Candela (CLZR) 8-K Results of Operations and Financial Condition

Exhibit 99.1

CANDELA CORPORATION (Nasdaq: CLZR)

Condensed Consolidated Statements of Operations (unaudited)

(amounts in thousands, except per share amounts)

	For the three months ended:						For the year ended:
	July 3, 2004			June 28, 2003			July 3, 2004			June 28, 2003
Revenue	$	34,204		$	25,939		$	104,438		$	78,651
Cost of sales	16,576			12,527			51,273			38,633
Gross profit	17,628			13,412			53,165			40,018
Operating expenses:
Research and development	1,351			1,375			5,302			4,545
Selling, general and administrative	11,185			7,639			33,978			24,519
Total operating expenses	12,536			9,014			39,280			29,064
Income from operations	5,092			4,398			13,885			10,954
Other income (expense):
Interest income	80			89			308			651
Interest expense	(6		)	(4		)	(19		)	(218		)
Other income (expense)	526			(18		)	924			(44		)
Total other income (expense)	600			67			1,213			389
Income from continuing operations before income taxes	5,692			4,465			15,098			11,343
Provision for income taxes	1,371			1,240			4,586			3,516
Income from continuing operations	4,321			3,225			10,512			7,827
Discontinued operations:
Loss from discontinued skin care center operations	—			(235		)	(298		)	(1,013		)
Loss on disposal of Skin Care Center, including provision of 3,348 for operating losses less income tax benefit of 1,253.	—			—			(2,095		)	—
Net income	$	4,321		$	2,990		$	8,119		$	6,814
Net income (loss) per share of common stock:
Basic:
Income from continuing operations	$	0.20		$	0.16		$	0.48		$	0.39
Loss from discontinued operations	—			(0.01		)	(0.11		)	(0.05		)
Basic earnings per share	0.20			0.15			0.37			0.34
Diluted:
Income from continuing operations	0.19			0.15			0.46			0.38
Loss from discontinued operations	—			(0.01		)	(0.10		)	(0.05		)
Diluted earnings per share	$	0.19		$	0.14		$	0.36		$	0.33
Weighted average shares outstanding	22,295			20,913			21,902			20,083
Diluted weighted average shares outstanding	23,073			21,606			22,712			20,645

CANDELA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(dollars in thousands)

	July 3, 2004			June 28, 2003
Assets
Current assets:
Cash and cash equivalents	$	37,396		$	31,870
Accounts receivable, net	34,302			26,572
Notes receivable	1,151			1,086
Inventories	13,571			10,834
Other current assets	3,238			658
Total current assets	89,658			71,020
Property and equipment, net	3,406			3,327
Other assets	7,415			6,154
Total assets	$	100,479		$	80,501
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	6,973		$	5,271
Accrued payroll and related expenses	5,428			4,656
Accrued warranty	4,946			3,628
Income taxes payable	1,844			3,528
Restructuring reserve	0			0
Other accrued liabilities	3,586			2,755
Current liabilities of discontinued operations	1,019			1,095
Deferred income	3,421			2,779
Total current liabilities	27,217			23,712
Other long-term liabilities	3,945			3,393
Long-term liabilities of discontinued operations	2,548			48
Total long-term liabilities	6,493			3,441
Stockholders’ equity
Common stock	268			258
Less: Treasury stock	(12,997		)	(12,997		)
Additional paid-in capital	53,047			48,350
Accumulated earnings	26,023			17,904
Cumulative translation adjustment	428			(167		)
Total stockholders’ equity	66,769			53,348
Total liabilities and stockholders’ equity	$	100,479		$	80,501