TLC Vision Corporation (Form: 8-K)

St. Louis, Missouri, March 7, 2005: TLC Vision Corporation (NASDAQ:TLCV; TSX:TLC), North America’s premier eye care services company, today announced its financial results for the three and twelve month periods ended December 31, 2004. 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.

•

Net income increased $53.1 million this year and generated EPS of $0.61 compared to a loss of ($0.15) per share in 2003

Revenues for the 4th quarter and the year increased as a result of higher refractive procedure volumes, growing custom mix and continued strong performance from the other healthcare services segment.

Full year total revenues for 2004 increased 24% to $242.2 million from $195.7 million in 2003. Total revenues for the 4th quarter 2004 rose 15% to $55.7 million compared to $48.5 million for the same period a year ago.

For the full year, refractive revenues were up 21% to $177.4 million. Refractive revenues for the 4th quarter 2004 increased 13% to $39.2 million compared to $34.7 million in 2003.

Other healthcare revenues continued to demonstrate steady growth of 19% for the 4th quarter year-over-year comparisons and an increase of 31% for the full year. This was led by ambulatory surgery center (ASC) business revenues which increased 84% over 2003 levels, due to additional investments in surgery centers combined with higher surgical volume. Overall, revenues from other healthcare services generated 27% of total net revenues compared to 25% in the 2003 twelve-month period.

TLCVision experienced record earnings for the quarter and the year which is attributable to refractive and cataract procedure volume increases, higher gross margins and the contribution from the Company’s participation in the initial public offering of OccuLogix Inc. in December 2004.

Net income increased $53.1 million for the year to realize $43.7 million or $0.61 per share. For the same twelve month period in 2003, TLCVision recorded a net loss of ($9.4 million) or ($0.15) per share. Net income rose $29 million in the 4th quarter to achieve $26.1 million or $0.36 per share. TLCVision reported a net loss of ($2.9 million) or ($0.04) per share for the same period a year ago. Without the impact from our age-related macular degeneration (AMD) business segment, earnings per share reached $0.29 for the year compared to a loss of ($0.11) for 2003, and $0.02 for the 4th quarter compared to a loss of ($0.03) for the same period last year.

“This has been an outstanding year for the Company as we achieved record earning results and all of our business segments grew at an impressive rate,” commented Jim Wachtman, President and Chief Executive Officer. “TLCVision is now well positioned to grow the business for the long term with strong financials, extensive geographic coverage and a disciplined operating system.”

Volume: The 4th quarter refractive procedure volumes from the same store centers business increased 12.6% year-over-year, which out-performed the estimated industry average of 11.5%. Total paid laser procedures increased to 42,200 compared to 38,600 in the same period a year ago. Overall procedures grew 9.3% and access procedures were up by 5.2%. The procedure volume mix in Q4-04 was 60% centers and 40% access.

For the full year, 196,000 refractive procedures were performed, which is 11.5% higher than the 2003 results. The centers business procedure volume grew 18.3% for the year, on a same store basis, and out-performed the industry average of 16.7%.

CustomLASIK: Higher pricing and gross margins associated with CustomLASIK procedures continue to support TLCVision’s strong operating performance. CustomLASIK procedures represented approximately 58% of Q4-04 center volumes, up from 55% in the prior quarter and 43% in the same period in 2003.

Margins: Refractive gross profit margins, for 2004, increased 5.6% to 29.4% due to higher refractive volume and improved custom and centers mix. Refractive margins, in the 4th quarter, increased 3.6% to 23.3%.

The Company ended the twelve-month period in a strong financial position with cash and short-term investments totaling $84.5 million on December 31, 2004, 179% higher than the level in 2003. With consolidation of OccuLogix’s cash position, TLCVision’s cash balance totaled $144.5 million.

Operating cash flow per share, fully diluted, for the full year increased significantly to $0.50 compared to $0.07 in 2003. For the 4th quarter, operating cash flow per share rose 212% to $0.09 from $0.03 in the same prior year period.

For Q1-05, based on preliminary financial analysis, the Company expects to report net earnings per fully diluted share in an approximate range of $0.13-$0.15, excluding the impact of the AMD business. The Company expects operating cash flow per share to be in the range of $0.14-$0.16. Actual Q1-05 results could vary and will be announced in early May.

For full year 2005, the Company expects to achieve the following growth trends and target ranges, before considering the impact of the AMD business:

•

Refractive Seasonality: Follows historical trends, Q1 is highest volume and decreases each sequential quarter

•

Operating Expenses: $3.5-$4.0 million additional spend, due principally to additional marketing, staffing and $1.4 million of stock option expense in the last half of 2005

•

Operating Cash Flow: Continued cash generation well in excess of earnings

TLCVision is 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, March 7, at 5:15 p.m. Eastern Time at 1-800-443-6324. The call will also be broadcast live and archived on the Company’s web site at www.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.

TLCVision is North America’s premier eye care services company, providing eye doctors with the tools and technologies needed to deliver high-quality care. We maintain leading positions in Refractive, Cataract and Optometric Services markets, plus the AMD market through our significant ownership in OccuLogix, Inc (NASDAQ: RHEO, TSX: RHE). The key drivers of TLCVision‘s strategy are our affiliated network of over 13,000 eye doctors, proven corporate and consumer marketing and education programs, and access to state of the art clinical technologies. We are supported by strong financial performance, a culture of operational excellence and an experienced management team.. The Company’s common shares trade on the NASDAQ National Market under the symbol ‘TLCV’ and on the Toronto Stock Exchange under the symbol ‘TLC’. More information about the Company can be found on the TLCVision web site at www.tlcv.com.

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.

TLC VISION CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)
(In thousands except per share amounts)


	THREE MONTHS ENDED DECEMBER 31,						TWELVE MONTHS ENDED
							DECEMBER 31,
	2004			2003			2004			2003
Revenues {r}
Refractive {r}
Centers	$	30,563		$	27,960			136,730		$	110,052

Access		8,676			6,703			40,659			36,140

Other healthcare services		16,476			13,881			64,806			49,488

Total revenues		55,715			48,544			242,195			195,680

Cost of revenues {r}
Refractive {r}
Centers		23,438			22,627			96,388			86,045

Access		6,646			5,223			28,863			25,424

Other healthcare services		10,751			8,654			40,435			31,836

Total cost of revenues		40,835			36,504			165,686			143,305

Gross margin		14,880			12,040			76,509			52,375

General and administrative		9,675			7,333			33,128			31,688

Marketing		3,706			3,819			13,385			14,094

Amortization of intangibles		1,013			1,670			4,098			6,685

Research and development		—			623			849			1,598

Adjustment to the fair value of investments and long-term receivables		—			11			(1,206	)		(206	)

Restructuring and other charges		—			320			2,755			2,040

		14,394			13,776			53,009			55,899

Operating income (loss)		486			(1,736	)		23,500			(3,524	)

Other income and (expense):

Other income, net		26,078			29			26,367			669

Interest expense, net		198			(278	)		(663	)		(1,364	)

Minority interests		(951	)		(1,060	)		(6,953	)		(4,672	)

Earnings from equity investments		490			—			2,057			—

Earnings (loss) before income taxes		26,301			(3,045	)		44,308			(8,891	)

Income tax expense		(206	)		119			(600	)		(508	)

Net income (loss)	$	26,095		$	(2,926	)	$	43,708		$	(9,399	)

Earnings (loss) per share — diluted	$	0.36		$	0.04		$	0.61		$	(0.15	)

Weighted average number of common shares outstanding — diluted		71,846			66,046			71,088			64,413


	DECEMBER 31,
	2004			2003
ASSETS
Current assets:
Cash and cash equivalents	$	144,450		$	29,580
Short-term investments		—			748
Accounts receivable		17,443			15,617
Prepaid expenses, inventory and other		13,555			11,646

Total current assets		175,448			57,591
Restricted cash		932			1,376
Investments and other assets		10,482			3,102
Goodwill		53,774			48,829
Other intangible assets		18,140			22,959
Fixed assets		46,465			56,891

Total assets	$	305,241		$	190,748

LIABILITIES
Current liabilities:
Accounts payable	$	8,716		$	10,627
Accrued liabilities		27,139			25,811
Current maturities of long-term debt		8,664			10,285

Total current liabilities		44,519			46,723
Other long-term liabilities		2,722			2,607
Long-term debt, less current maturities		9,991			19,242
Minority interests		37,222			10,907
STOCKHOLDERS’ EQUITY
Common stock, no par value; unlimited number authorized		458,959			397,878
Option and warrant equity		2,872			8,143
Accumulated deficit		(251,044	)		(294,752	)

Total stockholders’ equity		210,787			111,269

Total liabilities and stockholders’ equity	$	305,241		$	190,748

TLC VISION CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)


	YEAR ENDED DECEMBER 31,
	2004			2003
OPERATING ACTIVITIES
Net income (loss)	$	43,708		$	(9,399	)
Adjustments to reconcile net income (loss) to net cash from operating

activities:
Depreciation and amortization		17,681			22,593
Write-off of investment in research and development arrangements		849			1,598
Minority interests		6,953			4,672
Gain on sale of subsidiary stock		(25,792	)		—
Gain on sale of interest in subsidiary		(1,143	)		—
Earnings from equity investments		(2,057	)		—
Loss (gain) on sale of fixed assets		839			(484	)
Non-cash compensation expense		484			125
Adjustment to the fair value of investments and long-term receivables and impairment of fixed assets		(1,206	)		(206	)
Non-cash restructuring and other costs		—			677
Changes in operating assets and liabilities, net of acquisitions and dispositions
Accounts receivable		(1,449	)		(489	)
Prepaid expenses, inventory and other current assets		(1,535	)		(964	)
Accounts payable and accrued liabilities		(1,706	)		(13,831	)

Cash from operating activities		35,626			4,292

INVESTING ACTIVITIES
Purchases of fixed assets		(5,457	)		(4,433	)
Proceeds from sale of fixed assets		1,565			578
Proceeds from divestitures of investments and subsidiaries, net of cash		729			221
Distributions and loan payments received from equity investments		2,518			—
Investment in research and development arrangements		(849	)		(1,598	)
Acquisitions and investments, net of cash acquired		(10,067	)		(8,015	)
Proceeds from sale of short-term investments		313			809
Other		60			(229	)

Cash from investing activities		(11,188	)		(12,667	)

FINANCING ACTIVITIES
Restricted cash movement		444			2,599
Proceeds from debt financing		—			3,450
Principal payments of debt financing and capital leases		(13,669	)		(8,018	)
Proceeds from sale of subsidiary stock, net		25,792			—
Distributions to minority interests		(7,216	)		(4,901	)
Proceeds from issuance of subsidiary stock, net and cash acquired upon reorganization		59,850			—
Proceeds from issuance of common stock		25,231			8,744

Cash from financing activities		90,432			1,874

Net increase (decrease) in cash and cash equivalents during the period		114,870			(6,501	)
Cash and cash equivalents, beginning of period		29,580			36,081

Cash and cash equivalents, end of period	$	144,450		$	29,580


COMPONENTS OF OPERATING CASH FLOW:
Consolidated, as reported	$	35,626		$	4,292
AMD Business		(2,523	)		(2,024	)

Operating cash flow before AMD	$	38,149		$	6,316


New Brunswick	0-29302	980151150
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)

5280 Solar Drive, Suite 100, Mississauga, Ontario		L4W 5M8
_________________________________ (Address of principal executive offices)		___________ (Zip Code)


	TLC Vision Corporation

March 9, 2005	By:	Brian Andrew

		Name: Brian Andrew
		Title: General Counsel


Exhibit No.		Description

99.1		Earnings Press Release March 7, 2005


*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



COMPONENTS OF NET INCOME:
Consolidated, as reported	$	26,095		$	(2,926	)	$	43,708		$	(9,399	)
Gain from Occulogix IPO		25,792			—			25,792			—
AMD business excluding IPO gain		(783	)		(778	)		(2,592	)		(2,071	)

Net income before AMD	$	1,086		$	(2,148	)	$	20,508		$	(7,328	)

EPS BEFORE AMD – DILUTED	$	0.02		$	(0.03	)	$	0.29		$	(0.11	)


Date of Report (Date of Earliest Event Reported):		March 7, 2005


Registrant’s telephone number, including area code:		(905) 602-2020


		o2004 includes a favorable impact from OccuLogix IPO participation