EXHIBIT 99.1

Contact:

Kathy Taylor

Southwall Technologies Inc.

Phone:  (650) 798-1200

For Immediate Release

Southwall Announces 2009 Fourth Quarter and Full Year Results

PALO ALTO, Calif.—(BUSINESS WIRE)—March 25, 2010—Southwall Technologies Inc. (OTCBB: SWTX) announced fourth quarter 2009 revenue of $8.7 million, an increase of 23% as compared to the fourth quarter of 2008, reflecting a stabilizing economy. Full year 2009 revenue was $32.1 million, a 23% decrease over 2008. The full-year revenue decline was broad-based and driven by the poor economic climate, particularly in the first half of the year.

Net income and fully diluted earnings per share for the fourth quarter of 2009 were $1.2 million and $0.03, respectively, as compared with a net loss of $0.2 million, or a loss of $0.01 per fully diluted share, in the fourth quarter of 2008. The increase was primarily due to higher gross profit attributable to higher sales volumes and was partially offset by an increase in losses incurred by our insulating glass joint venture.  Year end 2009 net income was $5.7 million, an increase of approximately 9% as compared to 2008. Year end 2009 earnings per fully diluted share was $0.16 as compared to $0.15 for the year ended 2008.  The increase was primarily due to improved gross margins attributable to improved production efficiency, controlled operating expenses, and a gain recognized in the first quarter of 2009 relating to the settlement of our Matrix debt.

“In a tough year, we maintained our long-term focus on growth while delivering respectable results - a great tribute to the employees of Southwall”, said Dennis Capovilla, Chief Executive Officer. “Despite the challenging economy, we invested in growth, retired debt, increased profitability and generated cash. This positions us well for continued growth of our energy efficiency products in 2010.”

About Southwall Technologies Inc.

Southwall Technologies is the leading innovator of energy-saving films and glass products that dramatically improve the energy efficiency of buildings, homes and cars. Southwall is an ISO 9001/2000/14001-certified manufacturer with customers in over 25 countries around the world.

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 2010 or thereafter, that the Company will not be successful in improving operations 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						Twelve months ended
	December 31,			December 31,			December 31,			December 31,
	2009			2008			2009			2008
Net revenues	$	8,673		$	7,033		$	32,103		$	41,920
Cost of revenues		4,150			4,315			17,704			24,378
Gross profit		4,523			2,718			14,399			17,542
Operating expenses:
Research & development		756			624			2,874			2,996
Selling, general and administrative		2,227			2,028			8,037			8,199
Restructuring recoveries		(56	)		-			(56	)		-
Total operating expenses		2,927			2,652			10,855			11,195
Income from operations		1,596			66			3,544			6,347
Interest expense, net		(78	)		(154	)		(570	)		(586	)
Other income (expense), net		(367	)		61			2,844			(62	)
Income (loss) before provision for (benefit from) income taxes		1,151			(27	)		5,818			5,699
Provision for (benefit from) income taxes		(20	)		185			154			511
Net income (loss)		1,171			(212	)		5,664			5,188
Deemed dividend on preferred stock		123			122			489			489
Net income (loss) attributable to common stockholders	$	1,048		$	(334	)	$	5,175		$	4,699
Net income (loss) per share:
Basic	$	0.04		$	(0.01	)	$	0.18		$	0.17
Diluted	$	0.03		$	(0.01	)	$	0.16		$	0.15
Weighted average shares used in computing net income (loss) per share:
Basic		28,776			28,705			28,730			28,252
Diluted		35,688			28,705			34,486			34,262

SOUTHWALL TECHNOLOGIES INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

	December 31,			December 31,
	2009			2008
ASSETS
Current assets:
Cash and cash equivalents	$	12,454		$	10,768
Restricted cash		-			282
Accounts receivable, net		5,907			3,709
Inventories, net		4,522			5,965
Other current assets		1,479			745
Total current assets		24,362			21,469
Property, plant and equipment, net		14,393			15,012
Other assets		156			804
Total assets	$	38,911		$	37,285
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long term debt and capital leases	$	808		$	1,767
Accounts payable		1,258			596
Accrued compensation		1,395			1,372
Other accrued liabilities		4,881			5,127
Total current liabilities		8,342			8,862
Term debt and capital leases		3,358			4,501
Other long term liabilities		58			2,514
Total liabilities		11,758			15,877
Series A, convertible preferred stock		4,810			4,810
Stockholders’ equity:
Common stock		29			29
Capital in excess of par value		78,291			78,323
Accumulated other comprehensive income:
Translation gain on subsidiary		4,382			4,269
Accumulated deficit		(60,359	)		(66,023	)
Total stockholders’ equity		22,343			16,598
Total liabilities, preferred stock and stockholders’ equity	$	38,911		$	37,285

SOUTHWALL TECHNOLOGIES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Years ended
	December 31,			December 31,
	2009			2008
Cash flows from operating activities:
Net income	$	5,664		$	5,188
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on settlement of liability		(2,359	)		-
Deferred income tax		(38	)		38
(Gain) loss on disposal of property, plant and equipment		(4	)		97
Depreciation and amortization		2,596			2,647
Stock-based compensation charge		403			219
Changes in operating assets and liabilities:
Accounts receivable, net		(2,300	)		649
Inventories, net		1,461			(325	)
Other current and non-current assets		(20	)		601
Accounts payable and accrued liabilities		(175	)		(2,014	)
Net cash provided by operating activities		5,228			7,100
Cash flows from investing activities:
Restricted cash		261			1,189
Proceeds from sale of property, plant and equipment		34			-
Expenditures for property, plant and equipment		(1,725	)		(626	)
Net cash provided by (used in) investing activities		(1,430	)		563
Cash flows from financing activities:
Proceeds from exercise of stock options		54			304
Investment credit in Germany		221			-
Repayments of term debt and capital leases		(2,242	)		(3,551	)
Net cash used in financing activities		(1,967	)		(3,247	)
Effect of foreign exchange rate changes on cash		(145	)		(140	)
Net increase in cash and cash equivalents		1,686			4,276
Cash and cash equivalents, beginning of year		10,768			6,492
Cash and cash equivalents, end of year	$	12,454		$	10,768
Supplemental cash flows disclosures:
Interest paid	$	508		$	730
Income taxes paid	$	717		$	428
Supplemental schedule of non-cash investing and financing activities:
Dividends accrued	$	489		$	489
Property, plant and equipment acquired through capital leases	$	88		$	605