Theragenics reports consolidated revenue of $20.3 million for first quarter 2011

Theragenics CorporationMay 5 2011

Theragenics Corporation^® (NYSE: TGX), a medical device company serving the surgical products and prostate cancer treatment markets, today announced consolidated financial results for the first quarter ended March 31, 2011.

Highlights

• Consolidated revenue of $20.3 million in the first quarter of 2011 was flat compared to first quarter of 2010.
  • Surgical products segment revenue of $14.4 million in the first quarter of 2011 reflected a 1% decline from first quarter of 2010.
  • Brachytherapy segment revenue of $6.0 million in the first quarter of 2011 reflected a 1% increase from first quarter of 2010.
• Net earnings for the first quarter of 2011 were $0.01 per share, compared to net earnings of $0.00 per share in first quarter of 2010.
  • EPS excluding special items was $0.02 in the first quarter of 2011 and $0.01 in the first quarter of 2010. Table V describes the special items.
• Sales to Core Oncology represented 11% of product sales in our brachytherapy business in the first quarter of 2011, despite the previously announced termination of our brachytherapy supply contract with Core.
  • Subsequent to our termination of the contract, we have sold to Core only on a prepaid basis as they continue to attempt to obtain refinancing.
• We completed the quarter with cash and cash equivalents of $39.3 million and outstanding borrowings under our credit agreement of $26.2 million for a net positive position of $13.2 million.
• In April 2011 we signed a distribution agreement with Oncura, a unit of GE Healthcare. Theragenics will be a non-exclusive North American distributor of OncoSeed™, widely considered to be the industry standard in I-125 brachytherapy products.

Segment Results

Surgical Products Segment

Revenue in our surgical products segment was $14.4 million in the first quarter of 2011, a decline of 1% compared to the first quarter of 2010. We incurred an operating loss of $191,000 in our surgical products segment for the first quarter of 2011, compared to an operating loss of $390,000 in the first quarter of 2010. First quarter of 2011 included expenses related to an unsolicited acquisition proposal of $183,000 allocated to the segment, and charges for accounts receivable due from Core Oncology totaling $37,000. First quarter of 2010 included pre-tax expenses totaling $351,000 associated with our legal action against the former owner of CP Medical settled in the fourth quarter of 2010.

"We believe the 1% decline in year-over-year revenue in our surgical products segment is reflective of the volatile ordering patterns of our larger customers in this segment but fundamental demand remains strong," stated M. Christine Jacobs, Chairman and CEO.

Brachytherapy Seed Segment

Revenue in our brachytherapy segment was $6.0 million in the first quarter of 2011 compared to $5.9 million in 2010. Operating income was $1.1 million in the first quarter of 2011 and the first quarter of 2010. First quarter of 2011 included expenses of $76,000 allocated to the segment related to the unsolicited acquisition proposal and charges for accounts receivable due from Core Oncology totaling $215,000.

"This represents the third consecutive quarter of year-over-year revenue growth in our brachytherapy business," said Ms. Jacobs. "We are pleased that we have maintained significant unit volume with Core, even after transitioning to selling on a prepaid basis. Our distribution agreement signed with Oncura in April is important on a number of levels. First and foremost because it pairs up the two leading and most recognized brands in brachytherapy treatment and reinforces what the future of brachytherapy will look like."

Ms. Jacobs continued, "During the first quarter, we received an unsolicited acquisition proposal that grossly undervalued our business. This was a source of distraction for our management team. We look forward to redoubling our efforts of focusing on revenue growth and increasing profitability in our surgical products business, and increasing market share and sustaining cash flows in our brachytherapy business."