SM) to

consolidate its local exchange and inter-exchange carrier

services.

-- AAA - Ohio, is the Ohio chapter of the nationwide federation

of AAA, serving 870,000 members throughout the state with

travel, insurance, financial and auto-related services. The

Company's Consumer Strategic Alliance Organization has signed

a three-year partnership agreement with AAA - Ohio to provide

Internet and local exchange carrier services to support the

organization's 1,000 employees in 36 offices in Ohio.

-- Lourdes Health Systems, one of South Jersey's premier health

and hospital systems for over 50 years, recently selected ATX

for its voice services. ATX is providing ATX CoreConnect(SM)

PRI at two of Lourdes' facilities and ATX SmartPack(SM) at 15

of its other locations for local exchange and inter-exchange

carrier services to all areas of the system's network.

-- Interstate Gas Supply, one of the largest independent natural

gas suppliers in the Midwestern U.S. with more than 500,000

customers, recently became an ATX customer. ATX is providing

two ATX CoreConnect(SM) PRI circuits for inter-exchange

carrier services at both of Interstate's Columbus, OH

locations. Also ATX is supplying the company with a high

bandwidth (T1) dedicated Internet connection and 12 ATX

SmartPack(SM) lines to integrated inter-exchange and local

exchange carrier services.

-- Monstermoving, a marketing extension of Monster.com offering

online access to moving-related services and relocation tools,

has expanded its successful local exchange carrier services

Partner Program with the Company's Commercial Strategic

Alliance Organization to include the offering of Internet

access services nationwide to Monstermoving members.

-- Frankford Hospitals, an ATX customer since 1999, is

celebrating 100 years of serving the health care needs of the

Northeast Philadelphia community. Frankford Hospitals is now

integrating its local exchange and inter-exchange carrier

services with the Company's CoreConnect(SM) Preferred solution

at five locations in Philadelphia and CoreConnect(SM) PRI at a

sixth location.

-- Freehold Borough Schools, headquartered in Freehold, NJ, has

been an ATX customer for over two years. ATX is now providing

web development and web hosting services for the Borough,

recently building a content management application for the web

site which allows members of Freehold's different schools to

login and update school calendars and the principals'

newsletters without any programming knowledge required.

-- Access Worldwide, a leading marketing company that provides a

variety of sales, education, and communication services to the

pharmaceutical, manufacturing, telecommunication, insurance,

financial, and consumer industries, has been an ATX customer

since 2001. ATX is now consolidating Access' local exchange

and inter-exchange carrier services with its ATX

CoreConnect(SM) integrated solution delivered over ten

dedicated T1 facilities at the customer's Arlington, VA

location and two additional T1s at the Hyattesville, MD

location.

-- Technology Portals, one of the leading developers of touch

screen information kiosks found in welcome centers, convention

centers and visitor's bureaus nationwide, recently enhanced

its relationship with ATX. Technology Portals has connected 27

remote kiosks to the host location in Havertown, PA through an

ATX frame relay solution, providing all sites with real time

web access.

-- NJN Publishing, a subsidiary of Newhouse Publishing, is

utilizing ATX CoreConnect(SM) PRI for local exchange and

inter-exchange carrier services for six locations. ATX is also

providing seven Private Lines for data transmissions between

all offices with most terminating back to NJN's main office in

Somerville, NJ. Additionally, ATX is providing the Flemington,

NJ location with a high bandwidth (T1) connection for Internet

service.

-- Susquehanna University, an undergraduate university located in

the Susquehanna Valley of Central Pennsylvania, is utilizing

ATX inter-exchange carrier services. University staff members

are also utilizing ATX calling card services for remote

business calling while traveling.

OTHER DEVELOPMENTS

Announcement of Hiring of Credit Suisse First Boston

On July 2, 2003, ATX announced that it had engaged Credit Suisse First Boston LLC as an advisor in connection with the Company's ongoing review of the Company's strategic alternatives. As indicated in the Company's quarterly report filed on Form 10-Q, the Company is in the process of seeking and considering strategic alternatives in order to reduce its overall indebtedness, including amounts under the senior secured credit facility. Such strategic alternatives may include, among other things, debt or equity financings or refinancings, recapitalizations, restructurings, mergers and acquisitions, other transactions or bankruptcy. It is likely that any of such transactions, if implemented, would result in material dilution to our stockholders or possibly the elimination of any recovery to common stockholders.

                           FINANCIAL RESULTS
                       ATX Communications, Inc.
                 Consolidated Statement of Operations
                              (Unaudited)

                                      Three Months Ended September 30,
                                            2003            2002
                                      --------------------------------

Revenues                                  $68,632,000     $73,422,000

Costs and expenses
Operating                                  46,546,000      47,927,000
Selling, general and administrative        22,355,000      18,512,000
                                      --------------------------------
  EBITDA before corporate                    (269,000)      6,983,000

Corporate                                   1,528,000       1,930,000
Recapitalization costs                             --         373,000
Other costs                                   127,000              --
Depreciation                                3,941,000       8,895,000
Amortization                                       --          84,000
                                      --------------------------------
                                           74,497,000      77,721,000
                                      --------------------------------
Operating loss                             (5,865,000)     (4,299,000)

Other income (expense)
Interest income and other, net                (78,000)        115,000
Interest expense                           (5,758,000)     (4,503,000)
                                      --------------------------------
Loss before income taxes                  (11,701,000)     (8,687,000)
Income tax benefit                                 --          92,000
                                      --------------------------------
Net loss                                 $(11,701,000)    $(8,595,000)
                                      ================================

Basic and diluted net loss per share           $(0.39)         $(0.29)
                                      ================================

Weighted average number of shares          29,963,000      29,667,000
                                      ================================

(1) EBITDA (as defined) is a non-GAAP financial measure that is
    provided because it is commonly used in the communications
    industry to measure operating performance. EBITDA (as defined by
    the Company) is defined as net loss before income taxes, interest
    expense, interest income, depreciation and amortization, other
    costs, recapitalization costs, and corporate expense (where
    indicated). The Company believes that EBITDA (as defined) is
    useful because it illustrates the Company's operating income
    before various non-cash charges, expenses related to non-recurring
    or reorganization events, and expenses for activities that are
    corporate in nature and, therefore, are not directly related to
    the operations of the Company's subsidiaries. EBITDA (as defined)
    should not be construed as an alternative to operating income or
    cash flows from operating activities, both of which are determined
    in accordance with generally accepted accounting principles, or as
    a measure of liquidity. Because it is not calculated under
    generally accepted accounting principles, the Company's EBITDA (as
    defined) may not be comparable to similarly titled measures used
    by other companies. Please refer to the Company's annual and
    quarterly reports filed on Forms 10-K and 10-Q, respectively, with
    the Securities and Exchange Commission for additional information
    concerning the Company's results of operations, cash flows and
    liquidity.

DISCUSSION OF OPERATING RESULTS

Three Months Ended September 30, 2003 and 2002

The decrease in revenues to $68,632,000 from $73,422,000 is attributable to a decrease in other revenue, local exchange services and Internet access services revenue partially offset by an increase in toll-related telephony services revenue.

Operating costs include direct cost of sales, network costs and salaries and related expenses of network personnel. Operating costs decreased to $46,546,000 from $47,927,000 due to a decrease in our revenues.

Selling, general and administrative expenses increased to $22,355,000 from $18,512,000 due to increased payroll costs and professional fees and an increase in our allowance for doubtful accounts relating to charges to a company that filed for protection under bankruptcy.

Corporate expenses include the costs of some of our officers and corporate staff, the costs of operating the corporate office and costs incurred for strategic planning and evaluation of business opportunities. Corporate expenses decreased to $1,528,000 from $1,930,000 due to decreases in payroll partially offset by increased costs incurred for strategic planning and other corporate activities.

During the three months ended September 30, 2002, we incurred additional costs of $373,000 in connection with our recapitalization, which consisted primarily of employee incentives, legal fees, accounting fees and printing fees.

During the three months ended September 30, 2003, we incurred other costs of $127,000, which consisted of charges related to the termination of a facility lease obligation of $1,584,000 net of gains totaling $1,457,000 related to the collection of notes receivable and the settlement of certain legal matters.

Depreciation expense decreased to $3,941,000 from $8,895,000 primarily as a result of the reduction in the carrying value of our fixed assets during the fourth quarter of 2002 as determined by fair value analysis performed in accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets."

Amortization expense, other than amortization associated with deferred financing costs, has been eliminated in 2003 due to the reduction in the carrying value of our intangible assets to zero as determined by a fair value analysis performed on October 1, 2002 in accordance with SFAS No. 144.

Interest expense and other increased to $5,758,000 from $4,503,000 primarily due to the effect of an increase in the effective interest rate on our senior secured credit facility. The effective interest rate on our senior secured credit facility during the three months ended September 30, 2003 and 2002 was 9.50% and 6.75%, respectively.

The income tax benefit of $92,000 during 2002 is from state and local income tax refunds.

About ATX

Tracking its roots back to 1985, ATX Communications, Inc. is a holding company which, through various wholly-owned subsidiaries, is a facilities-based integrated communications provider offering local exchange carrier and inter-exchange carrier telephone, Internet, e-business, high-speed data, and wireless services to business and residential customers in targeted markets throughout the Mid-Atlantic and Midwest regions of the United States. Through its various subsidiaries, ATX currently serves more than 300,000 business and residential customers. For more information about ATX, please visit www.atx.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 - Certain statements contained herein constitute "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995. When used herein, the words, "believe," "anticipate," "plan," "will," "expects," "projects," "positioned," "strategy," "targeted" and similar expressions identify such forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from those contemplated, projected, forecasted, estimated or budgeted, whether expressed or implied, by such forward-looking statements. Such factors include, without limitation, the following: the ability of the Company to obtain trade credit and shipments and terms with vendors and service providers for current orders; the Company's ability to maintain contracts that are critical to its operations; the ability to remain in compliance with all required ratios and covenants contained in agreements governing its outstanding indebtedness; the Company's ability to identify or implement one or more strategic alternatives to reduce the Company's indebtedness; the ability of the Company to generate sufficient cash to fund its interest and principal payments when such payments become due; potential adverse developments with respect to the Company's liquidity or results of operations; the ability to fund and execute its business plan; the ability of the Company to avoid bankruptcy; the ability of the Company to continue as a going concern; potential adverse developments resulting from litigation; the ability to attract, retain and compensate key executives and associates; the ability of the Company to attract and retain customers; general economic and business conditions; technological developments; the Company's ability to continue to design networks, install facilities, obtain and maintain any required governmental licenses or approvals and finance construction and development, all in a timely manner at reasonable costs and on satisfactory terms and conditions; assumptions about customer acceptance, churn rates, overall market penetration and competition from providers of alternative services; the impact of restructuring and integration actions; the impact of new business opportunities requiring significant up-front investment; interest rate fluctuations and availability, terms and deployment of capital. The Company assumes no obligation to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting such statements.

For further information, please contact Winston Black, Director - Corporate Development at 212-509-4166.