Theragenics(R) Reports Revenue & Earnings for Third Quarter 2006

Theragenics Corporation® (NYSE: TGX), a medical device company serving the cancer treatment and surgical products markets, today announced consolidated financial results for the third quarter ended October 1, 2006. Consolidated revenue for the quarter was $14.3 million, an increase of $2.3 million, or 19% over the third quarter of 2005. For the nine-month period, consolidated revenue was $39.3 million, an increase of $6.4 million, or 19%, over the same period in 2005. Net income for the quarter was $1.7 million, or $0.05 per share, compared to a net loss of $27.2 million, or $0.85 per share in the third quarter of 2005. For the nine-month period, net income was $2.9 million, or $0.09 per share, compared to a net loss of $28.8 million, or $0.93 per share in the comparable 2005 period. Revenue and net income for the 2006 periods include non-recurring license fee revenue of $400,000 received in connection with the Company’s licensed TheraSphere® technology. The 2005 periods include pre-tax restructuring charges of $32.9 million. A comparison of non-GAAP revenue and operating income by segment, excluding non-recurring items, is summarized in Table III to this press release. Table IV includes a reconciliation of GAAP net earnings to earnings before interest, taxes, depreciation and amortization (EBITDA). The Company’s results include the results of operations of its subsidiaries subsequent to the dates of each respective acquisition. Theragenics acquired CP Medical Corp. on May 6, 2005 and Galt Medical Corp. on August 2, 2006. Commenting on the quarter, Chief Executive Officer and President M. Christine Jacobs said, "Results from our stated diversification strategy are beginning to manifest themselves. We have delivered our most profitable quarter since the second quarter of 2002. Top line revenue has expanded as well. We took a significant step forward in our continued diversification during the third quarter with the acquisition of Galt Medical. Today we are larger, stronger and more diversified than ever in our history. We have new avenues for growth through both CP Medical and Galt. We intend to continue executing our strategy. That strategy includes continued acquisitions of medical device companies that compliment our current portfolio.” Theragenics will host a conference call today at 11:00 a.m. Eastern Time. To access the call, dial 800-538-9844 or 706-634-7274 and provide the conference ID code 9074508. This call is also being broadcast live over the Internet, and a recording will be available for one month on the Company’s website. To access the webcast, log on to www.theragenics.com and select Investor Relations followed by selecting company presentations. You also can access a phone replay of the call until Midnight, November 8, 2006, by dialing 800-642-1687 or 706-645-9291 and providing the conference ID code: 9074508. Theragenics Corporation (NYSE: TGX) operates two business segments: its brachytherapy seed business and its surgical products business. The brachytherapy business manufactures and markets its premiere product, the palladium-103 TheraSeed® device and I-Seed, an iodine-125 based device, which are used primarily in the minimally invasive treatment of localized prostate cancer. Its surgical products business manufactures and distributes wound closure, needles and other surgical products used in the urology, veterinary, orthopedic and other markets through its CP Medical subsidiary, and disposable medical devices used for vascular access through its Galt Medical Corp. subsidiary. For additional information, call Theragenics’ Investor Relations Department at (800) 998-8479 or visit www.theragenics.com. This press release contains non-GAAP financial measures used by Management in its analysis of the Company’s operating performance. Management believes presentation of financial measures excluding the impact of certain identified items provides supplemental information that is helpful to an understanding of the operating results of the Company’s businesses and period-to-period comparisons of performance. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, the Company's reported GAAP results. This release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, the accuracy of which is necessarily subject to risks and uncertainties, including, without limitation, statements regarding the contribution of Galt Medical Corp. and CP Medical to Theragenics’ sales, impact on net income, future growth, and anticipated positive results in general. Actual results may differ materially due to a variety of factors, including, among other things, uncertainties related to the integration of Galt and CP Medical into the Theragenics organization, capitalization on opportunities for growth within the Galt and CP Medical business plans, ability to recognize value from areas of shared expertise, risks and uncertainties related to competition within the medical device industry, development and growth of new applications within the markets for vascular access, wound closure, brachytherapy and more broadly, medical devices, competition from other companies within the vascular access, wound closure and medical device markets, competition from other methods of treatment, new product development cycles, integration risks, effectiveness and execution of marketing and sales programs by Theragenics and its distributor, changes in product pricing by Theragenics or other brachytherapy seed producers, changes in costs of materials used in production processes (especially as it relates to isotope production), continued acceptance of the products by the market, continued demand for palladium-103, introduction and/or availability of competitive products by others, potential changes in third-party (including CMS) reimbursement, physician training, third-party distribution agreements, ability to execute on acquisition opportunities on favorable terms and successfully integrate any acquisitions, and other factors set forth from time to time in the Company’s Securities and Exchange Commission filings. All forward looking statements and cautionary statements included in this document are made as of the date hereby based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward looking statement or cautionary statement. TABLE I THERAGENICS AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands except per share data)   Three Months Ended Nine months Ended October 1, 2006 October 2, 2005 October 1, 2006 October 2, 2005 Product sales $13,766  $11,845  $38,446  $32,489  License fees 554  157  858  424  Total revenue 14,320  12,002  39,304  32,913  Cost of sales 7,263  6,833  19,798  17,871  Gross profit 7,057  5,169  19,506  15,042  Operating expenses: Selling, general & administrative 4,552  4,227  15,277  14,515  Amortization of purchased intangibles 471  187  846  313  Research & development 206  823  624  3,374  Restructuring expenses -  32,915  369  32,915  Gain on sale of assets -  -  (201) -  5,229  38,152  16,915  51,117  Operating income/(loss) 1,828  (32,983) 2,591  (36,075) Other income, net 209  288  924  911  Income/(Loss) before income tax 2,037  (32,695) 3,515  (35,164) Income tax expense/(benefit) 380  (5,457) 650  (6,394) Net earnings/(loss) $ 1,657  $(27,238) $ 2,865  $(28,770) Net income/(loss) per common share, Basic $ 0.05  $ (0.85) $ 0.09  $ (0.93) Net income/(loss) per common share, Diluted $ 0.05  $ (0.85) $ 0.09  $ (0.93) Weighted average shares Basic 32,752  31,915  32,293  31,024  Diluted 32,822  31,915  32,368  31,024  TABLE II THERAGENICS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands)   Assets October 1, 2006 December 31, 2005 Cash, short-term investments & marketable securities $ 29,015  $ 45,608  Trade accounts receivable 8,893  7,622  Inventories 7,576  5,042  Assets held for sale 3,400  3,433  Prepaid expenses and other current assets   2,991    2,720  Total current assets 51,875  64,425  Property, plant & equipment, net 31,825  32,766  Goodwill 38,824  18,370  Other intangible assets 14,290  6,388  Other long-term assets   112    115  Total assets $ 136,926  $ 122,064    Liabilities & Shareholders’ Equity Accounts payable & accrued expenses $ 4,482  $ 4,172  Contract termination liability 1,522  1,537  Long term debt 7,500  -  Deferred income tax liability 873  -  Other long-term liabilities   549    672  Total liabilities 14,926  6,381  Shareholders’ equity   122,000    115,683  Total liabilities & shareholders’ equity $ 136,926  $ 122,064  TABLE III THERAGENICS CORPORATION AND SUBSIDIARIES RECONCILIATION OF NON GAAP FINANCIAL MEASURES REVENUE BY SEGMENT EXCLUDING NON-RECURRING LICENSE FEES (in thousands)   Quarter Ended 10/1/06 Quarter Ended 10/2/05 Consolidated Brachytherapy Surgical products Consolidated Brachytherapy Surgical products Revenue, U.S. GAAP $14,320  $9,248  $5,072  $12,002  $9,076  $2,926  Less: non-recurring license fee (400) (400) -  -  -  -  Revenue before non-recurring license fee $13,920  $8,848  $5,072  $12,002  $9,076  $2,926  Nine Months Ended 10/1/06 Nine Months Ended 10/2/05 Consolidated Brachytherapy Surgical products Consolidated Brachytherapy Surgical products Revenue, U.S. GAAP $39,304  $26,866  $12,438  $32,913  $27,889  $5,024  Less: non-recurring license fee (400) (400) -  -  -  -  Revenue before non-recurring license fee $38,904  $26,466  $12,438  $32,913  $27,889  $5,024  TABLE III - CONTINUED THERAGENICS CORPORATION AND SUBSIDIARIES RECONCILIATION OF NON GAAP FINANCIAL MEASURES OPERATING INCOME BY SEGMENT EXCLUDING SPECIAL ITEMS   (in thousands)   Quarter Ended 10/1/06 Quarter Ended 10/2/05 Consolidated Brachytherapy Surgical products Consolidated Brachytherapy Surgical products Operating income (loss), U.S. GAAP $1,828  $1,708  $120  $(32,983) $(33,585) $602  Special items: Non-recurring license fees (400) (400) -  -  -  -  Restructuring related items, net -  -  -  32,915  32,915  -  Operating income (loss) excluding special items $1,428  $1,308  $120  $(68) $(670) $602  Nine Months Ended 10/1/06 Nine Months Ended 10/2/05 Consolidated Brachytherapy Surgical products Consolidated Brachytherapy Surgical products Operating income (loss), U.S. GAAP $2,591  $1,647  $944  $(36,075) $(37,182) $1,107  Special items: Non-recurring license fees (400) (400) -  -  -  -  Restructuring related items, net 170  170  -  32,915  32,915  -  Severance costs not related to restructuring -  -  -  731  731  -  Operating income (loss) excluding special items $2,361  $1,417  $944  $(2,429) $(3,536) $1,107  TABLE IV THERAGENICS CORPORATION AND SUBSIDIARIES RECONCILIATION OF NON GAAP FINANCIAL MEASURES EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA), EXCLUDING SPECIAL ITEMS   (in thousands)   Quarter Ended Nine Months Ended 10/1/06  10/2/05  10/1/06  10/2/05  Net earnings (loss), U.S. GAAP $1,657  $(27,238) $2,865  $(28,770) Income tax expense (benefit) 380  (5,457) 650  (6,394) Other income, net (209) (288) (924) (911) Operating income (loss) 1,828  (32,983) 2,591  (36,075) Depreciation and amortization 1,537  1,835  3,969  5,487  Stock based compensation amortization 79  64  302  163  EBITDA 3,444  (31,084) 6,862  (30,425) Special items: Non-recurring license fee revenue (400) -  (400) -  Restructuring related items -  32,915  170  32,915  Severance costs not related to restructuring -  -  -  731  EBITDA excluding special items $3,044  $1,831  $6,632  $3,221