793279--9/13/2007--CANDELA_CORP

related topics

{product, liability, claim}

{property, intellectual, protect}

{regulation, government, change}

{product, market, service}

{cost, contract, operation}

{control, financial, internal}

{acquisition, growth, future}

{operation, international, foreign}

{personnel, key, retain}

{stock, price, operating}

{product, candidate, development}

Unfavorable results in our intellectual property litigation with Palomar Medical Technologies may result in significant decline to our stock price. Because we derive more than half of our revenue from international sales, including approximately 20% of our revenue from Japan and the Asia-Pacific marketplace in fiscal 2007, we are susceptible to currency fluctuations, negative economic changes taking place in Japan and the Asia-Pacific marketplace, and other risks associated with conducting business overseas. The failure to obtain Alexandrite rods for the GentleLASE system from our sole supplier would impair our ability to manufacture and sell the GentleLASE system. Disappointing quarterly revenue or operating results could cause the price of our common stock to fall. Our failure to respond to rapid changes in technology and intense competition in the laser industry could make our lasers obsolete. Like other companies in our industry, we are subject to a regulatory review process and our failure to receive necessary government clearances or approvals could affect our ability to sell our products and remain competitive. We have modified some of our products without FDA clearance. The FDA could retroactively decide the modifications were improper and require us to cease marketing and/or recall the modified products. Achieving complete compliance with FDA regulations is difficult, and if we fail to comply, we could be subject to FDA enforcement action. We may also be subject to state regulations. State regulations, and changes to state regulations, may prevent sales to particular end users or may restrict use of the products to particular end users or under particular supervision which may decrease revenues or prevent growth of revenues. Claims by others that our products infringe their patents or other intellectual property rights could prevent us from manufacturing and selling some of our products or require us to incur substantial costs from litigation or development of non-infringing technology. We could incur substantial costs as a result of product liability claims. We may be unable to attract and retain management and other personnel we need to succeed. Our failure to manage future acquisitions and joint ventures effectively may divert management attention from our core business and cause us to incur additional debt, liabilities or costs. We face risks associated with product warranties. The expense and potential unavailability of insurance coverage for our customers could adversely affect our ability to sell our products and negatively impact our financial condition. Failure to maintain effective internal control over financial reporting could have a material adverse effect on our business, operating results and stock price.

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793279--9/13/2007--CANDELA_CORP_/DE/