SaaS Model Providing Record Subscription Revenue and Customer Growth

USA (July 08, 2009) –

iLinc Communications, Inc., a leading developer of web and video conferencing software and services, today provided an overview of the fiscal year that ended March 31, 2009 and its prospects for the next fiscal year.

Fiscal Year 2009 Highlights1

* Shifted sales and marketing focus in fiscal 2009 to Software-as-a-Service (SaaS) model adding monthly recurring revenue to the Company’s existing revenue base.
* Since the shift to SaaS, booked over 850 new transactions adding SMB and enterprise customers to an existing and loyal customer base, with over 130 added in month of March alone.
* In the March quarter, compounding SaaS revenue from new agreements topped $115,000, with over $57,000 added in new monthly SaaS revenue.
* Increased SaaS revenue by 340% in the March quarter as compared to the same three-month period last fiscal year and increased SaaS revenue by 35% over the December quarter.
* New credit card requirements and online order system decreased receivables aging and improved days sales outstanding (DSO) providing improved cash collections.
* Generated 84% gross profit (after allocated hosting and tech support costs) from a recurring revenue base that now includes SaaS subscription, maintenance and hosting agreements.
* Sold legacy audio conferencing assets providing over $4 million in cash while retaining proprietary VoIP audio conferencing asset.
* Turned cash flow positive in month of March.

Fiscal Year 2010 Forecast2

* We expect to add over 1,500 new customers and SaaS transactions in the fiscal year and accordingly expect SaaS revenues to rise at an increasing percentage rate due to the layering of compounding subscription agreements.
* We expect to expand gross margin to over 90% (after allocation of hosting and tech support costs), and expect increasing operating income as we benefit from growing monthly recurring revenue.
* We expect to remain cashflow positive for the fiscal year and expect our cash and CD balance to provide sufficient working capital to drive sales and further expand subscription revenue without the need to raise additional capital.

James M. Powers, Jr., President and Chief Executive Officer of iLinc Communications, said, “We are experiencing success with our SaaS model and are excited about our short-term and long-term prospects. Building on our blue chip customer base, we are now adding on average over 130 customers per month and see upward trends through fiscal 2010. The Company recently shifted its sales and marketing focus to a Software-as-a-Service offering and the SaaS model is already yielding sustainable growth in additional monthly recurring revenue, backlog and deferred revenue. We see increasing transaction counts, shortened sales cycles and much enthusiasm for our products and services. Because we offer one of the very best products in the web conferencing industry and because of the favorable market trends in our industry, we saw subscription revenues from direct sales rise over 340% in fiscal 2009 as compared to fiscal 2008. We see similar trends for fiscal 2010 and expect to earn over 90% of our total revenue from recurring sources next fiscal year,” continued Dr. Powers.

“From a financial point of view, we knew that the transition from our traditional software license model to the more sustainable SaaS subscription model would negatively impact our profitability in the short term. However, using the cash bridge provided by the sale of our legacy audio conferencing assets we have now crossed that revenue chasm. We now have compounding monthly SaaS subscription revenue that is providing long-term sustainable growth. To further enhance our long-term prospects, we also took steps in the March quarter to reduce overhead and adjust headcount to preserve working capital. With those changes, we turned cash flow positive in March and plan to continue to retain sufficient cash in Fiscal 2010 to achieve our growth goals,” added Dr. Powers.

“On the strategic front, iLinc remains the only independent enterprise-class provider of fully integrated web and video conferencing products in a growing industry. While we will continue to focus on SaaS, operational excellence and sales success, we continue to explore a variety of strategic options,” concluded Dr. Powers.

Notes:

1 The financial information provided has not been audited and is provided on a preliminary basis subject to later adjustment or revision. The Company will not be providing updated information or a subsequent press release when the Company’s audit is complete. However, shareholders of record will receive an annual report and proxy that will include audited financials as a part of the Company’s annual meeting to be held in August.

2The fiscal 2010 overview is based on current management expectations and actual results may differ from these expectations.

Significant Changes – Voluntary Deregistration: The Company filed paperwork in February with the Securities and Exchange Commission to terminate the Company’s registration under the Securities Exchange Act (so called Going Dark). As planned, the Company then also voluntarily delisted from the NYSE Alternext exchange. By doing so, the Company estimates that it is saving over $500,000 of direct expense (cash flow) annually, and is also able to refocus those public company activities to more important operational objectives. While the Company will not file public reports with the SEC, it will provide an annual report with audited financial statements to its shareholders as a part of its annual meeting process.

About iLinc Communications, Inc.

iLinc (ILNC), a recognized leader in web conferencing, desktop video conferencing software and collaboration solutions, aims to revolutionize the way organizations meet and communicate. Through its software and services, iLinc liberates people by enabling them to get more done, travel less and achieve work-life balance, all while preserving the environment. iLinc offers its enterprise-class web and video conferencing software as a software-as-a-service (SaaS) or rental model and is headquartered in Phoenix, Arizona. For more visit www.ilinc.com/investors.

iLinc and its respective logo is the trademark of iLinc Communications, Inc. Any other company name and product reference may be trademark of the respective company.

This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from any future results described within the forward-looking statements. The forward-looking information provided herein represents the Company’s estimates, beliefs, judgments and expectations as of the date of the press release, and subsequent events and developments may cause the Company’s estimates, judgment and expectations to change. The Company specifically disclaims any obligation to update the forward-looking information in the future.

iLinc Communications, Inc.
James M. Powers, Jr., 602-952-1200
Chairman, President and CEO

Source: iLinc