<PAGE>   1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q

|X|      Quarterly Report Pursuant to Section 13 or 15(d) of the Securities 
         Exchange Act of 1934

         For the quarterly period ended August 30, 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:     0-19524
                       ---------------

                         TECNOL MEDICAL PRODUCTS, INC.
             (Exact name of registrant as specified in its charter)

              DELAWARE                                75-1516861
    ------------------------------       -----------------------------------
   (State or other jurisdiction of       (I.R.S. employer identification no.)
   incorporation or organization)


                           7201 INDUSTRIAL PARK BLVD.
                           --------------------------
                            FORT WORTH, TEXAS 76180
                            -----------------------
                    (Address of principal executive offices)

Registrant's telephone number, including area code:           (817) 581-6424
                                                              --------------

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

               APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
     Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

     Yes              No 
        ------------    ------------

                     APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

   20,011,695 shares common stock, par value $.001, as of October 2, 1997
   ----------------------------------------------------------------------


<PAGE>   2





TECNOL MEDICAL PRODUCTS, INC.



                                FORM 10-Q INDEX

<TABLE>
<S>       <C>                                                                <C>
PART I    FINANCIAL INFORMATION.............................................. 3

Item 1.   Financial Statements............................................... 3

          Condensed Consolidated Balance Sheets as of
          November 30, 1996, and August 30, 1997............................. 3

          Condensed Consolidated Statements of Income for the Quarters and
          Year-to-Date Periods Ended August 31, 1996, and August 30, 1997.... 5

          Condensed Consolidated Statements of Cash Flows for the
          Year-to-Date Periods Ended August 31, 1996, and August 30, 1997.... 6

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

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations......................................... 10


PART II   OTHER INFORMATION................................................. 14

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

SIGNATURES.................................................................. 14
</TABLE>



                                       2
<PAGE>   3
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                         TECNOL MEDICAL PRODUCTS, INC.

                     CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                               Nov. 30,                 Aug. 30,
                                                                 1996                     1997
                                                           -----------------       ------------------
                               ASSETS                                                  (unaudited)
                               ------
<S>                                                        <C>                    <C>               
CURRENT ASSETS:
     Cash and cash equivalents                             $      4,355,033       $       11,129,064
     Accounts receivable, net of allowance
       for doubtful accounts of $1,497,000 in 1996
       and $2,062,000 in 1997                                    24,858,157               24,435,232
     Inventories                                                 32,036,334               33,720,927
     Prepaid expenses                                               620,807                  930,717
     Other current assets                                         3,497,720                3,743,697
                                                           ----------------       ------------------
                Total current assets                             65,368,051               73,959,637


NET PROPERTY, PLANT, AND EQUIPMENT                               48,671,113               54,389,065


OTHER ASSETS:
     Goodwill, net of accumulated amortization
       of $3,609,000 in 1996 and $4,632,000 in 1997              39,618,824               38,903,105
     Other purchased intangible assets, net of
       accumulated amortization of $3,140,000 in
       1996 and $3,519,000 in 1997                                  772,257                  442,462
     Patents and trademarks, net of accumulated
       amortization of $728,000 in 1996 and $975,000
       in 1997                                                    3,358,266                3,653,622
     Other                                                        1,711,193                1,895,211
                                                           ----------------       ------------------
                Total other assets                               45,460,540               44,894,400
                                                           ----------------       ------------------

                Total assets                               $    159,499,704       $      173,243,102
                                                           ================       ==================
</TABLE>






     See accompanying Notes to Condensed Consolidated Financial Statements

                                       3
<PAGE>   4
                         TECNOL MEDICAL PRODUCTS,INC.

                     CONDENSED CONSOLIDATED BALANCE SHEETS

                                  (Continued)

<TABLE>
<CAPTION>
                                                                                     Nov. 30,                    Aug. 30,
                                                                                       1996                        1997
                                                                                 ----------------            ----------------
                                                                                                                (unaudited)
                 LIABILITIES AND STOCKHOLDERS' EQUITY

<S>                                                                              <C>                         <C>             
CURRENT LIABILITIES:
     Accounts payable                                                            $      7,800,378            $      9,422,288
     Accrued expenses                                                                   4,662,419                   5,181,306
     Income taxes payable                                                                 719,042                   1,265,128
     Current maturities of long-term debt                                               3,641,287                   3,611,562
                                                                                 ----------------            ----------------
                 Total current liabilities                                             16,823,126                  19,480,284

LONG-TERM DEBT, net of current maturities                                               9,264,736                   5,755,542
DEFERRED INCOME TAXES                                                                   6,179,599                   5,256,899
                                                                                 ----------------            ----------------
                 Total liabilities                                                     32,267,461                  30,492,725

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
     Preferred stock, $.001 par value, 1,000,000
       shares authorized, no shares issued                                                -                          -
     Common stock, $.001 par value, 50,000,000
       shares authorized, 21,116,980 shares issued
       in 1996 and 21,172,403 shares issued in 1997                                        21,117                      21,173
     Additional paid-in capital                                                        27,886,864                  28,542,360
     Retained earnings                                                                103,755,583                 118,653,140
                                                                                 ----------------            ----------------
                                                                                      131,663,564                 147,216,673
     Less-treasury stock, at cost:
       1,159,489 shares in 1996 and 1,161,646 shares in 1997                            3,529,197                   3,564,172
     Less-unearned employee stock ownership shares,
       60,000 shares in 1996 and 1997                                                     902,124                     902,124
                                                                                 ----------------            ----------------
                 Total stockholders' equity                                           127,232,243                 142,750,377
                                                                                 ----------------            ----------------
                 Total liabilities and stockholders' equity                      $    159,499,704            $    173,243,102
                                                                                 ================            ================
</TABLE>





     See accompanying Notes to Condensed Consolidated Financial Statements

                                       4
<PAGE>   5
                         TECNOL MEDICAL PRODUCTS, INC.

            CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

  QUARTERS AND YEAR-TO-DATE PERIODS ENDED AUGUST 31, 1996, AND AUGUST 30, 1997


<TABLE>
<CAPTION>
                                                          Quarter Ended                        Year-to-Date
                                                  ------------------------------      --------------------------------
                                                    Aug. 31,          Aug. 30,          Aug. 31,           Aug. 30,
                                                      1996              1997             1996               1997
                                                  ------------      ------------      -------------      -------------
                                                   (unaudited)       (unaudited)       (unaudited)        (unaudited)

<S>                                               <C>               <C>               <C>                <C>          
NET SALES                                         $ 35,970,954      $ 38,946,531      $ 107,552,956      $ 116,142,020
COST OF GOODS SOLD                                  22,373,285        21,573,350         62,269,172         64,150,329
                                                  ------------      ------------      -------------      -------------
                 Gross profit                       13,597,669        17,373,181         45,283,784         51,991,691

SELLING EXPENSES                                     5,539,635         6,288,135         17,470,851         18,561,506
GENERAL AND ADMINISTRATIVE EXPENSES                  3,145,701         2,613,156          7,013,782          7,364,098
AMORTIZATION OF INTANGIBLES                            562,058           511,132          1,703,845          1,615,134
RESEARCH AND DEVELOPMENT EXPENSES                      412,157           514,258          1,273,577          1,413,860
                                                  ------------      ------------      -------------      -------------
                 Income from operations              3,938,118         7,446,500         17,821,729         23,037,093

OTHER INCOME (EXPENSE):
   Interest income                                      28,799           141,262            122,274            291,976
   Interest expense                                   (153,384)          (36,686)          (753,874)          (225,127)
   Litigation settlement expense                      (550,000)               --           (550,000)                --
   Other, net                                          (68,305)            8,668            220,718              5,559
                                                  ------------      ------------      -------------      -------------
                 Total other income (expense)         (742,890)          113,244           (960,882)            72,408
                                                  ------------      ------------      -------------      -------------

                 Income before provision
                    for income taxes                 3,195,228         7,559,744         16,860,847         23,109,501

PROVISION FOR INCOME TAXES                           1,063,824         2,751,423          5,629,968          8,211,944
                                                  ------------      ------------      -------------      -------------

NET INCOME                                        $  2,131,404      $  4,808,321      $  11,230,879      $  14,897,557
                                                  ============      ============      =============      =============

Net income per common and common
   equivalent share                               $       0.11      $       0.24      $        0.56      $        0.74
                                                  ============      ============      =============      =============

Weighted average number of common and
   common equivalent shares outstanding             20,163,764        20,410,668         20,153,648         20,240,643
                                                  ============      ============      =============      =============
</TABLE>


     See accompanying Notes to Condensed Consolidated Financial Statements


                                       5
<PAGE>   6
                         TECNOL MEDICAL PRODUCTS, INC.
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
        Year-to-Date Periods Ended August 31, 1996, and August 30, 1997

<TABLE>
<CAPTION>
                                                                                     Year-to-Date
                                                                            ------------------------------
                                                                               Aug. 31           Aug 30,
                                                                                1996              1997
                                                                            ------------      ------------
<S>                                                                         <C>               <C>   
CASH FLOWS FROM OPERATING ACTIVITIES:
       Net income                                                           $ 11,230,879      $ 14,897,557
       Adjustments to reconcile net income to net cash
       provided by operating activities:
          Depreciation                                                         3,160,381         3,417,517
          Amortization                                                         1,703,845         1,615,134
          Decrease in deferred income taxes                                     (514,000)         (922,700)
          Net change in assets and liabilities, excluding acquisitions-
              Accounts receivable                                              1,047,868           398,832
              Inventories                                                      7,396,551        (1,869,007)
              Other current assets                                              (336,871)         (555,887)
              Accounts payable                                                 2,156,276         1,658,900
              Accrued expenses                                                 1,487,046           518,887
              Income taxes payable                                            (1,413,316)          546,086
                                                                            ------------      ------------
                     Total adjustments                                        14,687,780         4,807,762
                                                                            ------------      ------------

          Net cash provided by operating activities                           25,918,659        19,705,319
                                                                            ------------      ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchase of property, plant, and equipment                             (7,230,327)       (9,374,359)
       Cash paid for acquisitions, net of cash acquired                       (5,169,463)               --
       Expenditures for patents and trademarks                                  (605,353)         (548,146)
       Increase in other assets                                                  (18,180)         (237,421)
                                                                            ------------      ------------
          Net cash used in investing activities                              (13,023,323)      (10,159,926)
                                                                            ------------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Decrease in bank line of credit                                        (3,530,000)               --
       Proceeds from bank loan                                                 5,500,000                --
       Principal payments on long-term debt                                   (8,171,086)       (3,391,939)
       Net proceeds from exercise of stock options                               183,306           620,577
                                                                            ------------      ------------
          Net cash used in financing activities                               (6,017,780)       (2,771,362)
                                                                            ------------      ------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                      6,877,556         6,774,031

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD                         230,401         4,355,033
                                                                            ------------      ------------

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD                          $  7,107,957      $ 11,129,064
                                                                            ============      ============

SUPPLEMENTAL DISCLOSURES:
       Cash paid during the period for:
          Interest                                                          $    972,376      $    668,194
          Income taxes                                                      $  7,779,663      $  7,797,850
NONCASH INVESTING AND FINANCING ACTIVITIES:
       Issuance of note for acquisition of assets                           $    665,000      $         --
</TABLE>


     See accompanying Notes to Condensed Consolidated Financial Statements


                                       6
<PAGE>   7




                         TECNOL MEDICAL PRODUCTS, INC.

         NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                  (UNAUDITED)


NOTE 1 -- BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the generally accepted accounting
principles for interim financial information and Article 10 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
adjustments) considered necessary for a fair presentation have been included.
Operating results for the quarter and year-to-date periods ended August 30,
1997, are not necessarily indicative of the results that may be expected for
the fiscal year ending November 29, 1997.

     The Company's fiscal year is the fifty-two or fifty-three week period
ending on the Saturday nearest to November 30. The quarter and year-to-date
periods ended August 31, 1996, and August 30, 1997, each include thirteen and
thirty-nine weeks, respectively. The fiscal year ending November 29, 1997, will
include 52 weeks.


NOTE 2 -- NET INCOME PER SHARE

     The following table reconciles the number of common shares shown as
outstanding on the consolidated balance sheet with the number of common and
common equivalent shares used in computing primary net income per share:

<TABLE>
<CAPTION>
                                                      Quarter                           Year-to-Date
                                            -----------------------------      ----------------------------
                                              August 31,      August 30,        August 31,       August 30,
                                               1996             1997               1996             1997
                                            -----------       -----------      -----------      -----------
                                              (unaudited)     (unaudited)      (unaudited)      (unaudited)
<S>                                          <C>              <C>              <C>              <C>
Common shares outstanding                     19,957,491       20,010,757       19,957,491       20,010,757

Effect of using weighted average common
and common equivalent shares outstanding
during the period                                   (916)         (10,882)         (11,595)         (22,655)

Effect of using weighted average unearned
ESOP shares                                      (71,250)         (41,250)         (78,750)         (48,750)

Effect of assuming exercise of
outstanding stock options based on the
treasury stock method                            278,439          452,043          286,502          301,291
                                             -----------      -----------      -----------      -----------

Shares used in computing primary net
income per share                              20,163,764       20,410,668       20,153,648       20,240,643
                                             ===========      ===========      ===========      ===========
</TABLE>


Primary and fully diluted net income per share are not materially different 



                                       7
<PAGE>   8



                         TECNOL MEDICAL PRODUCTS, INC.

         NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                  (UNAUDITED)


     Net income per common and common equivalent share was computed by dividing
net income by the weighted average number of shares of common stock and common
stock equivalents outstanding during the periods. Stock options are the only
common stock equivalents.

     In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Standards No. 128 (SFAS 128), "Earnings per Share." This
Statement establishes and simplifies standards for computing and presenting
earnings per share. The Company will be required to adopt SFAS No. 128 the
first quarter of fiscal year 1998. SFAS 128 replaces primary and fully diluted
earnings per share with basic and diluted earnings per share. The Company does
not expect the adoption of SFAS No. 128 to have a material impact on earnings
per share.

NOTE 3 -- LONG-TERM DEBT

     Long-term debt at November 30, 1996, and August 30, 1997, consists of the
following:

<TABLE>
<CAPTION>
                                               Nov. 30,            August 30,
                                                1996                 1997
                                           ---------------      ---------------
          <S>                              <C>                  <C>
          Industrial Revenue Bonds         $  3,600,000         $  3,400,000
          Bank Term Loans                     8,187,500            5,675,000
          Other installment obligations       1,118,523              292,104
                                           ---------------      ------------
                                             12,906,023            9,367,104
          Less-current maturities            (3,641,287)          (3,611,562)
                                           ---------------      ------------
                                           $  9,264,736         $  5,755,542
                                           ===============      ============
</TABLE>


NOTE 4 -- INVENTORIES

       Inventories at November 30, 1996, and August 30, 1997, consist of the
following:

<TABLE>
<CAPTION>
                                              Nov. 30,            August 30,
                                                1996                1997
                                           --------------      ---------------
          <S>                             <C>                   <C>
          Raw materials                    $ 15,212,956          $ 15,056,232
          Work-in-progress                    1,983,973             2,406,018
          Finished goods                     14,839,405             6,258,677
                                           --------------      ---------------
                                           $ 32,036,334          $ 33,720,927
                                           ==============      ===============
</TABLE>



                                       8

<PAGE>   9




NOTE 5 -- PROPERTY, PLANT, AND EQUIPMENT

       Property, plant, and equipment at November 30, 1996, and August 30,
1997, consists of the following:

<TABLE>
<CAPTION>
                                             Nov. 30,              August 30,
                                               1996                   1997
                                          -------------         --------------
          <S>                             <C>                   <C>
          Land                            $  6,247,752           $  6,617,559
          Buildings and improvements        14,563,836             14,958,979
          Automotive equipment               2,913,496              2,875,872
          Manufacturing equipment           36,510,853             40,658,512
          Office furniture and equipment     9,267,496             10,169,844
          Construction-in-progress           4,446,416              7,317,008
                                          ------------           ------------
          Less accumulated depreciation     73,949,849             82,597,774
                                           (25,278,736)           (28,208,709)
                                          ------------           ------------
                                          $ 48,671,113           $ 54,389,065
                                          ============           ============
</TABLE>

NOTE 6 -- RECLASSIFICATION

       Prior to August 30, 1997, the Company classified amortization expense
related to goodwill and noncompete agreements as other expense and amortization
expense related to other purchased intangible assets and patents and trademarks
as general and administrative expense. Beginning in the third quarter of fiscal
1997, all amortization expense is shown as a component of operating income.
This change in classification has no effect on reported net income. These
amounts in prior period financial statements have been reclassified to conform
to the current year presentation.


NOTE 7 -- SUBSEQUENT EVENT

       On September 4, 1997, Tecnol entered into a definitive agreement with
Kimberly-Clark Corporation ("Kimberly-Clark") and Vanguard Acquisition Corp., a
wholly-owned subsidiary of Kimberly-Clark ("Sub"), which provides for the
merger of Sub with and into Tecnol, with Tecnol surviving as a wholly-owned
subsidiary of Kimberly-Clark. Pursuant to the terms and conditions of the
agreement, each share of Tecnol stock (other than shares of Tecnol stock owned
directly or indirectly by Tecnol or Kimberly-Clark, which will be canceled)
will be converted into 0.42 of a share of Kimberly-Clark common stock. The
merger is subject to certain conditions, including approval by holders of a
majority of shares of Tecnol stock and certain regulatory approvals.
Kimberly-Clark is a leading global manufacturer and marketer of personal care,
consumer tissue, and away-from-home products. The merger is expected to take
place by the end of 1997.




                                       9
<PAGE>   10



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

     This analysis of the Company's operations encompassing the quarter and
year-to-date periods ended August 31, 1996, and August 30, 1997, should be
considered in conjunction with the condensed consolidated balance sheets,
statements of income and statements of cash flows.

Results of Operations

     Net sales increased 8.3% from $36.0 million in the third quarter of fiscal
1996 to $38.9 million in the third quarter of fiscal 1997. For the nine month
period, net sales increased 8.0% from $107.6 million in fiscal 1996 to $116.1
million in fiscal 1997. The growth in net sales was principally the result of
increases in unit sales of existing products and, to a lesser extent, new
product introductions and increased sales from contract manufacturing. The
International Division experienced a sales increase of approximately 1.6% for
the third quarter of fiscal 1997 compared to the third quarter of fiscal 1996
and an increase of 9.9% for the nine month period of 1997 compared to the nine
month period of 1996. Sales of the U.S. Hospital Division increased 9.7% for
the third quarter of fiscal 1997 as compared to the third quarter of fiscal
1996 and increased 6.9% for the nine month period in fiscal 1997 as compared to
fiscal 1996. Sales of the Specialty Markets Division increased 14.2% for the
third quarter of fiscal 1997 as compared to the third quarter of fiscal 1996
and increased 8.4% for the nine month period in fiscal 1997 as compared to
fiscal 1996. The Orthopedic Division experienced a sales increase of 13.6% for
the third quarter of fiscal 1997 as compared to the third quarter of fiscal
1996 and a sales increase of 6.3% for the nine month period in fiscal 1997 as
compared to fiscal 1996. Sales of the Industrial Products Division increased
15.4% for the third quarter of fiscal 1997 as compared to the third quarter of
fiscal 1996 and increased 2.7% for the nine month period in fiscal 1997 as
compared to fiscal 1996. Contract manufacturing generated sales of
approximately $2.4 million in the third quarter of fiscal 1997 compared to
approximately $2.7 million for the third quarter of fiscal 1996. For the nine
month period, contract manufacturing sales increased 20.1% from $6.9 million in
fiscal 1996 to $8.3 million in fiscal 1997.

     The gross profit margin increased from 37.8% in the third quarter of
fiscal 1996 to 44.6% in the third quarter of fiscal 1997. Gross profit margin
in the third quarter of fiscal 1996 was lower in part due to adjustments made
to inventory which amounted to approximately $1 million, the majority of which
were related to potentially obsolete inventory. For the nine month period, the
gross profit margin increased from 42.1% in fiscal 1996 to 44.8% in fiscal
1997. Gross profit margin was positively impacted by efficiency gains created
by a decrease in manufacturing employee turnover, reduction of overtime hours
worked, and an improvement in manufacturing quality. This positive impact was
partially offset by an increase in contract manufacturing, which provides a
lower gross profit margin than sales to distributors. Operating margin from
contract manufacturing is consistent with the corporate average, as minimal
selling expenses are incurred.

     Selling expenses increased 13.5% from $5.5 million in the third quarter of
fiscal 1996 to $6.3 million in the third quarter of fiscal 1997. For the nine
month period, selling expenses increased 6.2% from $17.5 million in fiscal 1996
to $18.6 million in fiscal 1997. As a percentage of net sales, selling expenses
increased from 15.4% of net sales in the third quarter of fiscal 1996 to 16.1%
of net sales in the third quarter of fiscal 1997 and decreased from 16.2% in
the first nine months of fiscal 1996 to 15.9% in the first nine months of 1997.
The Company did not increase the number of sales 


                                      10
<PAGE>   11
territories or sales professionals as total sales increased. Additionally, the
increase in contract manufacturing has been accomplished with minimal sales
support.

General and administrative expenses decreased 16.9% from $3.1 million in the
third quarter of fiscal 1996 to $2.6 million in the third quarter of fiscal
1997. During the third quarter of fiscal 1996, the Company incurred additional
bad debt expense of approximately $1.1 million attributable to rebate disputes
anticipated to result in uncollectible accounts receivable and the insolvency
of an Italian distributor. For the nine month period, general and
administrative expenses have increased 5.0% from $7.0 million in fiscal 1996 to
$7.4 million in fiscal 1997. As a percentage of net sales, general and
administrative expenses were 8.7% in the third quarter of fiscal 1996 (6.5% in
the first nine months of 1996) compared to 6.7% in the third quarter of fiscal
1997 (6.3% in the first nine months of 1997).

     Income from operations increased 89.1% from $3.9 million in the third
quarter of fiscal 1996 to $7.4 million in the third quarter of fiscal 1997 as a
result of the foregoing factors. For the nine month period, income from
operations increased 29.3% from $17.8 million in fiscal 1996 to $23.0 million
in fiscal 1997. Operating margin increased from 10.9% in the third quarter of
fiscal 1996 to 19.1% in the third quarter of fiscal 1997. For the nine month
period, operating margin increased from 16.6% in fiscal 1996 to 19.8% in fiscal
1997.

     Other income (expense) represented expense of approximately $743,000 in
the third quarter of fiscal 1996, compared to income of approximately $113,000
in the third quarter of fiscal 1997. During the third quarter of fiscal year
1996, the Company tentatively agreed to settle a class action lawsuit brought
against the Company and certain of its senior executives. In connection with
the settlement agreement the Company reserved and expensed $550,000. For the
nine month period, other expense totaled approximately $961,000 in fiscal 1996,
compared to income of approximately $72,000 in fiscal 1997. The Company has
incurred lower interest expense, as certain long-term debt has been repaid.
Interest income has increased as the Company's cash balance has increased.

     Tecnol's effective income tax rate increased from 33.3% in the third
quarter of fiscal 1996 (33.4% for the first nine months of fiscal 1996) to
36.4% in the third quarter of fiscal 1997 (35.5% for the first nine months of
fiscal 1997). The effective tax rate for the first nine months of 1996 is lower
than the statutory rate due to revisions in estimated reserves required for
federal income taxes. The Company expects the effective tax rate to be
approximately 36.5% for the remainder of fiscal 1997.

     Net income increased 125.6% from $2.1 million in the third quarter of 1996
to $4.8 million in the third quarter of 1997 as a result of the foregoing
factors. For the nine month period, net income increased 32.6% from $11.2
million in fiscal 1996 to $14.9 million in fiscal 1997. Net income per share
increased 118.2% from $0.11 in the third quarter of fiscal 1996 to $0.24 in the
third quarter of fiscal 1997. For the nine month period, net income per share
increased 32.1% from $0.56 in fiscal 1996 to $0.74 in fiscal 1997.

     Over the past few years, legislation designed to significantly reform the
way health care services are provided in the United States has been proposed.
The Company cannot predict whether any significant legislation will be enacted
into law or, if enacted, what effect the legislation will have on its business.
There are also changes in the structure and business methods within the health
care industry initiated by the private sector through hospital group purchasing
organizations, managed 


                                      11
<PAGE>   12
care, and other strategies. The objective of some of these changes is to reduce
costs of health care, including the hospital cost of medical devices. These
changes include changes in the methods and strategies used in the sales,
marketing, distribution, and purchasing of medical devices. The Company cannot
quantify what effect, if any, these changes will have on its business.

Liquidity and Capital Resources

     The Company believes that cash flow from operations, existing cash, and
periodic utilization of its line of credit will be sufficient to meet working
capital requirements and normal capital expenditures for the foreseeable
future.

     Tecnol owns 25 acres of land in Fort Worth, Texas on which the Company
plans to build a central distribution facility for finished goods, with
completion expected in fiscal 1998 at an estimated cost of $10 million. These
plans are subject to change as a result of the recent agreement to merge with
Kimberly-Clark. The Company owns approximately 10 acres of land in Acuna,
Mexico, on which the Company is nearing completion of a 91,000 square foot
facility to be used for office space, manufacturing, and warehousing. The cost
of the land and this facility is expected to be approximately $3.5 million. The
Company is nearing completion of a project to add space for engineering and
product development to its headquarters building and is also planning to add
approximately 56,000 square feet to its headquarters building in order to add
additional manufacturing space. The estimated cost for both projects is $4.45
million, with completion expected in 1998. The size of the addition, and the
estimated cost, is subject to change as a result of the recent agreement to
merge with Kimberly-Clark. The Company may use long-term bank financing, or
alternative financing if more desirable, for these facilities projects and any
acquisition opportunities that may arise.

     The Company's working capital increased from $48.5 million at the end of
fiscal 1996 to $54.5 million at August 30, 1997. Net cash generated by
operating activities for the nine months ended August 30, 1997, totaled $19.7
million. For the nine month period of fiscal 1997, cash generated by operating
activities was used to repay approximately $3.4 million of long-term debt and
to purchase approximately $9.4 million of property, plant, and equipment. Net
cash and cash equivalents at August 30, 1997, totaled approximately $11.1
million.

     On August 30, 1997, the Company had no amount outstanding and $12,500,000
available under its bank line of credit. The line of credit, which carries an
interest rate of prime on all funds drawn, expires March 14, 1998. On August
30, 1997, the Company also had $3,850,000 available under a reducing revolving
bank line of credit (at prime interest rate).

Subsequent Event

       On September 4, 1997, Tecnol entered into a definitive agreement with
Kimberly-Clark Corporation ("Kimberly-Clark") and Vanguard Acquisition Corp., a
wholly-owned subsidiary of Kimberly-Clark ("Sub"), which provides for the
merger of Sub with and into Tecnol, with Tecnol surviving as a wholly-owned
subsidiary of Kimberly-Clark. Pursuant to the terms and conditions of the
agreement, each share of Tecnol stock (other than shares of Tecnol stock owned
directly or indirectly by Tecnol or Kimberly-Clark, which will be canceled)
will be converted into 0.42 of a share of Kimberly-Clark common stock. The
merger is subject to certain conditions, including approval by holders of a
majority of shares of Tecnol stock and certain regulatory approvals.



                                      12
<PAGE>   13
Kimberly-Clark is a leading global manufacturer and marketer of personal care,
consumer tissue, and away-from-home products. The merger is expected to take
place by the end of 1997.

New Accounting Standard

     In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Standards No. 128 (SFAS 128), "Earnings per Share." This
Statement establishes and simplifies standards for computing and presenting
earnings per share. The Company will be required to adopt SFAS No. 128 the
first quarter of fiscal year 1998. SFAS 128 replaces primary and fully diluted
earnings per share with basic and diluted earnings per share. The Company does
not expect the adoption of SFAS No. 128 to have a material impact on earnings
per share.

Cautionary Information Regarding Forward-Looking Statements

     Statements, either written or oral, which express the Company's
expectation for the future with respect to financial performance or operating
strategies can be identified as forward-looking statements. These statements
are made to provide the public with management's assessment of the Company's
business.

     Caution must be taken to consider these statements in the context in which
they are made, including assumptions which are explicitly or implicitly
included in the statements, and in light of the following factors and
assumptions: current and contemplated cost-containment measures will be
successfully implemented; products in development will be introduced
successfully and on schedule; the Company will make acquisitions which
contribute to profitability; key distributors will make purchases at the same
level as their sales; demand for the Company's products will follow recent
growth trends; the Company will continue to expand into markets other than U.S.
hospitals; competitors will not introduce new products which will substantially
reduce Tecnol's market share or pricing in its significant product lines;
conversion from standard face masks to specialty face masks will continue in
the markets Tecnol serves; and the Company will continue to manufacture high
quality products at competitive costs and maintain or increase product pricing.

     In the event any of the above factors do not occur as management
anticipates, actual results could differ materially from the expectations
expressed in the forward-looking statements. The Company may or may not update
information contained in previously released forward-looking statements and
does not assume the duty to do so.


                                      13
<PAGE>   14



                          PART II - OTHER INFORMATION


Item 6.       EXHIBITS AND REPORTS ON FORM 8-K.

(a)  Exhibits - The following exhibits are filed as part of this report:
     27              Financial Data Schedule

(b)  No reports on Form 8-K were filed during the quarter ended August 30, 1997.


                                   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.


                                     TECNOL MEDICAL PRODUCTS, INC.
                                     ------------------------------------------
                                     (Registrant)




Date:  October  14, 1997            /s/Jeffrey A. Nick
                                    ------------------------------------------
                                    JEFFREY A. NICK, Vice President Finance and
                                    Accounting
                                    Duly Authorized Officer and Chief Financial 
                                    Officer


                                      14
<PAGE>   15
                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
EXHIBIT
NUMBER                        DESCRIPTION
------                        -----------
<S>                     <C>
27                      FINANCIAL DATA SCHEDULE
</TABLE>