<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-K/A
                             
                         AMENDMENT NO. 1 TO FORM 10-K/A     

                 Annual Report pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

     For the fiscal year ended June 29, 1996    Commission file number 0-14742

                              CANDELA CORPORATION
                              -------------------
             (Exact name of registrant as specified in its charter)

     Delaware                                                       04-2477008
     --------                                                   --------------
     (State or other jurisdiction of                        (I.R.S. Employer
     incorporation or organization)                         Identification No.)
 
     530 Boston Post Road, Wayland, Massachusetts                 01778
     --------------------------------------------                 -----       
     (Address of principal executive offices)                   (Zip Code)
 
     Registrant's telephone number, including area code:        (508) 358-7400
                                                                --------------

     Securities registered pursuant to Section 12(b) of the Act:  None
     Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.01 par value
                         Common Stock Purchase Warrants
                                (Title of Class)

     Indicate by check mark whether the registrant (1) has filed all reports
 required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
 1934 during the preceding 12 months (or for such shorter period that the
 registrant was required to file such reports), and (2) has been subject to such
 filing requirements for the past 90 days.  Yes [   ]  No [   ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
 405 of Regulation S-K is not contained herein and will not be contained in
 definitive proxy or information statements incorporated by reference in Part
 III of this Form 10-K or any amendment to this Form 10-K. [   ]

     As of September 20, 1996, 5,387,059 shares of the registrant's Common
 Stock, $.01 par value, were issued and outstanding.  The aggregate market value
 of the registrant's voting stock held by non-affiliates of the registrant as of
 September 20, 1996, based upon the closing price of such stock on The NASDAQ
 Stock Market on that date, was approximately $14,050,000.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Documents                                            Form 10-K Reference
     ---------                                            -------------------
 
     Proxy Statement for the Annual Meeting of
      Shareholders to be held on November 21, 1996        Part III

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  The undersigned registrant hereby amends and restates Item 5 of its Annual
Report on Form 10-K for the fiscal year ended June 29, 1996 so that as so
amended and restated said Item 5 shall read in its entirety as set forth on the
pages attached hereto.     
<PAGE>
 
                                    PART II
                                    -------

     Item 5.  Market for the Registrant's Common Equity and Related Stockholder
     ------   -----------------------------------------------------------------
              Matters
              -------

      The Company's common stock trades on The NASDAQ Stock Market under the
 symbol "CLZR."

      At September 20, 1996, there were 442 holders of record of the Company's
 common stock and the last sales price of the Company's common stock was $5 3/4
 on that day.      

      The following table sets forth quarterly high and low prices of the common
 stock for the indicated fiscal periods:
 
                               1996              1995
                               ----              ----
 
                          High      Low      High      Low
                          ----      ---      ----      ---  
 
       First Quarter     $ 4 3/4  $1 15/16  $4 1/4  $ 2 5/8
       Second Quarter      5 7/8   3   1/2   3 1/4    1 3/8
       Third Quarter       8 1/8   4  9/16   2 7/8    1 7/16
       Fourth Quarter     11 1/4   7         3        1 3/4

      The Company has never paid a cash dividend and has no present intention to
 pay cash dividends in the foreseeable future.  The Board of Directors currently
 intends to retain any future earnings for use in the Company's business.

     Item 6.  Selected Financial Data
     ------   -----------------------

      The table set forth below contains certain financial data for each of the
 last five fiscal years of the Company.  This data should be read in conjunction
 with the detailed information, financial statements and notes thereto, as well
 as Management's Discussion and Analysis of Financial Condition and Results of
 Operations included elsewhere herein.

      (in thousands, except per share data)
Statement of Operations    
 Data:                               1996     1995     1994      1993     1992
------------------------             ----     ----     ----      ----     ----  
 
     Revenue                       $30,413  $28,244   $29,820  $33,158   $35,410
     Gross profit                   13,580   12,376    13,765   13,434    19,763
     Income (loss) from
      operations                     1,889   (1,603)      714   (9,106)    3,809
     Income (loss) before
       extraordinary item            1,245   (1,536)      655   (9,208)    2,729
     Net income (loss)               1,245   (1,536)      655   (9,208)    3,729
     Income (loss) per
      share:
       Before
        extraordinary item             .22     (.29)      .13    (1.78)      .51
       Net income (loss)               .22     (.29)      .13    (1.78)      .70
     Weighted average
      number of common
       and common
        equivalent shares
         outstanding                 5,563    5,288     5,218    5,180     5,304
 
                                   June 29, July 1,   July 2,  July 3,  June 27,
     Balance Sheet Data:              1996     1995      1994     1993     1992
     -------------------           -------  -------   -------  -------   -------
 
     Working capital               $ 8,608  $ 8,033   $ 9,109  $ 8,775   $17,611
     Total assets                   19,334   16,832    20,447   20,269    28,697
     Current portion of
      long-term debt                   708      470       102      114        83
     Long-term debt                    557      476       223      305       330
     Stockholders' equity            9,965    9,086    10,566    9,671    18,432

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                                  SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
 Exchange Act of 1934, the registrant has duly caused this report to be signed
 on its behalf by the undersigned, thereunto duly authorized, on October 2,
 1996.      

                                    CANDELA CORPORATION

                                    By: /s/ Gerard E. Puorro
                                       ----------------------
                                       Gerard E. Puorro, President, Chief
                                       Executive Officer, Acting Chief Financial
                                       Officer and Director

         

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