SecProbe.io

CORRESP
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filename1.htm

March 18, 2005

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

Attention:              Mr.
Brian Cascio

                        Accounting Branch Chief

Re:          Candela
Corporation

                Form
10-K for the fiscal year ended July 3, 2004, filed 9/15/2004

                Form
10-Q for the period ending October 2, 2004, File No. 0-14742

Ladies and Gentlemen,

Candela
Corporation (“Candela, or the “Company”) hereby responds to the comments made
by the staff in your letter dated March 7, 2005 relating to the Company’s Form
10-K for the fiscal year ended July 3, 2004, filed September 15, 2004, and Form
10-Q for the period ending October 2, 2004 File No. 0-14742.

The
staff’s comments, indicated in bold, and the Company’s responses are as
follows:

1.  We recognize your response to our Comment 6
and reissue the first part of our comment. Supplementally, please indicate when
Candela was notified by the landlord that a sublease for the property was
secured during the first quarter fiscal 2005. Please indicate the terms of the
sublease that were conveyed to you by the landlord. You indicate that prior to
the events which occurred during the second quarter fiscal 2005, the Company could
not estimate the amount of sublease income. What events are you referring to
that occurred in the first quarter of fiscal 2005 that allowed you to estimate
the amount of the sublease income?

The
Company initially learned of the existence of the sublease during September of
2004 i.e. during our first quarter fiscal 2005. Several requests were made of
the landlord to release the sublease details, which in the end were secured by
Company counsel and provided to the Company on January 13, 2005. This date fell
after the end of the Company’s second quarter fiscal 2005, but prior to the
release of our financial statements for that period. Upon obtaining that
information the Company was able to determine the future economic benefit of
the sublease and revise the estimated future costs associated with the Boston
facility. The revision of those future costs resulted in the reversal of
approximately $859,000 of the restructuring reserve, and the related disclosure
which was included in the Company’s initial response to Comment 6 of your
letter dated February 15, 2005.

CANDELA CORPORATION

530
Boston Post Road, Wayland, Massachusetts 01778-1886 - Tel (508) 358-7631 - Fax
(508) 358-5602

2.  We note that on February 17, 2005 the
arbitrator reached an interim decision in the dispute concerning Candela’s
royalty obligation in favor of the Regents. Candela had previously deposited
$3.4 million in an escrow account with no charge to expense, pending the
outcome of the arbitration. We refer to your response to our Comment 5. The
press release indicates that Candela will take a charge for the related expense
in the fiscal quarter in which the arbitrator issues his final decision. In
light of the interim decision and the probability of the outcome, please
clarify why the conditions had not been met to record the accrual in the
earlier periods.

The
interim decision was reached by the arbitrator during the Company’s current
fiscal quarter. The Company has every intent and purpose to record a charge
related to the Regents arbitration during the current fiscal quarter. Candela
expects that the arbitrator will have a final decision prior to the filing
deadline for the Company’s current fiscal quarter ending April 2, 2005. If a
final decision is not available by that time, the Company will record a charge
based on the best available estimate at that time.

If
you have any questions concerning the foregoing responses, please contact the
undersigned at (508) 358-7637.

Very
truly yours,

/s/
Paul Broyer

Paul
Broyer

Chief
Financial Officer

Candela
Corporation