<PAGE>


                SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON, D.C. 20549

                   --------------------------------

                              FORM 10-Q

         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                 THE SECURITIES EXCHANGE ACT OF 1934

          FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1996

                     COMMISSION FILE NO. 0-10552

                      ----------------------------

                      SCHERER HEALTHCARE, INC.
       (Exact name of registrant as specified in its Charter)

           DELAWARE                              59-0688813
 (State or other jurisdiction of           (I.R.S. Employer
 incorporation or organization)             Identification No.)

      2859 PACES FERRY ROAD, SUITE 300, ATLANTA, GEORGIA  30339
    (Address of principal executive offices, including Zip Code)

                            (770) 333-0066
        (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 of each of the issuer's classes of Common Stock,
as of the latest practicable date:
                
        CLASS                          OUTSTANDING AS OF JANUARY 31, 1997
------------------------------         -----------------------------------
Common Stock, $0.01 par value                    4,313,878
        
<PAGE>
                
                             SCHERER HEALTHCARE, INC.

                        QUARTERLY REPORT ON FORM 10-Q
                  FOR THE QUARTER ENDED DECEMBER 31, 1996

                          TABLE OF CONTENTS

ITEM                                                                 PAGE
NUMBER                 PART I. FINANCIAL INFORMATION                 NUMBER
------                                                               ------

   1      Financial Statements:

          Condensed Consolidated Balance
          Sheets as of December 31, 1996 and
          March 31, 1996 . . . . . . . . . . . . . . . . . . . . . .    3

          Condensed Consolidated Statements
          of Operations for the Three and Nine Months
          Ended December 31, 1996 and 1995 . . . . . . . . . . . . .    5

          Condensed Consolidated Statements
          of Cash Flows for the Nine Months
          Ended December 31, 1996 and 1995 . . . . . . . . . . . . .    6

          Notes to Condensed Consolidated
          Financial Statements . . . . . . . . . . . . . . . . . . .    7

   2      Management's Discussion and Analysis
          of Financial Condition and Results 
          of Operations. . . . . . . . . . . . . . . . . . . . . . .    9

                           PART II. OTHER INFORMATION

   1      Legal Proceedings. . . . . . . . . . . . . . . . . . . . .   14

   5      Other Information. . . . . . . . . . . . . . . . . . . . .   14

   6      Exhibits and Reports on Form 8-K . . . . . . . . . . . . .   14

          SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . .   15

          Index to Exhibits. . . . . . . . . . . . . . . . . . . . .   16


                                      2
<PAGE>

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS


                            SCHERER HEALTHCARE, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

                                     ASSETS

<TABLE>
<CAPTION>
                                                          December 31, 1996     March 31, 1996
                                                         ------------------     ---------------
<S>                                                      <C>                    <C>
CURRENT ASSETS
   Cash and cash equivalents                                    $ 2,848,000        $ 3,622,000
   Accounts receivable, less allowance for doubtful 
     accounts of $210,000 and $243,000, respectively              5,515,000          6,092,000
   Current maturities of notes receivable                           255,000            393,000
   Inventories                                                    3,806,000          3,936,000
   Prepaid and other                                                312,000            331,000
                                                              -------------      -------------
       Total current assets                                     12,736,000         14,374,000
                                                              -------------      -------------
   
PROPERTY AND EQUIPMENT                                          16,653,000          15,749,000
   Less accumulated depreciation                                (6,174,000)         (5,146,000)
                                                              ------------       -------------
   Net property and equipment                                   10,479,000          10,603,000
                                                              ------------       -------------

OTHER ASSETS                                                    
   Cost in excess of net assets of business acquired, net       6,453,000            6,721,000
   Other investments, at cost                                     651,000              651,000
   Notes receivable, less current portion                         405,000              506,000
   Intangibles                                                    343,000              365,000
   Deferred income taxes                                          329,000              329,000
   Other                                                          290,000              305,000
   Net assets of discontinued operations                          695,000              589,000
                                                              ------------        ------------
       Total other assets                                       9,166,000            9,466,000
                                                             -------------        ------------
TOTAL ASSETS                                                  $32,381,000          $34,443,000
                                                             -------------        ------------
                                                             -------------        ------------
</TABLE>

         See notes to condensed consolidated financial statements.

                                      3
<PAGE>

                            SCHERER HEALTHCARE, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

                       LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                           December 31, 1996         March 31, 1996
                                                           -----------------        ---------------
<S>                                                        <C>                      <C>
CURRENT LIABILITIES              
     Accounts payable                                          $ 1,829,000            $ 2,150,000
     Accrued expenses                                            3,995,000              5,002,000
     Current maturities of debt obligations                        999,000                981,000
     Payable to affiliates                                       2,145,000              2,286,000
     Other                                                          18,000                 49,000
     Net liabilities of discontinued operations                     26,000                 33,000
                                                           ---------------          --------------
         Total current liabilities                               9,012,000             10,501,000
                                                           ---------------          --------------

LONG-TERM DEBT, net of current maturities                        5,142,000              5,291,000
                                                           ---------------          --------------
     
OTHER LIABILITIES                                                  330,000                347,000
                                                           ---------------          --------------
COMMITMENTS AND CONTINGENCIES                                            


MINORITY INTERESTS IN SUBSIDIARY                                                       
AND PARTNERSHIPS                                                1,801,000               2,130,000
                                                           --------------          --------------

STOCKHOLDERS' EQUITY                                                      
     Convertible preferred stock - $.01 par value,
      2,000,000 shares authorized;
      23,854 shares issued and outstanding
      (28,885 at March 31, 1996)                                        --                      --
     Common stock - $.01 par value,                                       
      12,000,000 shares authorized;                                        
      4,692,201 shares issued
      (4,669,928 at March 31, 1996);
      4,312,839 shares outstanding
      (4,290,566 at March 31, 1996)                                47,000                  47,000
     Capital in excess of par value                            22,316,000              22,316,000
     Accumulated deficit                                       (3,234,000)             (3,156,000)
     Less treasury stock, at cost                              (3,033,000)             (3,033,000)
                                                             ------------             -----------
         Total stockholders' equity                            16,096,000              16,174,000
                                                             ------------             -----------
TOTAL LIABILITIES AND STOCKHOLDERS'                            
EQUITY                                                        $32,381,000             $34,443,000
                                                              ------------            ------------
                                                              ------------            ------------

</TABLE>

         See notes to condensed consolidated financial statements.

                                      4
<PAGE>

                          SCHERER HEALTHCARE, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                             (UNAUDITED)

<TABLE>
<CAPTION>


                                                         Three months ended                  Nine months ended
                                                            December 31,                        December 31,
                                                    ---------------------------         -----------------------------
                                                         1996            1995                1996             1995
                                                    ------------   ------------         -------------     -----------
<S>                                                  <C>           <C>                   <C>               <C>
NET SALES                                           $ 8,250,000     $ 9,267,000           $26,727,000       $32,086,000
                                                     ----------      ----------            ----------       -----------
COSTS AND EXPENSES  
   Cost of goods sold                                 5,168,000       6,203,000            17,575,000        21,953,000
   Selling, general, and administrative               2,924,000       3,016,000             8,739,000         9,795,000
   Research and development                              98,000          36,000               196,000           112,000
                                                     ----------      ----------            ----------       -----------
     Total costs and expenses                         8,190,000       9,255,000            26,510,000        31,860,000
                                                     ----------      ----------            ----------       -----------

OPERATING INCOME                                         60,000          12,000               217,000           226,000
                                                     ----------      ----------            ----------       -----------
                              
OTHER INCOME (EXPENSE)                   
   Interest income                                       11,000         147,000               135,000           288,000
   Interest expense                                    (241,000)       (276,000)             (685,000)         (957,000)
   Gain (loss) on sale of assets                        (84,000)      2,806,000               (84,000)        3,023,000
   Other, net                                           (53,000)         49,000               (43,000)           45,000
                                                     ----------      ----------            ----------       -----------
     Total other income (expense)                      (367,000)      2,726,000              (677,000)        2,399,000
                                                     ----------      ----------            ----------       -----------
                         
Income (loss) from continuing operations
  before minority interest and income taxes            (307,000)      2,738,000              (460,000)        2,625,000
                              
Minority interest in net loss of subsidiary and 
   partnerships                                         155,000         191,000               390,000           227,000
                                                     ----------      ----------            ----------       -----------
Income (loss) from continuing operations 
  before income taxes                                  (152,000)      2,929,000               (70,000)        2,852,000
                            
Benefit (provision) for income taxes                      9,000        (595,000)               (8,000)         (630,000)
                                                     ----------      ----------            ----------       -----------
Income (loss) from continuing operations               (143,000)      2,334,000               (78,000)        2,222,000
                        
Loss from discontinued operations                             -         (14,000)                    -          (696,000)
                                                     ----------      ----------            ----------       -----------
NET INCOME (LOSS)                                    $ (143,000)     $2,320,000            $  (78,000)      $ 1,526,000
                                                     ----------      ----------            ----------       -----------
                                                     ----------      ----------            ----------       -----------
                             
INCOME (LOSS) PER COMMON SHARE:
   Income (loss) from  continuing operations         $     (.03)     $      .54            $     (.02)      $       .52
   Loss from discontinued operations                          -               -                     -              (.16)
                                                     ----------      ----------            ----------       -----------
NET INCOME (LOSS) PER COMMON 
SHARE                                                $     (.03)     $      .54            $     (.02)      $       .36
                                                     ----------      ----------            ----------       -----------
                                                     ----------      ----------            ----------       -----------
WEIGHTED AVERAGE COMMON                   
SHARES OUTSTANDING                                    4,311,206       4,290,677             4,298,139         4,276,548
                                                     ----------      ----------            ----------       -----------
                                                     ----------      ----------            ----------       -----------
</TABLE>
                 
         See notes to condensed consolidated financial statements.


                                      5
<PAGE>


                           SCHERER HEALTHCARE, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (UNAUDITED)


<TABLE>
<CAPTION>

                                                                              Nine months ended
                                                                                 December 31,
                                                                         -------------------------------
                                                                           1996                 1995
                                                                        --------------------------------
<S>                                                                      <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:        
   Net income (loss)                                                     $  (78,000)         $1,526,000
   Adjustments to reconcile net income (loss) to net cash used for
   operating activities:
    Depreciation and amortization                                         1,309,000           1,694,000
    Minority interest                                                      (374,000)           (186,000)
    Loss (gain) on sale of assets                                            84,000          (3,023,000)
    Loss from discontinued operations                                             -             696,000
    Other noncash charges and credits, net                                   (8,000)            (30,000)
   Changes in operating assets and liabilities, net of acquisitions:
    Accounts receivable, net                                                274,000           1,427,000
    Inventories                                                            (179,000)           (320,000)
    Prepaid and other                                                        17,000              93,000
    Accounts payable and accrued expenses                                (1,018,000)           (767,000)
    Other liabilities                                                       (16,000)            (19,000)
                                                                      ------------          -----------
   Net cash provided by operating activities of continuing                  
    operations                                                               11,000           1,091,000
                                                                      ------------          -----------
   Net operating activities of discontinued operations                     (134,000)         (1,218,000)
                                                                      ------------          -----------
   Net cash used for operating  activities                                 (123,000)           (127,000)
                                                                       ------------          -----------
                           
CASH FLOWS FROM INVESTING ACTIVITIES:        
   Additions to property and equipment, net                                (919,000)           (407,000)
   Proceeds from sale of assets                                             254,000           5,040,000
   Decrease in notes receivable                                             238,000             584,000
   Decrease in investments                                                        -           3,232,000
   Other investing activities, net                                         (44,000)             129,000
                                                                      ------------          -----------
Net cash provided by (used for) investing activities                      (471,000)           8,578,000
                                                                      ------------          -----------
CASH FLOWS FROM FINANCING ACTIVITIES         
   Net (repayment of) proceeds from borrowings                             (39,000)          (2,535,000)
   Net repayments to affiliated companies                                 (141,000)          (4,221,000)
                                                                      ------------          -----------
Net cash used for financing activities                                    (180,000)          (6,756,000)
                                                                      ------------          -----------
CHANGE IN CASH AND CASH EQUIVALENTS                                       (774,000)           1,695,000
         
                          
CASH AND CASH EQUIVALENTS, beginning of period                           3,622,000            1,273,000
                                                                      ------------          -----------
CASH AND CASH EQUIVALENTS, end of period                                $2,848,000           $2,968,000
                                                                      ------------          -----------
                                                                      ------------          -----------

</TABLE>

         See notes to condensed consolidated financial statements.

                                      6
<PAGE>

                           SCHERER HEALTHCARE, INC.

                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.
The accompanying condensed consolidated financial statements of Scherer 
Healthcare, Inc. and its subsidiaries (the "Company") include all adjustments 
that, in the opinion of management, are necessary for a fair presentation of 
the results for the period indicated. Quarterly results of operations are not 
necessarily indicative of annual results. These statements should be read in 
conjunction with the consolidated financial statements and the notes thereto 
included in the Company's Annual Report on Form 10-K for the fiscal year 
ended March 31, 1996.

Certain fiscal 1996 amounts have been reclassified to conform with the fiscal 
1997 presentation.


NOTE 2.
The components of inventory consist of the following:


<TABLE>
<CAPTION>

                                                                        December  31, 1996    March 31, 1996
                                                                       ------------------    ---------------
   <S>                                                                   <C>                   <C>
     Finished products                                                       $1,185,000        $1,884,000
     Work in progress                                                           338,000           233,000
     Containers, packaging, and raw materials                                 2,283,000         1,819,000
                                                                            -----------        ----------
                                                                             $3,806,000        $3,936,000
                                                                            -----------        ----------
                                                                            -----------        ----------
</TABLE>

Inventories are stated at the lower of net realizable value or cost using the 
first-in, first-out ("FIFO") method.

NOTE 3.
Debt and obligations under capital leases consist of the following:


<TABLE>
<CAPTION>
                          
                                                                         December  31, 1996     March 31, 1996
                                                                         ------------------    ---------------
   <S>                                                                   <C>                   <C>
   Swiss debt principal and accrued interest at 9%                           $  368,000             $397,000
   Note payable to bank, due through fiscal 2004;
       variable interest rate, 8.125% at December 31, 1996                      905,000              975,000
   Note payable to Scherer Capital Company, L.L.C.            
     due fiscal 2002, prime plus 1%, 9.75% at          
     December 31, 1996                                                          700,000              700,000
   Obligations under capital leases, due in varying                        
   installments through fiscal 2002                                           1,315,000            1,290,000
   Swiss notes payable due fiscal 1999 at 8%                                  2,851,000            2,896,000
   Other long-term debt                                                           2,000               14,000
                                                                         ----------------      ---------------
                                                                              6,141,000            6,272,000
   Less current maturities                                                     (999,000)            (981,000) 
                                                                         ----------------      ---------------
    Long-term debt                                                           $5,142,000          $ 5,291,000
                                                                         ----------------      ---------------
                                                                         ----------------      ---------------
</TABLE>



                                      7
<PAGE>


NOTE 4.
At December 31, 1996 and March 31, 1996, the Company had $2,145,000 and 
$2,248,000, respectively, payable to Scherer Capital Company L.L.C. ("Scherer 
Cap"), an affiliated company. The payable was due on demand and bore interest 
at prime rate plus 1% (9.25% at December 31, 1996). Additionally, at March 
31, 1996 the Company had $38,000 payable to another affiliate, Scherer 
Scientific, Ltd. These entities are controlled by the majority stockholder of 
the Company.

In January 1997, the Company and Scherer Cap restructured the balance of 
$2,128,000 on the demand loan into a promissory note (the "Note") to be 
repaid in monthly installments of principal and interest over a five year 
term with a maturity date of December 1, 2001. The Note bears interest at 
prime rate plus 1%, adjusted quarterly, and is collateralized by 2,432,251 
shares of the Marquest Medical Products, Inc. ("Marquest") common stock owned 
by the Company. The monthly payment is fixed at $44,437 except for the first 
payment which will be $45,030 and the last payment which will be for the 
amount of the unpaid principal balance plus any unpaid accrued interest as of 
December 1, 2001.

In March 1996, Scherer Cap and Marquest, a 51% owned subsidiary of the 
Company, entered into a Loan and Security Agreement (the "Loan Agreement") to 
refinance the balance of $700,000 owed to Scherer Cap by Marquest on a 
short-term promissory note. The Loan Agreement enables Marquest to borrow a 
maximum of $1,500,000 at an interest rate of 1% over prime, adjusted 
quarterly. The rate was 9.75% as of December 31, 1996. Any amounts borrowed 
under the Loan Agreement are represented by Convertible Notes due April 1, 
2001 (the "Scherer Cap Notes") and are secured by Marquest's inventory, 
building, and equipment. Pursuant to the Loan Agreement, which expires 
February 28, 2001, the Scherer Cap Notes are convertible at the option of 
Scherer Cap into shares of Marquest Common Stock at a conversion price of 
$.70 per share. As of December 31, 1996, Marquest had borrowed $700,000 under 
the Loan Agreement and the Scherer Cap Notes. Additionally, in March 1996 
Scherer Cap purchased 2,061,856 shares of Marquest Common Stock for an 
aggregate purchase price of $1,000,000.

During the first quarter of fiscal 1996 and prior periods, Scherer 
Scientific, Ltd. provided to the Company and its subsidiaries administrative, 
accounting, management oversight and payroll services (collectively, the 
"Administrative Services") and facilities costs. Effective July 1, 1995, 
Scherer Scientific, Ltd. and the Company terminated the Administrative 
Services arrangement and certain employees of Scherer Scientific, Ltd. became 
employees of the Company. As a result, the Company currently provides its own 
administrative, accounting, management and payroll services.

NOTE 5.
On October 29, 1996, the Company sold substantially all of the remaining 
assets of its majority owned partnership, Scherer Healthcare, Ltd. ("Scherer 
Ltd."), which was doing business as Protective Disposable Apparel, to a 
subsidiary of Health-Pak, Inc. ("Health-Pak") for approximately $254,000 plus 
the assumption by Health-Pak of $319,000 in accounts payable. The assets 
acquired by Health-Pak were those used in connection with Scherer Ltd.'s 
business of providing nonwoven apparel for industrial uses (the "Industrial 
Business") and include accounts receivable, inventory and furniture and 
fixtures. Additionally, Health-Pak agreed to assume certain accounts payable 
related to the Industrial Business. The Company recorded a loss from the 
transaction of approximately $84,000 in the third quarter primarily due to 
the write-off of the remaining book value of certain intangible assets. 


                                      8
<PAGE>

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

The following discussion contains, in addition to historical information, 
forward-looking statements. The Company's actual results may differ 
significantly from the results discussed in the forward-looking statements. 
Factors that could cause or contribute to such differences include, but are 
not limited to, those discussed below and in the Company's 1996 Annual Report 
on Form 10-K.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, the net sales and 
operating income (loss) for each segment of the business of the Company and 
its subsidiaries:

<TABLE>
<CAPTION>

                                                 Three months ended              Nine months ended
                                                    December 31,                  December 31,
                                               ----------------------------  -------------------------
                                                    1996            1995          1996          1995
                                               -----------     -----------   -------------  ---------
<S>                                            <C>             <C>           <C>            <C>
NET SALES:                          
  Medical Device and Surgical/Safety
  Disposables Segment:                    
   Marquest Medical Products, Inc.              $5,035,000      $5,739,000    $15,840,000   $16,216,000
   Scherer Healthcare, Ltd. (a)                     25,000         575,000      1,069,000     7,028,000
  Waste Management Services Segment              2,954,000       2,720,000      8,832,000     7,983,000
  Consumer Healthcare Products Segment             236,000         233,000        986,000       859,000
                                              ------------      ----------    -----------   ------------
      Company Totals                            $8,250,000      $9,267,000    $26,727,000   $32,086,000
                                              ------------      ----------    -----------   ------------
                                              ------------      ----------    -----------   ------------
                              
OPERATING INCOME (LOSS):                   
  Medical Device and Surgical/Safety
  Disposables Segment:                    
   Marquest Medical  Products, Inc.             $  (57,000)      $ 144,000   $   (117,000)    $ 248,000
   Scherer Healthcare,  Ltd. (a)                  (126,000)       (127,000)      (330,000)      (32,000)
  Waste Management Services Segment                304,000         228,000        868,000       681,000
  Consumer Healthcare Products Segment              61,000          75,000        369,000       304,000
  Corporate                                       (122,000)       (308,000)      (573,000)     (975,000)
                                              ------------      ----------    -----------     ----------
    Company Totals                              $   60,000       $  12,000    $   217,000     $ 226,000
                                              ------------      ----------    -----------     ----------
                                              ------------      ----------    -----------   ------------
</TABLE>

(a)   On October 3, 1995, Scherer Ltd., a majority owned partnership of
      the Company which had been doing business as Custom Medical
      Products, sold certain of its assets that were used in
      connection with its business of packing and distributing medical
      supplies for surgical procedures and providing nonwoven medical
      drapes, gowns and accessory items to hospitals and other health
      care providers (the "Medical Business"). After the transaction,
      Scherer Ltd. continued to operate in the business of providing
      nonwoven apparel for industrial uses (the "Industrial Business")
      under the name Protective Disposable Apparel. On October 29,
      1996, the Company sold substantially all of the remaining assets
     of Scherer Ltd. to a subsidiary of Health-Pak, Inc. This is
     discussed further under "Medical Device and Surgical/Safety
     Disposables Segment - Scherer Healthcare, Ltd.".

The Company's net sales decreased by 11% to $8,250,000 for the third quarter 
of fiscal 1997 from $9,267,000 for the third quarter of fiscal 1996; however, 
the third quarter of fiscal 1996 includes three months of net sales for the 
Industrial Business, or $575,000, which was sold in October 1996. 
Accordingly, the third quarter of fiscal 1997 includes less than one month of 
net sales for the Industrial Business, or $25,000. The Company reported 
operating income of $60,000 for the third quarter of fiscal 1997 compared to 
operating income of $12,000 during the same period in fiscal 1996. The 
Company's cost of sales decreased from 67% of net sales in the third quarter 
of fiscal 1996 to 63% in the third quarter of fiscal 1997. Selling, general, 
and administrative expenses increased from 33% of net sales in the third 
quarter of fiscal 1996 to 35% in the third quarter of fiscal 1997.

                                    9
<PAGE>

For the first nine months of fiscal 1997, the Company's net sales decreased 
17% to $26,727,000 from $32,086,000 during the first nine months of fiscal 
1996; however, fiscal 1996 includes six months of net sales for the Medical 
Business, or $5,344,000, which was sold on October 3, 1995. Additionally, 
fiscal 1996 includes nine months of net sales for the Industrial Business, or 
$1,684,000, and fiscal 1997 includes only six full months of net sales for 
the Industrial Business, or $1,069,000. The Company's operating income 
decreased to $217,000 for the nine months ended December 31, 1996 from 
$226,000 for the nine months ended December 31, 1995. The Company's cost of 
sales decreased from 68% of net sales for the nine months ended December 31, 
1995 to 66% of net sales for the nine months ended December 31, 1996. 
Selling, general and administrative expenses increased from 31% of net sales 
for the nine months ended December 31, 1995 to 33% for the nine months ended 
December 31, 1996.

The results of operations of the Company are dependent upon the results of 
operations of each of its subsidiaries and majority owned partnerships 
operating in the Company's individual business segments. Set forth below is a 
discussion of the results of operations of each of these segments.

MEDICAL DEVICE AND SURGICAL/SAFETY DISPOSABLES SEGMENT

MARQUEST MEDICAL PRODUCTS, INC.  Net sales for Marquest, the Company's 51% 
owned subsidiary, decreased approximately 12% to $5,035,000 for the third 
quarter of fiscal 1997 from $5,739,000 during the same period in fiscal 1996 
and Marquest's net sales decreased 2% to $15,840,000 for the nine months 
ended December 31, 1996 from $16,216,000 for the nine months ended December 
31, 1995. The decrease in net sales is primarily due to a decrease in sales 
of Marquest's medication delivery devices. Sales of these devices are down 
approximately $750,000 in fiscal 1997 compared to fiscal 1996, the majority 
of this decrease is attributable to one major customer who has not placed an 
order in fiscal 1997. The decrease in sales of the medication delivery 
devices was partially offset by an increase in sales of Marquest's arterial 
blood gas products which increased approximately $220,000 in fiscal 1997 
compared to fiscal 1996. This increase can be attributed to a long term 
contract signed with a major customer in late fiscal 1996 for these products. 
Additionally, as a result of Marquest's expanded European warehouse facility, 
some of Marquest's foreign customers are changing their buying patterns by 
placing more frequent smaller orders in contrast to placing sporadic large 
orders.

Primarily as a result of the decrease in net sales, Marquest reported
an operating loss of $57,000 for the third quarter of fiscal 1997
compared to operating income of $144,000 for the third quarter of
fiscal 1996. Marquest's cost of sales decreased to 68% of net sales
for the third quarter of fiscal 1997 from 69% of net sales during the
third quarter of fiscal 1996 and its selling, general and
administrative expenses increased to 31% of net sales for the third
quarter of fiscal 1997 from 28% during the same period in fiscal
1996.

Marquest reported an operating loss of $117,000 for the nine months
ended December 31, 1996 compared to operating income of $248,000 for
the nine months ended December 31, 1995. Marquest's cost of sales
increased to 70% of net sales for the nine months ended December 31,
1996 from 69% of net sales during the same period in fiscal 1996.
Selling, general, and administrative expenses remained flat at 29% of
net sales for the nine months ended December 31, 1996 and 1995. The
operating loss for the nine months ended December 31, 1996 is a
result of the decrease in net sales combined with an increase in
overtime expense in the first quarter of fiscal 1997 due to the
rework of certain products and an increase in the manufacturing of
inventory in an effort to improve customer service support.
Additionally, Marquest provides heated humidification units to
hospitals at no charge in exchange for agreements by the hospitals to
purchase specified levels of disposable products from Marquest.
Marquest provided a significantly higher number of these units to
hospitals in fiscal 1997 compared to fiscal 1996.

SCHERER HEALTHCARE, LTD.  On October 3, 1995, Scherer Ltd., a majority owned 
partnership of the Company which had been doing business as Custom Medical 
Products, sold certain assets to Cordis Medical Products, Inc. ("Cordis 
Medical"), a wholly-owned subsidiary of Cordis Corporation ("Cordis"). The 
assets acquired by Cordis Medical were those used in connection with Scherer 
Ltd.'s business of packing and distributing medical supplies for surgical 
procedures and providing nonwoven drapes, gowns and accessory items to 
hospitals and other health care providers (the "Medical Business"). After the 
transaction, Scherer Ltd. continued to operate in the business of providing 
nonwoven apparel for industrial uses (the "Industrial Business") under the 
name Protective Disposable Apparel.

On October 29, 1996, Scherer Ltd. sold substantially all of its remaining 
assets, all of which were used in connection with the Industrial Business, to 
a subsidiary of Health-Pak, Inc. ("Health-Pak"). The assets acquired by 
Health-Pak include accounts receivable, inventory and furniture and fixtures.

                                      10
<PAGE>

Scherer Ltd.'s net sales for the third quarter of fiscal 1997 decreased 96% 
to $25,000 from $575,000 during the third quarter of fiscal 1996; however, 
the third quarter of fiscal 1996 includes three full months of net sales for 
the Industrial Business while the third quarter of fiscal 1997 only includes 
net sales through October 18, 1996 (the effective date of the transaction 
regarding operations). Additionally, net sales for the third quarter of 
fiscal 1997 reflect adjustments to prior period sales for returned products.

Net sales for Scherer Ltd. decreased 85% to $1,069,000 for the nine months 
ended December 31, 1996 from $7,028,000 for the nine months ended December 
31, 1995; however, the nine months ended December 31, 1995 included six 
months of net sales for the Medical Business, or $5,344,000, which was sold 
on October 3, 1995. Net sales for the Industrial Business decreased 
approximately 37% to $1,069,000 for the nine months ended December 31, 1996 
compared to $1,684,000 for the same period in fiscal 1996; however, fiscal 
1996 includes nine months of net sales for the Industrial Business and fiscal 
1997 includes only six full months of net sales.

Scherer Ltd. reported an operating loss of $126,000 for the third quarter of 
fiscal 1997 compared to an operating loss of $127,000 during the third 
quarter of fiscal 1996, of which $76,000 relates to the Industrial Business. 
The increase in the operating loss of the Industrial Business can primarily 
be attributed to the decrease in net sales combined with the write down of 
inventory following a physical count taken for the Health-Pak transaction.

For the nine months ended December 31, 1996, Scherer Ltd. reported an 
operating loss of $330,000 compared to an operating loss of $32,000 during 
the same period in fiscal 1996. The Medical Business reported operating 
income of $215,000 for the nine months ended December 31, 1995 primarily due 
to monthly shortfall payments ($295,000 in total) received from Cordis to 
help offset losses incurred under Scherer Ltd.'s surgical disposable trays 
contract with Cordis. The Industrial Business reported an operating loss of 
$330,000 for the nine months ended December 31, 1996 compared to an operating 
loss of $247,000 during the same period in fiscal 1996. The increase in the 
operating loss of the Industrial Business is primarily due to the decrease in 
net sales combined with the inventory write down pursuant to the physical 
count taken for the Health-Pak transaction in October 1996.

WASTE MANAGEMENT SERVICES SEGMENT

Net sales in the Company's Waste Management Services Segment increased 
approximately 9% to $2,954,000 in the third quarter of fiscal 1997 from 
$2,720,000 during the third quarter of fiscal 1996 and its net sales 
increased approximately 11% to $8,832,000 for the nine months ended December 
31, 1996 from $7,983,000 during the same period in fiscal 1996. The increase 
in sales is due to the continuing acquisition of medical waste disposal 
contracts with hospitals.

Operating income increased approximately 33% to $304,000 for the third 
quarter of fiscal 1997 from $228,000 during the third quarter of fiscal 1996 
and increased approximately 27% to $868,000 for the nine months ended 
December 31, 1996 from $681,000 during the same period in fiscal 1996. The 
increase in operating income can primarily be attributed to a decrease in 
insurance expense in fiscal 1997 combined with the increase in net sales.

CONSUMER HEALTHCARE PRODUCTS SEGMENT

Net sales for Scherer Laboratories, Inc. ("Scherer Labs"), which operates the 
Company's Consumer Healthcare Products Segment, increased slightly to 
$236,000 during the third quarter of fiscal 1997 from $233,000 during the 
third quarter of fiscal 1996 and its net sales increased approximately 15% to 
$986,000 during the nine months ended December 31, 1996 from $859,000 during 
the same period in fiscal 1996. The increase in net sales can be attributed 
to the acquisition of new customers and retail outlets during fiscal 1997.

Operating income for Scherer Labs decreased to $61,000 for the third quarter 
of fiscal 1997 from $75,000 for the third quarter of fiscal 1996; however, 
operating income increased to $369,000 for the nine months ended December 31, 
1996 from $304,000 for the same period in fiscal 1996. The increase in 
operating income is primarily due to the increase in net sales discussed 
above. 


                                      11
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

THE COMPANY

CASH FLOWS FROM OPERATIONS.
The Company's (excluding Marquest's) operating activities from continuing 
operations provided cash during the first nine months of fiscal 1997 of 
approximately $774,000 compared to cash provided from continuing operations 
during the same period in fiscal 1996 of approximately $1,506,000. The 
decrease in cash provided from continuing operations can primarily be 
attributed to the collection of the remaining Scherer Ltd. accounts 
receivable associated with the Medical Business and the overall improvement 
of Scherer Ltd.'s working capital management prior to the sale of the Medical 
Business to Cordis Medical in October 1995. Cordis paid all amounts owed to 
Scherer Ltd. at the time of closing, approximately $560,000, for services 
provided under the contract with Cordis to assemble surgical disposable 
trays. Additionally, as part of the terms of the sale agreement, Scherer Ltd. 
retained all accounts receivable associated with the Medical Business, of 
which approximately $800,000 was collected during the third quarter of fiscal 
1996.

Scherer Labs, which operates the Company's Consumer Healthcare Products 
Segment, improved its cash provided from operations to $307,000 during the 
first nine months of fiscal 1997 from $215,000 during the same period in 
fiscal 1996. The improvement is primarily due to the timing of collection of 
its accounts receivable and the timing of payment of its accounts payable.

Discontinuing the operations of Biofor, Inc. ("Biofor") has significantly 
improved the cash flow of the Company. The net cash used by Biofor's 
operations during the first nine months of fiscal 1996 was approximately 
$1,218,000 compared to approximately $134,000 during the first nine months of 
fiscal 1997.

CASH FLOWS FROM FINANCING AND INVESTING ACTIVITIES.
Prior to fiscal 1996, Scherer Cap, an entity controlled by the majority 
stockholder of the Company, made loans (the "Affiliate Loans") to the Company 
and its subsidiaries the proceeds of which were used primarily for working 
capital and business acquisitions. The Affiliate Loans were payable on demand 
and bore interest at prime rate plus 1%. In the third quarter of fiscal 1996, 
the Company used $4,800,000 of the net proceeds from the sale of the Medical 
Business to Cordis Medical to repay a portion of the Affiliate Loans. In 
January 1997, the Company and Scherer Cap restructured the balance of 
$2,128,000 on the Affiliate Loans into a promissory note (the "Note") to be 
repaid in monthly installments of principal and interest over a five year 
term with a maturity date of December 1, 2001. The Note bears interest at 
prime rate plus 1 %, adjusted quarterly, and is collateralized by 2,432,251 
shares of the Marquest common stock owned by the Company. The monthly payment 
is fixed at $44,437 except for the first payment which will be $45,030 and 
the last payment which will be for the amount of the unpaid principal balance 
plus any unpaid accrued interest as of December 1, 2001.

During the first quarter of fiscal 1996, the Company terminated its 
$3,200,000 line of credit with Trust Company Bank (now SunTrust Bank). This 
line was fully collateralized by cash investments. The Company determined 
that the line provided no net financial leverage and converted the collateral 
previously used to secure the line of credit into operating cash. Available 
cash balances are invested in repurchase agreements (principally U.S. 
Treasuries) daily.

Management of the Company believes its current cash flow is sufficient to 
maintain its current operations.

MARQUEST

CASH FLOWS FROM OPERATIONS.
Marquest's cash used from operations increased during the first nine months 
of fiscal 1997 to approximately $764,000 from approximately $416,000 during 
the same period in fiscal 1996. The increase in cash used from Marquest's 
operations is primarily due to the monthly installments to the Internal 
Revenue Service ($360,000 in total over the nine months) as a result of the 
settlement with respect to tax issues related to previous years. 
Additionally, Marquest paid $170,000 during the first quarter of fiscal 1997 
to settle a lawsuit with an insurance company.

                                      12
<PAGE>

CASH FLOWS FROM FINANCING AND INVESTING ACTIVITIES.
In March 1996, Marquest and Scherer Cap entered into a Loan and Security 
Agreement (the "Loan Agreement") that enables Marquest to borrow a maximum of 
$1,500,000 at an interest rate of prime plus 1 1/2%, adjusted quarterly. Any 
amounts borrowed under the Loan Agreement are represented by Convertible 
Notes due April 1, 2001 (the "Scherer Cap Notes") and are secured by 
Marquest's inventory, building, and equipment. Pursuant to the Loan 
Agreement, which expires February 28, 2001, the Scherer Cap Notes are 
convertible at the option of Scherer Cap into shares of Marquest Common 
Stock. As of December 31, 1996, Marquest had borrowed $700,000 under the Loan 
Agreement. Additionally, Scherer Cap invested $1,000,000 in Marquest in March 
1996 through the purchase of 2,061,856 shares of Marquest Common Stock.

In November 1996, Marquest obtained a revolving line of credit from Norwest 
Business Credit, Inc. ("Norwest") which expires February 28, 1999. Any 
amounts borrowed against the line of credit will be secured by Marquest's 
accounts receivable and will bear interest at 2.25% over Norwest's prime 
rate. The maximum amount of the line of credit is 80% of the eligible 
accounts receivable or $2,000,000, whichever is less. As of December 31, 
1996, Marquest had not borrowed any funds against the line of credit. The 
convenants for the line of credit provide that Marquest maintain a debt 
service coverage ratio of 1:1 at the end of fiscal 1997, and the maximum net 
loss cannot exceed $50,000 for fiscal 1997. No assurance can be given that 
Marquest will satisfy the covenants for fiscal 1997.

Marquest's management believes that it can fund its current operating levels 
and meet its obligations for fiscal 1997 from cash on hand, funds generated 
from operations, and from funds available through other sources, including 
the Loan Agreement and the Norwest credit facility.

                                      13
<PAGE>

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

        In a complaint filed in September 1996 in Japan, Marquest's
        distributor of arterial blood gas products in Japan is alleged
        to have infringed the patent of Terumo K.K., resulting in a
        request for an injunction against the distributor from further
        marketing and sale of Marquest's arterial blood gas samplers in
        Japan. The complaint does not currently name Marquest.
        Marquest is paying the cost to defend its distributor in the
        litigation and has engaged counsel in Japan. Due to the
        preliminary nature of this litigation, there can be no
        assessment as to the potential impact on Marquest.

Item 5. OTHER INFORMATION

        Marquest is subject to regulation by the Food and Drug
        Administration ("FDA") regarding the manufacture and sale of its
        products. On October 1, 1991, Marquest entered into a five year
        Consent Decree with the FDA in which Marquest agreed to comply
        with the FDA's Current Good Manufacturing Practices ("cGMP").
        As of October 1, 1996, the Consent Decree expired.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a) Exhibits

         Exhibit No.                 Description
         -----------                 -----------
              27                      Financial Data Schedule

        (b) Reports on Form 8-K.

             None



                                      14
<PAGE>
                                    
                                SIGNATURES

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


                                       SCHERER HEALTHCARE, INC.
                                       (Registrant)


Date: February 13, 1997                /s/ Robert P. Scherer, Jr.
                                      ----------------------------
                                      Robert P. Scherer, Jr.
                                      Chairman


Date: February 13, 1997              /s/ Gary W. Ruffcorn
                                     ----------------------------
                                     Gary W. Ruffcorn
                                     Principal Accounting Officer



                                      15
<PAGE>

 
                            SCHERER HEALTHCARE, INC. 

                               INDEX OF EXHIBITS

             The following exhibit is being filed with this report.


Exhibit                                                      Page
Number                         Description                   Number
-------         -------------------------------------       -------
                         
 27                    Financial Data Schedule                17
                    (included only in EDGAR filing)






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