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 September 30, 1998

                                       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. Employer
incorporation or organization)                Identification Number)


       5325 Oakbrook Parkway
          Norcross, Georgia                           30093
 (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  November  12,  1998 the number of shares of $.01 par value  common  stock
outstanding was 29,391,762.



                             THERAGENICS CORPORATION

                                TABLE OF CONTENTS



PART I.  FINANCIAL INFORMATION:

      ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)                       Page No.

         Condensed Balance Sheets
           December 31, 1997 and September 30, 1998 . . . . . . . . . . . .  3
         Condensed Statements of Earnings
           For the three and nine months ended September 30, 1997 and 1998 . 5

         Condensed Statements of Cash Flows
           For the three and nine months ended September 30, 1997 and 1998 . 6

         Condensed Statement of Changes in Stockholders' Equity
           For the nine months ended September 30, 1998 . . . . . . . . . .  7

         Notes to Condensed Financial Statements . . . . . . . . . . . . .   8

      ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                    CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . 10


PART II.  OTHER INFORMATION

      ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . 15


SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16


<PAGE>
            
                             THERAGENICS CORPORATION
                            CONDENSED BALANCE SHEETS
                    DECEMBER 31, 1997 AND SEPTEMBER 30, 1998
                                   (UNAUDITED)

<TABLE>
<CAPTION>

ASSETS
                                                            December 31,            September 30,
                                                                1997                     1998
<S>                                                      <C>                      <C>   
                                                         ------------------       ------------------
CURRENT ASSETS
 Cash and short-term investments                               $30,161,614              $21,685,191
 Marketable securities                                           8,391,807                6,714,375
 Trade accounts receivable                                       2,925,390                4,492,496
 Inventories                                                       433,873                  670,706
 Refundable income taxes                                                 -                  134,738
 Deferred income tax asset                                               -                   93,000
 Prepaid expenses and other current assets                         160,620                  454,783
                                                         ------------------       ------------------
    TOTAL CURRENT ASSETS                                        42,073,304               34,245,289

PROPERTY AND EQUIPMENT
 Buildings and improvements                                      3,333,728               16,818,703
 Leasehold improvements                                            138,978                  138,978
 Machinery and equipment                                        14,698,623               22,230,812
 Office furniture and equipment                                     66,464                  154,521
                                                         ------------------       ------------------
                                                                18,237,793               39,343,014
 Less accumulated depreciation and
  amortization                                                 (4,695,669)              (6,222,186)
                                                         ------------------       ------------------
                                                                13,542,124               33,120,828
 Land                                                              525,754                  525,754
 Construction in progress                                       14,917,788               15,462,430
                                                         ------------------       ------------------
    TOTAL PROPERTY AND EQUIPMENT                                28,985,666               49,109,012

OTHER ASSETS
 Patent costs                                                       71,836                   65,199
 Other                                                               9,503                    8,948
                                                         ------------------       ------------------
   TOTAL OTHER ASSETS                                               81,339                   74,147
                                                                                  ------------------
                                                         ------------------

       TOTAL ASSETS                                            $71,140,309              $83,428,448
                                                         ==================       ==================

</TABLE>



   The accompanying notes are an integral part of these statements.

                             THERAGENICS CORPORATION
                      CONDENSED BALANCE SHEETS - CONTINUED
                    DECEMBER 31, 1997 AND SEPTEMBER 30, 1998
                                   (UNAUDITED)

<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' EQUITY
                                                                December 31,            September 30,
                                                                    1997                     1998
<S>                                                          <C>                      <C>    
                                                             ------------------       ------------------
CURRENT LIABILITIES
 Trade accounts payable                                             $1,435,154                 $746,747
 Accrued salaries, wages and payroll taxes                             689,610                  675,850
 Income taxes payable                                                  845,364                        -
 Other current liabilities                                             137,097                  358,743
                                                             ------------------       ------------------
    TOTAL CURRENT LIABILITIES                                        3,107,225                1,781,340

LONG-TERM LIABILITIES
 Deferred income taxes                                               1,000,000                1,460,000

STOCKHOLDERS' EQUITY
 Common stock, $.01 par value, 100,000,000
  shares authorized; 29,075,682 and 29,386,212
  issued and outstanding                                               290,756                  293,862
 Additional paid-in capital                                         55,594,988               58,080,523
 Retained earnings                                                  11,147,340               21,812,723
                                                             ------------------       ------------------
   TOTAL STOCKHOLDERS' EQUITY                                       67,033,084               80,187,108
                                                             ------------------       ------------------

       TOTAL LIABILITIES AND
        STOCKHOLDERS' EQUITY                                       $71,140,309              $83,428,448
                                                             ==================       ==================
</TABLE>




 The accompanying notes are an integral part of these statements.

                             THERAGENICS CORPORATION
                        CONDENSED STATEMENTS OF EARNINGS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                 Three Months                                     Nine Months
                                                     Ended                                           Ended
                                                 September 30,                                   September 30,
                                         -----------------------------------------        -----------------------------------------
                                         ------------------      -----------------        -----------------      ------------------
                                              1997                    1998                     1997                   1998
<S>                                      <C>                     <C>                      <C>                    <C>    
                                         ------------------      -----------------        -----------------      ------------------
 REVENUE
  Product sales - affiliates                 $5,078,682            $11,095,101               $5,078,682             $28,008,490
  Product sales - non affiliates              1,913,825                  8,832               12,143,682                  40,250
  Licensing Fees                                 25,000                 25,000                   75,000                  75,000
                                         ------------------      -----------------        -----------------      ------------------
                                              7,017,507             11,128,933               17,297,364              28,123,740

 COSTS AND EXPENSES
  Cost of sales                               1,580,207              3,183,913                4,284,908               7,786,699
  Selling, general & administrative           1,179,545              1,644,022                3,755,651               4,288,510
  Research & development                         11,090                262,268                   45,567                 352,206
                                         ------------------      -----------------        -----------------      ------------------
                                              2,770,842              5,090,203                8,086,126              12,427,415

 OTHER INCOME (EXPENSE)
  Interest income                               502,970                273,882                  897,690               1,041,518
  Interest and financing costs                   (3,893)               (15,170)                 (18,515)                (38,823)
  Other                                             355                  1,303                 (35,726)                 (1,637)
                                         ------------------      -----------------        -----------------      ------------------
                                                499,432                260,015                  843,449               1,001,058

 Earnings before income taxes                 4,746,097              6,298,745               10,054,687              16,697,383

  Income tax expense                          1,803,517              2,267,347                3,820,781               6,032,000
                                         ------------------      -----------------        -----------------      ------------------

 NET EARNINGS                                $2,942,580             $4,031,398               $6,233,906             $10,665,383
                                         ==================      =================        =================      ==================


NET EARNINGS PER COMMON SHARE
(Note C)
  Basic                                           $0.10                  $0.14                    $0.23                   $0.37
  Diluted                                         $0.10                  $0.13                    $0.22                   $0.35

WEIGHTED AVERAGE SHARES
(Note C)
  Basic                                       28,898,412             29,364,178               27,009,698              29,213,500
  Diluted                                     30,060,028             30,159,160               28,093,824              30,363,843

</TABLE>



   The accompanying notes are an integral part of these statements.
<PAGE>

                             THERAGENICS CORPORATION
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                   Three Months Ended                     Nine Months Ended
                                                                    September 30,                           September 30,
                                                      ---------------------------------       ----------------------------------
                                                                                 
                                                      ---------------    --------------       --------------    ----------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                    <C>                 <C>                 <C>                 <C>        
 Net earnings                                          $2,942,580          $4,031,398          $6,233,906          $10,665,383
 Adjustments to reconcile net earnings to net cash
  provided by operating activities
   Deferred income taxes                                  465,000             260,000           1,360,000              367,000
   Depreciation and amortization                          398,058             702,022           1,167,557            1,533,154
   Stock based compensation                                     -              81,867                   -               81,867
   Changes in assets and liabilities:
    Accounts receivable                                (1,771,189)         (1,085,243)         (3,896,841)          (1,567,106)
    Inventories                                           (55,451)            (61,238)           (239,381)            (236,833)
    Prepaid expenses and other current assets             (73,424)            (48,998)           (135,232)            (294,163)
    Other assets                                                -                 151                   -                  555
    Trade accounts payable                               (478,131)            278,375             (35,611)            (688,407)
    Accrued salaries, wages and payroll taxes              72,844             228,407                (258)             (13,760)
    Income taxes                                           67,366           2,007,427             799,492            1,009,898
    Other current liabilities                               7,572              33,735             180,673              221,646
                                                       ---------------------------------     ------------------------------------
     Total adjustments                                 (1,367,355)          2,396,505            (799,601)             413,851
                                                       ---------------------------------     ------------------------------------

      Net cash provided by operating activities         1,575,225           6,427,903           5,434,305           11,079,234
                                                       ---------------------------------     ------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
 Purchases and construction of property and
  equipment                                            (3,043,095)         (5,320,141)         (7,506,296)         (21,649,863)
 Purchases of marketable securities                             -          (2,489,573)                  -           (2,489,573)
 Maturities of marketable securities                            -           3,917,005                   -            4,167,005
 Other                                                      2,212                   -               6,637                    -
                                                       ---------------------------------     ------------------------------------
      Net cash used by investing activities            (3,040,883)         (3,892,709)         (7,499,659)         (19,972,431)
                                                       ---------------------------------     ------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
 Net repayments on revolving line of credit                     -                   -          (3,458,436)                   -
 Proceeds from exercise of stock options and warrants     551,652             147,506             899,703              416,774
 Proceeds from issuance of common stock, net                    -                   -          37,017,298                    -
 Other                                                          -                   -              48,759                    -
                                                       ---------------------------------     ------------------------------------
       Net cash provided by financing activities          551,652             147,506          34,507,324              416,774
                                                       ---------------------------------     ------------------------------------

NET INCREASE (DECREASE) IN CASH AND
 SHORT-TERM INVESTMENTS                                  (914,006)          2,682,700          32,441,970           (8,476,423)

CASH AND SHORT-TERM INVESTMENTS AT
 BEGINNING OF PERIOD                                   36,342,099          19,002,491           2,986,123           30,161,614
                                                      ----------------------------------     -------------------------------------
CASH AND SHORT-TERM INVESTMENTS AT
 END OF PERIOD                                        $35,428,093         $21,685,191         $35,428,093          $21,685,191
                                                      ==================================     =====================================


</TABLE>


The accompanying notes are an integral part of these statements.
<PAGE>

                             THERAGENICS CORPORATION
                   CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
                                   (UNAUDITED)
<TABLE>
<CAPTION>


                                      Common Stock                              Additional
                                       Number of            Par value            paid-in          Retained
                                        shares                 $.01              capital          earnings            Total
                                   ----------------    ---------------      ---------------   ----------------   ----------------
<S>                                 <C>                <C>                  <C>               <C>                <C>        
BALANCE, December 31, 1997            14,537,841             $145,378          $55,740,366       $11,147,340        $67,033,084

Two-for-one stock split               14,537,841              145,378             (145,378)                                   -

Exercise of stock options 
and warrants                             310,530                3,106              413,668                              416,774

Compensatory stock options                81,867                                    81,867

Income tax benefit from 
exercise of stock options 
and early disposition of shares                                                  1,990,000                            1,990,000

Net earnings for the period                                                                      10,665,383          10,665,383
                                    ---------------    ----------------     ----------------   -----------------  -----------------

BALANCE, September 30, 1998           29,386,212             $293,862          $58,080,523      $21,812,723         $80,187,108
                                    ===============    ================     ================   =================  =================

</TABLE>


The accompanying notes are an integral part of these statements.



THERAGENICS CORPORATION

NOTES TO FINANCIAL STATEMENTS
-----------------------------
SEPTEMBER 30, 1998
------------------
(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 as
of September 30, 1998,  the results of  operations  and cash flows for the three
and  nine  months  ended  September  30,  1997  and  1998  and  the  changes  in
stockholders'  equity for the nine months ended  September  30,  1998.  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  disclosures are adequate to make the information
presented 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,  1997,  included  in the Form  10-K  filed by the
Company.


NOTE B - CONSTRUCTION IN PROGRESS

The $15.5 million of  construction  in progress at September 30, 1998  primarily
represents  progress  payments on Theragenics'  most recent  capacity  expansion
projects. The expansion projects, which are expected to cost approximately $60.0
million,  include a  manufacturing  facility and four cyclotrons for the Phase I
expansion  project  and  six  cyclotrons  with  supporting   facilities  and  an
administrative  facility for the Phase II expansion  project.  The manufacturing
facility and two cyclotrons,  representing  total costs of  approximately  $19.6
million, were placed in service in the third quarter of 1998.


NOTE C - STOCK SPLIT

On March 16, 1998,  the board of directors  approved a two-for-one  common stock
split,  effected in the form of a 100% stock dividend,  which was distributed on
April 15, 1998 to  shareholders of record on March 31, 1998. The stock split has
been  recognized  by  reclassifying  the  par  value  of the  additional  shares
resulting from the split from additional  paid-in  capital to common stock.  All
references  to shares  outstanding  and per share  amounts have been restated to
reflect the stock split.

On June 12,  1998,  the  shareholders  approved  an  increase  in the  number of
authorized common shares from 50,000,000 to 100,000,000.


NOTE D - NEW ACCOUNTING PRONOUNCEMENTS

The Financial  Accounting  Standards Board (FASB) issued  Statement of Financial
Accounting  Standards (SFAS) No. 133, Accounting for Derivative  Instruments and
Hedging  Activities,  in June 1998. SFAS 133 will be effective for the Company's
fiscal year beginning January 1, 2000. SFAS 133 requires that all derivatives be
carried  in the  balance  sheet at their  fair  value.  Changes in fair value of
derivatives  will  be  either  recorded  in  earnings   currently  or  in  other
comprehensive  income,  depending  upon  the  intended  use of  the  derivative.
Management does not currently expect the adoption of SFAS 133 to have a material
impact on the Company's results of operations or financial condition.


THERAGENICS CORPORATION

NOTES TO FINANCIAL STATEMENTS - CONTINUED
SEPTEMBER 30, 1998
(Unaudited)


In March 1998, the American  Institute of Certified Public  Accountants  (AICPA)
issued  Statement of Position (SOP) 98-1,  "Accounting for the Costs of Computer
Software  Developed or Obtained for Internal Use". SOP 98-1 provides guidance on
accounting for the costs of computer software developed or obtained for internal
use.  Also, in June 1998,  the AICPA issued SOP 98-5  "Reporting on the Costs of
Start-Up  Activities."  SOP 98-5  requires  costs  of  start-up  activities  and
organizational  costs, as defined, to be expensed as incurred.  These statements
are  effective  for  the  Company's  fiscal  year  beginning  January  1,  1999.
Management  does not expect  either of these SOP's to have a material  impact on
the Company's results of operations or financial condition.
<PAGE>




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

Results of Operations

Revenues

Revenues  for the quarter and nine months  ended  September  30, 1998  increased
$4,111,000,  or 58.6%, and $10,826,000,  or 62.6%,  respectively,  over revenues
from the comparable  periods of 1997.  These increases were  attributable to the
Company's ability to increase  production volume of Theraseed(R) with additional
cyclotron and assembly  capacity,  including  the addition of cyclotron  numbers
five and six during the third quarter of 1998.  Contributing  to the increase in
revenues was increased patient awareness of the Theraseed(R) procedure.


Costs and expenses

Cost of sales

Cost of sales for the quarter and nine months ended September 30, 1998 increased
$1,604,000, or 101.5% and $3,502,000, or 81.7%, respectively, over cost of sales
from  the  comparable  periods  of 1997.  These  increases  are a result  of the
increases in sales  volumes over the 1997  periods.  Cost of product  sales as a
percentage of revenue  increased  during the quarter ended September 30, 1998 to
28.6% from 22.5% during the third  quarter of 1997.  Cost of product  sales as a
percentage of revenue also increased  during the nine months ended September 30,
1998, to 27.7% from 24.8% during the  comparable  1997 period.  These  increases
were  attributable  to an  increase  in the  manufacturing  fixed  cost  base as
depreciation and other fixed expenses associated with additional  cyclotrons and
new  manufacturing  facilities  were incurred  during 1998. The Company has also
increased  the  number  of   manufacturing   employees  and  enhanced   employee
compensation  and  benefits  during 1998 in an effort to continue to attract and
retain  qualified  employees.  The  Company  will  continue  to  strive to offer
competitive  compensation  and benefits  programs in order to attract and retain
qualified  employees.  The Company also incurred moving,  training,  testing and
other  start-up  expenses  during  1998  associated  with its new  manufacturing
facilities, which were placed in service in the third quarter. Additionally, the
1998 periods included testing and start-up expenses related to cyclotron numbers
five and six,  both of which were placed in service  during the third quarter of
1998, and cyclotron  number seven,  for which final  acceptance was not given by
the Company until October 1998.


Selling, General and Administrative Expenses

Selling,  general and administrative  ("SG&A") expenses for the quarter and nine
months ended September 30, 1998 increased  $464,000,  or 39.3% and $533,000,  or
14.2%, respectively, over the comparable periods of 1997. However, SG&A expenses
as a percentage of revenue  decreased to 14.8% in the third quarter of 1998 from
16.8% in the  third  quarter  of 1997,  and to 15.2% for the nine  months  ended
September 30, 1998 from 21.7% for the comparable 1997 period

The  increases in SG&A  expenses for the 1998 periods over the 1997 periods were
primarily  attributable to increases in professional  fees and  compensation and
benefits.  The increase in professional  fees was primarily due to legal fees in
connection with the on-going protection of the Company's trade secrets and other
proprietary  information.  Compensation  and  benefits  increased as the Company
continued to add employees and build  infrastructure  to support its  increasing
operations.  Additionally, the third quarter of 1998 included non-recurring SG&A
expenses  of  approximately  $175,000  related  to the  initial  listing  of the
Company's  common  stock  on the New  York  Stock  Exchange.  This  listing  was
undertaken  in an effort to benefit the  Company's  shareholders  by  increasing
liquidity and decreasing volatility of the Company's common stock.

The  increases  in SG&A  expenses  described  above were  partially  offset by a
reduction in selling expenses as result of a sales and marketing  agreement with
Indigo Medical,  Inc.  (Indigo).  Under this agreement  Indigo,  a subsidiary of
Johnson & Johnson,  bears the cost of a  substantial  portion of the selling and
marketing  efforts related to  Theraseed(R).  The decrease in SG&A expenses as a
percentage  of revenue in the 1998  periods from the 1997 periods is primarily a
result of the decreases in these selling expenses. Selling and marketing related
expenses  are not expected to continue to decline  however,  since the sales and
marketing  agreement  with Indigo became  effective  during the third quarter of
1997.


Research and development

In the third quarter of 1998 research and development  (R&D) expenses  increased
to $262,000 from $11,000 in the third quarter of 1997. For the nine months ended
September  30,  1998,  R&D expenses  increased  to $352,000  from $46,000 in the
comparable 1997 period.  These increases were a result of development efforts to
improve  the  Company's  proprietary   production   processes.   Management  may
accelerate  efforts and investment in research and development from time to time
in the future when and if  appropriate  opportunities  arise.  As a result,  R&D
expenses may fluctuate significantly on a quarterly basis.


Other income

Other income  decreased by $239,000,  or 47.9%,  for the quarter ended September
30, 1998 from the quarter ended  September  30, 1997.  For the nine months ended
September 30, 1998, other income  increased  $158,000,  or 18.7%,  over the nine
months ended  September  30, 1997.  The increase in the 1998 year to date period
over 1997 is due to the interest  income  generated  from the  investment of the
proceeds of the Company's secondary stock offering, which was completed in April
1997.  These  funds have and will  continue  to be  utilized  for the  Company's
current and future  expansion  programs.  The  reduction in other income for the
third  quarter  of 1998  from  the  third  quarter  of 1997  resulted  from  the
application  of a portion of the proceeds of the secondary  offering to fund the
expansion  programs.  As  funds  continue  to be used  for  expansion  programs,
management  expects other income to return to levels  consistent with historical
amounts.


Income tax expense

The  effective  income tax rates were 36.0% and 36.1% for the  quarter  and nine
months ended September 30, 1998,  respectively.  The effective  income tax rates
for the  quarter and nine months  ended  September  30, 1997 were 38.0% for each
period.  The decrease in the effective  income tax rates during the 1998 periods
from the 1997  periods is due to tax exempt  interest  earned on  invested  cash
during 1998.


Liquidity and Capital Resources

The Company had cash and  short-term  investments  of $21.7 million at September
30,  1998,  compared to $30.2  million on December  31, 1997, a decrease of $8.5
million.  For the nine months ended  September  30, 1998,  operating  activities
generated $11.1 million in cash. This consisted of net earnings of $10.7 million
plus non-cash expenses (primarily  depreciation) of $2.0 million,  reduced by an
increase in receivables of $557,000,  an increase in inventories of $237,000, an
increase in prepaid expenses and other current assets of $294,000 and a decrease
in accounts payable and accrued expenses of $481,000.

During the nine months ended September 30, 1998,  investing  activities utilized
$20.0 million in cash. The Company  utilized $21.7 million in cash for purchases
and construction of property and equipment.  Progress  payments on the Company's
current capacity expansion projects  represented the most significant portion of
these  expenditures.  Phase I of the  project,  which  includes a  manufacturing
facility and four cyclotrons,  is expected to cost  approximately  $30.0 million
and be  completed  during  the first  quarter of 1999.  Spending  on Phase I was
approximately  $24.9 million through  September 30, 1998, of which $11.3 million
was spent during the nine months ended  September  30, 1998.  The  manufacturing
facility  and two of the  cyclotrons  were  placed in  service  during the third
quarter  of 1998.  This  brings the number of fully  operational  cyclotrons  in
service to six at the end of the third quarter of 1998.

The Company also has expansion  projects  underway  consisting of six additional
cyclotrons, supporting facilities and an administrative facility. The total cost
of these  projects  is  expected  to be  approximately  $30.0  million and to be
completed  in various  stages  through  1999.  Spending  on these  projects  was
approximately $10.2 million through September 30, 1998 of which $9.3 million was
spent during the nine months ended September 30, 1998.

Other  investing  activities  during the nine months  ended  September  30, 1998
included  $1.1  million in spending on other  capital  expenditures,  consisting
primarily of machinery and  equipment,  and net  maturities  of short-term  bond
investments, which provided $1.7 million in cash during the period.

Financing activities,  consisting of the exercise of stock options and warrants,
provided  $417,000 in cash during the nine months ended September 30, 1998. This
was a  significant  decrease  from  the  $34.5  million  in cash  provided  from
financing  activities  during the nine months ended September 30, 1997. The 1997
period included net proceeds from the issuance of common stock of $37.0 million,
proceeds  from the  exercise of stock  options and  warrants  of  $900,000,  the
repayment  of a $3.5  million  line of credit and  $50,000  provided  from other
activities.

Management  believes  that  the  Company's  current  cash  balances,   financing
arrangements and anticipated cash flows from operations are adequate to meet the
financing needs of the Company through 1998. In the event  additional  financing
becomes  necessary,  management  may choose to raise those funds  through  other
forms of financing as appropriate.


Impact of the Year 2000 Issue

Introduction

Many computer  systems used today were designed and developed  using two digits,
rather than four, to specify the year. Consequently,  such systems may recognize
a date of "00" as the year 1900  instead of the year 2000.  Other  problems  may
also be encountered,  such as the inability to recognize special codes that make
use of the date field.  These and other  problems may exist in primary  software
products and  embedded  systems  such as  microcontrollers.  This may cause many
computer systems to fail or create inaccurate results unless corrective measures
are taken.  Additionally,  a company may be affected by the computer  systems of
their  customers  and  vendors,  even though that  company's  internal  computer
systems may be Year 2000 (Y2K) compliant.


State of Readiness

The  Company  began to assess the status of its Y2K  readiness  during  1997 and
developed a plan intended to make its information  technology assets,  including
embedded  microcontrollers  ("IT assets"),  year 2000 ready. The plan covers the
following  phases:  (i)  inventory  of IT  assets,  (ii)  assessment  of  repair
requirements (iii) repair and testing, and (iv) creation of contingency plans in
the event of Y2K related failures. The inventory and assessment phases have been
completed for all critical IT assets.  Repairs and testing of critical IT assets
is currently  in process and is scheduled to be completed in the second  quarter
of 1999.

The Company's Y2K  compliance  also depends upon the  compliance of others.  The
Company  has  contacted  its  critical  suppliers  and  significant  customer to
evaluate  their Y2K programs and state of readiness,  and to evaluate  whether a
Y2K related disruption at these entities would have a material adverse effect on
the Company's  operations as the year 2000 approaches.  At the current date, the
Company has received responses from approximately 43% of the entities contacted,
none of which have indicated that a year 2000 related  business  interruption is
anticipated.  However, while the Company believes it is taking reasonable action
in this regard, Theragenics is not in a position to guarantee the performance of
others or predict  whether any  assurances  and  representations  received  from
others will ultimately prove to be accurate. Additionally, the Y2K compliance of
the Company's critical suppliers and significant  customer also depends upon the
Y2K  compliance  of their  critical  suppliers and  customers.  The Company also
relies on governmental agencies,  utility companies,  telecommunication  service
providers,  financial  institutions and other service  providers  outside of the
Company's  control.  There is no assurance  that any of these  entities will not
experience a year 2000 related failure and business interruption.  Such failures
could have a material  adverse  effect on the Company's  financial  position and
results of operations.


Costs to Address the Year 2000 Issue

The Company has incurred  costs of  approximately  $50,000 in addressing the Y2K
issue,  consisting primarily of replacing IT assets that were not Y2K compliant.
Remaining costs of Y2K remediation are not expected to be material.


Risks of the Company's Year 2000 Issues

The Company  has not  currently  identified  any  critical  IT assets  under its
control  that  present a material  risk of not being Y2K  compliant  in a timely
manner, or for which an acceptable alternative cannot be implemented. As testing
continues  however,  it is  possible  that IT assets  could be  identified  that
present a material  risk of a Y2K  interruption,  and that such an  interruption
could have a material  adverse  effect on the Company's  financial  position and
results of operations.

The Company  does not possess  the  ability to control its  critical  suppliers,
significant  customer or the health care providers that utilize its product. Y2K
related  disruptions  at these  entities could result in delays in the supply of
goods and services and capital equipment from the Company's  vendors,  delays in
receiving payments from the Company's  significant  customer,  and delays in the
ordering of product and scheduling of Theraseed(R) procedures by the health care
providers,  among other things.  Such potential  delays could be of a short-term
nature or could be more significant and longer-term. The failure of any of these
entities to properly  address  their year 2000  issues  could have a  materially
adverse  effect on the Company's  financial  position and results of operations.
Additionally,  the failure of the Company's  primary equipment vendor to deliver
cyclotrons in accordance  with the terms of the purchase  contracts could have a
materially  adverse  effect on the Company's  ability to increase its production
capacity.


Contingency Plans

Contingency  plans for critical IT assets are currently being  developed.  These
contingency plans are in the early stages of development and will be modified as
the risks of potential Y2K interruptions continue to be assessed.


Forward Looking Statements

This document contains certain forward looking information within the meaning of
the  Private  Securities  Litigation  Reform  Act  of  1995  including,  without
limitation,  statements regarding possible benefits associated with the alliance
with Indigo  Medical,  Inc.,  future costs of sales,  SG&A  expenses,  expansion
plans, possible electronic data processing problems related to the year 2000 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  the
management of growth, year 2000 issues, government regulation of the therapeutic
radiological  pharmaceutical  and device  business,  dependence  on health  care
professionals,   and   competition   from  other   brachytherapy   products  and
conventional and newly developed methods of treating localized cancer.

<PAGE>


PART II.  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

         (a)   Exhibit 27 - Financial Data Schedule

         (b) Reports on Form 8-K.

              No  reports  on Form 8-K  were  filed  during  the  quarter  ended
September 30, 1998.


<PAGE>


                                   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 CORPORATION



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

                               /s/ Bruce W. Smith
                               --------------------------
                               Bruce W. Smith
                               Treasurer and Chief Financial Officer