<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 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 March 31, 1998

                                       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 0-22726

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

                    Florida                              59-2617525
         ---------------------------                --------------------
        (State or other jurisdiction                (IRS Employer ID No.)
     of incorporation or organization)

               12671 High Bluff Drive, San Diego, California 92130
               ---------------------------------------------------
                    (Address of principal executive offices)
                                 (619) 794-8111
              (Registrant's telephone number, including area code)

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

           Yes  [X]   No [ ]

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


               Class                             Outstanding at April 30, 1998
        ------------------                       -----------------------------
Common Stock, par value $0.01 per share                    53,744,699



<PAGE>   2
                              SAFESKIN CORPORATION

                                      INDEX


<TABLE>
<CAPTION>
                                                                                         Page Number
                                                                                         -----------
<S>                                                                                      <C>
PART I:  Financial Information.......................................................        1

ITEM 1.  Financial Statements........................................................        1

         Condensed Consolidated Balance Sheets at March 31, 1998 and December 31, 1997       2
         Condensed Consolidated Statements of Operations for the three months ended
         March 31, 1998 and 1997......................................................       3

         Condensed Consolidated Statements of Cash Flows for the three months ended
         March 31, 1998 and 1997......................................................       4

         Consolidated Statements of Comprehensive Income
         for the three months ended March 31, 1998 and 1997...........................       5

         Notes to Condensed Consolidated Financial
         Statements...................................................................       6

ITEM 2.  Management's Discussion and Analysis of Financial Condition and Results of
         Operations..................................................................        8

PART II: Other Information...........................................................       16

ITEM 6.  Exhibits and Reports on Form 8-K............................................       16


         SIGNATURES..................................................................       17
</TABLE>



                                      -i-
<PAGE>   3
                          PART I: FINANCIAL INFORMATION




ITEM 1.    Financial Statements



<TABLE>
<CAPTION>
           INDEX                                                          PAGE
           -----                                                          ----
<S>                                                                       <C>
           Condensed Consolidated Balance Sheets at March 31, 1998
           and December 31, 1997.............................................2

           Condensed Consolidated Statements of Operations for
           the three months ended March 31, 1998 and 1997....................3

           Condensed Consolidated Statements of Cash Flows for
           the three months ended March 31, 1998 and 1997....................4

           Consolidated Statements of Comprehensive Income for
           the three months ended March 31, 1998 and 1997 ...................5

           Notes to Condensed Consolidated Financial Statements..............6
</TABLE>




                                      -1-
<PAGE>   4

                              SAFESKIN CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      MARCH 31, 1998 AND DECEMBER 31, 1997



<TABLE>
<CAPTION>
                                                                  MARCH 31,      
                                                                   1998           DECEMBER 31,
                                                               (UNAUDITED)           1997     
                                                              -------------      -------------
<S>                                                           <C>                <C>
ASSETS

Current assets:
       Cash and cash equivalents ........................     $  16,001,560      $  23,916,959
       Accounts receivable, net .........................        25,579,785         22,195,828
       Inventory ........................................        26,488,916         21,242,732
       Other current assets .............................         6,120,674          5,692,369
                                                              -------------      -------------

              Total current assets ......................        74,190,935         73,047,888

Property, plant and equipment, net ......................        72,806,210         52,904,271
Intangibles and other assets ............................        21,931,880         12,568,245
                                                              -------------      -------------
              Total assets ..............................     $ 168,929,025      $ 138,520,404
                                                              =============      =============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
       Accounts payable .................................     $   7,401,132      $   6,922,540
       Accrued liabilities ..............................        19,982,429         22,924,623
                                                              -------------      -------------
              Total current liabilities .................        27,383,561         29,847,163

Deferred income taxes and other liabilities .............         3,411,523          2,094,928
                                                              -------------      -------------
       Total liabilities ................................        30,795,084         31,942,091

Commitments and contingencies

Shareholders' equity:
       Preferred stock; $.01 par value; 10,000,000 shares
            authorized and no shares outstanding ........                --                 --
       Common stock; $.01 par value; 80,000,000 shares
             authorized; 53,717,644 shares
             and 52,964,224 shares outstanding ..........           537,176            529,642
       Additional paid-in-capital .......................        52,388,386         47,517,453
       Accumulated other comprehensive loss .............       (32,324,919)       (45,687,717)
       Retained earnings ................................       117,533,298        104,218,935
                                                              -------------      -------------

             Total shareholders' equity .................       138,133,941        106,578,313
                                                              -------------      -------------

             Total liabilities and shareholders' equity .     $ 168,929,025      $ 138,520,404
                                                              =============      =============
</TABLE>



                 The accompanying notes are an integral part of
                     these condensed financial statements.


                                      -2-
<PAGE>   5
                              SAFESKIN CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                        1998              1997
                                                                                   ------------      ------------
<S>                                                                                <C>               <C>         
Net sales ....................................................................     $ 53,295,835      $ 41,168,378

Cost of goods sold ...........................................................       25,454,262        22,737,640
                                                                                   ------------      ------------

            Gross profit .....................................................       27,841,573        18,430,738
                                                                                   ------------      ------------

Operating expenses:
     Selling .................................................................        5,631,092         4,440,494
     Research and development ................................................        1,834,673           624,387
     General and administrative ..............................................        5,920,950         3,528,779
                                                                                   ------------      ------------

            Total operating expenses .........................................       13,386,715         8,593,660
                                                                                   ------------      ------------

            Income from operations ...........................................       14,454,858         9,837,078

Interest expense (income), net ...............................................         (282,736)         (193,056)

Other expense (income), net ..................................................          (56,142)          418,766
                                                                                   ------------      ------------

Income before income tax provision ...........................................       14,793,736         9,611,368

Income tax provision .........................................................        1,479,374         1,120,891
                                                                                   ------------      ------------

Net income ...................................................................     $ 13,314,362      $  8,490,477
                                                                                   ============      ============

Per share amounts:
Earnings per share of common stock
     and common stock equivalents:
                 Basic .......................................................     $       0.25      $       0.16
                 Diluted .....................................................             0.22              0.15
Weighted average number of shares of common stock and common stock equivalents
     outstanding:
                 Basic .......................................................       53,368,370        51,851,030
                 Diluted .....................................................       60,635,961        57,417,582
</TABLE>



                 The accompanying notes are an integral part of
                     these condensed financial statements.



                                      -3-
<PAGE>   6

                              SAFESKIN CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                    1998             1997
                                                               ------------      ------------
<S>                                                            <C>               <C>         
Cash flows from operating activities:
      Net income .........................................     $ 13,314,362      $  8,490,477
      Adjustments to reconcile net income to net cash
           provided by operating activities:
             Depreciation and amortization ...............        2,287,376         1,531,572
             Exchange loss-unrealized ....................        4,749,224                --
             Loss on disposal of equipment ...............           13,478            24,291
      Changes in operating assets and liabilities:
                  Accounts receivable ....................       (1,007,497)       (3,278,972)
                  Inventory ..............................       (3,634,558)        1,390,335
                  Other assets ...........................         (224,794)        1,058,646
                  Accounts payable and accrued liabilities       (1,832,905)         (830,198)
                                                               ------------      ------------
             Net cash provided by operating activities ...       13,664,686         8,386,151
                                                               ------------      ------------

Cash flows from investing activities:
      Net cash paid for acquisition of subsidiary ........       (5,145,128)      (14,463,092)
      Purchases of property, plant and equipment .........      (12,537,319)       (4,120,498)
      Proceeds from sale of equipment ....................               --             7,580
                                                               ------------      ------------
             Net cash used by investing activities .......      (17,682,447)      (18,576,010)
                                                               ------------      ------------

Cash flows from financing activities:
      Proceeds from issuance of common stock .............        3,314,467         1,306,676
                                                               ------------      ------------
             Net cash provided by financing activities ...        3,314,467         1,306,676
                                                               ------------      ------------

Effect of exchange rate changes on cash ..................       (7,212,105)          326,508
                                                               ------------      ------------
Net decrease in cash and cash equivalents ................       (7,915,399)       (8,556,675)
Cash and cash equivalents at beginning of period .........       23,916,959        16,265,468
                                                               ------------      ------------
Cash and cash equivalents at end of period ...............     $ 16,001,560      $  7,708,793
                                                               ============      ============
</TABLE>



                 The accompanying notes are an integral part of
                     these condensed financial statements.


                                      -4-
<PAGE>   7
                              SAFESKIN CORPORATION
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
               FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                      1998            1997
                                                  -----------     -----------
<S>                                               <C>             <C>        
Net income ..................................     $13,314,362     $ 8,490,477

Other comprehensive income, net of tax:

     Foreign currency translation adjustments      13,362,798          (4,920)
                                                  -----------     -----------

Comprehensive income ........................     $26,677,160     $ 8,485,557
                                                  ===========     ===========
</TABLE>



                 The accompanying notes are an integral part of
                     these condensed financial statements.



                                      -5-
<PAGE>   8

                              SAFESKIN CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.         In the opinion of the Company, the accompanying unaudited condensed
           consolidated financial statements contain all adjustments, which
           consist of normal and recurring adjustments, necessary for a fair
           presentation of results for the periods indicated. The results of any
           interim period are not necessarily indicative of results for the full
           year. Certain information and footnote disclosures normally included
           in financial statements prepared in accordance with generally
           accepted accounting principles have been condensed or omitted. These
           condensed consolidated financial statements should be read in
           conjunction with the consolidated financial statements and the
           related notes thereto for the year ended December 31, 1997. The
           December 31, 1997 condensed consolidated balance sheet was derived
           from audited financial statements, but does not include all
           disclosures required by generally accepted accounting principles.
           Certain reclassifications have been made to prior periods to conform
           to the current period's presentation.

2.         Inventories at March 31, 1998 consisted of $3,985,000, $1,641,000 and
           $20,863,000 for raw materials, work in process and finished goods,
           respectively. At December 31, 1997, inventories consisted of
           $2,701,000, $690,000 and $17,852,000 for raw materials, work in
           process and finished goods, respectively.

3.         On February 17, 1998, the Company authorized a two-for-one stock
           split of its common stock to be effective in the form of a stock
           dividend distributed on April 1, 1998 to shareholders of record at
           the close of business on February 27, 1998. The holders of the
           Company's common stock received a stock dividend at the rate of one
           share of common stock for each share of common stock owned. The
           stated par value of each share was not changed from $.01. A total of
           $268,588 and $264,821 was reclassified from the Company's additional
           paid-in capital account to the Company's common stock account for the
           periods ending March 31, 1998 and December 31, 1997, respectively.
           All share and per share amounts have been retroactively restated to
           reflect the stock split.

4.         The Company is exposed to exchange rate risk when it and certain of
           its subsidiaries enter into transactions denominated in currencies
           other than their functional currency. Certain firmly committed
           transactions are hedged with forward foreign exchange contracts. As
           exchange rates change, gains and losses on the exposed transactions
           may be partially offset by gains and losses related to the hedging
           contracts. Both the exposed transactions and the hedging contracts
           are translated at current spot rates, with gains and losses included
           in earnings. The Company's derivative activities, all of which
           consist of forward foreign exchange contracts as of March 31, 1998,
           are initiated primarily to hedge intercompany receivables and
           payables.

           The forward foreign exchange contracts generally require the Company
           to exchange U.S. dollars for foreign currencies based on
           pre-established exchange rates at the contracts' 



                                      -6-
<PAGE>   9

           maturity dates. If the counterparties to the exchange contracts
           (primarily AA rated international institutions) do not fulfill their
           obligations to deliver the contacted currencies, the Company could be
           at risk for currency related fluctuations (generally limited to
           unrealized gains). Management believes that the high credit
           worthiness of the counterparties to the hedging contracts minimizes
           the risk of non-performance. Net gains and losses from foreign
           currency transactions for the periods ended March 31, 1998 and 1997
           were not significant.

5.         The Company has adopted Statement of Financial Accounting Standards
           No. 130 "Reporting Comprehensive Income" in the first quarter of
           1998. This standard expands or modifies disclosures, and accordingly,
           has no impact on the Company's financial position, results of
           operations or cash flows.



                                      -7-
<PAGE>   10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
condensed consolidated financial statements and related notes thereto.

GENERAL

The Company's net sales have grown substantially over the past several years.
The Company attributes the growth in net sales during this period principally to
increased market penetration due to the implementation of sales and marketing
programs, the introduction of new products and growth in markets for its
products. The Company introduced lightly powdered medical gloves, powder-free
medical gloves, HypoClean(R) powder-free gloves, powder-free latex surgical
gloves and high technology and scientific nitrile gloves, and Safeskin 2000(TM)
powder-free latex surgical gloves, in 1989, 1990, 1992, 1994, 1995, and 1996,
respectively. In 1997, the Company began selling a medical examination glove
made of a non-latex material called nitrile. In addition, as a result of its
acquisition of the synthetic glove business of Tactyl Technologies, Inc.
("Tactyl"), the Company began selling Tactylon(R) synthetic examination and
surgical gloves. In 1998, as a result of its acquisition of Absolute Quality
Leadership, Inc. ("AQL"), the Company expanded its current product line
associated with the high-technology and scientific markets to include a broad
line of proprietary latex and synthetic glove products, specifically designed
for the microelectronics, health technologies and general laboratory and safety
market segments. Although the Company has continued to develop new products and
expects to do so in the future, no assurance can be given that the new products
will be accepted in the marketplace or will have similar growth rates.

The Company's net sales are derived from the sale of finished products, net of
contractual allowable rebates and fees provided to distributors and group
purchasing organizations for the resale of the Company's products in specific
volumes to specified end user customers. The Company estimates allowable rebates
on a monthly basis through the analysis of actual sales information from
customers, contractual arrangements and historical trends related to actual
rebates issued. Cost of goods sold includes all costs to manufacture the
finished product plus related costs associated with ocean freight, customs duty,
warehousing and product delivery expenses. Selling expenses include salaries for
sales and marketing staffs and other related expenses such as sales commissions,
and costs associated with travel, trade show participation and advertising.
Research and development expenses include salaries for research and development
staffs and related expenses for consulting, product testing and travel. General
and administrative expenses include salaries for administrative and information
technology staffs and related expenses for travel, insurance, facilities,
consulting and professional fees. The income tax provision is substantially less
than statutory rates as a result of the tax-free status of the Company's foreign
manufacturing operations. The Company's Malaysian manufacturing operations were
granted five years of tax-free status which expires on September 30, 1998. The
expiration of this tax-free status is not expected to have a material adverse
effect upon the 



                                      -8-
<PAGE>   11
Company's operations in the foreseeable future. The Company's existing Thailand
manufacturing operations have been granted tax-free status through 2003 and have
been granted a reduced tax rate through 2007. As the Company begins to build new
production facilities in Thailand, it has applied for and received similar
tax-free status for these operations.

The Company's medical glove distributor customers do not bill third-party
reimbursement sources separately for purchases of the Company's gloves.
Consequently, the timing and effect of third-party payments to hospitals and
clinics do not have a material effect on the Company's operations or liquidity.

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
1997

Net sales for the three months ended March 31, 1998 were $53,296,000 which
represents a 29.5% increase over net sales of $41,168,000 for the same three
month period in 1997. The predominant causes for the sales growth were an
increase in unit volumes sold and the shift in product mix to higher priced
powder-free gloves in the 1998 period as compared to the 1997 period.

Cost of goods sold increased 12.0% from $22,738,000 for the three months ended
March 31, 1997 to $25,454,000 for the three months ended March 31, 1998. As a
percentage of net sales, cost of goods sold decreased from 55.2% for the three
months ended March 31, 1997 to 47.8% for the same period in 1998. This decrease
in cost of goods sold as a percentage of net sales was attributable to the
continued shift of production to Thailand's lower-cost manufacturing facility
and an increased mix of higher margin powder-free gloves. In addition, the
Company's gross profit margin was favorably impacted in 1998 due to the positive
effects of the devaluation of the currencies in both Malaysia and Thailand. As a
result of the above factors, gross profits increased 51.1% from $18,431,000 for
the three months ended March 31, 1997 to $27,842,000 for the three months ended
March 31, 1998.

Selling expenses increased 26.8% from $4,441,000 for the three months ended
March 31, 1997 to $5,631,000 for the three months ended March 31, 1998. As a
percentage of net sales, selling expenses decreased slightly from 10.8% for the
three months ended March 31, 1997 to 10.6% for the same period in 1998.

Research and development expenses increased 193.8% from $624,000 for the three
months ended March 31, 1997 to $1,835,000 for the three months ended March 31,
1998. As a percentage of net sales, these expenses increased from 1.5% for the
three months ended March 31, 1997 to 3.4% for the three months ended March 31,
1998. The increase in research and development expenses as a percentage of net
sales is primarily attributed to increased costs associated with research
related to the Company's outstanding product liability claims.

General and administrative expenses increased 67.8% from $3,529,000 for the
three months ended March 31, 1997 to $5,921,000 for the three months ended March
31, 1998. As a percentage of net 


                                      -9-
<PAGE>   12
sales, these expenses increased from 8.6% for the 1997 period to 11.1% for the
1998 period. The increase in general and administrative expenses as a percentage
of net sales pertains primarily to increased compensation costs as well as
increased costs associated with the Company's efforts to improve and streamline
its information technology systems and services. Additional factors can be
attributed to increased costs associated with the Company's acquisitions of
Tactyl and AQL and increased consulting costs.

Income from operations increased 46.9% from $9,837,000 for the three months
ended March 31, 1997 to $14,455,000 for the three months ended March 31, 1998,
and operating margins increased from 23.9% in the 1997 period to 27.1% in the
1998 period.

Interest expense (income), net, increased from $193,000 of interest income for
the three months ended March 31, 1997 to $283,000 of interest income for the
three months ended March 31, 1998, primarily due to the fact that in 1998 the
Company generated increased investment returns on its increased cash balances.
Since 1997, the Company has been able to fund its operations, including its
acquisitions of Tactyl and AQL as well as the expansion of the Company's foreign
manufacturing operations, with internally generated cash, while at the same
time, generating excess cash balances.

Other expense (income), net, changed from $419,000 of other expense for the
three months ended March 31, 1997 to $56,000 of other income for the three
months ended March 31, 1998. This change in other expense was substantially due
to losses experienced from foreign currency transactions in the Company's
European subsidiaries in 1997. In 1998, the Company was not significantly
impacted by net foreign currency transaction gains or losses.

Provision for income taxes increased 32.0% from $1,121,000 for the three months
ended March 31, 1997 to $1,480,000 for the three months ended March 31, 1998.
The income tax provisions recorded in both 1997 and 1998 remain less than United
States statutory rates due to the foreign tax free status of the Company's
foreign manufacturing operations.

Net income increased 56.8% from $8,490,000 for the three months ended March 31,
1997 to $13,314,000 for the three months ended March 31, 1998. Due to the
foregoing factors, net income as a percentage of net sales increased from 20.6%
in 1997 to 25.0% in 1998.



                                      -10-
<PAGE>   13
LIQUIDITY AND CAPITAL RESOURCES

The Company's operations generated approximately $13,665,000 and $8,386,000 of
cash during the three months ended March 31, 1998 and 1997, respectively.
Further, during the three months ended March 31, 1997 and 1998, the Company
acquired capital assets of approximately $12,537,000 and $4,120,000,
respectively, substantially all of which were for the expansion of the Company's
foreign manufacturing operations.

During 1997, the Company completed construction and began operating the first of
its three new production lines located in its Thailand facility, referred to by
the Company as the "Grand Master(TM)." The two additional production lines began
operating in the first quarter of 1998. The Company's management believes that a
single "Grand Master(TM)" production line will have the highest capacity of any
glove production line in the world, equivalent in capacity to approximately
eight of the existing production lines in this facility. The construction of
these production lines has been funded with internally generated cash.

In addition, the Company is currently building a latex concentrate plant in
Thailand. The output of the plant will supply latex concentrate to the Company's
factories in Thailand and Malaysia for the manufacture of its disposable latex
gloves. The Company began initial production of latex concentrate in the third
quarter of 1997 and expects the final phase of construction of its latex
concentrate plant to be completed within a year. The Company anticipates that
this construction will be funded with internally generated cash. This plant will
allow the Company to integrate its manufacturing processes to gain better
control over the quality, cost and reliability of latex supplies.

In April 1997, the Company announced plans for the expansion of its Southeast
Asian manufacturing operations in order to meet the continued strong demand and
anticipated future demand for its latex and synthetic medical examination,
surgical and high-technology and scientific gloves. The Company's expansion
plans over the next two years include the construction of an additional building
and related machinery at the Company's existing Thailand facility. Additionally,
the Company also plans to construct a second manufacturing facility to be
located in southern Thailand that is expected to produce latex and synthetic
surgical, high-technology and scientific and examination gloves. Construction of
this site began in the second half of 1997 after approval by the Thailand Board
of Investment. Four production buildings are expected to be constructed on this
site. One of these buildings will house the expansion of the Company's
Tactylon(R) synthetic examination and surgical glove and the Company's nitrile
glove production and is scheduled to be completed during the second half of
1998. The first machine in this building is expected to increase by over 200
percent the production capacity of the Tactylon(R) product line in comparison to
the existing facility which is located in Vista, California. The second building
will be constructed to provide additional capacity for the production of the
Company's surgical and clean-room glove products. Production is scheduled to
begin in the fourth quarter of 1998. In the interim, these products will
continue to be manufactured at the Company's Malaysia and Vista, California
facilities. An additional two 


                                      -11-
<PAGE>   14
buildings will be constructed to house the Company's increased capacity for
latex examination, scientific, synthetic and surgical gloves. Production is
scheduled to begin in 1999. The new buildings, machines and supporting
infrastructure are expected to cost approximately $80 million in the aggregate.
The significant investment by the Company in its manufacturing operations is
expected to increase the Company's annualized production capacity from
approximately 3.5 billion gloves to approximately 5.5 billion gloves. Financing
for the total capital expenditures for the two-year period is projected to come
from internally generated funds, with any shortfalls to be financed through
borrowings from the existing credit facilities.

In February 1998, the Company completed the acquisition of AQL, a
California-based marketer of glove products for the high-technology and
scientific markets. The Company paid for this acquisition with internally
generated cash. The Company recently changed the name of AQL to Safeskin
Scientific Corporation.

The Company has an unsecured two-year credit facility for financing general
working capital needs, up to a maximum of $25,000,000 in borrowings. As of March
31, 1998, there were no borrowings outstanding under this credit facility.

The Company's foreign manufacturing subsidiaries have revolving lines of credit
for financing general working capital needs up to approximately $9,500,000, of
which there were no outstanding balances as of March 31, 1998. These borrowings
are secured by a guarantee of the Company.

In July 1997, the Thai baht and Malaysian ringgit were permitted to float
against the U.S. dollar and other currencies, and as a result, the baht and
ringgit have devalued from approximately 24.7 bahts/dollar and 2.52
ringgits/dollar, as of June 30, 1997 to approximately 48.15 bahts/dollar and
3.89 ringgits/dollar as of December 31, 1997, respectively. The significant
devaluation in both the Thailand and Malaysian currencies has resulted in an
increased amount of foreign currency transaction net gains, which are included
in other income, and an increased amount of foreign currency translation
adjustments, which are recorded as a separate component of equity. As of March
31, 1998, the Thailand baht and Malaysian ringgit were approximately 39.35
bahts/dollar and 3.65 ringgits/dollar. The Company has not experienced
significant foreign currency transaction net gains and losses in 1998.
Nevertheless, the Company has experienced an increased amount of foreign
currency translation adjustments in 1998. The devaluation of the baht and
ringgit may cause the Company's competitive environment to improve. It is not
possible at this time to determine what effect the devaluation will have upon
pricing or costs, but management believes the devaluation will not have a
material adverse effect and may have a continued positive impact upon the
Company's operating results for 1998 and beyond.



                                      -12-
<PAGE>   15
RISKS ASSOCIATED WITH YEAR 2000

The Company recognizes the need to ensure its operations will not be adversely
impacted by the inability of the Company's systems to process data having dates
on or after January 1, 2000 (the "Year 2000" issues). Processing errors due to
software failures arising from calculations using the Year 2000 date are a
recognized risk. In February 1998, the Company engaged Perot Systems Corporation
for the management of its information technology systems. Both the Company and
Perot Systems Corporation are currently addressing the risk, with respect to the
availability and integrity of its financial systems and the reliability of its
operating systems, and are in the process of communicating with suppliers,
customers, financial institutions and others with whom it conducts business
transactions to assess whether they are Year 2000 compliant. The Company does
not believe that it will incur a material financial impact from the risk, or
from assessing the risk, arising from the Year 2000 issues. However, there can
be no guarantee that the Company's initial assessment of the financial impact of
this risk will be accurate; actual results could differ materially from those
anticipated. Specific factors that might cause such material differences
include, but are not limited to, the availability and cost of personnel trained
in this area, the ability to locate and correct all relevant computer codes, and
similar uncertainties.




                                      -13-
<PAGE>   16
LEGAL PROCEEDINGS

Since May 1995, 125 actively pending product liability lawsuits seeking monetary
damages have been filed in federal and state courts against the Company, and
other manufacturers of latex gloves. On February 26, 1997, the Judicial Panel on
Multi-District Litigation entered an order transferring all latex allergy
lawsuits brought by healthcare workers against the Company and other latex glove
manufacturers in the Federal courts to the Federal district court in
Philadelphia, consolidating those cases, and other pending and future Federal
court latex allergy lawsuits, for discovery management and other pre-trial
proceedings.

CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

This report and the documents incorporated by reference herein contain
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934,
as amended. These forward-looking statements include, among others, statements
concerning the Company's outlook for 1998 and beyond, the effect of currency
fluctuations in Thailand and Malaysia on the operating results of the Company,
the Company's liquidity and working capital, the Company's ability to complete
construction of new facilities as scheduled, the production capacity and the
Company's ability to achieve additional efficiencies in its manufacturing
facilities and other statements of expectations, beliefs, future plans and
strategies, anticipated events or trends and similar expressions concerning
matters that are not historical facts. The forward-looking statements in this
report are subject to risks and uncertainties that could cause the assumptions
underlying such forward-looking statements and the actual results to differ
materially from those expressed in or implied by the statements.

The most important factors that could prevent the Company from achieving its
goals -- and cause the assumptions underlying forward-looking statements and the
actual results of the Company to differ materially from those expressed in or
implied by those forward-looking statements -- include, but are not limited to,
the following:

        o       the competitive nature of the industry and the ability of the
                Company to continue to distinguish its products on the basis of
                quality, reliability and value; possible obsolescence of the
                Company's primary product due to the development by competitors
                of new products, manufacturing processes or technologies
                including latex alternatives; the ability of the Company to
                maintain strong distributor relationships; and the ability of
                the Company to maintain selling prices and anticipated volumes;

        o       adverse outcomes regarding product liability lawsuits or the
                ability to obtain sufficient product liability insurance
                coverage at reasonable rates;

        o       the ability of the Company to meet existing or future FDA
                regulations regarding the manufacture and sale of the Company's
                gloves;


                                      -14-
<PAGE>   17
        o       delays in the completion of the Company's construction of its
                new production facilities in Thailand and the failure of these
                production facilities to generate anticipated productivity and
                efficiencies;

        o       risks associated with investments and operations in foreign
                countries, particularly Thailand and Malaysia, including
                exchange rate fluctuations, local economic conditions,
                governmental policies regarding foreign ownership of
                manufacturing facilities, local regulatory requirements, tax
                holidays and political factors;

        o       the consistent availability, at budgeted prices, of raw rubber
                from independent growers and concentrate plant operators in
                Malaysia and Thailand;

        o       delays in the completion of the final phase of the Company's
                construction of its latex concentrate plant in Thailand or the
                failure of this plant to generate anticipated productivity and
                efficiencies;

        o       failure of the Company's new production lines, referred to by
                the Company as "Grand Masters(TM)," to generate anticipated
                productivity and efficiencies;

        o       economic conditions in the healthcare industry, including the
                potential impact of industry consolidation and cost constraints
                on the end-user;

        o       changes in significant government regulations affecting the
                healthcare industry;

        o       the ability of the Company to protect its proprietary products,
                know-how and manufacturing processes; 

        o       changes in the Company's rates or basis of income taxation; and

        o       rapid levels of inflation which could have a significant effect
                on the Company's net sales and profitability.

These and other risks and uncertainties affecting the Company are discussed in
greater detail in this report and in other filings by the Company with the
Securities and Exchange Commission.



                                      -15-
<PAGE>   18
                           PART II: OTHER INFORMATION

ITEM 6.    Exhibits and Reports on Form 8-K

(a)        Exhibits


           EXHIBIT     DESCRIPTION


           10.42      Services Agreement between Safeskin Corporation and Perot
                      Systems Corporation dated February 3, 1998

           11         Statement Re:  Computation of Per Share Earnings


(b)        Reports on Form 8-K

           None.



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<PAGE>   19
                                   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.


                                       SAFESKIN CORPORATION


Date:  May 15, 1998                    By: /s/ David L. Morash
                                           ------------------------------------
                                           David L. Morash, Executive Vice-
                                           President, Chief Financial Officer




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