**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**




**FORM
      10-Q**




(X)
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934




For
      the
      quarterly period ended April 2, 2006




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
                or other jurisdiction of
            
            (I.R.S.
                Employerincorporation
                or organization)
            
            Identification
                Number)




5203
                Bristol Industrial WayBuford,
                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 the filing requirements
      for
      at least the past 90 days.  YES X NO
      ___





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer in Rule 12b-2 of the Exchange
      Act.





Large
      Accelerated Filer ___  Accelerated
      Filer X   Non
      Accelerated Filer ___





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). YES ___   NO X




As
      of May
      4 ,
      2006
      the number of shares of $0.01 par value common stock outstanding was
      32,065,619.




1




THERAGENICS
      CORPORATION





TABLE
      OF
      CONTENTS











PageNo.PART
                I. FINANCIAL INFORMATION
            3ITEM
                1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
            3Consolidated
                Balance Sheets - April 2, 2006 and December 31, 2005
            3Consolidated
                Statements of Operations and Comprehensive Income for the three months
                ended April 2, 2006 and April 3, 2005
            5Consolidated
                Statements of Cash Flows for the three months ended April 2, 2006
                and
                April 3, 2005
            6Consolidated
                Statement of Shareholders’ Equity for the three months ended April 2,
                2006
            7Notes
                to Consolidated Financial Statements
            8ITEM
                2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
                OF OPERATIONS
            20ITEM
                3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUTMARKET
                RISK
            27ITEM
                4. CONTROLS AND PROCEDURES
            27PART
                II. OTHER INFORMATION
            28ITEM
                1. LEGAL PROCEEDINGS
            28ITEM
                1A. RISK FACTORS
            28ITEM
                6. EXHIBITS
            28SIGNATURES
            29






2


**PART
                I. FINANCIALINFORMATION**
              
              **Item
                1.****FinancialStatements**
              **THERAGENICS
                CORPORATION AND SUBSIDIARY****CONSOLIDATEDBALANCE
                SHEETS****(Amounts
                in thousands, except per share data)**ASSETSApril
                2,
              2006
              (Unaudited)
            
            December
                31, 2005CURRENT
                ASSETSCash
                and short-term investments
            
            $
            11,198
            
            $
            10,073Marketable
                securities
            
            
            35,546
            
            
            35,535Trade
                accounts receivable, less allowance of $415 in 2006 and $517 in
                2005
            
            
            7,577
            
            
            7,622Inventories
            
            
            5,272
            
            
            5,042Prepaid
                expenses and other current assets
            
            
            2,865
            
            
            2,720Assets
                held for sale
            
            
            3,400
            
            
            3,433TOTAL
                CURRENT ASSETS
            
            
            65,858
            
            
            64,425PROPERTY
                AND EQUIPMENTBuildings
                and improvements
            
            
            21,802
            
            
            21,793Machinery
                and equipment
            
            
            35,350
            
            
            35,271Office
                furniture and equipment
            
            
            701
            
            
            70157,853
            
            
            57,765Less
                accumulated depreciation
            
            
            (26,980
            )
            
            (25,960
            )30,873
            
            
            31,805Land
            
            
            822
            
            
            822Construction
                in progress
            
            
            174
            
            
            139TOTAL
                PROPERTY AND EQUIPMENT
            
            
            31,869
            
            
            32,766Goodwill
            
            
            18,370
            
            
            18,370Other
                intangible assets, net
            
            
            6,192
            
            
            6,388Other
                assets
            
            
            88
            
            
            11524,650
            
            
            24,873TOTAL
                ASSETS
            
            $
            122,377
            
            $
            122,064




The
        accompanying notes are an integral part of these statements.
  3




**THERAGENICS
                CORPORATION AND SUBSIDIARY****CONSOLIDATED
                BALANCE SHEETS - Continued****(Amounts
                in thousands, except per share data)**LIABILITIES
                & SHAREHOLDERS’ EQUITYApril
                2,
              2006
              (Unaudited)
            
            December
                31,
              2005CURRENT
                LIABILITIESTrade
                accounts payable
            
            $
            1,285
            
            $
            1,488Accrued
                salaries, wages and payroll taxes
            
            
            1,213
            
            
            1,659Other
                current liabilities
            
            
            1,395
            
            
            1,025TOTAL
                CURRENT LIABILITIES
            
            
            3,893
            
            
            4,172LONG-TERM
                LIABILITIESDecommissioning
                retirement
            
            
            526
            
            
            672Contract
                termination liability
            
            
            1,532
            
            
            1,537TOTAL
                LONG-TERM LIABILITIES
            
            
            2,058
            
            
            2,209SHAREHOLDERS’
                EQUITYCommon
                stock, authorized 100,000 shares of
              $0.01
                par value, issued and outstanding,32,057
                in 2006 and 32,008 in 2005
            
            
            321
            
            
            320Additional
                paid-in capital
            
            
            68,704
            
            
            68,623Retained
                earnings
            
            
            47,699
            
            
            46,924Accumulated
                other comprehensive loss
            
            
            (298
            )
            
            (184
            )TOTAL
                SHAREHOLDERS' EQUITY
            
            
            116,426
            
            
            115,683TOTAL
                LIABILITIES ANDSHAREHOLDERS'
                EQUITY
            
            $
            122,377
            
            $
            122,064





The
        accompanying notes are an integral part of these statements.
  4
 
  **THERAGENICS
                      CORPORATION AND SUBSIDIARY****CONSOLIDATEDSTATEMENTS
                      OF OPERATIONS AND COMPREHENSIVE
                      INCOME****(UNAUDITED)**
                    **(Amounts
                      in thousands, except per share
                      data)**
 Three
                      Months EndedApril
                      2,
                  
                  April
                      3,2006
                  
                  2005REVENUEProduct
                      sales
                  
                  $
                  12,256
                  
                  $
                  9,462Licensing
                      fees
                  
                  
                  138
                  
                  
                  7712,394
                  
                  
                  9,539COST
                      OF SALES
                  
                  
                  6,055
                  
                  
                  4,794GROSS
                      PROFIT
                  
                  
                  6,339
                  
                  
                  4,745OPERATING
                      EXPENSESSelling,
                      general & administrative
                  
                  
                  5,535
                  
                  
                  4,501Research
                      & development
                  
                  
                  239
                  
                  
                  1,407Restructuring
                      expenses
                  
                  
                  306
                  
                  
                  -Gain
                      on sale of assets
                  
                  
                  (201
                  )
                  
                  -5,879
                  
                  
                  5,908EARNINGS
                      (LOSS) FROM OPERATIONS
                  
                  
                  460
                  
                  
                  (1,163
                  )OTHER
                      INCOME/(EXPENSE)Interest
                      income
                  
                  
                  415
                  
                  
                  383Interest
                      and financing costs
                  
                  
                  (69
                  )
                  
                  (55
                  )Other
                  
                  
                  (21
                  )
                  
                  2325
                  
                  
                  330Earnings
                      (loss) before income tax
                  
                  
                  785
                  
                  
                  (833
                  )Income
                      tax expense (benefit)
                  
                  
                  10
                  
                  
                  (337
                  )NET
                      EARNINGS (LOSS)
                  
                  $
                  775
                  
                  $
                  (496
                  )NET
                      EARNINGS (LOSS) PER COMMON SHARE:Basic
                  
                  $
                  0.02
                  
                  $
                  (0.02
                  )Diluted
                  
                  $
                  0.02
                  
                  $
                  (0.02
                  )WEIGHTED
                      AVERAGE SHARESBasic
                  
                  
                  32,052
                  
                  
                  30,014Diluted
                  
                  
                  32,085
                  
                  
                  30,014Comprehensive
                      income (loss):Net
                      earnings (loss)
                  
                  $
                  775
                  
                  $
                  (496
                  )Other
                      comprehensive loss:Unrealized
                      loss on securities available for sale, net of tax
                  
                  
                  (114
                  )
                  
                  (63
                  )Total
                      comprehensive income (loss)
                  
                  $
                  661
                  
                  $
                  (559
                  )
  The
            accompanying notes are an integral part of these
            statements.




5




**THERAGENICS
        CORPORATION AND SUBSIDIARY**
 **CONSOLIDATEDSTATEMENTS
        OF CASH FLOWS**
 **(UNAUDITED)**
 **(Amounts
        in thousands)**
 Three
                  Months EndedApril
                  2,
                2006
              
              April
                  3,
                2005CASH
                  FLOWS FROM OPERATING ACTIVITIESNet
                  earnings (loss)
              
              $
              775
              
              $
              (496
              )Adjustments
                  to reconcile net earnings (loss) to net cash provided by operating
                  activitiesDeferred
                  income taxes
              
              
              -
              
              
              (337
              )Depreciation
                  and amortization
              
              
              1,196
              
              
              1,789Provision
                  for allowances
              
              
              67
              
              
              11Share
                  based compensation
              
              
              59
              
              
              50Deferred
                  rent
              
              
              -
              
              
              10Decommissioning
                  retirement liability
              
              
              (146
              )
              
              -Gain
                  on sale of equipment
              
              
              (201
              )
              
              -Changes
                  in assets and liabilities:Accounts
                  receivable
              
              
              (19
              )
              
              (241
              )Inventories
              
              
              (233
              )
              
              (69
              )Prepaid
                  expenses and other current assets
              
              
              (145
              )
              
              (219
              )Other
                  assets
              
              
              27
              
              
              -Trade
                  accounts payable
              
              
              (203
              )
              
              (252
              )Accrued
                  salaries, wages and payroll taxes
              
              
              (446
              )
              
              (120
              )Other
                  current liabilities
              
              
              370
              
              
              39Other
              
              
              (5
              )
              
              -Net
                  cash provided by operating activities
              
              
              1,096
              
              
              165CASH
                  FLOWS FROM INVESTING ACTIVITIESPurchases
                  and construction of property and equipment
              
              
              (122
              )
              
              (130
              )Proceeds
                  from sale of equipment
              
              
              234
              
              
              -Cash
                  paid for acquisition
              
              
              -
              
              
              (348
              )Purchases
                  of marketable securities
              
              
              (7,347
              )
              
              (4,266
              )Maturities
                  of marketable securities
              
              
              7,241
              
              
              7,446Net
                  cash provided by investing activities
              
              
              6
              
              
              2,702CASH
                  FLOWS FROM FINANCING ACTIVITIESExercise
                  of stock options and stock purchase plan
              
              
              23
              
              
              67NET
                  INCREASE IN CASH AND SHORT-TERM INVESTMENTS
              
              $
              1,125
              
              $
              2,934CASH
                  AND SHORT-TERM INVESTMENTS ATBEGINNING
                  OF PERIOD
              
              
              10,073
              
              
              26,150CASH
                  AND SHORT-TERM INVESTMENTS ATEND
                  OF PERIOD
              
              $
              11,198
              
              $
              29,084Supplementary
                  cash flow disclosure:Interest
                  paid
              
              $
              69
              
              $
              55




The
        accompanying footnotes are an integral part of these statements.


6


**THERAGENICS
                CORPORATION AND SUBSIDIARY****CONSOLIDATEDSTATEMENT
                OF SHAREHOLDERS'
                EQUITY****FOR
                THE THREE MONTHS ENDED APRIL 2, 2006****(UNAUDITED)**
              **(Amounts
                in thousands, except per share
                data)**





AccumulatedCommon
                Stock
            
            Additional
            
            
            
            
            
            OtherNumber
                of
            
            Par
                value
            
            Paid-in
            
            Deferred
            
            Retained
            
            ComprehensiveShares
            
            $0.01
            
            Capital
            
            Compensation
            
            Earnings
            
            Loss
            
            TotalBALANCE,
                December 31, 2005
            
            
            32,008
            
            $
            320
            
            $
            68,717
            
            $
            (94
            )
            $
            46,924
            
            $
            (184
            )
            $
            115,683Employee
                stock purchase plan
            
            
            9
            
            
            -
            
            
            23
            
            
            
            
            
            
            
            
            
            
            
            23Adoption
                of SFAS 123R
            
            
            -
            
            
            -
            
            
            (94
            )
            
            94
            
            
            
            
            
            
            
            
            -Issuance
                of shares under restricted units
            
            
            40
            
            
            1
            
            
            (1
            )
            
            
            
            
            
            
            
            
            
            
            -Stock
                based compensation
            
            
            
            
            
            
            
            
            59
            
            
            
            
            
            
            
            
            
            
            
            59Unrealized
                loss on securities
              available
                for sale, net of taxes
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (114
            )
            
            (114
            )Net
                income for the period
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            775
            
            
            
            
            
            775BALANCE,
                April 2, 2006
            
            
            32,057
            
            $
            321
            
            $
            68,704
            
            $
            -
            
            $
            47,699
            
            $
            (298
            )
            $
            116,426





The
        accompanying notes are an integral part of these
        statements.


7


**THERAGENICS
      CORPORATION AND SUBSIDIARY**


**NOTESTO
      CONSOLIDATED FINANCIAL STATEMENTS**


**April
      2, 2006**


**(Unaudited)**


**NOTE
      A - BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS**





The
      unaudited interim consolidated financial statements included herein reflect
      the
      consolidated operations of the Company and its wholly-owned subsidiary, CP
      Medical Corporation. All intercompany accounts and transactions have been
      eliminated in consolidation. These statements reflect all adjustments that
      are,
      in the opinion of management, necessary to present fairly the consolidated
      financial position, consolidated results of operations, consolidated cash flows
      and changes in shareholders’ equity for the periods presented. All such
      adjustments are of a normal recurring nature. Pursuant to the rules and
      regulations of the Securities and Exchange Commission for reporting on Form
      10-Q, certain information and footnote disclosures normally included in
      financial statements prepared in accordance with accounting principles generally
      accepted in the United States of America have been condensed or omitted. These
      unaudited financial statements and notes should be read in conjunction with
      the
      audited financial statements and notes for the year ended December 31, 2005,
      included in the Form 10-K filed by the Company. The consolidated results of
      operations for the three months ended April 2, 2006 are not necessarily
      indicative of the results to be expected for a full year.





Theragenics
      Corporation is a medical device company serving the cancer treatment and
      surgical markets, operating in two business segments. In its brachytherapy
      seed
      business, the Company produces, markets and sells TheraSeed ® ,
      its
      premier palladium-103 prostate cancer treatment device, I-Seed, its iodine-125
      based prostate cancer treatment device, and related products and
      services.  The
      Company’s surgical products business consists of
      wound
      closure products and other surgical products and supplies at CP Medical
      Corporation (“CP Medical”). CP
      Medical, acquired in May 2005, produces sutures, cardiac pacing cables,
      brachytherapy needles and other surgical supplies. These products have
      applications in urology, veterinary, cardiology, orthopedics, plastic surgery,
      dental, and other fields.





**NOTE
      B - DISTRIBUTION AGREEMENT AND MAJOR CUSTOMERS**




*Distribution
      Agreement*




The Company
      sells its TheraSeed ® device
      directly to health care providers and to a third party distributor, and sells
      its I-Seed device directly to health care providers. Currently, the Company
      has
      a non-exclusive distribution agreement in place with C. R. Bard (“Bard”) for the
      distribution of the TheraSeed ® device
      (the “Bard Agreement”). The terms of the Bard Agreement provide for automatic
      one year extensions of the term, unless either party gives notice of its intent
      not to renew at least twelve months prior to the end of the current term. The
      current terms expires December 31, 2007, and will be automatically extended
      for
      one additional year unless either party gives notice of its intent not to extend
      by December 31, 2006. The Bard Agreement gives Bard the non-exclusive right
      to
      distribute the TheraSeed ® device
      in the U.S., Canada, and other international locations for the treatment of
      prostate cancer and other solid localized cancerous tumors. A distribution
      agreement with Medi-Physics, Inc. (formerly d/b/a Nycomed Amersham and part
      of
      Oncura) terminated on September 8, 2005 (see Note E).




*Major
      Customers*





Sales
      to
      Bard represented approximately 63% of total brachytherapy seed product revenue,
      and approximately 45% of consolidated revenue, for the three months ended April
      2, 2006. In the first quarter of 2005, sales to Bard and Oncura represented
      approximately 61% and 16% of brachytherapy seed product revenue, respectively.




8
 
  **THERAGENICS
          CORPORATION AND SUBSIDIARY**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **April
          2, 2006**
 **(Unaudited)**


Accounts
      receivable from Bard represented approximately
      50% of brachytherapy accounts receivable and 36% of consolidated accounts
      receivable at April
      2, 2006. At December 31, 2005, accounts receivable from Bard represented
      approximately 52% of brachytherapy accounts receivable and 39% of consolidated
      accounts receivable.




For
      the
      three months ended April 2, 2006, two customers equaled or exceeded 10% of
      surgical products sales, with one customer totaling 20% of sales and one
      customer totaling 10% of sales. One customer totaled approximately 20% and
      24%
      of surgical products accounts receivable at April 2, 2006 and December 31,
      2005,
      respectively.





**NOTE
      C - ACQUISITION OF CP MEDICAL**





On
      May 6,
      2005, the Company acquired all of the outstanding common stock of CP Medical
      Corporation (“CP Medical”) for approximately $26.7 million, including $20.6
      million in cash and 1,840,458 shares of common stock valued at approximately
      $6.1 million. Common shares issued were valued based on their average market
      price over the 20 day period from March 28, 2005 to April 22, 2005. CP Medical
      is a manufacturer and distributor of innovative wound closure and other medical
      products such as sutures, cardiac pacing cables, brachytherapy needles and
      supplies, and other surgical products. These products have applications in
      urology, veterinary, cardiology, plastic surgery, dental, orthopedics, and
      other
      fields. This acquisition establishes a new growth platform for the Company
      within the field of medical devices and serves to diversify the Company’s
      product offerings within its brachytherapy business. Consolidated results of
      operations for the first quarter of 2006 include the results of operations
      of CP
      Medical.





The
      acquisition was recorded under the provisions of Statement of Financial
      Accounting Standards No. 141, *Business
      Combinations* .
      Accordingly, the purchase price was allocated based on the fair values of the
      assets acquired and liabilities assumed at the date of acquisition, with the
      excess of the purchase price over the fair value of the net assets acquired
      recorded as goodwill. Following is a summary of the fair value of the assets
      acquired and liabilities assumed (in thousands):





Fair
                value
            Amortization
              life
                of
              intangible
              assetsCurrent
                assets
            $
                4,565
            -Equipment
            314
            -Goodwill
            15,792
            IndefiniteTrade
                names
            1,700
            IndefiniteCustomer
                relationships
            3,500
            9
                yearsNon-compete
                agreements
            1,269
            1-5
                yearsDeveloped
                technology
            360
            7
                yearsPatents
            31
            17
                yearsCurrent
                liabilities
            (857)
            -Net
                assets acquired
            $
                26,674





The
      weighted average life of intangible assets subject to amortization is 7.9 years.
      The goodwill acquired is expected to be deductible for income tax
      purposes.




9


**THERAGENICS
        CORPORATION AND SUBSIDIARY**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **April
        2, 2006**
 **(Unaudited)**




The
      following unaudited pro forma summary combines the Company’s results with those
      of CP Medical as if the acquisition had occurred on January 1, 2005. Certain
      adjustments have been made to reflect the impact of the purchase transaction,
      primarily consisting of amortization of certain intangible assets and a
      reduction in interest income as a result of cash used in the acquisition. These
      pro forma results have been prepared for comparative purposes only and are
      not
      necessarily indicative of what would have occurred had the acquisition been
      made
      as of January 1, 2005, nor are they necessarily indicative of results that
      may
      occur in the future (in thousands, except per share data):




Three
                months endedApril
                2, 2006
            
            April
                3, 2005Revenue
            
            $
            12,394
            
            $
            12,201Net
                earnings (loss)
            
            
            775
            
            
            (672
            )Earnings
                (loss) per share, basic and diluted
            
            $
            0.02
            
            $
            (0.02
            )





**NOTE
      D - RESTRUCTURING**





On
      August
      11, 2005, the Company announced a restructuring of its brachytherapy seed
      segment that resulted in the closure of the Plasma Separation Process
      (“PSP”) facility in Oak Ridge, Tennessee, ended the research and
      development activities related to the vascular, macular degeneration and breast
      cancer areas, and eliminated production of radiochemical products. Curtailing
      these activities allowed the Company to shrink its asset base by shutting down
      six cyclotrons, closing its Newton Terrace facility in Buford, Georgia, and
      closing its PSP facility in Oak Ridge, Tennessee. The objective of the
      restructuring is to sharpen the Company’s focus on its two business segments;
      brachytherapy seeds and surgical products, as well as provide a more focused
      platform for continued diversification and expansion through acquisitions and
      other channels.





Restructuring
      activities continued in the first quarter of 2006, and $306,000 of restructuring
      costs were incurred. These consisted primarily of the ongoing site exit and
      disposal costs associated with shutting down the PSP facility. These
      restructuring activities are expected to be completed in the second quarter
      of
      2006.




10





**THERAGENICS
        CORPORATION AND SUBSIDIARY**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **April
        2, 2006**
 **(Unaudited)**


Activity
      during the first quarter of 2006 related to the above-described restructuring
      is
      summarized as follows: (in thousands):




Total
                amount
              expected
                to
              be
                incurred
            
            Amount
              incurred
              in
                2006
            
            Cumulative
              amount
              incurred
              through
              April
                2, 2006Impairment
                of long-lived assets
            
            $
            28,789
            
            $
            -
            
            $
            28,789Write
                off of inventory and other assets
            
            
            1,757
            
            
            -
            
            
            1,757Contract
                termination costs
            
            
            1,495
            
            
            -
            
            
            1,495Severance
                costs
            
            
            911
            
            
            12
            
            
            901Site
                exit and disposal costs
            
            
            786
            
            
            294
            
            
            651Other
            
            
            107
            
            
            -
            
            
            102$
            33,845
            
            $
            306
            
            $
            33,695





A
      reconciliation of liabilities attributable to the restructuring follows (in
      thousands):





Accrual
                at
              December
                31,
              2005
            
            Charged
                to
              expenses
            
            Payments
            
            Accrual
                at
              April
                2,
              2006Contract
                termination costs
            
            $
            1,560
            
            $
            -
            
            $
            6
            
            $
            1,554Severance
            
            
            530
            
            
            12
            
            
            44
            
            
            498Site
                exit and disposal activities
            
            
            -
            
            
            294
            
            
            294
            
            
            -





Contract
      termination costs relate to the land lease at the Oak Ridge, Tennessee facility.
      This represents a liability for costs that will continue to be incurred through
      the remaining term of that lease agreement without economic benefit to the
      Company, measured at its fair value when the Company ceased using the facility
      in August 2005.  $22,000 and $23,000 of the accrual is classified as other
      current liabilities in the accompanying consolidated balance sheets at April
      2,
      2006 and December 31, 2005, respectively, representing the current portion
      of
      the liability due.





Severance
      costs are vested in accordance with the terms of the severance agreements.
      Additional severance may be earned based on the period of time affected
      employees remain during the shut down period. Any additional severance will
      be
      expensed in the period in which it is earned.





Site
      exit
      and disposal activities are related to the Oak Ridge facility and are expensed
      as incurred.





Assets
      held for sale of approximately $3.4 million at April 2, 2006, represents the
      estimated fair market value of the Oak Ridge facility to be disposed as a result
      of the restructuring.




11
 
  **THERAGENICS
          CORPORATION AND SUBSIDIARY**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **April
          2, 2006**
 **(Unaudited)**


**NOTE
      E - 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 were consolidated
      into a single action in the U.S. District Court for the Northern District of
      Georgia. The amended complaint generally alleged that the defendants made
      certain misrepresentations and omissions in connection with the performance
      of
      the Company during the class period and sought unspecified damages. In 2004,
      the
      consolidated federal securities class action was settled for an amount within
      the limits of the Company’s directors and officers’ liability insurance. The
      Company was not required to make any financial contribution toward the
      settlement and the federal securities case was officially over as of November
      1,
      2004.





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 was alleged in the consolidated federal class action complaint. The
      derivative action was stayed by the agreement of the parties. Its status is
      currently being reevaluated in light of the settlement of the securities class
      action lawsuit.





The
      Company and one of its distributors, Oncura, had been arbitrating claims arising
      in connection with the non-exclusive distribution agreement between the parties
      (the “Oncura Agreement”). As of April 9, 2005, the arbitration was settled by
      mutual consent of the parties. As part of the settlement, each party has dropped
      the claims it had been arbitrating against the other and the parties agreed
      to
      advance the termination of the Oncura Agreement to September 8, 2005.





From
      time
      to time the Company may be a party to claims that arise in the ordinary course
      of business, none of which, in the view of Management, is expected to have
      a
      material adverse effect on the consolidated financial position or results of
      operations of the Company.





**NOTE
      F - INVENTORIES**





Inventories
      are stated at the lower of cost or market. Cost is determined using the
      first-in, first-out (FIFO) method. Market is replacement cost or net realizable
      value. The Company estimates reserves for inventory obsolescence based on
      management’s judgment of future realization. Inventories as of April 2, 2006 and
      December 31, 2005 were comprised of the following (in thousands):




April
                2,
              2006
            
            December
                31,
              2005Raw
                materials
            
            $
            2,690
            
            $
            2,381Work
                in process
            
            
            476
            
            
            531Finished
                goods
            
            
            1,431
            
            
            1,422Spare
                parts and supplies
            
            
            891
            
            
            9215,488
            
            
            5,255Allowance
              for doubtful inventory
            
            
            (216
            )
            
            (213
            )Total
            
            $
            5,272
            
            $
            5,042




**NOTE
      G - SHARE-BASED COMPENSATION**





The
      Company provides stock-based compensation under equity incentive plans approved
      by stockholders, which provide for the granting of stock options, restricted
      stock and other equity incentives. As of April 2, 2006 there were 2,549,278
      options and restricted stock rights outstanding and 144,404 shares of Common
      Stock remaining available for issuance under the Company’s equity incentive
      plans.




12




**THERAGENICS
          CORPORATION AND SUBSIDIARY**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **April
          2, 2006**
 **(Unaudited)**




The Company
      adopted Statement of Financial Accounting Standards No. 123R, *Share-Based
      Payment* (“SFAS
      123R”), effective January 1, 2006. SFAS 123R revises Statement of Financial
      Accounting Standards No. 123, *Accounting
      for Stock-Based Compensation* (“SFAS
      123”), and supersedes Accounting Principles Board Opinion No. 25, *Accounting
      for Stock Issued to Employees* (“APB
      25”). SFAS 123R requires compensation costs related to share based payments,
      including stock options and other equity awards, to be measured based on the
      grant date fair value of the award. The Company has adopted SFAS 123R using
      the
      modified prospective application, which applies to new awards and to awards
      modified, repurchased, or cancelled after January 1, 2006. Additionally,
      compensation cost for the portion of awards for which the requisite service
      has
      not been rendered that are outstanding as of January 1, 2006 will be recognized
      as the requisite service is rendered. Accordingly, financial results for prior
      periods have not been restated. Previously, the Company accounted for share
      based payments in accordance with APB 25. In accordance with APB 25,
      compensation cost was recorded for performance-based and restricted stock and
      stock unit awards and recognized over the vesting periods of the awards. No
      compensation had been recognized for stock options issued to employees and
      directors, as all options granted had an exercise price at least equal to the
      market value of the underlying common stock at the date of grant.





Compensation
      cost for the portion of stock options outstanding at January 1, 2006 for which
      the requisite service period had not been rendered is recognized based on their
      grant date fair value as calculated for the pro forma disclosures under SFAS
      123. The
      performance-based and restricted stock and stock unit awards were previously
      recorded using fair value in a manner substantially equivalent to the accounting
      required under SFAS 123R. A ccordingly,
      the adoption of SFAS 123R did not have a material effect on the Company’s
      results of operations, earnings per share or cash flows in the first quarter
      of
      2006.





Stock
      Options





Stock
      options granted to date have had an exercise price at least equal to 100% of
      market value of the underlying common stock on the date granted. These options
      expire ten years from the date of grant and become exercisable over a three
      to
      five-year vesting period.


The
      following is a summary of activity in stock options outstanding during the
      three
      months ended April 2, 2006 (shares in thousands):





Shares
            
            Weighted
              average
              exercise
              price
            
            Weighted
              average
              remaining
                contractual
              life
                (yrs)
            
            Aggregate
              intrinsic
              valueOutstanding,
                beginning of period
            
            2,433
            
            $
            12.56
            
            
            5.2
            
            
            -Granted
            
            -
            
            
            -
            
            
            -
            
            
            -Exercised
            
            -
            
            
            -
            
            
            -
            
            
            -Forfeited
            
            1
            
            
            3.95
            
            
            8.9
            
            
            -Outstanding,
                end of period
            
            2,432
            
            $
            12.56
            
            
            5.1
            
            $
            -Exercisable
                at end of period
            
            2,321
            
            $
            12.73
            
            
            4.8
            
            $
            -







13


**THERAGENICS
          CORPORATION AND SUBSIDIARY**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **April
          2, 2006**
 **(Unaudited)**




A
      summary
      of the status of the Company’s non-vested stock options as of April 2, 2006 and
      changes during the three months ended April 2, 2006 follows (shares in
      thousands):





Non-vested
                shares
            
            Shares
            
            Weighted
              average
                grant
              date
                fair valueNon-vested
                at January 1, 2006
            
            
            140
            
            $
            2.03Granted
            
            
            -
            
            
            -Vested
            
            
            (27
            )
            
            1.49Forfeited
            
            
            (1
            )
            
            1.38Non-vested
                at April 2, 2006
            
            
            112
            
            $
            2.13





A
      summary
      of grant date fair values and intrinsic values follows (in thousands, except
      per
      share amounts):





Three
                Months EndedApril
                2,
              2006
            
            April
                3,
              2005Grant
                date fair value of options granted
            
            
            N/A
            
            $
            1.38Intrinsic
                value of options exercised
            
            
            N/A
            
            $
            60Fair
                value of options vested
            
            $
            40
            
            
            N/A





The
      Company recognizes compensation expense for awards with graded vesting on a
      straight line basis over the requisite service period for each separately
      vesting portion of the award. Compensation cost related to stock options totaled
      $13,000 during the first quarter of 2006. As of April 2, 2006, there was
      approximately $53,000 of unrecognized compensation cost related to nonvested
      stock options, which is expected to be recognized over a weighted average period
      of 1.6 years.




14




**THERAGENICS
        CORPORATION AND SUBSIDIARY**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **April
        2, 2006**
 **(Unaudited)**


Restricted
      Stock Issued to Non-Officer Directors





In
      2003
      and 2004, the Company issued 7,000 shares of restricted stock annually to
      non-officer directors as a portion of director compensation which vested one
      year after issuance. In 2005, the Board of Directors approved a change in
      director compensation effective January 1, 2005 that eliminated the granting
      of
      stock options and increased the number of restricted shares granted annually
      to
      each non-officer director to the lesser of 5,000 restricted shares or the number
      of shares calculated by dividing $50,000 by the closing market price of the
      Company’s common stock on the last business day preceding the date of the annual
      meeting, such shares to be granted on the date of the annual meeting. On May
      10,
      2005, the Company issued an aggregate of 35,000 restricted shares under this
      new
      director compensation program. These restricted shares vest ratably over three
      years.





Compensation
      cost related to the restricted shares is based on the grant date fair value
      of
      the common stock granted of $3.45 per share and is recorded over the requisite
      service period. Compensation cost related to these restricted shares totaled
      $10,000 and $7,000 for the first quarter of 2006 and 2005, respectively. As
      of
      April 2, 2006, there was approximately $84,000 of unrecognized compensation
      cost
      related to the restricted shares which is expected to be recognized through
      May
      2008. No restricted shares vested during the first quarter of 2006.





Stock
      Rights Issued to Employees





In
      August
      2004, the Board of Directors granted an aggregate of 48,000 restricted stock
      rights to executive officers which vested on December 31, 2005 and in August
      2005 the Board of Directors granted 10,000 restricted stock rights to a newly
      appointed executive officer that vest on December 31, 2006. Each right
      represents one share of common stock to be issued upon vesting, provided that
      the officer remains in the Company’s employ until vesting. The rights
      immediately vest upon a change in control.





The
      Board
      of Directors has also approved the issuance of performance restricted stock
      rights to executive officers as long-term incentives (the “Performance Stock
      Rights”). Under the original terms of these long-term incentives, the number of
      shares issuable upon vesting of each Performance Stock Right will depend on
      the
      Company’s stock price appreciation plus dividends paid (total shareholder
      return, or “TSR”) relative to the TSR of an industry peer group based on a fixed
      schedule over a three year period. Each Performance Stock Right represents
      the
      right to a minimum of 0.30 of a share of common stock and a maximum of 2 shares
      of common stock, provided the employee remains in the Company’s employ as of the
      vesting date. Performance Stock Rights may, but will not necessarily, be
      prorated for executive managers who commence participation in this long-term
      incentive plan subsequent to the grant date. The Performance Stock Rights become
      fully vested at the target achievement level, which is a ratio of 1 share for
      each right, upon a change in control. If the executive terminates employment
      under certain circumstances, or dies or becomes disabled, the employee will
      be
      entitled to a pro rata number of shares measured at the end of the performance
      period.





Under
      SFAS 123R, the Company’s Performance Stock Rights based on TSR would be
      considered to be based on a “market condition”, as defined in SFAS 123R. Under
      SFAS 123R, valuation of share based payments with market conditions requires
      a
      complex valuation methodology that would be unduly costly for a company the
      size
      of Theragenics. In view of this potentially significant administrative cost
      associated with valuing the Company’s outstanding Performance Stock Rights under
      SFAS No. 123R, in November 2005 the Board of Directors revised the outstanding
      Performance Stock Rights held by current executive officers. The revision
      includes termination of the performance cycle for measuring TSR under the
      outstanding Performance Stock Rights held by current executive officers as
      of
      December 31, 2005. As a result, the number of shares to be issued upon vesting
      was determined based on TSR through December 31, 2005. Vesting remains
      conditioned on continued employment through the original term of the award,
      subject to acceleration in certain events as set forth in the original award.
      Terms of Performance Stock Rights outstanding and held by former employees
      were
      not changed, and continue to be subject to a minimum of 0.30 and maximum of
      2
      shares per Performance Stock Right, based on TSR.




15


**THERAGENICS
        CORPORATION AND SUBSIDIARY**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **April
        2, 2006**
 **(Unaudited)**


In
      February 2006, the Board of Directors approved the issuance of 104,000
      Performance Stock Rights to executive officers which vest on December 31, 2008.
      The number of common shares issuable upon vesting of each Performance
      Stock  Right
      is
      subject to a minimum of 31,200 shares and a maximum of 208,000 shares, and
      will
      be partly based on the Company’s revenue and earnings per share from 2006 to
      2008, relative to its strategic objectives over the same period, and partly
      based on the subjective discretion of the Board of Directors. The grant date
      fair value of the Performance Stock Rights was based on the fair value of the
      underlying common stock, which was $3.45, and is recognized over the three
      year
      requisite service period. For the portion of the Performance Stock Rights
      containing performance conditions, the grant date fair value is adjusted each
      period for the number of shares ultimately expected to be issued. For the
      portion of the Performance Stock Rights subject to discretionary performance
      conditions, the grant date has not been established and accordingly, the fair
      value of the award is updated each period for changes in the fair value of
      the
      underlying common stock.





A
      summary
      of Stock Rights outstanding at April 2, 2006 follows:


Common
                  shares issuableRights
                outstanding
              
              Vesting
                  date
                December
                  31,
              
              Minimum
              
              Maximum
              
              Weighted
                  average
                grant
                  date
                fair
                  value53,668
              
              2006
              
              36,750
              
              39,586
              
              $3.6143,508
              
              2007
              
              13,052
              
              24,116
              
              $3.45104,000
              
              2008
              
              31,200
              
              208,000
              
              $4.21




Compensation
      cost related to Stock Rights issued to employees totaled $31,000 and $43,000
      during the first quarter of 2006 and 2005, respectively. As of April 2, 2006
      there was approximately $227,000 of unrecognized compensation related to Stock
      Rights issued to employees which is expected to be recognized over a weighted
      average period of 2.2 years.





Employee
      Stock Purchase Plan





The
      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. Compensation cost related to the ESPP totaled approximately
      $4,000 in the first quarter of 2006.





Pro
      Forma Results





The
      following represents the effect on net earnings (loss) and earnings per share
      if
      the Company had applied the fair market value recognition provisions of SFAS
      123R for all periods presented: (in thousands, except per share data):




16


**THERAGENICS
        CORPORATION AND SUBSIDIARY**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **April
        2, 2006**
 **(Unaudited)**




Three
                months endedApril
                2, 2006
            
            April
                3, 2005Net
                earnings (loss), as reported
            
            $
            775
            
            $
            (496
            )Less:
                total stock based compensationexpense
                determined under fair value
              method
                for all stock options, net ofrelated
                tax benefit
            
            
            -
            
            
            (27
            )Pro
                forma net earnings (loss)
            
            $
            775
            
            $
            (523
            )Basic
                and diluted earnings (loss) per share:As
                reported
            
            $
            0.02
            
            $
            (0.02
            )Pro
                forma
            
            $
            0.02
            
            $
            (0.02
            )





The
      weighted average fair value of the options granted during the first quarter
      of
      2005 was $1.38. The fair values were estimated using the Black-Scholes
      options-pricing model with the following weighted average
      assumptions:





Expected
                dividend yield
            0.0%Expected
                stock price volatility
            45.8%Risk-free
                interest rate
            3.0%Expected
                life of option (years)
            3.1





Expected
      stock price volatility is primarily based on the historical volatility of the
      Company’s stock price over the most recent period commensurate with the expected
      option life. When determining the expected life of stock options, the Company
      classifies options into groups for employees where relatively homogeneous
      exercise behavior is expected. The vesting period of the options, the length
      of
      time similar grants have remained outstanding in the past, and the expected
      volatility of the stock is also considered. These factors may cause the expected
      volatility and expected life of options granted to differ from period to
      period




**NOTE
      H - SEGMENT REPORTING**





*Segment
      Reporting*





The
      Company operates in two segments, the brachytherapy seed segment and the
      surgical products segment. The brachytherapy seed segment is comprised of the
      Company’s TheraSeed ® and
      I-Seed products as well as related products and services. The surgical products
      segment is comprised of sutures, cardiac pacing cables, brachytherapy needles
      and other surgical supplies at CP Medical. These products have applications
      in
      urology, veterinary, cardiology, orthopedics, plastic surgery, dental, and
      other
      fields. The following tables provide certain segment information for the three
      months ended April 2, 2006 and April 3, 2005 (amounts in
      thousands):




17
 
  **THERAGENICS
          CORPORATION AND SUBSIDIARY**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **April
          2, 2006**
 **(Unaudited)**





Three
                Months EndedApril
                2,
              2006
            
            April
                3,
              2005RevenuesBrachytherapy
                seed
            
            $
            9,008
            
            $
            9,539Surgical
                products
            
            
            3,442
            
            
            -Intersegment
                eliminations
            
            
            (56
            )
            
            -$
            12,394
            
            $
            9,539Restructuring
                expensesBrachytherapy
                seed
            
            $
            306
            
            $
            -Surgical
                products
            
            
            -
            
            
            -$
            306
            
            $
            -Gain
                on sale of assetsBrachytherapy
                seed
            
            $
            199
            
            $
            -Surgical
                products
            
            
            2
            
            
            -$
            201
            
            $
            -Earnings
                (loss) from operationsBrachytherapy
                seed
            
            $
            171
            
            $
            (1,163
            )Surgical
                products
            
            
            309
            
            
            -Intersegment
                eliminations
            
            
            (20
            )
            
            -$
            460
            
            $
            (1,163
            )Capital
                expendituresBrachytherapy
                seed
            
            $
            69
            
            $
            130Surgical
                products
            
            
            53
            
            
            -$
            122
            
            $
            130Depreciation
                and amortizationBrachytherapy
                seed
            
            $
            984
            
            $
            1,789Surgical
                products
            
            
            212
            
            
            -$
            1,196
            
            $
            1,789




Supplemental
      information related to significant assets and liabilities follows (in
      thousands):





April
                3,
            
            December
                31,2006
            
            2005Identifiable
                assetsBrachytherapy
                seed
            
            $
            120,597
            
            $
            120,485Surgical
                products
            
            
            29,789
            
            
            29,191Intersegment
                eliminations
            
            
            (28,009
            )
            
            (27,612
            )$
            122,377
            
            $
            122,064GoodwillBrachytherapy
                seed
            
            $
            2,578
            
            $
            2,578Surgical
                products
            
            
            15,792
            
            
            15,792$
            18,370
            
            $
            18,370Other
                intangible assetsBrachytherapy
                seed
            
            $
            21
            
            $
            29Surgical
                products
            
            
            6,171
            
            
            6,359$
            6,192
            
            $
            6,388






18


**THERAGENICS
          CORPORATION AND SUBSIDIARY**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **April
          2, 2006**
 **(Unaudited)**




Information
      regarding revenue by geographic regions follows (in thousands):





Quarter
                EndedApril
                2, 2006
            
            April
                3, 2005United
                States
            
            $
            11,928
            
            $
            9,539Europe
            
            
            292
            
            
            -Other
                foreign countries
            
            
            174
            
            
            -$
            12,394
            
            $
            9,539





Foreign
      sales relate to the surgical products segment and are attributed to countries
      based on location of the customer. All of the Company’s long-lived assets are
      located within the United States.





**NOTE
      I - ASSET RETIREMENT OBLIGATIONS**





Theragenics
      provides for retirement obligations relating to future decommissioning costs
      associated with the Company’s equipment and buildings in accordance with SFAS
      No. 143, *Accounting
      for Asset Retirement Obligations* .
      The
      liability is recorded at present value by discounting the Company’s estimated
      future cash flows associated with future decommissioning activities using the
      Company’s estimated credit-adjusted borrowing rate. The asset retirement
      obligation has been recorded in the accompanying consolidated balance sheets
      and
      will be adjusted to fair value over the estimated useful lives of the assets
      as
      an accretion expense. Changes in estimated future cash flows are adjusted in
      the
      period of change.





The
      following summarizes activity in the Company’s asset retirement obligation
      liability (in thousands):





Three
                Months EndedApril
                2, 2006
            
            April
                3, 2005Asset
                retirement obligation at beginning of period
            
            $
            672
            
            $
            549Accretion
                expense
            
            
            11
            
            
            6Revision
                in estimated cash flows
            
            
            (157
            )
            
            47Asset
                retirement obligation at end of period
            
            $
            526
            
            $
            602




**NOTE
      J - INCOME TAXES**





Income
      tax expense for the first quarter of 2006 was $10,000, representing current
      Alternative Minimum Tax. This is lower than income tax expense at the statutory
      rates, primarily due to the reduction in the valuation allowance for the net
      deferred tax asset. Primarily as a result of the 2005 restructuring, the Company
      had operating losses and other deductible temporary differences that resulted
      in
      a net deferred tax asset of $6.8 million at December 31, 2005. Because of the
      recent history of operating losses, and the uncertainty of projecting future
      taxable income sufficient to recognize these deferred tax assets, a valuation
      allowance for the full amount of the net deferred tax asset was recorded. As
      a
      result of the income generated in the first quarter of 2006, approximately
      $300,000 of the valuation allowance was reduced in this period, reducing income
      tax expense by that amount, and resulting in a net deferred tax asset of
      approximately $6.4 million at April 2, 2006. Due to the recent history of
      operating losses and uncertainties surrounding the projection of future taxable
      income sufficient to recognize these deferred tax assets, a valuation allowance
      for the full amount of the net deferred tax asset has been recorded.




19


**Item2.** **Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations**





***Overview***





Theragenics
      Corporation ® is a
      medical device company serving the cancer treatment and surgical markets,
      operating in two business segments. In its brachytherapy seed business, the
      Company produces, markets and sells TheraSeed ® ,
      its
      premier palladium-103 prostate cancer treatment device; I-Seed, its iodine-125
      based prostate cancer treatment device; and other related products and services. Theragenics
      is the world’s largest producer of palladium-103, the radioactive isotope that
      supplies the therapeutic radiation for its TheraSeed ® device.
      Physicians, hospitals and other healthcare providers, primarily located in
      the
      United States, utilize the TheraSeed ® device.
      The majority of sales are channeled through one third-party distributor. The
      Company also sells its TheraSeed ® devices
      directly to physicians. The Company’s surgical products business consists of
      wound
      closure products and other surgical products and supplies at CP Medical
      Corporation (“CP Medical”). CP
      Medical produces sutures, cardiac pacing cables, brachytherapy needles and
      other
      surgical supplies. These products have applications in urology, veterinary,
      cardiology, orthopedics, plastic surgery, dental, and other fields.




The
      Company acquired CP Medical Corporation (“CP Medical”) on May 6, 2005, for
      approximately $26.7 million, including $20.6 million in cash and 1,840,458
      shares of common stock valued at approximately $6.1 million. The Company’s
      consolidated results of operations for the first quarter of 2006 include the
      results of CP Medical.





***2005
      Restructuring***





The
      Company implemented a restructuring of the brachytherapy segment in August
      2005
      that resulted in the closure of the Plasma Separation Process (“PSP”) facility
      in Oak Ridge, Tennessee, ended
      the
      research and development activities related to the vascular, macular
      degeneration and breast cancer areas, and eliminated production of radiochemical
      products. Significant restructuring charges were recorded in the third quarter
      of 2005, and curtailing these activities allowed the Company to shrink its
      asset
      base by shutting down six cyclotrons, closing the Newton Terrace facility in
      Buford, Georgia, and closing the PSP facility. The objective of the
      restructuring was to sharpen the Company’s focus on its two main business
      segments, brachytherapy seeds and surgical products, as well as provide a more
      focused platform for continued diversification and expansion through
      acquisitions or other channels.





Restructuring
      activities continued during the first quarter of 2006, and the Company incurred
      restructuring costs of $306,000 during this period. These restructuring costs
      were primarily a result of the ongoing site exit and disposal costs associated
      with the shutting down of the Oak Ridge facility. These shut down activities
      are
      expected to be completed in the second quarter of 2006, and the Company expects
      to incur less than $150,000 in additional restructuring costs in the second
      quarter of 2006 as the shut down is completed. This will complete all shut
      down
      activities related to the 2005 restructuring. The Company is actively marketing
      its interest in its Oak Ridge real estate. Assets held for sale of $3.4 million
      are included in the accompanying consolidated balance sheet at April 2,
      2006.





During
      the first quarter of 2006 the restructuring generated pre-tax operating expense
      savings of approximately $1.9 million, including cash-based savings of $1.3
      million. For the full year of 2006, the restructuring is expected to generate
      pre-tax operating expense savings of approximately $6.5 million to $7.0 million,
      including pre-tax cash savings of approximately $4.0 million to $4.4 million.





The
      Company recognized gains on the sale of assets of $201,000 in the first quarter
      of 2006. The significant portion of these gains was in the brachytherapy
      business, and represented the sale of equipment idled by the restructuring.
      The
      Company was not able to sell its leasehold interest in the PSP equipment due
      to
      its highly specialized use, its sensitive security classification, and its
      export control regulations. As a result, the PSP equipment was returned to
      the
      Department of Energy during the first quarter of 2006.




20




***Results
      of Operations***





Consolidated
      revenue for the first quarter of 2006 was $12.4 million, compared to $9.5
      million in the first quarter of 2005, an increase of $2.9 million, or 30.5%.
      This increase was due to the inclusion of CP Medical in 2006, which had sales
      of
      $3.4 million. Sales in the brachytherapy seed segment were $9.0 million in
      the
      first quarter of 2006, a decrease of $530,000, or 5.6%, from 2005, primarily
      a
      result of the loss of one of the Company’s two non-exclusive distributors. The
      average selling price of the TheraSeed® device during the first quarter of 2006
      was comparable to the first quarter of 2005.





Currently,
      the Company has a non-exclusive distribution agreement in place with C. R.
      Bard
      (“Bard”) for the distribution of the TheraSeed ® device,
      which is effective through December 31, 2007 (the “Bard Agreement”). The
      terms
      of the Bard Agreement provide for automatic one year extensions of the term,
      unless either party gives notice of its intent not to renew at least twelve
      months prior to the end of the current term. The current term expires on
      December 31, 2007, and will be automatically extended for one additional year
      unless either party gives notice of its intent not to extend by December 31,
      2006. The
      Company also had a non exclusive distribution agreement in place with
      Medi-Physics, Inc., formerly d/b/a Nycomed Amersham and now part of Oncura,
      a
      company formed by a merger of the brachytherapy business of Amersham plc and
      Galil Medical Ltd. (the “Oncura Agreement”). In December 2004, Oncura notified
      the Company that it would not be renewing its distribution agreement effective
      December 31, 2005 and subsequently, the Oncura Agreement was terminated
      effective September 8, 2005. The Company’s direct sales force has aggressively
      marketed TheraSeed ® to
      customers of Oncura in an effort to retain the business.





In
      addition to the impact of the termination of the Oncura Agreement, management
      believes that the brachytherapy industry continues to be affected by competition
      from alternative therapies, changes and uncertainties regarding Medicare
      reimbursement, declining prices for iodine-125 and palladium-103 seeds,
      competitors’ selling tactics and the effects of consolidation in the industry.
      At any point in time, Theragenics and/or its non-exclusive distributor may
      change their respective pricing policies for the TheraSeed ® or
      I-Seed (in the case of Theragenics) device 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 average
      selling prices and could have a favorable effect or prevent an unfavorable
      effect on market share and volumes. Conversely, the Company and its
      non-exclusive distributor 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.





Consolidated
      cost of sales was $6.1 million in the first quarter of 2006, resulting in a
      gross profit margin of 51.1%. Cost of sales in the brachytherapy segment was
      $4.0 million in the first quarter of 2006, resulting in a gross profit margin
      of
      55.3% in that segment, compared to cost of sales of $4.8 million and a gross
      profit margin of 49.7% in the first quarter of 2005. Gross profit margin in
      the
      brachytherapy segment increased during the 2006 period primarily due to the
      $1.5
      million of manufacturing related cost savings realized from the 2005
      restructuring, and a reduction of expected future liabilities related to
      decommissioning costs associated with the cyclotrons and related facilities.
      These reductions in cost of sales were partially offset by fixed palladium-103
      production costs utilized to support research and development and the clinical
      trials underway in the 2005 period. In 2006, these fixed palladium-103
      production costs remained in cost of sales, decreasing gross margin. The gross
      profit percentage in the brachytherapy segment was also impacted by the lower
      revenue in the 2006 period.





Selling,
      general and administrative (“SG&A”) expense was $5.5 million during the
      first quarter of 2006, compared to $4.5 million during the first quarter of
      2005, an increase of $1.0 million or 22.2%. The increase for the first quarter
      of 2006 was attributable to $1.0 million of SG&A for CP Medical. SG&A
      expenses for the brachytherapy seed segment were flat compared to the first
      quarter of 2005 at $4.5 million. An increase in professional fees was offset
      by
      a decrease in advertising.




21





Research
      and development (“R&D”) expenses decreased to $239,000 in the first quarter
      of 2006, from $1.4 million in the first quarter of 2005. The
      Company was previously conducting clinical trials related to the use of
      palladium-103 for the prevention of restenosis (the “TheraP trial”), and to
      treat exudative (wet) age related macular degeneration (the “TheraSight trial”).
      The decrease in R&D expense during 2006 was primarily attributable to the
      completion of the TheraP trial during the second quarter of 2005 and curtailment
      of the TheraSight trial. In connection with the 2005 restructuring, all
      activities related to the TheraP trial have been discontinued, and activities
      related to the TheraSight trial have been curtailed. Looking forward, the only
      activity expected for these programs is the follow up of all patients previously
      treated in the TheraSight trial, in accordance with the FDA-approved protocol
      for this trial. The Company expects to reach the study endpoint by late 2006.
      R&D at CP Medical was approximately $88,000 in the first quarter of 2006,
      consisting primarily of new product development activities. R&D activities
      at CP Medical are dependent on opportunities for product development and process
      improvements, as well as pursuit of other appropriate opportunities as they
      arise. Accordingly, R&D expenses at CP Medical may fluctuate significantly
      from period to period.




Interest
      income was $415,000 in the first quarter of 2006, compared to $383,000 in the
      first quarter of 2005. The impact of higher interest rates and better investment
      returns in 2006 was partially offset by having less invested funds due to the
      acquisition of CP Medical in May 2005. The Company’s investments consist
      primarily of short-term cash investments and high-credit quality corporate
      and
      municipal obligations, in accordance with the Company’s investment policies.
      Funds available for investment have and will continue to be utilized for the
      Company’s current and future expansion programs 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
      interest income to fluctuate accordingly.





Income
      tax expense for the first quarter of 2006 was $10,000, representing current
      Alternative Minimum Tax. This is lower than income tax expense at the statutory
      rates, primarily due to the utilization of net operating loss carryforwards
      that
      were not recognized in previous periods. Mainly as a result of the 2005
      restructuring, the Company had operating loss carryforwards and other future
      deductible temporary differences that resulted in a net deferred tax asset
      of
      $6.8 million at December 31, 2005. Because of the recent history of operating
      losses, and the uncertainty of projecting future taxable income sufficient
      to
      recognize these deferred tax assets, a valuation allowance for the full amount
      of the net deferred tax asset was recorded. Approximately $300,000 of the
      valuation allowance was reduced in the first quarter of 2006, reducing income
      tax expense by that amount and reflecting the utilization of a portion of the
      net operating loss carryforwards. While the Company was profitable in the first
      quarter of 2006, management believes that the Company must first establish
      a
      track record of profitability before recognizing tax benefits associated with
      future taxable income. Accordingly, a valuation allowance for the full amount
      of
      the $6.4 million in net deferred tax assets at April 2, 2006 has been recorded.
      If the Company is successful in establishing a basis for justifying that an
      allowance is not necessary, and in generating future taxable income, these
      benefits will be recognized in future periods.





The
      Company’s effective income tax rate for the first quarter of 2005 was a benefit
      of 40.5%.




22




***Critical
      Accounting Policies***





The
      financial statements of Theragenics Corporation are prepared in conformity
      with
      accounting principles generally accepted in the United States of America.
      Management is required to make certain estimates, judgments and assumptions
      that
      we believe are reasonable based upon the information available. These estimates
      and assumptions affect the reported amounts of assets and liabilities at the
      dates of the financial statements and the reported amounts of revenues and
      expenses during the periods presented. The significant accounting policies
      which
      we believe are the most critical to aid in fully understanding and evaluating
      our reported financial results include the following:





*Property,
      plant and equipment.* Property,
      plant and equipment are recorded at cost and 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. As
      of
      April 2, 2006, the Company owned and operated eight cyclotrons, the first of
      which entered service in 1998. Each of the Company’s cyclotrons is depreciated
      using an estimated 10-year life. Management’s estimate of the useful life of
      these cyclotrons is based on the Company’s experience to date with these
      cyclotrons. Based on experience gained relative to the operation, refurbishment,
      and maintenance of the cyclotrons, Management believes there is a substantive
      basis for the current depreciable lives of the cyclotrons.





Management
      will continue to periodically examine estimates used for depreciation for
      reasonableness. 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 lives of the identified
      assets.





Management
      assesses the impairment of its depreciable assets whenever events or
      circumstances indicate that such assets might be impaired. In the event the
      expected undiscounted future cash flow attributable to the asset is less than
      the carrying value of the asset, an impairment loss equal to the excess of
      the
      asset’s carrying value over its fair value is recorded. The estimation of fair
      value, whether in conjunction with an asset to be held and used or with an
      asset
      held for sale, also involves judgment. It is possible that Management’s
      estimates concerning the realizability of the Company’s depreciable assets could
      change in the future.





*Goodwill.* The
      Company has $15.8 million of goodwill associated with its acquisition of CP
      Medical Corporation in May 2005, and $2.6 million of goodwill associated with
      the acquisition of its iodine-125 production line in 2003.





The
      Company accounts for goodwill and other intangible assets in accordance with
      the
      provisions of Statement of Financial Accounting Standards No. 142, *Goodwill
      and Other Intangible Assets* (“SFAS
      142”). Under SFAS 142, goodwill and intangible assets with indefinite lives are
      not amortized to expense and must be reviewed for impairment annually or more
      frequently if events or changes in circumstances indicate that such assets
      might
      be impaired. The first step of the impairment test, used to identify potential
      impairment, compares the fair value of a reporting unit with its carrying
      amount, including goodwill and intangible assets with indefinite lives. If
      fair
      value exceeds book value, goodwill is considered not impaired, and the second
      step of the impairment test is unnecessary. If book value exceeds market value,
      the second step of the impairment test is preformed to measure the amount of
      impairment loss, if any. For this step the implied fair value of the goodwill
      is
      compared with the book value of the goodwill. If the carrying amount of the
      goodwill exceeds the implied fair value of the goodwill, an impairment loss
      would be recognized in an amount equal to that excess. Any loss recognized
      cannot exceed the carrying amount of goodwill. After an impairment loss is
      recognized, the adjusted carrying amount of goodwill is its new accounting
      basis. Subsequent reversal of a previously recognized impairment loss is
      prohibited once the measurement of that loss is completed. The Company performs
      an annual goodwill impairment assessment during the fourth quarter. The most
      recent assessment was performed in the fourth quarter of 2005 and the Company
      determined that goodwill was not impaired.




23




Intangible
      assets with definite lives are being amortized and this amortization is included
      in the accompanying consolidated statements of operations.





*Allowance
      for doubtful accounts and returns.* Management judgments and estimates are made and used in connection with
      establishing an allowance for the possibility that portions of our accounts
      receivable balances may become uncollectable or subject to return. Accounts
      receivable are reduced by this allowance. Specifically, Management analyzes
      accounts receivable in relation to current economic trends, changes in our
      customer payment history, and changes in sales returns history in establishing
      this allowance. The accounts receivable balance, net of the provision for trade
      accounts receivables allowance of $415,000, was approximately $7.6 million
      as of
      April 2, 2006.





*Share-based
      compensation.* In
      February 2006 the Company granted performance restricted stock rights under
      which the number of shares issuable upon vesting will vary based on certain
      performance criteria over the vesting period. Each quarter the Company will
      determine the expected number of shares issuable upon vesting, based on the
      performance metrics as compared to the criteria to date. To the extent that
      the
      performance metrics vary significantly from period to period, the Company may
      record additional compensation expense or adjust previously recorded
      compensation expense to reflect current estimates.





*Valuation
      allowance for deferred tax assets.* A
      full
      valuation reserve related to the $6.4 million net deferred tax asset has been
      provided as of April 2, 2006. In the future, if sufficient evidence of the
      Company’s ability to generate adequate future taxable income becomes apparent,
      the valuation allowance may be required to be reduced. This would result in
      income tax benefits being recognized in the consolidated statement of
      operations. Management evaluates the realizability of the deferred tax assets
      and assesses the need for the valuation allowance each reporting
      period.




***Liquidity
      and Capital Resources***





The
      Company had cash, short-term investments and marketable securities of $46.7
      million at April 2, 2006, compared to $45.6 million at December 31, 2005.
      Marketable securities consist primarily of short-term cash investments and
      high-credit quality corporate and municipal obligations, in accordance with
      the
      Company’s investment policies. The aggregate increase in cash, short-term
      investments and marketable securities was primarily the result of cash generated
      from operations.





Working
      capital was $62.0 million at April 2, 2006, compared to $60.3 million at
      December 31, 2005. The Company also has a Credit Agreement with a financial
      institution that provides for revolving borrowings of up to $40.0 million,
      including a $5.0 million sub-limit for letters of credit, through a credit
      facility which expires on October 29, 2006. No borrowings were outstanding
      under
      the Credit Agreement as of April 2, 2006. Letters of credit totaling $1.1
      million were outstanding under the Credit Agreement as of April 2,
      2006. The
      Credit Agreement is unsecured, but provides for a “springing lien” to be
      established on substantially all of the assets of the Company (subject to
      certain exceptions) in the event certain events of default occur under the
      Credit Agreement. The Credit Agreement, as amended, contains representations
      and
      warranties, as well as affirmative, reporting and negative covenants, customary
      for financings of this type. Among other things, certain provisions of the
      Credit Agreement limit the incurrence of additional debt and require the
      maintenance of certain financial ratios and tests.




24





Cash
      provided by operations was $1.1 million and $165,000 during the first quarter
      of
      2006 and 2005, respectively. Cash provided by operations consists of net
      earnings/(loss) plus non-cash expenses such as depreciation, amortization,
      and
      changes in balance sheet items such as accounts receivable, inventories, prepaid
      expenses and payables. Inventories increased $234,000 during the first quarter
      of 2006 as a result of increased sales volume in the surgical products segment.
      Trade accounts payable, accrued salaries, wages and payroll taxes, and other
      current liabilities decreased an aggregate of $279,000 during the first quarter
      of 2006 primarily as a result of the timing of the payments.





Capital
      expenditures totaled $122,000 and $130,000 during the first quarter of 2006
      and
      2005, respectively.





Cash
      provided by financing activities was $23,000 and $67,000 in the first quarter
      of
      2006 and 2005, respectively, consisting of cash proceeds from the exercise
      of
      stock options and the Company’s Employee Stock Purchase Plan.





Cash
      could be used in 2006 for increased marketing and TheraSeed ® support
      activities, support for growth in the surgical products segment, and in the
      pursuit of additional diversification efforts such as the purchase of
      technologies, products or companies.





The
      Company believes that current cash and investment balances and cash from future
      operations and credit facilities will be sufficient to meet its current
      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***





On
      December 8, 2003, the President signed the Medicare Prescription Drug,
      Improvement and Modernization Act of 2003 (“MMA”) into law that provides for
      improved reimbursement and coding policies in 2004 and beyond for brachytherapy
      seeds/sources under Medicare’s hospital outpatient prospective payment system
      (“OPPS”).





The
      brachytherapy provisions in the MMA, which went into effect on January 1, 2004,
      require Medicare to unbundle the cost of the brachytherapy seeds/sources from
      the costs of the brachytherapy procedure, catheters and needles under the OPPS.
      More specifically, the MMA requires Medicare to reimburse hospitals for each
      brachytherapy seed/source furnished between January 1, 2004 to December 31,
      2006
      based on the hospital’s costs for each patient (calculated from the hospital’s
      charges adjusted by the hospital’s specific cost-to-charge ratio). This means
      that hospital reimbursement is no longer limited to or dictated by the bundled
      reimbursement amounts assigned to the brachytherapy codes that the Centers
      for
      Medicare and Medicaid Services (“CMS”) used in 2003.





The
      MMA
      also directed the U.S. Government Accountability Office (“GAO”) to conduct a
      study examining future payment policies for brachytherapy seeds. The GAO study
      is still pending.





There
      were no changes enacted in Medicare reimbursement policy for brachytherapy
      seeds/sources for 2006, although some reductions were implemented for hospital
      payments for outpatient procedures required to implant brachytherapy
      seeds.    Additionally, CMS may implement changes to the reimbursement
      level for brachytherapy seeds/sources beginning January 1, 2007. CMS may change
      reimbursement levels regardless of any recommendations that may be included
      in
      the GAO study referenced above. Any new reimbursement policies may have an
      adverse effect on utilization of the Company's brachytherapy
      products.




25





The
      Company believes its efforts in assisting policymakers in formulating and
      revising Medicare policies to recognize the unique aspects of classification
      and
      reimbursement that apply to brachytherapy devices such as TheraSeed â were
      pivotal to the enactment of the improved 2003 Medicare legislation for
      brachytherapy seeds/sources. The Company plans to continue working to assist
      policymakers regarding these important issues in the future.





Due
      to
      the fact that the Medicare rules governing coding of brachytherapy seeds/sources
      and the procedures required to implant seeds have undergone significant change
      during the past few years, and are likely to continue to undergo additional
      changes, the Company believes that Medicare reimbursement may continue to create
      confusion for hospitals and doctors going forward. In that regard, Management
      continues to closely monitor any effects of the reimbursement structure on
      the
      brachytherapy market as it continues to evaluate pricing, marketing and
      distribution strategies. The Company continues to engage consulting firms
      specializing in reimbursement practices to help communicate brachytherapy
      reimbursement guidelines to customers. Medicare’s OPPS reimbursement levels for
      the procedures performed during prostate brachytherapy could influence the
      utilization of brachytherapy seeds, including the Company’s brachytherapy
      products.





***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, the Company’s
      direct sales organization, including, but not limited to, its growth and
      effectiveness, third-party reimbursement, CMS policy, sales mix, effectiveness
      and continuation of non-exclusive distribution agreements, pricing for the
      TheraSeed ® and
      I-Seed devices, future cost of sales, R&D efforts and expenses, inventory
      investment, SG&A expenses, other income, potential new products and
      opportunities, the development of new markets and technologies, execution of
      restructuring plans, estimated impairment and other restructuring expenses,
      expected operating expense savings and associated cash expenditures and savings,
      Theragenics’ plans and strategies for diversification, 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 new product
      development cycles, effectiveness and execution of marketing and sales programs
      of Theragenics and its non-exclusive distributor, competitive conditions and
      selling tactics of the Company’s competitors, potential changes in third-party
      reimbursement, changes in assumptions used in estimating restructuring charges
      and operating expense savings, unforeseen costs and cash expenditures associated
      with the restructuring plan, and the risks identified in Item 1A of the
      Company’s most recent Form 10-K Annual Report. 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.





26




**Item3.** **Quantitative
      and Qualitative Disclosures About Market Risk**





The
      Company's market risk exposure related to market risk sensitive financial
      instruments is not material. Letters of credit totaling approximately $1.1
      million were outstanding under the terms of the Credit Agreement as of April
      2,
      2006. No borrowings were outstanding under the Credit Agreement as of April
      2,
      2006





**Item4.**  **Controls
      and Procedures**





Under
      the
      supervision and with the participation of the Company's management, including
      its Chief Executive Officer and Chief Financial Officer, the Company conducted
      an evaluation of the effectiveness of the design and operation of its disclosure
      controls and procedures, as such term is defined under Rule 13a-15(e)
      promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”). Based on this evaluation, the Chief Executive Officer and Chief Financial
      Officer concluded that the Company's disclosure controls and procedures were
      effective as of April 2, 2006, the end of the period covered by this
      report.





The
      Company acquired CP Medical Corporation (“CP Medical”) on May 6, 2005. Since the
      date of acquisition, the Company has been focusing on analyzing, evaluating,
      and
      implementing changes in CP Medical's procedures and controls to determine their
      effectiveness and to make them consistent with our disclosure controls and
      procedures. Prior to our acquisition of CP Medical, CP Medical was not required
      to prepare financial statements in accordance with accounting principles
      generally accepted in the United States of America. In addition, CP Medical
      was
      not previously required to maintain disclosure controls and procedures or
      maintain, document and assess internal control over financial reporting, in
      each
      case as required under the rules and regulation of the Securities and Exchange
      Commission. As noted in Management's Report on Internal Control over Financial
      Reporting in the Company’s Form 10-K for the year ended December 31, 2005 and as
      permitted by guidance issued by the staff of the U.S. Securities and Exchange
      Commission, CP Medical was excluded from the scope of management’s assessment
      over the effectiveness of internal control over financial reporting as of
      December 31, 2005. We have similarly excluded CP Medical from the scope of
      our
      quarterly discussion of material changes in internal control over financial
      reporting below. CP Medical constituted 27.3% of consolidated revenue for the
      three months ended April 2, 2006 and 24.3% of consolidated assets as of April
      2,
      2006.





During
      the course of integrating the operations of CP Medical in 2005, we identified
      material weaknesses in internal control specifically related to inventory
      accounting at CP Medical, as reported in our Form 10-K for the year ended
      December 31, 2005. We performed additional procedures to ensure that CP Medical
      inventory was properly stated in accordance with generally accepted accounting
      principles at April 2, 2006. We continue to take steps to address the material
      weaknesses in internal control previously identified over inventory at CP
      Medical, including developing and implementing formally documented system and
      control procedures. We expect to continue to analyze, document, implement and
      test internal controls at CP Medical during 2006 and will make additional
      changes in those controls as appropriate.




No
      changes in the Company's internal control over financial reporting were
      identified as having occurred during the fiscal quarter ended April 2, 2006
      that
      have materially affected, or are reasonably likely to materially affect, the
      Company's internal control over financial reporting, except as described above
      with respect to CP Medical.




27




**PARTII.
      OTHER INFORMATION**





**Item1.** **Legal
      Proceedings**





See
      Note
      E to the Company’s financial statements included in Part I, Item 1 of this
      report, which is hereby incorporated by reference.





**Item1A.** **Risk
      Factors**





In
      addition to the other information set forth in this report, the factors
      discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K
      for the year ended December 31, 2005, which could materially affect our
      business, financial condition or future results, should be carefully considered.
      The risks described in our Annual Report on Form 10-K are not the only risks
      facing our Company. Additional risks and uncertainties not currently known
      to us
      or that we currently deem to be immaterial also may materially adversely affect
      our business, financial condition and/or operating results.





**Item6.** **Exhibits**
  Exhibit
                  No.
              Title10.1
              Form
                  of Amendment to Performance Restricted Stock Rights Agreement
                  (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed
                  January 5, 2006).10.2
              Form
                  of Performance Restricted Stock Rights Agreement (incorporated
                  by
                  reference to Exhibit 10.1 of the Company’s Form 8-K filed February 22,
                  2006).31.1
              Certification
                  of Chief Executive Officer pursuant to Rule 13a-14(a) and Section
                  302 of
                  the Sarbanes-Oxley Act of 2002.31.2
              Certification
                  of Chief Financial Officer pursuant to Rule 13a-14(a) and Section
                  302 of
                  the Sarbanes-Oxley Act of 2002.32.1
              Certification
                  of Chief Executive Officer pursuant to Section 1350, Chapter 63
                  of Title
                  18, United States Code, as adopted to Section 906 of the Sarbanes-Oxley
                  Act of 2002.32.2
              Certification
                  of Chief Financial Officer pursuant to Section 1350, Chapter 63
                  of Title
                  18, United States Code, as adopted to Section 906 of the Sarbanes-Oxley
                  Act of 2002.
   28
 SIGNATURES




Pursuant
      to the requirements 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
              CORPORATIONDate: May
              5,
              2006
            By:
            /s/ M.
              Christine JacobsM. Christine Jacobs
              Chief
                  Executive Officer


Date: May
              5,
              2006
            By:
            /s/ Francis
              J. TaralloFrancis J. Tarallo
              Chief Financial Officer




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