<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, 1999

                                       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.

<TABLE>
<CAPTION>
                Class                              Outstanding at April 30, 1999
                -----                              -----------------------------
<S>                                                <C>       
Common Stock, par value $0.01 per share                     55,095,109
</TABLE>


<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, 1999 and
             December 31, 1998................................................                 2

             Condensed Consolidated Statements of Operations for the three
             months ended March 31, 1999 and 1998.............................                 3
             Consolidated Statements of Comprehensive Income
             for the three months ended March 31, 1999 and 1998 ..............                 4
             Condensed Consolidated Statements of Cash Flows for the three
             months ended March 31, 1999 and 1998.............................                 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................................................                24

ITEM 6.      Exhibits and Reports on Form 8-K.................................                24


             SIGNATURES.......................................................                25
</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, 1999
             and December 31, 1998............................................................2

             Condensed Consolidated Statements of Operations for
             the three months ended March 31, 1999 and 1998...................................3

             Consolidated Statements of Comprehensive Income for
             the three months ended March 31, 1999 and 1998 ..................................4

             Condensed Consolidated Statements of Cash Flows for
             the three months ended March 31, 1999 and 1998...................................5

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


                                      -1-
<PAGE>   4
                              SAFESKIN CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      MARCH 31, 1999 AND DECEMBER 31, 1998


<TABLE>
<CAPTION>
                                                                          MARCH 31,              DECEMBER 31,
                                                                            1999                    1998
                                                                         (UNAUDITED)
                                                                        -------------           -------------
<S>                                                                     <C>                     <C>          
ASSETS

Current assets:
       Cash and cash equivalents .............................          $   6,969,681           $   9,416,802
       Accounts receivable, net ..............................             32,254,082              32,511,412
       Inventory .............................................             44,797,703              37,056,821
       Other current assets ..................................             12,935,468               9,829,335
                                                                        -------------           -------------

            Total current assets .............................             96,956,934              88,814,370

Property, plant and equipment, net ...........................            127,802,021             119,456,352
Deferred taxes and other assets ..............................             42,096,351              40,690,386
                                                                        -------------           -------------
            Total assets .....................................          $ 266,855,306           $ 248,961,108
                                                                        =============           =============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
       Accounts payable ......................................          $   8,816,396           $   8,661,602
       Accrued liabilities ...................................             20,738,776              24,515,378
       Current portion of long-term debt .....................              6,000,000               4,500,000
                                                                        -------------           -------------
            Total current liabilities ........................             35,555,172              37,676,980

Long-term debt ...............................................            105,000,000              87,731,158
Other long-term liabilities ..................................              3,960,269               2,140,682
                                                                        -------------           -------------
       Total liabilities .....................................            144,515,441             127,548,820

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; 55,095,109 shares
             and 54,600,399 shares outstanding ...............                550,951                 546,004
       Additional paid-in-capital ............................             77,310,944              75,360,306
       Treasury stock, at cost; 1,999,900 shares in 1999
             and 1998.........................................            (73,589,169)            (73,589,169)
       Accumulated other comprehensive loss ..................            (28,980,668)            (26,993,003)
       Retained earnings .....................................            147,047,807             146,088,150
                                                                        -------------           -------------

             Total shareholders' equity ......................            122,339,865             121,412,288
                                                                        -------------           -------------

             Total liabilities and shareholders' equity ......          $ 266,855,306           $ 248,961,108
                                                                        =============           =============
</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, 1999 AND 1998
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                   1999                  1998
                                                              ------------          ------------
<S>                                                           <C>                   <C>         
Net sales ..........................................          $ 41,762,915          $ 53,295,835

Cost of goods sold .................................            21,413,306            25,454,262
                                                              ------------          ------------

            Gross profit ...........................            20,349,609            27,841,573
                                                              ------------          ------------

Operating expenses:
     Selling .......................................             7,088,558             5,631,092
     Research and development ......................             1,666,002             1,834,673
     General and administrative ....................             7,025,983             5,920,950
                                                              ------------          ------------

            Total operating expenses ...............            15,780,543            13,386,715
                                                              ------------          ------------

            Income from operations .................             4,569,066            14,454,858

Interest expense (income), net .....................             1,722,912              (282,736)

Other expense (income), net ........................             1,611,811               (56,142)
                                                              ------------          ------------

Income before income tax provision .................             1,234,343            14,793,736

Income tax provision ...............................               274,686             1,479,374
                                                              ------------          ------------

Net income .........................................          $    959,657          $ 13,314,362
                                                              ============          ============

Per share amounts:
Earnings per share of common stock
     and common stock equivalents:
                 Basic .............................          $       0.02          $       0.25
                 Diluted ...........................                  0.02                  0.22
Weighted average number of shares of common
     stock and common stock equivalents outstanding:
                 Basic .............................            52,910,264            53,368,370
                 Diluted ...........................            57,681,398            60,635,961
</TABLE>


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


                                      -3-
<PAGE>   6
                              SAFESKIN CORPORATION
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                            1999                  1998
                                                        -----------           -----------
<S>                                                     <C>                   <C>        
Net income .....................................        $   959,657           $13,314,362

Other comprehensive income, (loss):

     Foreign currency translation adjustments ..         (1,987,665)           13,362,798
                                                        -----------           -----------

Comprehensive income (loss) ....................        $(1,028,008)          $26,677,160
                                                        ===========           ===========
</TABLE>


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


                                      -4-
<PAGE>   7

                              SAFESKIN CORPORATION
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           FOR THE THREE MONTHS ENDED
                             MARCH 31, 1999 AND 1998
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                              1999                    1998
                                                                         -------------           -------------
<S>                                                                      <C>                     <C>          
Cash flows from operating activities:
     Net income .................................................        $     959,657           $  13,314,362
     Adjustments to reconcile net income to net cash
          provided by operating activities:
           Depreciation and amortization ........................            3,698,133               2,287,376
           Exchange loss ........................................            1,476,320               4,414,459
           (Gain) Loss on disposal of equipment .................              (10,197)                 13,478
     Changes in operating assets and liabilities:
                Accounts receivable .............................               70,650              (1,007,497)
                Inventory .......................................           (8,098,477)             (3,634,558)
                Other assets ....................................           (5,152,248)               (224,794)
                Accounts payable and accrued liabilities ........           (1,487,721)             (8,517,622)
                                                                         -------------           -------------
           Net cash provided by (used in) operating activities ..           (8,543,883)              6,645,204
                                                                         -------------           -------------

Cash flows from investing activities:
     Net cash paid for acquisition of subsidiary ................                 --                (5,145,128)
     Purchases of property, plant and equipment .................          (14,636,274)            (12,537,319)
                                                                         -------------           -------------
           Net cash used in investing activities ................          (14,636,274)            (17,682,447)
                                                                         -------------           -------------

Cash flows from financing activities:
     Proceeds from issuance of common stock .....................            1,955,585               3,314,467
     Borrowings of debt .........................................          124,043,524                    --
     Repayments of debt .........................................         (105,274,682)                   --
                                                                         -------------           -------------
           Net cash provided by financing activities ............           20,724,427               3,314,467
                                                                         -------------           -------------

Effect of exchange rate changes on cash .........................                8,609                (192,623)
                                                                         -------------           -------------
Net decrease in cash and cash equivalents .......................           (2,447,121)             (7,915,399)
Cash and cash equivalents at beginning of period ................            9,416,802              23,916,959
                                                                         -------------           -------------
Cash and cash equivalents at end of period ......................        $   6,969,681           $  16,001,560
                                                                         =============           =============
</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, 1998. The December 31, 1998 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, 1999 consisted of $7,020,000, $866,000 and
        $36,912,000 for raw materials, work in process and finished goods,
        respectively. At December 31, 1998, inventories consisted of $5,587,000,
        $909,000 and $30,561,000 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 par value of each share was not
        changed from $.01. 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, 1999, 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' maturity dates. If the counterparties
        to the exchange contracts (primarily A2 rated international
        institutions) do not fulfill their obligations to deliver the contracted
        currencies, 

                                      -6-
<PAGE>   9
        the Company could be at risk for currency related fluctuations
        (generally limited to unrealized gains). Management believes using A2
        rated international institutions as counterparties to the hedging
        contracts minimizes the risk of non-performance.


                                      -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

Safeskin's net sales have grown substantially over the past several years.
Safeskin attributes the growth in net sales during the past several years
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. Safeskin introduced lightly powdered medical gloves in 1989,
powder-free medical gloves in 1990, HypoClean(R) powder-free gloves in 1992,
powder-free latex surgical gloves in 1994 and various high technology and
scientific nitrile gloves in 1995. In 1997, Safeskin began selling a medical
examination glove made of nitrile, a non-latex material. Additionally, in 1997,
as a result of its acquisition of the synthetic glove business of Tactyl
Technologies, Inc. ("Tactyl"), Safeskin began selling Tactylon(R) synthetic
examination and surgical gloves. In February 1998, as a result of its
acquisition of Absolute Quality Leadership, Inc. ("AQL"), Safeskin 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 Safeskin 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.

Safeskin's net sales are derived from the sale of finished products, net of
contractual allowable rebates, incentives, fees and allowance for estimated
returns. These rebates are provided to distributors for the resale of Safeskin's
products in specific volumes to specified end user customers and fees are
provided to group purchasing organization based on sales made to their member
organizations. Safeskin estimates allowable rebates, on a monthly basis, through
the analysis of actual sales information from distributors, Safeskin's
projections of distributor inventories, contractual arrangements and historical
and projected trends related to actual rebates issued. The Company establishes
an allowance for estimated returns based on historical return patterns and
estimated future returns. 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
Safeskin's foreign manufacturing operations. Safeskin's existing Thailand
manufacturing 


                                      -8-
<PAGE>   11
facilities have been granted tax-free status through 2003 and have been granted
a reduced tax rate through 2007. In 1998, Safeskin built new production
facilities in Thailand, and applied for and received similar tax-free status for
these operations. These new facilities in Thailand have been granted tax-free
status through 2006 and were granted a reduced tax rate through 2010. Safeskin's
Malaysian manufacturing operations were granted five years of tax-free status
which expired on September 30, 1998. The expiration of this tax-free status is
not expected to have a material adverse effect upon Safeskin's operations as
significantly all of the Malaysian manufacturing operations were transferred to
Thailand during the first quarter of 1999. 

Restructuring

During 1996, Safeskin announced plans to move all of its remaining latex
examination glove production from its Malaysian facility to its Thailand
facility. Safeskin also announced that the Malaysian facility would continue to
operate as Safeskin's manufacturing source of higher-value synthetic, surgical,
and scientific products. At December 31, 1996, the Malaysian facility was
considered held for sale. During 1997, Safeskin extended the planned use of the
Malaysian facility due to existing production requirements and the timing of
bringing new production capacity on-line in Thailand. During 1998, Safeskin
successfully increased its examination glove production capacity at its existing
Thailand facility and in 1998, Safeskin commenced operations at its new 54-acre
manufacturing facility in Thailand. This facility was constructed to provide
additional capacity for the production of Safeskin's synthetic, surgical, and
scientific products. As a result of this increased production capacity in
Thailand for specialized gloves, during 1998 Safeskin decided to move all of its
remaining examination, surgical, and synthetic glove production from its Ipoh,
Malaysia and Vista, California production facilities to Safeskin's manufacturing
facilities in Thailand by the end of the first quarter of 1999. In addition,
Safeskin completed the integration of AQL in the fourth quarter of 1998 by
relocating AQL's offices from Santa Maria, California to Safeskin's corporate
headquarters in San Diego, California. In connection with the closure of
Safeskin's facilities in Ipoh, Malaysia and Vista and Santa Maria, California,
Safeskin recognized expense of $14,331,000 in the fourth quarter of 1998. This
expense consists of approximately $5,134,000 related to fixed assets written
down to estimated fair value, $3,883,000 related to employee termination costs,
$3,335,000 related to impairment of goodwill associated with the Tactyl
acquisition, $1,535,000 related to the write-off of leased equipment and the
costs to renovate a leased facility, and approximately $444,000 associated with
various other unusual charges. All remaining assets were assumed to be scrapped
at the disposition date. The net book value of assets expected to be disposed of
totaled approximately $14 million as of December 31, 1998. As of March 31, 1999,
Safeskin had not yet disposed of a significant portion of its fixed assets
written down to estimated fair value, primarily at its Ipoh, Malaysia facility.
Safeskin intends to dispose of these assets in 1999. There have been no
significant changes to the carrying amount of fixed assets held for disposal. In
connection with the restructuring activities related to the closure of
Safeskin's facilities in Ipoh, Malaysia and Vista and Santa Maria, California,
Safeskin accrued restructuring charges 


                                      -9-
<PAGE>   12
totaling $5,158,889 at December 31, 1998. As of March 31, 1999, there have been
no significant changes in Safeskin's previous estimates of accrued restructuring
charges. These charges related primarily to liabilities associated with
anticipated employee termination costs totaling $3,809,545 and costs associated
with the write-off of an equipment lease and costs to renovate a leased facility
totaling $1,349,344. As a result of the restructuring activities, Safeskin
estimated that approximately 1,800 employees would be terminated primarily in
Malaysia, in the first quarter of 1999. As of April 30, 1999, Safeskin has
terminated the majority of these employees.

THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
1998

Net sales for the three months ended March 31, 1999 were $41,763,000 which
represents a 21.6% decrease from net sales of $53,296,000 for the same three
month period in 1998. The predominant cause for the sales decline was a decrease
in unit volumes sold by the medical division in the 1999 period as compared to
the 1998 period. Safeskin began operating certain of its new manufacturing
facilities in the second half of 1998, which enabled Safeskin to increase its
production capacity during 1998. From July 1997 to June 1998, Safeskin operated
with its customers on an allocation of product basis, as Safeskin was only able
to fill a portion of each distributor's orders. As Safeskin increased production
capacity, Safeskin's sales personnel began a new and increased sales program
directed at new and current end-user customers. As part of this sales program,
Safeskin, its distributors and certain end-users entered into new three-way
contracts providing for the pricing and supply of Safeskin products to such
end-users. During the third quarter and the fourth quarter of 1998, Safeskin's
distributors increased their orders from Safeskin to enable them to fulfill new
sales they anticipated would be placed pursuant to these contracts. Safeskin
expected these trends to continue into the first quarter of 1999. However,
end-users did not purchase products under the new contracts as quickly as
anticipated. In addition, during the first quarter of 1999, Safeskin experienced
a longer than anticipated sales cycle for signing new contracts. As a result,
Safeskin publicly announced its expectation that sales and earnings for the full
year 1999 would be lower than anticipated.

Cost of goods sold decreased 15.9% from $25,454,000 for the three months ended
March 31, 1998 to $21,413,000 for the three months ended March 31, 1999. As a
percentage of net sales, cost of goods sold increased from 47.8% for the three
months ended March 31, 1998 to 51.3% for the same period in 1999. The primary
factors associated with the increase in cost of goods sold as a percentage of
net sales were attributable to lower average selling prices, a higher mix of
lower margin international sales and the negative effects of foreign currency in
the current period due to the strengthening of the Thai baht. These factors were
partially offset by an increased mix of higher-margin powder-free gloves and
lower costs associated with the shift of production from Malaysia to Thailand.
As a result of the above factors, gross profits decreased 26.9% from $27,842,000
for the three months ended March 31, 1998 to $20,350,000 for the three months
ended March 31, 1999. In the remaining quarters of fiscal 1999, Safeskin
anticipates that gross profit margins will be negatively affected by startup
costs associated with transferring operations to the new Thailand facility,
wind-down costs associated with the closing of the Malaysian manufacturing
facility and increased pricing 


                                      -10-
<PAGE>   13
pressures in the industry.

Selling expenses increased 25.9% from $5,631,000 for the three months ended
March 31, 1998 to $7,089,000 for the three months ended March 31, 1999. As a
percentage of net sales, selling expenses increased from 10.6% for the three
months ended March 31, 1998 to 17.0% for the same period in 1999. The increase
in selling expenses as a percentage of net sales is primarily attributed to
lower sales levels for the three months ended March 31, 1999. In addition,
Safeskin experienced increased selling expenses related to its efforts to expand
its business in international markets.

Research and development expenses decreased 9.2% from $1,835,000 for the three
months ended March 31, 1998 to $1,666,000 for the three months ended March 31,
1999. As a percentage of net sales, these expenses increased from 3.4% for the
three months ended March 31, 1998 to 4.0% for the three months ended March 31,
1999. The increase in research and development expenses as a percentage of net
sales is primarily attributed to lower sales levels for the three months ended
March 31, 1999. During the remaining quarters of fiscal 1999, Safeskin expects
research and development expenses to be affected by costs associated with
developing and testing new products scheduled for introduction in 1999.

General and administrative expenses increased 18.7% from $5,921,000 for the
three months ended March 31, 1998 to $7,026,000 for the three months ended March
31, 1999. As a percentage of net sales, these expenses increased from 11.1% for
the 1998 period to 16.8% for the 1999 period. The increase in general and
administrative expenses as a percentage of net sales is primarily attributed to
lower sales levels for the three months ended March 31, 1999. In addition,
Safeskin experienced increased costs associated with its efforts to improve and
streamline its information technology systems and services as well as increased
legal and related expenses associated with product liability lawsuits.

Income from operations decreased 68.4% from $14,455,000 for the three months
ended March 31, 1998 to $4,569,000 for the three months ended March 31, 1999,
and operating margins decreased from 27.1% in the 1998 period to 10.9% in the
1999 period.

Interest expense (income), net, changed from $283,000 of interest income for the
three months ended March 31, 1998 to $1,723,000 of interest expense for the
three months ended March 31, 1999, primarily due to the fact that in 1999
Safeskin had incurred interest expense on debt outstanding during the period. By
comparison, for the three months ended March 31, 1998, Safeskin had no debt
outstanding and generated investment returns on its cash balances.

Other expense (income), net, changed from $56,000 of other income for the three
months ended March 31, 1998 to $1,612,000 of other expense for the three months
ended March 31, 1999. This change in other expense was substantially due to
net foreign currency transaction losses in Safeskin's Thailand subsidiaries in
1999. In 1998, the Company was not significantly impacted by net foreign
currency transaction gains or losses.


                                      -11-
<PAGE>   14
Provision for income taxes decreased 81.4% from $1,480,000 for the three months
ended March 31, 1998 to $275,000 for the three months ended March 31, 1999. The
income tax provision recorded in 1998 was less than United States statutory
rates due primarily to the tax-free status of a significant portion of
Safeskin's foreign manufacturing operations. In 1999, the income tax provision
was less than United States statutory rates due primarily to the tax-free
status of a significant portion of Safeskin's foreign manufacturing operations
and the effect of a transaction entered into by two of Safeskin's subsidiaries,
during the third quarter of 1998, that qualified as a Section 351 Exchange, as
defined in Section 351 of the Internal Revenue Code.

Net income decreased 92.8% from $13,314,000 for the three months ended March 31,
1998 to $959,000 for the three months ended March 31, 1999. Due to the foregoing
factors, net income as a percentage of net sales decreased from 25.0% in 1998 to
2.3% in 1999.


                                      -12-
<PAGE>   15
LIQUIDITY AND CAPITAL RESOURCES

Safeskin began operating certain of its new manufacturing facilities in the
second half of 1998, which enabled Safeskin to increase its production capacity
during 1998. From July 1997 to June 1998, Safeskin operated with its customers
on an allocation of product basis, as Safeskin was only able to fill a portion
of each distributor's orders. As Safeskin increased production capacity,
Safeskin's sales personnel began a new and increased sales program directed at
new and current end-user customers. As part of this sales program, Safeskin, its
distributors and certain end-users entered into new three-way contracts
providing for the pricing and supply of Safeskin products to such end-users.
During the third quarter and the fourth quarter of 1998, Safeskin's distributors
increased their orders from Safeskin to enable them to fulfill new sales they
anticipated would be placed pursuant to these contracts. Safeskin expected these
trends to continue into the first quarter of 1999. However, end-users did not
purchase products under the new contracts as quickly as anticipated. In
addition, during the first quarter of 1999, Safeskin experienced a longer than
anticipated sales cycle for signing new contracts. As a result, Safeskin's
inventory levels as of March 31, 1999 increased significantly from $37,057,000
at December 31, 1998 to $44,798,000 at March 31, 1999.  On March 11, 1999,
Safeskin publicly announced its expectation that sales and earnings for the full
year 1999 would be lower than anticipated.

During the three months ended March 31, 1999 and 1998, Safeskin acquired capital
assets of approximately $14,636,000 and $12,537,000, respectively, primarily for
the expansion of Safeskin's foreign manufacturing operations.

Safeskin is currently building a latex concentrate plant in Thailand. Safeskin
began initial production of latex concentrate at this plant in the third quarter
of 1997 and expects the final phase of construction to be completed in 1999. The
output of the plant currently supplies approximately 70% of the latex
concentrate required by Safeskin's factories in Thailand for the manufacture of
its disposable latex gloves. Safeskin believes that this plant allows it to
integrate its manufacturing processes to gain better control over the quality,
cost and reliability of latex supplies. Safeskin anticipates that the completion
of this construction will be funded with internally generated funds and
borrowings under the credit facility.

Safeskin is expanding its Thailand manufacturing operations and has transferred
manufacturing capacity from California and Malaysia to capitalize on the
increased production efficiencies and lower operating costs in Thailand that
Safeskin expects to realize. Safeskin has recently 


                                      -13-
<PAGE>   16
completed construction of a fifth building and related machinery at Safeskin's
existing Hat Yai, Thailand facility. This building houses 22 high-speed and
product-flexible dipping production lines which were commissioned throughout
1998, beginning in the second quarter, and are expected to increase production
capacity by an additional 1.5 billion gloves annually. During 1999, Safeskin's
expansion plans include the completion of a second manufacturing facility in
Sadao, Thailand that is expected to produce latex and synthetic surgical,
high-technology and scientific and medical examination gloves. Construction of
the new manufacturing facility in Sadao, Thailand began in the second half of
1997 after approval by the Thailand Board of Investment. Four production
buildings have been constructed on this site. The first building provides
additional capacity for the production of Safeskin's surgical and cleanroom
glove products and was completed in the fourth quarter of 1998. The second
building is expected to house the expansion of Safeskin's Tactylon(R) synthetic
medical examination and surgical glove products and Safeskin's nitrile glove
production. This building is expected to increase by over 200 percent the
production capacity of the Tactylon(R) product line in comparison to the
previous facility located in Vista, California. Finally, the additional two
buildings are expected to provide Safeskin increased capacity for latex and
synthetic medical examination, surgical and scientific glove production. The new
buildings, machines and supporting infrastructure at the new Sadao manufacturing
facility and the fifth building at the Hat Yai facility are currently expected
to cost approximately $80 million in the aggregate, approximately $60 million of
which has been expended as of March 31, 1999. Safeskin believes that its
significant investment in its manufacturing operations has increased Safeskin's
annualized production capacity from approximately 3.5 billion gloves to
approximately 5.5 billion gloves as of December 31, 1998. Financing for the
total capital expenditures is projected to come from internally generated funds
and borrowings from the credit facilities.

In the fourth quarter of 1998, Safeskin began construction of a facility in
southern Thailand designed to manufacture boxes and ceramic gloveformers for its
own use. This facility is expected to allow Safeskin to further integrate its
manufacturing operations to gain better control over the quality, timeliness,
cost and reliability of these products. This facility is expected to commence
production in September 1999 and is expected to produce approximately 80% of
Safeskin's requirements. The total expected costs for the construction of these
facilities is approximately $7 million. This construction is expected to be
funded through internally generated cash and borrowings under Safeskin's credit
facilities.

During 1998, Safeskin had an unsecured two-year credit facility for financing
general working capital needs, up to a maximum of $40,000,000 in borrowings (the
"Revolving Credit Facility"). As of December 31, 1998, there was approximately
$12,000,000 outstanding under the Revolving Credit Facility. On July 30, 1998,
Safeskin, through its subsidiary Safeskin (B.V.I.) Limited ("Safeskin BVI"),
entered into and closed a credit agreement for a $100 million loan facility (the
"BVI Facility") with Union Bank of California, N.A., as Agent. The BVI Facility
was secured by a first priority lien on the Common Stock of Safeskin purchased
by Safeskin BVI, a first priority lien on all the assets of Safeskin BVI and a
first priority pledge of the capital stock 


                                      -14-
<PAGE>   17
and beneficial interest in Safeskin Corporation (Thailand) Limited. Safeskin BVI
had the option to accrue interest on the BVI Facility at an annual rate equal to
either (i) the base rate plus 0.25% or (ii) LIBOR plus 1.75%. As of December 31,
1998, there was approximately $80,000,000 outstanding under the BVI Facility.
During the second half of 1998, Safeskin used a majority of the funds from the
BVI Facility to repurchase approximately two million shares of its Common Stock.
The total cost of the treasury stock acquired related to this share buyback
totaled approximately $73,600,000 for the year ended December 31, 1998.
Borrowings above the cost of Safeskin's share buyback were used to finance (i)
Safeskin's ongoing investment in its Thailand facilities (ii) Safeskin's working
capital requirements and (iii) other general corporate purposes.

On March 5, 1999, Safeskin entered into a $100 million loan agreement, including
a $60 million term loan (the "Term Loan") and a $40 million revolving credit
facility (the "Revolver") both maturing in 2004. The Term Loan and the Revolver
bear interest at approximately LIBOR plus 1.625%, however, the rate may vary
according to certain financial ratios. Concurrently, Safeskin also closed a
private placement of $40 million of senior secured notes due 2009 (the "Notes")
with a final maturity of ten years and an average life of seven-years. The Notes
bear interest at an annual fixed rate of 6.89%. The Notes constitute senior debt
of Safeskin, ranking pari passu with Safeskin's other senior bank indebtedness.
The proceeds of the Term Loan, the Revolver and the Notes were used to repay
amounts outstanding under the Revolving Credit Facility and BVI Facility, which
were subsequently canceled. The Term Loan, Revolver, and the Notes are secured
by certain assets of Safeskin as well as a guarantee of all current and future
significant domestic subsidiaries. Safeskin also entered into a seven year lease
(the "Lease") for a new corporate headquarters campus facility to be constructed
for Safeskin. The lessor of the campus has committed to fund up to a maximum of
$60 million for the construction of the campus, with the portion of the
committed amount actually used to be determined by Safeskin. Safeskin has the
option to purchase the leased premises at any time during the lease. If Safeskin
elects not to purchase the premises, Safeskin has guaranteed that the lessor,
upon subsequent sale of the building, will receive a percentage of the total
amount of funding, up to $53.9 million. The Company's lease obligations,
including the payment of rents and the payment of the guaranteed residual value
is secured by the Company's interest in the real estate subject to the Lease
and, pari passu with the lenders on the Term Loan, Revolver, and Notes, certain
other assets of Safeskin. As of March 31, 1999, there was $111,000,000
outstanding under these credit facilities. As of March 31, 1998, the Company had
no debt outstanding.

Safeskin's foreign manufacturing subsidiaries have revolving lines of credit for
financing general working capital needs up to approximately $9,100,000. As of
March 31, 1999, there were no borrowings outstanding under these credit
facilities. These borrowings are collateralized by all assets of the
subsidiaries and are further supported by a guarantee of Safeskin.


                                      -15-
<PAGE>   18
YEAR 2000 READINESS DISCLOSURE

Overview

The Year 2000 Issue is the issue of whether information and non-information
technology systems will be able to accurately recognize and process
date-sensitive information involving dates in and beyond the Year 2000. Safeskin
relies, directly and indirectly, on information technology systems, such as
desktop computers, network hardware equipment and applications software, to
manage its business data and to perform a variety of administrative services
including, accounting, financial reporting, payroll and invoicing. Safeskin also
relies on non-information technology systems including office equipment,
security systems, telephone systems and process controllers, to control its
manufacturing systems and carry out its day-to-day operations. In addition,
third parties material to Safeskin's operations, such as suppliers, vendors and
customers, rely on information and non-information technology systems to manage
their businesses. All of these technology systems could potentially be affected
by the Year 2000 Issue.

In order to minimize the risk of Year 2000 related losses, Safeskin has
completed a comprehensive assessment of its Year 2000 Issue. Perot Systems
Corporation has been retained to help Safeskin (i) identify and update or
replace non-Year 2000 compliant information and non-information technology
systems that are material to Safeskin's operations and (ii) develop contingency
and business continuation plans in the event that Safeskin is unable to timely
address its Year 2000 Issue.

Safeskin's Year 2000 assessment involves the testing and analyzing of all
information technology equipment, applications software and non-information
technology systems used by Safeskin, and the evaluation of the Year 2000
preparedness of third parties critical to Safeskin's operations. As of March 31,
1999, Safeskin's Year 2000 assessment in each of these areas was over 90%
complete. To date, the assessment has revealed that two of the material
applications software on which Safeskin relies are not Year 2000 compliant.
Safeskin plans to replace both of these applications in 1999. In early 1998,
Safeskin began to implement a Year 2000 compliant enterprise-wide business
systems application. Although Safeskin installed the application in order to
improve the management of its business data, the application is also expected to
have the effect of ensuring that a significant percentage of Safeskin's
information technology systems are Year 2000 compliant. This application was
online at Safeskin's U.S. facilities in January 1999 and Safeskin expects it to
be online at the Southeast Asian manufacturing facilities by the end of the
third quarter of 1999.

Safeskin has developed preliminary remediation plans for each of the areas
targeted by the Year 2000 assessment. Specifically, non-Year 2000 compliant
information technology equipment, including obsolete hardware components and
outdated operating systems, BIOS or chip codes, will be updated or replaced,
applications software that is not Year 2000 compliant are expected to be
converted or replaced by the end of the third quarter of 1999 and any
non-information technology systems or processors that are either non-Year 2000
compliant or suspect due to lack of information from the vendor are expected to
be replaced or upgraded to a compliant version. 


                                      -16-
<PAGE>   19
In addition, Safeskin is currently requesting confirmation that all suppliers
and customers material to its operations are, or within a short period of time
are planning to become, Year 2000 compliant.

Safeskin has approved and began implementing a final remediation plan for
addressing all known Year 2000 Issues in the fourth quarter of 1998. Safeskin's
remediation plan will give priority to those non-Year 2000 compliant technology
systems which are material to Safeskin's operations. Perot Systems Corporation
is expected to handle all remediation efforts, including, if necessary, the
replacement of any information technology hardware or software, the upgrading of
manufacturing systems and the changing of BIOS or chip codes. Perot Systems
Corporation will coordinate its remediation efforts with Safeskin in order to
avoid, to the extent possible, disruption of Safeskin's manufacturing capacity.
Safeskin expects that contingency plans for all known Year 2000 Issues will be
finalized by mid-1999.

Safeskin also plans to examine the Year 2000 readiness of any information or
non-information technology systems acquired in the future and develop
remediation and contingency plans as necessary.

Safeskin is also preparing contingency plans in the event that there is a
disruption to the business caused by Year 2000 data processing problems.
Although Safeskin anticipates complete remediation by mid-1999, it is possible
that delays in the remediation process or Year 2000 issues caused by third party
trading partners could arise. Safeskin is assessing these issues and is
developing contingency plans that would provide for uninterrupted business
operations. Safeskin expects these contingency plans will be fully developed
by the end of the second quarter in 1999.

Costs

Although the total costs associated with becoming Year 2000 compliant have not
been fully identified, Safeskin does not currently expect the costs of
remediating its Year 2000 Issues to be material to its operations, results of
operations or financial condition. As of March 31, 1999, Safeskin has spent
approximately $165,000 on Year 2000 Issues, primarily attributable to the cost
of conducting the Year 2000 assessment and developing a remediation plan.

The future cost of identifying and remediating Year 2000 Issues is expected to
be at least $175,000. Costs for replacements or modifications that would have
been necessary independent of Year 2000 Issues, including the $1.0 million that
will be spent to install the new enterprise-wide business applications software
at Safeskin's Asian operation sites, have not been included in Safeskin's Year
2000 cost estimates.

Risks

The failure to correct a material Year 2000 problem could result in an
interruption in, or a failure 


                                      -17-
<PAGE>   20
of, certain normal business activities or operations of Safeskin. Such failures
could materially and adversely affect Safeskin's results of operations and
financial condition. In addition, the costs associated with the remediation of
the Year 2000 Issues may be significantly higher than Safeskin estimates,
depending upon the availability and cost of personnel trained in the remediation
of Year 2000 Issues, the ability to locate and correct all relevant computer
codes, the ability to obtain timely responses to and corrections by
third-parties and suppliers, the ability to implement interfaces between the new
systems and the systems not being replaced and similar uncertainties. Due to the
general uncertainty inherent in the Year 2000 problem, resulting in part from
the uncertainty of the Year 2000 readiness of third party suppliers and
customers and of the infrastructure in those countries in which Safeskin
operates, there can be no assurance that Year 2000 Issues will not have a
material impact on Safeskin's results of operations or financial condition.
However, Safeskin's Year 2000 remediation efforts are expected to significantly
reduce Safeskin's level of uncertainty about the Year 2000 Issue and, in
particular, about the Year 2000 compliance and readiness of its material third
party suppliers, customers and vendors. Furthermore, Safeskin believes that,
with the implementation of new business systems and the completion of its Year
2000 remediation plan as scheduled, the possibility of significant interruptions
of normal operations will be minimal.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of loss that may impact the consolidated
financial position, results of operations or cash flows of Safeskin. Safeskin,
in the normal course of doing business, is exposed to the risks associated with
foreign currency exchange rates, changes in interest rates, and certain
commodity prices. Safeskin employs established policies and procedures governing
the use of financial instruments to manage its exposure to such risks. These
financial exposures are monitored and managed by Safeskin as an integral part of
Safeskin's overall risk management program, which recognizes the
unpredictability of financial markets and seeks to reduce the potentially
adverse effect on Safeskin's results.

Foreign Currency Exchange Rate Risk

Safeskin is exposed to exchange rate risk when its U.S. and non-U.S.
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 are 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. Safeskin's derivative activities, all of which consist of forward
foreign exchange contracts, are initiated primarily to hedge intercompany
receivables and payables.

The forward foreign exchange contracts generally require Safeskin to exchange
U.S. dollars for foreign currencies based on pre-established exchange rates at
the contracts maturity dates. If the counterparties to the exchange contracts
(primarily A2 rated international institutions) do not 


                                      -18-
<PAGE>   21
fulfill their obligations to deliver the contracted currencies, Safeskin could
be at risk for currency related fluctuations (generally limited to unrealized
gains). Management believes using A2 rated international institutions as
counterparties to the hedging contracts minimizes the risk of non-performance.
As of March 31, 1999, Safeskin had forward foreign exchange contracts to
purchase Thai baht in the aggregate amount of $15,000,000 outstanding, with a
weighted average exchange rate of 37.19 Thai baht to 1 U.S. dollar. For the
three months ended March 31, 1999, Safeskin recorded an unrealized loss of
approximately $169,000 in connection with these contracts. Further disclosure
relating to forward foreign exchange contracts is included in Note 2 in the
Notes to the 1998 Consolidated Financial Statements.

Interest Rate Risk

Except for indebtedness under Safeskin's Note Agreement which is fixed rate
financing, the balance of Safeskin's indebtedness is variable rate financing.
Safeskin believes that its exposure to market risk relating to interest rate
risk is not material. Safeskin does not expect changes in interest rates to have
a material effect on income or cash flows in fiscal 1999, although there can be
no assurances that interest rates will not significantly change. Further
disclosure relating to financial instruments is included in Note 6 and Note 13
in the Notes to the 1998 Consolidated Financial Statements.

Commodity Price and Availability Risk

Safeskin is subject to risk associated with the consistent availability, at
budgeted prices, of raw rubber from independent growers and latex concentrate
from plant operators in Malaysia and Thailand and the availability of nitrile.
Safeskin enters into commodity forward contracts with suppliers. Such contracts
are executed to offset Safeskin's exposure to the potential change in supply
mainly for raw rubber and latex concentrate used in the manufacturing of
Safeskin's gloves.


                                      -19-
<PAGE>   22
LEGAL PROCEEDINGS

Approximately 222 product liability lawsuits seeking monetary damages, in most
cases of an unspecified amount, were pending in federal and state courts against
Safeskin and other manufacturers of latex gloves. These lawsuits allege injuries
ranging from dermatitis to severe allergic reactions caused by the residual
chemicals or latex proteins in gloves worn by medical workers while performing
their duties. On February 26, 1997, the Judicial Panel on Multi-District
Litigation entered an order transferring all latex allergy lawsuits brought on
behalf of healthcare workers against Safeskin and other latex glove
manufacturers in the Federal courts to the United States District Court for the
Eastern District of Pennsylvania, consolidating those cases for discovery
management and other pre-trial proceedings. Safeskin has referred the defense of
these lawsuits to its insurance carriers.

Since March 11, 1999, numerous lawsuits (collectively the "Securities Actions")
have been filed in the U.S. District Court for the Southern District of
California against Safeskin and certain officers and directors alleging
violations of Sections 10(b) and 20(a) of the Securities and Exchange Act of
1934, and Rule 10b-5 promulgated thereunder. The Securities Actions were brought
by plaintiffs in their individual capacity and on behalf of a purported class of
persons who purchased or otherwise acquired Safeskin publicly traded securities
during various periods occurring between October 23, 1997 and March 11, 1999.
The suits allege that plaintiffs purchased Safeskin securities at prices
artificially inflated by defendants' misrepresentations and omissions concerning
Safeskin's financial condition and prospects and seek an unspecified amount of
damages. In addition, a shareholder derivative action has been filed against
certain of Safeskin's directors, and Safeskin as a nominal defendant, in the
Supreme Court of the State of California, San Diego County (the "Derivative
Action"). The Derivative Action alleges breach of fiduciary duty, waste of
corporate assets and gross negligence in connection with Safeskin's stock 
repurchase program and seeks an unspecified amount of damages. Defendants'
time to respond to the allegations made in the Securities Actions and the
Derivative Action has not yet expired, however, Safeskin believes that these
claims are without merit and intends to contest the claims vigorously.

From time to time, Safeskin is involved in other litigation relating to claims
arising out of its operations in the normal course of business. As of the date
hereof, Safeskin is not a party to any other legal proceedings, the adverse
outcome of which, in management's opinion, individually or in the aggregate,
would have a material adverse effect on Safeskin's business, results of
operation or financial condition.

Safeskin's tax returns for the years ended December 31, 1995, 1996 and 1997 are
currently being 


                                      -20-
<PAGE>   23
audited by the Internal Revenue Service.

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, the
following statements included in Management's Discussion and Analysis:

o     statements regarding Safeskin's estimates with respect to sales, revenues,
      cost of goods sold and operating margins;

o     the financial effect of the expiration of the tax-free status of the
      Malaysian manufacturing operations;

o     the ability of Safeskin to dispose of its Malaysian and Vista, California
      assets in 1999 and to realize estimated fair values;

o     the effect on gross profit margins of start-up costs associated with
      transferring operations to the new Thailand facility, wind-down costs
      associated with the closing of the Malaysian manufacturing facility and
      increased pricing pressures;

o     the effect of currency fluctuations in Thailand on the cost of goods sold
      and upon Safeskin's operating results;

o     statements concerning Safeskin's outlook for 1999 and beyond including the
      ability of Safeskin to retain and increase sales under GPO, end-user and
      distributor contracts;

o     Safeskin's liquidity and working capital;

o     Safeskin's ability to complete construction of new facilities as
      scheduled;

o     Safeskin's ability to achieve anticipated production capacity in the new
      manufacturing facilities and recognize certain operating efficiencies and
      savings in Thailand; and

o     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 Safeskin from achieving its goals
-- and cause the assumptions underlying forward-looking statements and the
actual results of Safeskin to differ 


                                      -21-
<PAGE>   24
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 Safeskin to
      continue to distinguish its products on the basis of quality, reliability
      and value; possible obsolescence of Safeskin's primary products due to the
      development by competitors of new products, manufacturing processes or
      technologies including latex alternatives; the ability of Safeskin to
      maintain and build strong distributor relationships and attract new
      customer orders; and the ability of Safeskin to maintain selling prices
      and anticipated volumes;

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

o     Safeskin's ability to successfully develop and introduce new products to
      the market through record or even combined internal investments into
      product development or research and development;

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     Safeskin's ability to successfully integrate the operations of acquired
      businesses in a timely and efficient manner and to realize the anticipated
      benefits of such acquisitions;

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

o     adverse outcomes or excessive legal expenses in connection with lawsuits
      or the ability to obtain and maintain sufficient insurance coverage at
      reasonable rates;

o     delays in the completion of the construction of Safeskin's new production
      facilities in Thailand or the failure of these production facilities to
      generate anticipated productivity and efficiencies;

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

o     Safeskin's ability to make the necessary capital investments, which are
      required to expand its manufacturing operations and capacity;

o     the non-linearity of Safeskin's sales throughout the quarter which limits
      Safeskin's ability to accurately monitor and predict net sales and
      profitability;


                                      -22-
<PAGE>   25
o     Safeskin's ability to monitor inventories of products held by third-party
      distributors and to predict sales trends given Safeskin's limited
      visibility of sales to end user customers;

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 Safeskin to protect its proprietary products, know-how and
      manufacturing processes;

o     the ability to attract and retain key personnel;

o     Safeskin's ability to develop, maintain and improve information systems
      that provide the Company with accurate and timely information;

o     changes in Safeskin's rates or basis of income taxation, including
      applicable U.S. tax laws and policies governing foreign operations and
      Section 351 transactions;

o     the ability of Safeskin to complete its Year 2000 project and remediate
      its Year 2000 Issues within the specified time frames or within currently
      estimated costs; and

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

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


                                      -23-
<PAGE>   26
                           PART II: OTHER INFORMATION

ITEM 6. Exhibits and Reports on Form 8-K

(a)     Exhibits

        EXHIBIT                    DESCRIPTION OF DOCUMENT
        -------                    -----------------------

        10.46   Amended and Restated Revolving/Term Loan Agreement, dated as of
                March 5, 1999, by and among Safeskin Corporation, Union Bank of
                California, N.A. and certain lenders named therein; First
                Amendment to Amend and Restated Revolving/Term Loan Agreement,
                dated as of March 31, 1999.

        10.47   Security Agreement,dated as of March 5, 1999, by Safeskin
                Corporation, Safeskin Scientific Corporation and Union Bank of
                California, N.A.

        10.48   Note Purchase Agreement, dated as of March 5, 1999, by and
                among Safeskin Corporation and the several purchasers named
                therein.

        10.49   Intercreditor and Collateral Agency Agreement, dated as of
                March 5, 1999, by and among Safeskin Corporation, Safeskin 
                Scientific Corporation, Union Bank of California, N.A., the
                holders of the 6.89% Senior Secured Notes due 2009 and the
                Synthetic Lease Investors named therein.

        10.50   Credit Agreement, dated as of March 5, 1999, by and among Union
                Bank of California, N.A., as trustee, Union Bank of
                California, N.A. and the several lenders named therein; First
                Amendment to the Credit Agreement, dated as of March 31, 1999.

        10.51   Participation Agreement, dated as of March 5, 199, by and among
                Union Bank of California, N.A., as trustee, Union Bank of
                California, N.A., Bankers Commercial Corporation and the several
                lenders named therein.

        10.52   Guarantee, dated as of March 5, 1999, by Safeskin Corporation
                and Safeskin Scientific Corporation in favor of the
                beneficiaries named therein.

        10.53   Lease, dated as of March 5, 1999, by and between Union Bank of
                California, N.A., as trustee, and Safeskin Real Estate
                Incorporated.

        11      Statement re: Computation of Per Share Earnings

(b)     Reports on Form 8-K

        None.


                                      -24-
<PAGE>   27
                                   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 17, 1999                 By:  /s/ David L. Morash
                                         ---------------------------------------
                                         David L. Morash, Executive Vice-
                                         President, Chief Financial Officer


                                      -25-
<PAGE>   28
                                 EXHIBIT INDEX


        EXHIBIT                    DESCRIPTION OF DOCUMENT
        -------                    -----------------------

        10.46   Amended and Restated Revolving/Term Loan Agreement, dated as of
                March 5, 1999, by and among Safeskin Corporation, Union Bank of
                California, N.A. and certain lenders named therein; First
                Amendment to Amend and Restated Revolving/Term Loan Agreement,
                dated as of March 31, 1999.

        10.47   Security Agreement,dated as of March 5, 1999, by Safeskin
                Corporation, Safeskin Scientific Corporation and Union Bank of
                California, N.A.

        10.48   Note Purchase Agreement, dated as of March 5, 1999, by and
                among Safeskin Corporation and the several purchasers named
                therein.

        10.49   Intercreditor and Collateral Agency Agreement, dated as of
                March 5, 1999, by and among Safeskin Corporation, Safeskin 
                Scientific Corporation, Union Bank of California, N.A., the
                holders of the 6.89% Senior Secured Notes due 2009 and the
                Synthetic Lease Investors named therein.

        10.50   Credit Agreement, dated as of March 5, 1999, by and among Union
                Bank of California, N.A., as trustee, Union Bank of
                California, N.A. and the several lenders named therein; First
                Amendment to the Credit Agreement, dated as of March 31, 1999.

        10.51   Participation Agreement, dated as of March 5, 199, by and among
                Union Bank of California, N.A., as trustee, Union Bank of
                California, N.A., Bankers Commercial Corporation and the several
                lenders named therein.

        10.52   Guarantee, dated as of March 5, 1999, by Safeskin Corporation
                and Safeskin Scientific Corporation in favor of the
                beneficiaries named therein.

        10.53   Lease, dated as of March 5, 1999, by and between Union Bank of
                California, N.A., as trustee, and Safeskin Real Estate
                Incorporated.

        11      Statement re: Computation of Per Share Earnings


        27      Financial Data Schedule