MISSISSAUGA, ONTARIO--(Marketwire - Jan. 16, 2013) - CML HealthCare Inc. (TSX:CLC) (the "Company" or "CML") today announced its intention to divest its diagnostic imaging business, with the exception of its MRI/CT operations in Ontario. CML has commenced preliminary discussions with a number of prospective buyers and, although there can be no assurance that any transaction will be completed or the timing thereof, the Company will be working diligently to complete the sale of the business by the end of 2013. CML is committed to working with potential buyers to facilitate a smooth transition of the assets, with an emphasis on maintaining patient access. The Company expects to deploy the net proceeds from the planned sale of this business to reducing debt and to investments in its core Laboratory Services business.

The Company also announced the establishment of a new quarterly dividend of $0.1325 per common share, or $0.53 per common share on an annual basis. It is expected that the first quarterly dividend will be payable in April 2013, subject to Board approval. Any ultimate decision to declare and pay any future quarterly dividend will be made by the Board of Directors of the Company, at its discretion, based upon the Company's earnings, financial operation requirements and other factors and conditions the Board deems advisable at that time. The target Payout Ratio¹ associated with the new dividend level is in the range of 80% of Adjusted Funds From Continuing Operations¹ in 2013 following the exit of the diagnostic imaging business.

CML also announced its intention to implement a normal course issuer bid ("NCIB") to repurchase common shares for cancellation. The NCIB will be completed through the facilities of the Toronto Stock Exchange and is subject to prior acceptance by the Exchange. Particulars of the NCIB will be announced in due course.

"CML has provided critical laboratory services for more than 40 years as a trusted partner of medical professionals and the Ontario Ministry of Health and Long Term Care," said Patrice Merrin, Chairman of the CML Board of Directors. "With a central laboratory that processes the highest volumes in Ontario - over 44 million tests annually for approximately six million requisitions - the Company is well positioned to deliver shareholder value. We believe a quarterly dividend of $0.1325 per common share provides investors with attractive income while providing CML with financial flexibility to invest internally and on new opportunities."

"We are making good progress towards optimizing our core Laboratory Services business and this will remain an area of emphasis going forward," said Thomas Wellner, President and Chief Executive Officer of CML. "In the meantime, CML continues to generate strong margins with a balance sheet that can support our enhancements and future growth."

Financial Implications of Divesting Diagnostic Imaging

In connection with 2012 year-end financial reporting requirements, CML will review the carrying value of the diagnostic imaging business, which may result in a one-time, non-cash, asset impairment charge. Fourth quarter 2012 results will also include a special charge in respect of severances and a contract exit.

Upon completion of the sale of the diagnostic imaging operations, CML projects a $4 million annualized decline in corporate expenses with the full savings to be realized following the exit of the diagnostic imaging business. CML estimates that the new maintenance capital expenditure requirements for its continuing operations will be $7.5 million annually. This estimate takes into account CML's ongoing investments in its information technology and laboratory infrastructure.

Peter van der Velden joins the Board of Directors

CML is pleased to announce that Peter van der Velden has been appointed to the Company's Board of Directors. Mr. van der Velden is the Managing General Partner of Lumira Capital and is the former President and Chief Executive Officer of MDS Capital. He brings deep industry knowledge of the life sciences and healthcare sector with 25 years of investing and operating experience. Mr. van der Velden is the President of the Canada's Venture Capital & Private Equity Association.

Investor Call

Analysts and investors are invited to attend a conference call today, January 16, 2013 at 10:00 a.m. (ET) chaired by Thomas Wellner, President and Chief Executive Officer who will discuss today's announcements and provide a corporate update.

To join the call, dial 416-695-6617 or 800-952-4972. Please dial in 15 minutes prior to the call to secure a line. You will be put on hold until the conference call begins.

A live audio webcast along with a PowerPoint presentation will be available through [ www.cmlhealthcare.com ]. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be needed for the webcast. An archived replay of the webcast will be available for 90 days.

A taped replay of the conference call will also be available until January 30, 2013 by calling 905-694-9451 or 800-408-3053, reference number 9108573.

About CML HealthCare Inc.

Based in Mississauga, Ontario, CML HealthCare Inc. is Canada's leading community-based, medical diagnostic services provider operating 140 patient service centres in Ontario, 94 imaging centres in Ontario and British Columbia, and a reference laboratory in Ontario focused on specialized coagulation testing for customers worldwide. CML is publicly traded on the Toronto Stock Exchange under the symbol "CLC" and has approximately 89.8 million common shares outstanding. For more information, please visit [ www.cmlhealthcare.com ] and follow us on Twitter @cmlhealthcare.

¹ Adjusted funds from continuing operations ("AFFO") and Payout Ratio are not recognized measures under IFRS. AFFO is defined as cash flows from operating activities of continuing operations, with a normal level of working capital, less purchases of property and equipment in respect of routine maintenance expenditures. Payout Ratio is defined as the Company's dividend divided by its AFFO for the same period of time. The Company uses these terms as measures of financial performance, as indicators of its cash flow strength, its ability to meet future operational and capital expenditure requirements and ability to pay dividends on the Company's common shares.Investors should be cautioned, however that adjusted funds from continuing operations should not be construed as an alternative to cash provided by operating activities of continuing operations determined in accordance with IFRS. The Company's method of calculating adjusted funds from continuing operations may differ from other companies and accordingly, adjusted funds from continuing operations may not be comparable to measures used by other companies.

Caution concerning forward-looking statements

This document includes forward-looking statements within the meaning of certain securities laws, including the "safe harbour" provisions of the Securities Act (Ontario) and other provincial or territorial securities law in Canada. These forward-looking statements include, among others, statements with respect to our objectives, goals and strategies to achieve those objectives and goals, as well as statements with respect to our beliefs, plans, objectives, expectations, anticipations, estimates and intentions. The words "may", "will", "could", "should", "would", "suspect", "outlook", "believe", "plan", "anticipate", "estimate", "expect", "intend", "forecast", "objective" and "continue" (or the negative thereof), and words and expressions of similar import, are intended to identify forward-looking statements.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which give rise to the possibility that predictions, forecasts, projections and other forward-looking statements will not be achieved. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. We caution readers not to place undue reliance on these statements, as a number of important factors, many of which are beyond our control, could cause our actual results to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to: our ability to complete strategic acquisitions and to integrate our acquisitions successfully; ability to pay dividends in the future; dependence on government-based revenues in Canada; general economic conditions; pending and proposed legislative or regulatory developments in Canada including the impact of changes in laws, regulations and the enforcement thereof; reliance on funding models in Canada; operational and infrastructure risks including possible equipment failure and performance of information technology systems; intensifying competition resulting from established competitors and new entrants in the businesses in which we operate; insurance coverage of sufficient scope to satisfy any liability claims; fluctuations in total patient referrals; technological change and obsolescence; loss of services of key senior management personnel; privacy laws; structural subordination of common shares; leverage and restrictive covenants; fluctuations in cash timing and amount of capital expenditures; tax-related risks; unpredictability and volatility of the price of common shares; dilution; and future sales of common shares.

We caution that the foregoing list of important factors that may affect future results is not exhaustive. When reviewing our forward-looking statements, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Additional information about factors that may cause actual results to differ materially from expectations, and about material factors or assumptions applied in making forward-looking statements, may be found in the "Risk Factors" section of our Annual Information Form, under "Business Risks" and elsewhere in our Management's Discussion and Analysis of Operating Results and Financial Position ("MD&A") for the year ended December 31, 2011 and elsewhere in our filings with Canadian securities regulators. Except as required by Canadian securities law, we do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf. Such statements speak only as of the date made.