TLC Vision 8-K Strategic Initiatives Drive 14% Revenue Increase

News Release	Contact:
For Immediate Release	Anna Austin, EVP, Corporate Communications (636) 534-2271 Email: investor.relations@tlcvision.com

TLCVisionReports Second Quarter Earnings of $0.16 Per Share;

Strategic Initiatives Drive 14% Revenue Increase

ST. LOUIS, MO, August 9, 2006: TLC Vision Corporation (NASDAQ:TLCV; TSX:TLC), North America’s premier eye care services company, today announced its financial results for the second quarter and six months ended June 30, 2006. 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.

Editor’s Note: “Operating Business” (or “Operating”) is defined as TLCVision’s activities excluding the impact of the AMD segment, representing 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.

“TLCVisiondemonstrated this quarter that our strategic initiatives are delivering results,” said Jim Wachtman, President and Chief Executive Officer. “These results were achieved with contribution from all of our business segments. The Company delivered overall revenue growth and refractive procedure volume growth in our core centers, despite a slowdown in the industry. With 84 refractive centers and double digit growth in our Other Healthcare Services segment, we are positioned well for the future.”

SECOND QUARTER HIGHLIGHTS:

• 14% revenue growth.

• 4% increase in refractive centers procedure volume (including LECC).

• Over 20% revenue growth in Other Healthcare Services.

• Earnings per share of $0.16 (including a cumulative income tax benefit).

• Continued strong operating cash flow of $0.20 per share.

REVENUES

TLCVision’ssecond quarter revenues were $76.2 million, an increase of over 14% from 2005.

• Total refractive revenues were up 12% to $53.4 million, reflecting higher average selling prices in the centers business, the benefit of 2005 acquisitions and the early contribution from our value-priced strategy. Center revenues were 15% higher during the quarter, and total refractive center procedure volumes (including LECC) were 31,900, up over 4% from prior year, despite softness in the overall industry. Access revenues were down only 1%, the smallest decline in six quarters.

• Other Healthcare Services revenues (excluding AMD) increased 24% to $22.8 million, with strong growth in our cataract business of 23%. Total surgical procedures of 19,300 were 8% above prior year. Vision Source grew by 19% over the same period in 2005.

EARNINGS

Consolidated: Net income for the second quarter was $10.9 million, including the AMD net loss of $0.4 million.

Operating Business: Net income for the quarter of $11.3 million (or $0.16 per fully diluted share) was more than double prior year reported results of $5.2 million (or $0.07 per share). Excluding both the cumulative income tax benefit noted below and the benefit of reducing the Company’s effective tax rate from the 38% rate applied last quarter, the resulting pro forma net income would have been $5.4 million (or $0.08 per fully diluted share), 25% higher than the comparable pro forma results in 2005 on a per share basis.

During the quarter, TLCVisioncompleted its analysis of available net operating losses and evaluation of its income tax accounting. The findings and conclusions reached include the following:

• We have decided to restate our 2005 Form 10-K to record $1.2 million of income tax expense from 2005 (where it was originally recorded and disclosed) to 2004. This adjustment will have no impact on 2006 results.

• The Company confirmed that it has net operating loss carryforwards of approximately $187 million available to offset future taxable income. This amount was significantly higher than estimated at the end of 2005.

• Reflecting the new level of net operating loss carryforwards, the Company recorded a cumulative adjustment to our income tax accounts, resulting in a one-time benefit of $3.4 million.

• The Company reduced its effective tax rate from a 38% historic rate to approximately 12% for the full year 2006.

STRONG CASH GENERATION

Operating cash flow for the second quarter was $13.8 million, or $0.20 per fully diluted share. The Company continues to maintain a strong financial position, with cash and short-term investments totaling $45.7 million.

YEAR-TO-DATE RESULTS

For the six months ended June 30, 2006, revenues grew 12% to $153.8 million from $137.9 million for the six months ended June 30, 2005. Total centers procedure volume (including LECC) was 67,000, a 2% increase from prior year. Other Healthcare Services revenues increased 19% to $41.5 million.

For the six months ended June 30, 2006, consolidated net income was $13.6 million including a net $3.2 million loss from the AMD segment. Net income for the Operating Business was $16.8 million or $0.24 per share, a 28% increase over prior year on a per-share basis.

Consolidated operating cash flow for the six month period was $22.8 million. Operating cash flow for the Operating Business was $27.7 million or $0.40 per share.

2006 OPERATING BUSINESS FINANCIAL GUIDANCE

Reflecting the financial results for the first six months of the year, as well as factoring in the revised refractive industry growth rates for 2006 and the retiming of planned ambulatory surgery center acquisitions, we are updating our 2006 guidance for the Operating Business as follows:

• Net revenues are now anticipated to be between $290 million and $300 million, or a growth of between 12% and 16% from full year 2005 results, reflecting the lower overall growth prospects for the refractive industry and the delay in closing of planned ASC acquisitions.

• While the level of pre-tax earnings is not anticipated to change, as a result of the favorable income tax adjustments noted earlier and the lower overall effective tax rate, fully taxed earnings per share are now anticipated to be between $0.30 to $0.33.

• Operating cash flow per share guidance has been maintained at between $0.58 and $0.62.

“While we are decreasing our revenue guidance to better reflect current market conditions, we are holding to our expectations for earnings and cash flow,” said Jim Wachtman. “We continue to have confidence in the strategy that we are executing to grow the Company.”

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, August 9, at 4:30 pm Eastern Time at 1-877-888-3490. 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. A replay will be available until August 23 by dialing 1-888-509-0081 and entering pass code 628166.

About TLCVision

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 and Cataract markets. More information about TLCVision can be found on the corporate websitewww.tlcv.com. Go towww.tlcvision.com orwww.lasikselectvision.com for information on refractive surgery.

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.

				Three Months Ended
				June 30, 2006						Three Months Ended June 30, 2005						(As Restated)
										Results Before AMD
	Results Before AMD Segment			AMD Segment			Total TLCVision			Segment			AMD Segment				Total TLCVision
Revenues:
Refractive:
Centers	$	43,598		$	—		$	43,598		$	38,010		$	—			$	38,010
Access		9,771			—			9,771			9,828			—				9,828
Other healthcare services		22,846			—			22,846			18,414			568				18,982
Total revenues		76,215			—			76,215			66,252			568				66,820
Cost of revenues:
Refractive:
Centers		29,908			—			29,908			25,921			—				25,921
Access		7,160			—			7,160			7,200			—				7,200
Other healthcare services		13,946			—			13,946			10,697			510				11,207
Total cost of revenues		51,014			—			51,014			43,818			510				44,328
Gross profit		25,201			—			25,201			22,434			58				22,492
General and administrative		7,085			—			7,085			7,232			1,995				9,227
Marketing and sales		6,704			—			6,704			5,656			187				5,843
Research and development, clinical and regulatory		—			—			—			—			1,310				1,310
Amortization of intangibles		874			—			874			1,032			—				1,032
Other expenses (income), net		(169	)		—			(169	)		(363	)		—				(363	)
Total operating costs		14,494			—			14,494			13,557			3,492				17,049
Operating income (loss)		10,707			—			10,707			8,877			(3,434	)			5,443
Gain on sale of OccuLogix, Inc. stock		—			1,450			1,450			—			—				—
Interest income		222			—			222			558			421				979
Interest expense		(141	)		—			(141	)		(184	)		—				(184	)
Minority interests		(2,938	)		—			(2,938	)		(2,516	)		1,411				(1,105	)
Earnings (losses) from equity investments		951			(1,850	)		(899	)		680			—				680
Income (loss) before income taxes		8,801			(400	)		8,401			7,415			(1,602	)			5,813
Income tax benefit (expense)		2,466			—			2,466			(2,178	)		—				(2,178	)
Net income (loss)	$	11,267		$	(400	)	$	10,867		$	5,237		$	(1,602	)		$	3,635
Earnings (loss) per share — diluted	$	0.16		$	0.00		$	0.16		$	0.07		$	(0.02	)		$	0.05
Weighted average number of common shares outstanding — diluted		69,830			69,830			69,830			72,071			72,071				72,071
Note: The AMD segment includes the Company’s interest in OccuLogix, Inc.
TLC VISION CORPORATION
CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands except per share amounts)
				Six Months Ended
				June 30, 2006						Six Months Ended June 30, 2005 (As Restated)
										Results Before AMD
	Results Before AMD Segment			AMD Segment			Total TLCVision			Segment			AMD Segment				Total TLCVision
Revenues:
Refractive:
Centers	$	91,537		$	—		$	91,537		$	81,775		$	—			$	81,775
Access		20,759			—			20,759			21,239			—				21,239
Other healthcare services		41,500			—			41,500			33,855			1,000				34,855
Total revenues		153,796			—			153,796			136,869			1,000				137,869
Cost of revenues:
Refractive:
Centers		61,796			—			61,796			54,450			—				54,450
Access		14,675			—			14,675			14,610			—				14,610
Other healthcare services		25,273			1,659			26,932			20,328			1,030				21,358
Total cost of revenues		101,744			1,659			103,403			89,388			1,030				90,418
Gross profit (loss)		52,052			(1,659	)		50,393			47,481			(30	)			47,451
General and administrative		16,153			1,759			17,912			14,411			3,876				18,287
Marketing and sales		13,506			169			13,675			10,468			372				10,840
Research and development, clinical and regulatory		—			1,475			1,475			—			2,654				2,654
Amortization of intangibles		1,738			—			1,738			2,043			—				2,043
Other expenses (income), net		(526	)		849			323			(1,033	)		—				(1,033	)
Total operating costs		30,871			4,252			35,123			25,889			6,902				32,791
Operating income (loss)		21,181			(5,911	)		15,270			21,592			(6,932	)			14,660
Gain on sale of OccuLogix, Inc. stock		—			1,450			1,450			—			—				—
Interest income		869			366			1,235			1,275			776				2,051
Interest expense		(679	)		—			(679	)		(642	)		—				(642	)
Minority interests		(5,467	)		2,715			(2,752	)		(4,701	)		2,910				(1,791	)
Earnings (losses) from equity investments		1,874			(1,850	)		24			1,339			—				1,339
Income (loss) before income taxes		17,778			(3,230	)		14,548			18,863			(3,246	)			15,617
Income tax expense		(969	)		—			(969	)		(5,255	)		—				(5,255	)
Net income (loss)	$	16,809		$	(3,230	)	$	13,579		$	13,608		$	(3,246	)		$	10,362
Earnings (loss) per share — diluted	$	0.24		$	(0.05	)	$	0.19		$	0.19		$	(0.05	)		$	0.14
Weighted average number of common shares outstanding — diluted		69,832			69,832			69,832			72,057			72,057				72,057
Note: The AMD segment includes the Company’s interest in OccuLogix, Inc.
TLC VISION CORPORATION
CONSOLIDATING BALANCE SHEETS
(In thousands)
				June 30, 2006
				(Unaudited)									December 31, 2005
										Results Before AMD			AMD Segment
	Results Before AMD Segment			AMD Segment			Total TLCVision			Segment (Unaudited)			(Unaudited)				Total TLCVision
ASSETS
Current assets
Cash and cash equivalents	$	35,869		$	10		$	35,879		$	22,122		$	9,607			$	31,729
Short-term investments		9,825			—			9,825			6,550			31,663				38,213
Accounts receivable, net		19,811			—			19,811			20,056			527				20,583
Prepaid expenses, inventory and other		12,053			—			12,053			11,604			5,519				17,123
Total current assets		77,558			10			77,568			60,332			47,316				107,648
Intercompany		(565	)		565			—			1,693			(1,693	)			—
Restricted cash		1,010			—			1,010			975			—				975
Investments and other assets		21,712			18,278			39,990			19,838			—				19,838
Goodwill		96,440			—			96,440			99,402			—				99,402
Other intangible assets, net		22,249			—			22,249			23,886			135				24,021
Fixed assets, net		53,117			—			53,117			48,646			513				49,159
Total assets	$	271,521		$	18,853		$	290,374		$	254,772		$	46,271			$	301,043
LIABILITIES
Current liabilities
Accounts payable	$	9,675		$	—		$	9,675		$	10,517		$	514			$	11,031
Accrued liabilities		21,715			—			21,715			22,158			2,295				24,453
Current maturities of long-term debt		6,595			—			6,595			5,268			—				5,268
Total current liabilities		37,985			—			37,985			37,943			2,809				40,752
Long-term debt, less current maturities		14,236			—			14,236			12,665			—				12,665
Other long-term liabilities		3,132			—			3,132			3,427			—				3,427
Minority interests		14,696			—			14,696			14,284			21,510				35,794
Total liabilities		70,049			—			70,049			68,319			24,319				92,638
STOCKHOLDERS’ EQUITY
Common stock		418,193			30,898			449,091			419,936			30,767				450,703
Option and warrant equity		1,814			—			1,814			1,861			—				1,861
Accumulated deficit		(218,535	)		(12,045	)		(230,580	)		(235,344	)		(8,815	)			(244,159	)
Total stockholders’ equity		201,472			18,853			220,325			186,453			21,952				208,405
Total liabilities and stockholders’ equity	$	271,521		$	18,853		$	290,374		$	254,772		$	46,271			$	301,043
Note: The AMD segment includes the Company’s interest in OccuLogix, Inc.
TLC VISION CORPORATION
CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands except per share amounts)
				Six Months Ended
				June 30, 2006						Six Months Ended June 30, 2005 (As Restated)
		-						-
										Results Before AMD
	Results Before AMD Segment			AMD Segment			Total TLCVision			Segment			AMD Segment				Total TLCVision
OPERATING ACTIVITIES
Net income (loss)	$	16,809		$	(3,230	)	$	13,579		$	13,608		$	(3,246	)		$	10,362
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization		7,642			34			7,676			7,929			59				7,988
Reimbursements from investments in research and development
arrangements		(300	)		—			(300	)		(300	)		—				(300	)
Minority interests		5,467			(2,715	)		2,752			4,701			(2,910	)			1,791
(Earnings) losses from equity investments		(1,874	)		1,850			(24	)		(1,339	)		—				(1,339	)
Deferred taxes		2,019			—			2,019			4,126			—				4,126
Loss (gain) on sales and disposals of fixed assets		(28	)		29			1			(96	)		—				(96	)
Gain on sale of OccuLogix, Inc. stock		—			(1,450	)		(1,450	)		—			—				—
Write-down of OccuLogix, Inc. inventory		—			1,625			1,625			—			—				—
Gain on sale of subsidiary		—			—			—			(319	)		—				(319	)
Non-cash compensation expense		739			186			925			69			137				206
Other		—			26			26			—			88				88
Changes in operating assets and liabilities, net of acquisitions and dispositions:		(2,823	)		(1,225	)		(4,048	)		(5,039	)		(4,711	)			(9,750	)
Cash from operating activities		27,651			(4,870	)		22,781			23,340			(10,583	)			12,757
INVESTING ACTIVITIES
Purchases of fixed assets		(6,349	)		—			(6,349	)		(5,113	)		(64	)			(5,177	)
Proceeds from sales of fixed assets		516			—			516			724			—				724
Proceeds from divestitures of investments and subsidiaries, net		—			—			—			3,430			—				3,430
Proceeds from sale of OccuLogix, Inc. stock, net		—			2,226			2,226			—			—				—
OccuLogix, Inc. cash balance at time of deconsolidation		—			(14,814	)		(14,814	)		—			—				—
Distributions and loan payments received from equity investments		1,854			—			1,854			1,387			—				1,387
Reimbursements from investments in research and development
arrangements		300			—			300			300			—				300
Acquisitions and equity investments		(3,171	)		—			(3,171	)		(8,881	)		—				(8,881	)
Proceeds from sales of short-term investments		—			9,925			9,925			56,350			10,047				66,397
Purchases of short-term investments		(3,275	)		—			(3,275	)		(27,710	)		(5,383	)			(33,093	)
Other		24			(71	)		(47	)		35			(42	)			(7	)
Cash from investing activities		(10,101	)		(2,734	)		(12,835	)		20,522			4,558				25,080
FINANCING ACTIVITIES
Restricted cash movement		(35	)		—			(35	)		25			—				25
Transfer proceeds from sale of OccuLogix, Inc. stock, net		2,226			(2,226	)		—			—			—				—
Principal payments of debt financing and capital leases		(1,968	)		—			(1,968	)		(6,131	)		—				(6,131	)
Proceeds from debt financing		283			—			283			1,321			—				1,321
Distributions to minority interests		(4,754	)		—			(4,754	)		(3,744	)		—				(3,744	)
Proceeds from issuances of common stock		445			—			445			1,089			—				1,089
Proceeds from issuances of OccuLogix, Inc. stock		—			233			233			—			107				107
Cash from financing activities		(3,803	)		(1,993	)		(5,796	)		(7,440	)		107				(7,333	)
Net increase (decrease) in cash and cash equivalents during the period		13,747			(9,597	)		4,150			36,422			(5,918	)			30,504
Cash and cash equivalents, beginning of period		22,122			9,607			31,729			15,847			17,588				33,435
Cash and cash equivalents, end of period	$	35,869		$	10		$	35,879		$	52,269		$	11,670			$	63,939
Operating cash flow per diluted share	$	0.40		$	(0.07	)	$	0.33		$	0.32		$	(0.14	)		$	0.18
Note: The AMD segment includes the Company’s interest in OccuLogix, Inc.