SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549
                             -----------------------
                                    FORM 10-Q

(MARK  ONE)

[X]          QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR  15(D)  OF  THE
             SECURITIES  EXCHANGE  ACT  OF  1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003

                                       OR

[ ]          TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(D)  OF  THE
             SECURITIES  EXCHANGE  ACT  OF  1934

                     FOR THE TRANSITION PERIOD FROM     TO
                                                    ---    ---

                        COMMISSION FILE NUMBER 0 - 26728

                           TALK AMERICA HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)

       DELAWARE                                        23-2827736
(State of incorporation)                   (I.R.S. Employer Identification No.)


12020  SUNRISE  VALLEY  DRIVE,  SUITE  250,  RESTON,  VIRGINIA          20191
(Address of principal executive offices)                              (Zip Code)

                                 (703) 391-7500
              (Registrant's telephone number, including area code)

     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.

                                 Yes   X  No
                                     ----    ----

     Indicate by check mark whether the registrant is an accelerated filer (as
                       defined in Rule 12b-2 of the Act).

                                 Yes   X  No
                                     ----    ----

     Indicate  the  number of shares outstanding of each of the issuer's classes
of  common  stock,  as  of  the  latest  practicable  date.

     26,177,651  shares  of  Common  Stock,  par  value of $0.01 per share, were
issued  and  outstanding  as  of  May  9,  2003.

<PAGE>

                  TALK AMERICA HOLDINGS, INC. AND SUBSIDIARIES


                                      INDEX

                                                                        PAGE
                                                                        ----

PART I - FINANCIAL INFORMATION:

Item 1. Consolidated Financial Statements:

    Consolidated Statements of Operations - Three Months
    Ended March 31, 2003 and 2002 (unaudited)                            3

    Consolidated Balance Sheets - March 31, 2003 (unaudited)
    and December 31, 2002                                                4

    Consolidated Statements of Stockholders' Equity - Three
    Months Ended March 31, 2003 (unaudited)                              5

    Consolidated Statements of Cash Flows - Three Months Ended
    March 31, 2003 and 2002 (unaudited)                                  6

    Notes to Consolidated Financial Statements (unaudited)               7

Item 2. Management's Discussion and Analysis of Financial Condition
    and Results of Operations                                           12

Item 3. Quantitative and Qualitative Disclosure About Market Risk       20

Item 4. Controls and Procedures                                         21

PART II  - OTHER INFORMATION:

Item 6.  Exhibits and Reports on Form 8-K

    (a)  Exhibits                                                       22
    (b)  Reports on Form 8-K                                            22

                                        2
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM  1.  CONSOLIDATED  FINANCIAL  STATEMENTS

<TABLE>
<CAPTION>

               TALK  AMERICA  HOLDINGS,  INC.  AND  SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
                                   (UNAUDITED)

                                                         THREE MONTHS ENDED
                                                              MARCH 31,
                                                      ----------------------
                                                        2003         2002
                                                      ---------   ----------
<S>                                                     <C>          <C>
Sales                                                 $ 87,843    $ 79,447

Costs and expenses:
   Network and line costs                               43,884      40,219
   General and administrative expenses                  13,465      14,561
   Provision for doubtful accounts                       2,223       4,007
   Sales and marketing expenses                          8,785       5,895
   Depreciation and amortization                         4,307       4,443
                                                      ---------   ----------
      Total costs and expenses                          72,664      69,125
                                                      ---------   ----------

Operating income                                        15,179      10,322

Other income (expense):
   Interest income                                         110          89
   Interest expense                                     (2,479)     (1,474)
   Other income (expense), net                           2,151        (807)
                                                      ---------   ----------
Income before provision for income taxes                14,961       8,130
Provision for income taxes                               5,835          --
                                                      ---------   ----------
Net income                                            $  9,126    $  8,130
                                                      =========   ==========


Income per share - Basic:
   Net income per share                               $   0.35    $   0.30
                                                      =========   ==========
   Weighted average common shares outstanding           26,376      27,185
                                                      =========   ==========

Income per share - Diluted:
   Net income per share                               $   0.32    $   0.28
                                                      =========   ==========

   Weighted average common and common equivalent
      shares outstanding                                29,940      29,460
                                                      =========   ==========


          See accompanying notes to consolidated financial statements.

</TABLE>

                                        3
<PAGE>

<TABLE>
<CAPTION>

                     TALK AMERICA HOLDINGS, INC. AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
                 (IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)
                                     (UNAUDITED)

                                                                                        MARCH 31,     DECEMBER 31,
                                                                                          2003           2002
                                                                                     -------------    ------------
<S>                                                                                      <C>             <C>
ASSETS
Current assets:
   Cash and cash equivalents                                                          $   29,046       $   33,588
      Accounts receivable, trade (net of allowance for uncollectible accounts of
      7,349 and $7,821 at March 31, 2003 and December 31, 2002, respectively)             30,963           27,843
   Deferred income taxes                                                                  16,765           17,500
   Prepaid expenses and other current assets                                               1,810            2,330
                                                                                     -------------     -----------
         Total current assets                                                             78,584           81,261

Property and equipment, net                                                               66,277           66,915
Goodwill                                                                                  19,503           19,503
Intangibles, net                                                                           6,667            7,379
Deferred income taxes                                                                         --            4,800
Other assets                                                                               7,020            7,653
                                                                                     -------------     -----------
                                                                                      $  178,051       $  187,511
                                                                                     =============     ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                                   $   33,332       $   30,588
   Sales, use and excise taxes                                                            11,772           11,439
   Deferred revenue                                                                        7,634            6,480
   Current portion of long-term debt                                                          62               61
   Accrued compensation                                                                    3,358            5,609
   Other current liabilities                                                               6,464            9,013
                                                                                     -------------     -----------
         Total current liabilities                                                        62,622           63,190
                                                                                     -------------     -----------

Long-term debt:
   8% Secured convertible notes due 2006                                                  26,552           30,150
   12% Senior subordinated notes due 2007                                                 56,620           65,970
   8% Convertible senior subordinated notes due 2007 (includes future accrued
      interest of $1,151 and $1,216 at March 31, 2003 and December 31, 2002,
      respectively)                                                                        3,973            4,038
   5% Convertible subordinated notes due 2004                                                670              670
   Other long-term debt                                                                       11               27
                                                                                     -------------     -----------
         Total long-term debt                                                             87,826          100,855
                                                                                     -------------     -----------

Commitments and contingencies

Stockholders' equity:
   Preferred stock - $.01 par value, 5,000,000 shares authorized; no shares
      outstanding                                                                             --               --
   Common stock - $.01 par value, 100,000,000 shares authorized;
      26,161,437 and 27,469,593 shares issued and outstanding at March 31, 2003
      and December 31, 2002, respectively                                                     275             275
   Treasury stock - $.01 par value, 1,315,789 shares at March 31, 2003                     (5,000)             --
   Additional paid-in capital                                                             352,003         351,992
   Accumulated deficit                                                                   (319,675)       (328,801)
                                                                                       -----------    ------------
         Total stockholders' equity                                                        27,603          23,466
                                                                                       -----------    ------------
                                                                                        $ 178,051      $  187,511
                                                                                       ===========    ============

               See  accompanying  notes  to  consolidated  financial  statements.

</TABLE>

                                        4
<PAGE>

<TABLE>
<CAPTION>

                           TALK  AMERICA  HOLDINGS,  INC.  AND  SUBSIDIARIES
                          CONSOLIDATED  STATEMENTS  OF  STOCKHOLDERS'  EQUITY
                                           (IN  THOUSANDS)
                                             (UNAUDITED)

                                     COMMON STOCK        ADDITIONAL                      TREASURY STOCK
                                  -------------------     PAID-IN       ACCUMULATED     -----------------
                                   SHARES     AMOUNT      CAPITAL         DEFICIT       SHARES    AMOUNT      TOTAL
                                  -------    --------    ----------     -----------     ------   --------   --------
<S>                               <C>          <C>          <C>             <C>          <C>        <C>       <C>
Balance, December 31, 2002         27,470      $ 275      $ 351,992     $ (328,801)         --   $    --    $23,466

Net income                             --         --             --          9,126          --        --      9,126
Acquisition of treasury stock          --         --             --             --       1,316    (5,000)    (5,000)
Exercise of common stock
   options                              7         --             11             --          --        --         11
                                  -------    --------    ----------     -----------     ------   --------   --------
Balance, March 31, 2003            27,477      $ 275      $ 352,003     $ (319,675)      1,316   $(5,000)   $27,603
                                  =======    ========    ==========     ===========     ======   ========   ========

</TABLE>

                                        5
<PAGE>

<TABLE>
<CAPTION>

                   TALK  AMERICA  HOLDINGS,  INC.  AND  SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (IN THOUSANDS)
                                      (UNAUDITED)

                                                                  THREE MONTHS ENDED
                                                                       MARCH 31,
                                                                ----------------------
                                                                   2003        2002
                                                                ---------   ----------
<S>                                                                <C>          <C>
Cash flows from operating activities:
   Net income                                                   $  9,126     $  8,130
Reconciliation of net income to net cash provided by (used in)
   operating activities:
   Provision for doubtful accounts                                 2,223        4,007
   Depreciation and amortization                                   4,307        4,443
   Loss on sale and retirement of assets                              --          205
   Deferred income taxes                                           5,535           --
   Other non-cash charges (benefits)                              (2,219)          84
   Changes in assets and liabilities:
      Accounts receivable, trade                                  (5,343)        (582)
      Prepaid expenses and other current assets                      435          192
      Other assets                                                 1,114          120
      Accounts payable and accrued expenses                          494      (10,349)
      Deferred revenue                                             1,154       (1,655)
      Sales, use and excise taxes                                    332         (710)
      Other liabilities                                           (2,550)         682
                                                                ---------   ----------
         Net cash provided by operating activities                14,608        4,567
                                                                ---------   ----------

Cash flows from investing activities:
   Capital expenditures                                           (2,691)        (167)
   Capitalized software development costs                           (663)        (570)
   Acquisition of intangibles                                         --          (50)
                                                                ---------   ----------
         Net cash used in investing activities                    (3,354)        (787)
                                                                ---------   ----------

Cash flows from financing activities:
   Payments of borrowings                                             --       (1,336)
   Acquisition of convertible debt and senior notes              (10,793)      (1,227)
   Payment of capital lease obligations                              (16)        (422)
   Proceeds from exercise of stock options and warrants               12           --
   Repurchase of common stock                                     (5,000)          --
                                                                ---------   ----------
         Net cash used in financing activities                   (15,797)      (2,985)
                                                                ---------   ----------

Net increase (decrease) in cash and cash equivalents              (4,543)         795
Cash and cash equivalents, beginning of period                    33,589       22,100
                                                                ---------   ----------
Cash and cash equivalents, end of period                        $ 29,046      $ 22,895
                                                                =========   ==========

          See accompanying notes to consolidated financial statements.

</TABLE>

                                        6
<PAGE>

                  TALK AMERICA HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE  1.  ACCOUNTING  POLICIES

(A)  BASIS  OF  FINANCIAL  STATEMENTS  PRESENTATION

     The  consolidated financial statements include the accounts of Talk America
Holdings,  Inc. and its wholly owned subsidiaries (collectively, the "Company").
All  intercompany  balances  and  transactions  have  been  eliminated.

     The consolidated financial statements and related notes thereto as of March
31,  2003  and  for the three months ended March 31, 2003 and March 31, 2002 are
presented as unaudited, but in the opinion of management include all adjustments
necessary to present fairly the information set forth therein.  The consolidated
balance  sheet  information  for  December 31, 2002 was derived from the audited
financial  statements  included  in the Company's Annual Report on Form 10-K for
the  year ended December 31, 2002 filed March 31, 2003.  These interim financial
statements  should  be  read  in conjunction with the Company's Annual Report on
Form  10-K  for  the  year  ended December 31, 2002. The interim results are not
necessarily  indicative  of  the  results for any future periods.  Certain prior
year  amounts  have  been  reclassified  for  comparative  purposes.

(B)  RISKS  AND  UNCERTAINTIES

     Future  results  of operations involve a number of risks and uncertainties.
Factors  that  could  affect  future operating results and cash flows, and cause
actual  results  to vary materially from historical results include, but are not
limited  to:

     -    Failure  or  difficulties  in  managing  the  Company's  operations,
          including  attracting  and  retaining  qualified  personnel
     -    Dependence on the availability and functionality of RBOCs' networks as
          they  relate  to  the  unbundled  network  element  platform
     -    Increased  price  competition  in local and long distance services and
          overall  competition  within  the  telecommunications  industry
     -    Interruption  or  failure  of,  or  failure  to  manage, the Company's
          network  and  technology  and  information  systems
     -    Changes  in  government  policy, regulation and enforcement or adverse
          judicial  or administrative interpretations and rulings or legislative
          action  relating  to  regulations  and enforcement, including, but not
          limited  to,  changes  that  affect  the continued availability of the
          unbundled  network  element  platform  of  the local exchange carriers
          network.
     -    Failure  of  the  marketing  of the Company's bundle of local and long
          distance  services
     -    Inability  to  adapt  to  technological  change
     -    Failure  to  manage the nonpayment of amounts due the Company from its
          customers  from  bundled  and  long  distance  services
     -    Attrition  in  the  number  of  end  users
     -    Failure  of  the  Company  to be able to expand its active offering of
          local  bundled  services  in  a  greater  number  of  states
     -    Adverse  determinations  in  certain  litigation  matters
     -    Failure  of  the  Company  to  provide  adequate  customer  service

     Negative  developments  in  these areas could have a material effect on the
Company's  business,  financial  condition  and  results  of  operations.

                                        7
<PAGE>

(C)  NEW  ACCOUNTING  PRONOUNCEMENTS

     In  November 2002, the Financial Accounting Standards Board ("FASB") issued
FASB  Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements
for  Guarantees,  Including Indirect Guarantees of Indebtedness of Others" ("FIN
45"), an interpretation of FASB Statement No. 5, "Accounting for Contingencies."
This  interpretation  elaborates on the disclosures to be made by a guarantor in
its  interim and annual financial statements about its obligations under certain
guarantees that it has issued. It also clarifies that a guarantor is required to
recognize,  at  the  inception  of  certain guarantees, a liability for the fair
value  of  the  obligation  undertaken  in  issuing  the  guarantees.  This
interpretation  is  effective  on  a  prospective basis for guarantees issued or
modified  after  December  31,  2002  and for financial statements of interim or
annual  periods  ending  after  December  15, 2002. The Company historically has
been, and currently is, party to various agreements that obligate the Company to
indemnify  other  parties  in  certain  situations,  primarily for litigation or
regulatory  claims arising from activities conducted pursuant to the agreements.
These  agreements  generally  include,  but  are not limited to, agreements with
other  carriers,  marketing  agreements, licensing agreements, lease agreements,
underwriting agreements and employment related agreements.  The adoption of this
standard  did not have a material impact on the Company's consolidated financial
statements  for  the  three  months  ended  March  31,  2003.

NOTE  2.  DEBT

(A)  12%  SENIOR  SUBORDINATED  NOTES  DUE  2007  AND  8%  CONVERTIBLE  SENIOR
     SUBORDINATED  NOTES  DUE  2007

     Effective  April  4,  2002,  the  Company  completed  the exchange of $57.9
million  of  the  $61.8  million  outstanding  principal  balance  of its 4-1/2%
Convertible  Subordinated  Notes  due  September  15,  2002 ("4-1/2% Convertible
Subordinated Notes") into $53.2 million of new 12% Senior Subordinated PIK Notes
due  August  2007  ("12%  Senior Subordinated Notes") and $2.8 million of new 8%
Convertible  Senior  Subordinated  Notes due August 2007 ("8% Convertible Senior
Subordinated  Notes")  and  cash  paid of $0.5 million. In addition, the Company
exchanged  $17.4  million  of the $18.1 million outstanding principal balance of
its 5% Convertible Subordinated Notes ("5% Convertible Subordinated Notes") that
mature  on  December  15,  2004  into  $17.4  million  of  the  new  12%  Senior
Subordinated  Notes.

     The  new 12% Senior Subordinated Notes accrue interest at a rate of 12% per
year on the principal amount, payable semiannually on February 15 and August 15,
beginning  on  August  15,  2002.  Interest  is payable in cash, except that the
Company  may,  at  its  option,  pay  up to one-third of the interest due on any
interest payment date through and including the August 15, 2004 interest payment
date  in additional 12% Senior Subordinated Notes. The new 8% Convertible Senior
Subordinated  Notes  accrue  interest  at a rate of 8% per year on the principal
amount,  also  payable  semiannually  on  February  15  and  August  15, and are
convertible, at the option of the holder, into common stock at $15.00 per share.
The  12%  Senior Subordinated Notes and 8% Convertible Senior Subordinated Notes
are  redeemable  at  any  time  at  the  option of the Company at par value plus
accrued  interest  to  the  redemption  date.  The  AOL  Restructuring Agreement
discussed  below  obligates  the  Company to redeem 8% Secured Convertible Notes
upon the redemption of subordinated debt.  As of March 31, 2003, the Company had
$56.6  and  $2.8  million  principal  amount  outstanding  of  the  12%  Senior
Subordinated  Notes  and 8% Convertible Senior Subordinated Notes, respectively.
As  of  March 31, 2002, prior to the exchange, $61.8 million principal amount of
the  4-1/2%  Notes  and  $18.1 million principal amount of the 5% Notes remained
outstanding.

     In  accordance  with  SFAS No. 15, "Accounting by Debtors and Creditors for
Troubled  Debt  Restructurings,"  the  exchange  of  the  4-1/2%  Convertible
Subordinated  Notes  into $53.2 million of the 12% Senior Subordinated Notes and
$2.8  million  of the 8% Convertible Senior Subordinated Notes was accounted for
as  a  troubled  debt  restructuring. Since the total liability of $57.4 million
($57.9  million of principal as of the exchange date, less cash payments of $0.5
million)  is less than the future cash flows to holders of 8% Convertible Senior
Subordinated  Notes  and  12%  Senior  Subordinated  Notes  of  $91.5  million
(representing  the  $56.0  million  of  principal  and  $35.5  million of future
interest  expense), the liability remained on the balance sheet at $57.4 million
as  long-term  debt.  The  difference  of $1.4 million between principal and the
carrying  amount is being recognized as a reduction of interest expense over the
life  of  the  new  notes.

     The  Company  reacquired  $9.4  million  of  12%  Senior Subordinated Notes
during  the  three  months  ended March 31, 2003 at a $2.2 million discount from
face  amount.  This amount, in accordance with Statement of Financial Accounting
Standards  ("SFAS")  No.  145, "Rescission of FASB Statements No. 4, 44, and 64,

                                        8
<PAGE>

Amendment  of  FASB  Statements  No.  13,  and Technical Corrections as of April
2002,"  is reported as other income in the consolidated statement of operations.
There  was no such item in the comparable period.  In the second quarter of 2003
through  May  14,  the  Company has reacquired an additional $4.1 million of 12%
Senior  Subordinated  Notes  at  a  $0.2  million  discount  from  face  amount.

(B)  5%  CONVERTIBLE  SUBORDINATED  NOTES  DUE  2004

     As  of  March  31,  2003,  the  Company  had  $0.7 million principal amount
outstanding of its 5% Convertible Subordinated Notes that mature on December 15,
2004.  Interest  on  these  notes is due and payable semiannually on June 15 and
December  15.  The  notes  are  convertible,  at  the option of the holder, at a
conversion  price of $76.14 per share. The 5% Convertible Subordinated Notes are
redeemable, in whole or in part at the Company's option, at 101.43% of par prior
to  December  14,  2003  and  100.71%  of  par  thereafter.

(C)  8%  SECURED  CONVERTIBLE  NOTES  DUE  2006

     In  September 2001, the Company restructured its financial obligations with
America  Online,  Inc. ("AOL") that arose under the Investment Agreement entered
into  on  January  5,  1999  and,  effective  September 30, 2001, also ended its
marketing  relationship  with  AOL  (collectively  the "AOL Restructuring").  In
connection  with  the  AOL  Restructuring,  the  Company  and AOL entered into a
Restructuring  Agreement  pursuant  to  which  the  Company  issued to AOL $54.0
million  principal  amount  of  its 8% Secured Convertible Notes. The 8% Secured
Convertible  Notes  were  issued  in  exchange  for  a  release of the Company's
reimbursement  obligations  under  the Investment Agreement. AOL, in lieu of any
other  payment  for the early discontinuance of the marketing relationship, paid
the  Company,  at  the time of the AOL Restructuring, $20.0 million by surrender
and cancellation of $20.0 million principal amount of the 8% Secured Convertible
Notes delivered to AOL, thereby reducing the outstanding principal amount of the
8%  Secured  Convertible  Notes  to  $34.0  million.

     The  8%  Secured  Convertible  Notes  are  convertible  into  shares of the
Company's  common  stock  at the rate of $15.00 per share and may be redeemed by
the Company at any time without premium. The 8% Secured Convertible Notes accrue
interest  at  the  rate  of  8%  per  year  on  the  principal  amount,  payable
semiannually  on  January  1  and  July 1.  The 8% Secured Convertible Notes are
guaranteed  by the Company's principal operating subsidiaries and are secured by
a  pledge  of  the Company's and the subsidiaries' assets.  In addition, AOL, as
the  holder  of  the 8% Secured Convertible Notes, entered into an intercreditor
agreement  with the lender under the Company's existing secured credit facility,
which  survives  the  early retirement of debt under the Company's Senior Credit
Facility.

     On  December  23,  2002,  by  letter agreement, the Company and AOL amended
certain  provisions  of  the  Restructuring  Agreement  between  them  (the
"Amendment").  Pursuant  to  the Amendment, the maturity date for the 8% Secured
Convertible  Notes  issued  under  the  Restructuring  Agreement was advanced to
September  19, 2006 (four days later than the first date of mandatory redemption
at  the option of the holder) from 2011, and the Company's right to elect to pay
a  portion  (50%)  of  the  interest on the 8% Secured Convertible Notes in kind
rather  than  in  cash  was  eliminated.

     In  addition,  the  Amendment  provided  that  certain  limitations  on the
Company's purchase of its outstanding subordinated indebtedness ("Sub Debt") and
common  stock  were  amended, to permit the Company, through September 30, 2003,
to:  (i)  repurchase outstanding Sub Debt provided it does not pay more than 80%
of  the  face  amount  and,  for  every  dollar  used to repurchase Sub Debt, it
repurchases  $0.50 of principal amount of 8% Secured Convertible Notes from AOL;
and  (ii)  purchase shares of its common stock, provided it purchases the shares
at or below market value and it concurrently purchases an equal number of shares
of common stock from AOL. The aggregate amount that the Company may utilize with
respect to both the repurchase of Sub Debt and of common stock cannot exceed $10
million.

     As a consequence of the Amendment and the repurchase of $4.1 million of the
8% Secured Convertible Notes in the fourth quarter of 2002, the Company recorded
an  extraordinary non-cash gain of $28.9 million from the decrease in the future
accrued  interest  relating  to  the  8%  Secured  Convertible  Notes  which was
reflected  as  a  $28.9  million  reduction  in  long-term  debt.  As  a further
consequence,  the  Company  began recording the interest expense associated with
the  8%  Secured  Convertible Notes in its consolidated statement of operations.

                                        9
<PAGE>

     In  the  quarter ended March 31, 2003, the Company repurchased $3.6 million
of  the  8%  Secured  Convertible  Notes.  In  addition,  the  Company purchased
1,315,789  of  its  common  shares  from  AOL at a per share price of $3.80, the
average  closing price for the five days ended January 15, 2003. As of March 31,
2003,  the  aggregate amount remaining that the Company may utilize with respect
to  the  repurchase  of  both  Sub  Debt and common stock under the terms of the
Amendment  was  $1.4  million.

     In  the  second  quarter  of  2003,  through May 14, in connection with its
acquisition  of  $4.1 million principal amount of 12% Senior Subordinated Notes,
as  discussed above, the Company has reacquired an additional $4.1 million of 8%
Secured  Convertible  Notes  at par, leaving outstanding $22.5 million principal
amount  of  the  8%  Secured  Convertible  Notes.

NOTE  3.  LEGAL  PROCEEDINGS

     The  Company  is  party  to  a  number  of  legal  actions and proceedings,
including  purported  class  actions,  arising  from the Company's provision and
marketing  of  telecommunications services, as well as certain legal actions and
regulatory  investigations  and  enforcement proceedings arising in the ordinary
course  of  business.  Recently,  the  Company  has been made aware that AOL has
agreed  to  settle a class action case for approximately $10 million; the claims
in  the  case allegedly relate to marketing activities conducted pursuant to the
Telecommunications Marketing Agreement, by and between the Company, Talk America
Inc.  and  AOL,  dated  as  of  February  22,  1997,  as amended (the "Marketing
Agreement").  AOL  has asserted that the Company is required to indemnify AOL in
this  matter under the terms of the Marketing Agreement and advised that it will
seek  such  indemnification from the Company.  The Company believes that it does
not have an obligation to indemnify AOL in this matter and that any claim by AOL
for  this  indemnification  would be without merit.  The Company intends, if AOL
pursues a claim for indemnification under the Marketing Agreement, to defend the
claim  vigorously.  The  Company  believes  that  the  ultimate  outcome  of the
foregoing  actions  will  not  result  in  liability  that would have a material
adverse  effect  on  the Company's financial condition or results of operations.

NOTE  4.  STOCK-BASED  COMPENSATION

     The  following  disclosure  complies  with  the  adoption of  SFAS No. 123,
amended  by  SFAS No. 148, "Accounting for Stock-Based Compensation - Transition
and Disclosure - an amendment of FASB Statement No. 123," and includes pro forma
net  loss  as  if  the  fair  value based method of accounting had been applied:

                                            Three Months Ended March 31,
                                            ----------------------------
                                                2003           2002
                                            ------------    ------------
       Net income as reported                  $9,126          $8,130
       Stock-based employee  compensation
         expense included in reported
         net income                                --              --
       Total stock-based employee
         compensation expense determined
         under fair value based method
         for all options                          206           1,246
                                            ------------    ------------
       Pro forma net income                    $8,920          $6,884
                                            ============    ============


                                            Three Months Ended March 31,
                                            ----------------------------
                                                2003           2002
                                            ------------    ------------
       BASIC  EARNINGS  PER  SHARE:
         As  reported                          $0.35           $0.30
         Pro  forma                            $0.34           $0.25
       DILUTED  EARNINGS  PER  SHARE:
         As  reported                          $0.32           $0.28
         Pro  forma                            $0.31           $0.23


     For  purposes  of  pro forma disclosures under SFAS 123, the estimated fair
value  of  the  options  is assumed to be amortized to expense over the options'
vesting  period. The fair value of the options granted has been estimated at the

                                       10
<PAGE>

various  dates  of  the grants using the Black-Scholes option-pricing model with
the  following  assumptions:

     -    Fair market value based on the Company's closing common stock price on
          the  date  the  option  is  granted;
     -    Risk-free  interest  rate  based  on the weighted averaged 5 year U.S.
          treasury  note  strip  rates;
     -    Volatility  based on the historical stock price over the expected term
          (5  years);
     -    No  expected  dividend  yield  based on future dividend payment plans.


NOTE  5.  PER  SHARE  DATA

     Basic  earnings  per  common  share  for  a  fiscal period is calculated by
dividing  net  income by the weighted average number of common share outstanding
during  the  fiscal  period.  Diluted earnings per common share is calculated by
adjusting  the  weighted average number of common shares outstanding and the net
income  during  the  fiscal period for the assumed conversion of all potentially
dilutive  stock  options,  warrants and convertible bonds (and assuming that the
proceeds hypothetically received from the exercise of dilutive stock options are
used to repurchase shares at the Company's average share price during the fiscal
period).   For  the  diluted earnings calculation, the net income is adjusted by
the  interest expense on the convertible bonds assumed to be converted. Earnings
per  share  are  computed  as  follows  (in  thousands  except  per share data):

<TABLE>
<CAPTION>

                                                              THREE MONTHS ENDED,
                                                          -----------------------------
                                                              2003            2002
                                                          ------------     ------------
<S>                                                           <C>              <C>
Net income used to compute basic earnings per share         $  9,126         $  8,130
Interest expense on convertible bonds, net of tax affect         319               --
                                                          ------------     ------------
Net income used to compute diluted earnings per share       $  9,445         $  8,130
                                                          ============     ============

Average shares of common stock outstanding used to
   compute basic earnings per share                           26,376           27,185
Additional common shares to be issued assuming exercise
   of stock options and warrants (net of shares assumed
   reacquired) and conversion of convertible bonds *           3,564            2,275
                                                          ------------     ------------
Average shares of common and common equivalent stock
   outstanding used to compute diluted earnings per share     29,940           29,460
                                                          ============     ============

Income per share - Basic:
                                                          ------------     ------------
   Net income per share                                     $   0.35         $   0.30
                                                          ============     ============
   Weighted average common shares                             26,376           27,185
                                                          ============     ============

Income per share - Diluted:
                                                          ------------     ------------
   Net income per share                                     $   0.32         $   0.28
                                                          ============     ============

Weighted average common and common equivalent shares
   outstanding                                                29,940           29,460
                                                          ============     ============

*  The  diluted  share  basis for the three months ended March 31, 2003 and 2002
excludes 9 and 1,078 shares, respectively, associated with the convertible bonds
and  2,184  and  2,933  shares,  respectively,  associated  with the options and
warrants  due  to  their  antidilutive  effect.

</TABLE>

                                       11
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF  OPERATIONS

     The  following  discussion  should  be  read  in  conjunction  with  the
Consolidated  Financial  Statements  included elsewhere in this Form 10-Q and in
the Company's Annual Report on Form 10-K filed March 31, 2003 and any subsequent
filings.  Certain  of  the  statements  contained  herein  may  be  considered
forward-looking  statements.  Such  statements  are  identified  by  the  use of
forward-looking  words  or  phrases, including, but not limited to, "estimates,"
"expects,"  "expected,"  "anticipates," and "anticipated." These forward-looking
statements are based on the Company's current expectations. Although the Company
believes  that the expectations reflected in such forward-looking statements are
reasonable,  there can be no assurance that such expectations will prove to have
been  correct.

     Forward-looking  statements  involve  risks  and  uncertainties  and  the
Company's  actual  results  could  differ  materially  from  the  Company's
expectations.  In  addition  to  those factors discussed in the Company's Annual
Report  on  Form 10-K filed March 31, 2003, the Company's other filings with the
Securities  and  Exchange  Commission  and  below  in  the following discussion,
important  factors that could cause such actual results to differ materially are
discussed  in  Note  1 of the Notes to Consolidated Financial Statements, above.


OVERVIEW

     The  Company provides local and long distance telecommunication services to
residential  and small business customers in the United States.  The Company has
developed  integrated  order  processing,  provisioning,  billing,  payment,
collection,  customer  service  and  information  systems.  These  proprietary
systems,  along  with  attractive wholesale pricing, enable the Company to offer
savings  through  competitively  priced service plans, high-quality service  and
simplicity  through  consolidated  billing  and  responsive  customer  care.

     The Company offers both local and long distance telecommunication services,
primarily  a  bundled  offering of local and long distance voice services, which
are  billed  to customers in one combined invoice.  Local phone services include
local  dial tone, various local calling plans that include free member-to-member
calling,  and  a variety of features such as caller identification, call waiting
and three-way calling.  Long distance phone services include traditional 1+ long
distance,  international  and  calling  cards.  The  Company  uses the unbundled
network  element  platform  ("UNE-P")  of  the regional bell operating companies
("RBOCs") network to provide local services and the Company's nationwide network
to  provide  long  distance  services.  The  Federal  Communications  Commission
("FCC")  has recently concluded its triennial review of local phone competition.
Although  the  text  of  the order is not yet available, the decision appears to
preserve  the  Company's  ability  to  use  UNE-P  for  the provision of bundled
telecommunications  services  pending  further  market-by-market analyses by the
respective  state  commissions.

                                       12
<PAGE>

RESULTS  OF  OPERATIONS

     The  following table sets forth for the periods indicated certain financial
data  of  the  Company  as  a  percentage  of  sales:

<TABLE>
<CAPTION>
                                                THREE MONTHS ENDED
                                                    MARCH 31,
                                              ---------------------
                                                 2003       2002
                                              ---------   ---------
<S>                                              <C>         <C>
      Sales                                     100.0%     100.0%
      Costs and expenses:
         Network and line costs                  50.0       50.6
         General and administrative expenses     15.3       18.3
         Provision for doubtful accounts          2.5        5.1
         Sales and marketing expenses            10.0        7.4
         Depreciation and amortization            4.9        5.6
                                              ---------   ---------
            Total costs and expenses             82.7       87.0
                                              ---------   ---------
      Operating income                           17.3       13.0
      Other income (expense):
         Interest income                          0.1        0.1
         Interest expense                        (2.8)      (1.9)
         Other, net                               2.4       (1.0)
                                              ---------   ---------
      Income before income taxes                 17.0       10.2
      Provision for income taxes                  6.6         --
                                              ---------   ---------
      Net income                                 10.4%      10.2%
                                              =========   =========
</TABLE>

QUARTER  ENDED  MARCH  31,  2003  COMPARED  TO  QUARTER  ENDED  MARCH  31,  2002

     Sales.  Sales  increased  by  10.6%  to $87.8 million for the quarter ended
March  31,  2003  from  $79.4  million for the quarter ended March 31, 2002. The
increase  in  sales is due to higher bundled sales offset by lower long distance
sales  resulting  from  the  Company's  continued  focus,  begun in 2000, on its
efforts  in  the  local  telecommunication  services  market  by  offering local
telecommunication services bundled with long distance services and significantly
reduced  sales  and  marketing  related  to  the  long  distance  product.

     The Company's bundled sales for the quarter ended March 31, 2003 were $60.2
million  as  compared to $35.5 million for the quarter ended March 31, 2002. The
increase in sales was due to higher average bundled lines in 2003 as compared to
2002,  partially  offset  by  lower  average  monthly  revenue per customer. The
overall  increase  resulted  from the Company's ongoing strategy to market lower
priced  products  to  be  more  competitive with incumbent and other competitive
local  exchange  carriers.  The quarter ended March 31, 2003 also reflected both
growth  in  bundled  lines and reductions in customer turnover.  The Company had
approximately  402,300  bundled  lines  as  of  March  31,  2003  as compared to
approximately  193,700 bundled lines at March 31, 2002. Approximately 269,000 of
the  bundled  lines  at  March  31,  2003 were in Michigan.  Long term growth in
revenues  will  depend  upon  the Company's ability to develop and scale various
marketing  programs in additional states or areas, maintain the current level of
customer  turnover  and  maintain  operating  efficiencies.

     The  Company's  long  distance  sales  decreased  to  $27.7 million for the
quarter  ended March 31, 2003 from $43.9 million for the quarter ended March 31,
2002.  The  Company's  decision  to  focus on the bundled product, together with
customer  turnover,  contributed  to  the decline in long distance customers and
revenues.  This  decline  in long distance customers and revenues is expected to
continue  so long as the Company continues to focus its marketing efforts on the
bundled  product.  Long  distance  revenues for the quarter ended March 31, 2002
included  non-cash amortization of deferred revenue of $1.9 million related to a
telecommunications  service  agreement  entered  into  in 1997. Deferred revenue
relating  to  this  agreement  had  been  amortized over a five-year period. The
agreement  and  related  amortization  terminated  in  October  2002.

     During  the  quarter ended March 31, 2003 the Company selectively increased
certain  fees  and  rates  related to its long distance and bundled products and
such  changes  in  rates  and  bill  presentation  may adversely impact customer
turnover.  The  Federal  Trade  Commission  and  the  Federal  Communications

                                       13
<PAGE>

Commission  have  proposed  rules  and  regulations  governing  the creation and
enforcement  of national "do not call" databases that could affect the Company's
ability  to  outbound  telemarket, which is currently an important sales channel
for  the  Company.

     Network  and  Line Costs. Network and line costs increased by 9.1% to $43.9
million  for the quarter ended March 31, 2003 from $40.2 million for the quarter
ended  March 31, 2002. The increase in costs was primarily due to an increase in
bundled customers, partially offset by a decrease in long distance customers and
favorable resolution of disputes with vendors. As a percentage of sales, network
and  line  costs  decreased  to  50.0%  for the quarter ended March 31, 2003, as
compared  to 50.6% for the quarter ended March 31, 2002. The lower total network
and  line costs as a percentage of sales were due primarily to a decrease in the
bundled network and line costs as a percentage of sales for the bundled product.
This  decrease  was  partially  offset  by a shift in the Company's sales to the
higher  cost bundled product.  Bundled network and line costs as a percentage of
sales  decreased  to  53.4% for the quarter ended March 31, 2003, as compared to
63.8% for the quarter ended March 31, 2002. Long distance network and line costs
as  a  percentage  of  sales  increased to 42.6% for the quarter ended March 31,
2003,  as  compared  to 39.9% for quarter ended March 31, 2002. Network and line
costs  for the quarter ended March 31, 2003 included carrier billing credits for
disputed  amounts of approximately $0.8 million for bundled and $0.3 million for
long  distance network and line costs as compared to approximately $0.6 and $0.2
million,  respectively, for the quarter ended March 31, 2002.  There are several
factors  that  could  cause  network  and line costs as a percentage of sales to
increase  in  the future, including (i) adverse changes to the current rules and
regulations or adverse judicial or administrative interpretations and rulings or
legislative action relating to (a) the FCC's recently concluded triennial review
of  local  phone  competition  and  the pending market-by-market analyses by the
respective state commissions, or (b) prices the Company pays for UNEs and UNE-P,
(ii)  greater  absorption  of fixed network costs as the Company's long distance
customer  base  declines,  and (iii) certain minimum network service commitments
relating  to the Company's long distance network.  Changes in the pricing of the
Company's  service plans could also cause network and line costs as a percentage
of  sales  to change in the future.  See "Liquidity and Capital Resources, Other
Matters."

     General  and  Administrative  Expenses. General and administrative expenses
decreased  by  7.5%  to  $13.5 million, or 15.3% of sales, for the quarter ended
March  31,  2003  from  $14.6  million, or 18.3% of sales, for the quarter ended
March 31, 2002.  The overall decrease in general and administrative expenses was
due  primarily  to a reduction in costs associated with collection of delinquent
customer  accounts.  Due  to  improved  credit screening procedures and internal
collection  efforts,  the  Company  has  substantially  reduced  its  delinquent
customer  account balances and therefore its expenses associated with collection
of these accounts. The decrease was also due to significant workforce reductions
and  other  cost  cutting  efforts  by the Company as it pursued improvements in
operating  efficiencies  of  the  Company's bundled business model.    While the
Company  expects  general and administrative expense as a percentage of sales to
decline  as  the  customer  base grows, realization of such efficiencies will be
dependent on the ability of management to continue to control personnel costs in
areas  such as customer service and collections. There can be no assurances that
the  Company  will  be  able  to  realize  these  efficiencies.

     Provision  for Doubtful Accounts. Provision for doubtful accounts decreased
by  44.5% to $2.2 million for the quarter ended March 31, 2003 from $4.0 million
for the same quarter last year, and, as a percentage of sales, decreased to 2.5%
as  compared  to  5.1%  for  the quarter ended March 31, 2002. The provision for
doubtful  accounts for the quarter ended March 31, 2002 reflected a benefit from
the  reversal of the reserve for doubtful accounts of $1.0 million due to better
than  expected  collections  experience  on  outstanding  accounts receivable at
year-end 2001.  The Company continues to experience improved collections results
due  to several steps during the third and fourth quarters of 2001 to reduce bad
debt  expense,  improve  the  overall  credit  quality  of its customer base and
increase  its  collections  of  past  due amounts. The benefits of the Company's
actions to reduce bad debt expense and improve the overall credit quality of its
customer  base are reflected in the lower bad debt expense for the quarter ended
March  31,  2003.  In  general,  the Company believes that bad debt expense as a
percentage  of sales of the Company's long distance customers is lower than that
of  its bundled customers because of the relatively greater maturity of the long
distance  customer  base.

     Sales  and Marketing Expenses. During the quarter ended March 31, 2003, the
Company  incurred  $8.8  million  of sales and marketing expenses as compared to
$5.9  million  for  the  same  quarter  last  year,  a 49.1% increase, and, as a
percentage  of  sales,  an  increase  to 10% as compared to 7.4% for the quarter
ended  March  31,  2002.  The  increase  in expense is primarily attributable to
increased  levels  of  sales  and  marketing  activity to continue the Company's
bundled  sales  growth.  Currently, substantially all of the sales and marketing
expenses  relate  to  the  bundled  product.  Sales  and  marketing expenses are
expected  to  increase  in 2003 as the Company continues to target growth in the
bundled  product  and  invest  in  the  development  of  its marketing programs.

                                       14
<PAGE>

     Depreciation  and  Amortization.  Depreciation  and  amortization  for  the
quarter  ended  March  31,  2003  was  $4.3  million, a decrease of $0.1 million
compared  to $4.4 million for quarter ended March 31, 2002, and, as a percentage
of  sales, decreased to 4.9% as compared to 5.6% for the quarter ended March 31,
2002.

     Interest  Income.  Interest income was $0.1 million for each of the quarter
ended  March  31,  2003  and  the  quarter  ended  March  31,  2002.

     Interest  Expense.  Interest expense was $2.5 million for the quarter ended
March 31, 2003 as compared to $1.5 million for the quarter ended March 31, 2002.
The  increase  is due to higher interest expense associated with the issuance of
the  Company's  12%  Senior  Subordinated  Notes  and  8%  Convertible  Senior
Subordinated  Notes  issued  in  connection with the exchange offer completed on
April  4,  2002  (see Note 2 of Notes to Consolidated Financial Statements).  In
addition,  as  a  result of the restructuring agreement with AOL on December 23,
2002,  the  Company  began recording the interest expense associated with the 8%
Secured Convertible Notes on its consolidated statement of operations during the
first quarter ended March 31, 2003.  There was no interest expense recorded with
respect to the 8% Secured Convertible Notes in the quarter ended March 31, 2002,
as  the notes were accounted for as a troubled debt restructuring.  The increase
was  partially  offset  by  the  retirement  on October 4, 2002 by the principal
operating  subsidiaries  of  the  Company,  prior  to  maturity, of all the debt
outstanding  under the Senior Credit Facility Agreement between the subsidiaries
and  MCG  Finance  Corporation  ("MCG")  and  by  the  repurchase  of 12% Senior
Subordinated  Notes  and  8%  Convertible  Senior  Subordinated  Notes.

     Other  Income  and  Expense, Net. Net other income was $2.2 million for the
quarter  ended  March 31, 2003 compared to net other expense of $0.8 million for
the  quarter  ended  March  31, 2002. The amount for the quarter ended March 31,
2003  consists  of  gains  from the repurchase of a portion of the Company's 12%
Senior Subordinated Notes at a discount to par. The amount for the quarter ended
March  31,  2002  primarily  consisted  of cost in connection with the Company's
restructuring  of  its  convertible  subordinated  notes (see Note 2 of Notes to
Consolidated  Financial  Statements).

     Provision  for  Income  Taxes.  For  the  quarter ended March 31, 2003, the
Company  recorded  income  tax expense of $5.8 million, an effective tax rate of
39%,  but  as  a  result of the application of net operating loss carryforwards,
the  Company  need  only  pay accrued alternative minimum taxes and state income
taxes of $0.4 million for income earned in the quarter ended March 31, 2003.  At
March  31,  2002,  since the amounts and extent of the Company's future earnings
were  not  determinable with a sufficient degree of probability to recognize the
deferred  tax  assets  in  accordance  with  the  requirements  of  Statement of
Financial  Accounting  Standards  No.  109,  "Accounting  for Income Taxes", the
Company  recorded a full valuation allowance on the net deferred tax assets and,
as  a  result,  no  provision for income taxes was reflected on the statement of
operations.  Management  will  review  the  valuation  allowance  during 2003 to
determine  whether  the  remaining  valuation  allowance  should  be reversed or
portion  thereof.  There  can be no assurances that the Company will realize the
full  benefit  of  the net operating loss carryforwards on future taxable income
generated  by  the  Company  due  to the "change of ownership" provisions of the
Internal  Revenue  Code Section 382 (see "Liquidity and Capital Resources, Other
Matters").

                                       15
<PAGE>

LIQUIDITY  AND  CAPITAL  RESOURCES

     The  Company's  cash  requirements  arise  primarily from its subsidiaries'
operational  needs,  its subsidiaries' capital expenditures and the debt service
obligations  of  the Company.  Since Talk America Holdings, Inc. conducts all of
its  operations through its subsidiaries, primarily Talk America Inc., it relies
on dividends, distributions and other payments from its subsidiaries to fund its
obligations.

     Contractual  obligations of the Company as of March 31, 2003 are summarized
by  years  to  maturity  as  follows  (in  thousands):

<TABLE>
<CAPTION>

                                              1 year or     2 - 3        4 - 5
Contractual Obligations (1)          Total       less        Years        Years       Thereafter
--------------------------------   ---------  ---------   ----------   ----------    ------------
<S>                                <C>       <C>        <C>         <C>            <C>
Talk America Holdings, Inc.:
------------------------------
   8% Secured Convertible Notes
      due 2006                      $ 26,552    $   --      $   --      $ 26,552         $   --
   12% Senior Subordinated Notes
      due 2007                        56,620        --          --        56,620             --
   8% Convertible Senior
      Subordinated Notes
      due 2007 (2)                     3,973        --          --         3,973             --
   5% Convertible Subordinated
      Notes due 2004                     670        --         670            --             --

Talk America Inc. and other
subsidiaries:
--------------------------------
   Capital lease obligations              73        62          11            --             --
                                   ---------  ---------   ----------   ----------    ------------
                                    $ 87,888    $   62      $  681      $ 87,145         $   --

Operating leases                       4,744     1,626       2,352           619            147

Total Contractual Obligations       $ 92,632    $1,688      $3,033      $ 87,764         $  147
</TABLE>
--------------

(1)  Excluded  from  these  contractual  obligations are various network service
agreements  for  long  distance  services  that  contain  certain  minimum usage
commitments.  The  largest contract establishes pricing and provides for revenue
commitments  based  upon  usage  of $52 million for the 18 months ended February
2004  and  $40  million  for  the  9  months  ended December 2004. This contract
obligates  the  Company  to pay 65 percent of the shortfall, if any.  A separate
contract  with  a  different  vendor establishes pricing and provides for annual
minimum  payments  for  the  years  ended  December  31, as follows: 2003 - $6.0
million  and 2004 - $3.0 million. While the Company anticipates that it will not
be  required to make any shortfall payments under these contracts as a result of
(1)  growth  in  network  minutes,  (2)  the  management of traffic flows on its
network,  (3)  the  restructuring  of  these obligations, and/or (4) the sale of
additional  minutes  of usage from the wholesale or other long distance markets,
there  can  be no assurances that the Company will be successful in its efforts.
In  addition,  these  actions  will  likely  cause  the Company to experience an
increase  in  per  minute  network  costs.

(2)  The  8%  Convertible  Senior  Subordinated  Notes  include  $2.8 million of
principal  and  $1.2 million of future accrued interest (see Note 2 of the Notes
to  Consolidated  Financial  Statements).

     The  Company  relies  on  internally  generated  funds  and  cash  and cash
equivalents  on hand to fund its capital and financing requirements. The Company
had  $29.0  million of cash and cash equivalents as of March 31, 2003, and $22.9
million  as  of  March  31,  2002.

     Net cash provided by operating activities was $14.6 million for the quarter
ended March 31, 2003 as compared to $4.6 million for the quarter ended March 31,
2002.  For  the  quarter ended March 31, 2003, the major contributors to the net
cash  provided  by  operating  activities  were  net  income of $9.1 million and

                                       16
<PAGE>

non-cash  charges  of  $10.1  million,  primarily consisting of depreciation and
amortization of $4.3 million and deferred income taxes of $5.5 million. Net cash
provided by operating activities also consisted of decreases in prepaid expenses
of  $0.4  million,  other  assets of $1.1 million, primarily from repayment of a
related  party  loan,  and  an  increase in deferred revenue of $1.1 million for
advance  customer billings. These amounts were offset by an increase in accounts
receivable  of  $5.3  million,  a decrease in other liabilities of $2.6 million,
primarily  consisting  of  a  reduction  of  interest  payable, and increases in
prepaid  expenses  and other current and non-current assets of $1.5 million. For
the  quarter  ended  March  31,  2002,  the  major  contributors to the net cash
provided  by  operating  activities were net income of $8.1 million and non-cash
charges of $8.7 million, primarily consisting of provision for doubtful accounts
of  $4.0 million, and depreciation and amortization of $4.4 million.  These 2002
amounts  were offset by an increase in accounts receivable of $0.6 million and a
decrease  in  accounts  payable  of  $10.3  million.

     Net  cash  used in investing activities was $3.4 million during the quarter
ended  March  31,  2003, consisting of capitalized software development costs of
$0.7 million and capital expenditures primarily for the purchase of equipment of
$2.7  million.  Net cash used in investing activities of $0.8 million during the
quarter  ended  March  31,  2002  consisted  primarily  of  capitalized software
development  costs of $0.6 million. The remaining balance related to purchase of
property,  equipment  and  intangibles.  The  Company  expects  to incur capital
expenditures of between $10 and $12 million and capitalized software development
costs  of  between  $2  and  $3  million  in  2003.

     The  FCC  has  recently  concluded  its  triennial  review  of  local phone
competition.  Although  the text of the order is not yet available, the decision
appears  to  preserve  the  Company's  ability to use UNE-P for the provision of
bundled telecommunications services pending further market-by-market analyses by
the  respective  state commissions. Changes to the current rules and regulations
or adverse judicial or administrative interpretations and rulings or legislative
action relating thereto that result in any curtailment in the availability of or
the  prices  for  the  local  switching  UNE  could  require  the  Company  to
significantly  increase  its  capital  expenditures. (See "Liquidity and Capital
Resources,  Other  Matters").

     Net  cash used in financing activities for the quarter ended March 31, 2003
was  primarily  attributable to repurchases of $9.4 million of the Company's 12%
Senior  Subordinated  Notes  and  $3.6  million  of  the  Company's  8%  Secured
Convertible Notes, respectively, for a total of $10.8 million. The discount from
face  amount  is  reported  as  other  income  in  the consolidated statement of
operations  for  the  quarter ended March 31, 2003. In connection with the share
buyback  program  of  $10 million or 2,500,000 shares announced in January 2003,
cash  used in financing activities also consisted of the repurchase of 1,315,789
shares  of its common shares from AOL at a per share price of $3.80 (the average
closing  price for the five days ended January 15, 2003). The aggregate purchase
price  was approximately $5.0 million. For the quarter ended March 31, 2002, the
net  cash  used in financing activities was primarily attributable to payment of
borrowings  under  the Company's credit facility of $1.3 million, payments under
2011  Convertible  Notes  of  $1.2  million  and  payments  under  capital lease
obligations.

     The  Company  generally does not have a significant concentration of credit
risk  with  respect to net trade accounts receivable, due to the large number of
end-users  comprising  the  Company's  customer  base.

OTHER  MATTERS

     The  Company's  provision  of  telecommunication  services  is  subject  to
government  regulation.  Changes  in  existing regulations could have a material
adverse  effect  on the Company.  The Company's local telecommunication services
are  provided  almost  exclusively  through  the  use  of RBOC Unbundled Network
Elements  ("UNE"), and it is primarily the availability of cost-based  UNE rates
that  enables  the  Company  to  price  its  local  telecommunications  services
competitively.  On  December  12,  2001,  the  FCC  initiated  its so-called UNE
Triennial  Review  rulemaking  in  which it was to review all UNEs and determine
whether RBOCs should continue to be required to provide them to competitors. The
FCC  has  recently  concluded  its  Triennial Review of local phone competition.
Although  the  text  of  the order is not yet available, the decision appears to
preserve  the  Company's  ability  to  use  UNE-P  for  the provision of bundled
telecommunications  services  pending  further  market-by-market analyses by the
respective  state  commissions.  Changes to the current rules and regulations or
adverse  judicial  or  administrative interpretations and rulings or legislative
action  relating  thereto  that result in any curtailment in the availability of
the  local  switching  UNE  or  increase in costs that RBOCs may charge for such
elements  would  materially  impair  the  Company's  ability  to  provide  local
telecommunications  services.  Such  changes  could  eliminate  the  Company's
capability  to  provide  local  telecommunications  services entirely unless the
Company  is  able  to  utilize another technology, which may not be available or

                                       17
<PAGE>

available  on  economically feasible terms, or the Company purchases, builds and
implements  its  own  local  switching  network, which would require significant
additional  capital  expenditures  by  the  Company.

     At  December  31,  2002,  the  Company  had  net  operating  loss  ("NOL")
carryforwards for federal income tax purposes of approximately $262 million. Due
to  the  "change  of  ownership" provisions of the Internal Revenue Code Section
382,  the  availability  of  the  Company's  net  operating  loss  and  credit
carryforwards  may  be subject to an annual limitation against taxable income in
future  periods  if  a  change of ownership of more than 50% of the value of the
Company's  stock  should  occur  within a three-year testing period. Many of the
changes  that  affect these percentage change determinations, such as changes in
the  Company's  stock  ownership,  are  outside  the  Company's  control.  A
more-than-50%  cumulative  change  in  ownership for purposes of the Section 382
limitation occurred on August 31, 1998 and October 26, 1999. As a result of such
changes,  certain of the Company's carryforwards are limited. As of December 31,
2002,  approximately  $15  million  of  NOL carryforwards were limited to offset
future  income.  In  addition,  based  on information currently available to the
Company,  the  Company  believes  that  the  change  of ownership percentage was
approximately  38%  for  the currently applicable three-year testing period. If,
during  the  current  three-year  testing  period,  the  Company  experiences an
additional  more-than-50%  ownership change under Section 382, the amount of the
NOL  carryforward  available  to offset future taxable income may be further and
substantially  reduced.  To  the  extent  the Company's ability to use these net
operating loss carryforwards against any future income is limited, its cash flow
available  for  operations  and  debt  service would be reduced. There can be no
assurance  that  the Company will realize the full benefit of the carryforwards.

     The  Company  is  party  to  a  number  of  legal  actions and proceedings,
including  purported  class  actions,  arising  from the Company's provision and
marketing  of  telecommunications services, as well as certain legal actions and
regulatory  investigations  and  enforcement proceedings arising in the ordinary
course  of  business.  Recently,  the  Company  has been made aware that AOL has
agreed  to  settle a class action case for approximately $10 million; the claims
in  the  case allegedly relate to marketing activities conducted pursuant to the
Marketing Agreement.  AOL has asserted that the Company is required to indemnify
AOL  in  this matter under the terms of the Marketing Agreement and advised that
it  will  seek such indemnification from the Company.  The Company believes that
it  does  not  have  an  obligation to indemnify AOL in this matter and that any
claim  by  AOL  for  this  indemnification  would be without merit.  The Company
intends,  if  AOL  pursues  a  claim  for  indemnification  under  the Marketing
Agreement,  to  defend  the  claim  vigorously.  The  Company  believes that the
ultimate  outcome  of  the  foregoing  actions will not result in liability that
would  have  a  material  adverse effect on the Company's financial condition or
results  of  operations.

     While  the  Company  believes  that  it  has access, albeit limited, to new
capital  in the public or private markets to fund its ongoing cash requirements,
there  can be no assurance as to the timing, amounts, terms or conditions of any
such  new  capital  or  whether  it could be obtained on terms acceptable to the
Company.  Accordingly,  the  Company  anticipates  that  its  cash  requirements
generally  must  be  met from the Company's cash-on-hand and from cash generated
from  operations.  Based  on its current projections for operations, the Company
believes  that  its  cash-on-hand  and  its  cash  flow  from operations will be
sufficient  to  fund  its  currently contemplated capital expenditures, its debt
service obligations, including the increased interest expense of its outstanding
indebtedness,  and  the  expenses  of conducting its operations for at least the
next  twelve months. However, there can be no assurance that the Company will be
able  to  realize  its projected cash flows from operations, which is subject to
the  risks  and  uncertainties  discussed above, or that the Company will not be
required  to  consider  capital  expenditures  in  excess  of  those  currently
contemplated,  as  discussed  above.


CRITICAL  ACCOUNTING  POLICIES

     The  Company's  discussion  and  analysis  of  its  financial condition and
results  of  operations  are  based  upon  the  Company's consolidated financial
statements,  which  have  been prepared in accordance with accounting principles
generally  accepted  in  the  United  States. The preparation of these financial
statements  requires the Company to make estimates and judgments that affect the
reported  amounts  of  assets,  liabilities,  revenues and expenses, and related
disclosure  of  contingent  assets  and  liabilities.  On an on-going basis, the
Company  evaluates  its estimates, including those related to bad debt, goodwill
and  intangible  assets, income taxes, contingencies and litigation. The Company
bases  its estimates and judgments on historical experience and on various other
assumptions  that  are  believed  to  be reasonable under the circumstances, the

                                       18
<PAGE>

results  of  which form the basis for making judgments about the carrying values
of  assets  and  liabilities  that  are not readily apparent from other sources.
Actual  results  may  differ from these estimates under different assumptions or
conditions.

     RECOGNITION  OF  REVENUE

     The  Company  derives  its  revenues  from  local  and  long distance phone
services,  primarily  local  services  bundled with long distance services, long
distance services, inbound toll-free service and dedicated private line services
for data transmission. The Company recognizes revenue from voice, data and other
telecommunications  related  services in the period in which subscriber uses the
related  service.

     Deferred revenue represents the unearned portion of local telecommunication
services  and  features  that  are  billed  one  month  in advance. In addition,
deferred revenue at March 31, 2002 included a non-refundable prepayment received
in 1997 in connection with an amended telecommunications services agreement with
Shared Technologies Fairchild, Inc. The payment was amortized over the five-year
term  of  the  agreement,  which expired in October 2002. The amount included in
revenue  was  $1.9  million  in  the  quarter  ended  March  31,  2002.

     ALLOWANCE  FOR  DOUBTFUL  ACCOUNTS

     Allowances  for  doubtful  accounts  are  maintained  for  estimated losses
resulting  from  the  failure  of  customers  to make required payments on their
accounts.  The  Company reviews accounts receivable aging trends, historical bad
debt  trends,  and  customer  credit-worthiness  through customer credit scores,
current  economic trends and changes in customer payment history when evaluating
the  adequacy of the allowance for doubtful accounts. If the financial condition
of the Company's carriers that pay access charges were to deteriorate, resulting
in an impairment of their ability to make payments, additional allowances may be
required.  The  Company's  accounts receivable balance was $31.0 million, net of
allowance  for  doubtful  accounts  of  $7.3  million,  as  of  March  31, 2003.

     VALUATION  OF  LONG-LIVED ASSETS AND INTANGIBLE ASSETS WITH A DEFINITE LIFE

     The  Company reviews the recoverability of the carrying value of long-lived
assets,  including  intangibles  with  a  definite life, for impairment whenever
events  or  changes  in  circumstances indicate that the carrying amount of such
assets  may not be recoverable. When such events occur, the Company compares the
carrying  amount  of  the  assets to the undiscounted expected future cash flows
from  them.  Factors  the  Company  considers  important  that  could trigger an
impairment  review  include  the  following:

     -    Significant  underperformance  relative  to  historical  or  projected
          future  operating  results
     -    Significant changes in the manner of the Company's use of the acquired
          assets  or  the  strategy  for  the  Company's  overall  business
     -    Significant  negative  industry  or  economic  trends
     -    Significant  decline  in  the  Company's  stock  price for a sustained
          period  and  market  capitalization  relative  to  net  book  value

     If  this  comparison  indicates  there  is  impairment,  the  amount of the
impairment  loss  to  be recorded is calculated by the excess of the net assets'
carrying  value over its fair value and is typically calculated using discounted
expected  future  cash  flows.

     GOODWILL

     Goodwill represents the cost in excess of net assets of acquired companies.
Effective  January  1,  2002,  with  the  adoption  of  SFAS  No.  142, goodwill
(comprised  of  goodwill  acquired in the Access One acquisition in August 2000)
will  not  be  amortized, but rather will be tested for impairment annually, and
will  be  tested  for  impairment  between  annual  tests  if an event occurs or
circumstances  change  that  would indicate the carrying amount may be impaired.
Prior  to  January  1,  2002,  goodwill  and  intangibles  were  amortized  on a
straight-line  basis  over  periods ranging from 5 years to 15 years. Impairment
testing  for  goodwill  is  performed  at  a  reporting  unit level; the Company
determined that it has one reporting unit under the guidance of SFAS No. 142. An
impairment  loss  would  generally be recognized when the carrying amount of the
reporting  unit's  net  assets exceeds the estimated fair value of the reporting
unit.  Prior  to January 1, 2002, goodwill was tested for impairment in a manner
consistent  with  long-lived  assets and intangible assets with a definite life.

                                       19
<PAGE>

     SOFTWARE  DEVELOPMENT  COSTS

     Direct development costs associated with internal-use computer software are
accounted  for  under  Statement  of Position 98-1, "Accounting for the Costs of
Computer  Software  Developed or Obtained for Internal Use," and are capitalized
including  external  direct costs of material and services and payroll costs for
employees  devoting  time  to  the  software projects. Costs incurred during the
preliminary project stage, as well as for maintenance and training, are expensed
as  incurred. Amortization is provided on a straight-line basis over the shorter
of  3  years  or  the  estimated  useful  life  of  the  software.

     INCOME  TAXES

     Income taxes are accounted for under the asset and liability method. During
the  quarter  ended  March 31, 2003, the Company recorded income taxes at a rate
equal  to  the Company's combined federal and state effective rates. However, to
the  extent  of  available  net  operating  loss  carryforwards,  the Company is
shielded from paying cash income taxes for several years, other than alternative
minimum  taxes  and  some  state  taxes.

     Deferred tax assets and liabilities are recognized for the estimated future
tax consequences attributable to the differences between the financial statement
carrying  amounts  of  existing  assets and liabilities and their respective tax
bases  and  operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates in effect for the year in which
those  temporary  differences  are  expected  to  be  recovered  or  settled.

     The  Company  recorded  a  valuation  allowance  to reduce its deferred tax
assets  in  an  amount  that is more likely than not to be realized. The Company
provided  a valuation allowance of $66.7 million for the net deferred tax assets
for  the  estimated  future  tax  effects  attributable to temporary differences
between  the  basis  of  assets  and liabilities for financial and tax reporting
purposes  as  of March 31, 2003. In the event the Company were to determine that
it  would  be able to realize all deferred tax assets in the future in excess of
its  net recorded amount, an adjustment to the deferred tax asset would increase
income  in  the  period  such  determination  was  made. In 2002, as part of the
Company's  2003  budgeting  process,  management  evaluated  the  deferred  tax
valuation  allowance  and  determined that a portion of this valuation allowance
should be reversed, resulting in a non-cash deferred income tax benefit of $22.3
million.  Management will evaluate the deferred tax valuation allowance again in
2003  to  determine whether the remaining valuation allowance or portion thereof
should  be  reversed.

     LEGAL  PROCEEDINGS

     The Company is a party to a number of legal actions and proceedings arising
from  the  Company's  provision and marketing of telecommunications services, as
well  as  certain  legal  actions  and regulatory investigations and enforcement
proceedings  arising  in  the  ordinary course of business. Management's current
estimated  range of liability related to some of the pending litigation is based
on  claims  for  which management can estimate the amount and range of loss. The
Company  recorded the minimum estimated liability related to those claims, where
there  is  a  range  of  loss.  Because of the uncertainties related to both the
amount  and  range  of  loss  on the remaining pending litigation, management is
unable  to make a reasonable estimate of the liability that could result from an
unfavorable  outcome.  As  additional information becomes available, the Company
will  assess the potential liability related to the Company's pending litigation
and  revise  its  estimates.  Such  revisions  in the Company's estimates of the
potential  liability  could  materially  affect  its  results  of operations and
financial  position.

ITEM  3.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURE  ABOUT  MARKET  RISK

     In  the normal course of business, the financial position of the Company is
subject  to  a  variety  of  risks,  such  as the collectibility of its accounts
receivable and the receivability of the carrying values of its long-term assets.
The  Company's  long-term  obligations  consist primarily of long term debt with
fixed interest rates. The Company does not presently enter into any transactions
involving  derivative  financial  instruments  for  risk  management  or  other
purposes.

     The  Company's  available  cash balances are invested on a short-term basis
(generally  overnight)  and,  accordingly,  are not subject to significant risks
associated  with  changes  in interest rates. Substantially all of the Company's

                                       20
<PAGE>

cash  flows  are  derived  from  its operations within the United States and the
Company  is  not  subject  to  market  risk  associated  with changes in foreign
exchange  rates.

ITEM  4.  CONTROLS  AND  PROCEDURES

     Within  the 90-day period prior to the filing of this report, an evaluation
was  carried  out  under  the  supervision  and  with  the  participation of the
Company's  management,  including  the Chief Executive Officer ("CEO") and Chief
Financial  Officer  ("CFO"),  of  the  effectiveness of the Company's disclosure
controls  and  procedures.  Based  on  that  evaluation,  the  CEO  and CFO have
concluded that the Company's disclosure controls and procedures are effective to
ensure  that information required to be disclosed by the Company in reports that
it  files  or  submits  under  the  Securities Exchange Act of 1934 is recorded,
processed,  summarized  and  reported  within  the  time  periods  specified  in
Securities  and  Exchange Commission rules and forms.  Subsequent to the date of
their  evaluation,  there  were no significant changes in the Company's internal
controls  or  in  other  factors  that could significantly affect the disclosure
controls,  including  any  corrective  actions  with  regard  to  significant
deficiencies  and  material  weaknesses.

                                       21
<PAGE>

                           PART II - OTHER INFORMATION

ITEM  6.     EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)     Exhibits

10.1     Employment  Agreement  between the Company and Helen Manich dated April
14,  2003  (filed  herewith).*

10.2     Indemnification  Agreement  between  the Company and Helen Manich dated
April  14,  2003  (filed  herewith).*

10.3     Amendment to Employment Agreement for Kevin Griffo dated April 10, 2003
(filed  herewith).*

10.4     Amendment  to  Employment  Agreement for Warren Brasselle dated May 14,
2002  (filed  herewith).*

99.1     Certification  of  Gabriel Battista Pursuant to 18 U.S.C. Section 1350,
as  Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished
to  the  Commission  herewith).

99.2     Certification  of David G. Zahka Pursuant to 18 U.S.C. Section 1350, as
Adopted  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished to
the  Commission  herewith).

*  Management  contract  or  compensatory  plan  or  arrangement.

(b)     Reports  on  Form  8-K

     The  following Current Reports on Form 8-K were filed by the Company during
the  three  months  ended  March  31,  2003

     1.     Current  Report  on  Form  8-K  dated  January  20,  2003, reporting
authorization of a share buyback program and the waiver of certain provisions of
the  Company's  Restructuring  Agreement  with  America  Online,  Inc.

     2.     Current  Report  on  Form 8-K dated February 6, 2003, furnishing the
Company's  earnings  press  release  for the quarter and year ended December 31,
2002.

                                       22
<PAGE>
                                   SIGNATURES

Pursuant  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.

                                     TALK AMERICA HOLDINGS, INC.

Date:  May  14,  2003                By: /s/ Gabriel Battista
                                        ------------------------
                                     Gabriel  Battista
                                     Chairman of the Board of Directors,
                                     Chief  Executive  Officer  and  Director


Date:  May  14,  2003                By: /s/  David  G.  Zahka
                                        ------------------------
                                     David  G.  Zahka
                                     Chief  Financial  Officer
                                     (Principal  Financial  Officer)


Date:  May  14,  2003                By: /s/  Thomas  M.  Walsh
                                        ------------------------
                                     Thomas  M.  Walsh
                                     Senior  Vice  President  -  Finance
                                     (Principal  Accounting  Officer)



                                       23
<PAGE>
                                 CERTIFICATIONS
                                 --------------

                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                       AS ADOPTED PURSUANT TO SECTION 302
                        OF THE SARBANES-OXLEY ACT OF 2002


I,  Gabriel  Battista,  certify  that:

     1.  I  have  reviewed  this  quarterly  report on Form 10-Q of Talk America
Holdings,  Inc.;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not misleading with respect to the period covered by this quarterly
report;

     3.  Based  on  my  knowledge, the financial statements, and other financial
information  included  in  this quarterly report, fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report;

     4.  The  registrant's  other  certifying officers and I are responsible for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  we  have:

          a)  designed  such  disclosure  controls and procedures to ensure that
          material  information  relating  to  the  registrant,  including  its
          consolidated  subsidiaries, is made known to us by others within those
          entities,  particularly  during  the  period  in  which this quarterly
          report  is  being  prepared;

          b) evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this  quarterly  report  (the  "Evaluation  Date");  and

          c)  presented  in  this  quarterly  report  our  conclusions about the
          effectiveness  of  the disclosure controls and procedures based on our
          evaluation  as  of  the  Evaluation  Date;

     5.  The  registrant's other certifying officers and I have disclosed, based
on  our  most  recent  evaluation,  to  the  registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent  function):

          a) all significant deficiencies in the design or operation of internal
          controls  which  could  adversely  affect  the registrant's ability to
          record,  process,  summarize  and  report  financial  data  and  have
          identified  for  the  registrant's auditors any material weaknesses in
          internal  controls;  and

          b)  any  fraud,  whether  or not material, that involves management or
          other  employees  who  have  a  significant  role  in the registrant's
          internal  controls;  and

     6.  The registrant's other certifying officers and I have indicated in this
quarterly  report  whether  or  not  there  were significant changes in internal
controls  or  in other factors that could significantly affect internal controls
subsequent  to  the date of our most recent evaluation, including any corrective
actions  with  regard  to  significant  deficiencies  and  material  weaknesses.

May  14,  2003

/s/  Gabriel  Battista
----------------------
Gabriel  Battista
Chief  Executive  Officer

                                       24
<PAGE>

                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                       AS ADOPTED PURSUANT TO SECTION 302
                        OF THE SARBANES-OXLEY ACT OF 2002

I,  David  G.  Zahka,  certify  that:

     1.  I  have  reviewed  this  quarterly  report on Form 10-Q of Talk America
Holdings,  Inc.;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not misleading with respect to the period covered by this quarterly
report;

     3.  Based  on  my  knowledge, the financial statements, and other financial
information  included  in  this quarterly report, fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report;

     4.  The  registrant's  other  certifying officers and I are responsible for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  we  have:

          a)  designed  such  disclosure  controls and procedures to ensure that
          material  information  relating  to  the  registrant,  including  its
          consolidated  subsidiaries, is made known to us by others within those
          entities,  particularly  during  the  period  in  which this quarterly
          report  is  being  prepared;

          b) evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this  quarterly  report  (the  "Evaluation  Date");  and

          c)  presented  in  this  quarterly  report  our  conclusions about the
          effectiveness  of  the disclosure controls and procedures based on our
          evaluation  as  of  the  Evaluation  Date;

     5.  The  registrant's other certifying officers and I have disclosed, based
on  our  most  recent  evaluation,  to  the  registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent  function):

          a) all significant deficiencies in the design or operation of internal
          controls  which  could  adversely  affect  the registrant's ability to
          record,  process,  summarize  and  report  financial  data  and  have
          identified  for  the  registrant's auditors any material weaknesses in
          internal  controls;  and

          b)  any  fraud,  whether  or not material, that involves management or
          other  employees  who  have  a  significant  role  in the registrant's
          internal  controls;  and

     6.  The registrant's other certifying officers and I have indicated in this
quarterly  report  whether  or  not  there  were significant changes in internal
controls  or  in other factors that could significantly affect internal controls
subsequent  to  the date of our most recent evaluation, including any corrective
actions  with  regard  to  significant  deficiencies  and  material  weaknesses.

May  14,  2003

/s/  David  G.  Zahka
---------------------
David  G.  Zahka
Chief  Financial  Officer

                                       25
<PAGE>