<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 September 30, 1997
                                               ------------------
                                       OR

  [ ]   Transition  Report  Pursuant to Section 13 or 15(d) of the Securities  
        Exchange Act of 1934

        For the transition period from _____________ to ________________

                         Commission file number 0-22726

                              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 October 31, 1997
             -----                          -------------------------------
<S>                                                  <C>       
Common Stock, par value $0.01 per share              26,306,008
</TABLE>


<PAGE>   2

                                     SAFESKIN CORPORATION

                                             INDEX


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

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

             Condensed Consolidated Balance Sheets at September 30,
             1997 and December 31, 1996.............................              2

             Condensed Consolidated Statements of Operations for
             the three months ended September 30, 1997 and 1996.....              3

             Condensed Consolidated Statements of Operations for
             the nine months ended September 30, 1997 and 1996......              4

             Condensed Consolidated Statements of Cash Flows for
             the nine months ended September 30, 1997 and 1996......              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......................................             17

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


Signatures..........................................................             18
</TABLE>


<PAGE>   3







                                PART I: FINANCIAL INFORMATION




ITEM 1.        Financial Statements


<TABLE>
<CAPTION>
               INDEX                                                                      PAGE
               -----                                                                      ----
<S>            <C>                                                                        <C>
               Condensed Consolidated Balance Sheets at September 30, 1997
               and December 31, 1996.........................................................2

               Condensed Consolidated Statements of Operations for
               the three months ended September 30, 1997 and 1996............................3

               Condensed Consolidated Statements of Operations for
               the nine months ended September 30, 1997 and 1996.............................4

               Condensed Consolidated Statements of Cash Flows for the
               nine months ended September 30, 1997 and 1996.................................5

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

</TABLE>


<PAGE>   4
                              SAFESKIN CORPORATION

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                    SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
<TABLE>
<CAPTION>
                                                              SEPTEMBER 30,        
                                                                  1997             DECEMBER 31,
                                                               (UNAUDITED)             1996    
                                                              -------------       -------------
<S>                                                           <C>                 <C>          
ASSETS

Current assets:
      Cash and cash equivalents ........................      $  20,218,051       $  16,265,468
      Accounts receivable, net .........................         21,122,527          19,848,253
      Inventory ........................................         22,215,178          21,867,835
      Other current assets .............................          4,685,707           4,062,314
                                                              -------------       -------------

            Total current assets .......................         68,241,463          62,043,870

Property, plant and equipment, net .....................         58,263,084          53,391,423
Goodwill and other assets ..............................          9,657,214           1,313,731
                                                              -------------       -------------
            Total assets ...............................      $ 136,161,761       $ 116,749,024
                                                              =============       =============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
      Accounts payable .................................      $   5,172,495       $   5,362,273
      Accrued liabilities ..............................         21,323,083           8,371,962
                                                              -------------       -------------
            Total current liabilities ..................         26,495,578          13,734,235
                                                              -------------       -------------

Commitments and contingencies

Shareholders' equity:
      Preferred stock; $.01 par value; 10,000,000 shares
           authorized and no shares outstanding ........                 --                  --
      Common stock; $.01 par value; 40,000,000 shares
            authorized; 26,279,868 shares
            and 25,811,048 shares outstanding ..........            262,799             258,110
      Additional paid-in-capital .......................         42,465,383          39,101,451
      Foreign currency translation adjustment ..........        (25,283,934)            686,544
      Retained earnings ................................         92,221,935          62,968,684
                                                              -------------       -------------

            Total shareholders' equity .................        109,666,183         103,014,789
                                                              -------------       -------------

            Total liabilities and shareholders' equity .      $ 136,161,761       $ 116,749,024
                                                              =============       =============

 The accompanying notes are an integral part of these condensed financial statements.
</TABLE>

                                       -2-


<PAGE>   5
                              SAFESKIN CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                             1997                1996
                                                         ------------       ------------
<S>                                                      <C>                <C>         
Net sales .........................................      $ 46,897,491       $ 37,492,495

Cost of goods sold ................................        25,497,710         21,022,797
                                                         ------------       ------------

            Gross profit ..........................        21,399,781         16,469,698
                                                         ------------       ------------

Operating expenses:
     Selling ......................................         5,447,621          4,999,263
     Research and development .....................           934,394            526,471
     General and administrative ...................         4,077,681          2,891,152
                                                         ------------       ------------

            Total operating expenses ..............        10,459,696          8,416,886
                                                         ------------       ------------

            Income from operations ................        10,940,085          8,052,812

Interest expense (income), net ....................          (211,726)             8,744

Other expense (income), net .......................        (1,842,999)            75,785
                                                         ------------       ------------

Income before income tax provision ................        12,994,810          7,968,283

Income tax provision ..............................         1,435,168            916,354
                                                         ------------       ------------

Net income ........................................      $ 11,559,642       $  7,051,929
                                                         ============       ============

Net income per share ..............................      $       0.39       $       0.25

Weighted average number of shares of common
     stock and common stock equivalents outstanding        29,538,520         28,236,268



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

</TABLE>


                                      -3-
<PAGE>   6

                              SAFESKIN CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                             1997                 1996
                                                         -------------       -------------
<S>                                                      <C>                 <C>          
Net sales .........................................      $ 133,013,441       $ 106,534,022

Cost of goods sold ................................         71,455,376          62,576,360
                                                         -------------       -------------

            Gross profit ..........................         61,558,065          43,957,662
                                                         -------------       -------------

Operating expenses:
     Selling ......................................         16,528,182          12,746,953
     Research and development .....................          2,519,819           1,404,302
     General and administrative ...................         11,350,084           7,968,915
                                                         -------------       -------------

            Total operating expenses ..............         30,398,085          22,120,170
                                                         -------------       -------------

            Income from operations ................         31,159,980          21,837,492

Interest expense (income), net ....................           (544,901)            118,218

Other expense (income), net .......................         (1,217,468)            200,350
                                                         -------------       -------------

Income before income tax provision ................         32,922,349          21,518,924

Income tax provision ..............................          3,669,099           2,828,321
                                                         -------------       -------------

Net income ........................................      $  29,253,250       $  18,690,603
                                                         =============       =============

Net income per share ..............................      $        1.01       $        0.68

Weighted average number of shares of common
     stock and common stock equivalents outstanding         29,025,233          27,479,430



 The accompanying notes are an integral part of these condensed financial statements.
</TABLE>

                                      -4-
<PAGE>   7

                              SAFESKIN CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                     1997               1996
                                                                 ------------       ------------
<S>                                                              <C>                <C>         
Cash flows from operating activities:
       Net income .........................................      $ 29,253,250       $ 18,690,603
       Adjustments to reconcile net income to cash
            provided by operating activities:
             Depreciation and amortization ................         5,198,523          4,077,575
             Foreign currency transaction gain - unrealized        (1,726,958)                --
             Loss on sale/disposition of equipment ........            39,450             24,888
             Amortization of deferred compensation ........                --            152,469
       Changes in operating assets and liabilities:
             (Increase) decrease in:
                  Accounts receivable .....................          (619,228)           865,926
                  Inventory ...............................          (608,819)        (6,047,926)
                  Other assets ............................         1,174,512         (2,456,545)
             Increase in:
                  Accounts payable and accrued liabilities         10,789,144          2,683,067
                                                                 ------------       ------------
             Net cash provided by operating activities ....        43,499,874         17,990,057
                                                                 ------------       ------------

Cash flows from investing activities:
       Payments for acquisition ...........................       (14,463,092)                --
       Purchase of property, plant and equipment ..........       (25,807,033)       (14,331,379)
       Proceeds from sale of equipment ....................            24,654                 --
                                                                 ------------       ------------
             Net cash used by investing activities ........       (40,245,471)       (14,331,379)
                                                                 ------------       ------------

Cash flows from financing activities:
       Decrease in long-term debt .........................                --         (2,750,000)
       Proceeds from issuance of common stock .............         3,368,621          4,671,947
                                                                 ------------       ------------
             Net cash provided by financing activities ....         3,368,621          1,921,947
                                                                 ------------       ------------

Effect of exchange rate changes on cash ...................        (2,670,441)           602,571
                                                                 ------------       ------------
Net increase in cash and cash equivalents .................         3,952,583          6,183,196
Cash and cash equivalents at beginning of period ..........        16,265,468          2,086,972
                                                                 ------------       ------------
Cash and cash equivalents at end of period ................      $ 20,218,051       $  8,270,168
                                                                 ============       ============






The accompanying notes are an integral part of these condensed financial statements.
</TABLE>

                                      -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
    only 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 related notes thereto for the year
    ended December 31, 1996. The December 31, 1996 condensed consolidated
    balance sheet was derived from audited financial statements, but does
    not include all disclosures required by generally accepted accounting
    principles.

2.  Inventories at September 30, 1997 consisted of $2,192,000, $781,000 and
    $19,242,000 for raw materials, work in process and finished goods,
    respectively. At December 31, 1996, inventories consisted of $1,920,000,
    $114,000 and $19,834,000 for raw materials, work in process and finished
    goods, respectively.

3.  In November 1996, the Company authorized a two-for-one common stock split in
    the form of a stock dividend distributed on January 2, 1997 to shareholders
    of record at the close of business on November 29, 1996. 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. All share and per share
    amounts have been retroactively restated to reflect the stock split.

4.  In February 1997, the Financial Accounting Standards Board issued Statement
    of Financial Accounting Standards No. 128, Earnings Per Share ("SFAS 128").
    The standard, which requires the presentation of basic and dilutive earnings
    per share, is effective for the fourth quarter of 1997 and specifies the
    computation, presentation, and disclosure requirements for earnings per
    share. On a pro forma basis, had this standard been adopted, earnings per
    share for the three and nine month periods ending September 30, 1997 and
    1996, respectively, would be as follows:

<TABLE>
<CAPTION>
         For the three months ended September 30, For the nine months ended September 30,
                          1996           1997                    1996            1997
                       (unaudited)    (unaudited)             (unaudited)     (unaudited)
                       ----------     ----------              ----------       ----------
<S>                     <C>              <C>                     <C>           <C>     
    Basic EPS           $  .27           $  .44                  $.   74       $   1.12
    Dilutive EPS        $  .25           $  .39                  $.   68       $   1.01
</TABLE>



                                      -6-
<PAGE>   9

5.  The accounts of the Company's foreign subsidiaries are measured using local
    currency as the functional currency. For those operations, assets and
    liabilities are translated into U.S. dollars at period-end exchange rates
    and income and expense accounts are translated at average exchange rates in
    effect during the year. Net currency exchange gains or losses resulting from
    such translation are excluded from net income and accumulated in a separate
    component of shareholders' equity. Gains and losses from foreign currency
    transactions are recorded as a component of earnings.

    The Company is exposed to exchange rate risks when its U.S. and non-U.S.
    subsidiaries enter into transactions denominated in currencies other than
    their functional currency. The Company enters into foreign exchange
    contracts to hedge certain portions of these risks. As exchange rates
    change, gains and losses recorded on the exposed transactions are partially
    offset by gains and losses on the hedging contracts. Both the exposed
    transactions and the hedging contracts are translated at current spot rates
    monthly with gains and losses included in earnings. At September 30, 1997,
    the Company had outstanding foreign exchange contracts for Malaysian ringgit
    which fixed the exchange rate on intercompany transactions, totaling
    approximately $39.1 million, which have been eliminated in consolidation in
    the accompanying condensed consolidated financial statements. These foreign
    exchange contracts generally require the Company to exchange U.S. dollars
    for foreign currencies at the maturity date. If the counterparties to the
    exchange contracts (primarily AA rated international banks) do not fulfill
    their obligations to deliver the contracted currencies, the Company could be
    at risk for any currency related fluctuations. Management believes that the
    high credit worthiness of the counterparties to the hedging contracts
    minimizes non-performance risk.


                                      -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
the introduction of new products, growth in markets for its products, and
increased market penetration due to the implementation of sales and marketing
programs. 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 in 1989, 1990, 1992,
1994 and 1995, respectively. In the fourth quarter of 1996, the Company formally
launched its Safeskin 2000 powder-free latex surgical glove, which was developed
through the use of computer-aided design (CAD) and a new rapid prototyping
technique known as "laminated object manufacturing." The Company has recently
developed a medical examination glove made of nitrile synthetic latex and began
selling the gloves in the first quarter of 1997. In the second quarter of 1997,
the Company, as a result of its acquisition of the synthetic glove business of
Tactyl Technologies, Inc., began selling Tactylon(R) synthetic examination and
surgical gloves. 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 provided to distributors 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 and warehousing. Selling expenses include all salaries for
sales and marketing staffs together with other related expenses such as sales
commissions, and costs associated with travel, trade show participation,
advertising and product delivery. Research and development expenses include
salaries for research and development staffs as well as expenses such as
consulting, product testing and travel costs. General and administrative
expenses include salaries for administrative and information technology staffs,
together with related expenses for travel, insurance, facilities and consulting
and professional fees. The income tax provision is substantially less than
statutory rates primarily as a result of the tax free status of the Company's
foreign manufacturing operations. During June 1994, the Company's Malaysian
manufacturing operations were granted five additional years of tax free status
retroactive to October 1, 1993, the date on which the original five year grant
of tax free status expired. The Company's Thai manufacturing operations have
been granted tax free status through 2003.



                                      -8-
<PAGE>   11
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 SEPTEMBER 30, 1997 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1996

Net sales for the three months ended September 30, 1997 were $46,897,000 which
represents a 25.1% increase over net sales of $37,492,000 for the same period in
1996. The predominant cause for the sales growth was an increase in unit volumes
sold during the 1997 period, which includes sales of lightly powdered gloves
associated with the Company's new contracts with group purchasing organizations
as well as increased sales of powder-free surgical and scientific glove
products.

Cost of goods sold increased 21.3% from $21,022,000 for the three months ended
September 30, 1996 to $25,497,000 for the three months ended September 30, 1997.
As a percentage of net sales, cost of goods sold decreased from 56.1% for the
three months ended September 30, 1996 to 54.4% for the same period in 1997. This
decrease in cost of goods sold as a percentage of net sales was principally
attributable to the favorable impact of greater manufacturing efficiencies, the
continued shift of production to the Company's lower-cost manufacturing facility
in Thailand, and lower latex prices. Although sales of the Company's lower
margin lightly powdered gloves increased in the 1997 period as compared to the
1996 period, the impact on the gross profit margin was offset by increased sales
of higher margin powder-free surgical and scientific glove products. As a result
of the above, gross profits increased 29.9% from $16,470,000 for the three
months ended September 30, 1996 to $21,400,000 for the three months ended
September 30, 1997.

Selling expenses increased 9.0% from $4,999,000 for the three months ended
September 30, 1996 to $5,449,000 for the three months ended September 30, 1997.
As a percentage of net sales, selling expenses decreased from 13.3% for the
three months ended September 30, 1996 to 11.6% for the same period in 1997.
During the 1996 period, the Company had accrued approximately $523,000 of
non-recurring charges related to the severance of a former executive. Excluding
such charges, selling expenses as a percentage of net sales would have been
11.8% for the 1996 period, comparable to the 11.6% for the 1997 period.

Research and development expenses increased 77.5% from $527,000 for the three
months ended September 30, 1996 to $934,000 for the three months ended September
30, 1997. As a percentage of net sales, these expenses increased from 1.4% for
the three months ended September 30, 1996 to 2.0% for the same period in 1997.
The increase in research and development expenses as a percentage of net sales
reflects an increase in the Company's research and development personnel,
related travel costs, and research and development costs related to the
Tactylon(R) product line.

                                      -9-
<PAGE>   12
General and administrative expenses increased 41.0% from $2,891,000 for the
three months ended September 30, 1996 to $4,078,000 for the three months ended
September 30, 1997. As a percentage of net sales, general and administrative
expenses increased from 7.7% for the three months ended September 30, 1996 to
8.7% for the same period in 1997. The increase in general and administrative
expenses as a percentage of net sales was caused primarily by increased costs
associated with the acquisition of Tactyl Technologies, Inc.

Income from operations increased 35.9% from $8,053,000 for the three months
ended September 30, 1996 to $10,941,000 for the three months ended September 30,
1997. Operating margins increased from 21.5% in the 1996 period to 23.3% in the
1997 period.

Interest expense (income), net, decreased from $9,000 of interest expense for
the three months ended September 30, 1996 to $211,000 of interest income for the
three months ended September 30, 1997, and is primarily due to the fact that in
1997 the Company did not have any debt outstanding and generated investment
returns on its cash balances. The Company has been able to successfully fund its
operations, including the expansion of the Company's foreign manufacturing
operations, with internally generated cash.

Other expense (income), net, decreased from $76,000 of other expense for the
three months ended September 30, 1996 to $1,843,000 of other income for the
three months ended September 30, 1997. The decrease in other expense was due
substantially to net foreign currency transaction gains experienced in the
Company's Malaysian and Thailand subsidiaries for the three months ended
September 30, 1997. In prior periods, gains and losses from foreign currency
transactions for the Company's Malaysian and Thailand subsidiaries were recorded
as a component of cost of sales. Due to their immateriality and because
substantially all of the sales of these subsidiaries are intercompany sales, the
gains and losses related to foreign currency transactions had been recorded as a
component of cost of sales. However, due to the significant devaluation of the
Malaysian ringgit and the Thai baht since June 30, 1997, the Company has
experienced an increased amount of net foreign currency transaction gains and,
therefore, has recorded these net foreign currency transaction gains as a
component of other expense (income), net. In future periods, the Company will
record net foreign currency transaction gains and losses, regardless of
materiality, as a component of other expense (income), net.

Income taxes increased from $916,000 for the three months ended September 30,
1996 to $1,435,000 for the three months ended September 30, 1997. The income tax
provisions recorded in both 1996 and 1997 remain less than statutory rates due
to the foreign tax free status of the Company's manufacturing operations in
Malaysia and Thailand.

Net income increased 63.9% from $7,052,000 for the three months ended September
30, 1996 to $11,560,000 for the three months ended September 30, 1997 due to the
foregoing factors.



                                      -10-
<PAGE>   13
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER
30, 1996

Net sales for the nine months ended September 30, 1997 were $133,013,000 which
represents a 24.9% increase over net sales of $106,534,000 for the same period
in 1996. The predominant cause for the sales growth was an increase in unit
volumes sold during the 1997 period.

Cost of goods sold increased 14.2% from $62,576,000 for the nine months ended
September 30, 1996 to $71,455,000 for the nine months ended September 30, 1997.
As a percentage of net sales, cost of goods sold decreased from 58.7% for the
nine months ended September 30, 1996 to 53.7% for the same period in 1997. This
decrease in cost of goods sold as a percentage of net sales was principally
attributable to the favorable impact of greater manufacturing efficiencies, the
continued shift of production to the Company's lower-cost manufacturing facility
in Thailand, and lower latex prices. As a result of the above, gross profits
increased 40.0% from $43,958,000 for the nine months ended September 30, 1996 to
$61,558,000 for the nine months ended September 30, 1997.

Selling expenses increased 29.7% from $12,747,000 for the nine months ended
September 30, 1996 to $16,528,000 for the nine months ended September 30, 1997.
As a percentage of net sales, selling expenses increased from 12.0% for the nine
months ended September 30, 1996 to 12.4% for the same period in 1997. The
increase in selling expenses as a percentage of net sales can be primarily
attributed to increased selling expenses in the Company's European subsidiaries.

Research and development expenses increased 79.4% from $1,404,000 for the nine
months ended September 30, 1996 to $2,520,000 for the nine months ended
September 30, 1997. As a percentage of net sales, these expenses increased from
1.3% for the nine months ended September 30, 1996 to 1.9% for the same period in
1997. The increase in research and development expenses as a percentage of net
sales reflects an increase in the Company's product testing, research and
development personnel and research and development costs related to the
Tactylon(R) product line.

General and administrative expenses increased 42.4% from $7,969,000 for the nine
months ended September 30, 1996 to $11,350,000 for the nine months ended
September 30, 1997. As a percentage of net sales, general and administrative
expenses increased from 7.5% for the nine months ended September 30, 1996 to
8.5% for the same period in 1997. The increase in general and administrative
expenses as a percentage of net sales was caused primarily by increased costs
associated with the Company's acquisition of Tactyl Technologies, Inc.
Additional factors include increased product liability insurance costs and
increased investment in information technology and logistics, which the Company
believes will lower inventory costs and streamline distribution to customers.

Income from operations increased 42.7% from $21,838,000 for the nine months
ended September 30, 1996 to $31,160,000 for the nine months ended September 30,
1997. Operating margins increased from 20.5% in the 1996 period to 23.4% in the
1997 period.

                                      -11-
<PAGE>   14
Interest expense (income), net, decreased from $118,000 of interest expense for
the nine months ended September 30, 1996 to $545,000 of interest income for the
nine months ended September 30, 1997, and is primarily due to the fact that the
Company did not have any debt outstanding and generated investment returns on
its cash balances in 1997.

Other expense (income), net, decreased from $201,000 of other expense for the
nine months ended September 30, 1996 to $1,217,000 of other income for the nine
months ended September 30, 1997. The decrease in other expense was due
substantially to net foreign currency transaction gains in the Company's
Malaysian and Thailand subsidiaries for the nine months ended September 30,
1997. In prior periods, gains and losses from foreign currency transactions for
the Company's Malaysian and Thailand subsidiaries were recorded as a component
of cost of sales. Due to their immateriality and because substantially all of
the sales of these subsidiaries are intercompany sales, the gains and losses
related to foreign currency transactions had been recorded as a component of
cost of sales. However, due to the significant devaluation of the Malaysian
ringgit and the Thai baht since June 30, 1997, the Company has experienced an
increased amount of net foreign currency transaction gains and, therefore, has
recorded these net foreign currency transaction gains as a component of other
expense (income), net. In future periods, the Company will record net foreign
currency transaction gains and losses, regardless of materiality, as a component
of other expense (income), net.

Income taxes increased from $2,828,000 for the nine months ended September 30,
1996 to $3,669,000 for the nine months ended September 30, 1997. The income tax
provisions recorded in both 1996 and 1997 remain less than statutory rates due
to the foreign tax free status of the Company's manufacturing operations in
Malaysia and Thailand.

Net income increased 56.5% from $18,691,000 for the nine months ended September
30, 1996 to $29,253,000 for the nine months ended September 30, 1997 due to the
foregoing factors.



                                      -12-
<PAGE>   15
LIQUIDITY AND CAPITAL RESOURCES

The Company's operations generated approximately $43,500,000 and $17,990,000 of
cash during the nine months ended September 30, 1997 and 1996, respectively.
During the nine months ended September 30, 1997 and 1996, the Company acquired
capital assets of approximately $25,807,000 and $14,331,000, respectively,
primarily all of which were for the expansion of the Company's foreign
manufacturing operations.

The Company has completed construction on the first of its new production lines
located in its Thai facility, referred to by the Company as the "Grand Master."
This new production line is currently operational, and two additional lines are
scheduled to be operational by the end of 1997. The Company's management
believes that a single "Grand Master" 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 two additional production lines is expected to be 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 has begun initial production in the third quarter of 1997
and expects the final phase of construction 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 fully 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 Thai facility. Additionally, the
Company also plans to construct a second manufacturing facility to be located in
southern Thailand that is expected to produce surgical, high technology and
scientific and examination gloves. Construction of this site has begun in the
second half of 1997 upon approval by the Thailand Board of Investment.
Initially, two 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 gloves and is scheduled to be completed during the
second half of fiscal 1998. This building is expected to increase by 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 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 Malaysian and Vista, California facilities. The new buildings,
machines and supporting infrastructure are expected to cost approximately $40
million in the aggregate. Due to the Company's strong cash flow, financing for
the total capital expenditures 


                                      -13-
<PAGE>   16
for the two-year period is projected to come from internally generated funds,
with any shortfalls financed through borrowings from the existing credit
facilities.

As of December 31, 1996, the Company's plan for the Malaysian operations
included transfer of production to Thailand and sale of the Malaysian facility
in 1997. At December 31, 1996, the Malaysian facility was considered held for
sale. Subsequent to December 31, 1996, the Company extended the planned use of
the Malaysian facility to 1998 due to existing production requirements and the
timing of bringing new production capacity on-line in Thailand. The Company
still intends to transfer production to Thailand and sell the Malaysian
facility. As of September 30, 1997, the Malaysian facility is still considered
held for sale and the delay in moving the examination glove production from
Malaysia to Thailand has had no impact on the Company's restructuring plan and
the write-down of fixed assets recorded in 1996.

In March 1997, the Company acquired the synthetic glove business of Tactyl
Technologies, Inc., a San Diego based developer and manufacturer of non-latex
surgical gloves for the domestic and international markets. The acquisition,
which has been accounted for under the purchase method, included an acquisition
price of approximately $14.5 million payable at the closing, plus up to an
additional $5 million payment which is contingent upon the Tactyl business
achieving certain future sales and performance targets, including the
development of the next generation of synthetic latex technology. Such
additional payment, if any, would be recorded as goodwill and amortized over its
remaining life.

The Company has an unsecured two-year credit facility for financing general
working capital needs, up to a maximum of $25,000,000. As of September 30, 1997,
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 $13,700,000. As
of September 30, 1997, there were no borrowings outstanding under these credit
facilities. These borrowings are supported 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 2.5235
ringgits/dollar, as of June 30, 1997 to approximately 35.7 bahts/dollar and 3.25
ringgits/dollar as of September 30, 1997. The significant devaluation in both
the Thailand and Malaysian currencies have resulted in an increased amount of
foreign currency transaction net gains and foreign currency translation
adjustments, which are recorded as a separate component of equity. 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 upon the Company's operating
results for 1997 and beyond.



                                      -14-
<PAGE>   17
LEGAL PROCEEDINGS

Since May 1995, 87 product liability lawsuits seeking monetary damages have been
filed in federal and state courts in which the Company has been named a
defendant along with other manufacturers of latex gloves. In February 1997, the
Judicial Panel on Multi-District Litigation entered an order transferring the
latex allergy lawsuits brought against the Company and other latex glove
manufacturers in various federal courts to the United States District Court in
Philadelphia, consolidating pending and future federal court latex allergy
lawsuits for discovery management and other pre-trial proceedings. Management
has referred the defense of these cases to its insurance carriers. The Company
maintains levels of insurance coverage which it believes will be adequate to
cover the cost of the legal defense of these suits.

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 1997 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
           its selling prices and anticipated volumes;
       o   the ability of the Company to meet existing or future FDA regulations
           regarding the manufacture and sale of the Company's gloves;

                                      -15-
<PAGE>   18
        o  adverse outcomes regarding product liability lawsuits or the
           inability to obtain sufficient product liability insurance coverage
           at reasonable rates;
        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 Company's construction of its
           additional "Grand Master" production lines and other production lines
           and latex concentrate plant in Thailand or the failure of such new 
           lines or plant 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.


                                      -16-
<PAGE>   19

                                  PART II:  OTHER INFORMATION

ITEM 6.        Exhibits and Reports on Form 8-K

(a)     Exhibits

<TABLE>
<CAPTION>
        EXHIBIT       DESCRIPTION
        -------       ------------
       <S>           <C>                             
        10.41         Executive Deferred Compensation Plan of Safeskin Corporation
        11            Statement re: Computation of per share earnings
</TABLE>


(b)     Reports on Form 8-K

        None.


                                      -17-
<PAGE>   20
                                   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: November 14, 1997                     By:     /s/ David L. Morash
                                                   --------------------
                                            David L. Morash, Executive Vice-
                                            President, Chief Financial Officer




                                      -18-