Theragenics(R) Reports Revenue and Earnings for Second Quarter 2007

Theragenics Corporation® (NYSE:TGX), a medical device company serving the prostate cancer treatment and surgical markets, today announced consolidated financial results for the second quarter and six months ended July 1, 2007. Consolidated revenue for the quarter was $15.6 million compared to $12.6 million in the second quarter of 2006, an increase of 24%. For the six-month period, consolidated revenue was $31.0 million, compared to $25.0 million in the 2006 period, also an increase of 24%. Net income for the quarter was $1.5 million, or $0.05 per share, compared to net income of $433,000, or $0.01 per share in the second quarter of 2006. For the six-month period, net income was $2.7 million, or $0.08 per share, compared to net income of $1.2 million, or $0.04 per share, in 2006. Items affecting comparability between periods include an income tax benefit of $337,000 for the six-month period of 2006. This income tax benefit was from the release of a portion of the deferred tax valuation allowance, reducing the effective tax rate for that period. The 2007 periods included one-time interest income of $309,000 received in connection with a federal income tax refund. The 2006 periods included restructuring costs and gains on the sale of assets primarily related to the restructuring, resulting in $63,000 and $170,000 of net operating expenses for the second quarter and six-month period of 2006, respectively. Additionally, results for the 2006 periods did not include Galt Medical Corp., which was acquired on August 2, 2006. "Our strategy to diversify is posting strong positive results,” stated M. Christine Jacobs, Chairman, CEO & President. "This was our sixth consecutive quarter of record revenue and our best operating profit since the second quarter of 2002. Both business segments continued to deliver profitability, and cash flow was strong. We have transformed ourselves in less than two years and believe our future prospects have never been brighter.” Ms. Jacobs concluded, "We look forward to building upon the recent successes of strengthening our brachytherapy business and our diversification into surgical products. By maintaining our strength in brachytherapy and investing for growth in surgical products, we intend to sustain our positive momentum. We also intend to continue our growth and diversification via acquisition.” Tables I and II to this press release contain condensed consolidated statements of earnings and balance sheets. Revenue and operating income by segment is summarized in Table III, and Table IV includes a reconciliation of GAAP reported net earnings to earnings before interest, taxes, depreciation and amortization (EBITDA). 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 10294096. 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, August 9, 2007, by dialing 800-642-1687 or 706-645-9291 and providing the conference ID code: 10294096. Theragenics Corporation (NYSE:TGX) operates two business segments: its brachytherapy seed business and its surgical products business. The brachytherapy business manufactures and markets its premier 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 and vascular access products. Wound closure products include sutures, needles and other surgical products with applications in, among other areas, urology, veterinary, cardiology, orthopedics, plastic surgery and dental. Vascular access includes introducers and guidewires used in the interventional radiology, interventional cardiology and vascular surgery markets. 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 the 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 future growth, opportunities and investments, 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 acquired companies into the Theragenics organization, capitalization on opportunities for growth within the Surgical Products business, 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 brachytherapy, wound closure, and vascular access and, more broadly, medical devices, competition from other companies within the brachytherapy, wound closure, vascular access and medical device markets, competition from other methods of treatment, new product development cycles, effectiveness and execution of marketing and sales programs, changes in product pricing, changes in costs of materials used in production processes, continued acceptance and demand of the Company’s products by the markets in which it operates, 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 Corporation and Subsidiaries Condensed Consolidated Statements of Earnings   (Unaudited) (In thousands except per share data)   Three Months Ended Six months Ended July 1, 2007 July 2, 2006 July 1, 2007 July 2, 2006 Product sales $ 15,364 $ 12,424 $ 30,591 $ 24,680 License fees   211     166     435     304   Total revenue 15,575 12,590 31,026 24,984 Cost of sales   7,864     6,480     15,973     12,535   Gross profit 7,711 6,110 15,053 12,449 Operating expenses: Selling, general & administrative 4,898 5,378 9,754 10,725 Amortization of purchased intangibles 468 187 937 375 Research & development 379 179 670 418 Restructuring expenses - 63 - 369 Gain on sale of assets   -     -     -     (201 )   5,745     5,807     11,361     11,686   Operating income 1,966 303 3,692 763 Non-operating items Interest income 734 454 1,123 869 Interest expense (168 ) (65 ) (351 ) (134 ) Other   1     1     2     (20 )   567     390     774     715   Earnings before income tax 2,533 693 4,466 1,478 Income tax expense   989     260     1,754     270   Net earnings $ 1,544   $ 433   $ 2,712   $ 1,208   Earnings per share: Basic $ 0.05 $ 0.01 $ 0.08 $ 0.04 Diluted $ 0.05   $ 0.01   $ 0.08   $ 0.04   Weighted average shares: Basic 33,112 32,077 33,093 32,064 Diluted 33,264 32,120 33,236 32,114 TABLE II Theragenics Corporation and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) (In thousands)   Assets July 1, 2007   December 31, 2006 Cash, short-term investments & marketable securities $ 41,442 $ 32,980 Trade accounts receivable 7,998 7,556 Inventories 8,047 7,433 Deferred income tax asset 5,195 7,798 Assets held for sale 3,400 3,400 Prepaid expenses and other current assets   1,204     3,478 Total current assets 67,286 62,645 Property, plant & equipment, net 29,493 30,901 Goodwill 38,721 38,824 Other intangible assets 12,823 13,762 Other long-term assets   93     112 Total assets $ 148,416   $ 146,244   Liabilities & Shareholders’ Equity Current liabilities - accounts payable & accrued expenses $ 4,399   $ 4,381   Contract termination liability 1,501 1,513 Long-term debt 7,500 7,500 Deferred income tax liability, long-term 4,963 6,148 Other long-term liabilities   663     561 Total long-term liabilities 14,627 15,722   Shareholders’ equity   129,390     126,141 Total liabilities & shareholders’ equity $ 148,416   $ 146,244 TABLE III Theragenics Corporation and Subsidiaries Segment Information (Unaudited) (In thousands)     Quarter Ended Six Months Ended July 1, 2007 July 2, 2006 July 1, 2007 July 2, 2006 Revenue Brachytherapy seed $ 8,551 $ 8,610 $ 17,200 $ 17,618 Surgical products   7,071     4,019     13,910     7,461   15,622 12,629 31,110 25,079 Intersegment eliminations     (47 )   (39 )   (84 )   (95 ) Consolidated $ 15,575   $ 12,590   $ 31,026   $ 24,984       Quarter Ended Six Months Ended July 1, 2007 July 2, 2006 July 1, 2007 July 2, 2006 Operating income (loss) Brachytherapy seed $ 940 $ (233 ) $ 2,090 $ (61 ) Surgical products   1,029     528     1,607     837   1,969 295 3,697 776 Intersegment eliminations     (3 )   8     (5 )   (13 ) Consolidated $ 1,966   $ 303   $ 3,692   $ 763   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   Six Months Ended   7/1/07     7/2/06     7/1/07     7/2/06   Net earnings, U.S. GAAP $ 1,544 $ 433 $2,712 $ 1,208 Income tax expense 989 260 1,754 270 Interest income (734 ) (454 ) (1,123 ) (869 ) Interest expense 168 65 351 134 Other non-operating income/expense   (1 )   (1 )   (2 )   20   Operating income 1,966 303 3,692 763 Depreciation and amortization 1,572 1,236 3,139 2,432 Stock-based compensation amortization   172     164     365     223   EBITDA 3,710 $ 1,703 7,196 $ 3,418 Restructuring related items, net   -     63     -     170   EBITDA excluding special items $ 3,710   $ 1,766     $7,196   $ 3,588