Candela revenues and profitability up for 1st quarter fiscal 1997.

WAYLAND, Mass.--(BUSINESS WIRE)--Oct. 28, 1996--Candela Corp. (NASDAQ:CLZR) reported a 27 percent increase in revenues and improved profitability in the first quarter of fiscal 1997.

With several new products coming on stream, Candela revenues for the quarter ended Sept. 30, 1996 were $7.6 million, compared with $6.0 million the same quarter one year ago. Net income for the first quarter was $510,000, or 9 cents per share, compared with a loss of $105,000, or 2 cents per share during last year's fiscal first quarter. Financial reporting for all of fiscal 1996 and 1997 include the results of Spa Management Inc., which was acquired in June of 1996.

Candela Corp. develops, manufactures and distributes innovative clinical solutions in three primary areas -- medical laser treatment, cryosurgery and cosmetic spa/skin-care clinics. New products recently introduced include the ScleroPLUS, an advanced laser system for the treatment of port wine stain birthmarks, hemangiomas, spider veins, rosacea, stretch marks, vulvodynia, leg veins, scars and warts; and the ALEXLAZR, designed for treating pigmented lesions and unwanted tattoos of multiple colors.

Commenting on the results, Gerard E. Puorro, president and CEO, said: "The company's performance was aided by the growing acceptance of new products such as the ScleroPLUS and the ALEXLAZR. With the additional development of the FDA clearance of our Dynamic Cooling Device, we expect this momentum to continue into the second quarter and beyond."

The Dynamic Cooling Device is an instrument that significantly reduces pain during laser surgery by selectively cooling the top layers of the skin during treatments, consequently reducing thermal injury without affecting treatment efficacy.

"We are also pleased about the development of Candela Skin Care Centers Inc., including the acquisition of Spa Management Inc. This business posted a 31 percent increase in revenue for the first quarter compared to the same period in 1996," Puorro continued. "As we open other locations during the fiscal year, we will continue to move forward with precise steps as a leader in this emerging field, one of great importance to aging baby boomers.

Puorro also noted the acceptance of cryosurgery as a method of treating prostate disease and liver metastases and it is "gaining momentum in the medical community." Last August, Transamerica Life, the Medicare administrator for Southern California, notified urologists it will now reimburse patients cryosurgery used in treating prostate disease. In the same month the American Urological Association declared cryosurgery to no longer be an experimental or investigational procedure. "These two decisions augur well for potential national insurance eligibility and an increased demand for Candela's cryosurgical products,: Puorro concluded.

Candela Corp. develops, manufactures and distributes innovative clinical solutions that enable physicians, surgeons and personal care practitioners to treat selected cosmetic and medical problems using lasers, cryosurgery and other proven technologies. In addition, the company is applying its capabilities and experience with skin care and related problems to develop a network of company-owned skin care centers and spas. Founded near Boston in 1970 as Candela Laser Corp., Candela markets and services its products in over 40 countries from offices in the United States, Europe and the Far East. -0- Tables follow

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.

                          Candela Corp. (CLZR)
                Condensed Consolidated Statements of Operations

(in thousands except per share data)

                                (unaudited)
                        For the three months ended

                            Sept. 29,  Sept. 30,
                                1996     1995

Revenue                        $7,639   $5,984
Cost of sales                   3,885    3,590

Gross profit                    3,754    2,394

Operating expenses:
  Research and development        573      374
  Selling, general and
   administrative               2,505    2,023

Total operating expenses        3,078    2,397

Income (loss) from operations     676       (3)

Other income (expense):
  Interest income                  15       27
  Interest expense                (17)     (10)
  Other income (expense)           54     (119)

   Total other income (expense)    52     (102)

Income (loss) before
 income taxes                     728     (105)

Provision for income taxes        218        0

Net income (loss)                $510    ($105)

Net income (loss) per share     $0.09   ($0.02)

Weighted average number of
 common and common equivalent
 shares outstanding             5,655    5,239

CONTACT: Candela Corp.

Paul Broyer, 508/358-7400 x435

or

Stuart Pearlman & Co.

Stuart Pearlman, 212/370-4940