## UNITED STATES

## SECURITIES AND EXCHANGE COMMISSION

## WASHINGTON, D.C. 20549

## FORM 10-Q

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
         SECURITIES EXCHANGE ACT OF 1934
           For the quarterly period ended March 31, 2001

OR

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

COMMISSION FILE NO. 0-15443

# THERAGENICS CORPORATION

(Exact name of registrant as specified in its charter)

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

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

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

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

As of May 8, 2001 the number of shares of common stock, $.01 par value, outstanding was 29,605,973.

---

### THERAGENICS CORPORATION

### TABLE OF CONTENTS

| | PART I.  FINANCIAL INFORMATION:                                             |         
| | --------------------------------------------------------------------------- | --------
|
| | ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)                                   | Page No.
|
| | Balance Sheets - December 31, 2000 and March 31, 2001                       | 3       
|
| | Statements of Earnings for the three months ended March 31, 2000 and 2001   | 5       
|
| | Statements of Cash Flows for the three months ended March 31, 2000 and 2001 | 6       
|
| | Statement of Shareholder' Equity for the three months ended March 31, 2001  | 7       
|
| | Notes to Financial Statements                                               | 8       
|
| | ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION        | 10      
| | AND RESULTS OF OPERATIONS                                                   |         
|
| | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK          | 14      
|
| | PART II.  OTHER INFORMATION                                                 |         
|
| | ITEM 1. LEGAL PROCEEDINGS                                                   | 14      
|
| | ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                   | 14      
|
| | SIGNATURES                                                                  | 15      

---

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

ASSETS

| |                                                | December 31, | March 31,   
| | ---------------------------------------------- | ------------ | ------------
| |                                                | 2000         | 2001        
| | width="60%">CURRENT ASSETS                    
| | Cash and short-term investments                | $     29,722 | $      9,391
| | Marketable Securities                          | 15,459       | 35,929      
| | Trade Accounts Receivable, less allowance     
| | of $21 in 2000 and $198 in 2001                | 6,976        | 9,728       
| | Inventories                                    | 1,324        | 1,140       
| | Deferred income tax asset                      | 355          | 485         
| | Prepaid expenses and other current assets      | 1,004        | 1,104       
| | TOTAL CURRENT ASSETS                           | 54,840       | 57,777      
| |                                               
| | PROPERTY AND EQUIPMENT                        
| | Buildings and improvements                     | 26,156       | 26,171      
| | Machinery and equipment                        | 45,552       | 45,538      
| | Office furniture and equipment                 | 618          | 615         
| |                                                | 72,326       | 72,324      
| | Less accumulated depreciation and amortization | (15,972)     | (17,226)    
| |                                                | 56,354       | 55,098      
| |                                               
| | Land                                           | 832          | 832         
| | Construction in progress                       | 18,446       | 20,152      
| | TOTAL PROPERTY AND EQUIPMENT                   | 75,632       | 76,082      
| | OTHER ASSETS                                   | 228          | 229         
| | TOTAL ASSETS                                   | $   130,700  | $   134,088 

The accompanying notes are an integral part of these statements.

---

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

LIABILITIES & SHAREHOLDERS' EQUITY

| |                                            | December 31,  | March 31,    
| | ------------------------------------------ | ------------- | -------------
| |                                            | 2000          | 2001         
| | CURRENT LIABILITIES                       
| | Accounts payable                          
| | Trade                                      | $         977 | $         709
| | Construction                               | 356           | -            
| | Accrued salaries, wages and payroll taxes  | 488           | 501          
| | Income taxes payable                       | 2,866         | 2,249        
| | Other current liabilities                  | 301           | 323          
| | TOTAL CURRENT LIABILITIES                  | 4,988         | 3,782        
| |                                           
| | LONG-TERM LIABILITIES                     
| | Deferred income taxes                      | 5,475         | 5,655        
| | Other liabilities                          | 74            | 74           
| | TOTAL LONG-TERM LIABILITIES                | 5,549         | 5,729        
| |                                           
| | CONTINGENCIES                              | -             | -            
| |                                           
| | SHAREHOLDERS' EQUITY                      
| | Common stock, $.01 par value, 100,000     
| | shares authorized; 29,579 and 29,585      
| | issued and outstanding                     | 296           | 296          
| | Additional paid-in capital                 | 60,005        | 60,064       
| | Retained earnings                          | 59,862        | 64,217       
| | TOTAL SHAREHODLERS' EQUITY                 | 120,163       | 124,577      
| |                                           
| | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $  130,700    | $  134,088   

The accompanying notes are an integral part of these statements.

---

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

| |                                   | Three Months    |              
| | --------------------------------- | --------------- | -------------
| |                                   | Ended March 31, |              
| |                                   | 2000            | 2001         
| | REVENUE                          
| | Product sales                     | $    11,254     | $    13,524  
| | Licensing Fees                    | 25              | 43           
| |                                   | 11,279          | 13,567       
| |                                  
| | COST OF SALES                     | 3,302           | 3,903        
| |                                  
| | GROSS PROFIT                      | $      7,977    | $      9,664 
| |                                  
| | OPERATING EXPENSES               
| | Selling, general & administrative | 1,821           | 2,586        
| | Research & development            | 348             | 822          
| |                                   | 2,169           | 3,408        
| | EARNINGS FROM OPERATIONS          | 5,808           | 6,256        
| |                                  
| | OTHER INCOME (EXPENSE)           
| | Interest income                   | 455             | 568          
| | Interest and financing costs      | (37)            | (59)         
| | Other                             | ( 4)            | (35)         
| |                                   | 414             | 474          
| |                                  
| | EARNINGS BEFORE INCOME TAXES      | 6,222           | 6,730        
| | Income tax expense                | 2,228           | 2,375        
| | NET EARNINGS                      | $      3,994    | $      4,355 
| |                                  
| | NET EARNINGS PER COMMON SHARE    
| | Basic                             | $        0.14   | $        0.15
| | Diluted                           | $        0.13   | $        0.15
| |                                  
| | WEIGHTED AVERAGE SHARES          
| | Basic                             | 29,521          | 29,583       
| | Diluted                           | 30,267          | 29,879       

The accompanying notes are an integral part of these statements.

---

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

| |                                                      | Three Months    |             
| | ---------------------------------------------------- | --------------- | ------------
| |                                                      | Ended March 31, |             
| |                                                      | 2000            | 2001        
| | CASH FLOWS FROM OPERATING ACTIVITIES                
| | Net Earnings                                         | $      3,994    | $      4,355
| | Adjustments to reconcile net earnings to            
| | net cash provided by operating activities           
| | Deferred income taxes                                | 407             | 50          
| | Depreciation & amortization                          | 1,193           | 1,435       
| | Provision for allowances                             | (272)           | 251         
| | Stock based compensation                             | 47              | 31          
| | Income tax benefit from options                      | 21              | 2           
| | Loss on disposal of equipment                        | -               | 52          
| | Deferred rent                                        | (1)             | -           
| |                                                     
| | Changes in assets and liabilities:                  
| | Accounts Receivable                                  | (3,793)         | (2,929)     
| | Inventories                                          | 121             | 110         
| | Prepaid expenses and other current assets            | (72)            | (100)       
| | Other assets                                         | 4               | (12)        
| | Trade accounts payable                               | 377             | (268)       
| | Accrued salaries, wages and payroll taxes            | 148             | 13          
| | Income taxes payable                                 | 1,362           | (617)       
| | Other current liabilities                            | (65)            | 22          
| | Net cash provided by operating activities            | 3,471           | 2,395       
| |                                                     
| | CASH FLOWS FROM INVESTING ACTIVITIES                
| | Purchases and construction of property and equipment | (2,626)         | (2,282)     
| | Purchases and maturities of marketable securities    | (4,839)         | (20,470)    
| | Other                                                | 16              | -           
| | Net cash used by investing activities                | (7,449)         | (22,752)    
| |                                                     
| | CASH FLOWS FROM FINANCING ACTIVITIES                
| | Exercise of stock options and stock purchase plan    | 44              | 26          
| | Net cash provided by financing activities            | 44              | 26          
| |                                                     
| | NET DECREASE IN CASH AND                            
| | SHORT-TERM INVESTMENTS                               | (3,934)         | (20,331)    
| |                                                     
| | CASH AND SHORT-TERM INVESTMENTS AT                  
| | BEGINNING OF PERIOD                                  | 18,765          | 29,722      
| |                                                     
| | CASH AND SHORT-TERM INVESTMENTS AT                  
| | END OF PERIOD                                        | $    14,831     | $      9,391

---

### THERAGENICS CORPORATION
                                                STATEMENT OF SHAREHOLDERS' EQUITY
                                         FOR THE THREE MONTHS ENDED MARCH 31, 2001
                                                   (UNAUDITED)
                              (Amounts in thousands, except per share data)

| |                              | Common Stock | Additional |           |           |           
| | ---------------------------- | ------------ | ---------- | --------- | --------- | ----------
| |                              | Number of    | Par value  | paid-in   | Retained  |           
| |                              | shares       | $0.01      | capital   | earnings  | Total     
| | BALANCE, December 31, 2000   | 29,579       | $    296   | $  60,005 | $  59,862 | $  120,163
| | Exercise of stock options    | 1            | -          | 4         |           | 4         
| | Employee stock purchase plan | 5            | -          | 22        |           | 22        
| | Stock-based compensation     |              |            | 31        |           | 31        
| | Tax effect from options      |              |            | 2         |           | 2         
| | Net earnings for the period  |              |            |           | 4,355     | 4,355     
| | BALANCE, March 31, 2001      | 29,585       | $    296   | $60,064   | $  64,217 | $  124,577

The accompanying notes are an integral part of these statements.

---

### THERAGENICS
CORPORATION

NOTES TO FINANCIAL STATEMENTSMARCH 31, 2001

(Unaudited)

## NOTE A 
BASIS OF PRESENTATION

The interim financial
statements included herein have been prepared by the Company without audit.
These statements reflect all adjustments which are, in the opinion of
management, necessary to present fairly the financial position, results of
operations, cash flows and changes in stockholders equity for the periods
presented. All such adjustments are of a normal recurring nature. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. The Company believes that the financial statements and
disclosures are adequate to make the information not misleading. It is suggested
that these financial statements and notes be read in conjunction with the
audited financial statements and notes for the year ended December 31, 2000,
included in the Form 10-K filed by the Company.

## NOTE B 
DISTRIBUTION AGREEMENTS AND MAJOR CUSTOMERS

The Company sells its
TheraSeed® product directly to health care providers and to third party
distributors. Currently, the Company has non-exclusive distribution agreements
in place with four companies. Sales to three of the four non-exclusive
distributors individually represented 19%, 16%, and 11% of product revenue,
respectively, for the quarter ended March 31, 2001. Accounts receivable from two
of the four non-exclusive distributors individually represented 18% and 17% of
accounts receivable, respectively, at March 31, 2001.

## NOTE C -
CONSTRUCTION IN PROGRESS AND PURCHASE COMMITMENTS

The U.S. Department of
Energy (DOE) has granted Theragenics access to unique DOE technology for use in
production of isotopes, including Pd-103. This technology venture represents
part of a DOE initiative to redirect Cold War assets to peacetime use and
cushion the economic impact of U.S. Defense Department cutbacks. The Company is
constructing a facility in Oak Ridge, Tennessee to house the equipment,
infrastructure and work force necessary to support the production of isotopes,
including Pd-103, using this DOE technology. The Company expects to invest
approximately $25 million to $30 million through 2001 to build this
manufacturing and R&D facility. Construction costs of approximately $19.7
million have been incurred on this project as of March 31, 2001, and are
included in construction in progress.

---

### THERAGENICS
CORPORATION

NOTES TO FINANCIAL STATEMENTSMARCH 31, 2001

(Unaudited)

## NOTE D - CONTINGENCIES

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

---

Item 2.  Management's Discussion and Analysis of Financial Condition and

                             Results of Operations

Results of Operations

Revenues
for the first quarter of 2001 were $13.6 million, compared to $11.3 million for
the first quarter of 2000, an increase of $2.3 million, or 20.4%. During the
first quarter of 2001, approximately 37% of unit sales were sold by Theragenics
directly to customers, rather than through third-party distributors. As a
result, the average selling price of TheraSeed® increased, accounting for the
20.4 % increase in revenue over the first quarter of 2000. Unit sales during the
first quarter of 2001 were flat compared to the same period in 2000.

The
Companys Sales and Marketing Agreement with Indigo Medical, Inc. (Indigo)
was terminated effective January 5, 2001. Currently, the Company has
non-exclusive distribution agreements with four companies for the distribution
of TheraSeed®. Several customers that had been purchasing from Indigo now
purchase directly from Theragenics, while many other former Indigo customers are
purchasing TheraSeed® from Theragenics non-exclusive distributors.
Management expects these non-exclusive distributors to continue to aggressively
market to the former Indigo customers, and expects the percentage of direct
sales of TheraSeed® units, and accordingly, its average revenue per
TheraSeed® unit, to decline. By the end of the first quarter of 2001, direct
sales had declined to 29% of total unit sales, and the Company expects that
direct sales to customers could eventually decline to 10% of unit sales.

Based
on the importance of third-party reimbursement to all providers of healthcare
products and services, Theragenics, like many others, closely monitors
reimbursement of healthcare costs. In recent years, Medicare and other
healthcare legislation and regulations have created reimbursement concerns for
the entire healthcare industry. The U.S. Congress and the Health Care Financing
Administration (HCFA) frequently consider reforms that provide for reductions in
Medicare spending and prospective payment reform on healthcare purchasing levels
and payment streams. Due to the significance of these actions on revenue
streams, management expects that it, along with its non-exclusive distributors,
will continue to monitor the activities of the U.S. Congress and HCFA as they
relate to Medicare and prospective payments.

Cost
of sales was $3.9 million during the first quarter of 2001, resulting in a gross
profit margin of 71.2%, compared with cost of sales of $3.3 million and a gross
profit margin of 70.7% during the first quarter of 2000. Fourteen cyclotrons
were in operation during the first quarter of 2001, compared to eleven
cyclotrons for the same period of 2000. Cost of sales increased due to the
increase in depreciation, operating and maintenance costs related to the three
additional cyclotrons in operation during the 2001 period. Other maintenance
expenses also increased during the 2001 period.

Selling,
general and administrative (SG&A) expenses were $2.6 million, or
19.1% of revenue, during the first quarter of 2001, compared to $1.8 million, or
15.9% of revenue, during the first quarter of 2000, an increase of $800,000 or
44.4%. The increase was primarily due to an increase in advertising, marketing,
customer service and cancer information expenses. These expenses were borne by
Indigo under the terms of the Indigo Agreement in the first quarter of 2000.
Additionally, bad debt expense increased, as the Company increased its allowance
for doubtful accounts in recognition of both the move to direct sales and the
lack of collection experience with the new non-exclusive distributors. Finally,
start up expenses associated with the Companys PSP Project (see
Liquidity and Capital Resources below) also increased.

---

The
Company continues to expect that marketing expenses will increase on a year over
year basis during 2001 as it supports its brand in an attempt to increase demand
for TheraSeed® implants. It is expected that this support will take the form of
TheraSeed® brand advertising to consumers and physicians, clinical studies
aimed at showing the superiority of TheraSeed® implants in the treatment of
prostate cancer, technical field support to TheraSeed® customers and other
customer service and patient information activities.

Research
and development (R&D) expenses increased to $822,000, or 6.0% of revenue, in
the first quarter of 2001, from $348,000, or 3.1% of revenue, in the first
quarter of 2000. The increase in R&D expenses was a result of the
Companys R&D initiatives, including restenosis studies carried out by
the Atlanta Cardiovascular Research Institute (see below), and development
efforts to improve the Companys proprietary production processes. The
Companys research and development initiatives are intended to expand the
application of Pd-103 and TheraSeed® to other oncological and non-oncological
uses, and explore options for using the Companys expertise and
capabilities in other areas. Management plans to continue to increase efforts in
research and development as its initiatives to diversify move forward and
expects R&D expenditures to increase to as much as 7.5% of revenue in 2001.
However, R&D spending is dependent on the complex scheduling of research and
development activities in progress as well as the pursuit of other appropriate
opportunities as they arise. Accordingly, R&D expenses may fluctuate
significantly from period to period.

As
part of its R&D initiatives, the Company has an agreement with the Atlanta
Cardiovascular Research Institute (ACRI) to conduct pre-clinical animal studies
addressing the use of Pd-103 for the prevention of restenosis. Restenosis is the
reclosing of arteries that often occurs after coronary angioplasties. It is
estimated that nearly one-third of the 650,000 coronary angioplasties performed
in the United States each year fail or restenose within the first few months of
the operation. In the first phase of the study, which began in April 2000, the
Company delivered catheter-based Pd-103 devices to ACRI to demonstrate the
effectiveness of Pd-103 in inhibiting restenosis-like changes in pig coronary
arteries after balloon angioplasty. The preliminary data from Phase I of the
study, reported in August 2000, showed that the inhibitory effects of Pd-103 are
similar to that of other emitters, both beta and gamma, with efficacy possibly
achieved with a lower dose. Based on the preliminary data, the Company is
continuing its pre-clinical animal studies, and expects longer-term data to be
available in 2001. The Company is planning to conduct clinical feasibility
trials in humans for coronary in-stent restenosis in 2001. The commencement and
completion of any human trials will be dependent upon receiving successful
results from the ongoing additional pre-clinical animal studies, as well as the
evaluation of potential competing forms of treatment.

Other
R&D efforts are also underway, including the use of Pd-103 in treating the
wet form of age-related macular degeneration. This disease is a degeneration of
eyesight that, in some cases, can lead to complete blindness. The Company
expects to begin animal studies for this application during 2001.

Other
income, comprised of interest income and non-operating expenses, was $474,000 in
the first quarter of 2001 compared to $414,000 during the same period in 2000.
The increase was attributable to additional funds being available for investment
during the 2001 period. Funds available for investment have and will continue to
be utilized for the Companys current and future expansion programs and
research and development activities. As funds continue to be used for these
programs and activities, management expects other income to decline accordingly.

The
Companys effective income tax rate was 35.3% and 35.8% for the first
quarter of 2001 and 2000, respectively. The Companys income tax rate in
each period is lower than the statutory rates primarily due to the recognition
of tax credits generated by the Companys investments in its expansion
projects and research activities, and tax-exempt interest income.

---

Liquidity and Capital Resources

The
Company had cash, short-term investments and marketable securities of $45.3
million at March 31, 2001, compared to $45.2 million at December 31, 2000.
Marketable securities consist primarily of high-credit quality municipal
obligations, in accordance with the Companys investment policies. Working
capital was $54.0 million at March 31, 2001, compared to $49.9 million at
December 31, 2000.

Cash
generated by operations was $2.4 million and $3.5 million during the first
quarter of 2001 and 2000, respectively. Cash generated from operations consists
of net earnings plus non-cash expenses such as depreciation, amortization and
deferred income tax expense. Depreciation and amortization increased to $1.4
million in the first quarter of 2001 from $1.2 million in the first quarter of
2000. The increase in depreciation and amortization was a result of the increase
in the number of cyclotrons that were operational during 2001. Additionally,
$2.9 million in cash was absorbed by an increase in accounts receivable during
the first quarter of 2001, as the Companys accounts receivable base
changed as a result of its direct to customer sales and non-exclusive
distribution agreements.

The
Companys primary use of cash in the first quarter of 2001 and 2000 related
to capital spending to increase manufacturing capacity. Capital expenditures
totaled $2.3 million and $2.6 million during the first quarter of 2001 and 2000,
respectively. The Company expects that the significant portion of capital
expenditures in 2001 will relate to its DOE Project (see below).

The
U.S. Department of Energy (DOE) has granted Theragenics access to unique DOE
technology, known as the Plasma Separation Process (PSP), for use in production
of isotopes, including Pd-103 (the PSP Project). This technology
venture represents part of a DOE initiative to redirect Cold War assets to
peacetime use and cushion the economic impact of U.S. Defense Department
cutbacks. The Company expects that the use of the PSP technology could
significantly increase its Pd-103 capacity and allow for expanded use of Pd-103
and TheraSeed® beyond treatment of prostate cancer to new medical
applications. The Company also believes that the PSP Project may allow it to
explore options for applying this technology to other uses, including the
production of isotopically engineered materials for use in medical and
non-medical applications, though there are no assurances that this will be
achieved. The Company is constructing a facility in the Oak Ridge, Tennessee
area to house the equipment, infrastructure and work force necessary to support
the production of isotopes, including Pd-103, using this DOE technology.
Construction costs of approximately $19.7 million have been incurred on the PSP
Project through March 31, 2001, and the Company expects to additionally invest
between $5.3 million and $10.3 million through 2001 to complete this
manufacturing and R&D facility.

The
PSP Project is expected to become operational in 2001, though no revenues are
expected to be generated from the PSP Project in 2001. Accordingly, the PSP
Project is expected to increase operating expenses by approximately $2.0 million
in 2001, with the significant portion of these expenses incurred in the second
half of the year. Additionally, costs to be incurred in the production of stable
isotopes are expected to require an investment in inventory of up to $5.0
million.

---

As
part of the PSP Project, the Company has leased land in the Oak Ridge, Tennessee
area and equipment previously used by the government to produce isotopes. As a
result of the sensitive nature of the equipment, the specialized technology
involved and the restrictions on access to unique DOE-operated facilities, the
Company has contracted with the DOEs primary contractor for the Oak Ridge
government installation to handle certain technical and operational services
that are critical to the project, including moving, reassembling and
recommissioning equipment currently in storage, designing and fabricating new
parts and modifications to the equipment and DOE facilities; and operating and
providing ongoing access to the DOE facilities. The success of the project is
dependent on the continued cooperation of the DOE and its primary contractor,
which could be adversely affected by future changes in governmental program
priorities and funding. If the equipment cannot be moved and recommissioned
successfully, if there are problems with the operation or modification of the
DOE-operated facilities, or if unforeseen challenges arise, the project may not
be successful or the costs or timeliness associated with the project could
exceed current estimates. Additionally, as a result of the sensitive nature of
the PSP equipment and the specialized technology involved, the DOE can terminate
the Companys access in the event of national emergency or in the interest
of national defense, or require the Company to perform work involving
programmatic use of the technology for the DOE in connection with carrying out
its governmental mission. The Company would be entitled to compensation in the
event of termination in connection with national emergency or defense or for
programmatic use of the technology for the DOE.

In
addition to using cash to fund the PSP Project in 2001, the Company expects that
R&D spending will continue to increase. Pre-clinical animal studies
addressing the use of Pd-103 for the prevention of restenosis are underway, and
the Company is working toward beginning human clinical feasibility trials in
2001. Other R&D activities are also occurring (see Results of
Operations, above). The Company expects that R&D expense spending may
total up to approximately 7.5% of revenue in 2001, but could vary depending on
the scheduling and progress of R&D activities as well as the pursuit of
currently unforeseen opportunities.

Cash
provided by financing activities was $26,000 and $44,000 in the first quarter of
2001 and 2000, respectively, consisting of cash proceeds from the exercise of
stock options and the Companys Employee Stock Purchase Plan.

The
Company believes that current cash and investment balances, cash from future
operations and credit facilities, will be sufficient to meet its currently
anticipated working capital and capital expenditure requirements. In the event
additional financing becomes necessary, management may choose to raise those
funds through other means of financing as appropriate.

## 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, sales mix,
effectiveness of non-exclusive distribution agreements, pricing for
TheraSeed®, future cost of sales, R&D efforts and expenses, inventory
investment, SG&A expenses, other income, timing and ultimate outcome of the
Companys activities in restenosis, macular degeneration and other
diversification efforts, potential new products and opportunities, the PSP
Project, and the sufficiency of the Companys liquidity and capital
resources. From time to time, the Company may also make other forward-looking
statements relating to such matters as well as anticipated financial
performance, business prospects, technological developments, research and
development activities and similar matters. These forward-looking statements are
subject to certain risks, uncertainties and other factors which could cause
actual results to differ materially from those anticipated, including risks
associated with research and development activities, including animal studies
and clinical trials related to new products, risks associated with new product
development cycles, effectiveness and execution of marketing and sales programs
of Theragenics and its non-exclusive distributors, potential costs and delays in
capacity expansion and start-up, (especially as it relates to the PSP Project),
the actual start-up for the PSP Project, potential changes in product pricing
and competitive conditions, continued acceptance of TheraSeed® by the market,
execution and effectiveness of competitors, management of growth, acceptance and
efficacy of Pd-103 for other applications, adverse changes in governmental
program priorities and budgetary funding by the relevant governmental
authorities, potential costs and delays in the startup and refinement of
technology and related equipment, potential equipment failure, potential
inability to obtain, construct or install necessary parts or modifications to
production equipment or facilities, government regulation of the therapeutic
radiological pharmaceutical and device business, and potential changes in
third-party reimbursement. All forward looking statements and cautionary
statements included in this document are made as of the date hereby based on
information available to the Company as of the date hereof, and the Company
assumes no obligation to update any forward looking statement or cautionary
statement.

---

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

The Companys market
risk exposure related to market risk sensitive financial instruments is not
material. As of March 31, 2001, there were no outstanding borrowings under the
Companys Unsecured Credit Agreement.

## PART II. OTHER INFORMATION

## Item 1. Legal
Proceedings.

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

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

(a)  Reports on Form 8-K.

No
reports on Form 8-K were filed during the quarter ended March 31, 2001.

---

#### SIGNATURES

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

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

Dated: May 15, 2001