Candela Corporation and the University of California Enter a Mutually Favorable License Amendment for Cooling Technology.

WAYLAND, Mass. -- Candela Corporation (NASDAQ: CLZR) today announced that it had completed a negotiation with the University of California to amend the exclusive license the Company has for its Dynamic Cooling Device (DCD)(TM).

Under the amended agreement, royalties paid to the University for devices including the DCD will be cut in half from 6% to 3%. The Company has agreed to incorporate only the DCD in its devices. Further, the Company will make a $3.0 million pre-payment of license fees to be amortized over the ten years remaining on the licensed patent. Both Candela and the University have agreed to join together in a collaborative spirit to further research and develop new and additional technologies.

Gerard E. Puorro, Candela's President and Chief Executive Officer, commented: "This is very good news for Candela. Our gross margins will see immediate improvement. However, equally as important is the renewal of our research and development partnership that brought the world's most effective cooling to market, and we are confident this will bring new products and applications to market going forward."

David G. Schetter, Assistant Vice Chancellor, Office of Technology Alliances at the University of California, said: "The amended license agreement will help make Candela more competitive in growing markets, will ensure the public benefits from the very safe and effective DCD cooling technology, and sets the stage for a strong research collaboration and technology development partnership between Candela and UC Irvine's Beckman Laser Institute."

About Candela Corporation. Candela Corporation, an ISO-9001 certified company develops, manufactures, and distributes innovative clinical solutions that enable physicians, surgeons, and personal care practitioners to treat selected cosmetic and medical conditions using lasers, aesthetic laser systems, and other advanced technologies. Founded near Boston in 1970, the company markets and services its products in over 64 countries from offices in the United States, Europe, Japan and other Asian locations. Candela established the aesthetic laser market 16 years ago, and currently has an installed base of over 8,500 lasers worldwide. Candela is an Equal Opportunity and Affirmative Action Employer (Male/Female/Handicapped/Veteran). Visit Candela on the web at www.candelalaser.com.

Safe Harbor Statement: Except for the historical information contained herein, this news release contains forward-looking statements that constitute Candela's current intentions, hopes, beliefs, expectations or predictions of the future, which are therefore inherently subject to risks and uncertainties. Such statements may relate to, among other things, our future revenue, gross margin, expense levels and earnings, our growth prospects, market acceptance of our products, the strength of our distribution channels, our ability to add new products, our ability to expand regulatory approvals and the liquidity of our common stock. The risks and uncertainties that may affect forward-looking statements include, among others: the cancellation or deferral of customer orders, dependence on a small number of strategic distribution relationships, difficulties in the timely development and market acceptance of new products, unanticipated increases in expenses, market developments that vary from the current public expectations concerning the growth of the laser industry, increased competitive pressures, changes in economic conditions, or difficulties in obtaining timely regulatory approvals. Further information on factors that could affect Candela's performance is included in Candela's periodic reports filed with the SEC, including but not limited to, Candela's Annual Report on Form 10-K for the year ended July 3, 2004, and subsequent Quarterly Reports on Form 10-Q. Candela cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Candela expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any such statements to reflect any change in Candela's expectations or any change in events, conditions or circumstances on which any such statement is based.