Coherent, Inc. and Palomar Report on Negotiations for Acquisition of Palomar's Star Subsidiary.

SANTA CLARA, Calif.--(BW HealthWire)--Nov. 2, 1998--Coherent, Inc. (NASDAQ: COHR) a world leader in lasers and systems for medical, scientific and commercial applications, and Palomar Medical Technologies, Inc. (NASDAQ: PMTI), today announced that they are currently negotiating the acquisition by Coherent of Star Medical Technologies, Inc., a majority owned subsidiary of Palomar. Star, based in Pleasanton, California, manufactures the LightSheer(tm) diode laser system exclusively distributed by Coherent.

The sale price is expected to be in the range of $60 to $65 million, payable in cash. However, at this time the parties have not agreed to all of the terms of the transaction. Because a number of significant issues regarding the terms of the transaction remain unresolved, there can be no assurance that the parties will reach agreement. Due to the uncertain nature of transaction negotiations, the likelihood that an agreement will be reached is indeterminable. If an agreement is reached, consummation of the transaction would be subject to the approval of the stockholders of Palomar, as well as certain regulatory approvals and other standard closing conditions.

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act 

The statements in this press release that relate to future plans, events or performance are forward-looking statements that involve risks and uncertainties, including risks associated with uncertainties related to currency adjustments, contract cancellations, manufacturing risks, competitive factors, uncertainties pertaining to customer orders, demand for products and services, development of markets for the Company's products and services and other risks identified in the Company's SEC filings. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Readers are encouraged to refer to the risk disclosures described in the Company's reports on Forms 10-K, 10-Q and 8K, as applicable.

Founded in 1966, Coherent, Inc. is a Standard & Poor's SmallCap 600 company and a world leader in the design, manufacture, and marketing of lasers and systems for medical, scientific and commercial applications. Please direct any questions to Robert J. Quillinan, Executive Vice President and Chief Financial Officer at [phone]. For more information about Coherent, visit our Web site at http://www.cohr.com for product and financial updates. To receive a full text copy of this press release by fax, please call [phone].