THERAGENICS CORPORATION
5325 OAKBROOK PARKWAY
NORCROSS, GEORGIA 30093
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
---------------------
You are cordially invited to attend the Annual Meeting of Stockholders of
Theragenics Corporation (the "Company") to be held at 10:00 A.M., Atlanta time,
on Friday, May 24, 1996, at the Gwinnett Civic & Cultural Center, 6400 Sugarloaf
Pkwy., Duluth, Georgia 30136 for the following purposes:
1. To elect two directors;
2. To consider and vote on a proposal to ratify the appointment of Grant
Thornton as independent public accountants;
3. To transact such other business as may properly come before such
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on March 29, 1996,
as the record date for the determination of the stockholders entitled to notice
of, and to vote at, the meeting.
Sincerely,
/s/ BRUCE W. SMITH
BRUCE W. SMITH,
Secretary
Norcross, Georgia
April 19, 1996
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING OF STOCKHOLDERS, YOU
ARE REQUESTED TO FILL IN AND SIGN THE ENCLOSED FORM OF PROXY AND MAIL IT IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IT
IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. IF YOU DO ATTEND THE MEETING AND
DECIDE THAT YOU WISH TO VOTE IN PERSON, YOU MAY WITHDRAW YOUR PROXY.
<PAGE>
THERAGENICS CORPORATION
5325 OAKBROOK PARKWAY
NORCROSS, GEORGIA 30093
---------------------
PROXY STATEMENT
---------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Theragenics Corporation (the "Company") to
be voted at the Annual Meeting of Stockholders of the Company to be held on
Friday, May 24, 1996, at the Gwinnett Civic & Cultural Center, 6400 Sugarloaf
Pkwy., Duluth, Georgia 30136, at 10:00 o'clock in the morning, Atlanta time, for
the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders.
The Board of Directors has fixed the close of business on March 29, 1996,
as the record date for the determination of stockholders entitled to receive
notice of, and to vote at, the forthcoming Annual Meeting of Stockholders or any
adjournment thereof. Any person giving a proxy in the form accompanying this
statement has the power to revoke it at any time prior to its exercise. A proxy
may be revoked by attending and voting at the meeting or by written notice to
the Secretary of the Company received at the Company's offices at 5325 Oakbrook
Parkway, Norcross, Georgia, 30093 prior to the date of the Annual Meeting. When
proxies are returned properly executed, the shares represented thereby will be
voted as directed in the executed proxy. If the Proxy is returned but no choice
is specified therein, it will be voted for the election of the nominees named
therein and for each of the listed proposals.
The expenses for soliciting proxies for the forthcoming Annual Meeting of
Stockholders are to be paid by the Company. Solicitation of proxies may be made
by means of personal calls upon, or telephonic or telegraphic communications
with, stockholders or their personal representatives by directors, officers and
employees of the Company, who will not be specially compensated for such
services. The Company may or may not engage a proxy service to assist the
Company in the solicitation of proxies. The Company did not use a proxy
solicitation service for the 1995 Annual Meeting of Stockholders. It is
anticipated that this Proxy Statement and enclosed Proxy will first be mailed to
stockholders entitled to notice of and to vote at the Annual Meeting on or about
April 19, 1996.
VOTING SECURITIES AND PRINCIPAL SECURITY HOLDERS
As of March 29, 1996, the Company had outstanding and entitled to vote at
the Annual Meeting 11,504,954 shares of Common Stock, par value $.01 per share
("Common Stock").
The holders of Common Stock are entitled to vote as a single class and to
one vote per share, exercisable in person or by proxy, at all meetings of
stockholders. Holders of Common Stock do not have any cumulative voting rights.
Abstentions and "broker non-votes" are counted for purposes of determining the
presence or absence of a quorum for the transaction of business but not counted
in determining the numbers of shares voted for or against any nominee for
director or any proposal. Directors shall be elected by a plurality of the votes
of the shares present in person or represented by proxy and casting votes for
the position on the Board which that nominee represents.
<PAGE>
The following table sets forth the ownership of the Company's Common Stock
as of March 29, 1996 by each person known to the Company to be the beneficial
owner of more than 5% of such Common Stock, by each executive officer and
director and by all executive officers and directors as a group:
<TABLE>
<CAPTION>
AMOUNT AND PERCENTAGE
NATURE OF OF
BENEFICIAL COMMON STOCK
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) OUTSTANDING(2)
------------------------------------------- ------------ ------------
<S> <C> <C>
Otis W. Brawley, M.D..................... 24,000(3) *
9715 Hill Street
Kensington, MD 20895
Orwin L. Carter, Ph.D.................... 49,000(4) *
1029 Third Avenue South
Stillwater, MN 55082
Dean W. Fitzgerald....................... 25,793 *
5325 Oakbrook Parkway
Norcross, GA 30093
John V. Herndon.......................... 45,834(5) *
617 Longview Drive
Waynesville, N.C. 28786
M. Christine Jacobs...................... 189,070(6) 1.6%
5325 Oakbrook Parkway
Norcross, GA 30093
Mr. Charles Klimkowski................... 129,900(7) 1.1%
208 South LaSalle Street
Chicago, IL 60604
Peter A.A. Saunders...................... 62,000(8) *
2 Regents Close
South Croydon, Surrey CR2 7BW
England
Bruce W. Smith........................... 124,500(9) 1.1%
5325 Oakbrook Parkway
Norcross, GA 30093
All Directors and Officers............... 650,097(10) 5.4%
as a Group (seven persons)
Non-Management Owning > 5%
------------------------------------
Bellingham Industries Inc................ 2,383,500 20.8%
Urraca Building
Frederico Boyd Avenue
Panama City, Panama
</TABLE>
- ---------------
* Less than 1%
(1) Each person named in the table has sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by him or
her.
(2) The percentage of shares of Common Stock is calculated assuming that the
beneficial owner has exercised any conversion rights, options or other
rights to subscribe held by such beneficial owner that are currently
exercisable or exercisable within 60 days and that no other conversion
rights, options or other rights to subscribe have been exercised by anyone
else.
(3) Includes 24,000 shares purchasable by Dr. Brawley within 60 days upon
exercise of options.
(4) Includes 48,000 shares purchasable by Dr. Carter within 60 days upon
exercise of options.
(5) Includes 13,334 shares purchasable by Mr. Herndon within 60 days upon
exercise of options.
(6) Includes 117,570 shares purchasable by Ms. Jacobs within 60 days upon
exercise of options.
(7) Includes 76,000 shares purchasable by Mr. Klimkowski within 60 days upon
exercise of options.
(8) Includes 62,000 shares purchasable by Mr. Saunders within 60 days upon
exercise of options.
(9) Includes 108,000 shares purchasable by Mr. Smith within 60 days upon
exercise of options.
(10) Includes 448,904 shares purchasable by all executive officers and directors
within 60 days upon exercise of options.
2
<PAGE>
PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three classes (Class
I, Class II and Class III) with two directors in each class. One class of
directors is elected each year for a three-year term. Two directors,
representing the Class I Directors, are to be elected at the Annual Meeting.
These Class I Directors will serve until the Annual Meeting of Stockholders in
1999 or until their successors shall have been elected and qualified. The
current Board of Directors has selected, and will cause to be nominated at the
meeting, Mr. John V. Herndon and Mr. Peter A.A. Saunders, who upon election will
comprise the Class I Directors of the Board of Directors.
Provided that a quorum of stockholders is present at the meeting in person
or by proxy, directors will be elected by a plurality of the votes cast at the
meeting. The persons named on the enclosed proxy card or their substitutes will
vote all of the shares that they represent for the above-named nominee unless
instructed otherwise on the proxy card. If at the time of the Annual Meeting of
Stockholders any nominee is unable or declines to serve, the discretionary
authority provided in the proxy will be exercised to vote for a substitute.
Management has no reason to believe that a substitute nominee will be required.
The directors and director nominees have supplied the Company with the
following information concerning their age, principal employment, other
directorships and positions with the Company:
<TABLE>
<CAPTION>
DIRECTOR/NOMINEE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ------------------------- -----------------------------------------------------
<S> <S>
CLASS I DIRECTOR NOMINEES
John V. Herndon Mr. Herndon joined the Company in April 1987, as
Director since 1987 Executive Vice President and in July 1989, was
Age: 55 appointed President, Chief Executive Officer and
Chairman of the Board of Directors of the Company. In
August 1993, Mr. Herndon relinquished his role as
Chief Executive Officer while retaining his position
as Chairman of the Board of Directors of the Company.
Mr. Herndon stepped down as Chairman of the Board in
December 1994, and currently serves as a Director as
well as serving the Company in the position of
Advisor-to-the-President.
Peter A.A. Saunders Mr. Saunders is manager/owner of PASS Consultants, a
Director since 1989 Great Britain based management consulting firm
Age: 54 established in 1988. From April 1991 to April 1993,
Mr. Saunders was also Managing Director of United
Artists Communications in London, a cable television
and telephone service provider. Mr. Saunders
presently serves as a non-executive director for
several other British companies including Mayday
Healthcare Trust (hospital), Allied Radio plc (radio
stations), and Eurobell (Sussex) Ltd. (cable TV and
telecommunications).
CLASS II DIRECTORS
Charles R. Klimkowski Since 1980, Mr. Klimkowski has been employed by The
Director since 1993 Chicago Corporation, most recently as a Senior Vice
Age: 60 President and Director, a Portfolio Manager and a
member of the Investment Policy Committee. Mr.
Klimkowski was elected to the post of Chairman of
Theragenics' Board of Directors in December 1994.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR/NOMINEE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ------------------------- -----------------------------------------------------
<S> <S>
Otis W. Brawley, M.D. Since 1990, Dr. Brawley has been Program Director of
Director since 1995 the Community Oncology and Rehabilitation Branch,
Age: 37 Early Detection and Community Oncology Program, a
Division of Cancer Prevention and Control of the
National Cancer Institute. Dr. Brawley has also been
a Commissioned Officer of the U.S. Public Health
Service since 1989 and Tenured with the Research
Officer Group since February 1994. Dr. Brawley's
professional activities have included; National
Cancer Institute (NCI) Coordinator and Project
Officer of the Prostate Cancer Prevention Trial, NCI
Coordinator of the Minority Based Community Clinical
Oncology Program, and coauthor and associate
investigator in several protocols approved by the
National Institutes of Health Clinical Center
Investigational Review Committee. Dr. Brawley has
received such distinguished honors as the Public
Health Service Commendation in 1993 and the National
Cancer Institute and the Equal Employment Opportunity
Officer's Commendation in 1991 and 1993. Additionally
he has coauthored more than 21 publications. Dr.
Brawley also reviews for several prestigious
publications.
CLASS III DIRECTOR
Orwin L. Carter, Ph.D. Dr. Carter presently serves as a consultant with
Director since 1991 INCSTAR Corporation, a manufacturer of in vitro
Age: 53 diagnostic test kits and an affiliate of Sorin
Biomedica. From 1989 to March 1995, Dr. Carter served
INCSTAR in various capacities including Chairman,
C.E.O. and President. Dr. Carter also currently
serves on the Board of Directors of Lifecore
Biomedical, Inc.
M. Christine Jacobs Ms. Jacobs joined the Company as National Sales
Director since 1992 Manager in 1987 and was subsequently promoted to Vice
Age: 45 President of General Sales and Marketing. Since 1992,
Ms. Jacobs has been President and Chief Operating
Officer of the Company and in August 1993, Ms. Jacobs
was promoted to the position of Chief Executive
Officer while retaining the position of President.
Ms. Jacobs also serves as a director of the Georgia
Biomedical Partnership, a non-profit organization
which promotes economic and environmental development
beneficial to the growth of biomedical business
within Georgia.
</TABLE>
The Board of Directors held four meetings in the fiscal year ended December
31, 1995, and acted by unanimous written consent in lieu of a meeting in a
number of instances. All members participated in all meetings. All Directors
were involved in informal discussions prior to the signing of all unanimous
written consents.
The Board of Directors has established two standing committees and has
assigned certain responsibilities to each of those committees.
The Audit Committee, formed in 1991, met twice during fiscal year 1995. The
Audit Committee reviews the independence, qualifications and activities of the
Company's independent certified public accountants and the activities of the
Company's accounting staff. The Audit Committee also recommends to the Board the
appointment of the Company's independent certified public accountants and
reviews and approves the Company's annual financial statements together with
other financial reports and related matters. The Audit Committee is composed of
Mr. Saunders and Dr. Carter, each of whom attended all meetings.
4
<PAGE>
The Compensation Committee, formed in 1990, met three times during fiscal
year 1995. The Compensation Committee makes recommendations concerning
remuneration of the Company's Chief Executive Officer. The Compensation
Committee is composed of Dr. Brawley and Mr. Klimkowski, each of whom attended
the meetings.
The Board of Directors has no Nominating Committee.
Directors who are not officers of the Company receive $500 per meeting plus
expenses as compensation for attending Board of Directors and Committee
meetings.
EXECUTIVE OFFICERS
The executive officers of the Company are set forth in the table below. All
executive officers serve the Company under employment contracts.
<TABLE>
<CAPTION>
EXECUTIVE OFFICER OFFICE AND OTHER INFORMATION
- --------------------- ---------------------------------------------------------
<S> <S>
M. Christine Jacobs President and Chief Executive Officer since 1993. See
Age: 45 information above under Class III Directors.
Bruce W. Smith Treasurer and Chief Financial Officer of the Company and
Age: 43 Secretary of the Board of Directors since 1989. Mr. Smith
has served in financial capacities with the Company since
joining it in January 1987.
Dean Fitzgerald Vice President of Business Development since January
Age: 49 1996. Mr. Fitzgerald joined the Company in 1993 as
Manager of Client and Public Relations and was
subsequently promoted to Director of Marketing and Sales
before assuming his current duties. Prior to joining
Theragenics, Mr. Fitzgerald was President of American
Export Trading Company Inc., a manufacturer's
representative and marketing consulting firm.
REMUNERATION AND OTHER MATTERS
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid by the Company for
services rendered during the years indicated to each of the Company's executive
officers whose total salary and bonus exceeded $100,000 during the fiscal year
ended December 31, 1995.
</TABLE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-
TERM
COMPEN-
ANNUAL COMPENSATION SATION
------------------------------ -------
OTHER ALL
ANNUAL NUMBER OTHER
NAME AND FISCAL COMPEN- OF COMPEN-
PRINCIPAL POSITION YEAR SALARY(1) BONUS SATION(2) OPTIONS SATION(3)
- ------------------- ------ ----------- ------- --------- ------- ---------
<S> <C> <C> <C> <S> <C> <C>
M. Christine Jacobs 1995 $100,010 $68,000 -- -- $ 174
President & Chief 1994 $100,010 $28,000 -- -- $ 102
Executive Officer(4) 1993 $ 88,081 $16,667 -- 120,000 $ 143
</TABLE>
- ---------------
(1) Includes amounts deferred under the 401(k) feature of the Company's Employee
Savings Plan.
(2) Excludes certain personal benefits, the total value of which was less than
10% of the total annual salary and bonus.
(3) Represents premiums on a term life insurance policy.
5
<PAGE>
(4) The Company has an agreement with Ms. Jacobs, dated August 1, 1993, which
provides for her employment for the period commencing August 1, 1993 and
expiring July 31, 1996. This agreement provides for a minimum annual salary
of $100,000 plus an annual bonus determined by the Board of Directors
utilizing certain criteria. In addition the agreement provides a severance
package in the event of termination of up to six months' salary and other
related benefits.
The following table sets forth information concerning the value of
unexercised options as of December 31, 1995 held by Ms. Jacobs. No stock
appreciation rights have ever been issued by the Company.
<TABLE>
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES TABLE
<CAPTION>
NUMBER OF VALUE OF
UNEXERCISED UNEXERCISED
IN-THE-MONEY IN-THE-MONEY
SHARES OPTIONS ON OPTIONS ON
ACQUIRED DECEMBER 31, 1995 DECEMBER 31, 1995
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- ------------------- -------- --------- ---------------- ------------------
<S> <C> <C> <C> <C>
M. Christine Jacobs 100,000 $975,000 117,570/40,000 $853,574/$260,000
</TABLE>
Of the options described as exercisable but unexercised, 37,500 are
exercisable at $3.00 per share until the option expiration date of April 1,
1997, and 80,000 are exercisable at $5.375 per share until the option expiration
date of August 1, 2003. The 40,000 options currently unexercisable vest August
1, 1996 and are exercisable at $5.375 per share until the option expiration date
of August 1, 2003. All options are immediately exercisable upon change in
control of the Company. Terms of the option agreement provide for termination of
options if the employee is terminated for cause or voluntarily terminates
without the consent of the Company.
Board Compensation Committee Report on Executive Compensation. The
Compensation Committee has a policy that a significant portion of the Chief
Executive Officer's pay should be related to the performance of the Company.
Historically, it has been the Company's policy to establish employees base
salaries at rates below what the Committee believes the officers could command
in the market and supplement these base salaries with bonuses, if justified,
based on the Company's and individual's performance. The Committee believes this
policy is reflected, for example, in the terms of the Chief Executive's
employment contract and criteria for a performance bonus.
At the beginning of 1995, the Committee established criteria for the
C.E.O.'s performance bonus based upon a combination of dollar sales levels and
dollar after tax profitability. A matrix (the "Matrix") was established with
cells within the Matrix representing specific combinations of sales and profits.
Performance falling within a particular cell would result in a bonus to the
C.E.O. expressed as a percent of the C.E.O.'s base salary. This Matrix, which
allowed for bonuses running from 0% to 137% of the C.E.O.'s base salary, was
constructed to reward the C.E.O. for reaching specific combinations of sales and
profit levels with higher sales and profit resulting in a larger bonus. The
percentages within the Matrix recognize both the benefit to the Company of
reaching certain sales and profit levels and to a lesser extent the Committee's
assessment of the compensation the C.E.O. could obtain in the market. In
addition to the bonus called for in the Matrix, the Committee also has the
option of awarding the C.E.O. an additional bonus of up to 10% of her base
salary. This bonus which is subjectively determined by the Committee is based on
less quantifiable measures of performance (i.e., problem resolution, marketing
program development and execution, internal processes and procedures
development, cash management and expense control, and the effective and
efficient application of available resources to ensure both short-term and
long-term Company health).
Based upon the above criteria, Ms. Jacobs, the Company's C.E.O., was
awarded a 68% bonus or $68,000. The 68% represents an 58% bonus called for by
the Matrix plus a 10% bonus for the less quantifiable measures of performance.
/s/ Otis W. Brawley, M.D. /s/ Charles R. Klimkowski
- ------------------------------- ---------------------------------
Otis W. Brawley, M.D. Charles R. Klimkowski
6
<PAGE>
The following table summarizes the cumulative total return on investment in
the Company's Common Stock for fiscal years 1990 through 1995:
<TABLE>
COMPARISON OF FIVE YEAR -- CUMULATIVE TOTAL RETURNS
<CAPTION>
NASDAQ STOCK NASDAQ
MEASUREMENT PERIOD THERAGENICS MARKET (US PHARMACEUT
(FISCAL YEAR COVERED) CORPORATION COMPANIES) ICALS STOCKS
<C> <C> <C> <C>
1990 100 100 100
1991 680 161 266
1992 880 187 221
1993 680 215 197
1994 380 210 148
1995 1900 296 271
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Dr. Orwin Carter and Dr. Otis Brawley, directors of the Company, each
received $500 for consulting services rendered to the Company.
PROPOSAL NUMBER TWO
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
Stockholders will be asked to vote for a proposal to ratify the appointment
of Grant Thornton as the independent public accountants of the Company for the
fiscal year ending December 31, 1996. Grant Thornton has been the independent
public accountants for the Company since fiscal year 1989. If the stockholders,
by affirmative vote of the holders of a majority of the votes cast, do not
ratify this appointment, the Board of Directors will reconsider its action and
select other independent public accountants without further stockholder action.
A representative of Grant Thornton is expected to be present at the Annual
Meeting to respond to appropriate questions and will be given the opportunity to
make a statement if such representative desires to do so.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON AS THE INDEPENDENT PUBLIC
ACCOUNTANTS OF THE COMPANY.
7
<PAGE>
COMPLIANCE WITH FILING REQUIREMENTS
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, officers,
directors, and beneficial owners of more than ten percent of the outstanding
Common Stock are required to file reports with the Securities and Exchange
Commission reporting their beneficial ownership of the Common Stock at the time
they become subject to the reporting requirements and changes in beneficial
ownership occurring thereafter. Based on a review of the reports submitted to
the Company and written representations from persons known to the Company to be
subject to these reporting requirements, the Company believes that its executive
officers and directors complied with the Section 16(a) requirements.
STOCKHOLDERS PROPOSALS
Stockholders of Theragenics may submit proposals for inclusion in the proxy
materials. These proposals must meet the stockholder eligibility and other
requirements of the Securities and Exchange Commission. In order to be included
in the Company's 1997 proxy material, a stockholder's proposal must be received
not later than December 31, 1996 at Theragenics Corporation offices, 5325
Oakbrook Parkway, Norcross, Georgia 30093, ATTN.: Secretary.
In addition, Theragenics' By-Laws provide that in order for business to be
brought before the Annual Meeting, a stockholder must deliver or mail written
notice to the principal executive offices of the Company, which written notice
is received not less than 60 days nor more than 90 days prior to the date of the
meeting. The notice must state the stockholder's name, address, number and class
of shares of Theragenics stock held, and briefly describe the business to be
brought before the meeting, the reasons for conducting such business at the
Annual Meeting, and any material interest of the stockholder in the proposal.
The By-Laws also provide that if a stockholder intends to nominate a
candidate for election as a Director, the stockholder must deliver written
notice of his or her intention to the Secretary of the Company. The notice must
be received not less than 60 days nor more than 90 days before the date of the
meeting of stockholders. The notice must set forth the name and address of, and
the number of shares owned by, the stockholder (and that of any other
stockholder known to be supporting said nominee). The notice must also set forth
the name of the nominee for election as a Director, the age of the nominee, the
nominee's business address and experience during the past five years, the number
of shares of stock of the Company beneficially held by the nominee, and such
other information concerning the nominee as would be required to be included in
a proxy statement soliciting proxies for the election of the nominee. In
addition, the notice must include the consent of the nominee to serve as a
Director of Theragenics if elected.
MISCELLANEOUS
THE COMPANY WILL FURNISH WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM
10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1995, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES, TO ANY RECORD
OR BENEFICIAL OWNER OF ITS COMMON STOCK AS OF MARCH 29, 1996, WHO REQUESTS A
COPY OF SUCH REPORT. ANY REQUEST FOR THE 10-K REPORT SHOULD BE IN WRITING
ADDRESSED TO: RON WARREN, DIRECTOR OF INVESTOR RELATIONS, THERAGENICS
CORPORATION, 5325 OAKBROOK PARKWAY, NORCROSS, GA 30093. IF THE PERSON REQUESTING
THE REPORT WAS NOT A SHAREHOLDER OF RECORD ON MARCH 29, 1996, THE REQUEST MUST
INCLUDE A REPRESENTATION THAT SUCH PERSON WAS A BENEFICIAL OWNER OF COMMON STOCK
OF THE COMPANY ON THAT DATE. COPIES OF ANY EXHIBITS TO THE FORM 10-K WILL BE
FURNISHED ON REQUEST AND UPON PAYMENT OF THE COMPANY'S EXPENSES IN FURNISHING
SUCH EXHIBITS.
8
<PAGE>
OTHER MATTERS
Management is not aware of any matters to be presented for action at the
meeting other than those set forth in this Proxy Statement. However, should any
other business properly come before the meeting, or any adjournment thereof, the
enclosed Proxy confers upon the persons entitled to vote the shares represented
by such Proxy discretionary authority to vote the same in respect of any such
other business in accordance with their best judgment in the interest of the
Company.
Norcross, Georgia
April 19, 1996
9
<PAGE>
THERAGENICS CORPORATION
(An image of the palm of a hand with the caption "progressive
thinking + healing technology" is presented here on the cover.)
1995 Annual Report
<PAGE>
table
of contents
<TABLE>
<S> <C>
The Business of Theragenics Corporation.........................i
Financial Highlights............................................1
Our Progress Throughout 1995....................................2
Our Success Throughout 1995.....................................4
Management's Discussion and Analysis............................6
Report of Independent
Certified Public Accountants....................................8
Financial Statements............................................9
Notes to Financial Statements..................................13
Supplementary Financial Information............................16
Stockholder Information.........................inside back cover
</TABLE>
The business
of Theragenics Corporation
Theragenics Corporation ("Theragenics" or the "Company") was
incorporated in November 1981 to commercially engage in the
development, manufacture, and marketing of therapeutic
radiological devices for use primarily in the treatment of
cancer. The Company's products are intended to permit a physician
to introduce short-range, short-lived radioactive material
directly into cancerous tissue, thereby concentrating the impact
of the radiation on the cancerous tissue to be destroyed while
minimizing the effect on surrounding healthy tissue. To date the
Company has internally developed two products - TheraSeed, a
radioactive implant designed for the treatment of localized
tumors, and TheraSphere, radioactive microspheres for the
treatment of liver cancer. TheraSeed is being commercially
distributed in the United States while TheraSphere is being
commercially distributed in Canada.
The conventional treatments for cancer to date have been
surgery, radiation and chemotherapy. The treatments which have
been most successful are those which remove or kill all of the
cancerous tissue while avoiding excessive damage to the
surrounding healthy, normal tissue. When the cancerous tissue
cannot be completely removed or killed, the cancer usually
returns to the primary site often with metastases to other areas.
The Company's products are most effective on encapsulated,
confined tumors. Each product is based on established physical
principles and has the simple objective of delivering sufficient
radiation to the target cancer to kill it while minimizing the
radiation to surrounding tissue.
<PAGE>
financial
highlights
Set forth below are selected financial data derived from the
statements of operations of the Company for the years ended
December 31, 1991, 1992, 1993, 1994 and 1995 and the balance
sheets of the Company at December 31, 1991, 1992, 1993, 1994 and
1995.
<TABLE>
<CAPTION>
For the Fiscal Years Ended
December 31,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net sales $7,781,962 $4,723,107 $4,090,803 $4,379,300 $2,469,413
Licensing fee 85,431 - - - 300,000
Costs and expenses:
Cost of sales 2,645,730 1,790,450 1,677,631 1,227,154 818,184
Selling, general and
administrative 2,395,846 1,844,239 1,607,288 1,639,334 1,254,821
Research and
development 17,954 15,268 36,181 62,632 84,903
Other income(expense) 64,462 110,215 (85,959) 67,831 113,865
Taxes 1,100,000 453,000 254,000 582,000 280,000
Net profit/(loss)
before extraordinary
credit and change
in accounting
method 1,772,325 730,365 429,744 936,011 445,370
Extraordinary credit - - - 556,000 270,000
Change in
accounting method - - 2,860,000 - -
Net profit/(loss) 1,772,325 730,365 3,289,744 1,492,011 715,370
Net profit/(loss)
per common share
before extraordinary
credit and change
in accounting
method .15 .06 .04 .08 .04
Net profit/(loss)
per common share .15 .06 .28 .13 .07
Weighted average
number of common
shares outstanding 11,759,178 11,582,793 11,709,218 11,431,149 10,759,230
Total assets $16,878,182 $14,168,658 $12,618,869 $7,851,056 $3,299,375
</TABLE>
(Three vertical bar graphs appear at the bottom of this page with the
following titles and depicted data:
Revenues (in millions); 1991 - $2,769; 1992 - $4,379; 1993 - $4,091;
1994 - $4,723 & 1995 - $7,867.
Earnings Per Share; 1991 - $0.04; 1992 - $0.08; 1993 - $0.04; 1994 - $0.06
& 1995 - $0.15
Total Assets (in millions); 1991 - $3,299; 1992 - $7,851; 1993 - $12,619;
1994 - $14,169 & 1995 - $16,878.)
<PAGE>
our progress
throughout 1995
TO OUR SHAREHOLDERS:
1995 represented a breakthrough year for Theragenics. We were able to
increase revenues to unprecedented levels and shatter virtually every
in-house record for production. What drove these achievements? Many things,
but most importantly our success resulted from increases in manufacturing
capacity; reliability of supply; success of the TheraSeed treatment as
supported by clinical abstracts and presentations; and acceleration of
marketing programs designed for patient awareness.
THE YEAR IN REVIEW
In almost every key measure of performance, we exceeded last year's
results. For example, during the first six months of 1995 we surpassed
1994's annual net income. Focusing on strong expense management and cash
balances allowed us to reap the benefits of increased capacity utilization.
Financial highlights for 1995 include:
20th consecutive quarter of profitability;
67 percent increase in revenue to $7,867,393;
143 percent improvement in net income to $1,772,325;
Earnings per share more than doubled to $0.15;
A $5 million credit facility was secured.
In addition to delivering solid financial performance in 1995,
Theragenics' competitive position improved. The release of excellent product
efficacy data helped promote TheraSeed awareness among our target
audiences. This efficacy data, the result of a study conducted at the
Northwest Tumor Institute in Seattle, showed TheraSeed to be 100 percent
effective in treating localized, early-stage prostate cancer in its study
group. This data not only confirmed TheraSeed's efficacy but also its
ability to significantly reduce patient complications.
Last year we completed the doubling of our manufacturing capabilities.
This gave us the ability to grow both the business more rapidly and further
remove reliance on outside vendors for our key raw material. Two cyclotrons
also provide us with some sense of comfort, by reducing our exposure to risk
from unexpected downtime.
During 1993 and part of 1994 we were hampered by inconsistent supply.
We're proud to report that during 1995 our employees delivered a consistent
supply of TheraSeed in spite of normal production glitches. Our employees
continued to show the zeal instilled by the Company's higher purpose of
curing cancer. This commitment was translated into eighteen-hour work days
as the needs of the Company dictated. We are very proud of our employees and
they in turn are gratified that as a company we were able to supply enough
product to treat more than 2,600 men for prostate cancer.
Additionally, we were successful in increasing positive news coverage
about the Company in financial publications. Theragenics was named by
Individual Investor Magazine as part of their "Magic 25," a listing of fast
track companies to watch in 1996. Other significant media recognition
included Theragenics' naming to Georgia Trend's "10 Fastest Growing
Companies in Georgia" and The Atlanta Journal and Constitution's "Top 100"
companies in Georgia.
We are proud of our 1995 results! Our balance sheet is the strongest it
has ever been. We're healthy and looking forward to 1996. Someone once said,
"it's all right to look back, as long as you don't stare," and I agree.
Looking Forward
While 1996 will pose many new challenges for Theragenics, we plan to
stay focused on our priorities curing people of cancer, zero defect
medical devices, a safe environment for our employees, increasing
shareholder value and strong financial performance.
Regarding operations, we have a third and fourth cyclotron on
(An image of the right third of a one dollar bill with an upward slopping
trend line and the intials NASDAQ superimposed on the dollar bill appears
half way down this page on the right margin with the captio; Theragenics
stock began the year at $3.25 per share and ended at $11.875.")
(An image of earth appears at the bottom left hand corner of this page with
the caption; "During 1996 the American Cancer Society expects 317,000 new
cases of prostate cancer to be diagnosed.")
<PAGE>
(An image of a stephoscope appears at the top of this page with the caption;
"As a company we were able to supply enough product to treat more than 2,600
men for prostate cancer.")
order. Early in 1996 our construction efforts were delayed by inclement
weather. While it's a problem, we do not believe we will see any significant
delay in the installation of cyclotron number three. I'm optimistic that
once spring arrives we will be moving rapidly. We are currently within
budget regardless of our winter weather delay.
Our cash reserves are adequate. We have not needed to draw from our new
$5 million credit facility. This is a good sign that our accounts
receivables are well managed. We believe we have enough cash available from
operations combined with the credit facility to fund all of our current 1996
and 1997 projects.
Producing TheraSeed has always been a labor intensive process. We plan to
pursue automation and move away from tedious hand assembly. Given that we
are the sole providers of this product, we will be faced with the difficult
task of engineering custom automation. Although automating may exert a
short-term downward pressure on profits, we plan to manage this as best we
can. Keep in mind, these steps are necessary as we continue to increase
output and maintain a safe environment where radiation exposure for our
employees is minimized.
We are excited about our 1996 marketing plans and recognize the need to
expand awareness about the positive medical data revealed during 1995. We
know several doctors using TheraSeed will continue to compile data and
submit papers to prestigious medical journals. Patients, who have been
seeded, remain impassioned advocates of our product and our treatment of
this insidious disease. We will continue to support these programs with some
new approaches now taking shape.
The prostate cancer market has exploded during the past five years and
is growing at 25 percent per year. Although there is a great deal of work
left to be done, we have plans to address this expanding market. During 1996
the American Cancer Society expects 317,000 new cases of prostate cancer to
be diagnosed. In response we'll enhance our programs to assist patients with
education materials, books and experts. The thirst for knowledge by cancer
patients is increasing. We will continue to be a front runner in prostate
cancer support services to patients and families in need.
The competitive environment continues to change and presents us with new
challenges. Our chief competitor remains the surgical status quo treatment
of prostate cancer. However, this year we began to see emerging new trends
as ancillary, non-urologic groups took aim at quality of life issues for
surgical patients. We have always believed that this battle for early stage
prostate disease will be won on two fronts; efficacy and quality of life. We
recognize these trends and are actively involved in promoting projects that
support minimally invasive treatments with low complication rates.
Positioning Theragenics in the face of these and other market forces
such as managed care, Medicare reform, physician resistance, etc. are the
best type of new challenge for us. Just three years ago, we had to be able
to make the material before we worried about competitive forces.
While proudly reflecting on last year's success, we are ready to forge
ahead, solidifying our position as the type of company many investors find
appealing. 1995 was gratifying in more than just financial ways. We now have
many new employees who are entrusting their professional careers to this
company and our strong future. As evidenced by heavy market trading at year
end, Theragenics has attracted new investors who like what we do and trust
us to deliver long-term shareholder value. The patients who represent our
dads, brothers, sons and loved ones need and trust us to effectively deliver
a treatment for cancer. This is a responsibility we do not take lightly.
Thank you for your past and present support.
Sincerely,
/s/ M. Christine Jacobs
M. Christine Jacobs
(Photograph of M. Christine Jacobs on lower right hand corner of
this page.)
<PAGE>
"I see my mission as giving men hope, encouragement and to let them know
they have options. There is a better way of solving prostate cancer problems
other than surgery. There is no need to panic since no immediate decision is
needed men have time to familiarize themselves with their options and
select the treatment they feel comfortable with. If there is only one
message I could send to all men it would be, catch the cancer early and
learn your options before selecting a treatment."
Don Kaltenbach
(A photograph of Don Katenbach and his daughter appears on the page with the
above quote and is captioned; "Don Kaltenbach, formerly suffering from
prostate cancer, and his daughter, Whitney")
"In the five years I have been with Theragenics, I have seen weekly
production consistently increase, especially after the installation of the
Cyclotrons. It is very encouraging to know
<PAGE>
that we are helping so many men in their battle with prostate cancer. Every
time I pack an order I am reminded that there is a person with cancer at the
other end and it makes my work here more than just a job." Carolyn Hughes
(A photograph of Carolyn Hughes appears on the page with the above quote and
is captioned; "Carolyn Hughes, Theragenics technician")
"Pd-103 seed implantation for early stage prostate cancer is an effective
treatment that is convenient, cost-effective, and has minimum impact on
quality of life compared to the conventional treatments of surgery or
external radiation." Dr. John Blasko
(A photograph of Dr. John Blasko appears on the page with the above quote
and is captioned; "John Blasko, MD - Director of Radiation Oncology,
Northwest Tumor Institute, Seattle, WA.")
<PAGE>
Management's discussion and analysis
of financial condition and results of operations
The following discussion of the Company's financial
condition, results of operations and liquidity is intended to
clarify and highlight the Company's operating trends, liquidity
and capital resources. It should be read in conjunction with the
financial statements and related notes contained in the financial
section of this Report.
RESULTS OF OPERATIONS
1995 Compared to 1994
1995 Revenues - With increased production capacity,
consistent supply of product, enhanced marketing programs and
favorable clinical data, 1995 revenues increased substantially
(66.6%) to $7.9 million versus $4.7 million in 1994. Along with
the factors already noted, increased acceptance of its prostate
cancer treatment in the medical community and increased public
awareness of the medical advantages of the TheraSeed treatment
method versus other existing methods of treating prostate cancer
were major factors in driving the substantial sales increase.
Additionally, the Company believes sales were positively affected
in 1995 by further publication of supportive data from the
clinical study of patients treated with TheraSeed. This study had
shown no local recurrence of prostate cancer and low rates of
incontinence and impotence within the study group.
1995 Costs and Expenses - As a result of the increase in
sales, cost of sales rose. However, cost of sales as a percent of
sales fell to 34% versus 38% in 1994. This percentage improvement
was primarily attributable to increased utilization of production
capacity and economics of scale partially offset by increased
depreciation. Although management believes that cost of sales as
a percentage of revenue may continue to decline should sales in
future periods exceed those achieved in 1995, no assurances can
be given with respect to the operating margins in future periods.
In particular, continued improvements in manufacturing operations
and optimization of the production process may cause smaller
improvements in net margin.
Selling, General and Administrative ("SG&A") expenses
also increased in dollar amount but declined as a percent to
sales in 1995 to 30% versus 39% in 1994. In particular,
advertising and public relations expenses increased significantly
from 1994 to 1995 to support activities associated with increased
sales. Also, headcount expenses increased in response to the
additional workload created by the higher sales.
The addition of a cyclotron and facilities caused
depreciation and amortization to increase 45$ or $828,000 from
1994 to 1995.
Operating margins increased to 36% in 1995 versus 23% in
1994 due to increased sales and a reduction in SG&A expenses as a
percent of sales reflecting efficiency gains from increased
volumes.
Other income and expense was slightly higher in 1995
versus 1994 due to a lower level of construction in progress in
1995 that, in turn, limited the amount of interest expense
capitalizable.
1995 Earnings - Earnings increased more than 142% to
$1,772,000 or $.15 per share in 1995 from 1994's earnings of
$730,000 or $.06 per share. Such increase again was primarily due
to increased sales and a reduction in SG&A expenses as a percent
of sales reflecting efficiency gains from increased volumes.
At December 31, 1995, the Company's deferred tax asset
balance was $1,810,000. Since emerging from its development stage
in 1989, the Company has utilized approximately $3,900,000 of
operating loss carryforwards through December 31, 1995 and has
achieved twenty consecutive profitable quarters since 1991. To
realize income benefit from its remaining operating loss
carryforwards at December 31, 1995, it will be necessary for the
Company to generate future taxable income of approximately
$5,900,000, prior to the expiration of the operating loss
carryforward periods. Based on the Company's results of
operations subsequent to receiving FDA clearance in 1986 for its
product, and on expected future results of operations, management
currently strongly believes these net operating loss
carryforwards will be fully utilized prior to their statutory
expiration.
Historical Comparison
1994 Revenues - 1994 revenues increased more than 15% to
$4.7 million versus $4.1 million for 1993. In 1994, Theragenics
emerged from a two year manufacturing changeover that distanced
the Company from unreliable outside vendors. As the Company's
experience with cyclotron operations and subsequent radioactive
processes grew, the realities of these operations became clear.
No single cyclotron can be expected to run at full power for 52
weeks a year. In addition to the need for regular maintenance,
these operations require a "cool down" period before maintenance
can be performed. These "cool down" periods are imperative as
safety of the Company's employees (i.e., minimizing radiation
exposure) is among the Company's highest priorities.
<PAGE>
During the first part of 1994, production dependability
of the #1 cyclotron dictated the pace of sales growth. Once
consistent supply was demonstrated, the Company began reclaiming
marketing momentum. Fueling this momentum were favorable
five-year clinical data (July 1994) and the dedication of
additional financial resources to marketing.
1994 Costs and Expenses - As a result of the increase in
sales, cost of sales rose. However, cost of sales as a percent of
sales fell from 41% in 1993 to 38% in 1994. This decrease in
percent of cost of sales to sales reflected the economies of
scale associated with the large fixed cost component of the
Company's expense base.
Selling, General and Administrative ("SG&A") expenses
increased more than would have been expected if operations had
continued under the same structure as existed in 1993. Changes
were made in the advertising, public relations and investor
relations areas in 1994 which increased SG&A costs. These changes
proved to have significant success in increasing sales and
investor awareness.
Other income and expense improved by $196,000 due to
reduced interest expense. Both the higher level of construction
in progress in 1994 that increased the amount of interest expense
capitalizable and the replacement of an existing loan at 10.25%
interest with a new loan at 8.47% were the causes of this reduced
interest expense.
1994 Earnings - In 1994, the Company recorded a net
profit of $730,000 or $.06 per share. In 1993, the Company
recorded a net profit of $3,290,000, or $.28 per share. Included
in the 1993 profit number is a one-time positive earnings
adjustment of $2,860,000, or $.24 per share due to the mandated
implementation of FASB-109, "Accounting for Income Taxes." This
booking which appears on the balance sheet as an asset titled
"Deferred Income Tax Asset" primarily represents the tax benefit
which arises from the carryforward of prior years' operating
losses. Because of the differing accounting principles applied
between years, to accurately compare results of 1994 and 1993
requires that "Net Earnings Before Cumulative Effect of Change in
Accounting Principle" be the basis for comparison. Using this
method, 1994's earnings were $730,000, or $.06 per share and
1993's $430,000, or $.04 per share.
LIQUIDITY AND CAPITAL RESOURCES
Theragenics had cash, cash equivalents, short-term
investments and marketable securities of $3.3 million at December
31, 1995, compared to $2.4 million at year end 1994 and $3.4
million at year end 1993. Cash flows from operating activities
were $3.4 million in 1995 compared to $1.6 million in 1994 and
$1.1 million in 1993.
Capital spending was $2.4 million in 1995, $3.4 million
in 1994 and $2.7 million in 1993. Spending in each of these
years relates to construction of Theragenics' cyclotron facility.
Spending in 1993 primarily represented a continuation of payments
began in 1992 for initial construction of the facility and the
installation of the first cyclotron. Spending in 1994 primarily
represented progress payments on a project to add a second
cyclotron to the facility. This project began in 1993 and was
completed in 1995. Spending in 1995 represents the beginning of a
project to add cyclotrons three and four to the facility. The
expansion project for addition of cyclotrons three and four which
began in 1995 is estimated to cost approximately $9,000,000 when
completed. As of February 15, 1996, approximately $3,000,000 has
already been expended on this project with the remainder
scheduled for expenditure before the second quarter of 1997.
Management believes that funding for the remainder of this
project should be available from current cash balances, cash from
future operations and Theragenics' credit facility.
In the last three years, the Company's working capital
has been obtained from internally generated funds and borrowings
from banks. Working capital totaled $3.7 million at December 31,
1995, including $500,000 representing the current portion of an
outstanding long-term obligation. This compares to $2.5 million
at year end 1994 which also included $500,000 representing the
current portion of outstanding long-term obligations. In the
first quarter of 1993, Theragenics received funding on a $1.9
million loan secured by the Company's cyclotron facility (the
"1993 Term Loan"). The 1993 Term Loan was to mature in 1995 and
bore interest at 10.25% per annum. In the third quarter of 1994,
Theragenics received funding on a $2.1 million loan secured by
the Company's cyclotron facility including a second cyclotron
(the "1994 Term Loan"). The 1994 Term Loan matures in 1998 and
bears interest at 8.47% per annum. Of the $2.1 million loan, $1.4
million was used to pay off the outstanding balance under the
existing long-term financing while the remainder was used to
provide partial financing for the purchase of the second
<PAGE>
cyclotron and the facility expansion to house it. As of December
31, 1995, $1,500,000 remained outstanding on the 1994 Term Loan.
In December 1995, the Company amended and restated its other
existing bank credit facility (the "Bank Credit Facility"). The
Bank Credit Facility, as amended and restated, initially
consisted of a $1 million receivables credit facility and an
additional $2 million revolving credit facility. Based on the
Company meeting specified financial thresholds, the Bank Credit
Facility will be increased to $5,000,000 upon receipt by the bank
of the Company's Form 10-K for the year ended December 31, 1995.
Borrowings under the Bank Credit Facility are secured by
substantially all of the Company's assets. The Bank Credit
Facility contains certain covenants all of which the Company was
in compliance with at year end. Borrowings under the Bank Credit
Facility may be made, at the Company's option, at an interest
rate equal to the London Interbank Offered Rate ("LIBOR") plus 2%
or the lender's prime rate as defined. At year-end, $3,000,000 of
the Bank Credit Facility was available but unused. Although
internal forecasts had indicated that there would be a need to
access the credit facility in the fourth quarter of 1995, strong
fourth quarter results did not require the Company to do so.
Management believes that cash flow from operations, the
availability of funds under its bank credit agreements and the
availability of other forms of financing should permit the
Company to meet its anticipated capital expenditures and working
capital needs as well as to service its debt and fund future
growth as new business opportunities arise.
INFLATION AND CHANGING PRICES
Management does not believe that inflation has had an
abnormal or unanticipated effect on the Company's operations.
report of
independent certified public accountants
BOARD OF DIRECTORS
Theragenics Corporation
We have audited the balance sheets of Theragenics Corporation (a
Delaware corporation) as of December 31, 1994 and 1995, and the related
statements of earnings, shareholders' equity, and cash flows for each of the
three years in the period ended December 31, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the financial
position of Theragenics Corporation as of December 31, 1994 and
1995, and the results of its operations and its cash flows for
each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.
As described in Note E, the Company changed its method
of accounting for income taxes in 1993, as required by Statement
of Financial Accounting Standards No. 109.
GRANT THORNTON LLP.
Atlanta, Georgia
January 17, 1996
<PAGE>
balance
sheets
December 31, 1994 and December 31, 1995
Theragenics Corporation
<TABLE>
<CAPTION>
December 31, December 31,
ASSETS 1994 1995
<S> <C> <C>
Current Assets
Cash and short-term
investments (Note B-8) $ 2,317,463 $ 3,266,338
Marketable securities
(Note B-9) 50,000 -
Trade accounts receivable
(Note B-2) 732,424 1,335,645
Inventories (Notes B-3 and C) 192,161 166,955
Prepaid expenses and
other current assets 91,801 67,521
Total current assets 3,383,849 4,836,459
Property. Plant and Equipment - at cost
(Notes B-4 and F)
Building and improvements 899,760 1,690,045
Leasehold improvement 138,978 138,978
Machinery and equipment 5,167,815 8,203,256
Office furniture and equipment 44,721 44,721
6,251,274 10,077,000
Less accumulated depreciation
and amortization (1,445,206) (2,194,164)
4,806,068 7,882,836
Land 49,485 49,485
Construction in progress (Note D) 3,602,825 2,140,894
8,458,378 10,073,215
Other Assets
Deferred tax asset (Note E) 2,179,000 1,810,000
Patent costs (Note B-5) 94,982 90,704
Other 52,449 67,804
2,326,431 1,968,508
$14,168,658 $16,878,182
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of
long-term debt (Note F) $ 469,765 $ 511,362
Trade accounts payable 226,209 348,191
Accrued salaries, wages,
and payroll taxes 110,132 225,138
Income taxes payable (Note E) 113 3,255
Other current liabilities 33,036 12,680
Total current liabilities 839,255 1,100,626
Long-Term Debt: (Note F) 1,519,354 1,008,135
Commitments and Contingencies:
(Note G)
Shareholders' Equity: (Note I)
Common stock, authorized
50,000,000 shares of $.01
par value; issued and
outstanding 10,961,887 in
1994 and 11,394,785 in 1995. 109,618 113,948
Additional paid-in capital 15,207,453 16,390,170
Accumulated deficit (3,507,022) (1,734,697)
Total shareholders' equity 11,810,049 14,769,421
$14,168,658 $16,878,182
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
statement of
earnings
For The Three Years Ended December 31, 1995
Theragenics Corporation
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1994 1995
<S> <C> <C> <C>
Revenues:(Notes G and J)
Product sales $ 4,090,803 $ 4,723,107 $ 7,781,962
Licensing fees - - 85,431
4,090,803 4,723,107 7,867,393
Costs & Expenses:
Cost of sales 1,677,631 1,790,450 2,645,730
Selling, general,
and administrative 1,607,288 1,844,239 2,395,846
Research and
development 36,181 15,268 17,954
3,321,100 3,649,957 5,059,530
Other Income (Expense):
Interest income 114,905 135,888 143,424
Interest expense
(Note F) (195,035) - (51,967)
Other (5,829) (25,673) (26,995)
(85,959) 110,215 64,462
Net earnings before
income taxes,
and cumulative effect
of change in
accounting principle $ 683,744 $ 1,183,365 $ 2,872,325
Income Tax Expense
(Note E) 254,000 453,000 1,100,000
Net earnings before
cumulative effect
of change in
accounting principle $ 429,744 $ 730,365 $ 1,772,325
Cumulative effect on
prior years of change
in accounting for
income taxes (Note E) 2,860,000 - -
Net Earnings $ 3,289,744 $ 730,365 $ 1,772,325
Earnings Per Common
Share (Note B-7)
Earnings before
cumulative effect
of change in
accounting principle $ .04 $ .06 $ .15
Cumulative effect on
prior years of change
in accounting
for income taxes .24 - -
Net Earnings $ .28 $ .06 $ .15
Weighted Average Shares 11,709,218 11,582,793 11,759,178
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
statement of
shareholders' equity
For The Three Years Ended December 31, 1995
Theragenics Corporation
<TABLE>
<CAPTION>
Common Stock Additional
Number of Par value paid-in Accumulated
shares $.01 capital deficit Total
<S> <C> <C> <C> <C> <C>
Balance,
December 31, 1992 10,583,635 $105,836 $14,866,040 $(7,527,131) $ 7,444,745
Exercise of
warrants 200,000 2,000 173,000 - 175,000
Exercise of stock
options, net 129,302 1,293 122,902 - 124,195
Net earnings
for the year - - - 3,289,744 3,289,744
Balance,
December 31, 1993 10,912,937 $109,129 $15,161,942 $(4,237,387) $11,033,684
Exercise of stock
options, net 48,950 489 45,511 - 46,000
Net earnings
for the year - - - 730,365 730,365
Balance,
December 31, 1994 10,961,887 $109,618 $15,207,453 $(3,507,022) $11,810,049
Exercise of stock
options, net 432,898 4,330 469,717 - 474,047
Income tax benefit
from stock options
exercised - - 713,000 - 713,000
Net earnings
for the year - - - 1,772,325 1,772,325
Balance,
December 31, 1995 11,394,785 $113,948 $16,390,170 $(1,734,697) $14,769,421
</TABLE>
<PAGE>
statements of
cash flows
For The Three Years Ending December 31, 1995
Theragenics Corporation
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1994 1995
<S> <C> <C> <C>
Cash Flows from
Operating Activities:
Net earnings $3,289,744 $ 730,365 $ 1,772,325
Adjustments to
reconcile net earnings
to net cash provided
by operating activities:
Cumulative effect of
change in accounting
for income taxes (2,860,000) - -
Deferred income tax
expense 248,000 433,000 1,082,000
Depreciation and
amortization 515,831 571,615 828,072
Loss on disposal of
property and equipment 3,458 1,571 1,677
Change in assets and
liabilities:
Accounts receivable (18,347) (197,133) (603,221)
Inventories 84,737 (32,834) 25,206
Prepaid expenses and
other current assets (17,228) 22,448 24,280
Other assets 17,526 (200) -
Trade accounts payable (102,239) 78,402 121,982
Accrued salaries,
wages and payroll
taxes (7,938) 21,400 115,006
Income tax payable (20,387) (1,500) 3,142
Other current
liabilities (21,001) 16,442 (20,356)
Total adjustments (2,177,588) 913,211 1,577,788
Net cash provided by
operating activities 1,112,156 1,643,576 3,350,113
Cash Flows from
Investing Activities:
Purchase and
construction
of property
and equipment (2,740,263) (3,376,967) (2,426,961)
Maturities of
marketable securities 205,127 309,765 50,000
Patent costs (51,346) (587) (3,632)
Net cash used by
investing activities (2,586,482) (3,067,789) (2,380,593)
Cash Flows from
Financing Activities:
Proceeds from
long-term debt 1,900,000 2,100,000 -
Repayment of
long-term debt (569,561) (1,441,320) (469,622)
Proceeds from exercise
of stock options and
warrants, net 299,195 46,000 474,047
Other assets - (46,025) (25,070)
Net cash (used) provided
by financing activities 1,629,634 658,655 (20,645)
Net Increase (Decrease)in
Cash and Short-Term
Investments 155,308 (765,558) 948,875
Cash and Short-Term
Investments at
Beginning of Year 2,927,713 3,083,021 2,317,463
Cash and Short-Term
Investments at
End of Year $ 3,083,021 $ 2,317,463 $ 3,266,338
</TABLE>
Supplemental Schedule of Non Cash Financing Activities:
During 1995, the Company realized an income tax benefit from the
exercise and early disposition of certain stock options,
resulting in an increase in the deferred tax asset and additional
paid in capital of $713,000.
<TABLE>
<CAPTION>
Supplementary Cash Flow Disclosure:
<S> <C> <C> <C>
Interest paid, net of
amounts capitalized $ 195,035 $ - $ 53,843
Interest received $ 120,032 $ 144,452 $ 139,693
Income taxes paid $ 26,387 $ 21,500 $ 14,858
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
notes to
financial statements
December 31, 1994 and 1995
Theragenics Corporation
NOTE A
Organization and Description of Business
Theragenics Corporation (the "Company") was organized in November
1981 to develop, manufacture, and market radiological
pharmaceuticals and devices used in the treatment of cancer.
The Company manufactures and markets primarily one product,
which is used in the treatment of cancer. Use of the Company's
product is regulated by the U.S. Food and Drug Administration
(FDA). The Company sells its product primarily to hospitals,
physicians and other health service providers in the United
States. The Company therefore is directly affected by FDA
regulations and the well being of the health care industry.
NOTE B
Summary of Significant Accounting Policies
A summary of the significant accounting policies consistently
applied in the preparation of the accompanying financial
statements follows:
1. Use of Estimates in Preparation of Financial Statements
In preparing financial statements in conformity with Generally
Accepted Accounting Principles ("GAAP"), management is required
to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial
statements and revenues and expenses during the reporting period.
Actual results could differ from those estimates.
2. Accounts Receivable
The Company considers accounts receivable to be fully
collectible; accordingly, no allowance for doubtful accounts is
required. If amounts become uncollectible, they will be charged
to operations when that determination is made.
3. Inventories
Inventories are stated at the lower of cost or market. Cost is
determined using the specific identification method. Inventory
costs consist primarily of costs incurred in the extraction,
purification and irradiation processes of an isotope which is the
basic component of the Company's primary product.
4. Depreciation
Depreciation is provided for in amounts sufficient to relate the
cost of depreciable assets to operations over their estimated
service lives on a straight-line basis. Estimated service lives
are as follows:
Building 30 years
Machinery, leasehold improvements,
furniture and equipment 5-10 years
A significant portion of the Company's depreciable assets are
utilized in the production of its product. Management
periodically evaluates the realizability of its depreciable
assets in light of its current industry environment. Management
believes that no impairment of depreciable assets exists at
December 31, 1995. It is possible, however, that management's
estimates concerning the realizability of the Company's
depreciable assets could change in the near term due to changes
in the Company's technological and regulatory environment.
5. Patent Costs
The Company capitalizes the costs of patent applications for its
products. Amortization is computed on a straight line basis over
the estimated economic lives of the patents, commencing at the
date of grant of the related patent. Patent costs are net of
accumulated amortization of $29,366 and $37,276 at December 31,
1994 and 1995, respectively.
6. Research and Development Costs
The costs of research and development and consumable supplies and
materials to be used for the development of the Company's
intended products are expensed when incurred.
7. Net Earnings Per Common Share
The net earnings per common share is based on the weighted
average number of common shares and common equivalent shares
outstanding during each period (11,709,218 in 1993, 11,582,793 in
1994 and 11,759,178 in 1995).
Fully diluted information is not presented, as fully diluted
earnings per share is not materially different from the primary
earnings per share presented.
8. Statements of Cash Flows
For purposes of reporting cash flows, cash and short-term
investments include cash on hand, cash in banks and commercial
paper with original maturities of less than 90 days.
9. Marketable Securities
The Company adopted Statement of Financial Accounting Standards
No. 115, Accounting for Certain Investments in Debt and Equity
Securities (SFAS 115), effective January 1, 1994. The adoption of
SFAS 115 had no effect upon prior periods.
At December 31, 1994, marketable securities are categorized
as available for sale and as a result are stated at fair value,
which approximated cost. The Company held no marketable
securities at December 31, 1995.
10. Stock Based Compensation
The Company stock option plans are accounted for under APB
Opinion 25, Accounting for Stock Issued to Employees, and related
interpretations.
NOTE C
Inventories
Inventory consists of the following:
<TABLE>
<CAPTION>
December 31,
1994 1995
<S> <C> <C>
Raw material $ 17,361 $ 17,361
Work in process 79,820 92,887
Finished goods 33,361 56,707
Raw material to be recovered 61,619 -
$192,161 $166,955
</TABLE>
<PAGE>
"Raw material to be recovered" includes finished products which
cannot be sold due to loss of radiation. The irradiated isotope
contained in these products can be recovered and reused through a
purification process.
NOTE D
Construction in Progress
At December 31, 1995, construction in progress represented
payments made for the construction of manufacturing equipment and
facility expansion. Total cost of this project is expected to be
approximately $9,000,000, and is expected to be completed in
February 1997.
At December 31, 1994, construction in progress represented
payments made for the construction of manufacturing equipment
which was completed and placed in service during 1995.
NOTE E
Income Taxes
The Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS" and "FASB")
No. 109, Accounting for Income Taxes, which requires a change
from the deferred method to the asset and liability method of
accounting for income taxes. Under the asset and liability
method, deferred income taxes are recognized for the tax
consequences of "temporary differences" by applying enacted
statutory tax rates applicable to future years to differences
between the financial statement carrying amounts and the tax
bases of existing assets and liabilities.
The Company implemented SFAS 109 as of January 1, 1993. The
deferred tax asset recorded is primarily a result of the
recognition of the Company's net operating loss carryforward. The
cumulative effect on prior years of the change in accounting
principle increased net earnings by $2,860,000 ($.24 per share)
and is included in earnings for 1993. The effect of the change on
1993 was to decrease net earnings before cumulative effect of a
change in accounting principle by $248,000 ($.02 per share) and
The provision for income tax is summarized as follows:
<TABLE>
<CAPTION>
1993 1994 1995
<S> <C> <C> <C>
Current tax expense $ 6,000 $ 20,000 $ 18,000
Deferred tax expense 248,000 433,000 1,082,000
$ 254,000 $ 453,000 $1,100,000
</TABLE>
Significant components of the deferred tax asset are as
follows:
<TABLE>
<CAPTION>
December 31,
1994 1995
<S> <C> <C>
Loss carryforwards $2,455,000 $2,240,000
Depreciation (370,000) (565,000)
Other 94,000 135,000
$2,179,000 $1,810,000
</TABLE>
The significant portions of the operating loss carryforwards
were incurred while the Company was in the development stage.
Upon receiving clearance to market its "TheraSeed " product from
the U.S. Food and Drug Administration (FDA) in 1986, the Company
commenced manufacturing and distribution of its product in 1987.
Since emerging from the development stage in 1989, the Company
has utilized approximately $3,900,000 of these operating loss
carryforwards through December 31, 1995 by generating taxable
income. In order to realize income benefit from the remaining
operating loss carryforwards at December 31, 1995, it will be
necessary for the Company to generate future taxable income of
approximately $5,900,000, prior to the expiration of the
operating loss carryforward periods. Based on the Company's
results of operations subsequent to receiving FDA clearance to
market for its product, and on expected future results of
operations, management believes that currently it is more likely
than not that the income tax benefits of the operating loss
carryforwards will be realized within the carryforward period.
The amount of deferred tax asset considered realizable, however,
could be reduced in the near term if estimates of future taxable
income during the carryforward period are reduced.
The provision for income taxes differs from the amount of
income tax determined by applying the applicable federal rates
due to the following:
<TABLE>
<CAPTION>
1993 1994 1995
<S> <C> <C> <C>
Tax at applicable
federal rate of 34% $ 232,000 $ 402,000 $ 977,000
State tax, net 22,000 47,000 115,000
Other - 4,000 8,000
$ 254,000 $ 453,000 $1,100,000
</TABLE>
For income tax purposes only, the Tax Reform Act of 1986
enacted an alternative minimum tax system for corporations (the
"AMT"). AMT is imposed at a 20% rate on the Company's AMT income
which is determined by making statutory adjustments to regular
taxable income. A company pays the greater of the taxes computed
under the "regular" tax system or the AMT system. Because AMT net
operating loss carryforwards may only be utilized to offset 90%
of the AMT income, the Company was subject to the AMT in 1993,
1994 and 1995, resulting in an alternative minimum tax of $6,000,
$20,000 and $18,000, respectively. These amounts will be allowed
as a credit carryover to reduce the regular tax liability in
future years, but not below the AMT of such years.
At December 31, 1995, the Company had approximate net federal
operating loss carryforwards for regular tax and AMT purposes as
follows:
<TABLE>
<CAPTION>
Net operating Net operating
loss (regular) loss (AMT)
Year of expiration
<C> <C> <C>
2002 $1,013,000 $ -
2003 2,485,000 2,254,000
2004 1,806,000 1,765,000
2005 590,000 555,000
$5,894,000 $4,574,000
</TABLE>
<PAGE>
NOTE F
Notes Payable
In December 1995, the Company entered into an amended and
restated loan and security agreement (the "loan agreement") with
a financial institution. This loan agreement incorporated and
restated the Company's existing term loan and line of credit
facility. A summary of the applicable terms follows.
Term Loan
The term loan is payable in monthly installments of $51,862,
including interest at 8.47%. $1,989,119 and $1,519,497 were
outstanding under the term loan at December 31, 1994 and 1995,
respectively. Interest expense of approximately $140,000 and
$106,000 was capitalized with expansion of the manufacturing
facility and construction of certain manufacturing equipment
during 1994 and 1995, respectively.
Line of Credit
The loan agreement provides for a line of credit of up to
$1,000,000. Interest on outstanding borrowings is payable monthly
at the prime rate or, at the Company's option, may be payable at
the LIBOR rate plus 2%. There was no outstanding borrowings under
the line of credit at December 31, 1994 or 1995.
Revolving Credit Facility
The loan agreement also provides for a revolving credit facility
of up to $2,000,000. The maximum borrowings under the revolving
credit facility can be increased to $4,000,000 under certain
conditions. These conditions include, among other things, that
the Company achieve certain minimum earnings levels, as defined,
for four consecutive quarters. The Company has met the minimum
earnings requirements as of December 31, 1995, and management
expects that the revolving credit facility will be increased to
$4,000,000 during 1996. Interest on outstanding borrowings is
payable monthly at the prime rate or, at the Company's option,
may be payable at the LIBOR plus 2%. No amounts were outstanding
under the revolving credit facility at December 31, 1995.
All outstanding borrowings under the revolving credit
facility are due in April 1997. However, the outstanding
borrowings can be repaid in sixty equal and consecutive monthly
installments commencing in May 1997 if the Company meets certain
minimum earnings levels, as defined, and certain other financial
ratios for the year ending December 31, 1996. Additionally,
certain mandatory repayments based on "excess cash flow", as
defined, would be required commencing in May 1998 and annually
thereafter.
All outstanding borrowings under the loan agreement are
collateralized by substantially all of the Company's assets.
Provisions of the loan agreement limit the amount of annual
capital expenditures, the incurrence of additional debt and,
among other things, require the maintenance of certain minimum
financial ratios. As of December 31, 1995, the Company was in
compliance with the provisions of the loan agreement.
NOTE G
Commitments and Contingencies
Licensing Agreement
The Company holds a worldwide exclusive license from the
University of Missouri for the use of technology, patented by the
University, used in the Company's "TheraSphere" product. The
licensing agreement provides for the payment of royalties based
on the level of sales and on lump sum payments received pursuant
to a licensing agreement with Nordion International, Inc. (see
below).
The Company has granted certain of its geographical rights
under the licensing agreement with the University of Missouri to
Nordion International, Inc., a Canadian company which is a
producer, marketer and supplier of radioisotope products and
related equipment. Under the Nordion agreement, the Company will
receive a licensing fee for each geographic area in which Nordion
receives new drug approval. The Company will also be entitled to
a percentage of future revenues earned by Nordion as royalties
under he agreement. Royalties from this agreement for each of the
three years in the period ended December 31, 1995 were not
significant.
In March 1995, the Company received approximately $85,000
from Nordion for the right to use certain patents and to
manufacture, distribute, and sell TheraSphere for all
applications worldwide.
Letter of Credit
The Company has a letter of credit outstanding for approximately
$315,000 relating to regulatory requirements.
Lease Commitment
The Company leases office space under a noncancelable lease which
expires in December 1998. Approximate minimum lease payments
under the lease are as follows: 1996, $64,000; 1997, $67,000;
1998, $69,000.
Rent expense was approximately $70,000, $61,000 and $61,500 for the years
ended December 31, 1993, 1994 and 1995, respectively.
NOTE H
Transactions with Related Parties
Certain shareholders and directors provide consulting services to
the Company. Total consulting fees paid to shareholders and
directors were approximately $77,500, $5,500 and $1,000 during
the years ended December 31, 1993, 1994 and 1995, respectively.
NOTE I
Stock Options and Warrants
The Company's board of directors has approved three stock option
plans which in aggregate cover up to 2,200,000 shares of common
stock. The plans provide for the expiration of options ten years
from the date of grant and requires the exercise price of the
options granted to be at least equal to 100% of market value on
the date granted. Stock option transactions for the three years
ended December 31, 1995 are summarized as follows:
<PAGE>
<TABLE>
<CAPTION>
Option Shares
1993 1994 1995
<S> <C> <C> <C>
Outstanding,
beginning of year 1,188,316 1,258,116 1,226,716
Granted 200,000 40,000 221,000
Exercised (130,200) (49,900) (450,000)
Canceled - (21,500) -
Outstanding,
end of year 1,258,116 1,226,716 997,716
Option Price $1.00-$6.38 $1.00-$6.38 $1.00-$6.38
</TABLE>
As of December 31, 1995, options covering approximately
773,000 shares were exercisable. Expiration dates for these
options range from 1996-2005.
Two hundred thousand warrants (200,000) were exercised during
1993, resulting in proceeds to the Company of $175,000. The
Company also has warrants outstanding at December 31, 1995,
covering 100,000 shares of common stock. The warrants are
exercisable at a price of $7.50 per share and expire in May 1999.
The Company follows the practice of recording amounts
received upon the exercise of options by crediting common stock
and additional capital. No changes are reflected in the
statements of operations as a result of the grant or exercise of
options. The Company realizes an income tax benefit from the
exercise or early disposition of certain stock options. This
benefit results in an increase to the deferred tax asset and an
increase in additional paid-in capital.
NOTE J
Major Customers
During 1994, there were sales to one major customer that equaled
approximately ten percent of sales. During 1993 and 1995, there
were no customers which individually comprised ten percent of
sales.
NOTE K
Employee Benefit Plan
The Company sponsors a defined contribution 401(k) Plan covering
all employees with at least six months of service and at least 21
years of age. The Plan permits participants to defer a portion of
their compensation through payroll deductions. The Company may,
at its discretion, contribute to the Plan on behalf of
participating employees. No such Company discretionary
contributions have been made during any of the three years ended
December 31, 1995.
Note L
Recently Issued Accounting Standard
The Company currently accounts for the issuance of stock options
to employees in accordance with Accounting Principles Board
Opinion ("APB") Number 25, "Accounting for Stock Issued to
Employees." In October 1995, the FASB issued SFAS Number 123
("SFAS 123"), "Accounting for Stock Based Compensation." SFAS 123
allows for the continued use of the method prescribed by APB 25,
referred to as intrinsic value method. SFAS 123 also provides an
alternative method, referred to as the fair value method. If the
intrinsic value method of accounting for the issuance of stock
options is used, then SFAS 123 requires disclosure of pro forma
net income and earnings per share, as if the fair value method
had been used.
Management anticipates that the Company will continue to
account for the issuance of stock options to employees in
accordance with APB 25. Therefore, the only effect of adopting
SFAS 123 will be the new disclosure requirements. These
disclosure requirements are effective for the year ending
December 31, 1996.
<TABLE>
supplementary
financial information
Quarterly Results
<CAPTION>
YEAR 1st 2nd 3rd 4th
<S> <C> <C> <C> <C> <C>
Net Sales 1994 1,153,857 1,104,670 1,129,094 1,335,486
1995 1,834,462 1,911,647 1,926,456 2,194,828
Net Earnings 1994 177,649 147,483 117,625 287,608
1995 381,610 384,893 421,106 584,716
Net Earnings
per Common
Share 1994 .02 .01 .01 .02
1995 .03 .03 .04 .05
</TABLE>
<PAGE>
stockholder
information
INVESTOR COMMUNITY INFORMATION
Stockholders, registered representatives, professional
investment managers and financial analysts wanting additional
information about Theragenics Corporation are invited to contact:
Mr. Ronald A. Warren
Director of Investor Relations
and Assistant Secretary
Theragenics Corporation
5325 Oakbrook Parkway
Norcross, Georgia 30093
800-998-8479 or 770-381-8338.
AVAILABILITY OF FORM 10-K
The Company will furnish without charge a copy of its Annual
Report on Form 10-K filed with the Securities and Exchange
Commission for the fiscal year ended December 31, 1994, including
financial statements and schedules, to any record or beneficial
owner of its Common Stock as of May 5, 1995, who requests a copy
of such Report. Any request for the 10-K Report should be in
writing addressed to:
Mr. Ronald A. Warren
Director of Investor Relations
and Assistant Secretary
Theragenics Corporation
5325 Oakbrook Parkway
Norcross, Georgia 30093
800-998-8479 or 770-381-8338.
COMMON STOCK PRICE RANGES
Theragenics Corporation's common stock is traded on the
national market system under the Nasdaq Symbol "THRX." The
following table sets forth the quarterly high and low sales
prices for the periods indicated as reported by Nasdaq. The
prices shown represent actual sales prices without retail
markups, markdowns or commissions.
<TABLE>
<CAPTION>
Share Price of Common Stock
1994
High Low
<S> <C> <C>
First Quarter $ 4-3/8 $ 3-1/4
Second Quarter $ 4-3/4 $ 3-1/2
Third Quarter $ 4-5/8 $ 3-3/8
Fourth Quarter $ 3-7/8 $ 2-1/4
1995
High Low
First Quarter $ 3-3/4 $ 2-1/4
Second Quarter $ 6-1/2 $ 3-1/8
Third Quarter $ 6-3/8 $ 4-7/8
Fourth Quarter $12-1/2 $ 4-7/8
</TABLE>
TRANSFER AGENT AND REGISTRAR
Stockholders wishing to change the name on their
certificates, or to report a lost certificate, should contact the
transfer agent:
SunTrust Bank
Tom Donaldson
Stock Transfer Department
P.O. Box 4625
Mail Code 008
Atlanta, Georgia 30302
404-588-7831
INDEPENDENT PUBLIC ACCOUNTANTS
Grant Thornton, Atlanta, Georgia
GENERAL COUNSEL
Smith, Gambrell & Russell, Atlanta, Georgia
COMMON SHAREHOLDERS OF RECORD
As of March 29, 1996, Theragenics had 681 record holders of
common stock.
DIVIDEND POLICY
Theragenics has never paid cash dividends on the common
stock, and has no current plans to begin paying cash dividends.
DIRECTORS AND EXECUTIVE OFFICERS
Charles Klimkowski *
Chairman, Theragenics Corporation
Senior Vice President, The Chicago Corporation
M. Christine Jacobs *
President and Chief Executive Officer
Otis Brawley, M.D. *
Director of Oncology and Rehabilitation Branch,
Early Detection and Community Oncology Program,
National Cancer Institute
Dr. Orwin L. Carter, Ph.D. *
Consultant, INCSTAR Corporation
Dean W. Fitzgerald
Vice President of Business Development
John V. Herndon *
Advisor-to-the-President, Theragenics Corporation
Peter A.A. Saunders *
Consultant, PASS Consultants
Bruce W. Smith
Treasurer, Chief Financial Officer and Secretary
* Director of Theragenics Corporation
<PAGE>
THERAGENICS CORPORATION
(An illustration of the palm of a hand with Theragenics'
corporate logo superimposed on the palm appears in the center of
this page.)
5325 Oakbrook Parkway, Norcross, Ga 30093
770.381.8338
<PAGE>
THERAGENICS CORPORATION
5325 OAKBROOK PARKWAY
NORCROSS, GEORGIA 30093
PROXY -- ANNUAL MEETING OF STOCKHOLDERS -- MAY 24, 1996.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Ms. M. Christine Jacobs and Mr. Bruce W.
Smith, or either of them (the "Proxies"), as the undersigned's proxy or proxies,
each with the power to appoint her/his substitute, and hereby authorizes them to
represent and to vote, as designated below, all shares of Common Stock of
Theragenics Corporation (the "Company") which the undersigned is entitled to
vote at the Annual Meeting of Stockholders of the Company to be held on May 24,
1996, or any adjournment thereof.
1. ELECTION OF DIRECTORS.
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the contrary) to vote for all nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below.)
JOHN V. HERNDON PETER A.A. SAUNDERS
2. PROPOSAL TO RATIFY THE APPOINTMENT OF GRANT THORNTON AS THE INDEPENDENT
PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31,
1996.
/ / FOR / / AGAINST / / ABSTAIN
(CONTINUED ON REVERSE SIDE)
<PAGE>
3. In their discretion, the Proxies, or either of them, are authorized to vote
upon such other business as may properly come before the meeting or any
adjournment thereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted in favor of John V. Herndon and Peter A.A. Saunders for election as
directors and FOR Proposal 2.
Date
------------------------------
------------------------------
Signature
------------------------------
Signature, if held jointly
Please sign exactly as your
name or names appear at left.
When shares are held by joint
tenants, both should sign. If
signing in any fiduciary or
representative capacity, give
full title as such.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.
