<PAGE>   1
                                   FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
    ACT OF 1934
    For the quarterly period ended NOVEMBER 29, 1997
          -OR-
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 
    For the transition period from ______ to ______

                         COMMISSION FILE NUMBER 0-13099

                               TRISTAR CORPORATION
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

             DELAWARE                                        13-3129318
  ------------------------------                          ------------------
 (State or other jurisdiction of                          (I.R.S. Employer
  incorporation or organization)                          Identification No.)

   
          12500 SAN PEDRO AVENUE, SUITE 500, SAN ANTONIO, TEXAS 78216
-------------------------------------------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)
                                 (210) 402-2200
                                 --------------
              (Registrant's telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports 
     required to be filed by Section 13 or 15(d) of the Securities Exchange 
     Act of 1934 during the preceding 12 months (or for such shorter period 
     that the registrant was required to file such reports), and (2) has been 
     subject to such filing requirements for the past 90 days.

                     Yes     X        No 
                         ---------        ----------

     Indicate the number of shares outstanding of each of the issuer's classes 
     of common stock, as of the latest practicable date.

               ON JANUARY 2, 1998, THERE WERE OUTSTANDING 16,750,678 SHARES
               OF COMMON STOCK, $.01 PAR VALUE, OF THE REGISTRANT.





                                     Page 1

<PAGE>   2
                      TRISTAR CORPORATION AND SUBSIDIARIES
                               INDEX TO FORM 10-Q

<TABLE>
<CAPTION>
PART I.  FINANCIAL INFORMATION                                                          PAGE
                                                                                        ----
<S>                                                                                      <C>
Item 1.   Financial Statements (Unaudited)

          Consolidated balance sheets -- November 29, 1997 and August 30, 1997            3

          Consolidated statements of operations -- thirteen week periods
               ended November 29, 1997 and November 30, 1996, respectively                5

          Consolidated statements of cash flows -- thirteen week periods ended
               November 29, 1997 and November 30, 1996, respectively                      6

          Notes to consolidated financial statements -- November 29, 1997                 7

Item 2.   Management's Discussion and Analysis of Financial Condition and
               Results of Operations                                                     11

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings                                                              17

Item 2.   Changes in Securities                                                          17

Item 3.   Defaults Upon Senior Securities                                                17

Item 4.   Submission of Matters to a Vote of Security Holders                            17

Item 5.   Other Information                                                              17

Item 6.   Exhibits and Reports on Form 8-K                                               17


SIGNATURES                                                                               18

Index to Exhibits                                                                        19

</TABLE>


                                     Page 2
<PAGE>   3
                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                      TRISTAR CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>

                                                                                    November 29
                                                                                       1997            August 30,
                              ASSETS                                                (unaudited)           1997*
                                                                                   ------------       -----------
<S>                                                                                <C>               <C>
Current assets:
  Cash                                                                             $    469,000      $    492,000
  Accounts receivable, less allowance for doubtful accounts
    of $1,207,000 and $1,052,000, respectively                                       20,539,000        15,267,000
  Accounts receivable - related parties - net                                         1,856,000         1,820,000
  Inventories                                                                        12,923,000        13,560,000
  Prepaid Expenses                                                                      893,000           632,000
                                                                                   ------------      ------------
    Total current assets                                                             36,680,000        31,771,000
                                                                                   ------------      ------------
Property, plant and equipment, less accumulated depreciation
    of $7,546,000 and $7,101,000                                                      8,426,000         8,094,000
                                                                                   ------------      ------------
Other assets:
  Warrant valuation, less accumulated amortization
    of $1,780,000 and $1,769,000, respectively                                          309,000           320,000
  Other assets                                                                          348,000           236,000
                                                                                   ------------      ------------
    Total other assets                                                                  657,000           556,000
                                                                                   ------------      ------------
Total assets                                                                       $ 45,763,000      $ 40,421,000            
                                                                                   ============      ============


</TABLE>

* Prepared from audited financial statements for the year ended August 30, 1997.

See notes to unaudited consolidated financial statements.


                                     Page 3
<PAGE>   4
                     TRISTAR CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS (continued)
<TABLE>
<CAPTION>
                                                                        November 29,
                                                                            1997                     August 30,        
          LIABILITIES AND SHAREHOLDERS' EQUITY                          (unaudited)                    1997*
                                                                    --------------------         -----------------     
<S>                                                                 <C>                          <C>
Current liabilities:
      Revolving credit agreement borrowings, current                $         12,196,000         $       9,732,000
      Accounts payable-trade                                                  10,225,000                 8,139.000
      Accounts payable-related parties-net                                     3,635,000                 4,463,000     
      Accrued bonuses                                                            215,000                   257,000     
      Accrued Interest expense-subordinated debt                               1,654,000                 1,582,000
      Other accrued expenses                                                   1,206,000                 1,384,000
      Income taxes payable                                                        50,000                    11,000
      Current portion of capital lease obligations                               126,000                    42,000
      Current portion of long-term obligations                                     --                       28,000
                                                                    --------------------         -----------------     
       Total current liabilities                                              29,307,000                25,638,000

      Revolving credit agreement borrowings, noncurrent                          435,000                   473,000
      Long-term debt, less current portion                                     2,342,000                 2,474,000
      Obligations under capital leases, less current portion                     168,000                    37,000     
      Subordinated long term debt - related parties                            4,500,000                 4,500,000
                                                                    --------------------         -----------------     
       Total liabilities                                                      36,752,000                33,122,000
                                                                    --------------------         -----------------     
      Commitments and contingencies

      Shareholders' equity (deficit):
       Preferred stock $.05 par value; authorized 1,000,000 shares;
        Series A, 668,529 shares issued and outstanding                        4,666,000                 4,666,000
        Series B, 120,690 shares issued and outstanding                        4,511,000                 4,511,000
       Common stock, $.01 par value; authorized 30,000,000 shares;
        Issued and outstanding 16,749,569 shares and                                                               
        16,729,074 shares, respectively                                          168,000                   168,000
       Additional paid-in-capital                                             10,707,000                10,588,000
       Accumulated deficit                                                   (11,041,000)              (12,612,000)
                                                                    --------------------         -----------------       
        Total shareholders' equity (deficit)                                   9,011,000                 7,299,000
                                                                    --------------------         -----------------   
       Total liabilities and shareholders' equity                   $         45,763,000         $      40,421,000
                                                                    ====================         =================
</TABLE>     


*  Prepared from audited financial statements for the year ended 
August 30, 1997.

See notes to unaudited consolidated financial statements.


                                    Page 4

          
<PAGE>   5
                      TRISTAR CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

  
<TABLE>
<CAPTION>
                                                 Thirteen Weeks Ended
                                             November 29,      November 30,
                                                1997              1996
                                             ------------      ------------
<S>                                          <C>               <C>
Net sales                                    $ 20,365,000      $ 17,489,000

Cost of sales                                  14,927,000        12,262,000
                                             ------------      ------------

Gross profit                                    5,938,000         5,227,000

Selling, general and administrative expenses    3,748,000         3,768,000
                                             ------------      ------------

Income from operations                          2,190,000         1,459,000

Other income (expense):           
   Interest expense                              (474,000)         (604,000)
   Other expense                                  (95,000)          (39,000)
                                             ------------      ------------

Income before provision for income taxes        1,621,000           816,000

Provision for income taxes                         50,000            30,000
                                             ------------      ------------

Net income                                   $  1,571,000      $    786,000

Less:
   Preferred stock dividends                      (61,000)             -- 
                                             ------------      ------------
Net income applicable to common stock        $  1,510,000      $    786,000
                                             ============      ============

Earnings per common share:
Net income applicable to common stock        $        .06      $        .04
                                             ============      ============

   Weighted average common and common
    equivalent shares outstanding              18,952,251        17,497,919 
                                             ============      ============

</TABLE>

See notes to unaudited consolidated financial statements.

                                     Page 5
<PAGE>   6
                      TRISTAR CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


<TABLE>
<CAPTION>
                                                                   Thirteen Weeks Ended
                                                             November 29,       November 30,
                                                                 1997               1996
                                                             ------------       ------------
<S>                                                          <C>                <C>
Cash flows from (used in) operating activities
     Net income                                              $  1,571,000       $    786,000
     Adjustments to reconcile net income to
          net cash used in operating activities:
          Depreciation and amortization                           445,000            441,000
          Provision for losses on accounts receivable             156,000            282,000
          Provision for inventory allowances                      128,000            136,000
          Issuance of stock in connection with 401K plan              --              10,000
          Amortization of warrant valuations                       11,000             20,000
          Change in operating assets and liabilities:
               Accounts receivable                             (5,524,000)        (4,863,000)
               Inventories                                        569,000             10,000
               Prepaid expenses                                  (261,000)          (101,000)
               Income taxes payable                                39,000            (56,000)
               Accounts payable                                 1,258,000            809,000
               Accrued expenses                                  (148,000)           379,000
                                                             ------------       ------------
          Net cash used in operating activities                (1,756,000)        (2,147,000)
                                                             ------------       ------------
Cash flows (used in) from investing activities:
     Capital expenditures                                        (527,000)          (193,000)
     Increase in other assets                                    (112,000)            (8,000)
                                                             ------------       ------------
          Net cash used in investing activities                  (639,000)          (201,000)
                                                             ------------       ------------
Cash flows from (used in) financing activities:
     Net increase in revolving credit agreement 
       borrowings                                               2,426,000          2,466,000
     Principal payments under debt obligations                   (195,000)          (169,000)
     Proceeds from exercise of stock options                      141,000            120,000
                                                             ------------       ------------
          Net cash provided by financing activities             2,372,000          2,417,000
                                                             ------------       ------------
Net (decrease) increase in cash                                   (23,000)            69,000
Cash at beginning of period                                       492,000            233,000
                                                             ------------       ------------
Cash at end of period                                        $    469,000       $    302,000
                                                             ============       ============
</TABLE>


See notes to unaudited consolidated financial statements.

                                     Page 6
<PAGE>   7
                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                      TRISTAR CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
                                November 29, 1997

Note 1:  Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.

In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the thirteen week period ended November 29, 1997, are not
necessarily indicative of the results that may be expected for the year ending
August 29, 1998.

Note 2:  Net income per share

The computation of primary earnings per share is based on the weighted average
number of common shares outstanding during the period plus the dilutive effect
of common stock equivalents consisting of stock options, warrants and the Series
A cumulative convertible preferred stock. Earnings per common share have been
adjusted for dividend requirements on the Series B preferred stock as described
in Note 7. Fully diluted earnings per share is not less than the primary 
earnings (loss) per share for the thirteen week periods ended November 29, 1997,
and November 30, 1996, respectively.  Cumulative preferred stock dividends in
arrears at November 29, 1997, totalled approximately $370,000.

Note 3:  Inventories

Inventory is stated at the lower of cost or market.

     <TABLE>                                                           
     <CAPTION>                                                         
     ----------------------------------------------------------------- 
                                    November 29,          August 30,   
                                       1997                 1997       
     ----------------------------------------------------------------- 
     <S>                    <C>                   <C>                  
     Raw materials           $        5,788,000   $       6,105,000    
     Work-in-process                  2,063,000           2,101,000    
     Finished goods                   7,469,000           7,684,000    
                                ----------------     ---------------   
                                                                       
                                     15,320,000          15,890,000    
     Inventory allowances            (2,397,000 )        (2,330,000 )  
                                ----------------     ---------------   
                                                                       
                             $       12,923,000   $      13,560,000    
                             ==================   =================    
     ----------------------------------------------------------------- 
     </TABLE>                                                          
                                                                       


                                    Page 7
<PAGE>   8



Note 4:  Short-term Borrowing

The Company had at November 29, 1997 a revolving credit agreement which provided
for $15,500,000 of maximum borrowings at the prime rate (8.5%) plus two
percentage points per annum, with additional fees approximating a percentage
point per annum. Borrowing capability is based on eligible domestic and foreign
accounts receivable, and on eligible finished goods and manufacturing
inventories, within limits established under the agreement.

This facility is secured by substantially all of the assets of the Company. The
agreement contains material adverse change provisions, as well as certain
restrictions and conditions among which are limitations on cash dividends,
capital expenditures, maximum levels of accounts receivable from related
parties, and repayments of a prior financing arrangement with a related party.

Remaining availability under the line as of November 29, 1997 was $824,000,
based on the borrowing formulas.

On December 19, 1997, the Company entered into a $22,000,000 credit agreement
with a new lender (the "Credit Agreement"). The Credit Agreement includes a
revolving credit facility which provides for $15,100,000 of maximum borrowings
bearing interest, at the Company's election, at the Alternate Bank Rate (the
higher of the prime rate or the Federal Funds Rate plus .50%) plus 1.50% or the
London Interbank Offered Rate (LIBOR) plus 3.50%. Borrowings under the Revolving
Credit are limited by a formula based on Eligible Accounts Receivable and
Inventory, as defined. Additionally, borrowings based on LIBOR can not exceed
60% of the total outstanding borrowings under the Revolving Credit. Commitment
fees equal to .50% per annum on the unused portion of the Revolving Credit are
payable monthly.

The Credit Agreement also provides for a $3,400,000 term loan (the "Term Loan")
and a $3,500,000 capital expenditure facility (the "Cap Ex Facility"). The Term
Loan bears interest, payable monthly, at the Alternate Base Rate plus 2.00%.
Principal payments on the Term Loan will be equal monthly principal payments in
the amount of $56,667 for 35 months beginning in January 1998 with a $1,416,655
balloon payment due in December 2000. Additionally, 50% of annual excess cash
flow, as defined, must be applied to the Term Loan installments in the inverse
order of maturity.

Borrowings under the Cap Ex Facility are limited to 80% of the cost of new
machinery and equipment, limited to annual utilization of $1,500,000. These
borrowings also bear interest, payable monthly, at the Alternate Base Rate plus
2.00%. Principal payments on the Cap Ex Facility commence one month after the
take down in an amount based on a five year amortization. However, a balloon
payment in an amount equal to all outstanding borrowings under the Cap Ex
Facility is also due in December 2000.

The Company used the initial borrowings under the Credit Agreement, which
included $3,400,000 of borrowings under the Term Loan, to repay amounts
outstanding under the $15,500,000 credit agreement and the related term loan.
Accordingly, an amount of revolving credit agreement and term loan borrowings
outstanding at November 29, 1997 equal to the portion of the borrowings under
the New Term Loan which will be repaid subsequent to November 28, 1998 has been
classified as noncurrent in the accompanying consolidated balance sheet.

Borrowings under the Credit Agreement are secured by all of the Company's
present and future assets. The Credit Agreement contains restrictive financial
covenants including Minimum Tangible Net Worth, Minimum EBITDA, Minimum Fixed
Charge Coverage, Maximum Leverage and Maximum Capital Expenditures. Additional
covenants limit borrowings, assets sales and dividends.



                                    Page 8
<PAGE>   9



Note 5:  Litigation and Contingencies

         Freitas and Kenner

In October 1994, a suit was filed in Florida state court against the Company and
two of its directors by Ross Freitas, Carolyn Kenner, Rose Freitas and Melissa
Freitas. The complaint alleged causes of action by two plaintiffs for libel and
sought indemnification of legal costs allegedly incurred by those plaintiffs in
suits and proceedings arising from the facts which were the subject of the
investigation conducted by the Special Committee of the Board of Directors in
1992. The complaint also alleged, on behalf of all four plaintiffs, that the
Company's disclosures relating to the Core Sheth Families' holding of Company
stock and other matters were fraudulent or negligently misrepresented. In April
1995, the court dismissed the complaint without prejudice, in part due to the
plaintiffs' failure to state a claim for relief. In May 1995 the plaintiffs
refiled the complaint, asserting many of the same claims, and in June 1996,
amended their complaint yet again, naming only the Company and one of its
directors as defendants. The Company intends to dispute these allegations
vigorously and believes that ultimate disposition of the case will not have a
material adverse effect on its business, financial condition or results of
operations.

         Proceeds of an Executive Liability and Indemnification Policy

In November 1994 and June 1995, the United States District Court for the
District of South Carolina approved the disbursement of $1.25 and $0.75 million,
respectively, to the Company from the proceeds of an executive liability and
indemnification policy owned by the Company. Two other claimants under the
policy, Ross Freitas ("Freitas") and Carolyn Kenner ("Kenner"), sought
reconsideration of the latter court-approved disbursement. Pursuant to a
settlement agreement approved by the Court on December 18, 1997, Freitas and
Kenner have withdrawn their motion for reconsideration. As part of the
settlement, the Company will make payments totaling $175,000 to Freitas and
Kenner by April 15, 1998. The proceedings regarding the policy before the United
States district Court for the District of South Carolina have been dismissed.
The $175,000 settlement is reflected as an accrual in the accompanying financial
statements.

         Internal Revenue Service Examination

In February 1997, the Internal Revenue Service ("the IRS") concluded their
examination of the Company's tax returns submitted for fiscal years 1993, 1994
and 1995. The IRS proposed adjustments disallowing the deductions of payments
made in the settlement of the class action litigation and certain related legal
and professional fees. The Company is in discussions with the IRS on these
issues and will appeal the proposed adjustments if necessary. If the Company is
unsuccessful in its discussions or ultimately in an appeal, it will be required
to pay taxes from prior years and related interest thereon exceeding $1,500,000,
and it will lose a significant amount of its existing net operating loss
carryforward benefits. No accrual for the impact of the proposed IRS adjustments
has been recorded in the accompanying financial statements as the Company does
not believe it is probably that the IRS will prevail in this matter.

         Other

The Company is subject to ordinary and routine litigation arising out of the
conduct of its business. Management believes that the ultimate disposition of
these proceedings will not have a material adverse effect on the Company's
financial condition.



                                    Page 9
<PAGE>   10



Note 6:  Related Party Transactions:

Certain suppliers of fragrance product components and the primary suppliers of
cosmetic products are affiliates of the Core Sheth families who beneficially own
78% of the Company's outstanding common stock. Related party accounts payable
result from the purchase of products from those vendors. Related party accounts
receivable result from the sale of products to those and other affiliates of the
Core Sheth Families. The payables and receivables balances are offset for
presentation purposes and the net balance of accounts receivable or accounts
payable is presented on the balance sheet. Related party payables also include
payables due members of the Company's Board of Directors which result, in the
normal course of business, from expenses associated with Board and related
committee meetings. The following summarizes the presentations at November 29,
1997 and August 30, 1997.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------
                                           November 29,       August 30,
                                               1997              1997
                                          -----------------------------------
<S>                                       <C>                   <C>
Accounts Receivable:
Total accounts receivable-related parties $     2,070,000        2,267,000

Offset amount                                    (214,000)        (447,000)
                                          ===================================
Net related parties receivables           $     1,856,000        1,820,000
                                          ===================================

Accounts Payable:
Total accounts payable-related parties    $     3,849,000        4,910,000

Offset amount                                    (214,000)       (447,000)
                                          ===================================
Net related parties payables              $     3,635,000        4,463,000
                                          ===================================
-----------------------------------------------------------------------------
</TABLE>


The Company purchases finished goods and fragrance product components from Core
Sheth Families affiliates. During the thirteen week period ended November 29,
1997, and for the respective period in fiscal 1996, the Company purchased
approximately $1,073,000 and $1,618,000, respectively.

During the thirteen week period ended November 29, 1997, and for the respective
period in fiscal 1996, the Company sold products to Core Sheth Families
affiliates in the amounts of approximately $1,041,000 and $1,137,000,
respectively.

Note 7:   Shareholders' Equity (Deficit)

To strengthen the financial position of the Company, effective December 11,
1996, Transvit Manufacturing Corporation ("Transvit"), a related party and
principal stockholder, agreed to convert a $4,666,000 subordinated note payable
into 666,529 shares of the Company's Series A convertible non-voting preferred
stock. The preferred stock has cumulative preferred dividends of $0.315 per
share and a preferred distribution of $7.00 per share plus accrued and unpaid
dividends. Each share of the Series A preferred stock is convertible, at the
option of Transvit, into one share of the Company's common stock. The Company
can redeem the shares of Series A preferred stock at any time for cash of $7 per
share, plus all accrued and unpaid dividends. The conversion price approximated
the closing bid price of the Company's common stock as reported by the NASDAQ on
the date of this transaction

In a subsequent transaction effective February 21, 1997, Nevell Investments,
S.A. ("Nevell"), the holder of a subordinated long-term promissory note in the
principal amount of $4,000,000, converted $3,500,000 of that note into 120,690
shares of the Company's Series B convertible non-voting preferred stock. The
Series B preferred stock has cumulative preferred dividends of $2.03 per share
and a preferred distribution 



                                    Page 10

<PAGE>   11

of $29.00 per share plus accrued and unpaid dividends. Each share of the Series
B preferred stock is convertible, at the option of Nevell, into four shares of
the Company's common stock. The Company can redeem the shares of Series B
preferred stock at any time for cash of $29 per share ($7.25 per common share),
plus all accrued and unpaid dividends.



                                    Page 11
<PAGE>   12
Item 2.

Management's Discussion and Analysis of Financial Condition and Results of 
Operations

Results of operations for the thirteen weeks ended November 29, 1997.

This document contains certain "forward-looking" statements as such term is
defined in the Private Securities Litigation Reform Act of 1995 and information
relating to the Company and its subsidiaries that are based on the beliefs of
the Company's management. When used in this report, the words "anticipate,"
"believe," "estimate," "expect" and "intend" and words or phrases of similar
import, as they relate to the Company or its subsidiaries or Company management,
are intended to identify forward-looking statements. Such statements reflect the
current risks, uncertainties and assumptions related to certain factors
including, without limitation, competitive factors, general economic conditions,
customer relations, relationships with vendors, the interest rate environment,
governmental agencies, seasonality, distribution networks, product introductions
and acceptance, onetime events and other factors described herein and in other
filings made by the Company with the Securities and Exchange Commission. Based
upon changing conditions, should any one or more of these risks or uncertainties
materialize, or should any underlying assumptions prove incorrect, actual
results may vary materially from those described herein as anticipated,
believed, estimated, expected or intended. The Company does not intend to update
these forward-looking statements.

For the thirteen week period ended November 29, 1997 the Company recorded net
income of $1,571,000 compared to a net income of $786,000 for the thirteen week
period ended November 30, 1996. After giving effect to the preferred stock
dividends described in Note 2 to the Notes to the Consolidated Financial
Statements, the Company recorded a net income applicable to common stock of
$1,510,000 or $0.08 per share. For the same period of fiscal 1997, the Company
recorded net income of $786,000 or $0.04 per share.

Net Sales
Net sales of $20,865,000 for the thirteen weeks ended November 29, 1997, were
19% greater than the net sales of $17,489,000 for the thirteen weeks ended
November 30, 1996. The increase over the prior fiscal period can be primarily
attributed to growth in sales in the U.S. wholesale and Latin America markets as
a result of the success of the Royal Selections fragrance line, which was
introduced in September 1996.

Net sales - channels of distribution
The Company markets and distributes products to wholesalers, distributors, chain
stores, mass merchandisers, and independent retail channels in various markets
throughout North and South America.

For the thirteen week period ended November 29, 1997, the Company experienced a
growth in the U.S. wholesale and Latin America markets while experiencing a
slight decline in the combined chain, specialty chain and mass merchandising
channels when compared to fiscal 1997. The growth in the U.S. wholesale and
Latin America channels is indicative of the success of the new Royal Selections
fragrance line introduced in September 1996. The competitive, both in price and
presentation, Royal Selections line, designed for the wholesale and Latin
America markets, has received significant acceptance in those markets to the
extent that the Company was at times unable to completely satisfy the demand for
specific fragrances in that product line. The Company is continuing in its
efforts to equalize availability and demand. The Company continues to devote
resources to all channels of distribution in the U.S. and Latin America with
programs including, but not limited to, promotions and limited advertising. In
certain Latin America markets, economic and political conditions continue to
restrict growth.

Net sales - related parties
In the first thirteen week period of fiscal 1997 sales to affiliates of the Core
Sheth Families, the Company's major stockholder, were $1,041,000 as compared to
$1,137,000 for the comparable period ended November 30, 1996.



                                    Page 12
<PAGE>   13

Net sales - products purchased from related parties
Of the net sales in the first thirteen weeks of fiscal 1998, approximately 5%,
or $1,113,000, resulted from the sale of products purchased from related parties
as finished goods. For the same period in fiscal 1997, comparable numbers were
10%, or $1,814,000. In addition, fragrances and other products manufactured and
sold by the Company included some components that were purchased from related
parties. The cost of those components approximated 6% and 7% of cost of sales in
the same periods of fiscal 1998 and 1997, respectively.

Gross profit
The Company's gross profit for the thirteen week periods ended November 29, 1997
and November 30, 1996 was $5,938,000, or 29% of sales and $5,227,000 or 30% of
sales, respectively. The slight decline in gross profit in fiscal 1998 in
comparison to fiscal 1997 was primarily due to manufacturing variances.

Selling, general and administrative expenses
Selling, general and administrative expenses ("SG&A") for the thirteen week
periods ended November 29, 1997 decreased to $3,748,000 or 18% of sales from
$3,768,000 or 22% of sales for the like fiscal 1997 period ended November 
30, 1996. The total amount of these costs in the thirteen weeks of fiscal 1998
were comparable to the same period of fiscal 1997 due primarily to the Company's
continued efforts to control expenses.

Non operating income or expense
Interest expense decreased when comparing the thirteen week period of fiscal
1998 to the same period of fiscal 1997 as a result of the conversion of interest
bearing subordinated debt into preferred stock.  See Note 7 of the Notes to the
Consolidated Financial Statements.



                                    Page 13
<PAGE>   14



Potential adverse affects on results of operations for future periods

The results for the remainder of fiscal 1998 could be adversely affected by each
or all of the following factors:

1.   Mexican Market. The market for the Company's products continues to be 
     negatively impacted as a result of the devaluation of the Mexican Nuevo
     Peso in December 1994 and the subsequent economic and political
     instability. These factors sharply reduced the purchasing power of the
     Mexican consumer and therefore the demand for the Company's products was
     adversely affected. Any future significant deterioration of the Peso's
     value would be expected to further adversely affect the Company's sales in
     Mexico and also the collectability of accounts receivable. The Company
     believes that some of its customers based in the United States sell the
     Company's products (as well as the products of other companies) to
     purchasers who, in turn, may attempt to import goods into Mexico without
     full payment of applicable Mexican taxes and customs duties. Enhanced
     enforcement efforts by Mexican authorities may have an adverse effect on
     the Company's sales to such customers.

2.   Latin America Economies. Growth in sales, or even the maintenance of
     existing sales levels, in certain Latin American countries depends to a
     large extent on the economic health and political stability of those
     countries. Any deterioration in the economic or political stability in such
     countries could adversely affect sales.

3.   Supply of Products. The Company's ability to manufacture and to satisfy
     consumer demand for fragrances is dependent on the supply of certain
     components from single sources including an affiliate of the Core Sheth
     Families. Any inability of these vendors to meet the Company's requirements
     could have an adverse effect on the Company's results until an alternative
     source could be found and/or developed. In addition, the Company is
     dependent on the supply of cosmetic products, other than cosmetic pencils,
     from Core Sheth Families affiliates. If such affiliates were to cease or be
     unable to supply these cosmetic products, the lack of these products would
     have an adverse effect on the Company until a secondary supplier could be
     located.

4.   New and Developing Markets. The Company continues in its attempts to
     develop and expand sales in Latin America. In the process, the Company
     incurs significant expenses in order to establish a marketing presence and
     an economically viable amount of sales. There is no assurance that the
     Company will be successful in those endeavors nor that it will recover its
     initial expenses and start up costs. In addition, certain countries from
     time to time impose strict import restrictions, high levels of taxes on
     imports, and restrictions on currency transactions, all of which could
     affect the success of sales and marketing activities and also affect the
     profitability of such activities.

5.   Internal  Revenue  Service.  In February  1997,  the Internal  Revenue  
     Service ("the IRS") concluded its examination of the Company's tax returns
     submitted for fiscal years 1993, 1994 and 1995. The IRS proposed
     adjustments disallowing the deductions of payments made in the settlement
     of the class action litigation and certain related legal and professional
     fees. The Company is in discussions with the IRS on these issues and will
     appeal the proposed adjustments if necessary. If the Company is
     unsuccessful in its discussions or ultimately in an appeal, it will be
     required to pay taxes from prior years and related interest thereon
     exceeding $1,500,000, and it will lose a significant amount of its existing
     net operating loss carryforward benefits. No accrual for the impact of the
     proposed IRS adjustment has been recorded in the accompanying financial
     statements as the Company does not believe it is probable that the IRS will
     prevail in this matter.

At this time, it is not known whether, or to what degree, the above factors will
have a material adverse impact on future results.


                                   Page 14
<PAGE>   15



Liquidity and Capital Resources

The Company currently is obtaining its working capital from three primary
sources: a revolving line of credit, cash generated by operations, and from
delaying payments to vendors (primarily related parties) beyond customary terms.

Operating Activities
Operations in the thirteen week period ended November 29, 1997, utilized
$1,756,000 in cash primarily due to increased trade accounts receivable.
Offsetting the usages were net income adjusted for non cash items, and
increases in accounts payable.

Accounts receivable grew primarily as a result of increased sales, varying
extended financing terms given to customers and extended terms given to foreign
customers in order to develop those markets. Accounts payable increased as the
Company delayed payments to certain vendors and increased its purchases of
inventory and expanded manufacturing capability.

Investing Activities
Capital expenditures during the thirteen week period were $527,000, consisting
primarily of investments in production related machinery and equipment,
facilities related items, and computer equipment. Capital expenditures in fiscal
1998 are expected to exceed the fiscal 1997 level with the major portion being
devoted to manufacturing equipment.

Financing Activities
During the thirteen week period ended November 29, 1997, revolving credit
agreement borrowings increased $2,426,000 to $12,631,000. Remaining availability
based on the borrowing formulas as of November 30, 1997, was $824,000.

The Company had at November 29, 1997, a revolving credit agreement, amended as
of July 7, 1995, October 1, 1996, February 22, 1997, June 25, 1997, September 5,
1997 and November 21, 1997, which provided for $15,500,000 of maximum borrowings
at the prime rate (8.5% at August 30, 1997) plus two percentage points per
annum, with additional fees approximating one percentage point per annum.
Borrowings under this credit agreement were limited to 75% of eligible domestic
accounts receivable, 60% of eligible foreign accounts receivable, 100% of
eligible related party receivables secured by letters of credit, 50% of eligible
finished goods inventories, and 40% of eligible manufacturing inventories.

The term loan entered into in July 1995 with the same lender as the short term
revolving credit line, provided for borrowings of $3.9 million of which
$2,474,000 were outstanding as of August 30, 1997. This loan was subject to the
same interest rate, fees, and debt restrictions as listed above for the
revolving credit lines. The loan called for monthly installments assuming a
maturity date in 2002.

On December 19, 1997, the Company entered into a $22,000,000 credit agreement
with a new lender (the "Credit Agreement"). The Credit Agreement includes a
revolving credit facility (the "Revolving Credit") which provides for
$15,100,000 of maximum borrowings bearing interest, at the Company's election,
at the Alternate Base Rate (the higher of the prime rate or the Federal Funds
Rate plus .50%) plus 1.50% or the London Interbank Offered Rate (LIBOR) plus
3.50%. Borrowings under the Revolving Credit are limited by a formula based on
Eligible Accounts Receivable and Inventory, as defined. Additionally, borrowings
based on LIBOR can not exceed 60% of the total outstanding borrowings under the
Revolving Credit. Commitment fees equal to .50% per annum on the unused portion
of the Revolving Credit are payable monthly.

The Credit Agreement also provides for a $3,400,000 term loan (the "Term Loan")
and a $3,500,000 capital expenditure facility (the "Cap Ex Facility"). The Term
Loan bears interest, payable monthly, at the Alternate Base Rate plus 2.00%.
Principal payments on the Term Loan will be equal monthly principal payments in
the amount of $56,667 for 35 months beginning in January 1998 with a $1,416,655
balloon 


                                   Page 15
<PAGE>   16

payment due in December 2000. Additionally, 50% of annual excess cash flow, as
defined, must be applied to the Term Loan installments in the inverse order of
maturity.

Borrowings under the Cap Ex Facility are limited to 80% of the cost of new
machinery and equipment, limited to annual utilization of $1,500,000. These
borrowings also bear interest, payable monthly, at the Alternate Base Rate plus
2.00%. Principal payments on the Cap Ex Facility commence one month after the
take down in an amount based on a five year amortization. However, a balloon
payment in an amount equal to all outstanding borrowings under the Cap Ex
Facility is also due in December 2000.

The Company believes the new lines of credit, together with cash generated by
operations and the continued ability to delay payments to related party vendors
as required will provide sufficient cash to meet the cash requirements of the
Company for fiscal
1998.

As of August 31, 1996, the Company was indebted in the amount of $4.7 million to
a Core Sheth Families affiliate under a loan agreement entered into in August
1993. The note, which was subordinated to the commercial lender, bore interest
at the rate of 4.5% per annum. On December 11, 1996, the $4.7 million of
subordinated debt was converted into the Company's Series A convertible
preferred stock (See Note 7 of the Notes to the Consolidated Financial
Statements). The Company remains indebted to the affiliate for delinquent
interest payments ($567,000) on the converted debt.

The settlement of the stockholder class action litigation recorded in May 1993
($9.5 million) resulted in a material change to the Company's long-term debt to
equity ratio. The Company at August 31, 1996 had outstanding subordinated
long-term debt to a Core Sheth Families affiliate of $8.0 million related to
that settlement. On February 21, 1997, $3.5 million of this debt was converted
into the Company's Series B convertible preferred stock (See Note 7 of the
Notes to the Consolidated Financial Statements). The remaining debt bears
interest at rates of 6.36% to 8.23% per annum. The Company remains indebted to
the affiliate for delinquent interest payments of $315,000 on the converted debt
($3.5 million). Repayments on the remaining debt will begin in the year 2001.
Due to the subordination of the debt to senior lenders, the long-term nature of
the debt, and the conversion of $3.5 million to preferred stock, the Company
does not believe that the ratio of long-term debt to equity has an adverse
effect on the Company.

As of November 29, 1997, the Company's financial statements reflect accrued
interest of $1,087,000 due on the above related party debt including the
delinquent amounts due on debt converted to preferred stock.  

The Company also purchases certain equipment, primarily office furniture,
computer equipment and software, under long-term purchase agreements. These are
not material to the Company's cash flow.

The Company does not have any plans to pay any cash dividends on the Common
Stock or the Preferred Stock in the foreseeable future. Further, payments of
such dividends are subject to restrictions imposed by the Company's commercial
lender in connection with the existing revolving lines of credit.


                                   Page 16
<PAGE>   17

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         Not Applicable.

Item 2.  Changes in Securities

         None.

Item 3.  Defaults Upon Senior Securities

         None.

Item 4.  Submission of Matters to a Vote of Security Holders

         None.

Item 5.  Other Information

         None.

Item 6.  Exhibits and Reports on Form 8-K

         a)    Exhibits

10.1           Loan and Security  Agreement  dated December 19, 1997,  between 
               the Company and Bank of New York Financial  Credit Corporation 
               with Special provisions Rider.

27             Financial Data Schedule.

         b)    Reports on Form 8-K

                  None.



                                   Page 17
<PAGE>   18


SIGNAUTRES

Pursuant to the requirements of the Securities exchange Act of 1934, the 
Registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.


                                   TRISTAR CORPORTION
                                      (Registrant)


Date:   January 20, 1998           /s/ VIREN S. SHETH
       ------------------------    --------------------------
                                   Viren S. Sheth
                                   President and Chief Executive Officer
                                   (Principal and Executive Officer)

Date:   January 20, 1998           /s/ ROBERT M. VIOLA
       ------------------------    --------------------------
                                   Robert M. Viola
                                   Vice-President and Chief Executive Officer
                                   (Principal Financial and Accounting Officer)



                                   Page 18
<PAGE>   19


                               INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number         Description
<S>            <C>    
10.1           Loan and Security  Agreement  dated December 19, 1997,  between 
               the Company and Bank of New York Financial  Credit Corporation 
               with Special provisions Rider.

27             Financial Data Schedule.
</TABLE>