There's a saying among lawyers that when the law is against you, argue the facts, and when the facts are against you, argue the law. Aesthetic-laser maker Candela (NASDAQ:CLZR) applied that concept yesterday, when it released horrendous fourth-quarter earnings that fell 50% below last year. Instead of discussing the quarter in the conference call, Candela talked about the full year's numbers.

Management maintained that the laser maker's business should grow 20% annually, and pointed out that Candela's revenues grew 21% for 2006. The company said that gross margins should be in the range of 50% to 53%; they came in at 49.4% this year. Operating margins should be 14% to 16%, and they were 15.4% for the year. Cash in the bank, days sales outstanding, and inventory turns all improved year over year. Moreover, beginning in January, Candela will be introducing some new products -- what it tentatively referred to as the 3630, for the 36 configurations and 30 applications it will encompass in a single "footprint" -- which would be followed by more multi-configuration, multi-application products in the future. In short, the business was running as expected, and the future was looking bright.

Apparently, there was no need to dwell on, let alone mention, the dismal fourth-quarter results. Otherwise, management would have had to mention that while revenue grew to $41.3 million from last year's $38.6 million, earnings fell more than 25% to $2.4 million, or $0.10 per share. Analysts had been expecting revenues of $47 million and earnings of $0.23 per share, a miss that management obviously wouldn't want to highlight. That's a different tack than the company used when discussing its robust second-quarter numbers earlier this year.

Candela also apparently didn't want to discuss its legal wrangling with Palomar Medical Technologies (NASDAQ:PMTI), which filed a patent infringement lawsuit. CEO Gerard Puorro, who had previously implied that the patent holder had not "formally notified" Candela that it was infringing on its patents, now states that the company had received Palomar's "mass mailings," similar to the ones sent out to some 30-plus laser makers. Candela felt no need to enter into negotiations with Palomar, believing that it wasn't infringing on the other firm's patents. Previously, the company said there was no "formal notification," then they had received a "Palomar flyer." Now it's a "mass mailing."

Funny, but when I spoke with Palomar, management indicated it had been sending individualized letters to Candela since 1999. They were indeed similar to the letters sent to Cutera (NASDAQ:CUTR), Laserscope, Lumenis, and Cynosure, all companies that have since settled with Palomar by agreeing to pay royalties for the patent. It certainly wasn't some three-color brochure or bulk-rate mailing. Now, as Candela is in the crosshairs, it continues to downplay the significance of Palomar's efforts, even as it admits that the lawsuit (and Candela's counterclaim) will be protracted and costly. Though Candela management wouldn't speculate on the eventual size of the legal costs, it pledged to provide quarterly updates. Maybe it will -- unless those updates conflict with more rosy "facts" it wants to argue.

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Fool contributor Rich Duprey owns shares in Candela but does not own any of the other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.