EXHIBIT 99.1

Contact:

Mallorie Burak

Southwall Technologies Inc.

Phone:  (650) 798-1200

For Immediate Release

Southwall Announces Q1 2009 Results

PALO ALTO, Calif.--(BUSINESS WIRE)—May 13, 2009--Southwall Technologies Inc. (OTCBB: SWTX) announced first quarter 2009 revenue of $6.5 million, down 8% from fourth quarter 2008 revenues of $7.0 million and down 39% from first quarter 2008 revenues of $10.6 million. The year over year decrease was primarily due to a sharp decline in sales of automotive products and the impact of generally lower demand across all markets due to the global economic downturn.  First quarter 2009 net income increased to $2.3 million, or $0.07 per diluted share, as compared to a net loss posted in the fourth quarter 2008 of $0.2 million, or a loss of $0.01 per diluted share.  First quarter 2008 net income was $2.0 million, or $0.06 per diluted share. Net income in the first quarter 2009, included approximately $2.4 million of other income relating to the reversal of an accrued, long term reserve resulting from final payment of the Company’s obligation under a settlement agreement.

First quarter 2009 gross profit was $2.4 million, or 38% of net revenues, as compared $2.7 million, or 39% of net revenues, in fourth quarter 2008 and $4.9 million, or 46% of net revenues, in first quarter 2008. The Company posted income from operations of $0.1 million in the first quarter of 2009, as compared to $0.1 million in the fourth quarter 2008 and $2.1 million in the first quarter of 2008.  Fixed production costs in the first quarter of 2009 did not decline at the same rate as sales volume, resulting in lower gross margins year over year.

Over the last six quarters, the Company generated cash through increased sales of higher margin products, eliminated unprofitable product lines, and aggressively managed working capital and operating expenses. This enabled Southwall to retire certain existing debt, thus improving the Company’s debt ratios and strengthening the balance sheet.  From the third quarter of 2007 through the first quarter of 2009, Southwall has reduced debt by $7.6 million, reducing the debt to asset ratio from 33% in the third quarter of 2007 to 14% at the end of the first quarter of 2009.

Despite the sales decline over the last two quarters, Southwall continues to focus on a broad portfolio of high performance energy products to meet the growing global need for improved energy efficiency in green building and automotive design.

“While the global economy is having a visible impact on our core markets, we have minimized our debt and remain focused on disciplined financial management to carry us through this period of financial uncertainty,” said Dennis Capovilla, Southwall’s President and CEO.  “Though we expect lower sales and profit in the near term as the economy continues to struggle, we remain focused on our key growth initiatives to produce innovative, high performance, energy-efficient products.”

About Southwall Technologies Inc.

Southwall Technologies Inc. is recognized as an innovator in the development and manufacture of high performance, energy-saving films and glass products that dramatically improve the energy efficiency of architectural and automotive glass. Southwall is an ISO 9001:2000-certified manufacturer with customers in over 25 countries around the world, including Audi, BMW, DaimlerChrysler, Guardian, Peugeot-Citroen, Pilkington, Renault, Saint-Gobain Sekurit, and Volvo.

This press release may contain forward-looking statements, including, without limitation, statements regarding the Company's expectations, beliefs, intentions, or strategies regarding the future.  All forward-looking statements in this press release are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements.  These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those presented.  These risks include the possibility that the Company’s expected future results will be materially worse than estimated, that the Company may not continue to be profitable in future quarters or may not be able to achieve future long-term growth, that there will be a decline in one or more portions of our business in 2009 or thereafter, that the Company will not be successful in improving operating performance or controlling costs, that the Company will suffer a decline in manufacturing or financial effectiveness, that the Company’s new product development will not be successful, that there may be decreasing demand in certain markets and that the Company will not be able to secure additional financing if required, as well as risks associated with its failure to meet potential covenant requirements under future credit facilities.  Further risks are detailed in the Company's filings with the Securities and Exchange Commission, including those set forth in the Company's most recent Annual Report on Form 10-K for the year ended December 31, 2008, filed on March 26, 2009.

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SOUTHWALL TECHNOLOGIES INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

	Three months ended
	March 31, 2009			March 31, 2008
Net revenues	$	6,496		$	10,570
Cost of revenues		4,051			5,719
Gross profit		2,445			4,851
Operating expenses:
Research and development		682			709
Selling, general and administrative		1,690			2,038
Total operating expenses		2,372			2,747
Income from operations		73			2,104
Interest expense, net		(70	)		(139	)
Other income, net		2,433			193
Income before provision for income taxes		2,436			2,158
Provision for income taxes		157			113
Net income		2,279			2,045
Deemed dividend on preferred stock		122			122
Net income attributable to common stockholders	$	2,157		$	1,923
Net income per common share:
Basic	$	0.08		$	0.07
Diluted	$	0.07		$	0.06
Weighted average shares used in computing net income per share :
Basic		28,707			27,820
Diluted		33,770			33,520

SOUTHWALL TECHNOLOGIES INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

	March 31, 2009			December 31, 2008
ASSETS
Current assets:
Cash and cash equivalents	$	7,776		$	10,768
Restricted cash		-			282
Accounts receivable, net		4,826			3,709
Inventories, net		6,325			5,965
Other current assets		1,213			745
Total current assets		20,140			21,469
Property, plant and equipment, net		13,895			15,012
Other assets		344			804
Total assets	$	34,379		$	37,285
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt and capital leases	$	1,119		$	1,767
Accounts payable		1,232			596
Accrued compensation		666			1,372
Other accrued liabilities		4,825			5,127
Total current liabilities		7,842			8,862
Term debt and capital leases		3,691			4,501
Other long term liabilities		135			2,514
Total liabilities		11,668			15,877
Series A convertible preferred stock		4,810			4,810
Stockholders' equity:
Common stock		29			29
Capital in excess of par value		78,292			78,323
Accumulated other comprehensive income		3,325			4,269
Accumulated deficit		(63,745	)		(66,023	)
Total stockholders' equity		17,901			16,598
Total liabilities, preferred stock and stockholders' equity	$	34,379		$	37,285

SOUTHWALL TECHNOLOGIES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Three Months ended
	March 31, 2009			March 31, 2008
Cash flows used in operating activities:
Net income	$	2,279		$	2,045
Adjustments to reconcile net income to net cash used in operating activities:
Gain on settlement of liability		(2,359	)		-
Deferred income tax		24			-
Loss on disposal of property, plant and equipment		25			-
Depreciation and amortization		622			746
Stock-based compensation charge		92			48
Changes in operating assets and liabilities:
Accounts receivable, net		(1,053	)		(4,099	)
Inventories, net		(361	)		(1,601	)
Other current and non-current assets		(15	)		790
Accounts payable and accrued liabilities		(501	)		74
Net cash used in operating activities		(1,247	)		(1,997	)
Cash flows used in investing activities:
Restricted cash		261			(13	)
Proceeds from sale of property, plant and equipment		28			-
Expenditures for property, plant and equipment		(371	)		(369	)
Net cash used in investing activities		(82	)		(382	)
Cash flows used in financing activities:
Repayments of term debt and capital lease obligations		(1,228	)		(293	)
Net cash used in financing activities		(1,228	)		(293	)
Effect of foreign exchange rate changes on cash and cash equivalents		(435	)		542
Net decrease in cash and cash equivalents		(2,992	)		(2,130	)
Cash and cash equivalents, beginning of period		10,768			6,492
Cash and cash equivalents, end of period	$	7,776		$	4,362