Candela Expects to Post Earnings Credit From Sale of Two Skin Care Centers; Advanced Medical Alliance to Acquire Scottsdale, Ariz. and Boston Sites.

WAYLAND, Mass.--(BW HealthWire)--March 17, 1998--Candela Corporation (NASDAQ:CLZR) announced today that the company reached preliminary agreement to sell its skin care centers in Boston, and Scottsdale, Ariz., to Advanced Medical Alliance. Terms of the transaction include a cash payment of approximately $3 million, and the agreement is expected to be finalized by the end of March. Advanced Medical is a San Diego, Calif.-based company that provides complete aesthetic/cosmetic services to consumers in facilities operating as "Centers of Excellence."

Candela said that the impact of these divestitures on the company's financial statements will result in a one-time earnings credit in excess of $1 million, or more than 20 cents per diluted share. Commenting on the sale of its skin care centers, Gerard E. Puorro, Candela's president and chief executive officer said: "We took a major write-off last quarter, primarily to put the continuing high costs and losses from the skin care venture behind us." The laser treatment and spa facilities were developed by Candela beginning in 1996. "With this transaction", he said, "we are able to recoup a significant amount of the cash we invested and re-apply those and other resources to foster additional continuing growth in our core laser device business."

"Earlier this month at the annual meeting of the American Academy of Dermatology," Puorro continued, "we experienced high levels of interest and wrote a good deal of business for advanced Candela products such as the GentleLASE(TM) system, the Dynamic Cooling Device(TM), the ScleroPlus(TM) vascular laser, and the SkinPlus(TM) dual-wavelength. Such activity normally augurs well for future sales." Puorro added, "And shipments for our new GentleLASE have already begun."

According to Allan Danto, Advanced Medical Alliance's president & chief executive officer, the company plans to continue to operate the Boston location with the same staff and facilities, and to reopen the Scottsdale spa and aesthetic skin care center by May 15, 1998. Danto stated, "The acquisition of these two world class day spas and aesthetic laser centers allows Advanced Medical Alliance to continue to refine the efforts started by Candela, and to capitalize on the full spectrum of spa and medical services offered at the centers." Danto further stated, "The full spectrum of services offered in a `Center of Excellence' environment allows the centers to have significant cross referrals between services and repeat business, that will make up the core for the centers' success and longevity."

About Candela

Candela Corporation develops, manufactures, and distributes innovative clinical solutions that enable physicians, surgeons, and personal care practitioners to treat selected cosmetic and medical conditions using lasers, cryosurgery, and other proven technologies. Founded near Boston in 1970, as Candela Laser Corporation, Candela markets and services its products in over 40 countries from offices in the United States, Europe, and Asia. Candela established the aesthetic laser market 11 years ago. With an installed base of over 1,500 lasers worldwide, more than 500,000 aesthetic laser procedures are performed annually with Candela laser systems. For more information about Candela, visit the company's web site at http://www.clzr.com. -0-

This press release includes certain forward-looking statements. Any such statements are subject to risks that could cause the actual results to vary materially, including negative developments relating to unforeseen order cancellations or push-outs, Candela's strategic relationships, the impact of intense competition, and changes in the laser industry.

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