For the quarter ended June 30, 2009, NUCRYST reported a net loss of $0.4 million, or $0.02 cents per share, on revenues of $4.9 million. This compares to a net loss of $1.7 million, or $0.09 cents per share, on revenues of $4.7 million in the second quarter of 2008.

At June 30, 2009, NUCRYST had $11.8 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.

"We are pleased with the progress we are making in driving the Company towards profitability," said David B. Holtz, Interim President and Chief Executive Officer, and Chief Financial Officer of NUCRYST. "We remain focused on managing the Company with a lower cost structure while continuing to explore longer term strategic alternatives for the business."

David McDowell, NUCRYST's Vice President, Operations, added, "We are fully prepared to support Smith & Nephew as they begin the US market launch of the Acticoat(TM) Flex product line." Smith & Nephew and NUCRYST announced last week that Smith & Nephew received FDA clearance for the new Acticoat(TM) Flex product line.

Second quarter financial analysis

NUCRYST's total revenue for the second quarter of 2009, which consists of wound care product revenues less the manufacturing cost rebate, increased to $4.9 million compared to $4.7 million in the second quarter of 2008. The increase was due to a higher level of product shipments in the current quarter which was partially offset by slightly lower royalty revenues on Acticoat(TM) sales 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 43% in the second quarter of 2009, compared to 42% in the second quarter of 2008. The improvement was primarily due to reductions in per unit manufacturing costs which were partially offset by a slight decrease in manufacturing prices charged to Smith & Nephew. 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 the timing of product shipments to Smith & Nephew and the sale of that product by Smith & Nephew to its customers.

Research and development spending in the second quarter of 2009 totaled $0.6 million compared to $1.5 million in second 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 second quarter of 2009 totaled $1.4 million compared to $2.2 million in the second quarter of 2008. The decrease was primarily due to cost reductions achieved following the transfer of the Company's U.S. headquarters to Princeton, New Jersey and a reduction in administrative staff. The decline in the Canadian dollar relative to the U.S. dollar also contributed to overall decrease in reported costs.