Exhibit 99.1
Paul Broyer
Candela Corporation
508-358-7400 x435
CANDELA RELEASES SECOND QUARTER EARNINGS
AND ANNOUNCES ENTRY INTO INTENSE PULSED LIGHT SEGMENT
WITH NEXT GENERATION TECHNOLOGY
WAYLAND, MA, February 1, 2005 — Candela Corporation (NASDAQ: CLZR) today reported that revenues for the quarter ended January 1, 2005 were $28.2 million versus $23.9 million for the same quarter a year earlier – an 18% increase.
The Company reported earnings for the quarter of $2.6 million or $0.11 per share, compared to $2.4 million and $0.11 per share for the same quarter last year.
Included in the quarter’s earnings are $500,000 of expense consisting of legal fees related to the arbitration proceeding commenced by Candela against The Regents of the University of California, which proceeding was held in December 2004. Should the Company prevail in the arbitration, the Regents will be required to reimburse Candela for those legal fees.
Also included in the quarter’s earnings is a credit, net of tax, of $860,000 related to a decrease in the Company’s liability for lease payments at its former Boston spa, attributable to a new tenant taking over the premises.
Candela also announced today that it will soon commence the distribution in the U.S. of the next generation light technology called I2PL through a partnership with Danish Dermatologic Development (DDD). Candela is expanding its product portfolio with the Ellipse I2PL.
Gerard E. Puorro, Candela’s President and Chief Executive Officer, commented: “While our laser business continues to grow at a healthy pace, we felt we could enhance that growth by going into the intense pulsed light segment. This technology, unlike earlier generations of intense pulsed light, requires no skin cooling. Further, the Ellipse I2PL features a lightweight hand piece that is user-friendly and is effective for skin rejuvenation treatments on large or small body areas.” Puorro continued: “The Ellipse is the only pulsed light system in the world to feature patented I2PL technology, which removes ‘water absorbing’ wavelengths from the output spectrum device.” Puorro added: “Given our strong distribution channel in the United States, we are optimistic that the Ellipse I2PL will increase Candela’s lead in our markets.” Puorro concluded: “As for guidance for the quarter ending April 2, 2005, we presently believe that the Company is on track to generate a revenue range of $31 to $32 million, and an EPS of $0.12 to $0.14, without benefit of sales of the Ellipse I2PL, or factoring in any positive or negative results of the arbitration against the Regents.
About Candela:
Candela Corporation, an ISO-9001 certified company, develops, 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 over 64 countries from offices and distributors in the United States, Europe, Japan, China and other Asian locations. Candela established the aesthetic laser market 16 years ago, and currently has an installed base of 8,000 lasers worldwide. Candela is an Equal Opportunity and Affirmative Action Employer (Male/Female/Handicapped/Veteran). 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 an adverse judgment in the arbitration proceeding initiated by Candela to determine the respective obligations of Candela on the one hand and the Regents of the University of California on the other hand under their existing license Agreement, 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, including but not limited to, Candela’s Annual Report on Form 10-K for the year ended July 3, 2004, and subsequent Quarterly Reports on Form 10-Q. 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.
CANDELA CORPORATION (Nasdaq: CLZR)
Condensed Consolidated Statements of Operations (unaudited)
(amounts in thousands, except per share amounts)
| | For the three months ended: | | For the six months ended: | |
| | January 1, | | December 27, | | January 1, | | December 27, | |
| | 2005 | | 2003 | | 2005 | | 2003 | |
| | | | | | | | | |
Revenue | | $ | 28,204 | | $ | 23,898 | | $ | 50,595 | | $ | 42,584 | |
Cost of sales | | 14,228 | | 11,651 | | 24,578 | | 21,025 | |
| | | | | | | | | |
Gross profit | | 13,976 | | 12,247 | | 26,017 | | 21,559 | |
| | | | | | | | | |
Operating expenses: | | | | | | | | | |
Research and development | | 1,621 | | 1,415 | | 2,956 | | 2,491 | |
Selling, general and administrative | | 9,997 | | 7,818 | | 16,657 | | 13,221 | |
| | | | | | | | | |
Total operating expenses | | 11,618 | | 9,233 | | 19,613 | | 15,712 | |
| | | | | | | | | |
Income from operations | | 2,358 | | 3,014 | | 6,404 | | 5,847 | |
| | | | | | | | | |
Other income (expense): | | | | | | | | | |
Interest income | | 141 | | 76 | | 237 | | 155 | |
Interest expense | | — | | (4 | ) | — | | (8 | ) |
Other income | | 75 | | 379 | | 118 | | 412 | |
| | | | | | | | | |
Total other income | | 216 | | 451 | | 355 | | 559 | |
| | | | | | | | | |
Income from continuing operations before income taxes | | 2,574 | | 3,465 | | 6,759 | | 6,406 | |
| | | | | | | | | |
Provision for income taxes | | 824 | | 1,024 | | 2,163 | | 2,176 | |
| | | | | | | | | |
Income from continuing operations | | 1,750 | | 2,441 | | 4,596 | | 4,230 | |
Discontinued operations: | | | | | | | | | |
Loss from discontinued skin care center operations | | — | | — | | — | | (298 | ) |
Gain (loss) on disposal of Skin Care Center, including revision of leasehold obligations of $1,374 and provision for operating losses of $(3,348) less income tax expense of $(515) and income tax benefit of $1,253. | | 859 | | — | | 859 | | (2,095 | ) |
| | | | | | | | | |
Net income | | $ | 2,609 | | $ | 2,441 | | $ | 5,455 | | $ | 1,837 | |
| | | | | | | | | |
Net income (loss) per share of common stock: | | | | | | | | | |
Basic: | | | | | | | | | |
Income from continuing operations | | $ | 0.08 | | $ | 0.11 | | $ | 0.21 | | $ | 0.20 | |
Income (loss) from discontinued operations | | 0.04 | | — | | 0.04 | | (0.11 | ) |
Basic earnings per share | | 0.12 | | 0.11 | | 0.25 | | 0.09 | |
| | | | | | | | | |
Diluted: | | | | | | | | | |
Income from continuing operations | | 0.07 | | 0.11 | | 0.20 | | 0.19 | |
Income (loss) from discontinued operations | | 0.04 | | — | | 0.04 | | (0.11 | ) |
Diluted earnings per share | | $ | 0.11 | | $ | 0.11 | | $ | 0.24 | | $ | 0.08 | |
| | | | | | | | | |
Weighted average shares outstanding | | 22,363 | | 21,739 | | 22,233 | | 21,563 | |
| | | | | | | | | |
Diluted weighted average shares outstanding | | 23,063 | | 22,576 | | 22,935 | | 22,380 | |
CANDELA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(dollars in thousands)
| | January 1, | | July 3, | |
| | 2005 | | 2004 | |
| | | | | |
Assets | | | | | |
| | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 46,058 | | $ | 37,396 | |
Accounts receivable, net | | 30,291 | | 34,302 | |
Notes receivable | | 877 | | 1,151 | |
Inventories, net | | 13,679 | | 13,571 | |
Other current assets | | 5,161 | | 2,184 | |
| | | | | |
Total current assets | | 96,066 | | 88,604 | |
| | | | | |
Property and equipment, net | | 3,504 | | 3,406 | |
| | | | | |
Other assets | | 6,808 | | 8,469 | |
| | | | | |
Total assets | | $ | 106,378 | | $ | 100,479 | |
| | | | | |
Liabilities and Stockholders’ Equity | | | | | |
| | | | | |
Current liabilities: | | | | | |
Accounts payable | | $ | 6,474 | | $ | 6,973 | |
Accrued payroll and related expenses | | 3,314 | | 5,428 | |
Accrued warranty | | 4,779 | | 4,946 | |
Income taxes payable | | 3,468 | | 1,844 | |
Other accrued liabilities | | 3,542 | | 3,586 | |
Deferred revenue | | 4,465 | | 3,421 | |
Total current liabilities | | 26,042 | | 26,198 | |
| | | | | |
Long-term liabilities | | 4,773 | | 3,945 | |
Net liabilities of discontinued operations | | 1,898 | | 3,567 | |
| | | | | |
Stockholders’ equity | | | | | |
Common stock | | 246 | | 246 | |
Treasury stock | | (12,997 | ) | (12,997 | ) |
Additional paid-in capital | | 53,487 | | 53,069 | |
Accumulated earnings | | 31,478 | | 26,023 | |
Cumulative translation adjustment | | 1,451 | | 428 | |
Total stockholders’ equity | | 73,665 | | 66,769 | |
| | | | | |
Total liabilities and stockholders’ equity | | $ | 106,378 | | $ | 100,479 | |
