## UNITED STATES

## SECURITIES AND EXCHANGE COMMISSION

## WASHINGTON, D.C. 20549

## FORM 10-Q

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
         SECURITIES EXCHANGE ACT OF 1934
           For the quarterly period ended March 31, 2002

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) | (I.R.S. Employer Identification Number)

| | 5203 Bristol Industrial Way              |           
| | ---------------------------------------- | ----------
|
| | Buford, Georgia                          | 30518     
| | (Address of principal executive offices) | (Zip Code)

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

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

As of May 14, 2002 the number of shares of common stock, $.01 par value, outstanding was 29,753,482.

---

### THERAGENICS CORPORATION®

### TABLE OF CONTENTS

| | PART I.  FINANCIAL INFORMATION:                                             |         
| | --------------------------------------------------------------------------- | --------
|
| | ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)                                   | Page No.
|
| | Balance Sheets - December 31, 2001 and March 31, 2002                       | 3       
|
| | Statements of Earnings for the three months ended March 31, 2001 and 2002   | 5       
|
| | Statements of Cash Flows for the three months ended March 31, 2001 and 2002 | 6       
|
| | Statement of Shareholder' Equity for the three months ended March 31, 2002  | 7       
|
| | Notes to Financial Statements                                               | 8       
|
| | ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION        | 10      
| | AND RESULTS OF OPERATIONS                                                   |         
|
| | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK          | 15      
|
| | PART II.  OTHER INFORMATION                                                 |         
|
| | ITEM 1. LEGAL PROCEEDINGS                                                   | 15      
|
| | ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                   | 15      
|
| | SIGNATURES                                                                  | 16      

---

### THERAGENICS CORPORATION®
                                               BALANCE SHEETS
                                                (UNAUDITED)
                               (Amounts in thousands, except per share data)

ASSETS

| |                                                | December 31, | March 31,  
| | ---------------------------------------------- | ------------ | -----------
| |                                                | 2001         | 2002       
| | CURRENT ASSETS                                
| | Cash and short-term investments                | $     45,373 | $    48,599
| | Marketable Securities                          | 10,852       | 12,177     
| | Trade accounts receivable, less allowance     
| | of $300 in 2001 and $220 in 2002               | 7,220        | 7,278      
| | Inventories                                    | 1,590        | 1,829      
| | Deferred income tax asset                      | 582          | 366        
| | Prepaid expenses and other current assets      | 1,289        | 939        
| | TOTAL CURRENT ASSETS                           | 66,906       | 71,188     
| |                                               
| | PROPERTY AND EQUIPMENT                        
| | Buildings and improvements                     | 26,567       | 26,581     
| | Machinery and equipment                        | 45,904       | 46,051     
| | Office furniture and equipment                 | 673          | 682        
| |                                                | 73,144       | 73,314     
| | Less accumulated depreciation and amortization | (21,479)     | (22,926)   
| |                                                | 51,665       | 50,388     
| |                                               
| | Land                                           | 834          | 834        
| | Construction in progress                       | 24,331       | 25,461     
| | TOTAL PROPERTY AND EQUIPMENT                   | 76,830       | 76,683     
| |                                                |              |            
| | OTHER ASSETS                                   | 271          | 257        
| |                                                |              |            
| | TOTAL ASSETS                                   | $   144,007  | $  148,128 

The accompanying notes are an integral part of these statements.

---

### THERAGENICS CORPORATION®
                                               BALANCE SHEETS
                                                (UNAUDITED)
                               (Amounts in thousands, except per share data)

LIABILITIES & SHAREHOLDERS' EQUITY

| |                                            | December 31,  | March 31,   
| | ------------------------------------------ | ------------- | ------------
| |                                            | 2001          | 2002        
| | CURRENT LIABILITIES                       
| | Accounts payable                          
| | Trade                                      | $         796 | $      1,284
| | Accrued salaries, wages and payroll taxes  | 554           | 400         
| | Income taxes payable                       | -             | 715         
| | Other current liabilities                  | 241           | 436         
| | TOTAL CURRENT LIABILITIES                  | 1,591         | 2,835       
| |                                           
| | LONG-TERM LIABILITIES                     
| | Deferred income taxes                      | 6,337         | 6,390       
| | Other liabilities                          | 72            | 71          
| | TOTAL LONG-TERM LIABILITIES                | 6,409         | 6,461       
| |                                           
| | CONTINGENCIES                              | -             | -           
| |                                           
| | SHAREHOLDERS' EQUITY                      
| | Common stock, $.01 par value, 100,000     
| | shares authorized; 29,690 and 29,738      
| | issued and outstanding                     | 297           | 297         
| | Additional paid-in capital                 | 60,714        | 60,994      
| | Retained earnings                          | 74,996        | 77,623      
| | Accumulated other comprehensive income     | -             | (82)        
| | TOTAL SHAREHODLERS' EQUITY                 | 136,007       | 138,832     
| |                                           
| | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $  144,007    | $  148,128  

The accompanying notes are an integral part of these statements.

---

### THERAGENICS CORPORATION®
                                     STATEMENTS OF EARNINGS
                                           (UNAUDITED)
                             (Amounts in thousands, except per share data)

| |                                                  | Three Months    |              
| | ------------------------------------------------ | --------------- | -------------
| |                                                  | Ended March 31, |              
| |                                                  | 2001            | 2002         
| | REVENUE                                         
| | Product sales                                    | $    13,524     | $    11,489  
| | Licensing Fees                                   | 43              | 144          
| |                                                  | 13,567          | 11,633       
| |                                                 
| | COST OF SALES                                    | 3,903           | 3,655        
| |                                                 
| | GROSS PROFIT                                     | $      9,664    | $      7,978 
| |                                                 
| | OPERATING EXPENSES                              
| | Selling, general & administrative                | 2,586           | 3,092        
| | Research & development                           | 822             | 933          
| |                                                  | 3,408           | 4,025        
| | EARNINGS FROM OPERATIONS                         | 6,256           | 3,953        
| |                                                 
| | OTHER INCOME (EXPENSE)                          
| | Interest income                                  | 568             | 241          
| | Interest and financing costs                     | ( 59)           | ( 31)        
| | Other                                            | ( 35)           | (   1)       
| |                                                  | 474             | 211          
| |                                                 
| | EARNINGS BEFORE INCOME TAXES                     | 6,730           | 4,164        
| | Income tax expense                               | 2,375           | 1,537        
| | NET EARNINGS                                     | $      4,355    | $      2,627 
| |                                                 
| | NET EARNINGS PER COMMON SHARE                   
| | Basic                                            | $        0.15   | $        0.09
| | Diluted                                          | $        0.15   | $        0.09
| |                                                 
| | WEIGHTED AVERAGE SHARES                         
| | Basic                                            | 29,583          | 29,715       
| | Diluted                                          | 29,879          | 30,097       
| | Comprehensive income (loss):                     |                 |              
| | Net Income                                       | 4,355           | 2,627        
| | Other comprehensive income:                     
| | Unrealized loss on securities available for sale | -               | (82)         
| | Total comprehensive income                       | $     4,355     | $     2,545  

The accompanying notes are an integral part of these statements.

---

### THERAGENICS CORPORATION®
                                                STATEMENTS OF CASH FLOWS
                                            (UNAUDITED)
                                       (Amounts in thousands, except per share data)

| |                                                      | Three Months    |             
| | ---------------------------------------------------- | --------------- | ------------
| |                                                      | Ended March 31, |             
| |                                                      | 2001            | 2002        
| | CASH FLOWS FROM OPERATING ACTIVITIES                 |                 |             
| | Net Earnings                                         | $      4,355    | $      2,627
| | Adjustments to reconcile net earnings to             |                 |             
| | net cash provided by operating activities            |                 |             
| | Deferred income taxes                                | 50              | 269         
| | Depreciation & amortization                          | 1,435           | 1,449       
| | Provision for allowances                             | 251             | (42)        
| | Stock based compensation                             | 31              | 17          
| | Income tax benefit from options                      | 2               | 90          
| | Loss on disposal of equipment                        | 52              | -           
| | Deferred rent                                        | -               | (1)         
| |                                                      |                 |             
| | Changes in assets and liabilities:                   |                 |             
| | Accounts receivable                                  | (2,929)         | 22          
| | Inventories                                          | 110             | (277)       
| | Prepaid expenses and other current assets            | (100)           | 350         
| | Other assets                                         | (12)            | -           
| | Trade accounts payable                               | (268)           | 488         
| | Accrued salaries, wages and payroll taxes            | 13              | (154)       
| | Income taxes payable                                 | (617)           | 715         
| | Other current liabilities                            | 22              | 195         
| | Net cash provided by operating activities            | 2,395           | 5,748       
| |                                                      |                 |             
| | CASH FLOWS FROM INVESTING ACTIVITIES                 |                 |             
| | Purchases and construction of property and equipment | (2,282)         | (1,300)     
| | Purchases and maturities of marketable securities    | (20,470)        | (1,395)     
| | Net cash used by investing activities                | (22,752)        | (2,695)     
| |                                                      |                 |             
| | CASH FLOWS FROM FINANCING ACTIVITIES                 |                 |             
| | Exercise of stock options and stock purchase plan    | 26              | 173         
| | Net cash provided by financing activities            | 26              | 173         
| |                                                      |                 |             
| | NET DECREASE IN CASH AND                            
| | SHORT-TERM INVESTMENTS                               | (20,331)        | 3,226       
| |                                                      |                 |             
| | CASH AND SHORT-TERM INVESTMENTS AT                   |                 |             
| | BEGINNING OF PERIOD                                  | (29,722)        | 45,373      
| |                                                      |                 |             
| | CASH AND SHORT-TERM INVESTMENTS AT                   |                 |             
| | END OF PERIOD                                        | $      9,391    | $    48,599 

The accompanying notes are an integral part of these statements.

---

### THERAGENICS CORPORATION®
                                                STATEMENT OF SHAREHOLDERS' EQUITY
                                         FOR THE THREE MONTHS ENDED MARCH 31, 2002
                                                   (UNAUDITED)
                              (Amounts in thousands, except per share data)

| |                               |              |            |           |           | Accumulated   |           
| | ----------------------------- | ------------ | ---------- | --------- | --------- | ------------- | ----------
| |                               | Common Stock | Additional |           | other     |              
| |                               | Number of    | Par value  | paid-in   | Retained  | comprehensive |           
| |                               | shares       | $0.01      | capital   | earnings  | income        | Total     
| | BALANCE, December 31, 2001    | 29,690       | $    297   | $  60,714 | $  74,996 | -             | $  136,007
| | Exercise of stock options     | 46           | -          | 158       |           |               | 158       
| | Employee stock purchase plan  | 2            | -          | 15        |           |               | 15        
| | Stock-based compensation      |              |            | 17        |           |               | 17        
| | Unrealized loss on securities |              |            |           |           |               |           
| | available for sale            |              |            |           |           | $   (82)      | (82)      
| | Tax effect from options       |              |            | 90        |           |               | 90        
| | Net earnings for the period   |              |            |           | 2,627     |               | 2,627     
| | BALANCE, March 31, 2002       | 29,738       | $    297   | $60,994   | $  77,623 | $   (82)      | $  138,832

The accompanying notes are an integral part of these statements.

---

### THERAGENICS
CORPORATION®

NOTES TO FINANCIAL STATEMENTSMARCH 31, 2002

(Unaudited)

## NOTE A 
BASIS OF PRESENTATION

The interim financial
statements included herein have been prepared by the Company without audit.
These statements reflect all adjustments which are, in the opinion of
management, necessary to present fairly the financial position, results of
operations, cash flows and changes in stockholders equity for the periods
presented. All such adjustments are of a normal recurring nature. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. The Company believes that the financial statements and
disclosures are adequate to make the information not misleading. It is suggested
that these financial statements and notes be read in conjunction with the
audited financial statements and notes for the year ended December 31, 2001,
included in the Form 10-K filed by the Company.

## NOTE B 
DISTRIBUTION AGREEMENTS AND MAJOR CUSTOMERS

The Company sells its
TheraSeed® product directly to health care providers and to third party
distributors. Currently, the Company has non-exclusive distribution agreements
in place with four companies. Sales to the four non-exclusive distributors
represented approximately 80% of product revenue for the quarter ended March 31,
2002, with sales to three of the four non-exclusive distributors each exceeding
10% of total revenue for the quarter. Accounts receivable from the four
non-exclusive distributors represented approximately 51% of accounts receivable
at March 31, 2002, with each of the four non-exclusive distributors exceeding
10% of total accounts receivable.

## 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
has constructed 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 up to
approximately $30 million through 2002 to complete this manufacturing and
R&D facility. Construction costs of approximately $25.3 million have been
incurred on this project as of March 31, 2002, and are included in construction
in progress.

---

### THERAGENICS
CORPORATION®

## NOTES TO
FINANCIAL STATEMENTS  CONTINUED
MARCH 31, 2002
(Unaudited)

NOTE D -
CONTINGENCIES

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.  Subsequently, the Court
certified the class 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.

## NOTE E 
RECENTLY ISSUED ACCOUNTING STANDARD

In 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.
Management estimates that the adoption of this standard 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.

---

Item 2.  
Managements Discussion and Analysis of Financial Condition and Results
              of Operations

## Results of Operations

Revenues for the first
quarter of 2002 were $11.6 million, compared to $13.6 million for the first
quarter of 2001, a decrease of $1.9 million, or 14.3%. In the first quarter of
2002, approximately 15% of unit sales were sold by Theragenics directly to
customers, compared to approximately 37% of total unit sales in the first
quarter of 2001. Since the Companys unit revenue received from its direct
customers is higher than that received from its distributors, the higher
percentage of distributor sales caused the average selling price of a
TheraSeed® unit to be lower in the first quarter of 2002. The average unit
sales price decrease combined with a unit volume decrease of approximately 8% in
the first quarter of 2002 compared to the same period in 2001 combined to create
the total revenue decrease.

The change in distribution
mix and the resultant decrease in average unit selling price reflected the
following factors. In January 2001 a distribution agreement with Indigo Medical
Inc. (Indigo), a Johnson and Johnson Company, terminated. At that point a
significant number of Indigos TheraSeed® customers began purchasing
from Theragenics while most of the other TheraSeed® customers began
purchasing from Theragenics non-exclusive distributors. As expected,
the percentage of direct-to-customer sales for Theragenics declined from
the first quarter of 2001 as the non-exclusive distributors began aggressively
marketing to all of Indigos former customers. Management expects
that these non-exclusive distributors will continue to aggressively market
to the former Indigo customers. Accordingly, its average revenue per
TheraSeed® unit may continue to decline.

Licensing fees revenue
represents licensing payment received for the Companys TheraSphere®
technology. Such licensing fees are not expected to become material in the
foreseeable future.

Cost of sales was $3.7
million during the first quarter of 2002, resulting in a gross profit margin of
68.6%, compared with cost of sales of $3.9 million and a gross profit margin of
71.2% during the first quarter of 2001. Cost of sales decreased by approximately
$200,000 in the first quarter of 2002 as certain manufacturing materials and
resources were used in research and development activities and the
Companys spare parts inventory for cyclotrons was increased. The decreases
were partially offset by increases in personnel costs reflecting a higher
headcount and an employee mix weighted toward higher technical expertise.

Selling, general and
administrative (SG&A) expense was $3.1 million, or 26.6% of revenue, during
the first quarter of 2002, compared to $2.6 million, or 19.1% of revenue, during
the first quarter of 2001, an increase of $500,000, or 19.8%. The increase in
the first quarter of 2002 compared to the same period in 2001 is primarily due
to increases in advertising and marketing activities, professional fees related
to, among other things, supporting adequate reimbursement for TheraSeed®
and evaluating strategic opportunities for growth and diversification, increases
in personnel costs and start up expenses associated with the Companys PSP
Project (see Liquidity and Capital Resources below).

The Company expects to
continue its increase in marketing activities for the remainder of 2002 in an
effort to support its brand and increase demand for TheraSeed® implants. It
is expected that these activities will include national and regional
TheraSeed® brand advertising to consumers and physicians, clinical studies
aimed at showing the superiority of TheraSeed® implants in the treatment of
prostate cancer, technical field support to TheraSeed® customers,
promotional attendance at trade shows and physician conferences, and other
customer service and patient information activities. Accordingly, the Company
anticipates that on a full year basis these efforts may increase marketing
expenses by up to $5.0 million in 2002.

Research and development
(R&D) expenses increased to $933,000, or approximately 8% of revenue, in the
first quarter of 2002, from $822,000, or approximately 6% of revenue, in the
first quarter of 2001. The increase in R&D expenses was a result of the
Companys diversification initiatives with the bulk of these expenses
associated with the Companys peripheral vascular and macular degeneration
programs.

Contingent on obtaining FDA
Investigational Device Exemption (IDE) approval and other appropriate approvals,
the Company is planning to conduct studies addressing the use of Pd-103 for
prevention of restenosis1 in the femoral artery. Also, the Company
has developed a prototype device for the treatment of the wet form of macular
degeneration2in animal studies and expects to begin these studies
during 2002. Due to the highly competitive and innovative nature of the
restenosis market and the macular degeneration market, the Companys
strategies as well as development efforts in these areas will continue to be
flexible.

Management plans to
continue to increase efforts in R&D as its initiatives to diversify move
forward, and expects R&D expenditures to increase accordingly. 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.

Other income, comprised of
interest income and non-operating expenses, was $211,000 in the first quarter of
2002 compared to $474,000 during the first quarter of 2001. 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 the first
quarter of 2002, the interest rate environment during 2002 has reduced the
effective returns on a significant portion of the Companys investments.
Funds available for investment have and will continue to be utilized for the
Companys current and future expansion programs, R&D activities, and
strategic opportunities for growth and diversification. 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s
effective income tax rate was approximately 37% for the first quarter compared
to approximately 35% for the same period in 2001. This increase is a result of a
reduction in tax credits generated by the Companys investments in its
expansion projects during 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 research activities
and tax-exempt interest income.



1.    
Restenosis is the renarrowing of blood vessels following procedures that are
done to open blocked or
        stenosed blood vessels.

2.    
Macular degeneration is a disease that can lead to loss of eyesight and in some
cases complete
        blindness.

---

## Critical
Accounting Policies

The SEC issued statements
regarding disclosure by companies within their managements discussion and
analysis of financial condition and results of operations. In those statements,
the SEC encouraged companies to identify critical accounting policies. Critical
accounting policies are those that are most important to the portrayal of a
companys financial condition and results, and that require
managements most difficult, subjective or complex judgments, often as a
result of the need to make estimates about the effect of matters that are
inherently uncertain. In response to the SEC statements, management has
identified the following critical accounting policies used in the preparation of
our financial statements and accompanying notes. These polices have been
reviewed with the Audit Committee of the Companys Board of Directors.

Allowance for doubtful
accounts. Management judgments and estimates are made and used in connection
with establishing an allowance for the possibility that portions of the
Companys accounts receivable balances may become uncollectable.
Specifically, management analyzes accounts in relation to current economic
trends and changes in our customer payment history in establishing this
allowance. Accounts receivable are reduced by this allowance. The Companys
accounts receivable balance, net of the provision for this trade accounts
receivables allowance of $200,000, was approximately $7.3 million as of March
31, 2002.

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. The Company 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. 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).

Recently Issued
Accounting Standard. Theragenics has identified retirement obligations
associated with the decommissioning of its cyclotrons and related facilities.
Management expects the adoption of SFAS No. 143 (see Notes to the
Financial Statements, above) 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.

Management is required to
use estimates in determining the potential impact of SFAS No.143 on its
financial statements. Factors including the regulatory environment, inflation,
alternative uses of the cyclotrons, and new or alternative technologies, among
other things, used in determining these estimates may change over time.
Therefore, changes in these factors will require the Company to reexamine and
adjust the anticipated effect of asset retirement obligations accordingly. The
Company will implement SFAS No. 143 in 2003.

---

## Liquidity
and Capital Resources

The Company had cash,
short-term investments and marketable securities of $60.8 million at March 31,
2002, compared to $56.2 million at December 31, 2001. Marketable securities
consist primarily of short-term cash investments and 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 $68.4 million at March 31, 2002, compared to
$65.3 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. No borrowings were outstanding under the Unsecured
Credit Agreement as of March 31, 2002.

Cash generated by
operations was $5.8 million and $2.4 million during the first quarter of 2002
and 2001, respectively. Cash generated from operations consists of net earnings
plus non-cash expenses such as depreciation, amortization, deferred income tax
expense and changes in balance sheet items such as accounts receivable,
inventories and payables. Cash from operations increased over the first quarter
of 2001 primarily because approximately $2.9 million more of 2001s first
quarter income was in the form of an accounts receivable rather than cash. This
change in receivables reflected the Companys change to selling its product
to a number of third party distributors and physicians, rather than through its
former exclusive marketing partner. Cash from operations also increased quarter
over quarter as both income tax payable and accounts payable increased rather
than decreasing as in the prior years first quarter. These primary sources
of cash from operations were partially offset by the year-over-year decrease in
net income.

Capital expenditures
totaled $1.3 million and $2.3 million during the first quarter of 2002 and 2001,
respectively. This spending related primarily to the Companys PSP Project
(see below).

The Company has constructed
a facility in the Oak Ridge, Tennessee area to house the equipment,
infrastructure and work force intended to support the production of isotopes,
including Pd-103, using DOE technology. Construction costs of approximately
$25.3 million have been incurred on the PSP Project through March 31, 2002, and
the Company expects to additionally invest up to $4.7 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.

In addition to using cash
to fund the PSP Project in 2002, the Company expects that R&D spending will
continue to increase (see Results of Operations, above). The
Company expects that R&D expense spending may total up to approximately 10%
of revenue in 2002, but could vary 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 (see Results of Operations, above), and in the
pursuit of diversification efforts such as the purchase of technologies,
products or companies.

Cash provided by financing
activities was $173,000 and $26,000 in the first quarter of 2002 and 2001,
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.

## Medicare Developments

Theragenics
TheraSeed® implant and other brachytherapy seeds fall within various
transitional pass-through codes, which are separate from the
procedure payment codes that comprise much of Medicares Outpatient
Prospective Payment System (OPPS). Effective April 1, 2002, The Centers for
Medicare and Medicaid Services (CMS) implemented changes in hospital payments
for brachytherapy and other services provided under Medicares OPPS for the
remainder of 2002. Through December 1, 2002 CMS will bundle a portion of
pass-through reimbursement for brachytherapy seeds and other pass-through
devices with associated procedure codes, thereby effectively sheltering seeds
from pro rata reductions that would otherwise have applied under
current Medicare Law. To the extent that these pass-through device costs exceed
the bundled amount, the remaining cost will be subject to a 63.6% pro rata
reduction in reimbursement. Management does not
anticipate any impact on the price of the TheraSeed® product for the
remainder of 2002 as a result of the current reimbursement structure.

Based on the importance of
third-party reimbursement to all providers of healthcare products and services,
Theragenics will continue to closely monitor reimbursement of healthcare
costs. Specifically, Theragenics intends to continue its efforts to assist
policymakers in formulating Medicare policies which recognize the unique aspects
of classification and reimbursement that apply to the TheraSeed® implant
and brachytherapy in general. Future reductions in payments for brachytherapy
seeds could reduce the competitive pricing advantages of TheraSeed® over
competing treatments which could adversely affect prices of TheraSeed® and
the Companys revenue stream.

## Forward
Looking and Cautionary Statements

This 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, third-party reimbursement,
sales mix, effectiveness of non-exclusive distribution agreements, pricing for
TheraSeed®, future cost of sales, R&D efforts and expenses, inventory
investment, 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 statements relating to
anticipated financial performance, business prospects, technological
developments, other research and development 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 research and development
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 capacity expansion and
start-up, (especially as it relates to the PSP Project), the actual start-up for
the PSP Project, 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, potential inability to obtain,
construct or install necessary parts or modifications to production equipment or
facilities, government regulation of the therapeutic radiological pharmaceutical
and device business, and potential changes in third-party reimbursement. 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 price of TheraSeed® and could have a favorable effect
or prevent an unfavorable effect on market share and volumes. Conversely, the
Company and its non-exclusive distributors could individually and independently
decide to maintain per unit pricing under certain competitive situations that
could adversely affect current or potential market share and volumes. 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.

---

## Item 3.  
Quantitative and Qualitative Disclosures About Market Risk

The Companys market
risk exposure related to market risk sensitive financial instruments is not
material. As of March 31, 2002, there were no outstanding borrowings under the
Companys Unsecured Credit Agreement.

## PART II.   OTHER INFORMATION

## Item 1.  Legal
Proceedings.

See NOTE D to the
Companys financial statements included in Item 1 of this report, which is
incorporated by reference hereby.

## Item 6.
Exhibits and Reports on Form 8-K.

(a)  Reports on Form 8-K.

No
reports on Form 8-K were filed during the quarter ended March 31, 2002.

---

#### 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.

| | (Registrant)                         
| | -------------------------------------
| | THERAGENICS CORPORATION®             
| |                                      
| | By:/s/ M. Christine Jacobs           
| | M. Christine Jacobs                  
| | Chief Executive Officer              
| |                                      
| | By:/s/ Bruce W. Smith                
| | Bruce W. Smith                       
| | Treasurer and Chief Financial Officer

Dated: May 15, 2002