<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 June 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 of        (IRS Employer ID No.)
         incorporation or organization)

               12671 High Bluff Drive, San Diego, California 92130
                    (Address of principal executive offices)

                                 (619) 794-8111
              (Registrant's telephone number, including area code)

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

          Yes X  No __

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

              Class                            Outstanding at July 31, 1997
              -----                            ----------------------------
Common Stock, par value $0.01 per share                 26,142,238



<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 June 30,
            1997 and December 31, 1996...................................   2

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

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

            Condensed Consolidated Statements of Cash Flows for
            the six months ended June 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>
            Condensed Consolidated Balance Sheets at June 30, 1997
            and December 31, 1996........................................   2

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

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

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

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



<PAGE>   4
                              SAFESKIN CORPORATION

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                       JUNE 30, 1997 AND DECEMBER 31, 1996

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

Current assets:
          Cash and cash equivalents ........................     $ 14,624,538     $ 16,265,468
          Accounts receivable, net .........................       22,023,872       19,848,253
          Inventory ........................................       21,154,014       21,867,835
          Other current assets .............................        5,469,629        4,062,314
                                                                 ------------     ------------

                    Total current assets ...................       63,272,053       62,043,870

Property, plant and equipment, net .........................       69,557,037       53,391,423
Goodwill and other assets ..................................       11,135,606        1,313,731
                                                                 ------------     ------------
                    Total assets ...........................     $143,964,696     $116,749,024
                                                                 ============     ============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
          Accounts payable .................................     $  5,772,461     $  5,362,273
          Accrued liabilities ..............................       13,653,991        8,371,962
                                                                 ------------     ------------

                    Total current liabilities ..............       19,426,452       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; 26,098,238 shares
                and 25,811,048 shares outstanding ..........          260,982          258,110
          Additional paid-in-capital .......................       41,267,907       39,101,451
          Foreign currency translation adjustment ..........        2,347,062          686,544
          Retained earnings ................................       80,662,293       62,968,684
                                                                 ------------     ------------

                Total shareholders' equity .................      124,538,244      103,014,789
                                                                 ------------     ------------

                Total liabilities and shareholders' equity .     $143,964,696     $116,749,024
                                                                 ============     ============
</TABLE>

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



                                      -2-
<PAGE>   5
                              SAFESKIN CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                            1997              1996
                                                        ------------      ------------
<S>                                                     <C>               <C>         
Net sales .........................................     $ 44,947,573      $ 35,986,610

Cost of goods sold ................................       24,198,197        21,767,338
                                                        ------------      ------------

            Gross profit ..........................       20,749,376        14,219,272
                                                        ------------      ------------

Operating expenses:
     Selling ......................................        5,661,896         3,884,002
     Research and development .....................          961,039           425,468
     General and administrative ...................        3,743,624         2,680,962
                                                        ------------      ------------

            Total operating expenses ..............       10,366,559         6,990,432
                                                        ------------      ------------

            Income from operations ................       10,382,817         7,228,840

Interest expense (income), net ....................         (140,119)           45,029

Other expense, net ................................          206,765            29,380
                                                        ------------      ------------

Income before income tax provision ................       10,316,171         7,154,431

Income tax provision ..............................        1,113,039           966,141
                                                        ------------      ------------

Net income ........................................     $  9,203,132      $  6,188,290
                                                        ============      ============

Net income per share ..............................     $       0.32      $       0.22

Weighted average number of shares of common
     stock and common stock equivalents outstanding       28,828,390        27,856,832
</TABLE>

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



                                      -3-
<PAGE>   6
                              SAFESKIN CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                 FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                            1997              1996
                                                        ------------      ------------
<S>                                                     <C>               <C>         
Net sales .........................................     $ 86,115,950      $ 69,041,527

Cost of goods sold ................................       45,957,666        41,553,563
                                                        ------------      ------------

            Gross profit ..........................       40,158,284        27,487,964
                                                        ------------      ------------

Operating expenses:
     Selling ......................................       11,080,561         7,747,690
     Research and development .....................        1,585,425           877,831
     General and administrative ...................        7,272,403         5,077,763
                                                        ------------      ------------

            Total operating expenses ..............       19,938,389        13,703,284
                                                        ------------      ------------

            Income from operations ................       20,219,895        13,784,680

Interest expense (income), net ....................         (333,175)          109,474

Other expense, net ................................          625,531           124,565
                                                        ------------      ------------

Income before income tax provision ................       19,927,539        13,550,641

Income tax provision ..............................        2,233,931         1,911,967
                                                        ------------      ------------

Net income ........................................     $ 17,693,608      $ 11,638,674
                                                        ============      ============

Net income per share ..............................     $       0.62      $       0.43

Weighted average number of shares of common
     stock and common stock equivalents outstanding       28,768,590        27,101,010
</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 SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                          1997              1996
                                                                      ------------      ------------
<S>                                                                   <C>               <C>         
Cash flows from operating activities:
          Net income ............................................     $ 17,693,608      $ 11,638,674
          Adjustments to reconcile net income to cash
               provided by operating activities:
                    Depreciation and amortization ...............        3,367,232         2,674,563
                    Loss on sale of equipment ...................           37,926            24,896
                    Amortization of deferred compensation .......             --             228,793
          Changes in operating assets and liabilities:
                    (Increase) decrease in:
                         Accounts receivable ....................       (1,158,596)       (1,171,565)
                         Inventory ..............................        1,335,670        (4,968,625)
                         Other assets ...........................          769,295              (803)
                    Increase (decrease) in:
                         Accounts payable and accrued liabilities        5,259,940          (374,476)
                                                                      ------------      ------------
                    Net cash provided by operating activities ...       27,305,075         8,051,457
                                                                      ------------      ------------

Cash flows from investing activities:
          Payments for acquisition ..............................      (14,463,092)             --
          Purchase of property, plant and equipment .............      (17,120,521)       (8,969,733)
          Proceeds from sale of equipment .......................           24,662              --
                                                                      ------------      ------------
                    Net cash used by investing activities .......      (31,558,951)       (8,969,733)
                                                                      ------------      ------------

Cash flows from financing activities:
          (Decrease) in long-term debt ..........................             --          (2,750,000)
          Proceeds from issuance of common stock ................        2,169,328         4,514,610
                                                                      ------------      ------------
                    Net cash provided by financing activities ...        2,169,328         1,764,610
                                                                      ------------      ------------

Effect of exchange rate changes on cash .........................          443,618           484,676
                                                                      ------------      ------------
Net increase (decrease) in cash and cash equivalents ............       (1,640,930)        1,331,010
Cash and cash equivalents at beginning of period ................       16,265,468         2,086,972
                                                                      ------------      ------------
Cash and cash equivalents at end of period ......................     $ 14,624,538      $  3,417,982
                                                                      ============      ============
</TABLE>

 The accompanying notes are an integral part of 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
     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 June 30, 1997 consisted of $2,299,000, $617,000 and
     $18,238,000 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 six month periods ending June 30, 1997
     and 1996, respectively, would be as follows:

<TABLE>
<CAPTION>
                            For the three months               For the six months
                               ended June 30,                    ended June 30,
                        ----------------------------      ----------------------------
                            1996             1997             1996             1997
                        (unaudited)      (unaudited)      (unaudited)      (unaudited)
                        -----------      -----------      -----------      -----------
<S>                     <C>              <C>              <C>              <C> 
Basic EPS                   $.24             $.35             $.46             $.68
Dilutive EPS                $.22             $.32             $.43             $.62
</TABLE>



                                      -6-
<PAGE>   9
5.   Subsequent Events

     In July 1997, the Thai baht was permitted to float against the U.S. dollar
     and other currencies, and as a result, the baht has been devalued from 24.7
     bahts/dollar as of June 30, 1997 (the date used for inclusion of the
     Company's Thailand operations in the consolidated financial statements of
     the Company) to approximately 32.1 bahts/dollar as of July 31, 1997.

     While it is difficult to assess the effect on the Company's operating
     results for the second half of 1997, the devaluation of the baht may cause
     the Company's competitive environment to improve, and may result in an
     incremental growth in revenues. 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 1997 operating results.



                                      -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 began selling the newly acquired 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
allowable rebates provided by contract to distributors covering the resale of
the Company's products in specific volumes to specified end user customers. 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, travel costs, trade
shows, advertising and delivery expenses. 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 executives and administrative and information
technology staffs, together with related expenses such as travel costs,
insurance, facilities costs and consulting and professional fees. The income tax
provision is substantially less than statutory rates as a result of the tax free
status of the Company's foreign manufacturing operations. 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 JUNE 30, 1997 COMPARED TO THE THREE MONTHS ENDED 
JUNE 30, 1996

Net sales for the three months ended June 30, 1997 were $44,948,000 which
represents a 24.9% increase over net sales of $35,987,000 for the same period in
1996. The predominant causes for the sales growth were an increase in unit
volumes sold and the shift in product mix to higher priced powder-free gloves in
the 1997 period as compared to the 1996 period. Sales were driven by the
continued strong domestic demand, in the acute care market, for the Company's
powder-free and lightly powdered exam gloves.

Cost of goods sold increased 11.2% from $21,768,000 for the three month period
ended June 30, 1996 to $24,199,000 for the three months ended June 30, 1997. As
a percentage of net sales, cost of goods sold decreased from 60.5% for the three
months ended June 30, 1996 to 53.8% 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, lower latex prices and an increased mix of higher margin powder-free
gloves, partially offset by start-up costs associated with the Company's initial
"Grand Master" production machine during the 1997 period. As a result of the
above, gross profits increased 45.9% from $14,219,000 for the three months ended
June 30, 1996 to $20,749,000 for the three months ended June 30, 1997.

Selling expenses increased 45.8% from $3,884,000 for the three months ended June
30, 1996 to $5,662,000 for the three months ended June 30, 1997. As a percentage
of net sales, selling expenses increased from 10.8% for the three months ended
June 30, 1996 to 12.6% for the same period in 1997. The increase in selling
expenses as a percentage of net sales reflects the costs associated with the
expansion of the Company's medical and scientific sales force and the
establishment of its Dental division and its National Accounts Group which
supports Group Purchasing Organization (GPO) contract business. In addition, the
Company has experienced increased selling expenses in its European subsidiaries.

Research and development expenses increased 125.9% from $425,000 for the three
months ended June 30, 1996 to $961,000 for the three months ended June 30, 1997.
As a percentage of net sales, these expenses increased from 1.2% for the three
months ended June 30, 1996 to 2.1% for the three months ended June 30, 1997. The
increase in research and development expenses as a percentage of net sales
reflects the Company's increased spending for research and development, which
includes product testing, consulting costs, salaries for research and
development personnel and travel costs. In addition, research and development
costs increased due to the acquisition of Tactyl Technologies, Inc.



                                      -9-
<PAGE>   12
General and administrative expenses increased 39.6% from $2,681,000 for the
three months ended June 30, 1996 to $3,744,000 for the three months ended June
30, 1997. As a percentage of net sales, general and administrative expenses
increased from 7.5% for the 1996 period to 8.3% for the 1997 period. 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. and increased expenditures in information technology and
logistics, which the Company believes will lower inventory costs and streamline
distribution to customers.

Income from operations increased 43.6% from $7,229,000 for the three months
ended June 30, 1996 to $10,382,000 for the three months ended June 30, 1997.
Operating margins increased from 20.1% in the 1996 period to 23.1% in the 1997
period.

Interest expense (income), net, decreased from $45,000 of interest expense for
the three months ended June 30, 1996 to $140,000 of interest income for the
three months ended June 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. 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, net, increased from $29,000 for the three months ended June 30,
1996 to $206,000 for the three months ended June 30, 1997. The increase in other
expense was due substantially to losses experienced from foreign currency
transactions in the Company's European subsidiaries in the three months ended
June 30, 1997.

Income taxes increased from $966,000 for the three months ended June 30, 1996 to
$1,113,000 for the three months ended June 30, 1997. The income tax provisions
recorded in both 1996 and 1997 remain less than statutory rates due to the
foreign tax free status.

Net income increased 48.7% from $6,188,000 for the three months ended June 30,
1996 to $9,203,000 for the three months ended June 30, 1997 due to the foregoing
factors.



                                      -10-
<PAGE>   13
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996

Net sales for the six months ended June 30, 1997 were $86,116,000 which
represents a 24.7% increase over net sales of $69,042,000 for the same period in
1996. The predominant causes for the sales growth were an increase in unit
volumes sold and the shift in product mix to higher priced powder-free gloves in
the 1997 period as compared to the 1996 period. Sales were driven by the
continued strong domestic demand, in the acute care market, for the Company's
powder-free and lightly powdered exam gloves.

Cost of goods sold increased 10.6% from $41,554,000 for the six month period
ended June 30, 1996 to $45,958,000 for the six months ended June 30, 1997. As a
percentage of net sales, cost of goods sold decreased from 60.2% for the six
months ended June 30, 1996 to 53.4% 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, lower latex prices and an increased mix of higher margin powder-free
gloves during the 1997 period. As a result of the above, gross profits increased
46.1% from $27,488,000 for the six months ended June 30, 1996 to $40,158,000 for
the six months ended June 30, 1997.

Selling expenses increased 43.0% from $7,748,000 for the six months ended June
30, 1996 to $11,081,000 for the six months ended June 30, 1997. As a percentage
of net sales, selling expenses increased from 11.2% for the six months ended
June 30, 1996 to 12.9% for the same period in 1997. The increase in selling
expenses as a percentage of net sales reflects the costs associated with the
expansion of the Company's medical and scientific sales force and the
establishment of its Dental division and its National Accounts Group which
supports Group Purchasing Organization (GPO) contract business. In addition, the
Company has experienced increased selling expenses in its European subsidiaries.

Research and development expenses increased 80.6% from $878,000 for the six
months ended June 30, 1996 to $1,586,000 for the six months ended June 30, 1997.
As a percentage of net sales, these expenses increased from 1.3% for the six
months ended June 30, 1996 to 1.8% for the six months ended June 30, 1997. The
increase in research and development expenses as a percentage of net sales
reflects the Company's increased spending for research and development, which
includes product testing, consulting costs, salaries for research and
development personnel and travel costs. In addition, research and development
costs increased due to the acquisition of Tactyl Technologies, Inc.

General and administrative expenses increased 43.2% from $5,078,000 for the six
months ended June 30, 1996 to $7,272,000 for the six months ended June 30, 1997.
As a percentage of net sales, general and administrative expenses increased from
7.4% for the 1996 period to 8.4% for the 1997 period. The increase in general
and administrative expenses as a percentage of net sales was caused primarily by
increased product liability insurance costs. Additional factors include
increased



                                      -11-
<PAGE>   14
investment in information technology and logistics, which the Company believes
will lower inventory costs and streamline distribution to customers, as well as
increased costs related to the Company's acquisition of Tactyl Technologies,
Inc.

Income from operations increased 46.7% from $13,785,000 for the six months ended
June 30, 1996 to $20,219,000 for the six months ended June 30, 1997. Operating
margins increased from 20.0% in the 1996 period to 23.4% in the 1997 period.

Interest expense (income), net, decreased from $109,000 of interest expense for
the six months ended June 30, 1996 to $333,000 of interest income for the six
months ended June 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, net, increased from $125,000 for the six months ended June 30,
1996 to $625,000 for the six months ended June 30, 1997. The increase in other
expense was due substantially to losses experienced from foreign currency
transactions in the Company's European subsidiaries in the six months ended June
30, 1997.

Income taxes increased from $1,912,000 for the six months ended June 30, 1996 to
$2,234,000 for the six months ended June 30, 1997. The income tax provisions
recorded in both 1996 and 1997 remain less than statutory rates due to the
foreign tax free status.

Net income increased 52.0% from $11,639,000 for the six months ended June 30,
1996 to $17,693,000 for the six months ended June 30, 1997 due to the foregoing
factors.



                                      -12-
<PAGE>   15
LIQUIDITY AND CAPITAL RESOURCES

The Company's operations generated approximately $27,305,000 and $8,051,000 of
cash during the six months ended June 30, 1997 and 1996, respectively. During
the six months ended June 30, 1997 and 1996, the Company acquired capital assets
of approximately $17,121,000 and $8,970,000, 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. A single "Grand Master"
production line is expected to 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 expects to begin production in the third quarter of 1997 and
expects the final phase of construction to be completed within two years. 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 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 is
expected to begin 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
newly acquired Tactylon(R) synthetic examination and surgical gloves and is
scheduled to be completed during the second half of fiscal 1998. Production
capacity of the Tactylon(R) product line is expected to increase in excess of
200 percent over 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. 



                                      -13-
<PAGE>   16
Due to the Company's strong cash flow, financing for the total capital  
expenditures for the two-year period is projected to come from internally
generated funds, with any shortfalls financed through borrowings from the
existing credit facilities. Due to the demand for increased production
capacity, the Company has delayed its previously announced plan to move exam
glove production from Malaysia to Thailand.

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.

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 June 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 June 30, 1997, 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 the Company.



                                      -14-
<PAGE>   17
LEGAL PROCEEDINGS

Since May 1995, 73 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 Company's liquidity
and working capital, the Company's ability to generate 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;

     -    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;

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

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



                                      -15-
<PAGE>   18
     -    the consistent availability, at budgeted prices, of raw rubber from
          independent growers and concentrate plant operators in Malaysia and
          Thailand;

     -    delays in the completion of the Company's construction of its
          additional "Grand Master" production lines and latex concentrate plant
          in Thailand or the failure of such new lines or plant to generate
          anticipated productivity and efficiencies;

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

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

     -    changes in significant government regulations affecting the healthcare
          industry;

     -    the ability of the Company to protect its proprietary products,
          know-how and manufacturing processes;
 
     -    changes in the Company's rates or basis of income taxation; and
 
     -    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


     EXHIBIT     DESCRIPTION
     -------     -----------

     11          Statement re: Computation of per share earnings


(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: August 14, 1997                  By:  /s/ David L. Morash
                                            ------------------------------
                                            David L. Morash, Executive Vice-
                                            President, Chief Financial Officer



                                      -18-