Candela Reports Fourth Quarter and Fiscal Year 2008 Results.

WAYLAND, Mass. -- Candela Corporation (NASDAQ:CLZR) today reported results for the fourth fiscal quarter and fiscal year ended June 28, 2008. Revenues of $37.8 million in the fourth quarter decreased 3.1 percent from $39.0 million in the comparable prior-year period. The Company reported a net loss of $2.7 million, or $0.12 per share, for the fourth fiscal quarter versus a net loss of $727,000, or $0.03 per share, in the corresponding period last year.

Revenues from lasers and other products in the fourth quarter decreased to $25.6 million from $29.2 million in the prior year period. Revenues from product-related services increased to $12.2 million from $9.8 million in the prior year period.

Gross profit margin declined to 40.6 percent for the fourth quarter from 51.6 percent in the comparative prior-year period primarily due to the product reliability issues that were discussed last quarter. Fourth quarter 2008 selling, general and administrative expenses, including approximately $3.7 million in legal expenses, increased to $18.3 million, or 48.4 percent of revenues, compared with $16.7 million, or 42.3 percent of revenues in the same period last year. Research and development spending for the fourth quarter decreased to $3.0 million from $5.1 million in the prior year's quarter.

Gerard E. Puorro, President and Chief Executive Officer, said, "We are committed to minimizing the customer downtime associated with the product reliability issues that we are encountering and, as a result, we are going to great lengths to ease the burden on our customers and remain true to the Candela brand. We expect the remainder of the calendar year to be challenging as we work through these issues and absorb the financial impact, while navigating the weaker North American market. However, because we expect our litigation expenses to decline, we expect to return to profitability in the first calendar quarter of 2009."

Total revenues for the fiscal year ended June 28, 2008 were $148.2 million, essentially consistent with last year. Gross profit margin decreased to 45.1 percent from 50.5 percent in the prior year. For the fiscal year ended June 28, 2008, the Company reported a net loss of $9.1 million, or $0.40 per share, versus net income of $6.3 million, or $0.27 per share, last year.

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Conference Call Details

The Company will host a conference call today at 5:00 p.m. ET to discuss this announcement. The call can be accessed live by dialing [phone] or by visiting Candela Corporation's website at www.candelalaser.com

Investors may access a replay by dialing [phone], passcode 1272568, which will be available from 8:30 p.m. ET on August 20, 2008 through 11:59 p.m. ET on August 23, 2008. The webcast replay will also be archived in the "Investor Relations" section of the company's website.

About CANDELA: Candela Corporation 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 86 countries from offices and distributors in the United States, Europe, Japan, China and other Asian locations. Candela established the aesthetic laser market 20 years ago, and currently has an installed base of over 13,500 systems worldwide. Visit Candela on the Web at http://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, the risk of a material adverse judgment or increased litigation-related expenses in pending litigation matters, 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. 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.

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