CANDELA - THE BEGINNING OF A TURNAROUND?
Newly introduced dermatological laser products have been fueling
financial growth at Candela Corporation (NASDAQ:CLZR) for the last
several years. However, in 1997 a new "LaserSpa" venture has been
absorbing a substantial amount of the Company's resources and caused
it to become unprofitable.
The evening of January 15th Candela Corp (NASDAQ:CLZR) issued a
press release headlined "Candela Reports $4.4 Million Net Loss For
Fiscal 2nd Quarter." The release went on to announce that Company
was halting the "LaserSpa" program and would be refocusing its
energies on its core business. As a result, I feel that CLZR is now
taking the steps needed to correct the financial problems previously
identified by The Napeague Letter, and that the reserves established
will likely absorb any future losses from the now-abandoned
"LaserSpas".
On January 16th, the market reacted to the announcement with
apparent stunned disbelief. Panic selling drove CLZR down to $2.88 -
36% below its previous close at $4.50, although the price quickly
rebounded somewhat and the stock closed the day at $3.38.
On June 7th of last year, I laid out "my personal plans for investing in
this stock" in The Napeague Letter. Specifically, I stated that "if it
appears that the full impact of the Candela Skin Care Centers "start-up"
costs will be over shortly, I will invest if the stock can be purchased
advantageously." Currently, I believe that these conditions have been
met.
This is a Summary of an in-depth Analysis of CLZR, which can be
found on the Napeague Web Site at napeague.com. I
encourage you to read the entire Analysis as well as the Company's
investor relations information and its reports to the Securities &
Exchange Commission prior to making any decision to invest in this
or any other Company.
The Napeague Letter will continue to follow CLZR and will update
this Analysis whenever new information becomes available.
NOTICE
This analysis is based on publicly-available information, and is in no
way warranted by me as to accuracy or completeness. I do not
guarantee to advise you as to any change in this information. I currently
am a stockholder in this Company as the result of purchases in the open
market, and I may from time to time purchase or sell this Company's
securities. I otherwise have no affiliation with this Company, and I am
not compensated by it in any way whatsoever. |
