## UNITED STATES

## SECURITIES AND EXCHANGE COMMISSION

## WASHINGTON, D.C. 20549

## FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
         SECURITIES EXCHANGE ACT OF 1934
           FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
         SECURITIES EXCHANGE ACT OF 1934
           FOR THE TRANSITION PERIOD FROM _________ TO _________

COMMISSION FILE NO. 0-15443

# THERAGENICS CORPORATION®

(Exact name of registrant as specified in its charter)

|Delaware                        | 58-1528626                             
|------------------------------- | ---------------------------------------
|(State of incorporation Number) | (I.R.S. Employer Identification Number)



|5203 Bristol Industrial Way             
|----------------------------------------
|Buford, Georgia                         
|(Address of principal executive offices)

Registrant's telephone number, including area code:(770) 271-0233

Securities registered pursuant to Section 12(b) of the Act:

| |                                 | Name of each exchange on     
| | ------------------------------- | -----------------------------
| | Title of each class             | which registered             
| | - - - - - - - - - - - - - - -   | - - - - - - - - - - - - - - -
| | Common stock, $.01 par value,   | New York Stock Exchange      
| | Together with associated Common |                              
| | Stock Purchase Rights          

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  YES    X           NO

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Indicate  by check  mark if  disclosure  of  delinquent  filers  pursuant  to Item 405 of  Regulation  S-K is not
contained  herein,  and will not be  contained,  to the best of  registrant's  knowledge,  in  definitive  Proxy or
information  statements  incorporated  by  reference  in Part III of this Form 10-K or any  amendment  to this form
10-K. (X)

As of March 14, 2001 the aggregate market value of the common
stock of the registrant held by non-affiliates  of the registrant,  as determined by reference to the closing price
of the Common Stock as reported on the New York Stock Exchange, was $257,648,580.

As of March 14, 2001 the number of shares of Common Stock, $.01 par value, outstanding was 29,445,552.

Documents  incorporated by reference:  Proxy Statement for the registrant's  2002 Annual Meeting of Stockholders,
to be filed with the  Securities  and Exchange  Commission  not later than 120 days after  December  31,  2001,  is
incorporated by reference in Part III herein.

---

Part I

Item 1.

General

Theragenics  Corporation® ("Theragenics" or the "Company"),  incorporated under Delaware law in 1981, is the manufacturer of
TheraSeed®,  a rice-sized  FDA-cleared device used primarily in treating localized prostate cancer with a one-time,  minimally invasive
procedure.  Theragenics  is the world's  leading  producer of  Palladium-103  (Pd-103),  the  radioactive  isotope  that  supplies the
therapeutic  radiation for its TheraSeed® implant.  Theragenics is also involved in research and development  utilizing Pd-103 for the
treatment of restenosis,  macular  degeneration and other diseases,  and has research and development programs involving other isotopes
and their uses.  Physicians,  hospitals and other healthcare providers,  primarily located in the United States, utilize the TheraSeed®
product.

From May 1997 to August 2000,  substantially  all  TheraSeed®  implants for the treatment of prostate  cancer were sold through an
exclusive  distributor.  Notice  of  termination  of  that  exclusive  distribution  agreement  was  received  in  August  2000  ending
Theragenics'  contractual  requirement to use an exclusive distributor.  The contract was subsequently  terminated in January 2001. The
Company currently sells its TheraSeed® implants directly to physicians and non-exclusive third party distributors.

The Company has an active and ongoing  program  targeted at diversifying  its future revenue  stream.  As part of this program
the Company  constructed a facility in the Oak Ridge,  Tennessee area to house the equipment,  infrastructure  and work force necessary
to support the production of isotopes,  including  Pd-103,  using unique plasma  separation  process (PSP) technology being leased from
the U.S.  Department of Energy (DOE).  PSP technology is a method of separating  relatively large quantities of a specific isotope from
a specific  element.  In the past this technology had demonstrated  the ability to produce material for the U.S.  Government to support
nuclear power  generation.  It was also utilized by  Theragenics  to produce Pd-102 for conversion to Pd-103.  In addition to possibly
increasing  its capacity and allowing for expanded use of Pd-103,  the Company also  believes that the DOE  technology  may allow it to
produce other isotopically engineered materials for use in medical and non-medical applications.

---

Research and development initiatives are also underway to support the Company's  diversification  program. Certain pre-clinical
animal studies  addressing the use of Pd-103 for the  prevention of restenosis in coronary  artery disease are underway.  Restenosis is
the renarrowing of blood vessels  following  procedures that are done to open stenosed  (blocked) blood vessels.  The use of Pd-103 for
the treatment of age-related macular  degeneration,  a disease that leads to loss of eyesight and in some cases complete blindness,  is
also being studied, with pre-clinical animal trials expected to begin in 2002.

The Company is also searching for,  reviewing and evaluating  external  opportunities  for  diversification  such as partnering
and/or acquiring technologies, products or companies.

In 1998 the Company  received  regulatory  approval for the marketing of  TheraSeed®  throughout  the member  countries of the
European  Union by obtaining CE Marking.  Sales of  TheraSeed® in Europe were not  significant  in any of the three years in the period
ended December 31, 2001.

Industry Overview

Prostate Cancer

Excluding skin cancer, prostate cancer is the most common form of cancer, and the second leading cause of cancer deaths, in
men. It is most common in North America and northwestern Europe and less common in Asia, Africa, Central America, and South America. The
American Cancer Society estimates there will be about 189,000 new cases of prostate cancer diagnosed and an estimated 30,200 deaths
associated with the disease in the United States during 2002.

Prostate cancer incidence and mortality increase with age. Prostate cancer is found most often in men who are over the age of
50.  More than seven out of ten men diagnosed with prostate cancer are over the age of 65. At the age of 70, the chance of having
prostate cancer is 12 times greater than at age 50.  According to the American Cancer Society, prostate cancer incidence rates
increased between 1988 and 1992 due to earlier diagnosis in men who otherwise had no sign of symptoms.  Consequently, early screening
has fostered a decline in the prostate cancer death rate since 1990.

---

Weak or interrupted urine flow, an inability to urinate, frequent urination and pain during urination can all be signs of
prostate cancer.  Additional symptoms can include blood in the urine, continual lower back pain or pain in the pelvis or pain in the
upper thighs.  However, it should be noted that these symptoms are nonspecific and can be caused from non-malignant conditions.

According to the American Cancer Society, approximately 83% of all prostate cancers are found while they are still localized
(confined to the prostate), and a 5-year relative survival rate for men with localized prostate cancer is 100%. According to the
American Cancer Society, the survival rate for all stages of prostate cancer combined has increased from 67% to 96% over the past 20
years.  Longer follow-up suggests the relative survival continues to increase after a diagnosis.  Recent data indicates that the
relative 10-year survival is 75%, and 15-year survival rate is 54%.

In addition to  age, other risk factors are linked to prostate cancer, such as genetics. Men who have relatives that have
been affected, especially if the relatives were young at diagnosis, have an even higher risk of contracting the disease.
Researchers have discovered changes in certain genes, influenced by DNA mutations inherited from a parent, may cause some men to be more
inclined to develop prostate cancer. It has also been suggested that environmental factors such as exposure to cancer-causing
chemicals or radiation may cause DNA mutations in many organs, but this theory has not been confirmed.

Another factor that may contribute to prostate cancer is diet. A diet high in fat may play a part in causing prostate
cancer.  The American Cancer Society suggests that Lycopenes, found in vegetables and certain fruits such as tomatoes, grapefruit,
and watermelon, and the mineral selenium  found in fish, meat, poultry, cereals and vegetables such as mushrooms and asparagus, seem
to lower prostate cancer risk. An increase in prostate cancer may also be related to a diet high in calcium and low in fructose
(fruit sugar).

The prostate is a walnut-sized gland surrounding the male urethra, located below the bladder and adjacent to the rectum. The
two most prevalent prostate diseases are benign prostatic hyperplasia (BPH) and prostate cancer. BPH is a non-cancerous enlargement
of the innermost part of the prostate. Prostate cancer is a malignant tumor that begins most often in the periphery of the gland and,
like other forms of cancer, may spread beyond the prostate to other parts of the body. If left untreated, prostate cancer can
metastasize to the lung or bone, resulting in death.

---

The American Cancer Society recommends that men without symptoms, risk factors and a life expectancy of at least ten years
should begin regular annual medical exams at the age of 50, and  believes that health care providers should offer as part of the exam
the prostate-specific antigen (PSA) blood test and a digital rectal examination (DRE).  The PSA blood test determines the amount
of prostate specific antigen present in the blood. PSA is found in a protein secreted by the prostate, and elevated levels of PSA can
be associated with either prostatitis (a noncancerous inflammatory condition) or a proliferation of cancer cells in the prostate.
Industry studies have shown that the PSA test can detect prostate cancer as many as five years earlier than the digital rectal exam.
Transrectal ultrasound tests and biopsies are typically performed on patients with elevated PSA readings to confirm the existence of
cancer.

A tumor found by a prostate biopsy is usually assigned a grade by a pathologist.  The most common prostate cancer grading
system is called the Gleason grading system. A Gleason score, which ranges from 2 to 10, usually is used to estimate the tumor's growth
rate.  The lower the score, the slower the cancer grows.  Most localized cancers of the prostate gland are an intermediate score
ranging from Gleason scores 4, 5 or 6.

Staging is the process of determining how far the cancer has spread.  The treatment and recovery outlook depend on the stage
of the cancer.  The TNM system is the staging process used most often.  The TNM descriptions can be grouped together with stages
labeled 0 through IV (0-4).  The higher the number, the more the cancer has spread.  The following table summarizes the various
stages of prostate cancer.

|Stages   | Characteristics of prostate cancer
|-------- | ----------------------------------
|T1 or T2 | Localized in the prostate         
|T3 or T4 | Locally advanced                  
|N+ or M+ | Spread to pelvic lymph nodes (N+) 
|         | or distanorgans (M+)              

Treatment Options

In addition to seeding, localized prostate cancer is most commonly treated with radical prostatectomy (RP), external beam radiation therapy (EBRT), cryosurgery, hormone therapy, and watchful waiting.
Some of these therapies may be combined in special cases to address a specific cancer stage or patient need.  For example, TheraSeed®
has been used in combination with EBRT to treat some locally advanced cases of prostate cancer. The treatments that have been most
successful are those that remove or kill all of the cancerous tissue while avoiding excessive damage to the surrounding healthy
tissue. When the cancerous tissue is not completely eliminated, the cancer typically returns to the primary site, often with
metastases to other areas. The following is a summary of treatment options for prostate cancer other than seeding.

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Radical Prostatectomyis the most common surgical procedure. Radical
Prostatectomy involves the complete removal of the prostate gland and has been used for over 30 years in treating early-stage,
localized tumors. RP typically requires a three-day average hospital stay and a lengthy recovery period (generally three to five
weeks). Possible side effects include impotence and incontinence. The cost of RP ranges from $19,000 to $25,000 per procedure,
excluding treatment for side effects and postoperative complications.

External Beam Radiation Therapyinvolves directing a beam of radiation at the prostate gland from outside the body to
destroy tumorous tissue and has been a common technique for treating many kinds of cancer since the 1950s. EBRT has typically been
reserved for early-stage prostate cancer in locally advanced cases where the patient is an inappropriate surgical risk. Patients are
usually treated five days per week in an outpatient center over a period of six to seven weeks. Rectal complications resulting from
damage to the rectal wall caused by the radiation beam as it travels to the prostate are the most common side effects. Other possible
side effects include incontinence and impotence, but these side effects generally occur with less frequency than they do
following RP. EBRT is estimated to cost between $13,000 to $17,000 per patient.

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Cryosurgery involves placing a small metal tool into the tumor and killing the cancer by freezing the entire prostate.
Patients usually remain in the hospital for one to two days.  There will be some bruising and soreness of the area where the probe
was inserted. Side effects of cryosurgery may include damage to nerves near the prostate that may cause impotence and incontinence,
damage to bladder and intestines, and a fistula (an abnormal opening) between the rectum and bladder.  This option is considered most
appropriate for men with serious medical conditions that make them unable to endure surgery or radiation therapy.

Ancillary Therapies, primarily consisting of hormone therapy and chemotherapy, are used to slow the growth of cancer and
reduce tumor size, but are generally not intended to be curative. Ancillary therapies are often used during advanced stages of the
disease to extend life and relieve symptoms. Side effects of hormonal drug therapy include increased development of breasts,
impotence and decreased libido. In addition, many hormone pharmaceuticals artificially lower PSA levels in patients, which can
interfere with staging the disease and monitoring its progress. Side effects of chemotherapy include nausea, hair loss and fatigue.
Drug therapy and chemotherapy require long-term, repeated administration of medication on an outpatient basis.

Watchful Waiting is recommended by some physicians in certain circumstances based on the severity and growth rate of the
disease, as well as on the age and life expectancy of the patient. The aim of watchful waiting is to monitor the patient, treat some
of the attendant symptoms and determine when more active intervention is required.  Watchful waiting has gained popularity among
those patients refusing treatment due to side effects associated with radical prostatectomy. Watchful waiting requires periodic
physician visits and PSA monitoring.

A trial study with 18,000 men enrolled is currently underway to determine the efficacy of the drug called finasteride, which
prevents the prostate from using male hormones.  The drug inhibits male hormones called androgens that are known to be important in
the growth of normal and cancerous prostate cells and may be important in the promotion of prostate cancer. It will take several
years, however, before the results of the study are known due to the fact that prostate cancers form slowly.

In addition to the treatment options described above, other forms of treatment as well as prevention are being developed and
tested in clinical settings.

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The Theragenics Solution

Theragenics produces TheraSeed®, an FDA-cleared device for treatment of all solid localized tumors and currently used
principally for the treatment of prostate cancer. In the prostate application, TheraSeed® devices are implanted throughout the prostate
gland in a minimally invasive surgical technique under ultrasound guidance. The radiation emitted by the seeds is contained within
the immediate prostate area, killing the tumor while sparing surrounding organs of significant radiation exposure. The seeds, whose
capsules are biocompatible, remain in the prostate after delivering their radiation dose. TheraSeed® is best suited for solid
localized tumors and is typically classified as a treatment for early-stage disease.

Management believes TheraSeed® offers significant advantages over RP and EBRT. Recent multi-year clinical studies indicate
that seeding offers success rates for early-stage prostate cancer that are comparable to or better than those of RP or EBRT and is associated with
reduced complication rates. In addition, the TheraSeed® treatment is a one-time outpatient procedure with a typical two to three day
recovery period. By comparison, RP is an inpatient procedure typically accompanied by an average three day hospital stay and a three
to five week recovery period, and EBRT involves six to seven weeks of daily radiation treatments. The Company estimates that
treatment with TheraSeed® generally costs $13,000 to $17,000 per procedure, which is lower than the cost of RP and comparable to the
cost of EBRT.

TheraSeed® is a radioactive "seed" approximately 4.5 millimeters long and 0.8 millimeters in diameter, or roughly the size of a
grain of rice. Each seed consists of biocompatible titanium that encapsulates the radioactive substance Pd-103. The half-life of
Pd-103, or the time required to reduce the emitted radiation to one-half of its initial level, is 17 days. The half-life
characteristics result in the loss of almost all radioactivity in less than four months.

Treatment Protocol

Prostate cancer patients electing seed therapy, first undergo a transrectal ultrasound test or CT scan, which generates a
two-dimensional image of the prostate. With the assistance of a computer program, a three dimensional treatment plan is created that
calculates the number and placement of the seeds required for the best possible distribution of radiation to the prostate.

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Once the implant model has been constructed, the procedure is scheduled and the seeds are ordered. The number of seeds
implanted normally ranges from 40 to 100, with the number of seeds varying with the size of the prostate. The procedure is usually
performed under local anesthesia in an outpatient setting. An ultrasound probe is first positioned in the rectum to guide needle
placement and seed location. Correct needle placement is facilitated by a template, or grid, that covers the perineum (the area
between the scrotum and rectum through which the needles are inserted).  This template is attached to the ultrasound probe. Implant
needles loaded with seeds are assigned to the appropriate template holes as indicated in the treatment plan. Each needle is guided
through the template and then through the perineum to its predetermined position within the prostate under direct ultrasound
visualization. The seeds are implanted as the needle is withdrawn from the prostate. When all seeds have been inserted, the
ultrasound image is again reviewed to verify seed placement. An experienced practitioner typically performs the procedure in
approximately 60 to 90 minutes, with the patient often returning home at day's end.

Seeding has been used as a treatment for prostate cancer for more than 20 years. Twenty years ago, seeds containing the radioactive
isotope Iodine-125 (I-125) were implanted in prostate tumors under open surgery. However, this technique fell into disfavor because
the seeds were often haphazardly arranged resulting in radiation not reaching all of the targeted cancerous prostate.  Compounding
this was that often an unintended radiation dose was delivered to healthy surrounding tissues, particularly the urethra and rectum.
Clinical results indicate that the computer modeling, advanced imaging and other techniques used in seeding today have significantly
ameliorated these drawbacks.

Clinical Results

Strong Efficacy Results.  Clinical data indicates that seeding offers success rates for early-stage prostate cancer
treatment that are comparable to or better than those of RP or EBRT. The vast majority of published studies on the use of seeding in
the treatment of early-stage prostate cancer have been very positive. A nine-year clinical study published in the March 2000 issue of
International Journal of Radiation Oncology, Biology and Physics, reported that 83.5% of the patients treated with TheraSeed® were
cancer-free at nine years. The study was conducted by Dr. John Blasko of the Seattle Prostate Institute and included 230 patients
with clinical stage T1 and T2 prostate cancer.  Only 3% experienced cancer recurrence in the prostate. Because of Dr. Blasko's
extensive experience in the treatment of cancer and brachytherapy, the Company retained him as a medical and cancer advisor in 1998.

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Seeding treatment in combination with EBRT has also recorded impressive results in the treatment of higher risk prostate
cancer patients.  In their paper published for the Seminars in Surgical Oncology 1997, Drs. Blasko, Ragde, Grimm, et al. presented an
eight-year actuarial local and distal disease-free rate of 91% and 83%, respectively for 231 patients who were considered to
represent higher risks of locally advanced prostate cancer and were treated with a combination of Pd-103 or I-125 seeding and a
modified dose of EBRT. A study by Dr. Michael Dattoli of University Community Hospital, Tampa, Florida, and Dr. Kent Wallner of
Memorial Sloan-Kettering Cancer Center, New York, New York, published in the International Journal of Radiation Oncology, Biology and
Physics in July 1996, found a three-year actuarial freedom from biochemical failure (based on PSA scores) of 79% among 73 patients
with clinically localized, high risk prostate cancer who were treated with EBRT in combination with Pd-103. This compares favorably
to results reported for patients treated with conventional dose EBRT alone. These locally advanced cases are significant because
typical RP protocols would not classify them as suitable for surgical treatment.

Reduced Incidence of Side Effects. Because TheraSeed® delivers a highly concentrated and confined dose of radiation directly
to the prostate, healthy surrounding tissues and organs are spared excessive radiation exposure. This results in significantly fewer
and less severe side effects and complications than are incurred with other conventional therapies. RP generally results in a 50% to
90% impotence rate and an incidence rate as high as 65% for incontinence, and EBRT generally results in impotence and incontinence
rates of 40% to  60% and 8% to 18%, respectively.  Conversely, brachytherapy patients experience 5% to 15% erectile dysfunction while
there is a close to zero incidence of incontinence according to Wessels, Arnold, and Henderson Industry Data. According
to a 1995 study by the Northwest Tumor Institute described above, it was reported that 85% of seed therapy patients under 70 years
of age who were potent before the procedure remained so. In addition, patients who had not had a previous transurethral prostate
resection (TURP) suffered no incontinence. Patients having a previous TURP have compromised urinary tracts and can experience
higher rates of incontinence. Patients receiving seeding can expect some urethra irritation and urinary urgency post-implantation as
the Pd-103 delivers its radiation dose.

---

A five-year study, using either Pd-103 or I-125 seed implants, published in the August 2001 edition of
International Journal of Radiation Oncology, Biology and Physics promotes brachytherapy treatment for early-stage prostate cancer in
men under 65 while indicating lower incidence of side effects such as incontinence and impotence. According to Dr. Gregory Merrick of
Schiffler Cancer Center in Wheeling, West Virginia, the findings from the study involving 76 patients ranging in ages between 48 and
62 years who received seed implants between the period of 1995 to 1999 are encouraging "because it shows younger men that they can
survive cancer with a significantly lower incidence of side effects."

Lower Treatment Cost.  The total cost of seeding is approximately $15,000 per procedure. This is approximately two-thirds
the cost of RP, which ranges from $19,000 to $25,000, excluding treatment for side effects and post-operative complications.  Seeding
cost is comparable to the cost of EBRT, which ranges from $13,000 to $17,000 for a six-to-seven week course of treatment.

Management believes TheraSeed® represents the best available form of seeding. Another radioactive isotope, I-125,
is also commercially available as a permanent implant. TheraSeed® was the first commercially available alternative isotope
to I-125 since I-125's introduction over 20 years ago. Management believes that I-125 and Pd-103 are used in approximately 70% and
30%, respectively, of all prostate cancer seeding procedures. Another technique known as "temporary seeding," which involves the
temporary placement of an Iridium-based source in or near a tumor, is used in a very small percentage of cases. Management believes
Pd-103 has the following advantages over I-125: (i) Pd-103 delivers three times the initial dose rate of I-125, which can yield
advantages in treating aggressive cancers, (ii) Pd-103 has approximately one-third the half-life of I-125, which shortens the
duration of some radiation induced side effects by two-thirds and reduces radiation exposure to medical personnel in treatment
follow-up; and (iii) unlike I-125, Pd-103 is nontoxic and non-volatile as it decays.

A seven-year, peer-reviewed study conducted at Yale University School of Medicine published in the October 29, 1999, issue
of Radiation Oncology Investigations: Clinical and Basic Research demonstrated that patients receiving TheraSeed® Pd-103
seed implants experienced significantly lower incidences of side effects than patients implanted with I-125.  Overall severe
complication rates from both I-125 and Pd-103 are very low when compared to other treatment modalities. Only 9% of the patients
involved in the study performed at Yale experienced long-term complications, none of whom were implanted with TheraSeed®.
Furthermore, the study indicates that the minimum tumor dose for implants performed with Theraseed® may be increased without comprising side effect results.

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Production

The production of TheraSeed® is dependent upon the availability of Pd-103, as well as Rhodium-103 (Rh-103), titanium,
graphite and lead. With the exception of Pd-103, all of these raw materials are relatively inexpensive and readily available from
third party suppliers.

Pd-103 is a radioactive isotope that can be produced by neutron bombardment of Pd-102 in a nuclear reactor, or by proton
bombardment of Rh-103 in a cyclotron. Following the production of Pd-103 from Rh-103 in the cyclotron, the Pd-103 is harvested from
the cyclotron and moved through a number of proprietary production processes until it reaches its final seed form.

The Company has produced Pd-103 using Company-owned cyclotrons since 1993. The Company currently has fourteen cyclotrons in
production, and has no current plans to purchase additional cyclotrons. The Company's cyclotrons were designed, built, installed and
tested by a company specializing in the construction of such equipment.

Cyclotron operations constitute only one component of the TheraSeed® manufacturing process. Because the production of
TheraSeed® is highly sensitive and labor intensive, Management is focusing significant attention and effort on automating and
otherwise improving all aspects of the Company's manufacturing process. Certain portions of the Companys production processes were
automated during the past four years.  Although the automation process is difficult and time consuming, and has been subject to
significant delays, Management believes it can continue to improve efficiency, further reduce radiation exposure to personnel and
provide additional production capacity for TheraSeed®.

Since 1997, the Companys quality control system has been certified as meeting all the requirements of the International
Organization for Standards ISO 9001/EN46001 Quality System Standard.

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The U.S.DOE has granted Theragenics access to unique DOE technology, known as the PSP for use in production of isotopes, including Pd-103 (the PSP Project). The Company has constructed
facilities and infrastructure to support the use of this DOE technology.  The facilities are expected to become operational during
2002, though no revenues are expected from the PSP Project in 2002 (see Item 7 -Managements Discussion and Analysis of Financial
Condition and Results of Operations).

As a result of the sensitive nature of the PSP equipment and the specialized technology involved, the DOE can terminate the
Company's access in the event of national emergency or in the interest of national defense, or require the Company to perform work
involving programmatic use of the technology for the DOE in connection with carrying out its governmental mission. The Company would
be entitled to compensation in the event of termination in connection with national emergency or defense or for programmatic use of
the technology for the DOE.

Marketing

From May 1997 until August 2000,  Indigo Medical,  Inc.  (Indigo) held the exclusive  worldwide  rights to market and sell the
TheraSeed®  implant  for  prostate  cancer  under a Sales and  Marketing  Agreement  with  Theragenics  (the  Agreement).  Under the
Agreement,  Indigo had the  responsibility  for the marketing and training  related to the  TheraSeed®  implant.  In August 2000 Indigo
exercised its option and gave notice of termination  of the  Agreement.  As a result of Indigo$s  notice of  termination,  Theragenics
regained the right to directly  market and  distribute its  TheraSeed®  product for the treatment of prostate  cancer to physicians and
third-party  distributors.  Subsequent  to  Indigos  notice of  termination,  the  Company  has  executed  non-exclusive  distribution
agreements with four companies for the  distribution  of TheraSeed®  (see Item 7 -  Managements  Discussion and Analysis of Financial
Condition and Results of Operation).

Management  does not  currently  intend to develop an internal  sales and marketing  organization.  The Company does intend to
support  the  TheraSeed®  brand and its  non-exclusive  distributors  with a  significant  increase in  advertising  to  consumers  and
physicians,  clinical  studies aimed at showing the  superiority  of TheraSeed® in the treatment of prostate  cancer,  technical  field
support to TheraSeed®  customers and other customer service and patient information  activities (see Item 7 - Managements  Discussion
and Analysis of Financial Condition and Results of Operation).

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TheraSphere®

Theragenics has also participated in the development of TheraSphere®, a microscopic radioactive glass sphere designed for the
treatment of liver cancer. The Company holds a worldwide exclusive license from the University of Missouri for the use of the
technology required to produce TheraSphere®. The Company has granted to Nordion International, Inc. (Nordion) an exclusive
worldwide sublicense to manufacture, distribute and sell TheraSphere® for any application. Under the terms of the sublicense, Nordion
has agreed to obtain the necessary regulatory approvals for distribution of TheraSphere® in the United States and other countries.
TheraSphere® has been approved for distribution in Canada and is available in other markets outside North America, though sales of
TheraSphere® have not been significant.  Nordion was granted a Humanitarian Device Exemption (HDE) authorization from the FDA to
market Therasphere®. The HDE does not represent full regulatory approval for
distribution in the United States, and the timing for commercial development and regulatory approval of TheraSphere® in the United
States and elsewhere is uncertain.  Management does not anticipate significant revenues from TheraSphere® within the foreseeable
future.

A TheraSphere® treatment dose contains approximately five million Yttrium-90 glass spheres that are each approximately half the
diameter of a human hair. In the treatment of liver cancer, a radiation dose is delivered to the tumor by introducing TheraSphere® by
catheter into the hepatic artery, which carries arterial blood to the liver. Because of greater blood flow to tumors compared to
healthy liver tissue, the microspheres concentrate in the capillaries feeding the tumor. The concentration of microspheres in healthy
tissue is much lower. Because of the ability to place and concentrate the radiation source in such close proximity to the tumor,
TheraSphere® can deliver a radiation dose to the tumor cells five times as strong as that which can be delivered via external beam
radiation.

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Patents and Licenses; Trade Secrets

The Company holds United States patents directed to Palladium delivery devices for therapeutic uses and processes for making such
devices. The Company also has corresponding patents in Canada, South Africa, Japan and the countries of the European Patent
Convention, and a PCT patent application on file for Japan, Australia, New Zealand, Canada, and Europe (representing 16 European
countries) as well as a direct filing in Mexico. The Company may file additional patent applications from time to time in connection
with its existing business and research and development activities.  The Company considers the ownership of patents important, but
not necessarily essential, to its operations. The Company also uses a strategy of confidentiality agreements and trade secret
treatment to provide primary protection to a number of proprietary design modifications in the cyclotrons, as well as various
production processes.

The Company also holds a worldwide exclusive license from the University of Missouri for the use of technology required for
producing TheraSphere®. Theragenics holds the rights to all improvements developed by the University of Missouri on this technology.
The Company, in turn, sublicenses exclusive worldwide rights to this technology and all improvements to Nordion. Pursuant to its
license agreement with the University of Missouri, the Company is obligated to pay the University the greater of a fixed annual
amount or a percentage of the gross sales amount derived from the sale of TheraSphere®.

Theragenics holds patents for technology concerning methods for delivery of TheraSphere® in several countries, including the
United States, Canada, Australia, Argentina, South Africa and the countries of the European Patent Convention, and has patent
applications on file in other countries, including Japan. The Company exclusively licenses this technology to Nordion for worldwide
use.

The Company also relies to a significant degree on trade secrets, proprietary know-how and technological advances that are either
not patentable or which the Company chooses not to patent. In particular, the Company has designed certain modifications to its
cyclotrons as well as various production processes that it deems to be proprietary. The Company seeks to protect non-patented
proprietary information, in part, by confidentiality agreements with suppliers, employees and consultants.

---

Seasonality

Although effects from seasonality cannot be identified in relation to a specific quarter or quarters, management  believes that  holidays,  major medical  conventions  and vacations  taken by  physicians,  patients and patients'
families may have a seasonal  impact on sales for TheraSeed®.

Research and Development

R&D expenses were $2.7 million, $2.1 million,  and $709,000 in 2001, 2000 and 1999,  respectively.
R&D expenses have related  primarily to restenosis  studies and  development  efforts to improve the Companys  proprietary  production
processes  (see Item 7- Managements  Discussion  and Analysis of Financial  Condition and Results of  Operations,  2001 compared to
2000).

Competition

The Company  competes in a market  characterized  by  technological  innovation,  extensive  research  efforts and significant
competition.  In general,  TheraSeed® competes with conventional  methods of treating localized cancer, such as RP and EBRT, as well as
competing  permanent implant devices.  RP currently  represents the most common medical treatment for early-stage,  localized  prostate
cancer.  RP has a long history of favorable  clinical  results and physicians  have developed a high degree of familiarity  and comfort
with this  procedure.  EBRT is also a  well-established  method of treatment and is widely accepted for patients who do not represent a
good  surgical risk or whose  prostate  cancer has advanced  beyond the stage for which  surgical  treatment is  indicated.  Management
believes that if general  conversion  from these  treatment  options (or other  established or  conventional  procedures) to TheraSeed®
treatment does occur,  such conversion will be the result of a combination of equivalent or better efficacy,  reduced incidence of side
effects and complications, lower cost, other quality of life issues and pressure by health care providers and patients.

I-125 is  commercially  available as a permanent  implant and competes  with  TheraSeed®.  A number of companies
have  obtained  regulatory  approval to produce  and  distribute  I-125  seeds and a number of other  companies  have  announced  their
intentions to apply for such approval.  Management believes that I-125 and Pd-103 are used in approximately 70% and 30%,  respectively,
of all prostate cancer seeding procedures.

---

Management  believes that Pd-103 has certain  advantages over I-125. A seven-year  study  conducted at Yale University  School
of Medicine  demonstrated  that patients  receiving  TheraSeed®  Pd-103 implants  experienced  significantly  lower  incidences of side
effects  than  patients  implanted  with  I-125.  The  results of this  peer-reviewed  study  appeared in the October 29, 1999 issue of
Radiation  Oncology  Investigations:  Clinical and Basic  Research.  A review of 123 early stage T1 and T2 prostate  cancer  patients
implanted  between 1992 and 1999 with I-125 or TheraSeed®  revealed an overall  complication  rate of 0% with TheraSeed® versus 13% for
I-125. Most important,  the grade III-IV complication  (bladder,  urethra,  and rectum) rate for TheraSeed® was 0% versus 6% for I-125.
The three-year  actuarial  probability of remaining free of long-term  complications  was 100% for TheraSeed® versus 82% for I-125. The
study also  reported  that a review of the  literature  for 992  patients  implanted  with I-125  versus 540  patients  implanted  with
TheraSeed® shows a consistently higher complication rate for I-125 versus TheraSeed®.

Management  believes that certain  characteristics  of Pd-103 can lead to continued  improved  results over I-125,  including:  (i) a
higher dose rate, which can yield advantages in treating  aggressive  cancers;(ii) a shorter  half-life,  which shortens the duration
of some radiation induced side effects by two-thirds and reduces radiation  exposure to medical personnel in treatment  follow-up;  and
(iii) unlike I-125, Pd-103 is non toxic and non-volatile as it decays.

Several companies have obtained  regulatory  approval to produce and distribute Pd-103 seeds, which compete directly with TheraSeed®.
A number of other  companies have also announced  their  intentions to apply for regulatory  approval to produce and distribute  Pd-103
seeds.  Management  believes  that  Theragenics  has  competitive  advantages  over  these  companies  including:  (i) its  proprietary
production  processes  that  have been  developed  and  patented;  (ii) its  record  of  reliability  and  safety in its  manufacturing
operations;  (iii) the time and resources required for competitors  production  capabilities to ramp up to commercial  production on a
scale comparable to Theragenics  and (iv) the non-exclusive  distribution  agreements that the Company  currently has in place,  which
allow it to leverage multiple distribution channels and access multiple marketing approaches and philosophies.

---

At any point in time,  management of Theragenics and/or its non-exclusive  distributors may change their respective pricing policies
for  TheraSeed®  in order to take  advantage  of market  opportunities  or  respond to  competitive  situations.  Responding  to market
opportunities  and  competitive  situations  could have an adverse  effect on the prices of  TheraSeed®  and/or  could have a favorable
effect on market share and volumes,  while failure to do so could adversely  affect market share and volumes  although per unit pricing
could possibly be maintained.

In addition to the  competition  from the  procedures  and companies  noted above,  many  companies,  both public and private,  are
researching  new and  innovative  methods of  preventing  and treating  cancer.  In addition,  many  companies,  including  many large,
well-known  pharmaceutical,  medical device and chemical  companies that have significant  resources  available to them, are engaged in
radiological  pharmaceutical  and device research.  These companies are located in the United States,  Europe and throughout the world.
Significant developments by any of these companies could have a material adverse effect on the demand for Theragenics' products.

Government Regulation

The Companys  present and future  intended  activities  in the  development,  manufacture  and sale of cancer  therapy  products are
subject to extensive laws,  regulations,  regulatory  approvals and  guidelines.  Within the United States,  the Companys  therapeutic
radiological  device  must comply with the U.S.  Federal  Food,  Drug and  Cosmetic  Act,  which is enforced by the FDA. As a result of
receiving its CE Marking  during 1998, the Company must also comply with the  regulations of the Competent  Authorities of the European
Union for TheraSeed® sold in the member nations of the European Union.

The Company is also required to adhere to applicable FDA regulations for Good  Manufacturing  Practices,  including  extensive record
keeping and periodic inspections of manufacturing facilities.

The Company  obtained FDA 510(k) clearance in 1986 to market  TheraSeed® for, in general,  the treatment of localized solid tumors. A
new 510(k) clearance would be required for any modifications in the device or its labeling that could  significantly  affect the safety
or effectiveness of the original product.

---

The  Companys  handling  of  radioactive  materials  is governed by the State of Georgia in  agreement  with the Nuclear  Regulatory
Commission  (NRC).  The users of TheraSeed® are also required to possess  licenses  issued either by the states in which they reside or
the NRC (depending  upon the state involved and the production  process  used).  The Companys  expansion  plans require the Company to
secure additional  permits and licenses from a number of environmental,  health and safety regulatory  agencies.  The Company believes,
but cannot assure,  that it will be able to acquire the permits and licenses  necessary for its planned  expansion of its manufacturing
capacity in accordance  with its  timetable.  To date,  the Company has not  experienced  delays in licensing any of its  facilities or
cyclotrons.

The Company is required  under its  radioactive  materials  license to maintain  radiation  control and radiation  safety  personnel,
procedures,  equipment and processes,  and to monitor its facilities  and its employees and  contractors.  The Company is also required
to provide  financial  assurance that adequate funding will exist for end-of-life  radiological  decommissioning  of its cyclotrons and
other radioactive areas of its property that contain radioactive  materials.  The Companys  decommissioning  obligations will increase
as its production capacity is expanded.

The Company disposes of low level radioactive  waste to licensed  commercial  radioactive waste treatment or disposal  facilities for
incineration  or land  disposal.  Management  believes  the Company is in  compliance  with all state and federal  regulations  in this
regard.  The Company provides training and monitoring of its personnel to facilitate the proper handling of all materials.

The U.S. DOE has granted  Theragenics  access to unique DOE  technology,  known as the PSP,  for use in  production of isotopes.  U.S.  Government  Export  Control Laws and  Regulations  govern the exporting of
certain products produced in the PSP and the exporting of technology associated with the PSP.

Employees

As of December  31,  2001,  the  Company  had 160 full time  employees  (including  full time  temporary  employees  and  executive
personnel).  Of this total,  110 were engaged in the development and production of the Companys  products.  The remainder were engaged
in marketing and general  corporate  activities.  The Companys  employees are not  represented  by a union or a collective  bargaining
agreement, and management considers employee relations to be good.

---

Item 2.  Properties

The Company owns two manufacturing  facilities located in Buford,  Georgia. One facility houses cyclotrons,  raw material processing,
assembly and shipping operations.  The second facility,  which is adjacent to the first facility,  houses cyclotrons.  The Company also
owns an administrative facility adjacent to its production facilities in Buford.

The Company  owns  approximately  15 acres in Buford-Gerogia on which its two manufacturing facilities and administration facilities are located. Land
remains available  for future  development  adjacent to its current  facilities.
Management  intends to use this land for long term  expansion  of its  manufacturing  and  support  operations,  if such  expansion  is
required.

The  Company  leases  21 acres of land in the Oak  Ridge,  Tennessee  area,  on which it is  constructing  a  facility  to house  the
equipment,  infrastructure  and workforce  necessary to support  operations using technology leased from the U.S. DOE
(see Item 7 -  Managements  Discussion  and Analysis of Financial  Condition  and Results of  Operations).  The Company also holds a
right of first refusal option on the lease of 21 acres adjacent to its current leased site in the Oak Ridge area.

Item 3.  Legal Proceedings

In January  1999,  the Company and certain of its  officers  and  directors  were named as  defendants  in certain  securities
actions  alleging  violations of the federal  securities  laws,  including  Sections 10(b),  20(a) and Rule 10b-5 of the Securities and
Exchange Act of 1934, as amended.  These actions have been  consolidated  into a single action  pending in the U.S.  District Court for
the  Northern  District of Georgia.  The  complaint,  as amended,  purports to  represent a class of  investors  who  purchased or sold
securities  during the time  period from  January 29, 1998 to January 11,  1999.  The  amended  complaint  generally  alleges  that the
defendants  made certain  misrepresentations  and omissions in connection  with the  performance of the Company during the class period
and seeks  unspecified  damages.  On May 14, 1999, a stockholder  of the Company filed a derivative  complaint in the Delaware  Court of
Chancery  purportedly on behalf of the Company,  alleging that certain  directors  breached their  fiduciary  duties by engaging in the
conduct that is alleged in the  consolidated  federal class action  complaint.  The derivative  action has been stayed by the agreement
of the parties.  On July 19, 2000, the Court granted the Companys  motion to dismiss the  consolidated  federal class action complaint
for failure to state a claim against the Company,  and granted the plaintiffs leave to amend their  complaint.  On August 21, 2000, the
plaintiffs  filed a second amended  complaint and on March 30, 2001, the Court denied the defendants  motion to dismiss the plaintiffs
second  amended  complaint.  The Court also denied the Companys  motion for  reconsideration,  and  discovery is underway.  Management
believes these charges are without merit and intends to vigorously  oppose the  litigation,  however,  given the nature and early stage
of the  proceedings,  the ultimate  outcome of the  litigation  cannot be  determined at this time.  Accordingly,  no provision for any
liability that might result from this litigation has been made.  The Company maintains insurance for claims of this general nature.

---

Item 4.  Submission of Matters to a Vote of Security Holders

The Company did not submit any matter to a vote of its security holders during the fourth quarter of calendar year 2001.

PART II

Item 5.         Market for Registrant's Common Equity and Related
                Stockholder Matters

The  Companys Common Stock,  $.01 par value, (Common  Stock) is traded on the New York Stock  Exchange  (NYSE) under the symbol
TGX.  The high and low prices for the Companys  Common Stock as reported on the NYSE for each quarterly  period in 2000 and 2001 are
as follows:

|2001                                                                                         | High   | Low  
|-------------------------------------------------------------------------------------------- | ------ | -----
|First Quarter............................................................................... | $7.90  | $5.38
|Second Quarter..........................................................................     | 13.79  | 6.10 
|Third Quarter.............................................................................   | 11.76  | 7.46 
|Fourth Quarter...........................................................................    | 10.47  | 8.20 
|2000                                                                                        
|First Quarter............................................................................... | $16.63 | $8.13
|Second Quarter..........................................................................     | 13.25  | 6.94 
|Third Quarter..............................................................................  | 9.81   | 6.31 
|Fourth Quarter...........................................................................    | 6.63   | 3.94 

As of March 14, 2002,  the closing  price of the  Company's  Common Stock was $8.75 per share.  Also,  as of that date,  there were
approximately 621 holders of record of the Company's Common Stock.  The number of record holders does not reflect the number
of beneficial owners of the Company's Common Stock for whom shares are held by depositary trust companies, brokerage firms and others.

---

The Company  has a  Stockholder  Rights  Plan (the  Rights  Plan),  which  contains  provisions  designed to protect the  Companys
stockholders.  Pursuant to the Rights Plan, each share of the Companys  Common Stock contains a share purchase right (a Right).  The
Rights  expire in February  2007 and do not become  exercisable  unless  certain  events  occur; including,  the  acquisition  of, or
commencement  of a tender offer for, 15% or more of the  outstanding  Common  Stock.  In the event  certain  triggering  events  occur,
including the acquisition of 20% or more of the outstanding  Common Stock,  each Right that is not held by the 20% or more  stockholder
will entitle its holder to purchase  additional  shares of Common Stock at a substantial  discount to then current market  prices.  The
Rights Plan and the terms of the Rights,  which are set forth in a Rights Agreement between the Company and SunTrust Bank,  Atlanta, as
Rights  Agent,  could add  substantially  to the cost of acquiring  the Company,  and  consequently  could delay or prevent a change in
control of the Company.

Dividend Policy

The Company has never  declared or paid a cash dividend on its Common Stock.  It is the present policy of the Board of Directors to
retain  all  earnings  to support  operations  and to finance  expansion.  Consequently,  the Board of  Directors  does not  anticipate
declaring or paying cash dividends on the Common Stock in the foreseeable  future.  The Company's current credit facility restricts the
Companys  ability to pay  dividends  if such  dividend  payment  would cause a default  under any of the credit  facilitys  financial
covenants.  Decisions  on the  payment  and  amount of any  dividends  on the  Common  Stock will  depend on the  Company's  results of
operations, capital requirements and financial condition and other relevant factors as determined by the Board of Directors.

Stock Split

On March 16,  1998,  the Board of  Directors  approved  a  two-for-one  Common  Stock  split,  effected  in the form of a 100% stock
dividend,  which was distributed on April 15, 1998, to  stockholders  of record on March 31, 1998. All references to shares  outstanding
and per share amounts contained herein have been restated to reflect the stock split.

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Item 6.  Selected Financial Data

The  selected  financial  data set forth below as of  December  31, 2000 and 200, and for each of the three years in the period
ended  December 31, 2001, have been derived from the financial  statements of the Company  included  elsewhere  herein,  which have been
audited by Grant Thornton LLP,  independent  certified public  accountants.  The selected  financial data as of December 31, 1998
and 1999, and for each of the two years in the period ended  December 31, 1998, have been derived from the  financial  statements  of the
Company,  which have been audited by Grant  Thornton  LLP but are not included  herein.  The  selected  financial  data set forth below
should be read in conjunction with the financial  statements of the Company and related notes thereto and "Management's  Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere herein.


Year Ended December 31,1997
1998
1999
2000
2001(Amounts in thousands, except per share data)Statement of Earnings Data:Product sales............................................
$24,457
$37,858
$43,618
$43,898
$49,667Licensing fees...........................................
100
100
100
106
333Total revenue...........................................
24,557
37,958
43,718
44,004
50,000Cost of product sales...............................
6,141
10,869
13,293
13,578
14,641Gross profit..............................................
18,416
27,089
30,425
30,426
35,359Selling, general and administrative.............
4,819
6,000
6,300
6,872
10,448Research and development......................
55
448
709
2,108
2,671Operating profit.......................................
13,542
20,641
23,416
21,446
22,240Other income (expense)...........................
1,306
1,262
1,273
7,253
1,408Net earnings before income taxes.............
14,848
21,903
24,689
28,699
23,648Income tax expense.................................
5,350
7,880
8,677
10,019
8,514Net earnings.............................................
$9,498
$14,023
$16,012
$18,680
15,134Earnings per common share Basic.............
$ 0.35
$ 0.48
$ 0.54
$ 0.63
$ 0.51Diluted.....................................................
$ 0.33
$ 0.46
$ 0.53
$ 0.62
$ 0.50Weighted average common sharesBasic........................................................
27,526
29,259
29,478
29,534
29,627Diluted.....................................................
28,618
30,315
29,960
29,962
30,029December 31,1997
1998
1999
2000
2001(In thousands)Balance Sheet Data:Cash and short-term investments...............
$30,162
$19,542
$18,765
$29,722
$45,373Marketable securities................................
8,392
6,830
15,137
15,459
10,852Property, plant and equipment, net............
28,986
53,258
64,081
75,632
76,830Total assets.............................................
71,200
88,273
108,043
130,700
144,007Long-term debt, including current installments
-
-
-
-
-Shareholders' equity...............................
67,033
84,385
101,077
120,163
136,007Item 7.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL                 
                      CONDITION AND RESULTS OF OPERATIONSOVERVIEWTheragenics Corporation® is the manufacturer of TheraSeed® a rice-sized, FDA-cleared device used primarily in treating localized prostate
cancer with a one-time, minimally invasive procedure. Theragenics is the worlds leading producer of Palladium-103 (Pd-103), the
radioactive isotope that supplies the therapeutic radiation for its TheraSeed® implant. Physicians, hospitals and other healthcare
providers, primarily located in the United States, utilize the TheraSeed® product. TheraSeed® has also been approved for marketing
throughout the member countries of the European Union by obtaining its CE Marking. Sales of TheraSeed® in Europe were not significant
in any of the three years in the period ended December 31, 2001.From May 1997 to August 2000, substantially all TheraSeed® implants for the treatment of prostate cancer were sold through an exclusive
distributor. Notice of termination of that exclusive distribution agreement was received in August 2000 ending Theragenics
contractual requirement to use an exclusive distributor. The contract was subsequently terminated in January 2001. The Company
currently sells its TheraSeed® implants directly to physicians and non-exclusive third-party distributors.The Company has an active and ongoing  program  targeted at diversifying  its future revenue  stream.  As part of this program
the Company  constructed a facility in the Oak Ridge,  Tennessee area to house the equipment,  infrastructure  and work force necessary
to support the production of isotopes,  including  Pd-103,  using unique plasma  separation  process (PSP) technology being leased from
the U.S.  Department of Energy (DOE).  PSP technology is a method of separating  relatively large quantities of a specific isotope from
a specific  element.  In the past this technology had demonstrated  the ability to produce material for the U.S.  Government to support
nuclear power  generation.  It was also utilized by  Theragenics  to produce Pd-102 for conversion to Pd-103.  In addition to possibly
increasing  its capacity and allowing for expanded use of Pd-103,  the Company also  believes that the DOE  technology  may allow it to
produce other isotopically engineered materials for use in medical and non-medical applications.Research  and  development(R&D) initiatives  are  also  underway  to  support  the  Companys   diversification  program.  Certain
pre-clinical  animal studies  addressing  the use of Pd-103 for the  prevention of restenosis in coronary  artery disease are underway.
Restenosis is the renarrowing of blood vessels  following  procedures that are done to open stenosed  (blocked) blood vessels.  The use
of Pd-103 for the treatment of age-related  macular  degeneration,  a disease that leads to loss of eyesight and in some cases complete
blindness, is also being studied, with pre-clinical animal trials expected to begin in 2002.The Company is also  searching  for,  reviewing  and  evaluating  external  opportunities  for  diversification  such as joint
ventures, partnerships, and/or the acquisition of technologies, products or companies.RESULTS OF OPERATIONSYear Ended December 31, 2001, Compared to Year Ended December 31, 2000Revenues were $50.0 million in 2001  compared to $44.0  million in 2000, an increase of $6.0 million,  or 13.6%.  During 2001,
Theragenics sold approximately 26% of unit sales directly to customers.  In comparison,  Theragenics sold almost all of its 2000 unit
sales to third-party distributors.  Because  direct-to-customer sales are made at higher prices than sales to third-party distributors,
the average  selling price of TheraSeed®  increased from 2000 to 2001. Even though units sold during 2001 decreased 2.5% from 2000, the
higher average selling price caused year-over-year revenue to increase.From May 1997 to August of 2000 the Company  was a party to a Sales and  Marketing  Agreement  with Indigo  Medical,  Inc.,  a
Johnson & Johnson  company,  (the Indigo  Agreement and Indigo,  respectively)  that granted Indigo exclusive  worldwide  marketing
rights to TheraSeed®  for the treatment of prostate  cancer.  In July 2000 the Company billed Indigo $5.4 million for shortfalls in its
purchase  minimum  requirements,  and Indigo gave notice of its intention to terminate  the  agreement.  The Company  continued to sell
TheraSeed®  implants to Indigo under this  agreement on a  non-exclusive  basis from August 10, 2000,  until January 5, 2001,  when the
agreement was terminated.  Currently, in addition to direct-to-customer sales,  Theragenics has non-exclusive  distribution agreements
with four companies for the  distribution  of TheraSeed®.  These  five-year  agreements  give each  distributor the right to distribute
TheraSeed® in the U.S.,  Canada and Puerto Rico for the treatment of prostate cancer and other solid localized  cancerous  tumors.  One
of these  non-exclusive  agreements  gives the distributor the option to distribute  TheraSeed®  internationally.  A second of the four
distributors also has the right, via a separate five-year  agreement executed in March 2001, to distribute  TheraSeed®  internationally
on a  non-exclusive  basis.  The Company may continue to explore  additional  non-exclusive  distribution  agreements  in order to take
advantage of multiple distribution channels and expanded market coverage.Several  customers  that had been  purchasing  from Indigo now purchase  directly from  Theragenics,  while many other former
Indigo customers are purchasing TheraSeed® from Theragenics non-exclusive  distributors.  Management expects that these non-exclusive
distributors  will  continue to  aggressively  market to the former  Indigo  customers,  and expects the  percentage of direct sales of
TheraSeed® units by the Company, and accordingly, its average revenue per TheraSeed® unit, to continue to decline.The Companys licensing fees revenue represents licensing payments received for the Companys  TheraSphere®  technology.  Such
licensing fees are not expected to become material in the foreseeable future.At any point in time,  Theragenics  and/or its  non-exclusive  distributors may change their respective  pricing policies for
TheraSeed®  in  order  to take  advantage  of  market  opportunities  or  respond  to  competitive  situations.  Responding  to  market
opportunities  and competitive  situations  could have an adverse effect on the prices of TheraSeed® and could have a favorable  effect
or prevent an unfavorable  effect on market share and volumes.  Failure to respond to market  opportunities and competitive  situations
in order to maintain per unit pricing could adversely affect current or potential market share and volumes.Cost of sales was $14.6 million  during 2001  compared to $13.6  million in 2000,  an increase of $1.0  million.  Gross profit
increased slightly to 70.7% of revenue in 2001,  compared to 69.1% in 2000. During 2001, 14 cyclotrons were in operation.  During 2000,
all 14  cyclotrons  were not in  operation  until the third  quarter.  The  increase  in cost of sales in 2001 over 2000 was due to the
increase in depreciation  and operating costs related to the additional  cyclotrons,  plus an increase in salary and related  expenses.
The increase in  salary-related  costs  reflects an increase in  headcount  and an employee mix more  heavily  weighted  toward  higher
technical expertise.Selling,  general  and  administrative  (SG&A)  expenses  were $10.4  million in 2001,  compared to $6.9  million in 2000,  an
increase of $3.5 million,  or 50.7%.  This increase was primarily due to an increase in advertising,  marketing,  customer  service and
cancer  information  expenses.  Prior to September 2000,  these expenses were borne by Indigo under the terms of the Indigo  Agreement.
Additionally,  Theragenics  incurred  additional  expense as the Company increased its allowance for doubtful  accounts  receivable to
reflect the possibility of nonpayment from its customers.  Management believed it to be appropriate  to increase this allowance because
of the  Companys  move to  direct  sales and the lack of  collection  experience  with the  new non-exclusive  distributors.  Finally,
compensation  and benefits,  and start up expenses  associated with the Companys Plasma  Separation  Process Project (the PSP project)
(see Liquidity and Capital Resources below), also increased during the 2001 periods.In  the  third  quarter  of  2001  the  Company   engaged  a  marketing   consultant   with  experience  in  health  care  and
direct-to-consumer marketing, and expects direct-to-consumer  advertising activity to increase significantly.  The Company also expects
to continue other  activities in an attempt to support its brand and increase demand for TheraSeed®  implants,  including:  advertising
to physicians,  clinical studies aimed at showing the advantages of TheraSeed® implants in the treatment of prostate cancer,  technical
field  support to TheraSeed®  customers,  and other  customer  service and patient  information  activities.  Accordingly,  the Company
expects that these efforts may increase marketing expenses by up to $5.0 million in 2002.R&D expenses increased to $2.7 million,  or 5.4% of revenue in 2001, from $2.1 million,  or 4.8% of
revenue in 2000. The Companys R&D  initiatives  in 2001 and 2000 related  primarily to restenosis  studies  carried out by the Atlanta
Cardiovascular  Research  Institute  (ACRI) (see  below),  and  development  efforts to improve the  Companys  proprietary  production
processes.  The Companys R&D initiatives are intended to expand the application of Pd-103 to other  oncological
and non-oncological  uses, and to explore options for using the Companys  expertise and capabilities in other areas.  Management plans
to continue to  increase  efforts in R&D as its  initiatives  to  diversify  move  forward  and  expects R&D  expenditures  to increase
proportionately.  However,  R&D spending is dependent on the complex scheduling of R&D activities in progress as well as the pursuit of
other appropriate opportunities as they arise. Accordingly, R&D expenses may fluctuate significantly from period to period.As part of its R&D initiatives,  the Company has an agreement with the ACRI to conduct  pre-clinical animal studies addressing
the use of Pd-103 for the  prevention of restenosis in coronary  artery  disease.  Early phases of the studies have  indicated that the
inhibitory  effects of Pd-103 are similar to that of other emitters,  both beta and gamma.  The Company is continuing its  pre-clinical
animal  studies,  and expects  additional data to be available in 2002. The Company has met with  representatives  of the U.S. Food and
Drug Administration  (FDA) to present the results of the pre-clinical  animal studies,  discuss further  pre-clinical  studies planned,
and discuss the  requirements  and timing on proceeding  with human  clinical  studies using  TheraSource,  the Companys  proprietary
Pd-103 source. The Company is planning to provide TheraSource for a human clinical feasibility trial for restenosis in peripheral
vessels in 2002.  However,  the commencement  and completion of any human trials will be dependent upon the investigator  receiving the
appropriate  approvals and  authorizations  necessary  for carrying out this trial,  including  the  submission  and FDA approval of an
Investigational Device Exemption.The market for the prevention of restenosis is characterized by rapid technological  innovation,  significant research efforts
and continual scientific  discoveries.  Many innovative treatments for the prevention of restenosis are currently being studied, all at
different  stages of development.  Many companies are involved in research in this area, some with significant  resources  available to
them.  Theragenics  believes that the treatment of restenosis  and vascular  disease will continue to evolve at a rapid pace,  and the
Companys development efforts in this area will continue to be flexible.Other  R&D  efforts  are  also  underway,  including  the use of  Pd-103  in  treating  the wet  form of  age-related  macular
degeneration.  The Company has developed a prototype device for macular  degeneration animal studies and expects to begin these studies
during 2002.Other income  (exclusive of minimum  income),  primarily  comprised of interest  income,  was $1.4 million in 2001 compared to
$1.8 million in 2000. The Companys  investments  consist  primarily of short-term cash investments and high-credit  quality  municipal
obligations,  in accordance with the Companys investment  policies.  While additional funds were available for investment during 2001,
the interest rate  environment  during 2001 has reduced the effective  returns on a significant  portion of the Companys  investments.
Funds available for investment have been and will continue to be utilized for the Companys  current and future expansion  programs and
R&D activities,  and may be used for the acquisition of technologies,  products or companies consistent with the goals of Theragenics.
As funds continue to be used for these programs and  activities,  and as interest  rates continue to change, Management  expects other
income to fluctuate accordingly.The  Company  recognized  $5.4  million  of other  income in 2000  related to  purchase  minimum  shortfalls  under the Indigo
Agreement. This increased net earnings during 2000 by $3.5 million, or $.12 per diluted share.The Companys  effective  income tax rate was  approximately  36% and 35% for 2001 and 2000,  respectively.  The increase is a
result of a reduction in tax credits generated by the Companys  investments in its expansion  projects and research  activities during
2001. The Company  expects  further  reductions in its tax credits in 2002. The Companys  income tax rate in each period is lower than
the statutory rates primarily due to the recognition of tax credits  generated by the Companys  investments in its expansion  projects
and research activities, and tax-exempt interest income.Medicare DevelopmentsThe Centers for Medicare and Medicaid  Services (CMS) are  promulgating  changes in future payments under Medicare Part B that
hospitals will receive for providing  brachytherapy in outpatient  departments.  The previously published reimbursement rates for 2002,
which were announced November 2001, were delayed due to technical errors. Under the previously  published rule,  reductions in payments
for  medical  devices of  approximately  10% to 20% may have  occurred.  After  reevaluating  its  previous  calculations,  CMS has now
established significantly more favorable reimbursement for brachytherapy.Specifically,  effective  April 1, 2002, CMS will be implementing  changes in hospital  payments for  brachytherapy  and other
services  provided  under  Medicares  Outpatient  Prospective  Payment  System  (OPPS).  Theragenics  TheraSeed®  implant  and other
brachytherapy  seeds currently fall within various  transitional  pass-through  codes , which are separate from the procedure  payment
codes that  comprise much of OPPS.  During the last nine months of 2002,  CMS will bundle a portion of the  pass-through  reimbursement
for brachytherapy seeds and other pass-through  devices with the associated procedure codes.  In effect,  this will shelter the bundled
portion of  reimbursement  for seeds from pro rata  reductions  that otherwise would apply this year to  pass-through  payments under
Medicare law. For many  TheraSeed®  implant  patients,  we anticipate that the  pass-through  seed and device costs will remain near or
below the maximum  amount to be bundled with new payment codes,  rendering  significant  pro rata payment  reductions  unnecessary  for
these  patients.  To the extent that  pass-through  device costs exceed the bundled  amount,  the remaining  costs will be subject to a
63.6% pro rata reduction.As CMS officials  consider OPPS payment  policies for calendar year 2003 and beyond,  Theragenics  will continue to work with
policymakers to help ensure that Medicare  policies account for the unique aspects of classification  and  reimbursement  that apply to
the TheraSeed®  implant and the brachytherapy area in general.  Reductions in payments under OPPS for brachytherapy  seeds could reduce
the competitive advantages of TheraSeed® over competing treatments.Year Ended December 31, 2000, Compared to Year Ended December 31,1999Revenues were $44.0 million in 2000  compared to $43.7  million in 1999, an increase of $300,000 or 0.7%.  Revenue  during the
second  half of 2000 was  impacted  by the  termination  of the  Companys  relationship  with  Indigo,  and the  change to a sales and
marketing strategy utilizing non-exclusive distributors.The Companys licensing fees revenue represents licensing payments received for the Companys TheraSphere® technology.Gross  profit  decreased to 69.1% of revenue in 2000 from 69.6% of revenue in 1999.  This  decline in gross profit  margin was
primarily a result of the increase in depreciation  expense for the additional  cyclotrons that were ordered almost two years before to
meet sales  forecasts made at that time by Indigo.  The non-cash  depreciation  charge related to  manufacturing  for 2000 increased to
$5.0 million from $3.6 million for 1999. The increase  reflects 14 cyclotrons  being in operation by December 31, 2000,  versus only 11
cyclotrons  in  operation by December  31,  1999.  The increase in  depreciation  was  partially  offset by improved  efficiencies  and
automation in the Companys proprietary production processes,  and the utilization of certain manufacturing  materials and resources in
R&D activities.SG&A expenses  were $6.9 million in 2000 compared to $6.3 million in 1999, an increase of $600,000 or 9.5%.  This increase was
primarily  due to an  increase  in  compensation  and  benefits,  customer  service and  patient  information  expenses  which had been
previously  borne by Indigo prior to September  2000,  and start-up costs related to the Companys  construction  project in Oak Ridge,
Tennessee. These increases were partially offset by a reduction in legal and professional fees.R&D expenses increased to $2.1 million, or 4.8% of revenue,  in 2000,  compared to $709,000,  or 1.6% of revenue, in 1999.The
increase in R&D expenses was a result of the Companys R&D  initiatives,  including  restenosis  studies carried  out by the  ACRI, and
development efforts to improve the Companys proprietary production processes.Other income,  excluding  minimum income described  below,  increased to $1.8 million in 2000 from $1.3 million in 1999. Other
income  consists  primarily of interest income  generated from the Companys  short-term  investments  and high quality  municipal bond
investments.  The  increase was  attributable  to  additional  funds being  available  for  investment  during 2000 as a result of cash
generated from operations.The  Company  recognized  $5.4  million of other  income in the third  quarter of 2000  related to  Theragenics  billing for
purchase minimum  shortfalls under the Indigo Agreement.  This increased net earnings during 2000 by $3.5 million,  or $.12 per diluted
share.The  Companys  effective  income tax rate was  approximately  35% for 2000 and 1999.  The  Companys  income tax rate in each
period is lower than the statutory  rates  primarily due to the  recognition of tax credits  generated by the Companys  investments in
its expansion projects and research activities, and tax-exempt interest income.Liquidity and Capital ResourcesThe Company had cash,  short-term  investments  and  marketable  securities  of $56.2  million at December 31, 2001,  compared
to $45.2 million at December 31, 2000.  Marketable  securities  consist  primarily of high-credit  quality  municipal  obligations,  in
accordance  with the Companys  investment  policies.  The increase in cash,  short-term  investments  and marketable  securities was a
result of cash generated by operations,  partially  offset by capital  expenditures.  Working capital was $65.3 million at December 31,
2001,  compared to $49.9 million at December 31, 2000. The Company also has an Unsecured Credit Agreement with a financial  institution
that provides for maximum  borrowings of $40.0 million under two lines of credit,  and an additional  uncommitted $10.0 million line of
credit.  The Unsecured Credit Agreement  expires in August 2003.  Letters of credit  totaling  approximately  $810,000 were outstanding
under the terms of the Unsecured Credit Agreement at December 31, 2001.Cash  generated  by  operations  was $18.0  million and $28.6  million in 2001 and 2000,  respectively.  Cash  generated  from
operations  consists of net earnings  plus  non-cash  expenses  such as  depreciation,  amortization  and deferred  income tax expense.
Depreciation  and  amortization  increased  to $5.7  million in 2001 from $5.5  million  in 2000.  The  increase  in  depreciation  and
amortization was a result of the increase in the number of cyclotrons that were operational during 2001.The  Companys  primary  use of cash in 2001 and 2000  related to capital  spending  to increase  manufacturing  capacity  and
support  diversification  efforts.  Capital  expenditures  were $7.4 million and $17.3  million in 2001 and 2000,  respectively.  These
expenditures  related primarily to the Companys PSP Project (see below), the addition of cyclotrons and supporting  facilities and the
Companys new headquarters  facility.  The Company expects capital spending on current expansion to decrease in 2002 as the PSP Project
is completed.The DOE has granted  Theragenics  access to unique DOE  technology,  known as the PSP,  for use in  production  of  isotopes,
including  Pd-103.  This  technology  venture  represents  part of a DOE  initiative  to redirect  Cold War assets to peacetime use and
cushion the  economic  impact  of U.S.  Defense  Department  cutbacks.  The Company  expects that the use of the PSP  technology  could
significantly  increase its Pd-103 capacity and allow for expanded use of Pd-103 and TheraSeed®  beyond treatment of prostate cancer to
new medical  applications.  The Company also believes that the PSP Project may allow it to explore options for applying this technology
to other uses, including the production of isotopically  engineered materials for use in medical and non-medical  applications,  though
there are no assurances that this will be achieved.  The Company has  constructed a facility in the Oak Ridge,  Tennessee area to house
the  equipment,  infrastructure  and work force  necessary to support the  production  of isotopes,  including  Pd-103,  using this DOE
technology.  Construction  costs of  approximately  $24.1 million have been incurred on the PSP Project through  December 31, 2001, and
the Company  expects to  additionally  invest up to $5.9  million in 2002 to complete  this  manufacturing  and R&D  facility.  The PSP
Project is expected to become  operational in 2002,  though no  significant  revenues are expected to be generated from the PSP Project
in 2002.As part of the PSP Project,  the Company has leased land in the Oak Ridge,  Tennessee  area and equipment  previously  used by
the government to produce isotopes. As a result of the sensitive nature of the equipment,  the specialized  technology involved and the
restrictions on access to unique  DOE-operated  facilities,  the Company has contracted  with the DOEs primary  contractor for its Oak
Ridge  facilities to handle certain  technical and operational  services that are critical to the project,  including  reassembling and
recommissioning  equipment,  designing and fabricating new parts and  modifications to the equipment and DOE facilities,  and operating
and providing  ongoing access to the DOE  facilities.  The success of the project is dependent on the continued  cooperation of the DOE
and its primary  contractor,  which could be adversely affected by future changes in governmental  program  priorities and funding.  If
the equipment  cannot be  recommissioned  successfully,  if there are problems with the operation or modification  of the  DOE-operated
facilities,  or if unforeseen  challenges  arise,  the project may not be successful  or the costs or  timeliness  associated  with the
project could exceed current  estimates.  Additionally,  as a result of the sensitive  nature of the PSP equipment and the  specialized
technology  involved,  the DOE can  terminate the  Companys  access in the event of national  emergency or in the interest of national
defense,  or require the Company to perform work involving  programmatic  use of the technology for the DOE in connection with carrying
out its  governmental  mission.  The Company would be entitled to  compensation in the event of termination in connection with national
emergency or defense or for programmatic use of the technology for the DOE.In  addition to using cash to  complete  the PSP Project in 2002,  the Company  expects  that R&D  spending  will  continue to
increase.  Pre-clinical  animal studies addressing the use of Pd-103 for the prevention of restenosis are underway,  and the Company is
working toward providing material for a human clinical feasibility trial in 2002. Other R&D activities are also occurring
(see Results of Operations  above).  R&D spending has fluctuated and could continue to do so depending on the scheduling and progress
of R&D  activities  as well as the  pursuit of  currently  unforeseen  opportunities.  Cash  could  also be used in 2002 for  increased
marketing and  TheraSeed®  support  activities,  and in the pursuit of  diversification  efforts such as the purchase of  technologies,
products or companies.Cash provided by financing  activities was $362,000 and $121,000 in 2001 and 2000,  respectively,  consisting of cash proceeds
from the exercise of stock options and the Companys Employee Stock Purchase Plan.The Company believes that current cash and investment  balances,  cash from future operations and credit  facilities,  will be
sufficient to meet its currently  anticipated working capital and capital expenditure  requirements.  In the event additional financing
becomes necessary, management may choose to raise those funds through other means of financing as appropriate.SIGNIFICANT ACCOUNTING POLICIESOur significant accounting policies are more fully described in Note B to our financial statements.  However, certain of our
accounting policies are important to the portrayal of our financial position and results of operations and require the application of
judgment by our management.Allowance for doubtful accounts. Management judgments and estimates are made and used in connection with establishing an
allowance for the possibility that portions of our accounts receivables balances may become uncollectable. Accounts receivable are
reduced by this allowance for amounts that may become uncollectible in the future.  Specifically, management analyzes accounts in
relation to current economic trends and changes in our customer payment history in establishing this allowance.  Our accounts
receivable balance, net of the provision for this trade accounts receivables allowance of $.3 million, was approximately $7.2 million
as of December 31, 2001.Property, Plant and Equipment. Property, plant and equipment are recorded at cost and are depreciated on a straight-line
basis over the estimated useful lives of such assets.   The Companys estimates can result in differences from the actual useful
lives of certain assets. We currently own and operate 14 cyclotrons, the first of which entered service in 1993. Each of the
Company's cyclotrons is  depreciated using an estimated 10-year life.  The cyclotrons incorporate a number of proprietary design
modifications that render the cyclotrons unique to commercial applications. Managements estimate of the useful life of these
cyclotrons is based on the Companys experience to date with these cyclotrons.  As management continues to gain experience relative
to the operation, repair, refurbishment, and maintenance of these cyclotrons,  the Company may reassess the useful lives of the
machines. Management will continue to periodically examine estimates used for depreciation for reasonableness in relation to the
cyclotrons.  If the Company determines that the useful life of property, plant or equipment should be shortened or lengthened,
depreciation expense would be adjusted accordingly for the remaining useful life (lives) of the identified asset(s).FORWARD-LOOKING STATEMENTSThis document contains certain  forward-looking  statements within the meaning of the Private Securities Litigation Reform Act
of 1995 including,  without limitation,  statements regarding sales,  marketing and distribution efforts,  sales mix,  effectiveness of
non-exclusive  distribution  agreements,  pricing for  TheraSeed®,  future cost of sales,  third-party  reimbursement,  R&D efforts and
expenses,  SG&A expenses,  other income,  timing and ultimate outcome of the Companys  activities in restenosis,  macular degeneration
and other  diversification  efforts,  potential new products and opportunities,  the PSP Project,  and the sufficiency of the Companys
liquidity  and  capital  resources.  From time to time,  the Company may also make other  forward-looking  statements  relating to such
matters as well as anticipated  financial  performance,  business  prospects,  technological  developments,  R&D activities and similar
matters.  These  forward-looking  statements  are subject to certain  risks,  uncertainties  and other factors which could cause actual
results to differ  materially from those  anticipated,  including risks  associated with R&D activities,  including  animal studies and
clinical  trials  related to new  products,  risks  associated  with new product  development  cycles,  effectiveness  and execution of
marketing and sales programs of  Theragenics  and its  non-exclusive  distributors,  potential costs and delays in the start-up of the
Oak Ridge  facility,  potential  changes in product  pricing and  competitive  conditions,  continued  acceptance  of TheraSeed® by the
market,  execution and effectiveness of competitors,  management of growth,  acceptance and efficacy of Pd-103 for other  applications,
adverse changes in governmental  program  priorities and budgetary funding by the relevant  governmental  authorities,  potential costs
and delays in the startup and refinement of technology and related equipment,  potential  equipment failure,  government  regulation of
the  therapeutic  radiological   pharmaceutical  and  device  business,  and  potential  changes  in  third-party  reimbursement.   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.Quarterly ResultsThe following table sets forth certain  statement of operations  data for each of the Company's last eight  quarters.  This unaudited
quarterly  information  has been prepared on the same basis as the annual audited  information  presented  elsewhere in this Form 10-K,
reflects all adjustments  (consisting only of normal,  recurring adjustments) which are, in managements opinion,  necessary for a fair
presentation  of the  information  for the periods  covered and should be read in conjunction  with the financial  statements and notes
thereto.  The  operating  results for any quarter are not  necessarily  indicative  of results for any future  period.  Quarterly  data
presented may not reconcile to totals or full year results due to rounding.




2000
2001First
Second
Third
Fourth
First
Second
Third
FourthQtr
Qtr
Qtr
Qtr
Qtr
Qtr
Qtr
Qtr(Amounts in thousands, except per share data)Total revenues
$11,279
$11,524
$10,536
$10,665
$13,567
$13,121
$11,892
$11,420Cost of productsales

3,302
3,475
3,579
3,222
3,903
3,731
3,597
3,410Gross profit
7,977
8,049
6,957
7,443
9,664
9,390
8,295
8,010Selling, general andadministrative
1,821
1,642
1,678
1,731
2,586
2,487
2,678
2,697Research anddevelopment

348
571
596
593
822
723
506
620Other income
414
419
5,904
516
474
389
330
215Net earnings before incomeTaxes
6,222
6,255
10,587
5,635
6,730
6,569
5,441
4,908Income tax expense
228
2,155
3,777
1,859
2,375
2,356
2,009
1,774Net earnings
$ 3,994
$ 4,100
$ 6,810
$ 3,776
$ 4,355
$ 4,213
$ 3,432
$ 3,134Earnings per commonshare:Basic
$0.14
$0.14
$0.23
$0.13
$0.15
$0.14
$0.12
$0.11Diluted
$0.13
$0.14
$0.23
$0.13
$0.15
$0.14
$0.11
$0.10Weighted average sharesoutstanding:Basic:
29,521
29,527
29,531
29,557
29,583
29,611
29,646
29,666Diluted
30,267
30,021
29,903
29,808
29,879
30,033
30,185
30,112InflationManagement  does not believe that the  relatively  moderate  levels of  inflation  which have been  experienced  in the
United States in recent years have had a significant effect on the Company's net sales or profitability.Item 7A. Quantitative and Qualitative Disclosures About Market RiskThe Company's market risk exposure related to market risk sensitive  financial  instruments is not material.  As of December 31, 2000,
there were no outstanding borrowings under the Company's Unsecured Credit Agreement.


Item 8.  Financial Statements and Supplementary DataSee Index to Financial Statements (Page 43) and
           following pages.Item 9.  Changes in and Disagreements on Accounting and                 Financial DisclosureNot ApplicablePART IIIItem 10. Directors and Officers of Registrant*Item 11. Executive Compensation*Item 12. Security Ownership of Certain Beneficial Owners and Management*Item 13. Certain Relationships and Related Transactions*______________________________*The information called for by Items 10, 11, 12 and 13 is omitted from this Report and is incorporated by reference to the
       definitive Proxy Statement to be filed by the Company not later than 120 days after December 31, 2001, the close of its fiscal
       year.PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
a) The following documents are filed as part of this Report.
1. Financial Statements
       See index to financial statements on page 43

     2. Financial Schedules
          See the index to financial schedules on page 43

3. Exhibits
3.1
              -
              Certificate of Incorporation as amendedthrough July 29, 1998,(incorporated byreference to Exhibit 3.1 of the Company'sreport on Form 10-Q for the quarterlyperiod ended June 30, 1998)3.2
              -
              By-Laws, (incorporated by reference toExhibit 3.4 of the Companys registrationstatement on Form S-1, File No. 33-7097,and post-effective amendments thereto)4.1
-
See Exhibits 3.1 - 3.2 for provisions inthe Company's Certificate of Incorporationand By-Laws defining the rights of holdersof the Company's Common Stock.10.1
-
License Agreement with University ofMissouri, as amended, (incorporated byreference to Exhibit 10.3 of the Companysregistration statement on Form S-1, FileNo. 33-7097, and post-effective amendmentsthereto)10.2
-
Reassignment and Release Agreement amongthe Company, John L. Russell, Jr., andGeorgia Tech Research Institute,(incorporated by reference to Exhibit 10.8of the Companys registration statement onForm S-1, File No. 33-7097, and post-effective amendments thereto)10.3
-
1986 Incentive and Non-Incentive StockOption Plan*, (incorporated by reference toExhibit 10.11 of the Companys registrationstatement on Form S-1, File No. 33-7097,and post-effective amendments thereto)10.4
-
1990 Incentive and Non-Incentive StockOption Plan*, (incorporated by reference toExhibit 10.10 of the Companys report onForm 10-K for the year ended December 31,1990)10.5
-
Agreement with Nordion International Inc.,(incorporated by reference to the Companysreport on Form 8-K dated March 23, 1995)10.6
-
Rights Agreement dated as of February 17,1997 between the Company and SunTrustBank, Atlanta, (incorporated byreference to Exhibit 99.1 of the Companysregistration statement on Form 8-A filedFebruary 27, 1997)10.7
-
Theragenics Corporation® 1995 Stock OptionPlan*, (incorporated by reference toExhibit 10.1 of the Companys common stockregistration statement on Form S-8, fileno. 333-15313)10.8
-
1997 Stock Incentive Plan, (incorporatedby reference to appendix B of the CompanysProxy Statement for its 1997 Annual Meetingof Stockholders filed on Schedule 14A)*10.9
-
Marketing and Sales Agreement by andbetween the Company and Indigo Medical,Inc.dated May 30, 1997 (incorporated byreference to Exhibit 10 of the Companysreport on Form 10-Q for the quarterlyperiod ended September 30, 1997)10.10
-
Theragenics Corporation® Employee StockPurchase Plan*, (incorporated by referenceto appendix A of the Company's Proxystatement for its 1998 Annual Meeting ofStockholders filed on Schedule 14A)10.11
-
Employment agreement of Bruce W. Smith*,(incorporated by reference to Exhibit 10.22of the Companys report on Form 10-K forthe year ended December 31, 1998)10.12
-
Sublease dated March 25, 1999 betweenTheragenics Corporation® and Community ReuseOrganization of East Tennessee,(incorporated by reference to Exhibit 10.1of the Companys report on Form 10-Q forthe quarterly period ended March 31, 1999)10.13
-
Work for Others Agreement dated March 25,1999 between Theragenics Corporation® andLockheed Martin Energy ResearchCorporation, (incorporated by reference toExhibit 10.2 of the Companys report onForm 10-Q for the quarterly period endedMarch 31, 1999)10.14
-
Credit Agreement between TheragenicsCorporation® and Wachovia Bank, NationalAssociation,(incorporated by reference toExhibit 10.1 of the Companys report onForm 10-Q for the quarterly period endedSeptember 30, 1999)10.15
-
Theragenics Corporation® 2000 StockIncentive Plan* (incorporated by referenceto Exhibit 10.16 of the Companys report onForm 10-K for the year ended December 31,1999)10.16
-
Employment Agreement of M. ChristineJacobs* (incorporated by reference toExhibit 10.1 of the Companys report onForm 10-Q for the quarterly period endedMarch 31, 2000)24.1
-
Consent of Independent Public Accountantsfor Incorporation by Reference of AuditReport into Registration Statements27.1
-
Financial Data Schedule for the yearsended December 31, 2000 and 1999 (for SECuse only)*    Management contract or compensatory plan or arrangement identified pursuant to Item 14(a)(3) of Form
10-K(b) Reports on Form 8-KNo reports on Form 8-K were filed by the Company during the last quarter of the most
                  recent fiscal year.


SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.



                                  THERAGENICS CORPORATION®
                                       (Registrant)

                                  By:/s/ M. Christine Jacobs
                                     M. Christine Jacobs                
                                     Chief Executive Officer

Dated: March 28, 2002
               Buford, Georgia

     Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.

Name
Title
Date/s/ M. Christine Jacobs
Chief Executive Officer
3/28/02M. Christine Jacobs
(Principal Executive Officer);President, Chairman/s/ Bruce W. Smith
Executive Vice President,
3/28/02Bruce W. Smith
Chief Financial Officer,Treasurer(PrincipalFinancial and AccountingOfficer) and Secretary/s/ Otis W. Brawley, M.D.
Director
3/28/02Otis W. Brawley, M.D./s/ Orwin L. Carter,Ph.D.
Director
3/28/02Orwin L. Carter,Ph.D./s/  Earnest W. Deavenport, Jr.
Director
3/28/02Earnest W. Deavenport, Jr./s/  Patrick L. Flinn
Director
3/28/02Patrick L. Flinn/s/ John V. Herndon
Director
3/28/02John V. Herndon/s/ Philip Incarnati
Director
3/28/02Philip A. Incarti/s/ Peter A.A. Saunders, F.R.S.A.
Director
3/28/02Peter A.A. SaundersTHERAGENICS CORPORATION®

TABLE OF CONTENTS

PageREPORT OF INDEPENDENT PUBLIC ACCOUNTANTSON FINANCIAL STATEMENTS ............................................................................................
31FINANCIAL STATEMENTSBalance Sheets - December 31, 2000 and 2001 ..........................................................................
32Statements of Earnings for each of the three years inthe period ended December 31, 2001   .........................................................................................
34Statements of Shareholders' Equity for each of the threeyears in the period ended December 31, 2001 .............................................................................
35Statements of Cash Flows for each of the three yearsin the period ended December 31, 2001 .......................................................................................
37NOTES TO FINANCIAL STATEMENTS ................................................................................
39REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE .........................
54Schedule II - Valuation and Qualifying Accounts for eachof the three years in the period ended December 31, 2001..............................................................
55


Report of Independent Certified Public AccountantsBoard of Directors
Theragenics Corporation®

We have audited the balance sheets of Theragenics  Corporation® (a Delaware  corporation) as of December 31, 2000 and 2001, and
the related statements of earnings,  shareholders  equity, and cash flows for each of the three years in the period ended December 31,
2001. These financial  statements are the  responsibility of the Companys  management.  Our responsibility is to express an opinion on
these financial statements based on our audits.We conducted  our audits in accordance  with  auditing  standards  generally  accepted in the United States of America.  Those
standards  require that we plan and perform the audit to obtain  reasonable  assurance about whether the financial  statements are free
of material  misstatement.  An audit  includes  examining,  on a test basis,  evidence  supporting  the amounts and  disclosures in the
financial  statements.  An audit also includes assessing the accounting  principles used and significant  estimates made by management,
as well as evaluating the overall financial statement presentation.  We believe our audits provide a reasonable basis for our opinion.In our opinion,  the financial  statements referred to above present fairly, in all material respects,  the financial position
of  Theragenics  Corporation®  as of December 31, 2000 and 2001,  and the results of its  operations  and its cash flows for each of the
three years in the period ended December 31, 2001, in conformity with  accounting  principles  generally  accepted in the United States
of America./s/ GRANT THORNTON LLPGRANT THORNTON LLPAtlanta, Georgia
January 11, 2002
Theragenics Corporation®
BALANCE SHEETS
December 31,
(Amounts in thousands)
ASSETS


2000
2001CURRENT ASSETSCash and short-term investments
$29,722
$45,373Marketable securities
15,459
10,852Trade accounts receivable, less allowance of$21 in 2000 and $300 in 2001
6,976
7,220Inventories
1,324
1,590Deferred income tax asset
355
582Prepaid expenses and other current assets
1,004
1,289Total current assets
54,840
66,906PROPERTY, PLANT AND EQUIPMENT - AT COSTBuildings and improvements
26,156
26,567Machinery and equipment
45,552
45,904Office furniture and equipment
618
67372,326
73,144Less accumulated depreciation
15,972
21,47956,354
51,665Land and improvements
832
834Construction in progress
18,446
24,33175,632
76,830OTHER ASSETS
228
271$ 130,700
$ 144,007The accompanying notes are an integral part of these statements.



LIABILITIES AND SHAREHOLDERS EQUITY

2000
2001CURRENT LIABILITIESAccounts payableTrade

977
796Construction

356
-Accrued salaries, wages and payroll taxes

488
554Income taxes payable

2,866
-Other current liabilities

301
241Total current liabilities
4,988
1,591DEFERRED INCOME TAXES

5,475
6,337OTHER LIABILITIES

74
72COMMITMENTS AND CONTINGENCIES

-
-SHAREHOLDERS' EQUITYCommon stock - authorized 100,000 sharesof $.01 par value; issued and outstanding,29,579 in 2000 and 29,690 in 2001
296
297Additional paid-in capital
60,005
60,714Retained earnings
59,862
74,996120,163
136,007$ 130,700
$ 144,007Theragenics Corporation®

STATEMENTS OF EARNINGS
Year ended December 31,
(Amounts in thousands, except per share data)


1999
2000
2001RevenueProduct sales
$43,618
$43,898
$49,667Licensing fees
100
106
33343,718
44,004
50,000Cost of sales
13,293
13,578
14,641Gross profit
30,425
30,426
35,359Operating expensesSelling, general and administrative
6,300
6,872
10,448Research and development
709
2,108
2,6717,009
8,980
13,119Earnings from operations
23,416
21,446
22,240Other income(expense)Minimum income
-
5,444
-Interest income
1,316
1,942
1,639Interest and financing costs
(93)
(133)
(168)Other
50
-
(63)1,273
7,253
1,408Net earnings before income taxes
24,689
28,699
23,648Income tax expense
8,677
10,019
8,514Net earnings
$ 16,012
$ 18,680
$ 15,134Net earnings per common shareBasic
$ .54
$ .63
$ .51Diluted
$ .53
$ .62
$ .50The accompanying notes are an integral part of these statements.
Theragenics Corporation®

                                                  STATEMENTS OF SHAREHOLDERS' EQUITY

                                              For the three years ended December 31, 2001

                                                         (Amounts in thousands)



Common stock
AdditionalNumber of
Par value
paid-in
Retainedshares
$.01
capital
earnings
TotalBalance, December 31, 1998
29,406
$ 294
$ 58,921
$ 25,170
$84,385Exercise of stock options and warrants
97
1
322
-
323Common stock issued under employee stock purchase plan
11
-
73
-
73Stock based compensation
-
-
276
-
276Income tax benefit from stock options and stock purchase plan
-
-
8
-
8Net earnings for the year
-
-
-
16,012
16,012Balance, December 31, 1999
29,514
295
59,600
41,182
101,077Exercise of stock options, net of 44 shares redeemed
52
1
35
-
36Common stock issued under employee stock purchase plan
13
-
85
-
85Stock-based compensation
-
-
189
-
189Theragenics Corporation®

                                                  STATEMENTS OF SHAREHOLDERS' EQUITY - CONTINUED

                                              For the three years ended December 31, 2001

                                                         (Amounts in thousands)

Common stock
AdditionalNumber of
Par value
paid-in
Retainedshares
$.01
capital
earnings
TotalIncome tax benefit from stock options and stock purchase plan
-
-
96
-
96Net earnings for the year
-
-
-
18,680
18,680Balance, December 31, 2000
29,579
$ 296
$ 60,005
$ 59,862
$ 120,163Exercise of stock options
99
1
292
-
293Common stock issued under employee stock purchase plan
12
-
69
-
69Stock-based compensation
-
-
123
-
123Income tax benefit from stock options and stock puchase plan
-
-
225
-
225Net earnings for the year
-
-
-
15,134
15,134Balance, December 31, 2001
29,690
$ 297
$ 60,714
$74,996
$ 136,007Theragenics Corporation®

                                                       STATEMENTS OF CASH FLOWS

                                                        Year ended December 31,

                                                      (Amounts in thousands)



1999    2000    2001Cash flows from operating activities:Net earnings

    $16,012   $18,680   $15,134Adjustments to reconcile net earnings to netcash provided by operating activities:Depreciation and amortization
   3,887     5,464           5,721Deferred income taxes                                       1,468         1,652                   635Income tax benefit from stock options                          8      96                       225Stock-based compensation                                      276       189                       123Deferred rent78       (4)                    (2)Provision for allowances  263         (341)                        527Loss on disposal of equipment     4  -                     52Change in assets and liabilities:Accounts receivable (322)     379                     (523)Inventories    (665)  167              (514)Prepaid expenses and other current assets   (384)                       (41)          (285)Other assets  -           (115)              (90)Accounts payable   155          194            (181)Accrued salaries, wages and payroll taxes   (166)              155              66Income taxes payable        688          2,303                     (2,866)Other current liabilities    149 (165)  (60)Net cash provided by operating activities   21,451   28,613       17,962Cash flows from investing activities:Purchase and construction of property and equipment                    (14,129)                (17,334)                 (7,354)Purchase of marketable securities                                       (11,985)                (10,013)                 (14,823)Maturities of marketable securities                                      3,600                   9,570                    19,504Net cash used by investing activities  (22,514)         (17,777)                 (2,673)

Theragenics Corporation®

                                                       STATEMENTS OF CASH FLOWS - CONTINUED

                                                        Year ended December 31,

                                                      (Amounts in thousands)


1999
2000
2001Cash flows from financing activities:Proceeds from exercise of stock options,warrants and stock purchase plan

396
121
362Financing fees

(110)
-
-Net cash provided byfinancing activities

286
121
362Net increase (decrease) in cash andshort-term investments

(777)
10,957
15,651Cash and short-term investmentsat beginning of year

19,542
18,765
29,722Cash and short-term investmentsat end of year

$18,765
$29,722
$45,373Supplementary Cash Flow DisclosureInterest paid, net of amounts capitalized

$93
$133
$168Income taxes paid

$ 6,513
$ 6,158
$10,971The accompanying notes are an integral part of these statements.

Theragenics Corporation®


                                                   NOTES TO FINANCIAL STATEMENTS

December 31, 2000 and 2001



NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS
Theragenics  Corporation® (the "Company") is the manufacturer of TheraSeed®,  an implantable  radiation device used primarily in the
   treatment of prostate  cancer.  TheraSeed®  is a U.S.  Food and Drug  Administration  (FDA)  licensed  device based on Palladium 103
   (Pd-103),  a  radioactive  isotope.  Since August 10, 2000,  the Company has sold its  TheraSeed®  implants  directly to health care
   providers and to third party  distributors.  Prior to that date, all TheraSeed®  implants for the treatment of prostate  cancer were
   sold  through an exclusive  distributor.  The  exclusive  distribution  agreement  was  terminated  on August 10, 2000 (see Note D).
   Physicians,  hospitals and other healthcare providers,  located primarily in the United States,  utilize the TheraSeed® product. The
   Company has received  regulatory  approval for the marketing of TheraSeed®  throughout the member countries of the European Union by
   obtaining CE Marking.  Sales of TheraSeed®  in Europe were not  significant  in any of the three years in the period ended  December
   31, 2001.
The Company  competes in a market  characterized  by rapid  technological  innovation,  significant  research  efforts and continual
   scientific  discoveries.  This market is also subject to significant  regulatory  oversight at the federal,  state and local levels.
   The regulatory  bodies include,  among others,  the FDA, the Nuclear  Regulatory  Commission,  various states'  agencies such as the
   Departments  of Natural  and Human  Resources,  and the  Occupational  and Health  Safety  Administration,  as well as the  European
   counterparts of these U.S.  governmental  units. The Company is therefore  directly  affected by changes in technology and products,
   as they may apply to cancer  treatment,  governmental  regulations  related to its  industry  and the well  being of the  healthcare
   industry.NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant  accounting policies  consistently applied in the preparation of the accompanying  financial statements
   follows:
1.Use of EstimatesIn preparing financial statements in conformity with generally accepted accounting  principles  (GAAP), management is required to
   make certain estimates and assumptions that affect the reported amounts in the financial  statements and accompanying  notes. Actual
   results could differ from those estimates and assumptions.
Theragenics Corporation®

                                  NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2000 and 2001



NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued2.       Revenue RecognitionRevenue from product sales is recognized upon shipment.  Licensing fees are recognized in the period to which they relate.3.Cash and Short-Term InvestmentsFor purposes of reporting cash flows, cash and short-term  investments  include cash on hand, cash in banks and variable rate demand
   notes and commercial paper with original maturities of less than 90 days.
4.Marketable Securities
Marketable securities consist primarily of high-credit quality municipality  obligations in accordance with the Company's investment
   policies.  Marketable  securities  are  classified  as available  for sale and are reported at fair value,  based upon quoted market
   prices at the balance sheet date. The amortized  cost of marketable  securities  approximated  their fair value at both December 31,
   2000 and 2001.  The estimated fair value of marketable securities by contractual maturity at December 31, 2001, is as follows:
Due in one year or less
$ 8,792Due after one year through five years
2,0605.Inventories
Inventories  are  stated  at the  lower  of cost or  market.  Cost is  determined  using  the  first-in,  first-out  (FIFO)  method.
   Inventories consist primarily of spare parts, components and work in process.6.Property, Equipment, Depreciation and Amortization
Property and equipment are recorded at historical  cost.  Depreciation  and  amortization  is provided for in amounts  sufficient to
   relate the cost of depreciable assets to operations over their estimated services lives on a straight-line  basis.  Depreciation and
   amortization  expense  related to property  and  equipment  charged to  operations  was  approximately  $3,786,000,  $5,296,000  and
   $5,748,000 for 1999, 2000 and 2001,  respectively.  Estimated  services lives are 30 years for buildings and improvements,  and 3 to
   10 years for machinery, equipment and furniture.

Theragenics Corporation®

                                               NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2000 and 2001


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
6.Property, Equipment, Depreciation and Amortization - Continued
A significant  portion of the Companys  depreciable  assets is utilized in the production of its product.  Management  periodically
   evaluates the  realizability of its depreciable  assets in light of its current industry  environment.  Management  believes that no
   impairment of depreciable assets exists at December 31, 2001. It is possible,  however,  that managements  estimates concerning the
   realizability of the Companys  depreciable  assets could change in the near term due to changes in the technological and regulatory
   environment.
7.Income Taxes
The Company accounts for income taxes using the asset and liability method.  Under this method,  deferred tax assets and liabilities
   are recognized for the future tax  consequences  attributable to differences  between the financial  statement  carrying  amounts of
   existing assets and liabilities and their  respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax
   rates  applied to taxable  income.  The effect on deferred  tax assets and  liabilities  of a change in tax rates is  recognized  in
   income in the period that  includes the  enactment  date. A valuation  allowance is provided for deferred tax assets when it is more
   likely than not that the asset will not be realized.
8.Research and Development CostsResearch and development (R&D) costs are expensed when incurred.
9.Advertising
The Company  expenses  the cost of  advertising  as  incurred.  Advertising  expense was  approximately  $513,000 for the year ended
   December 31, 2001.  Advertising expense in each of the two years ended December 31, 2000 was not significant.
10. Earnings Per Share and Common Stock
Basic net earnings  per common  share is based upon the weighted  average  number of common  shares  outstanding  during the period.
   Diluted net  earnings  per common  share is based upon the  weighted  average  number of common  shares  outstanding  plus  dilutive
   potential common shares, including options and warrants outstanding during the period.

Theragenics Corporation®

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2000 and 2001



NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

11. Stock Based Compensation
Stock options  issued to employees are accounted for under the intrinsic  value method in which  compensation  expense is recognized
   for the amount,  if any, that the fair value of the underlying  common stock exceeds the exercise price at the date of grant.  Stock
   options and other equity  instruments  issued in exchange for goods or services  with  non-employees  are accounted for based on the
   fair value of the consideration received or the fair value of the equity instruments issued, whichever is more readily measurable.
12. Fair Value of Financial Instruments
The Companys financial  instruments include cash, cash equivalents and marketable  securities.  The carrying value of cash and cash
   equivalents  approximates  fair value due to the relatively short period to maturity of the instruments.  Marketable  securities are
   classified as available for sale and are reported at cost which approximates fair value.

NOTE C - CONSTRUCTION IN PROGRESS AND PURCHASE COMMITMENTS
The U.S.  Department of Energy (DOE) has granted  Theragenics  access to unique DOE  technology  for use in production of isotopes,
   including  Pd-103.  This  technology  venture  represents  part of a DOE initiative to redirect Cold War assets to peacetime use and
   cushion the economic impact of U.S. Defense Department cutbacks.  The Company is constructing a facility in Oak Ridge,  Tennessee to
   house the equipment,  infrastructure  and work force necessary to support the production of isotopes,  including Pd-103,  using this
   DOE  technology.  The  Company  expects to invest  approximately  $25  million to $30  million to build this  manufacturing  and R&D
   facility.  Construction  costs of  approximately  $24.1 million have been incurred on this project as of December 31, 2001,  and are
   included in construction in progress.


Theragenics Corporation®

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2000 and 2001
 NOTE D  MARKETING AND SALES AGREEMENTS AND MAJOR CUSTOMERS
   From May 1997 until August of 2000  substantially  all  TheraSeed®  implants for the treatment of prostate  cancer were sold through
   Indigo Medical,  Inc.  (Indigo) as an exclusive  distributor under a Sales and Marketing  Agreement between  Theragenics and Indigo
   (the  Agreement).  In August 2000 the Company  billed  Indigo $5.4 million for  shortfalls  in its purchase  minimum  requirements
   under the Agreement,  and Indigo gave notice of its intention to terminate the Agreement.  The Company  continued to sell TheraSeed®
   implants  to Indigo on a  non-exclusive  basis from  August 10,  2000 until  January 5, 2001,  when the  Agreement  was  terminated.
   Currently, in addition to direct-to customer sales,  Theragenics has non-exclusive  distribution agreements with four companies for
   the  distribution  of TheraSeed®.  The five-year  agreements give each  distributor the right to distribute  TheraSeed® in the U.S.,
   Canada and Puerto Rico for the treatment of prostate cancer and other solid localized  cancerous tumors. One of these  non-exclusive
   agreements gives the distributor the option to distribute  TheraSeed®  internationally.  A second of the four  distributors also has
   the right, via a separate five-year  agreement executed in March 2001, to distribute  TheraSeed®  internationally on a non-exclusive
   basis.Sales to the four non-exclusive  distributors represented approximately 66% of product revenue for the year ended December 31, 2001,
   with sales to three of the four  non-exclusive  distributors each exceeding 10% of total revenue for the year.  Accounts  receivable
   from the four non-exclusive  distributors  represented  approximately 74% of accounts  receivable at December 31, 2001, with each of
   the four non-exclusive distributors exceeding 10% of total accounts receivable.As a result of the exclusive Sales and Marketing Agreement with Indigo, substantially all sales in the years ended December 31,
   1999 and 2000, were to Indigo.  Additionally, approximately 87% of accounts receivable were due from Indigo at December 31, 2000.The $5.4 million purchase minimum shortfall billing in August 2000, which was also received from Indigo in the third quarter of
   2000, added approximately $3.5 million or $0.12 per diluted share to net earnings for the year ended December 31, 2000.Theragenics Corporation®
NOTES TO FINANCIAL STATEMENTS - CONTINUED


December 31, 2000 and 2001




NOTE E - INCOME TAXESThe income tax provision consisted of the following (in thousands):1999
2000
2001Current:Federal
$ 6,926
$ 7,798
$ 7,305State
283
569
5747,209
8,367
7,879Deferred:Federal
1,334
1,513
583State
134
139
521,468
1,652
635$ 8,677
$10,019
$ 8,514The Company's temporary differences result in a deferred income tax liability at December 31, 2000 and 2001, summarized as follows (in thousands):


December 31,2000
2001Deferred tax assets:Nondeductible accruals and allowances

202
335Inventories

177
272Stock compensation

232
277Gross deferred tax assets

611
884Deferred tax liabilities:Property and equipment

(5,731)
(6,639)Net deferred tax liability

$(5,120)
$(5,755)Theragenics Corporation®

                         NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2000 and 2001

NOTE E - INCOME TAXES - ContinuedThe net deferred tax liability is classified in the accompanying balance sheets as follows (in thousands):December 31,2000
2001Current deferred tax asset
$355
$582Long-term deferred tax liability
(5,475)
(6,337)Net deferred tax liability$
(5,120)
(5,755)A reconciliation of the statutory federal income tax rate and the effective tax rate follows:1999
2000
2001Tax at applicable federal rates
35.0%
35.0%
35.0%State tax, net of federal income tax
2.0
2.1
2.1Investment credits
(1.3)
(0.7)
(0.8)Tax exempt interest
(0.8)
(1.6)
(0.5)Other
0.2
0.1
0.235.1%
34.9%
36.0%NOTE F - UNSECURED CREDIT AGREEMENTThe Company has an Unsecured Credit  Agreement with a financial  institution that expires in August 2003 and provides for borrowings
   of up to $40.0  million under two lines of credit.  Interest on  outstanding  borrowings  is payable  monthly at the prime rate or a
   LIBOR based rate,  at the option of the  Company.  The LIBOR based rate is equal to LIBOR plus a margin  ranging  from .7% to 1.55%,
   depending upon certain  financial ratios of the Company.  An additional  uncommitted  $10.0 million line of credit is also available
   under the Unsecured Credit Agreement, subject to the approval of the financial institution.Provisions  of the Unsecured  Credit  Agreement  limit the  incurrence of  additional  debt and require the  maintenance  of certain
   financial  ratios,  among other things.  As of December 31, 2001, the Company was in compliance with the provisions of the Unsecured
   Credit Agreement and there were no outstanding borrowings.
Theragenics Corporation®

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2000 and 2001
NOTE F - UNSECURED CREDIT AGREEMENT - Continued
The  Company  has letters of credit  outstanding  under the  Unsecured  Credit  Agreement  for  approximately  $810,000  relating to
   regulatory  requirements.  The letters of credit are subject to terms  identical to those of borrowings  under the Unsecured  Credit
   Agreement.
NOTE G - COMMITMENTS AND CONTINGENCIES
Licensing Agreement
The Company  holds a  worldwide  exclusive  license  from the  University  of Missouri  for the use of  technology,  patented by the
   University,  used in the Companys  "TheraSphere®"  product.  The licensing agreement provides for the payment of royalties based on
   the level of sales and on lump sum payments received pursuant to a licensing agreement with Nordion International, Inc. (see below).
The Company has granted certain of its geographical  rights under the licensing agreement with the University of Missouri to Nordion
   International,  Inc., a Canadian company that is a producer,  marketer and supplier of radioisotope  products and related equipment.
   Under the Nordion  agreement,  the Company will receive a licensing fee for each geographic area in which Nordion  receives new drug
   approval.  The  Company  will also be  entitled  to a  percentage  of future  revenues  earned by  Nordion  as  royalties  under the
   agreement.  Royalties from this agreement are disclosed as Licensing fees in the accompanying statements of earnings.
Lease CommitmentsThe Company leases land,  space and office  equipment  under  noncancelable  leases that expire at various dates through April 2029.
   Approximate  minimum  lease  payments  under the leases are as follows:  2002,  $322,000;  2003,  $314,000;  2004,  $137,000;  2005,
   $137,000; 2006, $137,000; and  $3,048,000 thereafter.Rent expense was approximately $404,000, $407,000 and $385,000 for the years ended December 31, 1999, 2000 and 2001, respectively.


Theragenics Corporation®

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2000 and 2001
 NOTE G - COMMITMENTS AND CONTINGENCIES - ContinuedContingenciesIn January 1999,  the Company and certain of its officers and  directors  were named as  defendants  in certain  securities  actions
   alleging  violations of the federal  securities laws,  including Sections 10(b), 20(a) and Rule 10b-5 of the Securities and Exchange
   Act of 1934,  as amended.  These actions have been  consolidated  into a single action  pending in the U.S.  District  Court for the
   Northern  District of Georgia.  The  complaint,  as amended,  purports to  represent  a class of  investors  who  purchased  or sold
   securities  during the time period from  January 29, 1998 to January 11,  1999.  The amended  complaint  generally  alleges that the
   defendants made certain  misrepresentations  and omissions in connection with the performance of the Company during the class period
   and seeks unspecified  damages.  On May 14, 1999 a stockholder of the Company filed a derivative  complaint in the Delaware Court of
   Chancery  purportedly on behalf of the Company,  alleging that certain directors  breached their fiduciary duties by engaging in the
   conduct that is alleged in the consolidated  federal class action complaint.  The derivative action has been stayed by the agreement
   of the  parties.  On July 19,  2000,  the Court  granted the  Companys  motion to dismiss the  consolidated  federal  class  action
   complaint for failure to state a claim against the Company,  and granted the plaintiffs  leave to amend their  complaint.  On August
   21, 2000, the plaintiffs filed a second amended  complaint and on March 30, 2001, the Court denied the defendants  motion to dismiss
   the  plaintiffs  second  amended  complaint.  The Court also denied the  Companys  motion for  reconsideration,  and  discovery is
   underway.  Management believes these charges are without merit and intends to vigorously oppose the litigation,  however,  given the
   nature and early stage of the proceedings,  the ultimate outcome of the litigation  cannot be determined at this time.  Accordingly,
   no provision for any liability that might result from this litigation has been made. The Company  maintains  insurance for claims of
   this general nature.


Theragenics Corporation®

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2000 and 2001

NOTE H - STOCK OPTIONS AND WARRANTSStock Options
The  Companys  board of directors has approved  four stock option plans which in aggregate  cover up to 5,000,000  shares of common
   stock.  The plans  provide for the  expiration  of options ten years from the date of grant and requires  the exercise  price of the
   options  granted to be at least equal to 100% of market value on the date granted.  Stock options become  exercisable  over a two to
   five year vesting period.
Stock option  transactions  for each of the three years in the period  ended  December 31, 2001,  are  summarized  below  (shares in
   thousands):


1999
2000
2001Weighted

Weighted

WeightedAverage

Average

AverageExercise

Exercise

ExerciseShares
Price
Shares
Price
Shares
PriceOutstanding, beginning of year
1,764
$ 10.37
2,291
$10.10
2,311
$10.00Granted
564
8.77
176
7.66
112
7.96Exercised
(37)
2.64
(96)
2.69
(99)
2.98Forfeited
-
-
(60)
18.50
-
-Outstanding, end of year
2,291
$10.10
2,311
$ 10.00
2,324
$ 10.21The following table summarizes information about stock options outstanding at December 31, 2001 (shares in thousands):Options Outstanding
Options ExercisableWeightedAverage
Weighted

WeightedRange of
Number
Remaining
Average
Number
AverageExercise
Outstanding at
Contractual
Exercise
Exercisable at
ExercisePrice
December 31, 2001
Life(Years)
Price
December 31, 2001
Price$1.63 - $5.38
414
3.2
2.76
400
$2.67$6.88 - $11.75
1,293
6.4
8.45
823
8.48$16.56-$26.63
617
6.2
18.90
485
19.112,324
6.1
$10.21
1,708
$10.14Theragenics Corporation®

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2000 and 2001




NOTE H - STOCK OPTIONS AND WARRANTS  Continued
Stock Options - Continued
The Company follows the practice of recording  amounts  received upon the exercise of certain options by crediting  common stock and
   additional  paid-in  capital.  No charges are  reflected in the  statements  of  earnings as a result of the grant or exercise of
   options to or by employees.  The Company  realizes an income tax benefit from the exercise of certain stock options and the exercise
   and early  disposition of the shares  acquired via certain other stock options.  This benefit results in a reduction to income taxes
   payable and an increase to additional paid-in capital.
The Company uses the  intrinsic  value method in  accounting  for stock options  issued to  employees.  In applying this method,  no
   compensation  cost has been  recognized.  Had  compensation  cost for the Companys stock option plans been determined  based on the
   fair value at the grant dates for awards under those plans,  the  Companys  net earnings and earnings per share would have resulted
   in the pro forma amounts indicated below (in thousands, except per share data):
1999
2000
2001Net earnings
As reported
$16,012
$18,680
$15,134Pro forma
14,122
16,612
13,749Basic net earnings percommon share
As reported
$.54
$.63
$.51Pro forma
.47
.57
.47Diluted net earnings percommon share
As reported
$.53
$.62
$ .50Pro forma
.46
.56
.46The weighted  average fair value of the options granted during 1999,  2000 and 2001 was $6.37,  $5.06 and $5.84,  respectively.  The
   fair values were estimated using the Black Scholes options-pricing model with the following weighted average assumptions:1999
2000
2001Expected dividend yield

0.0%
0.0%
0.0%Expected stock price volatility

77.3%
79.7%
79.8%Risk-free interest rate

6.2%
5.4%
5.3%Expected life of option (years)

6.3
5.0
6.3Theragenics Corporation®

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2000 and 2001


NOTE H - STOCK OPTIONS AND WARRANTS - Continued
Stock Options Issued to Non-Employees
During 1998, the Company issued 100,000 stock options to an individual for medical and cancer  consulting  services.  The Company is
   recording  consulting  expenses based on the estimated fair value of the options at the grant date over the consulting  term of five
   years.  Consulting  expenses  related to this agreement were  approximately  $276,000,  $189,000 and $123,000  during 1999, 2000 and
   2001, respectively.
 Warrants
60,000  warrants  were  exercised  during 1999,  resulting  in proceeds to the Company of $225,000.  No  unexercised  warrants  were
   outstanding as of December 31, 2001.
NOTE I - EARNINGS PER SHARE

   Earnings per common share was computed as follows (in thousands, except per share data):
Year ended December 31,1999
2000
2001Numerator for basic and diluted earningsper share income available commonshareholders
$       16,012
$       18,680
$       15,134Denominator for basic earnings per shareweighted average shares
29,478
29,534
29,627Effect of dilutive stock options and warrants
                 482
428
402Denominator for diluted earnings per share adjusted weighted average shares
29,960
29,962
30,029Basic earnings per share
$          .54
$          .63
$           .51Diluted earnings per share
$                    .53
$          .62
$         .50Theragenics Corporation®

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2000 and 2001


NOTE J - EMPLOYEE BENEFIT PLAN401(k) Savings PlanThe Company has a 401(k)  savings plan  providing  retirement  benefits to all employees at least 21 years of age. The Company makes
   matching contributions of 20%-60% of each participants  contribution,  up to 6% of salary. The percentage of matching contributions
   are based on net  earnings  and are made in the form of Company  common  stock.  Matching  contributions  are  charged to  operating
   expenses and totaled approximately $69,000, $48,000 and $47,000 in 1999, 2000 and 2001, respectively.Employee Stock Purchase PlanThe Theragenics  Corporation® Employee Stock Purchase Plan (the "ESPP") allows eligible employees the right to purchase common stock
   on a quarterly  basis at the lower of 85% of the market  price at the  beginning or end of each  quarterly  offering  period.  As of
   December 31, 2000 and 2001,  there were 176,000 and 162,000 shares of common stock reserved for the ESPP,  respectively,  and 24,000
   and 38,000 shares had been issued under the plan, respectively.NOTE K - RELATED PARTY TRANSACTIONSAn officer and director of the Company is a director of the Atlanta Cardiovascular Research Institute (ACRI).
   ACRI performs animal studies related to the Companys research initiatives.  Theragenics paid ACRI
   approximately $192,000, $280,000, and $320,000 during 1999, 2000, and 2001, respectively, for these animal
   studies.The same officer and director is also a director of a vendor that provides radiation measurement services to
   Theragenics.  Theragenics paid this vendor approximately $27,000, $22,000 and $24,000, during 1999, 2000 and
   2001 for these services.Theragenics Corporation®

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2000 and 2001
 (Amounts in thousands, except per share data)



NOTE L - QUARTERLY FINANCIAL DATA (UNAUDITED)

   The following summarizes certain quarterly results of operations (in thousands, except per share data):Quarters endedMarch 31
June 30
September 30
December 31Year ended December 31, 2001:Net revenue
$13,567
$13,121
$11,892
$11,420Gross profit
9,664
9,390
8,295
8,010Net earnings
4,355
4,213
3,432
3,134Net earnings per common shareBasic
$      .15
$      .14
$      .12
$      .11Diluted
$      .15
$      .14
$      .11
$      .10Quarters endedMarch 31
June 30
September 30
December 31Year ended December 31, 2000:Net revenue
$   11,279
$   11,524
$   10,536
$   10,665Gross profit
7,977
8,049
6,957
7,443Net earnings
3,994
4,100
6,810
3,776Net earnings per common shareBasic
$      .14
$      .14
$      .23
$      .13Diluted
$      .13
$      .14
$      .23
$      .13NOTE M  RECENTLY ISSUED ACCOUNTING STANDARDIn June 2001, the Financial Accounting Standards Board (FASB) issued Statement on Financial Accounting Standards
(SFAS) No. 143, Accounting for Asset Retirement Obligations, which will be effective for the Companys 2003
fiscal year.  SFAS No. 143 provides accounting requirements for the recognition and measurement of liabilities
for obligations associated with the retirement of tangible long-lived assets resulting from the acquisition,
construction, development, and operation of a long-lived asset. Under the standard, these liabilities will be
recognized at fair value as incurred and capitalized as part of the cost of the related tangible long-lived
asset. This additional asset cost will be amortized over the related assets useful life. Accretion expense
related to the liability due to the passage of time will also be recorded. SFAS No. 143 requires that expense
amounts related to periods prior to adoption of SFAS No. 143 be recorded as a cumulative effect adjustment in the
year of adoption.Theragenics Corporation®

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2000 and 2001
(Amounts in thousands, except per share data)


NOTE M  RECENTLY ISSUED ACCOUNTING STANDARD -  continuedTheragenics has identified retirement obligations associated with the decommissioning of its cyclotrons and
related facilities.   Management expects the adoption of SFAS No. 143 in 2003 will result in an increase to its
liabilities of approximately $625,000, and a cumulative effect expense of approximately $310,000 before income
taxes, and $195,000 after income taxes.  Annual amortization of the increased asset costs and accretion expense
charged to operations is expected to be less than $100,000 before income taxes and $63,000 after income taxes.Prior to the issuance of SFAS No. 143, the Company has been disclosing that it has been required to provide
letters of credit for regulatory requirements (which represent future decommissioning activities) since the
commencement of the related operations. This disclosure is found in Note F of these footnotes and in previous
financial statements. The significant portion of the letters of credit referred to in Note F are required by the
relevant governmental agency that regulates these aspects of the Companys activities.Report of Independent Certified Public Accountants on Schedule






Board of DirectorsTheragenics Corporation®In connection  with our audit of the financial  statements of  Theragenics  Corporation®  referred to in our report
dated January 11, 2002,  which is included in the annual report to security  holders and  incorporated by reference
in Part II of this  form,  we have  also  audited  Schedule  II for each of the  three  years in the  period  ended
December 31,  2001.  In our opinion,  the schedule  presents  fairly,  in all material  respects,  the  information
required to be set forth therein./s/ GRANT THORNTON LLPAtlanta, GeorgiaJanuary 11, 2002Theragenics Corporation®

                                            SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                                   For each of the three years in the period ended December 31, 2001
                                                        (Amounts in thousands)


Column A
Column B
Column C
Column D
Column EAdditions(1)
(2)Balance at
Charged to
Charged to

Balance atbeginning of
costs and
other accounts
Deductions -
end ofDescription
period
expense
describe
describe (a)
periodYear ended December 31, 2001Allowance for doubtfulaccounts receivable
$         21
$          279
$      -
$     -
$        300Allowance for doubtful inventory
$       300
$          248
$      -
$     -
$        548Year ended December 31, 2000Allowance for doubtfulaccounts receivable
$         43
$          -
$      -
$  22(a)
$        21Allowance for doubtful inventory
$       619
$          -
$      -
$ 319(b)
$      300Year ended December 31, 1999Allowance for doubtfulaccounts receivable
$         54
$          -
$      -
$  11(a)
$        43Allowance for doubtful inventory
$        345
$      274
$      -
$     -
$      619(a)- adjustment to reserve
(b)- disposal of inventoryTHERAGENICS
CORPORATION®

INDEX TO
EXHIBITS

Page No.24.1
-
Consent of Independent Public Accountants
for Incorporation by Reference of Audit
Report into Registration Statements

57CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors
Theragenics Corporation®


We hereby  consent to the  incorporation  by reference  of our reports  dated  January 11, 2002,  appearing in your
Annual Report on Form 10-K for the year ended December 31, 2001, in the Company's  Registration  Statements on Form
S-8, file numbers 333-15313, 333-40737, 333-40653, 333-64801 and 333-48136.



/s/ GRANT THORNTON LLP
 GRANT THORTON LLP

Atlanta, Georgia
March 27, 2002