For the quarter ended March 31, 2009, NUCRYST reported a net loss of $1.1 million, or $0.06 cents per share, on revenues of $4.1 million. This compares to a net loss of $2.2 million, or $0.12 cents per share, on revenues of $5.2 million in the first quarter of 2008.

At March 31, 2009, NUCRYST had $8.4 million in cash and cash equivalents, compared to $23.4 million at December 31, 2008. In the first quarter of 2009, NUCRYST completed a $14.7 million, or $0.80 per share, cash distribution to NUCRYST shareholders.

"With the return of capital to our shareholders in the first quarter of 2009, we are taking the necessary steps to reduce our cost structure to an appropriate level," said David B. Holtz, Interim President and Chief Executive Officer, and Chief Financial Officer of NUCRYST. "We remain focused on driving the Company towards a sustainable level of profitability while continuing to explore strategic alternatives for the business."

First quarter financial analysis

NUCRYST's total revenue which consists of wound care product revenues less the manufacturing cost rebate for the first quarter of 2009 decreased to $4.1 million compared to $5.2 million in the first quarter of 2008. The decline was due to lower product shipments in the first quarter of 2009 and lower royalty revenues as a result of lower US dollar sales of Acticoat(TM) reported by Smith & Nephew plc. Smith & Nephew's reported Acticoat(TM) sales were negatively impacted by the strengthening U.S. dollar.

Gross margin on product revenues was 46% in the first quarter of 2009, compared to 21% in the first quarter of 2008. The improvement is primarily the result of cost reductions achieved through manufacturing efficiency programs NUCRYST initiated late in 2007. NUCRYST recognizes manufacturing revenue when NUCRYST ships product to Smith & Nephew and recognizes royalty income when Smith & Nephew sells Acticoat(TM) products to its customers. Consequently, NUCRYST's gross margin percent may vary from period to period due to differences in timing of product shipments to Smith & Nephew and when Smith & Nephew sells product to its customers.

Research and development spending in the first quarter of 2009 totaled $0.8 million compared to $1.5 million in first quarter of 2008. NUCRYST completed the closure of its Wakefield, Massachusetts research operations in the fourth quarter of 2008. NUCRYST has also eliminated spending on several development programs until commercialization partners are secured for these programs.

General and administrative costs in the first quarter of 2009 totaled $2.6 million compared to $2.5 million in the first quarter of 2008 as severance costs and other administrative transition items offset costs reductions achieved in the quarter through staff reductions and lower facility-related costs.

Other income and expenses for the first quarter of 2009 included foreign exchange gains of $0.4 million compared to foreign exchange gains of $0.6 million in the first quarter of 2008. The changes in the U.S. dollar and Canadian dollar exchange rate resulted in unrealized currency gains on our U.S. dollar working capital amounts held by our Canadian operations. All of our revenues from Smith & Nephew are received in U.S. dollars.

A conference call regarding NUCRYST's 2009 first quarter results is set for today at 9 a.m. EST. To participate, please call the toll- free number 1-800-814-4861. To listen to the call live on the Internet, please go to http://www.nucryst.com/web_casts.htm.