IntraLase Corp. Reports Another Quarter of Record Revenues and Laser Placements; Revenues Rise 40%; 52 Laser Placements; Strong Cash Generation

Highlights from IntraLase's second quarter included:

-- record revenues of $32.2 million;

-- record number of laser placements with 52 lasers sold or leased worldwide;

-- record number of procedures with 119,000 IntraLase procedures sold worldwide;

-- addition of a significant new international corporate center customer;

-- penetration of new international markets;

-- an increase in cash and marketable securities of $7.6 million;

-- tremendous progress on the IntraLase Keratoplasty application, which is expected to launch in September of this year.

Revenues increased 40% to $32.2 million versus $23.0 million inthe second quarter of 2005. This growth was led by global sales of the4th Generation IntraLase FS(R) laser, with the company placing forsale or lease a record 52 lasers versus 39 lasers in the secondquarter of 2005 and 49 lasers in the first quarter of 2006. The recordrevenue number included sales of 119,000 procedures in the secondquarter of 2006, a 40% increase over the second quarter of 2005 and a6% sequential increase over the first quarter of 2006. Second quarternet income was $5.6 million, including $1.2 million in non-cash,stock-based compensation expense, compared to net income of $1.3million in the second quarter of 2005, which included $1.1 million ofnon-cash, stock-based compensation expense. Second quarter earningsper fully diluted share were $0.18, versus $0.04 for the secondquarter of 2005. Cash and marketable securities increased by $7.6million, to $97.4 million from $89.8 million at March 31, 2006.

"Our second quarter performance is proof of the continued rapid,global adoption of our IntraLase FS laser," said Robert J. Palmisano,president and CEO of IntraLase Corp. "IntraLase continued to grow andcapture market share with our record number of laser placements and weare especially proud of our strong international growth." Palmisanocontinued, "We are looking forward to our planned September 2006launch of the IntraLase FS(R) laser application for penetratingkeratoplasty, considered by many leading surgeons to be a breakthroughtechnology for corneal transplants."

Revenues for the first six months of 2006 were $62.2 million, anincrease of 41% over the comparable period of 2005. The company soldor leased 101 lasers in the first half of 2006, a 29% increase overthe 78 sold or leased in the comparable period of 2005. Proceduresales during the first half of 2006 of 231,000 procedures increased44% from the same period in 2005. Net income for the first six monthsof 2006 was $8.8 million, including $2.8 million in non-cashstock-based compensation expense, compared to net income of $3.3million, which included $1.1 million in non-cash stock-basedcompensation expense in the first six months of 2005. Earnings perfully diluted share for the first six months of 2006 were $0.28,versus $0.11 for the same period in 2005.

New International Corporate Center Customer

IntraLase also announced that it signed an agreement with a newinternational corporate center customer. Ultralase, a U.K.-based lasereye treatment specialist with 13 clinics, has acquired multipleIntraLase lasers.

Tony Veverka, managing director of Ultralase stated: "We haveaccelerated our roll-out of IntraLase following a very successfultrial. The proven benefits that this technology has to offer are asignificant step forward for our patients, both in terms of safety andoutcome. Soon we expect to become the first national provider in theU.K. to equip its entire network of clinics with IntraLase."

Palmisano added: "Ultralase truly sees the benefits of ourbladeless technology for their LASIK surgeons as well as theirpatients. We are pleased that Ultralase chose our technology to helpgrow their corporate center business. We look forward to a strongrelationship with Ultralase."

Penetration of New International Markets

During the second quarter of 2006, IntraLase continued to expandits international footprint, selling lasers for the first time inBrazil, Chile, Portugal and New Zealand. IntraLase now has customersin 31 countries outside the United States.

Guidance for 2006

IntraLase stated its guidance for fiscal year 2006 for revenuesand net income. The company expects revenue of approximately $130million, net income of approximately $22 million and earnings perfully diluted share of approximately $0.70 including estimatedexpenses of approximately $6.0 million associated with non-cash,stock-based compensation.

Conference Call

IntraLase will host a conference call today at 11 a.m. Easterntime to provide information on its financial results. The call will bewebcast live and can be accessed on the IntraLase Web site atwww.intralase.com. A replay of the webcast will be available for aone-week period following the call. The webcast is also beingdistributed to both institutional and individual investors. Individualinvestors can access the call at: www.fulldisclosure.com.Institutional investors can access the call via a password-protectedevent management site at www.streetevents.com. The call may also beaccessed by telephone at 866-383-8008 and for international parties at617-597-5341 by entering the confirmation code 83204316 between 10:50a.m. and 11 a.m. Eastern time. A telephone rebroadcast may also beaccessed for a one-week period by calling 888-286-8010 and forinternational parties 617-801-6888 by entering confirmation code88810386.

About Ultralase

Based in the United Kingdom, Ultralase has been performing lasereye treatment since January 1991. Ultralase has 13 clinics nationwideand has performed over 100,000 procedures since its founding. For moreinformation, visit the company's Web site athttp://www.ultralase.co.uk.

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 31 other countries. IntraLase has headquarters and manufacturesits products in Irvine. For additional information, visit thecompany'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 March 31, 2006, as filed with theSecurities and Exchange Commission on May 9, 2006.

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 Six Months Ended
------------------------- -------------------------
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
------------ ------------ ------------ ------------
Revenues - product
revenues (1) $32,170,926 $23,002,969 $62,233,980 $44,183,942
Costs of goods sold
(2) 14,395,889 10,944,054 27,993,075 20,966,290
------------ ------------ ------------ ------------
Gross Margin 17,775,037 12,058,915 34,240,905 23,217,652
------------ ------------ ------------ ------------
Operating expenses:
Research and
development (2) 3,689,339 3,083,344 7,284,704 5,598,394
Selling, general
and
administrative
(2) 9,381,883 8,289,367 19,866,054 15,537,832
------------ ------------ ------------ ------------
Total
operating
expenses 13,071,222 11,372,711 27,150,758 21,136,226
------------ ------------ ------------ ------------
Income from
operations 4,703,815 686,204 7,090,147 2,081,426
Interest and other
income, net 1,057,770 664,078 1,990,099 1,331,975
------------ ------------ ------------ ------------
Income before
provision for
income taxes 5,761,585 1,350,282 9,080,246 3,413,401
------------ ------------ ------------ ------------
Provision for
income taxes 197,644 40,505 290,567 107,408
------------ ------------ ------------ ------------
Net income $5,563,941 $1,309,777 $8,789,679 $3,305,993
============ ============ ============ ============
Net income per
share - basic $0.20 $0.05 $0.31 $0.12
============ ============ ============ ============
Net income per
share applicable -
diluted $0.18 $0.04 $0.28 $0.11
============ ============ ============ ============
Weighted average
shares outstanding
- basic 28,496,710 27,219,621 28,359,985 27,020,035
============ ============ ============ ============
Weighted average
shares outstanding
- diluted 31,196,889 31,045,535 31,125,925 31,105,344
============ ============ ============ ============

(1) Revenues from product sales are as follows:

Laser revenues $15,263,924 $11,045,233 $29,887,502 $21,486,795
Per procedure
disposable patient
interface revenues 14,293,752 10,107,097 27,665,145 19,135,047
Maintenance
revenues 2,613,250 1,850,639 4,681,333 3,562,100
------------ ------------ ------------ ------------
$32,170,926 $23,002,969 $62,233,980 $44,183,942
============ ============ ============ ============

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

Costs of goods sold $141,275 $28,256 $276,215 $63,129
Research and
development 223,116 274,844 722,118 178,129
Selling, general
and administrative 878,816 841,191 1,836,911 844,248
------------ ------------ ------------ ------------
$1,243,207 $1,144,291 $2,835,244 $1,085,506
============ ============ ============ ============



IntraLase Corp.
Condensed Consolidated Balance Sheet

June 30, Dec. 31,
2006 2005
------------- -------------
Assets:
Cash, cash equivalents and marketable
securities $63,413,214 $46,198,665
Accounts receivable, net 18,496,553 13,575,776
Inventories, net 14,047,720 13,471,961
Other current assets 3,398,377 3,190,412
------------- -------------
Total current assets 99,355,864 76,436,814
------------- -------------
Marketable securities 34,000,000 44,000,000
Other long-term assets 22,471,952 19,190,743
------------- -------------
Total long-term assets 56,471,952 63,190,743
------------- -------------
Total $155,827,816 $139,627,557
============= =============

Liabilities and Stockholders' Deficit:
Total current liabilities $19,101,399 $16,510,633
Total long-term liabilities 4,839,184 5,144,360
------------- -------------
Total liabilities 23,940,583 21,654,993
Stockholders' equity 131,887,233 117,972,564
------------- -------------
Total $155,827,816 $139,627,557
============= =============