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

                                   FORM 10-Q
                                        
                                        

   Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934
   For the quarter ended September 27, 1997.


                         Commission file number 0-14742

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


           Delaware                                      04-2477008
    (State or other jurisdiction                      (I.R.S. Employer 
   of 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

                            _______________________
                                        
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  X      No
   -----      -----    



Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.

               Class                        Outstanding at November 4, 1997
          ---------------                   -------------------------------


   Common Stock, $.01 par value                        5,433,665

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<PAGE>
 
                              CANDELA CORPORATION

                                     INDEX


<TABLE>
<CAPTION>

                                                          Page(s)
                                                          -------
<S>                                                      <C>

Part I.  Financial Information:
      
         Item 1.  Condensed Consolidated Balance Sheets      3
      
                  Consolidated Statements of Operations      4  
                                                             
                  Consolidated Statements of Cash Flows      5
                                                             
                  Notes to Consolidated Financial            
                   Statements                                6-7
      
         Item 2.  Management's Discussion and
                   Analysis of Financial Condition
                   and Results of Operations                 8-13
 
 
Part II. Other Information:
 
         Item 6.  Exhibits and Reports on Form 8-K           14
 
         Exhibit Index                                       16
 
                  Exhibit 11    Computation of Earnings 
                                 Per Share                   17
 
                  Exhibit 27.1  Financial Data Schedule      18
</TABLE>

                                       2
<PAGE>
 
                              CANDELA CORPORATION
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                (in thousands)
 
<TABLE>
<CAPTION>
 
 
                                                                         
                                                     September 27,          June 28,
                                                        1997                  1997
                                                    (unaudited)
ASSETS 
---------------------------------------------------------------------------------------------
<S>                                               <C>                      <C> 
Current assets:                         
    Cash and cash equivalents                         $ 2,196               $ 2,674
    Accounts receivable(net)                            5,872                 8,848
    Notes receivable                                    1,478                 1,284
    Inventory                                           7,538                 6,776
    Other current assets                                  510                   522
---------------------------------------------------------------------------------------------
        Total current assets                           17,594                20,104
=============================================================================================
Property and equipment, net                             3,470                 3,523
Other assets                                            1,090                 1,210
---------------------------------------------------------------------------------------------
                Total Assets                          $22,154               $24,837
=============================================================================================
 
LIABILITIES AND STOCKHOLDERS' EQUITY
---------------------------------------------------------------------------------------------
Current liabilities:       
    Current portion of long-term debt                 $ 2,315               $ 1,827
    Deferred income                                     1,843                 2,071
    Accounts payable                                    4,152                 5,879
    Accrued payroll and related expenses                  728                   833
    Accrued warranty costs                              1,280                 1,338
    Income taxes payable                                  374                   516
    Other accrued liabilities                             811                   608
---------------------------------------------------------------------------------------------
          Total current liabilities                    11,503                13,072
---------------------------------------------------------------------------------------------
Long-term debt                                          1,397                 1,519
---------------------------------------------------------------------------------------------
Stockholders' equity:
    Common stock                                           54                    54
    Additional paid-in capital                         17,259                17,223
    Retained deficit                                   (7,737)               (6,885)
    Accumulated translation adjustment                   (322)                 (146)
---------------------------------------------------------------------------------------------
          Total stockholders' equity                    9,254                10,246
---------------------------------------------------------------------------------------------
                Total Liabilities and 
                 Stockholders' Equity                 $22,154               $24,837
=============================================================================================
</TABLE> 

The accompanying notes are an integral part of the consolidated financial
statements.

                                       3
<PAGE>
 
 
                             CANDELA CORPORATION 
                    CONSOLIDATED STATEMENTS OF OPERATIONS 
                     (in thousands, except per share data)
 
<TABLE>
<CAPTION>
                                                        For the three months ended:
                                                    September 27,          September 28,
                                                         1997                  1996
                                                                 (unaudited)
-----------------------------------------------------------------------------------------
<S>                                               <C>                    <C>                                   
Revenue                                                 $7,822                $7,639
Cost of sales                                            4,502                 3,885
-----------------------------------------------------------------------------------------
Gross profit                                             3,320                 3,754

Operating expenses:              
    Research and development                               578                   573
    Selling, general and administrative                  3,394                 2,505
-----------------------------------------------------------------------------------------
       Total operating expenses                          3,972                 3,078
-----------------------------------------------------------------------------------------
Income (loss) from operations                             (652)                  676
 
Other income (expense):
    Interest income                                          8                    15
    Interest expense                                       (65)                  (17)
    Other                                                  (64)                   54
-----------------------------------------------------------------------------------------
        Total other income (expense)                      (121)                   52
-----------------------------------------------------------------------------------------
Income (loss) before income taxes                         (773)                  728
Provision for income taxes                                  78                   218
-----------------------------------------------------------------------------------------
Net income (loss)                                       $ (851)               $  510
=========================================================================================

Net income (loss) per share                             $(0.15)               $ 0.09
=========================================================================================
 
Weighted average number of common 
and common equivalent shares outstanding                 5,546                 5,655
 
=========================================================================================
</TABLE>
 
The accompanying notes are an integral part of the consolidated financial
 statements.
 

                                       4
<PAGE>
 
                              CANDELA CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (in thousands)
 
<TABLE>
<CAPTION>
                                                                    For the three months ended:
                                                           September 27,                    September 28,
                                                               1997                            1996
                                                                           (unaudited)
---------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                            <C> 
Cash flows from operating activities:        
    Net income (loss)                                        $  (851)                          $  510
    Adjustments to reconcile net income (loss) 
      to net cash provided by (used for) 
      operating activities:
      Depreciation and amortization                               202                             107
      Change in assets and liabilities:
      Accounts receivable                                       2,786                            (142)
      Notes receivable                                           (253)                          1,007
      Inventory                                                  (840)                            (88)
      Other current assets                                          6                            (115)
      Other assets                                                115                             (99)
      Accounts payable                                         (1,473)                           (740)
      Accrued payroll and related expenses                       (116)                            (26)
      Deferred income                                            (208)                           (227)
      Accrued warranty costs                                      (53)                            164
      Income taxes payable                                       (180)                            133
      Other accrued liabilities                                    95                            (187)
---------------------------------------------------------------------------------------------------------------------
         Total adjustments                                         81                            (213)
---------------------------------------------------------------------------------------------------------------------
Net cash provided by (used for) operating activities             (770)                            297
---------------------------------------------------------------------------------------------------------------------
 
Cash flows from investing activities:
    Proceeds from sale of equipment                                 0                              45
    Payment for additions to property and equipment               (59)                           (134)
---------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities                            (59)                            (89)
---------------------------------------------------------------------------------------------------------------------
 
Cash flows from financing activities:
    Payments of capital lease obligations                        (102)                            (39)
    Proceeds (payment) of long-term debt                          429                            (143)
    Proceeds from the issuance of common stock                     35                              34
---------------------------------------------------------------------------------------------------------------------
Net cash used for financing activities                            362                            (148)
---------------------------------------------------------------------------------------------------------------------
 
Accumulated translation adjustment                                (11)                            (82)
---------------------------------------------------------------------------------------------------------------------
 
Net decrease in cash and equivalents                             (478)                            (22)
---------------------------------------------------------------------------------------------------------------------
Cash and equivalents at beginning of period                     2,674                           3,041
---------------------------------------------------------------------------------------------------------------------
Cash and equivalents at end of period                         $ 2,196                         $ 3,019
=====================================================================================================================

</TABLE>
 
The accompanying notes are an integral part of the consolidated financial
statements.

                                       5
<PAGE>
 
                              CANDELA CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. BASIS OF PRESENTATION

   The accompanying financial statements and notes do not include all of the
   disclosures made in the Company's Annual Report on Form 10-K for fiscal 1997,
   which should be read in conjunction with these statements.  The financial
   information included herein, with the exception of the consolidated balance
   sheet at June 28, 1997, has not been audited.  However, in the opinion of
   Management, the statements include all adjustments necessary for a fair
   presentation of the quarterly results.  All adjustments made to these
   financial statements were considered to be of a normal and recurring nature.
   The results for the three month period ended September 27, 1997, are not
   necessarily indicative of the results to be expected for the full year.

2. INVENTORY

   Inventory consists of the following (in thousands):
<TABLE>
<CAPTION>
 
                                         September 27, 1997   June 28, 1997
                                         -------------------  -------------
                                            (unaudited)           /(1)/
<S>                                      <C>                  <C>
                        
       Raw materials                             $3,025          $2,429
       Work in process                            1,015           1,023
       Finished goods                             3,498           3,324
                                                 ------          ------
                                                 $7,538          $6,776
                                                 ======          ======
</TABLE>

3. PROPERTY AND EQUIPMENT

   Property and equipment consists of the following (in thousands):

<TABLE>
<CAPTION>
 
                                        September 27, 1997   June 28, 1997
                                        -------------------  -------------
                                           (unaudited)           /(1)/
<S>                                     <C>                  <C>
 
       Leasehold improvements                   $2,016          $2,014
       Office furniture & equipment              1,069           1,064
       Laser systems                               483             483
       Equipment                                 4,407           4,271
                                                ------          ------
       Total                                     7,975           7,832
 
       Less accumulated depreciation
        and amortization                         4,505           4,309
                                                ------          ------
                                                $3,470          $3,523
                                                ======          ======
 
</TABLE>

/(1)/  Derived from audited financial statements

                                       6
<PAGE>
 
                              CANDELA CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (CONTINUED)



4. NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE


   Net income per share is computed by dividing net income by the weighted
   average number of shares of common stock and, if dilutive, common stock
   equivalents outstanding.  Common stock equivalents include shares issuable
   upon the exercise of stock options or warrants, net of shares assumed to have
   been purchased with the proceeds.

   In February 1997, the Financial Accounting Standards Board (FASB) issued
   Statement of Financial Accounting Standard (SFAS) No. 128 - Earnings per
   Share.  SFAS No. 128 establishes standards for computing and presenting
   earnings per share (EPS) and requires a dual presentation of  basic and
   dilutive EPS.  SFAS No. 128 is effective for financial statements issued for
   periods ending after December 15, 1997,  and earlier adoption is not
   permitted.  Neither basic nor diluted EPS computed in accordance with FAS 128
   would be materially different from the Company's primary EPS presented in the
   financial statements.

                                       7
<PAGE>
 
                              CANDELA CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW:
---------

   Candela Corporation develops, manufactures, and distributes innovative
clinical solutions that enable physicians, surgeons and personal care
practitioners to treat selected cosmetic and medical problems using lasers,
cryosurgery and other proven technologies.  In addition, the Company is applying
its capabilities and experience with skin care and related problems to develop a
network of Company-owned skin care centers and spas.

   The Company continued to post positive operating results from its laser
operation (the manufacture, sale and servicing of lasers) and continued the
investment and expansion of its skin care centers through Candela Skin Care
Centers, Inc. ("CSCC"), a wholly-owned subsidiary, while reducing the level of
operating expenses incurred by CSCC.  Based on the increasing significance of
revenue and costs associated with the establishment and operation of the skin
care centers in relation to the Company in total, the following discussion and
analysis provides expanded discussion on both the laser operations and for the
skin care centers in greater detail.

RESULTS OF OPERATIONS
---------------------

   Total revenue for the three months ended September 27, 1997 and September 28,
1996, are reflected in the following table:

<TABLE>
<CAPTION>
 
($ in 000's)
                      1997     1996    Change
                     -------  -------  -------
<S>                  <C>      <C>      <C>
Laser operations      $7,199   $7,104       1%
Skin care centers        623      535      16%
                      ------   ------
 
   Total              $7,822   $7,639       2%
</TABLE>

   The increase in revenues for laser operations for the three months reflects a
change in the mix of products shipped. During the first quarter there were
significant increases in the number of units of the Dynamic Cooling Device(DCD)
shipped compared to no shipments in the same quarter a year earlier. The
increase in units was offset by the lower selling price of the DCD, when
combined with other product shipped, resulted in a 1% increase in revenues over
the prior year. Revenues for the skin care centers reflect increases from
services provided at the new center in Scottsdale, AZ, opened in February 1997,
and from increased revenues generated by the skin care center in Boston, MA.
Losses during the period for CSCC are mainly the result of continued efforts to
increase retail traffic at the new centers.

   Gross profits were 43% for the three months ended September 27, 1997,
compared to gross profits of 49% for the same period a year earlier.  The
decline in gross profit for the three month period is the result of a change in
mix of product shipped in addition to an increase in costs, principally labor,
associated with the operation of the Scottsdale skin care center.

   Research and development spending is associated with laser operations and
increased to $578,000 from $573,000 for the three months ended September 27,
1997. These amounts reflect an increase of 1% over the same three month period a
year earlier. 

                                       8
<PAGE>
 
                             CANDELA CORPORATION 
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
                                  (CONTINUED)
                                        
   Selling, general and administrative expenses increased 35% for the three
month period ending September 27, 1997, compared to the same period one year
earlier, reflecting increases from both the laser operations and skin care
centers.  The increase in laser operations expenses of $362,000 for the three
month period ended September 27, 1997, are the result of increased spending for
marketing new laser products and expansion of staffing in the sales and
administrative areas.  Skin care center expenses during the three month period
increased $527,000 over the same period a year earlier due to spending
associated with the new skin care centers that was not included in the prior
year results.

   Loss from operations of $(652,138) for the three month period ended September
27, 1997, compared to a profit from operations of $675,302 for the same period
one year earlier, reflect increased expenses associated with the skin care
centers offset in part by profits from operations from the Laser operations.

   Other income and expense for the three month period ended September 27, 1997,
reflects an increase of $173,000 compared to the same period a year earlier.
This change reflects an increase in interest expense of $52,000 and a decrease
in other expenses of $121,000, primarily the result of foreign currency
transactions.

   The provision for income taxes includes an adjustment in the quarter ended
September 27, 1997, to reflect the expected annualized tax rate based on 
projected earnings for the Company in both domestic and foreign operations.  The
provision for income taxes for the three months ended September 27, 1997,
reflects the utilization of a portion of the Company's domestic net operating
loss carryforwards and tax provided in Japan at a 55% tax rate yielding an
overall effective tax rate of 10%.

                                       9
<PAGE>
 
                              CANDELA CORPORATION
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)
                                        
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

   Cash and equivalents at September 27, 1997, decreased by $478,000 to
$2,196,000 from $2,674,000 at June 28, 1997.  Major factors impacting this
change include payment for additions to property and equipment for the skin care
centers,  payment of capital lease obligations, long-term debt, and the use of
cash for operating activities of $770,000.

   The Company opened a LaserSpa(TM) in Scottsdale, AZ, in February 1997 and in
Boston, MA in April 1997.  In May 1997, a laser skin care treatment center was
opened in Cairo, Egypt, with Candela Skin Care Centers, Inc. maintaining 51%
ownership in a joint-venture with local Egyptian investors.  Equipment leasing
has provided a portion of the funds used by the Company for the initial capital
investment costs for these facilities.

   In support of the continued growth of CSCC and its laser production
operations, the Company obtained a renewable $3,500,000 Line of Credit with a
major bank during fiscal 1997.  The Line of Credit bears interest at  1/2% over
the bank's prime lending rate and is secured by total domestic and international
accounts receivable and inventory and a pledge of the stock of CSCC.  At
September 27, 1997, the Company had utilized $1,500,000 of the Line of Credit.
At September 27, 1997, the Company was in compliance with all of the loan
covenants of the Line of Credit.  Also, the Company's Japanese subsidiary
borrowed funds to be used for payment of purchases made from the parent
corporation.  At September 27, 1997, the value of this liability is $736,000,
converted at the quarter-end exchange rate.  The Company's remaining short-term
and long-term debt is comprised of capital lease obligations, which were
$355,000 and $1,122,000, respectively, at September 27, 1997, compared to
$156,000 and $317,000 for the same period a year earlier.

   Other private sector sources of cash are being pursued in addition to the
above, however, there can be no assurance that such funding will be available on
terms acceptable to the Company, or at all.

                                       10
<PAGE>
 
                              CANDELA CORPORATION
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)

 CAUTIONARY STATEMENTS

    In addition to the other information in this Quarterly Report on Form 10-Q,
 the following cautionary statements should be considered carefully in
 evaluating the Company and its business.  Statements contained in this Form 10-
 Q that are not historical facts (including, without limitation, statements
 concerning anticipated operational and capital expense levels and such expense
 levels relative to the Company's total revenues) and other information provided
 by the Company and its employees from time to time may contain certain
 "forward-looking" information, as that term is defined by (i) the Private
 Securities Litigation Reform Act of 1995 (the "Act") and, (ii) in releases made
 by the Securities and Exchange Commission (the "SEC").  The factors identified
 in the cautionary statements below, among other factors, could cause actual
 results to differ materially from those suggested in such forward-looking
 statements.  The cautionary statements below are being made pursuant to the
 provisions of the Act and with the intention of obtaining the benefits of the
 "safe harbor" provisions of the Act.

   VARIABILITY OF QUARTERLY OPERATING RESULTS.  The Company's quarterly
 operating results may vary significantly from quarter to quarter, depending
 upon factors such as the timing of product sales, the timing of expenditures in
 anticipation of future product orders, the introduction and market acceptance
 of new products, effectiveness in managing manufacturing processes, changes in
 cost and availability of labor and product components, order cancellations, the
 budgetary cycles of its customers, the timing of regulatory approvals and the
 opening of new LaserSpas(TM) by CSCC.  The Company's ability to accurately
 forecast future revenues and income for any period is necessarily limited, and
 any forward-looking information provided from time to time by the Company
 represents only management's then-best current estimate of future results or
 trends, and actual results may differ materially from those contained in the
 Company's estimates.

    POTENTIAL VOLATILITY OF STOCK PRICE.  There has been significant volatility
 in the market price of securities of companies in the medical device industry.
 Factors such as announcements of new products by the Company or its
 competitors, quarterly fluctuations in the financial results of the Company or
 its competitors, shortfalls in the Company's actual financial results compared
 to results previously forecast by stock market analysts, conditions in the
 medical device industry and the financial markets and the economy generally
 could cause the market price of the Company's securities to fluctuate
 substantially and may adversely affect the price of the Company's securities.

                                       11
<PAGE>
 
                              CANDELA CORPORATION
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)
                                        
    RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS.  A significant portion of
 the Company's revenues are attributable to international operations and
 revenues from international operations are likely to continue to represent a
 significant portion of the Company's revenues in future periods.  The Company's
 international business and financial performance may be adversely affected by a
 number of factors, including without limitation to fluctuations in exchange
 rates, tariffs and other trade barriers, adverse tax regulation, and adverse
 political and economic conditions.  Adverse effects on the Company's
 international operations may have materially adverse effects on the Company's
 overall financial condition and operating results.

    NEW BUSINESS STRATEGIC DEVELOPMENT.  While the Company continues to expand
 and diversify its core cosmetic and surgical laser equipment business, the
 Company has embarked on a new business strategy of opening combined spa and
 laser cosmetic skin care centers.  Currently, the Company operates combined
 spa/skin care facilities in Boston, Massachusetts and Scottsdale, Arizona.  The
 Company's skin care treatment center previously located in Framingham,
 Massachusetts has been combined with the spa in Boston to create a combination
 spa/skin care facility.  Additionally, the Company has entered into a joint-
 venture with Egyptian investors to open a new laser cosmetic center in Cairo,
 Egypt.  The surgical skin care treatments performed in each location are
 administered by board-certified physicians under contract with the Company's
 wholly-owned subsidiary, Candela Skin Care Centers, Inc.  While the target
 audience for the Company's core laser equipment tends to be medical practice
 groups and other health care providers, its target audience for its spa and
 skin care centers are individuals who are typically reached through entirely
 different marketing efforts.  The cost structures, new client accretion methods
 and other demands associated with the Company's new facilities are largely
 untested, and the Company could incur significant losses in connection with its
 spa and skin care centers.

    GOVERNMENTAL REGULATION.  Medical devices are subject to approval before
 they can be utilized for clinical studies or sold commercially.  In addition,
 the Company's activities in connection with its CSCC business may subject the
 Company to additional regulation under state and federal laws.  The process for
 obtaining the necessary approvals and compliance with applicable regulations
 can be costly and time consuming.  Many foreign countries in which the Company
 markets or may market its products have similar regulatory bodies and
 restrictions.  There is no assurance that the Company will be able to obtain
 any such government approvals or successfully comply with any such regulations
 in a timely and cost-effective manner, if at all, and failure to do so may have
 an adverse effect on the Company's financial condition and results of
 operations.

                                       12
<PAGE>
 
                              CANDELA CORPORATION
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)
                                        
    RISKS ASSOCIATED WITH PRODUCT LIABILITY.  The administration of medical and
 cosmetic treatments using laser products is subject to various risks of
 physical injury to the patient which may result in product liability or other
 claims against the Company.  The costs and resources involved in defending or
 settling any such claims, or the payment of any award in connection therewith,
 may adversely affect the Company's financial condition and operating results.
 The Company maintains product liability insurance, but there is no assurance
 that its policy will provide sufficient coverage for any claim or claims that
 may arise, or that the Company will be able to maintain such insurance coverage
 on favorable economic terms.

    RAPID TECHNOLOGICAL CHANGE; COMPETITION.  The medical laser industry is
 subject to rapid and substantial technological development and product
 innovations.  The Company, to be successful, must be responsive to new
 developments in laser technology and applications of existing technology, and
 the Company's financial condition and operating results may be adversely
 affected by the failure of new or existing products to compete favorably in
 response to such technological developments.  In addition, the Company competes
 against numerous other companies offering products similar to the Company's
 and/or alternative products and technologies, some of which have greater
 financial, marketing and technical resources than the Company.  There can be no
 assurance the Company will be able to compete successfully.  In addition, the
 Company's CSCC operations face a host of competitors including hair salons,
 health spas, massage therapists, aestheticians, health and fitness clubs,
 personal trainers, dermatologists, plastic surgeons, cosmetic laser centers and
 cosmetic retailers.  The Company also believes its CSCC operations will face
 competition from laser manufacturing companies that have, or may develop, plans
 to open facilities based on concepts similar to the Candela LaserSpa(TM)
 concept.  Such competition could have a material adverse effect on the
 Company's business, financial condition and results of operations.  Further,
 even if the Company is able to successfully compete, there can be no assurance
 that it would be able to do so in a profitable manner.

    RELIANCE ON ATTRACTING AND RETAINING KEY EMPLOYEES.  The Company's success
 will depend in large part on its ability to attract and retain highly-qualified
 scientific, technical,  sales and marketing, management and other personnel.
 Competition for such personnel is intense and any decline in the Company's
 ability to attract and retain such personnel may have adverse effects on its
 financial condition and operating results.

                                       13
<PAGE>
 
                              CANDELA CORPORATION
                          PART II   OTHER INFORMATION

Item 1 Legal Proceedings

       There have been no material developments in the legal proceedings
       previously reported by the Company.



Item 6 Exhibits and Reports on Form 8-K

       (a) Exhibits

           Exhibit 11, Computation of Earnings Per Share.

           Exhibit 27.1, Financial Data Schedule, page 16.

       (b) Reports on Form 8-K

           No reports on Form 8-K were filed during the quarter ended 
           September 27, 1997.

                                       14
<PAGE>
 
                                    SIGNATURES



Pursuant to the requirements 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.


                               CANDELA CORPORATION
                               Registrant



Date: November 10, 1997        /s/ Gerard E. Puorro
      -----------------        ------------------------------------
                               Gerard E. Puorro
                               (President, Chief Executive Officer)
 


Date: November 10, 1997        /s/ F. Paul Broyer
      -----------------        ------------------------------------
                               F. Paul Broyer
                               (Vice President, Treasurer and
                               Chief Financial Officer)

                                       15
<PAGE>
 
                                 EXHIBIT INDEX



                                                   Page Number
                                                   -----------

                                        
   11        Computation of Earnings Per Share         17

   27.1      Financial Data Schedule                   18


                                        

                                       16