Theragenics Corp (TGX) SEC Filing 10-K Annual report for the fiscal year ending Saturday, December 31, 2005

EX-99.1
2
a5058346ex99_1.txt
EXHIBIT 99.1 - PRESS RELEASE

                                                                    Exhibit 99.1

 Theragenics Corporation(R) Reports Fourth Quarter and Year-End 2005
                    Consolidated Financial Results

    BUFORD, Ga.--(BUSINESS WIRE)--Jan. 18, 2006--Theragenics
Corporation(R) (NYSE:TGX), a medical device company serving the
prostate cancer treatment and surgical markets, today announced
consolidated financial results for the fourth quarter and year ended
December 31, 2005. Consolidated revenue for the quarter was $11.4
million, an increase of $2.9 million, or 34.3% over the fourth quarter
of 2004. For the 12-month period, consolidated revenue was $44.3
million, an increase of $10.9 million or 32.8%, compared to the prior
year. Net loss for the quarter was $236,000, or $0.01 per share,
compared to a net loss of $1.3 million, or $0.04 per share in the
fourth quarter of 2004. For the year, the net loss was $29.0 million,
or $0.93 per share, compared to a net loss of $4.3 million, or $0.14
per share in 2004. Revenue improvements during the year included
increases in sales of both TheraSeed(R) and I-Seed brachytherapy
products and the inclusion of revenue from CP Medical's products.
Theragenics acquired CP Medical on May 6, 2005.
    The quarter and year ended December 31, 2005 include pre-tax
restructuring charges of $475,000 for the quarter and $33.4 million
for the year, respectively. $32.0 million of the restructuring charges
for the year were one-time non-cash charges. On a non-GAAP basis, the
pre-tax earnings, excluding these restructuring charges, would have
been $239,000 for the fourth quarter of 2005. A reconciliation of the
pre-tax loss computed in accordance with GAAP to the non-GAAP pre-tax
earnings (loss) excluding restructuring charges appears in a schedule
accompanying this press release.
    Commenting on the results, Chief Executive Officer and President
M. Christine Jacobs stated, "2005 was a year of transformation for
Theragenics. We made some tough decisions that appear to be paying
off. We restructured the Company in an effort to right size our cost
structure and fully utilize our resources to support growth in our two
business segments. In May, we acquired CP Medical. This acquisition
has had a positive impact on our results of operations. We continue to
be pleased with the sales performance in our core prostate
brachytherapy seed business. The success of our 2005
direct-to-consumer brachytherapy campaign has encouraged us to
continue these efforts in 2006, with a new twist. We have entered into
an association with ESPN and the B.A.S.S. Tour and recently produced a
commercial that will be aired in conjunction with several 2006
B.A.S.S. Tour fishing events. In our surgical device segment, our
efforts will continue to be focused on product and customer
development, sales growth and vertical integration. As a stronger,
leaner and more focused company, we are also better able to pursue
investment opportunities to provide additional strategic
diversification and continued growth. All this culminates in what we
believe will be a turnaround year for the Company. We expect to
continue our diversification strategy, grow our businesses and look
forward to returning to profitability in 2006."
    Theragenics will host a conference call today at 11:00 a.m.
Eastern Time. To access the call, dial 800-538-9844 or 706-634-7274
and provide the conference ID code 4190223. This call is also being
broadcast live over the Internet, and a recording will be available
for one month on the Company's Web site. To access the webcast, log on
to www.theragenics.com and select the Investor Relations button
followed by selecting the Overview button. You also can access a phone
replay of the call until Midnight, January 25, by dialing 800-642-1687
or 706-645-9291 and providing the conference ID code: 4190223.
    Theragenics Corporation(R) (NYSE:TGX) is a provider of
brachytherapy and surgical products. In Buford, Ga., the Company
manufactures and markets its premiere product, the palladium-103
TheraSeed(R) device (www.theraseed.com), and I-Seed, an iodine-125
based device, which are used primarily in the minimally invasive
treatment of localized prostate cancer. Theragenics is the world's
largest producer of palladium-103 for human use. Through its
subsidiary, CP Medical (www.cpmedical.com), based in Portland, Ore.,
the Company manufactures and distributes wound closure and other
medical devices with applications in, among others, the veterinary,
brachytherapy, orthopedics, dental, plastic surgery, and cardiology
markets. For additional information, call the Company's Investor
Relations Department at (800) 998-8479 or visit www.theragenics.com.
    This press release contains non-GAAP financial measures used by
management in its analysis of the Company's operating performance.
Management believes presentation of financial measures excluding the
impact of certain identified items provides supplemental information
that is helpful to an understanding of the operating results of the
Company's businesses and period-to-period comparisons of performance.
Non-GAAP financial measures should be considered in addition to, but
not as a substitute for, the Company's reported GAAP results.
    This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, the
accuracy of which is necessarily subject to risks and uncertainties,
including, without limitation, statements regarding optimism for the
results of Theragenics' restructuring, Theragenics' and CP Medical's
sales growth, statements regarding the contribution of CP Medical to
Theragenics' sales, new sales and marketing initiatives, new product
development, Theragenics' relationship with its distributors,
institution of activities and plans that could benefit Theragenics'
goals in its diversification efforts and anticipated positive results
in general, including a return to profitability in 2006. Actual
results may differ materially due to a variety of factors, including,
among other things, risks and uncertainties related to new product and
process development cycles, integration risks, potential costs and
delays in production optimization, effectiveness and execution of
marketing and sales programs by Theragenics and its distributor,
changes in product pricing by Theragenics or other brachytherapy seed
producers, changes in costs of materials used in production processes
(especially as it relates to isotope production), continued acceptance
of the products by the market, continued demand for palladium-103,
introduction and/or availability of competitive products by others,
third-party (including CMS) reimbursement, physician training,
third-party distribution agreements, ability to execute on acquisition
opportunities on favorable terms and successfully integrate any
acquisitions, and other factors set forth from time-to-time in the
Company's Securities and Exchange Commission filings.
    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.


THERAGENICS CORPORATION(R) AND SUBSIDIARY CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands except per share data)

                                  Three Months Ended    Year Ended
                                  12/31/05 12/31/04 12/31/05 12/31/04
                                  ------------------------------------
Total revenues                     $11,357   $8,456  $44,270  $33,338
Cost of sales                        5,891    3,975   23,763   14,122
                                  ------------------------------------
     Gross profit                    5,466    4,481   20,507   19,216
Operating expenses:
     Selling, general &
      administrative                 5,324    4,616   20,152   17,619
      Research & development           258    2,248    3,632    9,583
     Restructuring expenses            475        -   33,390        -
                                  ------------------------------------
                                     6,057    6,864   57,174   27,202
                                  ------------------------------------
     Operating loss                   (591)  (2,383) (36,667)  (7,986)
Other income, net                      355      349    1,267    1,134
                                  ------------------------------------
    Loss before income tax            (236)  (2,034) (35,400)  (6,852)
                                  ------------------------------------
Income tax benefit                       -     (745)  (6,394)  (2,542)
                                  ------------------------------------
Net loss                             $(236) $(1,289)$(29,006) $(4,310)
                                  ====================================
Net loss per common share, Basic    $(0.01)  $(0.04)  $(0.93)  $(0.14)
                                  ====================================
Net loss per common share, Diluted  $(0.01)  $(0.04)  $(0.93)  $(0.14)
                                  ====================================
Weighted average
     Shares outstanding - Basic     32,027   29,983   31,273   29,971
     Shares outstanding - Diluted   32,027   29,983   31,273   29,971


                                  Three Months Ended    Year Ended
KEY RATIOS                        12/31/05 12/31/04 12/31/05 12/31/04
                                  ------------------------------------
Gross Margin                          48.1%    53.0%    46.3%    57.6%
Operating Margin                     (5.2)%  (28.2)%  (82.8)%  (24.0)%
Operating Margin before
   restructuring charges             (1.0)%  (28.2)%   (7.4)%  (24.0)%
Loss Before Tax Margin               (2.1)%  (24.1)%  (80.0)%  (20.6)%
Margin on earnings (loss) before
 tax and restructuring charges         2.1%  (24.1)%   (4.5)%  (20.6)%
Loss After Tax Margin                (2.1)%  (15.2)%  (65.5)%  (12.9)%
ROE                                 ( 0.8)%  ( 3.7)% ( 22.9)%  ( 3.1)%


THERAGENICS CORPORATION(R) AND SUBSIDIARY CONDENSED CONSOLIDATED
BALANCE SHEETS
(Unaudited)

(In thousands)

Assets                                       December 31, December 31,
                                                2005        2004
                                             -------------------------
     Cash, short-term investments
          & marketable securities                 $45,608     $62,261
     Trade accounts receivable                      7,622       5,787
     Assets held for sale                           3,433           -
     Inventories and other current assets           7,762       7,627
                                             -------------------------
               Total current assets                64,425      75,675
     Property, plant & equipment, net              32,766      70,215
     Goodwill                                      18,370       2,578
     Other intangible assets                        6,388          86
     Other long-term assets                           115         124
                                             -------------------------
          Total assets                           $122,064    $148,678
                                             =========================

Liabilities & Shareholders' Equity
     Accounts payable & accrued expenses           $4,281      $3,086
     Deferred income taxes                              -       6,920
     Other liabilities                              2,100         612
                                             -------------------------
               Total liabilities                    6,381      10,618
     Shareholders' equity                         115,683     138,060
                                             -------------------------
               Total liabilities &
                shareholders' equity             $122,064    $148,678
                                             =========================


THERAGENICS CORPORATION(R) AND SUBSIDIARY - RECONCILIATION OF U.S.
GAAP NET LOSS TO EARNINGS (LOSS) BEFORE INCOME TAXES AND RESTRUCTURING
CHARGES

(In thousands)
                                Three Months Ended Twelve Months Ended
                                 12/31/05 12/31/04  12/31/05 12/31/04
                                 -------------------------------------
Net loss, U.S. GAAP                 $(236) $(1,289) $(29,006) $(4,310)
Add (deduct):
     Income tax benefit                 -     (745)   (6,394)  (2,542)
     Restructuring charges
        One time impairment,
         write off, contract
         termination and
         severance costs              191        -    33,033        -
        Site exit and disposal
         costs                        284        -       357        -
                                 -------------------------------------
Total restructuring charges           475        -    33,390        -
                                 -------------------------------------
Earnings (loss) before income
 taxes
     and restructuring charges       $239  $(2,034)  $(2,010) $(6,852)
                                 =====================================

    CONTACT: Theragenics Corporation, Buford
             Frank Tarallo or Lisa Rassel, 800-998-8479
             or 770-271-0233
             www.theragenics.com