IntraLase Corp. Reports Record 2005 Revenues, Net Income and Fully Diluted E.P.S.; Announces Major Technology Breakthrough: Laser Speed Doubled Again and Procedure Times Cut in Half

Revenues for the fourth quarter of 2005 were $27.4 million, a 43%increase over the comparable period in 2004. This growth was led byglobal sales of the IntraLase(R) FS laser, with the company placingfor sale or lease a record 44 lasers in the fourth quarter of 2005versus 37 lasers in the fourth quarter of 2004. Fourth quarter netincome was $3.8 million, including $893,000 in non-cash, stock-basedcompensation expense, compared to a loss of $3.1 million in the fourthquarter of 2004. Fourth quarter earnings per fully diluted share were$0.12, versus a loss of $0.12 for the fourth quarter of 2004. Fourthquarter 2005 gross margin and profit expansion was primarily due to anincrease in per procedure sales, inclusive of a disposable patientinterface, to 95,000 procedures in the fourth quarter of 2005, an 81%increase over the comparable period in 2004.

Revenues for the fiscal year ended December 31, 2005 were $94.4million, a 57% year-over-year gain. Driving this increase was the saleor lease of a record 156 IntraLase lasers compared to 111 in 2004, anincrease of 41%, bringing the worldwide installed base to 371 lasers.Net income for the 12 month period was $9.5 million, versus a loss of$10.2 million for the 12 months ended December 31, 2004. Earnings perfully diluted share for 2005 were $0.31, versus a loss of $1.28 infiscal year 2004. Total procedures sold in 2005, each inclusive of adisposable patient interface, were 338,000, an increase of 76%year-over-year.

"We are extremely pleased with our performance in 2005 and firmlybelieve that the ongoing rapid adoption of our technology demonstratesIntraLase's emergence as the technology of choice for corneal flapcreation," said Robert J. Palmisano, President and CEO of IntraLase.

Major Technology Breakthrough: 60 kHz IntraLase(R) laser

Demonstrating its commitment to continued product innovation,IntraLase announced its plan to launch a new 60 kHz laser at theannual meeting of the American Society of Cataract and RefractiveSurgery (ASCRS), scheduled to take place in San Francisco, CA March17-22, 2006. This new platform will significantly reduce the timeinvolved in creating the corneal flap. The 60 kHz laser nearly halvesthe procedure time to about 18 seconds and enables tighter spotplacement which facilitates easier flap elevation and enhances thesurgical experience while using less energy, diminishing the potentialfor post-operative inflammatory response.

"Our planned introduction of the 60 kHz laser demonstratesIntraLase's continued commitment to maintaining and enhancing ourproduct offering to benefit surgeons and patients through research anddevelopment. The 60 kHz introduction and upgrade for existingIntraLase lasers addresses the needs of both our current and potentialcustomers. Our experience thus far in five customer sites with 12prominent surgeons who have already used the 60 kHz laser is extremelyfavorable. Lastly, the 60 kHz laser confirms our leadership positionin femtosecond technology," stated Mr. Palmisano.

Leading ophthalmologist and early IntraLase adopter Michael GordonMD, of the GordonBinder Vision Institute in San Diego, stated, "Whilethe upgrade from 15 to 30 kHz was remarkable with regard to reducedenergies, reduced potential for inflammation, and smoothness of thecorneal bed, the latest upgrade to 60 kHz should make IntraLase laserflap creation the obvious choice for all surgeons. This technology isunbeatable in terms of accuracy and versatility, and with lowerenergies the flap lifts are very smooth." Dr. Gordon continued, "Thefaster procedure time is also nice, but it is the overall clinicalefficacy of the IntraLase created flap that has become so significantin our practice."

Guidance Reaffirmed for 2006

IntraLase reiterated its previously stated guidance for fiscalyear 2006. It expects revenue of approximately $130 million, netincome of approximately $22 million, and earnings per fully dilutedshare of approximately $0.70 including estimated expenses ofapproximately $6.5 million associated with non-cash, stock-basedcompensation.

Conference Call

IntraLase will host a conference call today at 11:00 a.m. EasternTime to provide information on its financial results. The call will bewebcast live and can be accessed on the IntraLase web site. A recordedversion of the webcast will be available for a one-week periodfollowing the call. The webcast is also being distributed to bothinstitutional and individual investors. Individual investors canaccess the call at: www.fulldisclosure.com. Institutional investorscan access the call via a password-protected event management site atwww.streetevents.com. The call may also be accessed by telephone at(800) 561-2731 or for international parties at (617) 614-3528 andentering the confirmation code 73779742 between 10:50 a.m. and 11:00a.m. Eastern Time. A telephone rebroadcast may also be accessed for aone-week period by calling (888) 286-8010 or for international parties(617) 801-6888 and entering confirmation code 10068613.

About IntraLase Corp.

IntraLase designs, develops, and manufactures an ultra-fast laserthat is revolutionizing refractive and corneal surgery by creatingsafe and more precise corneal incisions. Delivering on the promise ofophthalmic laser technology, the IntraLase FS laser, related software,and disposable devices replace the hand-held microkeratome blade usedduring LASIK surgery. The unsurpassed accuracy of IntraLase'scomputer-controlled femtosecond laser has been shown to improve safetyprofiles and visual outcomes when used during LASIK. Additionally, theIntraLase FS laser creates precision-designed intracorneal incisionsthat when combined can be used during lamellar and penetratingkeratoplasties, and intrastromal ring implantation. IntraLase ispresently in the process of commercializing applications of itstechnology in the treatment of corneal diseases that require cornealtransplant surgery. The company's proprietary laser and disposablepatient interfaces are presently marketed throughout the United Statesand 26 other countries. IntraLase is headquartered and manufacturesits products in Irvine, California. For additional information, visitthe company's web site: www.intralase.com.

Forward Looking Statements

Statements contained in this press release that are not historicalinformation are forward-looking statements as defined within thePrivate Securities Litigation Reform Act of 1995. Forward-lookingstatements can be identified by the use of words such as "believe,""expect," "anticipate," "intend," "plan," "estimate," "project," orwords of similar meaning, or future or conditional verbs such as"will," "would," "should," "could," or "may." Such forward-lookingstatements are subject to risks and uncertainties that could causeactual results to differ materially from those projected or implied.Those risks and uncertainties include, but are not limited to: thedegree of continued acceptance of LASIK surgery; potentialcomplications revealed by long-term follow up; the extent of adoptionof our product offering by LASIK surgeons; general economicconditions; changes in federal tax laws governing the ability ofpotential LASIK patients to use pre-tax dollars to pay for LASIKsurgery; the scope of government regulation applicable to ourproducts; patients' willingness to pay for LASIK surgery; our abilityto compete against our competitors; the effectiveness of our measuresto ensure full payment of procedure fees; the occurrence and outcomeof product liability suits against us; our ability to adequatelyprotect our intellectual property; whether we become subject to claimsof infringement or misappropriation of the intellectual propertyrights of others; the continued availability of supplies fromsingle-source suppliers and manufacturers of our key laser components;the ability of our managers, operations, and facilities to manage ourgrowth; the success of our expansion into markets outside the UnitedStates; whether we lose any of our key executives or fail to attractqualified personnel; or if our new products or applications fail tobecome commercially viable.

Certain of these risks and uncertainties, in addition to otherrisks, are more fully described in the company's quarterly report onForm 10-Q for the period ending September 30, 2005, as filed with theSecurities and Exchange Commission on November 8, 2005.

These forward-looking statements are made only as of the date ofthis press release, and the company assumes no obligation to update orrevise the forward-looking statements, whether as a result of newinformation, future events, or otherwise.
IntraLase Corp.
Condensed Consolidated Statement of Operations


Three Months Ended Twelve Months Ended
----------------------------------------------------
December 31, December 31, December 31, December 31,
2005 2004 2005 2004
------------ ------------ ------------ -------------
Revenues - product
revenues (1) $27,361,099 $19,163,251 $94,432,835 $ 59,968,274
Costs of goods
sold (2) 12,744,925 10,834,885 44,237,314 34,491,140
----------- ----------- ----------- ------------
Gross Margin 14,616,174 8,328,366 50,195,521 25,477,134
----------- ----------- ----------- ------------
Operating
expenses:
Research and
development (2) 3,261,485 3,714,606 11,652,675 12,718,418
Selling, general
and
administrative
(2) 8,200,621 8,093,082 31,611,517 23,352,288
----------- ----------- ----------- ------------
Total
operating
expenses 11,462,106 11,807,688 43,264,192 36,070,706
----------- ----------- ----------- ------------
Income (loss) from
operations 3,154,068 (3,479,322) 6,931,329 (10,593,572)
Interest and other
income, net 830,060 388,659 2,933,292 426,670
----------- ----------- ----------- ------------
Income (loss)
before provision
for income taxes 3,984,128 (3,090,663) 9,864,621 (10,166,902)
----------- ----------- ----------- ------------
Provision for
income taxes 155,572 7,500 340,163 30,000
----------- ----------- ----------- ------------
Net income (loss) 3,828,556 (3,098,163) 9,524,458 (10,196,902)
Accretion of
preferred stock - - - (44,845)
Net income (loss)
applicable to
common
stockholders $ 3,828,556 $(3,098,163) $ 9,524,458 $(10,241,747)
=========== =========== =========== ============
Net income (loss)
per share
applicable to
common
shareholders -
basic $ 0.14 $ (0.12) $ 0.35 $ (1.28)
=========== =========== =========== ============
Net income (loss)
per share
applicable to
common
shareholders -
diluted $ 0.12 $ (0.12) $ 0.31 $ (1.28)
=========== =========== =========== ============
Weighted average
shares
outstanding -
basic 27,947,962 25,005,538 27,405,499 8,008,494
=========== =========== =========== ============
Weighted average
shares
outstanding -
diluted 31,068,833 25,005,538 31,136,538 8,008,494
=========== =========== =========== ============

(1). Revenues from product sales are as follows:

Laser revenues $14,275,623 $11,541,157 $46,812,834 $ 33,237,551
Per procedure
disposable
patient interface
revenues 11,036,408 6,192,363 39,908,016 22,256,211
Maintenance
revenues 2,049,068 1,429,731 7,711,985 4,474,512
----------- ----------- ----------- ------------
$27,361,099 $19,163,251 $94,432,835 $ 59,968,274
=========== =========== =========== ============

(2). Amounts include stock-based compensation, as follows:

Costs of goods
sold $ 18,290 $ 51,816 $ 104,516 $ 197,614
Research and
development 509,273 565,719 702,688 1,467,311
Selling, general
and
administrative 365,044 1,488,760 1,290,873 2,844,188
----------- ----------- ----------- ------------
$ 892,607 $ 2,106,295 $ 2,098,077 $ 4,509,113
=========== =========== =========== ============



IntraLase Corp.
Condensed Consolidated Balance Sheet


December 31, December 31,
2005 2004
-----------------------------
Assets:
Cash, cash equivalents and
marketable securities $ 46,198,665 $ 92,014,926
Accounts receivable, Net 13,575,776 7,186,163
Inventories, Net 13,471,961 8,901,684
Other current assets 3,190,412 1,868,186
------------ ------------
Total current assets 76,436,814 109,970,959
------------ ------------
Marketable Securities 44,000,000 -
Other long-term assets 19,190,743 8,241,105
------------ ------------
Total long-term assets 63,190,743 8,241,105
------------ ------------
Total $139,627,557 $118,212,064
============ ============

Liabilities and Stockholders' Deficit:
Total current liabilities $ 16,510,633 $ 14,948,344
Total long-term liabilities 5,144,360 970,115
------------ ------------
Total liabilities 21,654,993 15,918,459
Stockholders' equity 117,972,564 102,293,605
------------ ------------
Total $139,627,557 $118,212,064
============ ============