TLC Vision 8-K TLCVisionReports Third Quarter 2005 Financial Results

News Release	Contact:
For Immediate Release	Anna Austin, EVP, Corporate Communications (314) 523-8354 Ian Chadsey, Manager, Investor Relations (905) 238-3904 Email: investor.relations@tlcvision.com

TLCVisionReports Third Quarter 2005 Financial Results

St. Louis, Missouri, November 7, 2005: TLC Vision Corporation (NASDAQ:TLCV; TSX:TLC), North America’s premier eye care services company, today announced its financial results for the third quarter and nine month period ended September 30, 2005. All dollar amounts are expressed in U.S. currency and results are reported in accordance with U.S. generally accepted accounting principles (U.S. GAAP) unless otherwise noted.

Third Quarter Highlights:

CONSOLIDATED:
– – –	Revenues were $62 million EPS of $0.02 on net income of $1.7 million Operating cash flow was $6 million or $.09 per share
OPERATING BUSINESS (Excluding AMD):
– – –	Revenues were $61 million EPS of $0.04 on net income of $2.8 million Operating cash flow was $10.4 million or $0.15 per share
Nine-Month Highlights:
CONSOLIDATED:
– – –	Revenues were $200 million EPS of $0.23 on net income of $16.8 million Operating cash flow was $19 million or $.27 per share
OPERATING BUSINESS (Excluding AMD):
– – –	Revenues were $198 million EPS of $0.30 on net income of $21 million Operating cash flow was $34 million or $0.47 per share

Editor’s Note: “Operating Business” (or “Operating”) is defined as TLCVision’s operating activities excluding the impact of the AMD segment, principally represented by our investment in OccuLogix Inc. To provide maximum transparency for investors, Operating Business financial results are listed separately from consolidated results in this press release.

HIGHER REVENUES

TLCVision’s third quarter net revenues from the Operating Business were $61.0 million vs. $57.5 million last year, an increase of $3.5 million or 6%. TLCVisionrefractive centers revenues were up 9% to $35 million, driven by a 4% increase in price per procedure vs. prior quarter. Year to date, centers refractive revenues were up 6%. Overall, centers quarterly procedure volume was equal to last year, as North American same store procedure volume was down by 5%, offset by volume from recent acquisitions. The access business revenues declined by $1.5 million during the quarter, with access procedure volumes down 18% as compared to the same period last year. Overall refractive procedures were 42,500 compared to 45,700 the prior year, down 7%.

Other healthcare revenues from ongoing operations grew by 20% over the prior year. Revenues from MSS were up 17%. Vision Source revenues were 21% higher than third quarter 2004.

SOLID NET INCOME AND EARNING PER SHARE

Consolidated net income for the third quarter was $1.7 million or $0.02 per share. After removing the loss from the Company’s 51% ownership in OccuLogix, Inc., net income from the Operating Business was $2.8 million or $0.04 per share, which was down $0.02 from prior year primarily as the result of lower volumes in the refractive business.

“Despite the dip in refractive volumes, we delivered a solid, profitable quarter,” said Jim Wachtman, President and Chief Executive Officer. “Currently, we are not seeing the levels of procedure growth that we or our shareholders would expect. To deliver higher growth rates, we have launched a new expansion strategy focused on the value-priced consumer segment, which includes our new LASIK Select branded centers and the acquisition of TruVision, a leading managed care contractor. We remain confident in our diversified service model and growth strategy, and comfortable with current analyst earnings expectations for full year 2005, before the impact of our AMD business.”

STRONG CASH GENERATION

The business model continues to demonstrate strong cash generation that will fund the growth strategy for the company.

Consolidated operating cash flow per share decreased 38% to $0.09 from $0.14, reflecting cash used in OccuLogix operations. Quarter-end consolidated cash and short-term investments totaled $101 million, up 88% vs. September 2004.

Operating cash flow from the Operating Business was $10.4 million or $0.15 per share, up marginally from last year. The company continues to maintain a strong financial position, with cash and short-term investments totaling $55.5 million. TLCVisioncompleted its previously announced share repurchase program in early October, with a total repurchase of two million shares of common stock.

NINE-MONTH FINANCIAL RESULTS

Total Operating Business net revenues were up 4% to $198 million compared to $190 million. Refractive revenues were $146 million, up 3%. Other healthcare revenues, excluding the AMD segment, were up 9% and MSS mobile cataract revenues were up 16%. Consolidated net income was $17 million or $0.23 per share. Operating Business earnings were $21 million or $0.30 per share, a level that compares to $0.29 for the entire year of 2004.

GROWTH STRATEGY ANNOUNCEMENTS

REFRACTIVE
TLCVisionrecently announced a new refractive expansion strategy that will establish 15 value-priced “LASIK Select” branded centers by the end of 2006. The company also acquired TruVision, a leading managed care contractor for elective health care services that will serve as a patient generation channel for the new LASIK Select centers. This acquisition provides an immediate entry point into the under-penetrated, value-priced market as TruVision is projected to refer over 23,000 LASIK procedures to its network of providers in 2005 and 28,000 in 2006.

AMBULATORY SURGERY CENTERS (ASC)
TLCVisionannounces the acquisition, effective November 1, 2005, of 49% of the Eastern Oregon Regional Surgery Center in Hermiston, Oregon. This ASC is well recognized in their market place and currently performs 800 cataract procedures annually.

In addition, TLCVisionannounces the development of a new surgery center in Milwaukee, Wisconsin. This two room ASC is a joint venture with American Surgisite and several area ophthalmologists, and is expected to open in May 2006.

MOBILE CATARACT
TLCVision announces the acquisition of 20/20 Medical, a Chicago, Illinois based mobile diagnostics company with 200 customers in 8 states. This is a strategic and geographic expansion of the growing in-office diagnostic services offering to ophthalmologists and optometrists.

Conference Call

TLCVisionis pleased to invite all interested parties to participate in a conference call during which these results will be discussed. The call will be held today, November 7, at 10:30 a.m. Eastern Time at 800-756-8919. The call will also be broadcast live and archived on the Company’s web site atwww.tlcv.com under the “Webcasts” link in the Investor Relations section. In addition, the live web cast will be available at various other popular portals and financial web sites.

AboutTLCVision

TLCVisionis North America’s premier eye care services company, providing eye doctors with the tools and technologies needed to deliver high-quality patient care. Through its centers management and technology access service models, and its managed care contracting strength, TLCVision maintains leading positions in Refractive, Cataract, and AMD markets. More information about TLCVisioncan be found on the website atwww.tlcv.com.

Forward Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934, which statements can be identified by the use of forward looking terminology, such as “may”, “will”, “expect”, ”intend”, “anticipate”, “estimate”, “predict”, “plans” or “continue” or the negative thereof or other variations thereon or comparable terminology referring to future events or results. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous factors, including the timing of expenditures, effects of competition, changes to pricing, acquisitions and expansion opportunities, any of which could cause actual results to vary materially from current results or TLCVision’s anticipated future results. See the Company’s reports filed with the Canadian Securities Regulators and the U.S. Securities and Exchange Commission from time to time for cautionary statements identifying important factors with respect to such forward looking statements, including certain risks and uncertainties, that could cause actual results to differ materially from results referred to in forward looking statements. TLCVision assumes no obligation to update the information contained in this press release.

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TLC VISION CORPORATION
CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands except per share amounts)
				Three Months Ended September 30, 2005												Three Months Ended September 30, 2004
	Results Before AMD																												Total
	Segment			AMD Segment						Total TLCVision		Results Before AMD Segment						AMD Segment											TLCVision
Revenues:
Refractive:
Centers	$	34,968		$	—					$	34,968					$	32,003	$	—										$	32,003
Access		7,846			—			7,846						9,390							—						9,390
Other healthcare services		18,190			635			18,825						16,080							219						16,299
Total revenues		61,004			635			61,639						57,473							219						57,692
Cost of revenues:
Refractive:
Centers		26,147			—			26,147						23,201							—						23,201
Access		6,319			—			6,319						6,910							—						6,910
Other healthcare services		11,289			363			11,652						9,753							219						9,972
Total cost of revenues		43,755			363			44,118						39,864							219						40,083
Gross profit (loss)		17,249			272			17,521						17,609							—						17,609
General and administrative		6,695			1,994			8,689						6,580							212						6,792
Marketing and sales		5,279			119			5,398						4,688							22						4,710
Research and development, clinical and regulatory		—			1,140			1,140						—							525						525
Amortization of intangibles		1,047			—			1,047						1,016							—						1,016
Other		198			(166	)		32						(163	)						—						(163	)
Total operating costs		13,219			3,087			16,306						12,121							759						12,880
Operating income (loss)		4,030			(2,815	)		1,215						5,488							(759	)					4,729
Interest income		660			411			1,071						387							—						387
Interest expense		(435	)		—			(435	)					(573	)						—						(573	)
Minority interests		(1,867	)		1,258			(609	)					(1,674	)						—						(1,674	)
Earnings from equity investments		487			—			487						555							—						555
Income (loss) before income taxes		2,875			(1,146	)		1,729						4,183							(759	)					3,424
Income tax expense		(27	)		(3	)		(30	)					(102	)						—						(102	)
Net income (loss)	$	2,848		$	(1,149	)				$	1,699							$	4,081				$	(759	)				$	3,322
Earnings (loss) per share — diluted	$	0.04		$	(0.02	)				$	0.02							$	0.06				$	(0.01	)				$	0.05
Weighted average number of common shares outstanding - diluted		71,524			71,524			71,524						71,353							71,353						71,353
Note: The AMD segment primarily includes the Company’s majority interest in OccuLogix, Inc. (formerly Vascular Sciences Corp.).									��
TLC VISION CORPORATION
CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands except per share amounts)
				Nine Months Ended																Nine Months Ended September 30,
				September 30, 2005																	2004
	Results Before AMD
	Segment			AMD Segment			Total TLCVision						Results Before AMD Segment							AMD Segment						Total TLCVision
Revenues:
Refractive:
Centers	$	116,743		$	—					$	116,743							$	110,058	$	—								$	110,058
Access		29,085			—			29,085						31,983							—						31,983
Other healthcare services		52,045			1,635			53,680						47,839							491						48,330
Total revenues		197,873			1,635			199,508						189,880							491						190,371
Cost of revenues:
Refractive:
Centers		80,597			—			80,597						76,841							—						76,841
Access		20,929			—			20,929						22,217							—						22,217
Other healthcare services		31,617			1,393			33,010						29,131							553						29,684
Total cost of revenues		133,143			1,393			134,536						128,189							553						128,742
Gross profit (loss)		64,730			242			64,972						61,691							(62	)					61,629
General and administrative		21,108			5,868			26,976						19,174							393						19,567
Marketing and sales		15,747			491			16,238						13,478							87						13,565
Research and development, clinical and regulatory		—			3,794			3,794						—							1,249						1,249
Amortization of intangibles		3,090			—			3,090						3,085							—						3,085
Other		(835	)		(166	)		(1,001	)					(1,895	)						—						(1,895	)
Restructuring, severance and other charges		—			—			—						2,755							—						2,755
Total operating costs		39,110			9,987			49,097						36,597							1,729						38,326
Operating income (loss)		25,620			(9,745	)		15,875						25,094							(1,791	)					23,303
Interest income		2,174			1,187			3,361						1,338							—						1,338
Interest expense		(1,316	)		—			(1,316	)					(2,199	)						—						(2,199	)
Minority interests		(6,567	)		4,167			(2,400	)					(6,002	)						—						(6,002	)
Earnings from equity investments		1,826			—			1,826						1,567							—						1,567
Income (loss) before income taxes		21,737			(4,391	)		17,346						19,798							(1,791	)					18,007
Income tax expense		(527	)		(3	)		(530	)					(394	)						—						(394	)
Net income (loss)	$	21,210		$	(4,394	)				$	16,816							$	19,404				$	(1,791	)				$	17,613
Earnings (loss) per share — diluted	$	0.30		$	(0.07	)				$	0.23							$	0.27				$	(0.02	)				$	0.25
Weighted average number of common shares outstanding - diluted		71,877			71,877			71,877						70,832							70,832						70,832
Note: The AMD segment primarily includes the Company’s majority interest in OccuLogix, Inc. (formerly Vascular Sciences Corp.).
TLC VISION CORPORATION
CONSOLIDATING BALANCE SHEETS
(In thousands)
				September 30, 2005
				(Unaudited)																December 31, 2004
	Results Before AMD
	Segment			AMD Segment			Total TLCVision						Results Before AMD Segment (Unaudited)							AMD Segment (Unaudited )						Total TLCVision
ASSETS
Current assets
Cash and cash equivalents	$	37,263		$	13,394					$	50,657							$	15,847				$	17,588					$	33,435
Short-term investments		18,200			32,435			50,635						68,515							42,500						111,015
Accounts receivable		18,063			949			19,012						16,489							954						17,443
Prepaids and other current assets		11,874			6,398			18,272						12,212							1,609						13,821
Total current assets		85,400			53,176			138,576						113,063							62,651						175,714
Intercompany		1,679			(1,679	)		—						1,877							(1,877	)					—
Restricted cash		1,140			—			1,140						932							—						932
Investments and other assets		12,497			—			12,497						10,482							—						10,482
Goodwill		89,039			—			89,039						53,774							—						53,774
Intangibles, net		22,587			116			22,703						18,037							103						18,140
Fixed assets, net		46,853			495			47,348						45,636							563						46,199
Total assets	$	259,195		$	52,108					$	311,303							$	243,801				$	61,440					$	305,241
LIABILITIES
Current liabilities
Accounts payable	$	8,688		$	113					$	8,801							$	8,491				$	225					$	8,716
Accrued liabilities		25,807			2,827			28,634						23,425							3,714						27,139
Current portion of long-term debt		4,572			—			4,572						8,664							—						8,664
Total current liabilities		39,067			2,940			42,007						40,580							3,939						44,519
Long-term debt, less current maturities		12,020			—			12,020						9,991							—						9,991
Other long-term liabilities		2,640			—			2,640						2,242							480						2,722
Minority interests		15,030			24,222			39,252						9,307							27,915						37,222
Total liabilities		68,757			27,162			95,919						62,120							32,334						94,454
STOCKHOLDERS’ EQUITY
Capital stock		422,095			30,317			452,412						428,877							30,082						458,959
Option and warrant equity		1,868			—			1,868						2,872							—						2,872
Treasury stock		(4,668	)					(4,668	)					—
Accumulated deficit		(228,857	)		(5,371	)		(234,228	)					(250,068	)						(976	)					(251,044	)
Total stockholders’ equity		190,438			24,946			215,384						181,681							29,106						210,787
Total liabilities and stockholders’ equity	$	259,195		$	52,108					$	311,303							$	243,801				$	61,440					$	305,241
Note: The AMD segment primarily includes the Company’s majority interest in OccuLogix, Inc. (formerly Vascular Sciences Corp.).
TLC VISION CORPORATION
CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands except per share amounts)
				Nine Months Ended																Nine Months Ended September 30,
				September 30, 2005																	2004
	Results Before AMD
	Segment			AMD Segment			Total TLCVision						Results Before AMD Segment							AMD Segment						Total TLCVision
OPERATING ACTIVITIES
Net income (loss)	$	21,210		$	(4,394	)	$	16,816										$	19,404				$	(1,791	)				$	17,613
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization		11,931			88			12,019						13,251							53						13,304
Write-offs (reimbursements) of investments in research and development
arrangements		(300	)		—			(300	)					(400	)						1,249						849
Minority interests		6,567			(4,167	)		2,400						6,002							—						6,002
Earnings from equity investments		(1,826	)		—			(1,826	)					(1,567	)						—						(1,567	)
Loss (gain) on disposals of fixed assets		(38	)		(166	)		(204	)					1,032							—						1,032
Gain on the sales of subsidiaries		(319	)		—			(319	)					(1,143	)						—						(1,143	)
Non-cash compensation expense		69			216			285						424							—						424
Adjustment to the fair value of investments and long-term receivables		—			—			—						(1,206	)												(1,206	)
Other		—			135			135						—													—
Changes in operating assets and liabilities, net of acquisitions and dispositions:		(3,594	)		(6,286	)		(9,880	)					(6,309	)						686						(5,623	)
Cash from operating activities		33,700			(14,574	)		19,126						29,488							197						29,685
INVESTING ACTIVITIES
Purchases of fixed assets		(6,526	)		(138	)		(6,664	)					(4,115	)						(128	)					(4,243	)
Proceeds from sales of fixed assets		966			284			1,250						900							—						900
Proceeds from divestitures of investments and subsidiaries, net		3,430			—			3,430						729							—						729
Distributions and loan payments received from equity investments		1,828			—			1,828						792							—						792
Reimbursements from (investments in) research and development arrangements		300			—			300						(849	)						—						(849	)
Acquisitions and equity investments		(42,119	)		—			(42,119	)					(5,245	)						—						(5,245	)
Proceeds from sales of short-term investments		78,025			20,550			98,575						2,165							—						2,165
Purchases of short-term investments		(27,710	)		(10,585	)		(38,295	)					(31,230	)						—						(31,230	)
Other		48			(15	)		33						711							—						711
Cash from investing activities		8,242			10,096			18,338						(36,142	)						(128	)					(36,270	)
FINANCING ACTIVITIES
Restricted cash movement		(208	)		—			(208	)					(12	)						—						(12	)
Principal payments of debt financing and capital leases		(7,500	)		—			(7,500	)					(12,137	)						—						(12,137	)
Proceeds from debt financing		1,489			—			1,489						—							—						—
Distributions to minority interests		(6,024	)		—			(6,024	)					(5,536	)						—						(5,536	)
Purchases of treasury stock		(10,031	)		—			(10,031	)					—							—						—
Proceeds from issuance of common stock		1,748			—			1,748						19,121							—						19,121
Proceeds from issuance of OccuLogix, Inc. common stock		—			284			284						—							—						—
Cash from financing activities		(20,526	)		284			(20,242	)					1,436							—						1,436
Net increase (decrease) in cash and cash equivalents during the period		21,416			(4,194	)		17,222						(5,218	)						69						(5,149	)
Cash and cash equivalents, beginning of period		15,847			17,588			33,435						21,554							26						21,580
Cash and cash equivalents, end of period	$	37,263		$	13,394					$	50,657							$	16,336				$	95					$	16,431
Operating cash flow per diluted share	$	0.47		$	(0.20	)				$	0.27							$	0.42				$	0.00					$	0.42
Note: The AMD segment primarily includes the Company’s majority interest in OccuLogix, Inc. (formerly Vascular Sciences Corp.).

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