NuVox Scores $78.5MNuVox Scores $78.5M

ST. LOUIS -- NuVox Communications, a rapidly growing, facilities-based broadband services provider, announced today that it has raised $78.5 million of additional capital to finance its operations. A total of $66 million of additional equity funding was provided by existing investors including private equity funds associated with Goldman Sachs & Co., JP Morgan Partners, Whitney & Co., Meritage Private Equity Fund, Richland Ventures, BancAmerica Capital Investors, Centennial Funds, Norwest Equity Partners, Boston Millenia Partners and Flagship Ventures. General Electric Capital Corporation and CIT Lending Services Corporation provided $12.5 million of additional debt financing. "The continuing prolonged downturn in private and public equity markets and challenging operating environment for emerging telecommunications companies has forced many companies in our industry into bankruptcy," said David L. Solomon, Chairman and Chief Executive Officer of NuVox. "In this environment, it is a strong endorsement of our business strategy, management team and committed employees that we have been able to attract this meaningful amount of additional capital to fund NuVox's continued development." The additional equity and debt financing is part of NuVox's revised financial plan under which approximately $160.5 million of obligations under its previous credit facility have been repaid with cash payments totaling approximately $23.2 million and the issuance of shares of NuVox convertible preferred stock representing 8.24% of total equity. NuVox also adopted revisions to its business plan that include reductions in operating and capital costs and a decrease in the amount of cash that NuVox estimates will be required to fund its operations to positive free cash flow. In a separate release: NuVox Communications, a rapidly growing, facilities-based broadband services provider, announced today continuing improvement in operating and financial results for the quarter ended June 30, 2002. NuVox reported second quarter 2002 revenues of $33.8 million, a 77 percent increase over the second quarter of 2001 and a 12 percent sequential increase over the first quarter of 2002. Revenues attributable to core broadband products grew 120 percent to $29.3 million from $13.3 million during the second quarter of 2001 and 18 percent above the $24.9 million in the first quarter of 2002. Core broadband revenues include revenues from NuVox's Broadband Bundle, an integrated local, long distance, and high-speed Internet access product, and its broadband data communications services. On-net access lines installed during the second quarter of 2002 increased 9.3 percent to 34,204 lines from 31,305 lines in the same period of 2001 and 9.9 percent from 31,115 lines installed in the first quarter of 2002. On-net access lines in service increased 140 percent from 84,004 lines at June 30, 2001 and 19 percent from 169,273 lines at March 31, 2002 to 201,355 lines at June 30, 2002. Total gross margins for the quarter improved to 42 percent verses 39 percent in the first quarter of 2002 and 18 percent in the second quarter of 2001. NuVox's selling, general and administrative (SG&A) expenses, which were relatively constant in all three periods, were 77 percent of revenues in Q2'02 versus 82 percent in Q1'02 and 135 percent in Q2'01. EBITDA losses declined from 116 percent of revenues in Q2'01 and 43 percent of revenues in Q1'02 to 36 percent of revenues in Q2'02. NuVox's second quarter net loss was $36.0 million, a 20 percent improvement over Q2'01. "We continue to be encouraged by the improving results we have been able to achieve each quarter despite the challenging economic and operating environment confronting emerging telecommunications companies," said David L. Solomon, Chairman and Chief Executive Officer of NuVox. "These results demonstrate the attractiveness of our product offerings to business customers and the continuing dedication of the entire NuVox team to providing high quality responsive customer service. We remain committed to continuously improving our results to achieve our goals of becoming EBITDA positive by the fourth quarter of this year and attaining positive free cash flow before the end of 2003." NuVox Communications