SAFESKIN CORP, S-3/A, 1996-12-31

SAFESKIN CORP
S-3/A, 1996-12-31
FABRICATED RUBBER PRODUCTS, NEC

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 31, 1996

REGISTRATION NO. 333-17239
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- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT

UNDER
THE SECURITIES ACT OF 1933
------------------------
SAFESKIN CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
FLORIDA 3096 59-2617525
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>

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

12671 HIGH BLUFF DRIVE
SAN DIEGO, CA 92130
(619) 794-8111
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------

WILLIAM C. MILLER, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
SAFESKIN CORPORATION
12671 HIGH BLUFF DRIVE
SAN DIEGO, CA 92130
(619) 794-8111
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------

with copies to:

HOWARD L. SHECTER, ESQ. FREDERICK W. KANNER, ESQ.
MORGAN, LEWIS & BOCKIUS LLP DEWEY BALLANTINE

101 PARK AVENUE 1301 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10178 NEW YORK, NEW YORK 10019

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.

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<PAGE>

SUBJECT TO COMPLETION, DATED DECEMBER 30, 1996

PROSPECTUS
3,200,000 SHARES

[LOGO]

SAFESKIN(Registered)

COMMON STOCK
------------------------

All of the shares of Common Stock, $.01 par value (the 'Common Stock'), of
Safeskin Corporation (the 'Company') offered hereby are being sold by the
Selling Shareholders. See 'Principal and Selling Shareholders.' The Company will
not receive any of the proceeds from the sale of shares by the Selling
Shareholders.

The Company's Common Stock is traded on the Nasdaq National Market under
the symbol 'SFSK.' On December 27, 1996, the closing price of the Common Stock,
as reported by the Nasdaq National Market and as restated to give effect to a
two-for-one split of the Common Stock to be effected on January 2, 1997, was
$25.00 per share.

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

SEE 'RISK FACTORS' BEGINNING ON PAGE 6 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) SHAREHOLDERS(2)
<S> <C> <C> <C>
Per Share..................................................... $ $ $
Total(3)...................................................... $ $ $
</TABLE>

(1) The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See 'Underwriting.'
(2) Before deducting expenses of the offering estimated at $ , of which

$ is payable by the Company and $ is payable by the Selling
Shareholders.
(3) The Selling Shareholders have granted the Underwriters a 30-day option to
purchase up to 480,000 additional shares of Common Stock on the same terms
as set forth above to cover over-allotments, if any. If the Underwriters
exercise such option in full, the total Price to Public, Underwriting
Discounts and Commissions and Proceeds to Selling Shareholders will be
$ , $ and $ , respectively. See
'Underwriting.'
------------------------

The shares of Common Stock are being offered by the several Underwriters
named herein, subject to prior sale, when, as and if accepted by them and
subject to certain conditions. It is expected that certificates for the shares
of Common Stock offered hereby will be available for delivery on or about
, 1997 at the offices of Smith Barney Inc., 333 West 34th Street,
New York, New York 10001.
------------------------

SMITH BARNEY INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH & CO.

JANUARY , 1997

Information contained herein is subject to completion or amendment.
A registration statement relating to these securities has been filed
with the Securities and Exchange Commission. These securities may
not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This Prospectus shall
not constitute an offer to sell or the solicitation of an offer to buy
nor shall there be any sale of these securities in any state in which
such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state.

<PAGE>
[Color pictures.]

IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMPANY'S COMMON
STOCK ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 10B-6A UNDER THE
SECURITIES EXCHANGE ACT OF 1934. SEE 'UNDERWRITING.'

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

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
---------------------------

Safeskin(Registered), HypoClean(Registered) and HypoClean 100(Registered)
are registered trademarks of the Company, and Oxyglazed System(Trademark) is a
mark of the Company for which an application for federal trademark registration
is pending.

<PAGE>
PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial data appearing elsewhere or incorporated by reference
in this Prospectus. See 'Risk Factors' for a discussion of certain factors to be
considered by prospective investors. Unless otherwise indicated, all financial
information, share and per share data in this Prospectus assume no exercise of
the Underwriters' over-allotment option and give effect to a two-for-one split
of the Common Stock to be effected on January 2, 1997.

THE COMPANY

The Company is the leading manufacturer of high quality disposable latex
medical examination gloves for the United States market and believes that it is
the world's leading manufacturer of high quality disposable powder-free
examination gloves. The Company sells its gloves primarily to the medical,
dental, high technology and scientific markets. The Company markets high quality
gloves designed to prevent the transmission of infectious disease while at the
same time minimizing the risk of any debilitating side effects which may result
from prolonged use by the wearer. In 1995, the Company became the market share
leader, in both sales dollars and total units, of medical examination gloves to
acute care facilities (hospitals) in the United States. Based upon information
provided by its distributors, the Company believes that, in 1995, approximately
64% of the Company's sales were to acute care facilities, approximately 28% were
to alternate care (primary care and extended care) and dental facilities and
approximately 8% were to the high technology and scientific market.

In 1995, the total market for medical gloves in the United States was
approximately $1 billion. The growth in the market for medical examination
gloves over the past nine years has largely resulted from the increased concerns
among health care professionals over protection from the transmission of
infectious diseases, particularly human immunodeficiency virus ('HIV'), which
can cause acquired immunodeficiency syndrome ('AIDS'), and hepatitis B virus
('HBV'). The demand for latex gloves has also grown among users in the
semiconductor, biotechnology, pharmaceutical, general industrial manufacturing
and research segments of the high technology and scientific market.
Increasingly, the manufacturing processes in these industries take place in
cleanrooms and require gloves that minimize the amount of particles on their
surfaces to prevent contamination.

Between 1991 to 1995, the Company's net sales grew from $17.0 million to
$117.0 million, a compound annual growth rate of 61.9%. During that same period,
net income grew from $1.2 million to $14.9 million, a compound annual growth
rate of 88.6%. During the nine months ended September 30, 1996, net sales and
net income grew 26.4% and 80.4%, respectively, over the comparable period in
1995. The Company's strategy for future growth is to (i) increase its domestic
market penetration by emphasizing sales of powder-free gloves, (ii) expand its
customer base to include new categories of customers and international markets,
(iii) introduce new products and (iv) continue to develop innovative

manufacturing techniques and facilities.

The Company currently manufactures and markets three basic types of gloves:
medical examination gloves, surgical gloves and high technology and scientific
gloves. The Company's gloves consist of six types of latex gloves and one type
of nitrile synthetic latex glove, substantially all of which are marketed under
the 'Safeskin' trade name to enhance market recognition and brand loyalty. Each
type of the Company's latex gloves comes in various sizes and, except for the
high technology and scientific nitrile glove, is made of natural rubber latex
with a beaded cuff for added strength and ease in donning. The Company
manufactures both ambidextrous and hand specific gloves.

In 1996, the Company introduced a powder-free, sterile 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
Safeskin 2000 surgical glove offers superior ergonomic characteristics which
provide surgeons with greater freedom of motion and increased dexterity, thereby
resulting in less hand fatigue. The Company introduced its nitrile synthetic
latex gloves in its high technology and scientific product line in the first
half of 1996. These gloves are manufactured from a synthetic material, thus
eliminating natural rubber protein antigens and offering a broader range of
resistance to many of the chemicals used in high technology and laboratory
applications. The Company has also developed a medical examination glove made of
nitrile synthetic latex and has recently received clearance from the FDA to
begin selling the gloves in the United States.

3
<PAGE>
The Company manufactures its products at two factories in Ipoh, Malaysia
and one factory in Hat Yai, Thailand. Factory locations are selected to be close
to the rubber tree plantations, which are the Company's source of natural latex,
as well as for favorable cost and availability of labor supply. The Company's
gloves are manufactured on production machines which can run continuously and
which can be changed quickly to produce different types and sizes of gloves. A
new production line currently being constructed at the Thai facility, referred
to by the Company as the 'Grand Master' and scheduled to be completed by early
1997, is expected to have the capacity of approximately eight existing
production lines in this facility and lower production costs through higher
operating efficiencies and lower labor requirements. Quality control and testing
are emphasized throughout the Company's manufacturing process.

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 to manufacture its disposable latex gloves.
The Company expects that the first construction phase of this new plant will be
completed in the first half of 1997 and that the final phase will be completed
within two years. This plant will allow the Company to integrate more fully its
manufacturing processes in order to gain better control over the quality, cost
and reliability of latex supplies.

The Company's sales and marketing efforts focus principally on the acute
care market, alternate care market and dental market with respect to medical
products and on the semiconductor, biotechnology, pharmaceutical, general
industrial manufacturing and research market segments with respect to high
technology and scientific products. The Company's sales and marketing efforts
are supported by the Company's logistics team that delivers services to medical
products distributors and end users designed to assist them in their businesses.
The Company believes that these logistics services are one of its key
competitive advantages and have helped the Company become the preferred supplier
for many of its customers. Specifically, the Company's logistics personnel work
with medical products distributors to reduce their order cycle time and
inventory levels and have succeeded in increasing product availability for the
Company's customers.

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered...................... 3,200,000 shares(1)

Common Stock outstanding.................. 25,708,448 shares(2)

Use of proceeds........................... All of the proceeds from the sale of the shares will be received by
the Selling Shareholders.

Nasdaq National Market symbol............. SFSK
</TABLE>

- ------------------
(1) Does not include up to 480,000 shares of Common Stock that may be sold by
Selling Shareholders pursuant to the Underwriters' over-allotment option.
See 'Underwriting.'

(2) Does not include 4,788,654 shares of Common Stock issuable upon exercise of
options outstanding as of September 30, 1996 and 344,668 shares reserved for
issuance pursuant to the Company's equity compensation plan (the 'Equity
Compensation Plan').

4
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Net sales......................... $17,013 $33,878 $57,264 $84,142 $117,014 $84,278 $106,534
Cost of goods sold................ 11,135 20,603 33,237 50,376 75,756 55,282 62,576
------- ------- ------- ------- -------- ------- --------
Gross profit.................... 5,878 13,275 24,027 33,766 41,258 28,996 43,958
Selling expenses.................. 1,594 3,981 7,999 11,685 16,120 11,617 12,747
Research and development(2)....... -- -- 398 977 1,493 978 1,404
General and administrative
expenses........................ 1,672 1,812 2,561 3,625 6,397 4,275 7,969
------- ------- ------- ------- -------- ------- --------
Income from operations............ 2,612 7,482 13,069 17,479 17,248 12,126 21,838
Interest expense, related
parties......................... 203 216 156 -- -- -- --
Interest expense, other........... 1,253 1,325 1,285 17 194 107 118
Other expense (income), net....... (21) (203) (237) (825) (163) (191) 201
------- ------- ------- ------- -------- ------- --------
Income before income tax........ 1,177 6,144 11,865 18,287 17,217 12,210 21,519
Income tax provision.............. -- 127 213 3,920 2,326 1,851 2,828
------- ------- ------- ------- -------- ------- --------
Net income...................... $ 1,177 $ 6,017 $11,652 $14,367 $ 14,891 $10,359 $ 18,691
------- ------- ------- ------- -------- ------- --------
------- ------- ------- ------- -------- ------- --------
Net income per share.............. $ .07 $ .34 $ .56 $ .57 $ .58 $ .41 $ .68
Weighted average common shares
outstanding(3).................. 17,403 17,491 20,817 25,392 25,605 25,411 27,479
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
---------------------------------------------------- -------------------
1991 1992 1993 1994 1995 1995 1996
------- ------- ------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA(1):
Working capital (deficit)......... $(8,131) $(6,768) $22,310 $22,987 $ 28,055 $28,123 $ 39,893
Total assets...................... 12,134 21,393 43,224 61,230 84,675 83,858 108,698
Long-term debt.................... 3,337 852 -- -- 2,750 4,750 --
Shareholders' equity (deficit).... (6,307) 934 38,750 54,260 69,861 66,118 93,903
</TABLE>

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

(1) The summary consolidated financial data for the five years ended December
31, 1995 are derived from the audited consolidated financial statements of
the Company except for per share information which has been restated to give
effect to a two-for-one split of the Common Stock to be effected on January
2, 1997. The statement of operations data for the nine months ended
September 30, 1995 and 1996 and the balance sheet data at September 30, 1995
and 1996 are derived from unaudited financial statements of the Company.

(2) Prior to the year ended December 31, 1993, the Company did not separately
classify the cost of research and development because it was not
significant.

(3) Net income per share is computed by dividing net income by the weighted
average of common shares outstanding and dilutive common stock equivalents.
Common stock options are common stock equivalents and are included in the
weighted average of common shares outstanding using the treasury stock
method. Primary and fully diluted net income per share amounts and the
number of primary and fully diluted weighted average common shares
outstanding are the same for all periods presented except for the nine
months ended September 30, 1996. Fully diluted net income per share and the
number of fully diluted weighted average common shares outstanding for the
nine months ended September 30, 1996 were $.67 and 27,969, respectively.

<PAGE>
THE COMPANY

The Company was incorporated in the State of Florida in 1985 and was
inactive until 1987, when it entered the latex glove business. The Company's
principal executive offices are located at 12671 High Bluff Drive, San Diego,
California 92130, and its telephone number is (619) 794-8111. Unless the context
indicates otherwise, Safeskin Corporation and its subsidiaries are referred to
herein collectively as the 'Company.'

RISK FACTORS

An investment in shares of Common Stock offered by this Prospectus involves
a high degree of risk. In addition, this Prospectus contains, and documents
incorporated by reference herein contain, forward-looking statements that
involve risks and uncertainties. Discussions containing such forward-looking
statements may be found in the material set forth under 'Prospectus Summary,'
'Risk Factors,' 'Management's Discussion and Analysis of Financial Condition and
Results of Operations,' 'Business,' 'Business--Strategy,' 'Business--Products,'
'Business--Products Under Development,' 'Business--Sales and Marketing,'
'Business--Manufacturing and Quality Control,' 'Business--Competition,'
'Business--Government Regulation,' 'Business--Product Liability and Insurance,'
and 'Business--Legal Proceedings,' as well as elsewhere in the Prospectus and
the documents incorporated by reference herein generally. The Company's actual
results could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including those set forth in the
following risk factors and elsewhere in the Prospectus and the documents
incorporated by reference herein. Accordingly, in evaluating the Company and its
business, prospective investors should carefully consider the following risk
factors in addition to the other information included and incorporated by
reference herein.

DEPENDENCE ON GLOVES

The Company is exclusively engaged in the manufacture and sale of
disposable gloves. Accordingly, the Company's results of operations and
financial condition are highly dependent on the level of supply of and demand
for disposable gloves. There can be no assurance that the supply of or demand
for disposable gloves will continue at current levels or that changes in such
supply or such demand will not have a material adverse effect on the Company's
results of operations or financial condition.

DEPENDENCE ON RUBBER HARVEST AND LATEX CONCENTRATE

The ability of the Company to produce its products profitably is entirely
dependent upon the consistent availability, at competitive prices, of raw rubber
harvested by independent growers in Malaysia and Thailand and locally processed
by the Company and others into latex concentrate. Any disruption in the
consistent supply of rubber for latex concentrate due to weather or other
natural phenomena, labor or transportation stoppages, shortages or other
factors, could cause significant adverse effects to the Company's results of
operations and financial condition. In addition, rubber is a commodity traded on
world commodities exchanges and is subject to price fluctuations driven by
changing market conditions over which the Company has no control. Increases in

the price of latex concentrate have adversely affected the Company's raw
material costs in the past and could do so again. See 'Management's Discussion
and Analysis of Financial Condition and Results of Operations' and
'Business--Manufacturing and Quality Control.'

COMPETITION; RISK OF OBSOLESCENCE

The market for the Company's products is highly competitive. The Company
competes with many other firms, including several large firms having
substantially greater financial, management and marketing resources than the
Company. There can be no assurance that the Company's competitors or others will
not develop products, manufacturing processes or new technologies that would
render the Company's gloves obsolete or uncompetitive or that would be more cost
effective or more efficient than the processes and technologies of the Company.
Such competition could have a material adverse effect on the Company's results
of operations and financial condition. See 'Business--Competition.'

6
<PAGE>
RELIANCE UPON DISTRIBUTORS

Substantially all domestic sales of the Company's gloves are made through
distributors. Three of the nation's largest medical products distributors, Owens
& Minor, General Medical and Bergen Brunswig Medical, accounted for
approximately 30.3%, 29.8% and 8.2%, respectively, of the Company's 1995
consolidated net sales. If the efforts of the Company's distributors prove
unsuccessful, if such distributors abandon or limit their distribution of the
Company's products, or if such distributors encounter serious financial
difficulties, the Company's results of operations and financial condition could
be materially adversely affected.

MANUFACTURING IN MALAYSIA AND THAILAND

Two of the Company's latex glove factories and its latex concentrate
manufacturing and processing plant are located in Malaysia and its third latex
glove factory is located in Thailand. In addition, the Company is currently in
the process of building a latex concentrate plant in Thailand. As a result, the
Company is, and will continue to be, directly affected by the political and
economic conditions existing in both Malaysia and Thailand. Any political or
economic instability in either Malaysia or Thailand, a significant increase in
the rate of Malaysian or Thai corporate taxation, a discontinuance or reduction
in Thai export tax rebates, or any other change in either country's policies
regarding foreign ownership of manufacturing facilities could have significant
adverse effects on the Company's business, financial condition and results of
operations. The Company's non-United States expenses represented 79%, 75% and
84% of its total expenses in 1993, 1994 and 1995, respectively, almost all of
which were in foreign currencies (Malaysian ringgits and Thai baht). The Company
expects that non-United States expenses will continue to represent the major
portion of its expenses and that it will continue to be subject to the normal
risks of conducting business internationally, including foreign currency
exchange rate fluctuations, unexpected changes in regulatory requirements,
tariffs and other barriers. No assurance can be given that the Company's results
of operations or financial condition will not be materially adversely affected
by currency exchange rate fluctuations. See 'Management's Discussion and

Analysis of Financial Condition and Results of Operations' and
'Business--Manufacturing and Quality Control.'

LACK OF PATENTED PRODUCTS AND PROCESSES

The Company's products are not protected by patents. The Company considers
certain of its manufacturing processes to be proprietary and relies on trade
secret laws and confidentiality procedures to protect its rights. There can be
no assurance that these means of protecting the Company's proprietary
manufacturing processes will be effective. In addition, the laws of some foreign
countries may not protect the Company's proprietary rights to the same extent as
do the laws of the United States.

GOVERNMENT REGULATION AND LABELING

The Company's products and the manufacturing, marketing and labeling of its
products are subject to regulation by governmental authorities in the United
States, including the Food and Drug Administration (the 'FDA'), and other
countries. The regulatory process can result in a substantial delay in the
introduction of a new product developed by the Company, and there can be no
assurance that regulatory approval will be obtained for a new product. In
addition, delays or rejections may be encountered based upon changes in FDA
laws, regulations or policies. Periodic testing by the FDA of shipments to the
United States of medical gloves has in the past and may in the future result in
the detention of shipments and losses or delays in the recognition of income by
the Company. Similar delays may also be encountered in foreign countries.
Further, the Company's gloves and its manufacturing facilities are subject to
continual review and periodic inspections, and the discovery of previously
unknown problems with a product or facility may result in the FDA imposing
restrictions on the product or facility, including the withdrawal of the product
from the market. The FDA has proposed issuing regulations prohibiting the use of
a 'hypoallergenic' label on medical gloves and requiring a labeling statement
that latex may cause allergic reactions. The term 'hypoallergenic' is currently
used on the labels of all gloves manufactured and sold by the Company. As a
result, the Company may need to rely on alternate labeling. The Company has
received FDA clearance for its powder-free medical gloves with labeling
concerning total protein content, including a claim for '50 micrograms or less
of total water extractable protein per gram,' the lowest protein content claim
allowable by the FDA for latex medical gloves, which the Company began using in
1996. In addition, the Company may elect to seek approval of alternative
labeling with respect to the chemical qualities

7
<PAGE>
of its medical gloves, but there can be no assurance that such an alternative
claim will be permitted. See 'Business--Product Labeling' and
'Business--Government Regulation.'

EFFECTS OF REIMBURSEMENT POLICIES; CHANGES AFFECTING THE HEALTHCARE INDUSTRY

Although the Company's customers do not bill third-party reimbursement
sources separately for purchases of the Company's gloves, the Company's ability

to sell its latex medical gloves profitably may depend in part on the extent to
which reimbursement for the cost of medical gloves will be affected by
reimbursement policies and regulations of government health administration
authorities, private health insurers and other organizations. Such third-party
payors are increasingly challenging the price of medical products and services.
Additionally, legislative measures, if adopted, could adversely affect the
pricing of, or the amount or availability of reimbursement for, the Company's
medical gloves. See 'Business--Government Regulation.' In addition, the
healthcare industry is currently experiencing significant change, including a
consolidation trend among healthcare providers. The Company cannot predict how
these changes will ultimately affect the healthcare industry or its business. No
assurance can be given that any such change will not have a material adverse
effect on the Company's results of operations or financial condition.

PRODUCT LIABILITY

Participants in the medical supplies business are potentially subject to
lawsuits alleging product liability, many of which involve significant damage
claims and defense costs. A successful claim against the Company in excess of
the Company's insurance coverage could have a material adverse effect on the
Company's results of operations or financial condition. Claims made against the
Company, regardless of their merit, could also have a material adverse effect on
the Company's reputation. There is no assurance that the coverage limits of the
Company's insurance policy will be adequate. While the Company has been able to
obtain product liability insurance in the past, such insurance varies in cost,
is difficult to obtain and may not be available in the future on acceptable
terms or at all. See 'Business--Product Liability and Insurance.' The Company is
subject to a number of lawsuits filed against it and other manufacturers of
latex gloves alleging injuries relating to allergic reactions caused by the
residual chemicals or latex proteins in gloves. The litigation is still in the
early stages, and there can be no assurance that the Company's insurance will be
sufficient to meet any recovery for which the Company may be found liable or
that the outcome of such suits will not materially adversely affect the
Company's results of operations or financial condition. See 'Business--Legal
Proceedings.'

ANTI-TAKEOVER PROVISIONS

The Company's Board of Directors has the authority to issue shares of
preferred stock and to determine the designations, preferences and rights and
the qualifications or restrictions of those shares without any further vote or
action by the shareholders. The rights of the holders of Common Stock will be
subject to, and may be adversely affected by, the rights of the holders of any
preferred stock that may be issued in the future. The issuance of preferred
stock, while providing desirable flexibility in connection with possible
acquisitions and other corporate actions, could have the effect of making it
more difficult for a third party to acquire a majority of the outstanding voting
stock of the Company.

Pursuant to the foregoing authority, the Company recently adopted a
shareholder rights plan, which involves the issuance of preferred stock purchase
rights to holders of its Common Stock. The rights issued pursuant to such plan
will provide discount purchase rights to shareholders of the Company upon
certain acquisitions of beneficial ownership of 15% or more of the outstanding
Common Stock and certain tender offers which would result in beneficial
ownership of 15% or more of the outstanding Common Stock. The effect of the
foregoing may be to inhibit a change in control of the Company that may be
beneficial to the Company's shareholders.

8
<PAGE>
USE OF PROCEEDS

All of the shares of Common Stock being offered hereby are offered by the
Selling Shareholders. The Company will not receive any of the proceeds from the
sale of such shares.

RECENT DEVELOPMENTS

On December 13, 1996, the Company announced plans to move all of its
remaining latex examination glove production from its Malaysian facility to its
Thai facility in 1997. In connection with the move, the Company will take a $3
million after-tax charge against earnings in the fourth quarter of 1996. The
Company anticipates that the move will improve profit margins in 1997 and future
years due to the lower production costs at the Thai facility. To accomodate the
increased production requirements in Thailand, the Company plans to complete its
initial 'Grand Master' production machine in the first quarter of 1997 and build
two additional 'Grand Master' lines scheduled to be completed during the second
half of 1997. The combination of the three machines is expected to increase the
Thai facility's capacity by approximately 70% by the end of 1997 when the new
machines are scheduled to be fully operational. The Company will continue to
operate one of its Malaysian facilities for the production of higher value
products, such as the newly introduced Safeskin 2000 powder-free surgical glove,
the high technology and scientific division's HypoClean products and synthetic
nitrile products.

Effective January 1, 1997, the Company's founder, current Co-Chairman and
director Neil K. Braverman will resign as Co-Chairman and enter into a one-year
consulting arrangement with the Company. Pursuant to the consulting arrangement,
Mr. Braverman will work on a part-time basis, assisting the Company in the areas
of manufacturing and new product development. Mr. Braverman will remain a
director of the Company.

<PAGE>
PRICE RANGE OF COMMON STOCK

The Company's Common Stock trades on the Nasdaq National Market under the
symbol 'SFSK.' The following table sets forth the high and low closing prices of
a share of the Company's Common Stock for each quarter in 1994 and 1995, the
first three quarters in 1996 and the interim period indicated, as reported by
the Nasdaq National Market and restated to give effect to a two-for-one split of
the Common Stock to be effected on January 2, 1997.

<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1994
First Quarter....................................................... $ 8 5/8 $6 3/4
Second Quarter...................................................... 7 3/4 6 1/8
Third Quarter....................................................... 8 5/8 6 3/4
Fourth Quarter...................................................... 8 7/8 6 1/2
1995
First Quarter....................................................... 7 5/8 6 1/8
Second Quarter...................................................... 7 3/4 5 1/2
Third Quarter....................................................... 9 5/8 7 1/4
Fourth Quarter...................................................... 9 13/16 8
1996
First Quarter....................................................... 13 5/8 8
Second Quarter...................................................... 20 3/4 12 1/2
Third Quarter....................................................... 20 5/8 15
Fourth Quarter (through December 27, 1996).......................... 26 11/16 17 7/8
</TABLE>

The closing price of the Company's Common Stock on December 27, 1996, as
reported by the Nasdaq National Market and restated as set forth above, was
$25.00.

The approximate number of record holders of the Company's Common Stock as
of December 27, 1996 was 276. The Company believes that a larger number of
beneficial owners hold such shares of Common Stock in depositary or nominee
form.

10
<PAGE>
DIVIDEND POLICY

The Company has never paid any cash dividends on the Common Stock. The
Company does not anticipate payment of any cash dividends in the foreseeable
future and intends to continue its present policy of retaining earnings for

reinvestment in the operations of the Company and the expansion of its business.

CAPITALIZATION

The following table sets forth the short-term debt and capitalization of
the Company at September 30, 1996.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
------------------
(DOLLARS IN
THOUSANDS)
<S> <C>
Short-term debt............................................................................... $ --
----------
----------
Long-term debt................................................................................ $ --
----------
----------
Shareholders' equity:
Preferred stock; $.01 par value; 10,000,000 shares authorized and no shares outstanding at
September 30, 1996....................................................................... --
Common Stock; $.01 par value; 40,000,000 shares authorized(1); 25,708,448 shares
outstanding.............................................................................. 257
Additional paid-in capital.................................................................. 34,693
Foreign currency translation adjustment..................................................... 876
Retained earnings........................................................................... 58,077
----------
Total shareholders' equity............................................................... 93,903
----------
Total capitalization..................................................................... $ 93,903
----------
----------
</TABLE>

- ------------------
(1) Authorized shares include 4,700,300 shares issuable upon exercise of
outstanding options under the Equity Compensation Plan and 88,354 shares
issuable under other options. An additional 344,668 shares are reserved for
issuance for future awards under the Equity Compensation Plan.

11
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The following selected consolidated financial data of the Company for the
five years ended December 31, 1995 are derived from the audited consolidated
financial statements of the Company except for per share information which has
been restated to give effect to a two-for-one split of the Common Stock to be
effected on January 2, 1997. The statement of operations data for the nine

months ended September 30, 1995 and 1996 and the balance sheet data at September
30, 1995 and 1996 are derived from unaudited financial statements of the
Company. The unaudited financial statements include all adjustments (consisting
only of normal recurring items) that the Company considers necessary for a fair
presentation of the financial information set forth therein. The results of
operations for the nine months ended September 30, 1996 are not necessarily
indicative of the results to be expected for any future period or for the entire
year. The following information should be read in conjunction with the
Consolidated Financial Statements of the Company and the related notes thereto
incorporated by reference herein and 'Management's Discussion and Analysis of
Financial Condition and Results of Operations' included herein.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------------------------------- -------------------
1991 1992 1993 1994 1995 1995 1996
------- ------- ------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales............................... $17,013 $33,878 $57,264 $84,142 $117,014 $84,278 $106,534
Cost of goods sold...................... 11,135 20,603 33,237 50,376 75,756 55,282 62,576
------- ------- ------- ------- -------- ------- --------
Gross profit.......................... 5,878 13,275 24,027 33,766 41,258 28,996 43,958
Selling expenses........................ 1,594 3,981 7,999 11,685 16,120 11,617 12,747
Research and development(1)............. -- -- 398 977 1,493 978 1,404
General and administrative expenses..... 1,672 1,812 2,561 3,625 6,397 4,275 7,969
------- ------- ------- ------- -------- ------- --------
Income from operations................ 2,612 7,482 13,069 17,479 17,248 12,126 21,838
Interest expense, related parties....... 203 216 156 -- -- -- --
Interest expense, other................. 1,253 1,325 1,285 17 194 107 118
Other expense (income), net............. (21) (203) (237) (825) (163) (191) 201
------- ------- ------- ------- -------- ------- --------
Income before income tax.............. 1,177 6,144 11,865 18,287 17,217 12,210 21,519
Income tax provision.................... -- 127 213 3,920 2,326 1,851 2,828
------- ------- ------- ------- -------- ------- --------
Net income............................ $ 1,177 $ 6,017 $11,652 $14,367 $ 14,891 $10,359 $ 18,691
------- ------- ------- ------- -------- ------- --------
------- ------- ------- ------- -------- ------- --------
Net income per share.................... $ .07 $ .34 $ .56 $ .57 $ .58 $ .41 $ .68
------- ------- ------- ------- -------- ------- --------
------- ------- ------- ------- -------- ------- --------
Weighted average common shares
outstanding(2)........................ 17,403 17,491 20,817 25,392 25,605 25,411 27,479
</TABLE>

BALANCE SHEET DATA:
Working capital (deficit)............... $(8,131) $(6,768) $22,310 $22,987 $ 28,055 $28,123 $ 39,893
Total assets............................ 12,134 21,393 43,224 61,230 84,675 83,858 108,698
Long-term debt.......................... 3,337 852 -- -- 2,750 4,750 --
Shareholders' equity (deficit).......... (6,307) 934 38,750 54,260 69,861 66,118 93,903
</TABLE>

- ------------------
(1) Prior to the year ended December 31, 1993, the Company did not separately
classify the cost of research and development because it was not
significant.

(2) Net income per share is computed by dividing net income by the weighted
average of common shares outstanding and dilutive common stock equivalents.
Common stock options are common stock equivalents and are included in the
weighted average of common shares outstanding using the treasury stock
method. Primary and fully diluted net income per share amounts and the
number of primary and fully diluted weighted average common shares
outstanding are the same for all periods presented except for the nine
months ended September 30, 1996. Fully diluted net income per share and the
number of fully diluted weighted average common shares outstanding for the
nine months ended September 30, 1996 were $.67 and 27,969, respectively.

<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with
the Consolidated Financial Statements and related Notes thereto incorporated by
reference herein.

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(Registered) 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.' 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. Income tax
expenses are 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.

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.

13
<PAGE>
RESULTS OF OPERATIONS

The following table presents certain items in the Consolidated Statements
of Operations, expressed as a percentage of total sales, for the years ended

December 31, 1993, 1994, 1995, and for the nine months ended September 30, 1995
and 1996.

<TABLE>
<CAPTION>
PERCENTAGE OF SALES
---------------------------------------------
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
------------------------- ---------------
1993 1994 1995 1995 1996
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net sales....................................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of goods sold.............................................. 58.0 59.9 64.7 65.6 58.7
----- ----- ----- ----- -----
Gross profit.................................................. 42.0 40.1 35.3 34.4 41.3
Selling expenses................................................ 14.0 13.9 13.8 13.8 12.0
Research and development........................................ .7 1.1 1.3 1.1 1.3
General and administrative expenses............................. 4.5 4.3 5.5 5.1 7.5
----- ----- ----- ----- -----
Income from operations........................................ 22.8 20.8 14.7 14.4 20.5
Interest expense, related parties............................... .3 -- -- -- --
Interest expense, other......................................... 2.2 -- .2 .1 .1
Other expense (income), net..................................... (.4) (.9) (.2) (.2) .2
----- ----- ----- ----- -----
Income before income tax...................................... 20.7 21.7 14.7 14.5 20.2
Income tax provision............................................ .4 4.6 2.0 2.2 2.7
----- ----- ----- ----- -----
Net income.................................................... 20.3% 17.1% 12.7% 12.3% 17.5%
----- ----- ----- ----- -----
----- ----- ----- ----- -----
</TABLE>

NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1995

Net sales for the nine months ended September 30, 1996 were $106,534,000
which represents a 26.4% increase over net sales of $84,278,000 for the same
period in 1995. 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 1996 period as compared to the 1995 period.

Cost of goods sold increased 13.2% from $55,282,000 for the nine months
ended September 30, 1995 to $62,576,000 for the nine months ended September 30,
1996. As a percentage of net sales, cost of goods sold decreased from 65.6% for
the nine months ended September 30, 1995 to 58.7% for the same period in 1996.
This decrease in cost of goods sold as a percentage of net sales was principally
attributable to improved operating efficiencies in the Thai facility as well as
decreased raw material costs during the 1996 period. Cost of goods sold for the
nine months ended September 30, 1996 also reflects the favorable impact of U.S.
import legislation ('Generalized System of Preferences' or 'GSP') reinstated by
President Clinton in the third quarter of 1996 retroactive to August 1, 1995. As

a result of this legislation, the Company has estimated a cumulative customs
duty refund of approximately $1,175,000 for gloves imported from its
manufacturing facilities between August 1, 1995 and September 30, 1996, which
amount is reflected as a reduction of cost of goods sold for the nine months
ended September 30, 1996. The new GSP term, under which imports from Thailand
and certain imports from Malaysia are currently eligible, runs through May 31,
1997. The favorable impact of this refund was partially offset by a $650,000
charge in the third quarter of 1996 relating to the write off of inventory as a
result of the introduction of the new Safeskin 2000 powder-free latex surgical
glove. Excluding the customs duty refund and the write off of inventory, cost of
goods sold as a percentage of net sales for the nine months ended September 30,
1996 would have been 59.4%. As a result of the above, gross profits increased
51.6% from $28,996,000 for the nine months ended September 30, 1995 to
$43,958,000 for the nine months ended September 30, 1996.

Selling expenses increased 9.7% from $11,617,000 for the nine months ended
September 30, 1995 to $12,747,000 for the nine months ended September 30, 1996.
As a percentage of net sales, selling expenses decreased from 13.8% for the nine
months ended September 30, 1995 to 12.0% for the same period in 1996. Selling
expenses for the nine months ended September 30, 1996 include approximately
$523,000 of non-

14
<PAGE>
recurring net severance charges relating to a former executive. Excluding such
charges, such selling expenses as a percentage of net sales would have been
11.4%. The decrease in selling expenses as a percentage of net sales is a result
of selling expenses such as salaries, travel costs and delivery expenses
remaining comparable to the prior year while sales have significantly increased
over the prior year.

Research and development expenses increased 43.6% from $978,000 for the
nine months ended September 30, 1995 to $1,404,000 for the nine months ended
September 30, 1996. As a percentage of net sales, research and development
expenses increased from 1.1% for the nine months ended September 30, 1995 to
1.3% for the nine months ended September 30, 1996.

General and administrative expenses increased 86.4% from $4,275,000 for the
nine months ended September 30, 1995 to $7,969,000 for the nine months ended
September 30, 1996. As a percentage of net sales, general and administrative
expenses increased from 5.1% for the 1995 period to 7.5% for the 1996 period.
The increase in general and administrative expenses as a percentage of net sales
pertains primarily to increased costs associated with the Information Technology
Department (which was established in the second quarter of 1995) to support the
continued growth of the Company. Additional factors include increased facilities
costs and increased consulting fees in 1996.

Income from operations increased 80.1% from $12,126,000 for the nine months
ended September 30, 1995 to $21,838,000 for the nine months ended September 30,
1996. Operating margins increased from 14.4% in the 1995 period to 20.5% in the
1996 period.

Interest expense increased slightly from $107,000 for the nine months ended
September 30, 1995 to $118,000 for the nine months ended September 30, 1996.

Other expense (income), net, increased from $191,000 of other income for
the nine months ended September 30, 1995 to $201,000 of other expense for the
nine months ended September 30, 1996. The increase in other expense was
substantially due to losses experienced from foreign currency transactions in
the Company's European subsidiaries in the nine months ended September 30, 1996
compared to gains from foreign currency transactions experienced in the prior
year.

Provision for income taxes increased from $1,851,000 for the nine months
ended September 30, 1995 to $2,828,000 for the nine months ended September 30,
1996. The income tax provisions recorded in both 1995 and 1996 remain less than
statutory rates due to the foreign tax free status.

Net income increased 80.4% from $10,359,000 for the nine months ended
September 30, 1995 to $18,691,000 for the nine months ended September 30, 1996
due to the foregoing factors.

1995 COMPARED TO 1994

Net sales for 1995 were $117,014,000 which represents a 39.1% increase over
net sales of $84,142,000 in 1994. The predominant cause for the sales growth was
higher unit volumes in the 1995 period as compared to the 1994 period. The
Company's gross margins were negatively impacted by competitive pricing
pressures beginning in the later part of 1994. In response to higher raw
materials costs, the Company increased prices on most of its products in the
United States beginning in the second quarter of 1995.

Cost of goods sold increased 50.4% from $50,376,000 for 1994 to $75,756,000
for 1995. As a percentage of net sales, cost of goods sold increased from 59.9%
in 1994 to 64.7% in 1995. The increase in cost of goods sold as a percentage of
net sales is principally attributable to increased raw material costs coupled
with competitive pricing pressures. Despite the significant increase in raw
material costs in 1995, manufacturing costs benefited from greater operating
efficiencies in the new Thai facility. The Company anticipates that these
operating efficiencies will continue in 1996 as the Thai facility's production
capacity increases. As a result of the above, gross profits increased 22.2% from
$33,766,000 in 1994 to $41,258,000 in 1995.

Selling expenses increased 38.0% from $11,685,000 in 1994 to $16,120,000 in
1995. As a percentage of net sales, selling expenses are comparable to the prior
year, decreasing slightly from 13.9% in 1994 to 13.8% in 1995.

15
<PAGE>
Research and development expenses increased 52.8% from $977,000 in 1994 to
$1,493,000 in 1995. As a percentage of net sales, research and development
expenses increased from 1.1% in 1994 to 1.3% in 1995.

General and administrative expenses increased 76.5% from $3,625,000 in 1994
to $6,397,000 in 1995. As a percentage of net sales, general and administrative
expenses increased from 4.3% in 1994 to 5.5% in 1995. This increase in general
and administrative expenses as a percentage of net sales pertains primarily to
the formation of an Information Technology Department in fiscal year 1995 to

support the growth of the Company. Additional factors include increased
consulting, investor relations efforts and legal expenses as well as the costs
associated with the relocation of the finance department to San Diego to
consolidate the sales, marketing and finance areas of the Company.

Income from operations decreased 1.3% from $17,479,000 in 1994 to
$17,248,000 in 1995 and operating margins decreased from 20.8% in 1994 to 14.7%
in 1995.

Interest expense increased from $17,000 in 1994 to $194,000 in 1995. This
increase resulted from the additional debt incurred in 1995 to facilitate the
growth of the Company.

The excess of other income over other expense decreased from $825,000 in
1994 to $163,000 in 1995. This reflected a decrease in other income, primarily
due to the reclassification in fiscal 1995 of scrap sale proceeds totaling
approximately $688,000 as a reduction of cost of goods sold.

Provision for income taxes decreased 40.7% from $3,920,000 in 1994 to
$2,326,000 in 1995. During June 1994, the Company's Malaysian manufacturing
operations were granted five additional years of tax free status retroactive to
October 1, 1993. The income tax provisions recorded in both 1994 and 1995 remain
less than statutory rates due to the foreign tax free status.

Net income increased 3.6% from $14,367,000 in 1994 to $14,891,000 in 1995
and the net income margin decreased from 17.1% in 1994 to 12.7% in 1995 due to
the foregoing factors.

1994 COMPARED TO 1993

Net sales for 1994 were $84,142,000 which represents a 46.9% increase over
net sales of $57,264,000 in 1993. The predominant causes for the sales growth
were higher unit volumes and the continuing shift in product mix to higher
priced powder-free gloves in 1994 as compared to 1993.

Cost of goods sold increased 51.6% from $33,237,000 for 1993 to $50,376,000
for 1994. As a percentage of net sales cost of goods sold increased from 58.0%
in 1993 to 59.9% in 1994. This increase in cost of goods sold as a percentage of
net sales was principally attributable to increased raw material costs during
the 1994 period. Despite the increase in raw material costs, cost of goods sold
as a percentage of net sales was favorably impacted by improved production
efficiencies caused by increased volume. As a result of the above, gross profit
increased 40.5% from $24,027,000 in 1993 to $33,766,000 in 1994.

Selling expenses increased 46.1% from $7,999,000 in 1993 to $11,685,000 in
1994. As a percentage of net sales, selling expenses were comparable to the
prior year, decreasing slightly from 14.0% in 1993 to 13.9% in 1994.

Research and development expenses increased 145.5% from $398,000 in 1993 to
$977,000 in 1994. As a percentage of net sales, research and development
expenses increased from 0.7% in 1993 to 1.1% in 1994.

General and administrative expenses increased 41.5% from $2,561,000 in 1993
to $3,625,000 in 1994. As a percentage of net sales, however, these expenses

declined from 4.5% in 1993 to 4.3% in 1994. The principal items causing the
increase in dollars were compensation increases for existing employees, the
addition of administrative employees and increases in accounting and legal fees.

Income from operations increased 33.7% from $13,069,000 in 1993 to
$17,479,000 in 1994 and operating margins decreased from 22.8% in 1993 to 20.8%
in 1994.

Interest expense decreased substantially from $1,441,000 in 1993 to $17,000
in 1994. This decrease resulted from the repayment of debt with the proceeds of
the Company's initial public offering.

16
<PAGE>
The excess of other income over other expense increased from $237,000 in
1993 to $825,000 in 1994. The principal reasons for the increase were increased
scrap sales and interest income from the remaining proceeds from the Company's
initial public offering.

As a result of the tax free status at the Company's foreign manufacturing
operations, which initially expired at the end of September 1993, and net
operating loss carryforwards available in the United States, the income tax
provision recorded in 1993 was substantially less than statutory rates. During
June 1994, the Company's Malaysian manufacturing operations were granted five
additional years of tax free status retroactive to October 1, 1993. Net
operating loss carryforwards available in the United States were substantially
utilized during 1993. The income tax provision recorded in 1994 remains less
than statutory rates due to the foreign tax free status.

Net income increased 23.3% from $11,652,000 in 1993 to $14,367,000 in 1994
and the net income margin decreased from 20.3% in 1993 to 17.1% in 1994 due to
the foregoing factors.

LIQUIDITY AND CAPITAL RESOURCES

The Company's operations generated approximately $10,843,000, $11,868,000
and $6,494,000 of cash during 1995, 1994 and 1993, respectively, and
approximately $17,990,000 and $8,876,000 of cash during the nine months ended
September 30, 1996 and 1995, respectively. Further, during 1995, 1994, 1993, and
the nine months ended September 30, 1996 and 1995, the Company acquired capital
assets of approximately $16,461,000, $15,423,000, $10,241,000, $14,331,000 and
$12,536,000, respectively, substantially all of which were for the expansion of
the Company's foreign manufacturing operations. Included in the 1993 amount was
approximately $5,100,000 for the acquisition of an additional manufacturing
facility and equipment located adjacent to the Company's existing manufacturing
facilities in Ipoh, Malaysia. Included in the 1994 and 1995 amounts were
approximately $10,645,000 and $14,319,000, respectively, for the acquisition of
land and the construction of plant and equipment at the Company's manufacturing
facility in Hat Yai, Thailand.

The Company is currently constructing a new production line in its Thai
facility. The new production line, referred to by the Company as the 'Grand
Master,' 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. Production and capital costs are expected to
be reduced due to labor savings and higher unit production. Construction is
expected to be completed by early 1997 and is being funded with internally
generated cash. The Company plans to build two additional 'Grand Master' lines
by the end of 1997, construction of which is also being 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 to manufacture its disposable latex gloves.
The Company expects that the first construction phase of this new plant will be
completed in the first half of 1997 and that the final phase will be completed
within three years. This plant will allow the Company to integrate more fully
its manufacturing processes to gain better control over the quality, cost and
reliability of latex supplies.

The Company has a domestic two-year term credit facility for financing
general working capital needs, up to a maximum of $25,000,000 in borrowings. As
of September 30, 1996, 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, of which there were no outstanding balances as of September 30,
1996. These borrowings are collateralized by all assets of the subsidiaries and
are further supported by a guarantee of the Company.

INFLATION

The Company does not believe that the relatively moderate levels of
inflation which have been experienced in the United States in recent years have
had a significant effect on its net sales or its profitability.

<PAGE>
BUSINESS

The Company began operations in 1987 to take advantage of the opportunity
presented by the growing demand for high quality latex gloves which appeal to
the wearer by being safe, durable and comfortable to don and wear for extended
time periods. The Company built a manufacturing facility in Malaysia and began
producing latex gloves in 1988. In order to protect the wearer from the glove,
the Company developed manufacturing processes which produced gloves that were
lower in proteins and chemical allergens than those on the market at that time.
In August 1989, the Company was the first manufacturer to receive FDA clearance
to market non-sterile latex gloves labeled 'hypoallergenic' and 'lightly
powdered.' In November 1989, the Company received FDA clearance to market
non-sterile latex gloves labeled 'hypoallergenic' and 'powder-free;' these
gloves were introduced to the market early in 1990 and have become the Company's
largest selling and fastest growing product. (See '--Product Labeling' for a
discussion of the Company's use of the 'hypoallergenic' label.) In 1992, the
Company introduced its line of HypoClean gloves for high technology and
scientific uses; in 1994, the Company introduced a powder-free latex surgical
glove; and in 1995, the Company introduced a powder-free glove made of nitrile
synthetic latex designed for use in the high technology and scientific market.
During 1995, the Company received FDA clearance to label its powder-free gloves
as having the lowest protein level claim that the FDA allows for medical grade
gloves. The Company was the first glove manufacturer to receive clearance for
use of this claim for all of its powder-free glove products. In 1996, the
Company introduced 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.'

INDUSTRY

the Centers for Disease Control ('CDC') issued recommendations that anyone
coming into contact with bodily fluids should use 'universal precautions,'
including wearing gloves. Additionally, since 1991 Occupational Safety and
Health Administration ('OSHA') regulations have required that protective gloves
be worn when it can be reasonably anticipated that an employee will have contact
with blood, saliva or other potentially infectious substances.

The demand for latex gloves has also grown among users in the
semiconductor, biotechnology, pharmaceutical, general industrial manufacturing
and research segments of the high technology and scientific market.
Increasingly, the manufacturing processes in these industries take place in
cleanrooms and require gloves that minimize the amount of particles on their
surfaces to prevent contamination.

As people began wearing more latex gloves for longer periods, there was an
increase in allergic reactions to the water soluble proteins in latex and to the
chemical and other additives used in processing latex and manufacturing gloves.
In 1991, the FDA issued a medical alert warning health care professionals about
the increased incidences of allergic reactions to latex medical products by both
medical personnel and patients. In response to the increase in allergic
reactions to latex gloves, glove manufacturers attempted to reduce the amount of
powder, latex proteins and chemical allergens in their gloves, which may
contribute to the likelihood of

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allergic reaction. OSHA regulations in effect since 1991 require that all
employers provide gloves that are both hypoallergenic and powder-free for
employees who are allergic to the gloves otherwise provided. In 1995, the United
States acute care market for powder-free medical examination gloves was
approximately $100 million and had grown at a rate of approximately 35% from the
previous year.

STRATEGY

The Company's strategy for future growth includes the following principal
components:

Increase Domestic Market Penetration. The Company's strategy is to
increase its penetration of the overall domestic acute care medical examination
glove market, which had sales of $280 million in 1995, by emphasizing sales in
the powder-free segment of that market. In 1995, the powder-free segment grew
approximately 35% from 1994, compared to 3% growth in the overall domestic acute
care medical examination glove market. The Company estimates that in 1995 it had
a 47% share of the powder-free segment, compared to a 23% share of the overall
market.

Expand Customer Base. The Company intends to expand the customer base of
its products to include new categories of customers and international markets.

The Company's traditional marketing efforts have focused on the domestic acute
care market, which accounted for 64% of the Company's sales in 1995. The Company
plans to increase its marketing efforts in the expanding alternate care market,
such as the medical laboratory, primary care, and extended care segments, in the
dental market, and in the high technology and scientific market, which includes
the semiconductor, biotechnology, pharmaceutical, general industrial
manufacturing and research segments. The Company also plans to expand its sales
and marketing efforts in Europe.

Introduce New Products. The Company has a history of new product
development and innovation and has recently introduced the Safeskin 2000
powder-free surgical latex glove to the high value added $215 million annual
United States market for surgical gloves. The Company plans to continue to be an
innovator in glove manufacturing technology and intends to introduce new
products to the marketplace in the future. Specifically, the Company intends to
acquire or develop other medical and scientific gloves made of nitrile or other
synthetic latex and to continue to dedicate resources to research and
development of new healthcare and scientific product opportunities.

Emphasize Innovative Manufacturing. The Company intends to continue to
develop innovative manufacturing techniques and facilities to improve quality
and efficiency. The Company is currently constructing a new production line in
its Thai facility. The new production line, referred to by the Company as the
'Grand Master,' 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 the facility. The Company is also in the process of building
a latex concentrate plant in Thailand, which will supply latex concentrate to
the Company's factories in Thailand and Malaysia and will allow the Company to
integrate more fully its manufacturing processes. These two manufacturing
innovations will improve the reliability of the Company's raw material supplies
and the quality of the Company's gloves, decrease raw material costs, improve
operating efficiencies and profitability, expand capacity and reduce capital
costs.

PRODUCTS

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MEDICAL EXAMINATION GLOVES

o Medical Examination Gloves--Powder-Free. Safeskin powder-free medical
examination gloves were introduced to the market in 1990. Medical
examination gloves are designed to be used for medical uses where a
sterile glove is not required. These gloves are manufactured utilizing a
proprietary process in order to make them easy to don and remove without
the need for corn starch powder and are also processed to reduce further
both proteins in the latex and additives used in the manufacturing
process. The lack of powder makes the gloves more desirable to wearers
who may develop reactions to prolonged use of powdered gloves.
Additionally, powder-free gloves eliminate complications which could be
caused by powder entering open wounds, and they eliminate airborne powder
which may cause distress to respiratory and neo-natal patients. End users
typically pay between $.12 and $.24 per pair for powder-free medical
examination gloves.

o Medical Examination Gloves--Lightly Powdered. Safeskin lightly powdered
medical gloves were the Company's first product introduced to the market
in 1989. The lightly powdered glove is the Company's least expensive and
is designed to minimize the incidence of contact dermatitis. 'Lightly
Powdered' refers to the corn starch powder added to the inside of the
glove in order to make it easier to don and remove. Principal users are
hospital personnel. The glove is also used by other healthcare personnel
such as paramedics, nursing home workers and dental professionals. End
users typically pay between $.08 and $.16 per pair for lightly powdered
medical examination gloves.

SURGICAL GLOVES

o Safeskin 2000 Powder-Free Surgical Gloves. In 1996, the Company
introduced a powder-free, sterile surgical glove, which was developed
through the use of computer-aided design (CAD) and a new rapid
prototyping technique known as 'laminated object manufacturing.' Surgical
gloves are designed to meet the more rigorous demands of the operating
room environment. The Safeskin 2000 surgical glove offers superior
ergonomic characteristics which provide surgeons with greater freedom of
motion and increased dexterity, thereby resulting in less hand fatigue.
In addition to being sterile, the glove is non-pyrogenic, which
eliminates endotoxin (dead bacteria) contamination of surgical sites. The
CAD program revolutionized prototype and mold design processes, greatly
decreasing the time between product development and market launch, and
utilized data from a United States Army Anthropometric Survey on several
thousand hand measurements and spatial relationships for unique fit. End
users typically pay between $1.00 and $2.00 per pair for powder-free
surgical gloves.

o Surgical Gloves--Lightly Powdered. Safeskin lightly powdered sterile
surgical gloves were first introduced in 1994 to the European market.
These gloves offer many of the same benefits of the Company's powder-free

sterile surgical glove. End users in the European market typically pay
between $.45 and $.75 per pair for lightly powdered surgical gloves.

HIGH TECHNOLOGY AND SCIENTIFIC GLOVES

o HypoClean 100(Registered) Cleanroom Latex Gloves. Introduced in 1992,
HypoClean 100(Registered) cleanroom gloves are engineered and processed
to meet the stringent contamination control requirements of highly
critical cleanroom applications in the semiconductor and pharmaceutical
industries. These gloves are developed through an integrated
manufacturing process, the Oxyglazed System(Trademark). The Oxyglazed
System(Trademark) is a proprietary process that minimizes particulates,
reduces latex proteins, removes residual chemicals and enabled the
Company to offer the first non-cytotoxic (i.e., does not destroy cells)
glove to the high technology and scientific market. In addition,
HypoClean 100(Registered) gloves receive further ultra pure cleaning and
are packaged in a Class M3.5 (100) cleanroom for compatibility with all
critical environment applications. End users in the high technology and
scientific fields typically pay between $.32 and $.80 per pair for latex
gloves designed for a cleanroom environment.

o HypoClean(Registered) Powder-Free Latex Gloves. These hand specific and
ambidextrous gloves, which were introduced in 1992 and are developed
through the Oxyglazed System(Trademark), are sold to the high technology
and scientific market for applications where glove powders can interfere
with production yields and

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laboratory processes. End users in the high technology and scientific
fields typically pay between $.20 and $.60 per pair for powder-free
latex gloves.

o High Technology and Scientific Nitrile Gloves. The Company introduced
its nitrile synthetic latex gloves in its high technology and scientific
product line in the first half of 1996. These gloves are manufactured
from a synthetic material, thus eliminating natural rubber protein
antigens and offering a broader range of resistance to many of the
chemicals used in high technology and laboratory applications. End users
in the high technology and scientific fields typically pay between $.28
and $.70 per pair for powder-free synthetic latex gloves.

RESEARCH AND DEVELOPMENT

The Company's research and development strategy is to develop high quality
disposable gloves for the medical, dental, high technology and scientific
markets. In 1993, 1994, 1995 and the nine months ended September 30, 1996, the
Company's research and development expenses were approximately $398,000,
$977,000, $1,493,000 and $1,404,000, respectively. The Company expects these
costs to increase as the Company increases the number of new products it
introduces. The Company believes that the close interaction between its research
and development and manufacturing personnel allows for timely and effective
realization of the Company's new glove concepts.

PRODUCTS UNDER DEVELOPMENT

The Company has developed a medical examination glove made of nitrile
synthetic latex and has recently received clearance from the FDA to begin
selling the gloves in the United States. The Company is also currently
developing non-nitrile synthetic latex gloves for the medical, high technology
and scientific markets. In the future, the Company intends to introduce
specialty powder-free surgical gloves designed to offer additional benefits such
as increased barrier protection.

There can be no assurance that these new products will be successfully
developed, will be cleared by the FDA, will gain market acceptance or will
command pricing levels acceptable to the Company.

PRODUCT LABELING

All of the Company's latex medical gloves are labeled 'hypoallergenic' and
have passed the modified Draize test for hypoallergenicity. Gloves labeled
'hypoallergenic' are manufactured and processed with lower levels of chemicals.
These products are designed to minimize the likelihood of irritation or allergic
contact dermatitis. The Company's powder-free latex gloves have soluble and
antigenic protein levels which the Company believes are as low as the level in
any other latex gloves on the market. The Company has received 510(k) clearance
for its powder-free medical gloves with labeling concerning total protein
content. The product labeling which was cleared through the 510(k) process
included a claim for '50 micrograms or less of total water extractable protein
per gram,' the lowest protein content claim allowable by the FDA for latex
medical gloves.

There is a risk with all latex gloves that individuals sensitive to latex
proteins might have allergic reactions. The recent emergence of allergies to
latex protein have caused the FDA to question whether the use of the term
'hypoallergenic' is still appropriate. Therefore, in June 1996, the FDA proposed
issuing regulations prohibiting the use of a 'hypoallergenic' label on latex
gloves for use by healthcare personnel and requiring a labeling statement that
latex may cause allergic reactions. In the event such regulations are adopted by
the FDA, the Company will stop using the term 'hypoallergenic' on its packaging
and will comply fully with applicable labeling requirements. As a result, the
Company may need to rely on alternate labeling such as the low protein content
claim cleared through the 510(k) process. In addition, the Company may elect to
seek approval of alternative labeling with respect to the chemical qualities of
its medical gloves, but there can be no assurance such an alternative claim will
be permitted. The Company also currently uses the statement 'THIS PRODUCT
CONTAINS NATURAL RUBBER LATEX' on all of its packaging containing medical latex
gloves, as recommended by the FDA.

By establishing criteria for glove manufacturers to claim a low level of
chemical residue and a low protein content, the FDA will be raising industry
standards for glove manufacturing. The Company believes that its

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strength in manufacturing and research and development provide it with an
opportunity to further distinguish itself from its competitors by anticipating
and exceeding regulatory requirements.

SALES AND MARKETING

The Company's sales and marketing efforts focus principally on the acute
care market (hospital), alternate care market (primary care and extended care)
and dental market with respect to medical products and on the semiconductor,
biotechnology, pharmaceutical, general industrial manufacturing and research
market segments with respect to high technology and scientific products. In
1995, sales of latex medical gloves to acute care facilities represented
approximately 64% of the Company's total sales, while sales to alternate care
facilities represented approximately 28% of total sales. Sales by the Scientific
Division to the non-medical, high technology and scientific users represented
approximately 8% of total sales during 1995.

The Company's sales and marketing activities in the medical products area
are directed at the end users of medical glove products, such as hospitals,
group purchasing organizations, integrated healthcare networks and primary or
alternate care providers. The Company targets decision makers at these entities
and attempts to increase demand for the Company's medical glove products with
them and among their constituencies. Sales to end users are then made by a
medical products distributor who will purchase the Company's products, stock
inventory and resell and deliver the products to the healthcare provider or
other end user, typically pursuant to a contract between the Company and the
distributor specifying prices to be paid by the distributor for gloves sold to a
particular end user. The Company's gloves are currently used in over 3,400
hospitals, which constitute approximately 40% of all hospitals in the United
States.

Purchasing decisions by healthcare systems are customarily made by a
clinical staff committee which evaluates potential products based on quality
criteria, such as effectiveness, durability and likelihood to cause dermatitis,
as well as price and value. The Company's sales representatives work with
healthcare personnel to ensure that the Company's products are considered in the
process and that their comparative advantages are known by the committee. The
Company's sales staff also participates in healthcare trade shows to introduce
prospective customers to its products and to generate sales orders for the
distributors. The Company also participates in various workshops and educational
programs relating to healthcare worker protection and skin disorders in order to
promote the Company's products and educate the hospital and other personnel
utilizing the products. The Company continues to expand its healthcare marketing
efforts to other healthcare professionals, including physicians offices, nursing
homes, outpatient clinics, surgical centers, blood banks and other areas of the
alternate-care market. Recently, the Company hired a sales manager to focus on
the dental market and is in the process of recruiting sales representatives to
support the Company's efforts.

The Company's sales force for medical gloves currently comprises 44

persons, who are supervised by seven Regional Managers and the Director of
Sales, Medical Division. The sales representatives are paid salaries plus
performance-based commissions. Each sales representative possesses at least five
years of previous sales experience and is trained by the Company in the
dermatological and immunological aspects of latex. They are also specifically
trained to conduct continuing education programs for healthcare personnel to
educate them on the reactions possible from latex gloves. Under these education
programs, the Company has trained approximately 30,000 healthcare professionals.
The sales force maintains regular interaction with healthcare personnel, thereby
providing the Company with valuable feedback on market perception of the
Company's products as well as new developments within the industry.

The Company's recently formed national accounts department promotes sales
to and negotiates agreements with group purchasing organizations, integrated
delivery networks, large non-acute care customers and multi-facility high
technology and scientific customers. The national accounts department is also
responsible for assuring that all operating functions of the Company provide
high service levels to these national accounts and maintain relationships with
the purchasing agents and senior officers at each such account once a contract
is in place.

The Company's sales and marketing efforts are supported by the Company's
logistics team that delivers services to medical products distributors and end
users designed to assist them in their businesses. The Company believes that
these logistics services are one of its key competitive advantages and have
helped the Company become the preferred supplier for many of its customers.
Specifically, the Company's logistics personnel work

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with medical products distributors to reduce their order cycle time and
inventory levels and have succeeded in increasing product availability for the
Company's customers. In addition, the Company actively promotes the use of
electronic data interchange (EDI) technology, for applications such as order
entry and sales tracing, which produces savings for both the Company and its
distributors.

All domestic sales of the Company's medical products are made through
approximately 140 national, regional and local distributors, typically pursuant
to a contract between the Company and the distributor specifying prices to be
paid by the distributor for gloves sold to a particular end user. Three of the
largest distributors to the general hospital market, Owens & Minor, General
Medical, and Bergen Brunswig Medical currently carry the Company's product line
on a non-exclusive basis. Owens & Minor, General Medical and Bergen Brunswig
Medical distributed gloves accounting for approximately 30.3%, 29.8% and 8.2%,
respectively, of the Company's 1995 consolidated net sales. Medical products
distributors provide the Company with an extensive nationwide distribution
network. This enables the Company's products to reach hospitals, clinics,
physicians and dental offices located in metropolitan as well as rural areas.
The distributors do not, however, necessarily promote the sale of the Company's
products more aggressively than the other competing lines of latex gloves which
they carry.

During 1994, the Company entered into a three year contract with General
Medical governing sales of the Company's gloves through General Medical. The
contract also designated the Company as the exclusive manufacturer of General
Medical's private label gloves. Sales of gloves under the contract first occured
in 1995. In July 1996, the contract was amended to extend its term for an
additional two years and to name the Company as General Medical's preferred
glove manufacturer. In the amendment, General Medical also agreed to promote
sales of the Company's gloves and the private label gloves manufactured by the
Company. General Medical is a leading national medical/surgical products
distributor and is the nation's largest distributor to the alternate healthcare
market.

In December 1996, the Company entered into a five year contract, subject to
early termination, to supply its examination gloves to Premier Purchasing
Partners ('Premier'), a national group purchasing organization ('GPO') which is
the largest hospital alliance in the United States. The Company is one of two
examination glove suppliers selected by Premier. Premier comprises 1,800
healthcare facilities with 315,000 beds, approximately one-third of the U.S.
hospital marketplace. Beginning in the first quarter of 1997, the Company's
examination gloves will be made available to the Premier member hospitals and
their alternate care affiliates. Premier corporate guidelines direct members to
utilize contracted vendors for a minimum of 90 percent of their product
requirements.

In December 1996, the Company also entered into a three year contract,
subject to early termination, to supply its examination gloves to Catholic
Materials Management Alliance ('CMMA'), a GPO representing approximately 230
healthcare facilities with 40,000 beds in the United States. The contract
contemplates that the Company will be the sole contracted supplier of
examination gloves to CMMA members between March 1997 and February 2000.

The Scientific Division markets its products for a variety of cleanroom and
laboratory applications in the semiconductor, biotechnology, pharmaceutical,
general industrial manufacturing and research segments of the high technology
and scientific market. Like the medical segment, more workers in the high
technology and scientific market are beginning to use gloves. Gloves protect
both the worker and the products or processes in these industries. As of
November 25, 1996, the Company's high technology and scientific products were
sold by a network of over 80 distribution companies, including the two largest
U.S. laboratory/cleanroom distributors, Fisher Scientific and VWR Scientific
Products. The Company has a sales force of six Company sales representatives and
four independent manufacturing representatives actively supporting the
distribution network and end user customers. This sales force reports to the
Director of Sales, Scientific Division.

The Company established a sales and marketing office in The Netherlands in
1992. In 1994, the Company opened its international sales and marketing

headquarters in Germany, with a satellite office in the United Kingdom. The
Company also recruited and trained a sales organization in 1994 and continues to
expand its distribution network throughout the European Community (the 'EC').
The Company also sells its products in South America, Australia, and Japan.
During 1995, international sales represented approximately six percent of

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the Company's total sales. Foreign sales may be subject to certain additional
risks, including import and export license requirements, trade regulations,
tariffs and foreign medical regulations.

MANUFACTURING AND QUALITY CONTROL

The Company manufactures its products at two factories in Ipoh, Malaysia
and one factory in Hat Yai, Thailand. Factory locations are selected to be close
to the rubber tree plantations, which are the Company's source of natural latex,
as well as for favorable cost and availability of labor supply. Immediately
after daily harvest from rubber trees, raw natural rubber is sold by the
plantations to latex processing firms which concentrate the rubber to produce
latex concentrate and incorporate additives and preservatives to prevent
spoilage. Latex concentrate is then purchased by the Company as the raw material
for gloves.

The Company's facilities in Ipoh, Malaysia have received an ISO 9002
certification and the Company expects to receive ISO 9002 certification for the
new Thailand facility in 1997. ISO standards are internationally recognized
quality manufacturing standards established by the International Organization
for Standardization based in Geneva, Switzerland. To obtain its ISO
registration, the Company's factories were independently audited to ensure
compliance with the applicable standards, and to maintain registration, the
factories receive regular announced inspections by an independent certification
organization. The Company believes that the ISO 9002 registration makes it more
competitive in the marketplace as customers are increasingly recognizing the
standard as an indication of product quality.

The Company's Thai facility began producing gloves in the first quarter of
1995 and is capable of producing all types of the Company's latex examination
glove products. Processes have been added in order to allow the Company to
further reduce protein levels and chemical contact sensitizers to minimize
adverse reactions to natural rubber latex gloves and in anticipation of
potential FDA labeling regulations. See '--Product Labeling.' Current results
indicate that the new facility generates significant labor, raw materials, and
water processing savings and efficiencies as compared to its Malaysian
facilities. The Company has announced plans to move all of its remaining latex
examination glove production from its Malaysian facility to its Thai facility in
1997. See 'Recent Developments.' A new production line currently being
constructed at the Thai facility, referred to by the Company as the 'Grand
Master' and scheduled to be completed by early 1997, is expected to have the
capacity of approximately eight existing production lines in this facility and
lower production costs through higher operating efficiencies and lower labor
requirements. The Company plans to build two additional 'Grand Master' lines by

the end of 1997.

The gloves are manufactured on production machines which can run
continuously and which can be changed quickly to produce different types and
sizes of gloves. Quality control and testing are emphasized throughout the
Company's manufacturing process. Each batch of latex concentrate arriving at the
factory is tested to ensure that it meets Company quality standards. Each glove
is formed by dipping a porcelain mold into the latex compound. Water soluble
proteins which occur naturally in latex, and certain additives which are added
to latex when it is processed, are removed by means of extensive heating and
leaching processes. In both the Thai and Malaysian facilities, the Company has
begun automating the glove stripping process. In the past, the lack of rigidity
of newly-manufactured gloves required that they be removed manually from their
molds; new glove-stripping equipment streamlines the procedure by reducing
manpower requirements. Proteins and chemicals are minimized as a result of the
Company's proprietary latex formulations. In addition, the majority of the
Company's gloves are treated under a proprietary process to make them
powder-free and lower in protein. Throughout the manufacturing process the
Company's quality assurance team performs in-process testing of gloves for
thickness, tensile strength, tear resistance and water tightness. A sample of
every batch is retained for future analysis.

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The Company's HypoClean 100(Registered) gloves for use in cleanrooms are
processed and packaged in a Class M3.5 (100) cleanroom built into one of the
Company's Ipoh, Malaysia factories in 1993. Cleanrooms are classified by the
level and size distribution of allowed airborne particles per given volume of
air and are increasingly required for the manufacture of sensitive
microelectronic components. In a Class M3.5 (100) cleanroom, no more than 100
airborne particles per cubic foot of air are allowed.

Although the Company has never experienced an interruption in the
availability of latex due to natural phenomena or transportation problems or by
a factory shutdown resulting from fire, power outage, employee strike or other
cause, there can be no assurance that the Company's production of gloves will
not be adversely affected by such events.

COMPETITION

The Company faces substantial competition from a number of manufacturers of
latex gloves. The leading competitors in the medical glove product line are

Allegiance (a spin-off of Baxter Healthcare), Maxxim Medical, Ansell-Perry, and
Johnson & Johnson. The Company believes that Allegiance is the leading
competitor in the high technology and scientific glove market. There are also a
number of other competitors which are engaged in manufacturing or distributing
high technology and scientific gloves. Many of the Company's competitors,
particularly those competitors which are large medical and pharmaceutical and
hospital supply companies, have substantially greater financial, manufacturing,
marketing and technical resources than the Company. Synthetic latex glove
manufacturers also sell products in the medical and non-medical glove market.
Synthetic latex gloves are generally more expensive than natural latex gloves
and do not, in the Company's opinion, present a significant threat to the
Company's natural rubber latex products at this time.

The Company believes the primary competitive factors within its markets are
product quality, durability, reliability and consistency, clinical value, ease
of product use, access to distribution channels, price and the availability of
prompt delivery. Failure of the Company to continue to distinguish its products
on the basis of quality, reliability and value could have a material adverse
effect on the Company's business and results of operations. Furthermore, there
can be no assurance that the Company's competitors or others will not develop
products, manufacturing processes or new technologies which would be more cost
effective or more efficient than those of the Company or that the Company's
gloves will not be rendered obsolete or uncompetitive. Such competition could
have a material adverse effect on the Company's business, financial condition
and results of operations.

GOVERNMENT REGULATION

The Company's products are subject to regulation by numerous governmental
authorities in the United States and other countries, particularly as to safety
and efficacy, and adherence to the Good Manufacturing Practices ('GMP')
regulations for medical devices. In the United States, examination and surgical
gloves are classified as Class I medical device products regulated by the FDA.
The Federal Food, Drug, and Cosmetic Act (the 'FFD&C Act') and other federal
statutes and regulations govern or influence the testing, manufacture, safety,
labeling, storage, record-keeping, approval, advertising and promotion of Class
I devices. Noncompliance with the FFD&C Act or regulations promulgated
thereunder can result in administrative enforcement, such as warning letters,
import alerts and administrative detention, or in civil penalties, product bans,
defect notifications, mandatory field corrections, seizures, recalls,
injunctions and criminal prosecution. Periodically the FDA inspects shipments of
medical gloves as they arrive in United States ports. The time period during
which the tests are conducted and the FDA reviews the results may cause delays
in delivery and thus can result in a loss or delay in recognition of income by
the Company.

Latex medical and surgical gloves must be submitted to the FDA for
clearance to market by a pre-market notification filing under Section 510(k) of
the FFD&C Act. An application is made for a particular use or performance claim
for each type of glove produced by a specific manufacturer. Applications under
the 510(k) procedure must demonstrate substantial equivalence to a legally
marketed device. Additional data requirements apply to gloves such as surgical

gloves, which are sterile. Applicants must defer marketing until a written order
is issued by the FDA finding the firm's device substantially equivalent to a
legally marketed device. This notice may be issued within 90 days of submission,
but may take substantially longer. The FDA, however, may

25
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determine that the proposed device is not substantially equivalent, or the
agency may require the Company to submit further information, such as additional
test data, before it is able to make a substantial equivalence determination.
Such an adverse determination or request for additional information could have
the effect of materially delaying the commencement of marketing. As part of the
substantial equivalence determination, the Company must demonstrate that the
glove complies with the American Society of Testing and Materials testing
standards relating to physical specifications for the product and must pass the
FDA 'leakage test.' In addition, the FDA may inspect the manufacturing
facilities before issuing a notice of substantial equivalence and may delay or
decline to issue such notice.

The Company has obtained 510(k) clearance for each type of currently
marketed glove which requires clearance. The Company has not experienced any
substantial difficulty in obtaining 510(k) clearances in the past. If the
Company makes any changes to a type of glove previously cleared by the FDA that
could significantly affect its safety or effectiveness (such as significant
changes in the manufacturing process), a new 510(k) submission will be required.

The Company is subject to periodic inspection by the FDA for compliance
with GMP regulations. Under GMP regulations, the Company is subject to
significant procedural and documentation requirements with respect to
manufacturing, packaging, storage and control activities. The Company also may
be subject to inspection by foreign regulatory authorities to determine
compliance with comparable standards. Beginning in June 1997, the Company will
have to comply with the FDA's recently promulgated Quality System Regulation,
which will replace the GMP regulations for medical devices and will incorporate
preproduction design and development controls and achieve consistency with
quality system requirements worldwide. Therefore, the Company must continue to
expend time, monies and efforts in the areas of production and quality control
to ensure full technical compliance with these standards.

The Company must also comply with various FDA labeling and post-market
reporting requirements. Failure to comply with applicable regulatory
requirements can result in administrative enforcement, such as warning letters,
import alerts and administrative detention, or in product bans, field
corrections, seizures, recalls, injunctions and criminal prosecutions. Changes
in existing requirements or adoption of new requirements could adversely affect
the ability of the Company to comply with regulatory requirements. Failure to
comply with regulatory requirements could have a material adverse effect on the
Company's business, financial condition and results of operations.

Whether or not FDA clearance is obtained for a new product, approval or
clearance of a product by regulatory authorities in foreign countries may be
required prior to the commencement of commercial sales of the product in such

countries. The requirements governing product approvals or clearances vary
widely from country to country, and the time required for approval may be longer
or shorter than that required for FDA approval.

The Company must meet various regulatory requirements for the sale and
distribution of its product throughout the EC. The Company currently meets all
such regulatory requirements, including registration with the appropriate
notified bodies, which register companies for the sale of products throughout
the EC. In order to continue selling its products within the EC following June
14, 1998, the Company will be required to comply with the EC's Medical Devices
Directive.

Although the Company's customers do not bill third-party reimbursement
sources separately for purchases of the Company's gloves, the Company's ability
to sell its latex medical gloves profitably may depend in part on the
reimbursement policies and regulations of government health administration
authorities, private health insurers and other organizations. Such third-party
payors are increasingly challenging the price of medical products and services.
Additionally, reform measures, if adopted, could adversely affect the pricing of
the Company's medical gloves.

In addition to the statutes and regulations described above, the Company is
also subject to Malaysian and Thai occupational, health and environmental laws
and regulations.

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LEGAL PROCEEDINGS

Since May 1995, 41 product liability lawsuits seeking monetary damages, in
most cases of an unspecified amount, have been filed in federal and state courts
against the Company, and other manufacturers of latex gloves, alleging injuries
ranging from dermatitis to severe allergic reactions caused by the residual
chemicals or latex proteins in gloves worn by medical workers while performing
their duties. The Company has referred the defense of these lawsuits to its
insurance carriers. While the Company maintains levels of insurance coverage
which it believes will be adequate to cover the costs of the legal defense of
these suits, there can be no assurance that the Company's insurance will be
sufficient to meet any damages for which the Company may be found liable in the
existing lawsuits, which are still in relatively early stages of discovery, or
any others that may be filed in the future, or that the outcome of such suits
will not adversely affect the Company's results of operations or financial
condition.

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

PRODUCT LIABILITY AND INSURANCE

Participants in the medical supply industry are subject to lawsuits
alleging product liability, many of which involve significant damage claims and
defense costs. The Company currently has in force product liability insurance
policies. The Company's insurance policies are on a 'claims made' basis and are
subject to annual renewal. A successful claim against the Company in excess of
the Company's insurance coverage could have a material adverse effect on the
Company's results of operations or financial condition. Claims made against the
Company, regardless of their merit, also could have a material adverse effect on
the Company's reputation. There is no assurance that the coverage limits of the
Company's insurance policies will be adequate. While the Company has been able
to obtain product liability insurance in the past, such insurance varies in
cost, is difficult to obtain and may not be available in the future on
acceptable terms or at all.

EMPLOYEES

As of November 15, 1996, the Company had approximately 4,200 employees, of
whom approximately 4,050 were employed in Malaysia and Thailand. The Malaysian
factory workers are represented by a company union which has entered into a
collective bargaining agreement with the Company's Malaysian subsidiary. The
agreement expires on September 30, 1997. The Company considers its relations
with its employees to be good.

FACILITIES

The Company owns two manufacturing facilities located in Ipoh, Malaysia,
totaling approximately 300,000 square feet, and a latex concentrate
manufacturing and processing plant located in Seremban, Malaysia, comprised of
approximately 30,000 square feet. The Company leases the land where its
facilities are located under long-term leaseholds from the state government
which have expiration dates ranging from the year 2063 to the year 2072. Any
transfer of a land leasehold by the Company requires the prior approval of the
state. The Company has announced plans to close one of the Malaysian facilities
in 1997. See 'Recent Developments.'

The Company also owns a manufacturing facility in Hat Yai, Thailand
totaling approximately 300,000 square feet. The Company owns the approximately
46 acres of land on which the facility is located.

In the United States, the Company leases warehouse space in Hanover,
Maryland and San Diego, California, of approximately 40,000 square feet and
45,000 square feet, respectively. The Company also utilizes the services of a
logistical management company which provides warehouse services in Des Plaines,
Illinois. The Company leases approximately 42,000 square feet of office space in
San Diego, California for its headquarters and approximately 1,755 square feet
of additional office space in Boca Raton, Florida. The Company also leases
approximately 2,746 square feet of space in San Diego, California for its
research and development laboratory.

<PAGE>
MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information with respect to the
executive officers and directors of the Company:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------- --- ----------------------------------------------------------
<S> <C> <C>
Irving Jaffe 78 Chairman Emeritus and Director
Richard Jaffe(1) 43 Chairman, President, Chief Executive Officer and Director
Neil K. Braverman(1) 57 Co-Chairman and Director
David L. Morash 51 Executive Vice President and Chief Financial Officer
Lee Chee Ming 48 Managing Director, Southeast Asian Operations
John G. Brewer 45 Vice President, Logistics and Information Technology
Craig C. Cook 48 Vice President, Sales
Seth S. Goldman 39 Vice President, Finance, Controller and Secretary
Jeffrey A. Martin 45 Vice President, Marketing and Business Development
William C. Miller 59 Vice President and General Counsel
Egon Thiele 60 Managing Director, Europe
Wava Truscott, Ph.D. 46 Vice President, Scientific Affairs
Richard J. Witmeyer, Ph.D. 48 Vice President, Technical Affairs
Cam L. Garner (2)(3) 48 Director
Howard L. Shecter(1)(2) 53 Director
Joseph Stemler(2)(3) 65 Director
</TABLE>

- ------------------
(1) Member of Executive Committee.
(2) Member of Audit Committee.
(3) Member of Compensation Committee.

Mr. Irving Jaffe became Chairman Emeritus of the Company in May 1996 and
has served as a director of the Company since April 1988. He served as the
Chairman of the Board between August 1988 and May 1996 and as Chief Executive
Officer of the Company from August 1988 through March 1993. Since 1986, he has
been the Senior Managing Partner of the Jaffe Family Partnership, a family
investments partnership. From 1977 through 1985, Mr. Jaffe was the Chairman of
the Board and Chief Executive Officer of Nutri Foods International, Inc., a
manufacturer of frozen desserts. In 1985, Nutri Foods International, Inc. was
sold to The Coca-Cola Company. Mr. Jaffe attended New York University. Mr. Jaffe
is the father of Richard Jaffe.

Mr. Richard Jaffe became the Chairman of the Board, President and Chief
Executive Officer of the Company in May 1996 and has served as a director of the
Company since April 1988. Between March 1993 and May 1996, he was the Vice
Chairman of the Board and Co-Chief Executive Officer of the Company. Mr. Jaffe
served as the President of Safeskin Corporation (Malaysia) Sdn. Bhd. and Chief

Operating Officer of the Company between April 1988 and March 1993. In 1977, Mr.
Jaffe founded Nutri Foods International, Inc., a manufacturer of frozen
desserts. He served as President of Nutri Foods International, Inc. until
December 1987. Nutri Foods International, Inc. was sold to The Coca-Cola Company
in 1985. Mr. Jaffe served on the executive operating committee of the Foods
Division of The Coca-Cola Company from 1985 through 1987. Mr. Jaffe has been a
Managing General Partner of the Jaffe Family Partnership since 1985. Mr. Jaffe
holds a B.S. degree in industrial and labor relations from Cornell University.
Mr. Jaffe is the son of Irving Jaffe.

Mr. Braverman became Co-Chairman of the Company in May 1996 and has served
as a director since he founded the Company in 1985. He served as the Co-Chief
Executive Officer of the Company between March 1993 and May 1996 and as the
President of the Company between 1985 and May 1996. At various times during the
period from 1972 through 1985, Mr. Braverman was President of Reserve Energy
Corporation, an oil drilling

28
<PAGE>

company, and was President of Paramount Oil Co., a manufacturer of lubricating
oils. From 1964 to 1972, he was President and Chief Executive Officer of Flair,
Inc., a consumer products manufacturer in Hong Kong. In 1968, Flair, Inc. was
sold to U.S. Industries. Mr. Braverman holds a B.S. degree in industrial
management and engineering from the Georgia Institute of Technology. Effective
January 1, 1997, Mr. Braverman will resign as Co-Chairman and enter into a
one-year consulting arrangement with the Company. See 'Recent Developments.'

Mr. Morash has been the Executive Vice President, Chief Financial Officer
of the Company since August 1994. Formerly, as Managing Director, he helped
found Bedford Management Group, Inc. in 1992, a twenty member consulting firm
specializing in advising clients on key financial, marketing and human resource
issues. As Executive Vice President, Chief Financial Officer, he was part of an
investment and management team brought in to turn around H.B.S.A. Industries in
1990, a department store fixture and construction firm. His prior experience
includes the positions of Vice President, Treasurer of Merrill Lynch Realty, a
publicly traded residential real estate and relocation management firm, and Vice
President, Business Investment of Primerica Corporation (now Travelers Group
Inc.), a diversified financial services company. Mr. Morash holds a B.A. in
economics from Columbia College and an M.B.A. in finance from Columbia Graduate
School of Business.

Mr. Lee has been the Managing Director, Southeast Asian Operations since
November 1996. From 1988 to November 1996, Mr. Lee served as the Managing
Director of Safeskin Corporation (Malaysia) Sdn. Bhd., the Company's
manufacturing subsidiary. From 1985 through 1988, Mr. Lee was the Managing
Director of Dynacraft (Malaysia) Sdn. Bhd., a subsidiary of National
Semiconductor Corporation. Mr. Lee holds an M.S. degree in management from the
Asian Institute of Management, The Philippines.

Mr. Brewer was named Vice President, Logistics and Information Technology
in October 1996 and served as Vice President, Logistics between April 1996 and
October 1996. Between February 1994 and April 1996, Mr. Brewer served as the

Chief Financial Officer of The Masters Alliance, Inc., a remodeling and property
management company. He served as a Supply Chain Manager for Nestle USA, Inc., a
conglomerate, between August 1991 and February 1994. Mr. Brewer holds a B.S. in
accounting from the University of Tennessee.

Mr. Cook became Vice President, Sales in October 1996. Between April 1995
and October 1996, Mr. Cook served as the Company's Vice President, Scientific
Division. He served as the Vice President, Sales, Scientific Division from
November 1994 to April 1995 and as the Regional Vice President, Medical Sales,
Western Region between November 1993 and November 1994. Mr. Cook joined the
Company in July 1992 as the Western Regional Medical Sales Manager and served in
such capacity until November 1993. Between April 1991 and July 1992, Mr. Cook
served as the President of Secure Products Corp., a medical disposables
business. Mr. Cook holds a B.S. degree in biology and chemistry from the
University of Southern California.

Mr. Goldman has served as Vice President of Finance since April 1996, as
Secretary since May 1996, and as Controller of the Company since August 1991.
Mr. Goldman was previously employed by Coopers & Lybrand L.L.P. and became a
certified public accountant in 1980. He holds a B.B.A. degree in accounting from
Florida Atlantic University.

Mr. Martin has served as Vice President, Marketing and Business Development
since October 1996 and served as Vice President, Marketing between March 1994
and October 1996. He was Southeast Regional Sales Manager for the Company from
April 1993 through August 1993 when he became Regional Vice President, Sales,
Southeast Region. From 1986 through 1993, Mr. Martin served in a variety of
management and sales positions with the healthcare division of James River
Corporation and the successor of that division, Regent Hospital Products Ltd.
Mr. Martin holds a B.S. degree in engineering from the Georgia Institute of
Technology.

Mr. Miller became Vice President and General Counsel of the Company in
September 1996. From September 1995 to September 1996 he served as Vice
President and General Counsel of Gen-Probe Incorporated, a manufacturer of
medical diagnostic tests. He served in the same positions for Collagen
Corporation, a publicly traded biomedical device company, between October 1992
and September 1995. Mr. Miller was the Vice President, General Counsel and
Secretary of Boehringer Mannheim Corporation, a manufacturer of medical supplies
and instruments, between 1985 and October 1992. He holds a B.A. degree in
journalism from Washington and Lee University, an LL.B. from Washington and Lee
Law School, an LL.M. in comparative law from New York University and has
completed the Advanced Management Program at Harvard Business School.

29
<PAGE>
Mr. Thiele became the Company's Managing Director, Europe in June 1994.
Between August 1991 and June 1994, he served as the Regional Director, Europe
for Ansell Medical, a medical device manufacturer.

Dr. Truscott became Vice President, Scientific Affairs in September 1993.
Between June 1993 and September 1993, she served as the Company's Director of
Scientific Affairs. She served as the Director of Regulatory Affairs, Pharmaseal

Division, for Baxter Corporation, a manufacturer of medical devices, between
January 1991 and July 1993. Dr. Truscott holds a B.S. in botany from Brigham
Young University, an M.B.A. from the University of La Verne and a Ph.D. in
comparative pathology from the University of California at Davis.

Dr. Witmeyer became Vice President, Technical Affairs in June 1995. In May
1995, he served as the Executive Vice President and Chief Operating Officer of
BioBarrier, Inc., a manufacturer of examination gloves. Between September 1992
and April 1995, he was the Vice President of Technical Affairs for Standard
Textile Company, Inc., a healthcare textile company. Dr. Witmeyer served as the
Vice President, Scientific Affairs, for Regent Hospital Products, Ltd./London
International U.S. Holdings between April 1990 and September 1992. He holds a
B.S. and an M.S. degree in chemical engineering from Lehigh University, an
M.B.A. from Georgia State University and a Ph.D. in materials engineering from
North Carolina State University.

Mr. Garner became a director of the Company in June 1996. He has served as
the Chairman of Dura Pharmaceuticals, Inc., a publicly held pharmaceutical
company, since December 1995 and as the President and Chief Executive Officer
since May 1990. Between October 1989 and May 1990, he served as the Executive
Vice President of Dura Pharmaceuticals, Inc. From November 1987 to June 1989, he
served as the President of Syntro Corp., a biotechnology company. From October
1983 to October 1987, Mr. Garner was the Senior Vice President of Sales and
Marketing at Hybritech, Inc., a pharmaceutical company. Mr. Garner is currently
a director of Dura Pharmaceuticals, Inc., Houghton Pharmaceuticals, Inc. and
Spiros Development Corporation. He holds a B.A. degree in biology from Virginia
Wesleyan College and an M.B.A. from Baldwin-Wallace College.

Mr. Shecter became a director of the Company in June 1993. He has been a
partner since 1973 in the law firm of Morgan, Lewis & Bockius LLP. Mr. Shecter
served as the managing partner of Morgan, Lewis & Bockius LLP from 1979 to 1983
and was the Chairman of the Executive Committee of that firm in 1985. Mr.
Shecter holds an A.B. degree in government from Harvard College and a J.D.
degree from the University of Pennsylvania Law School.

Mr. Stemler became a director of the Company in June 1995. He has been the
President, Chairman and Chief Executive Officer of Scholle Corporation, an
aseptic packaging company, since January 1996. Mr. Stemler served as President,
Chief Executive Officer and Chairman of the Board of Directors of La Jolla
Pharmaceutical Company from its formation in 1989 to January 1996. From 1985 to
1989, Mr. Stemler served as President and Chairman of Quidel Corporation (the
predecessor of La Jolla Pharmaceutical Company). From 1978 and 1985, he served
as President of Bentley Laboratories and then as President of American Hospital
Supply Corporation's Bentley subsidiary. Mr. Stemler serves as a director of La
Jolla Pharmaceutical Company and Sunrise Medical Inc., a publicly held
manufacturer and provider of medical products used in the rehabilitation and
recovery phases of patient care. He is an engineering graduate of Illinois
Institute of Technology and holds advanced degrees in engineering and business
administration.
------------------------

All directors hold office until the next annual meeting of shareholders.
Officers are elected annually by the Board of Directors and serve at the

discretion of the directors.

The Executive Committee of the Board of Directors has all the authority
held by the full Board of Directors, except with respect to certain matters
reserved to the Board of Directors by law. All matters to be approved by the
Board of Directors, except such reserved matters, must first be approved by the
Executive Committee.

The Board of Directors has also established an Audit Committee and a
Compensation Committee. The Audit Committee reviews the scope and results of the
audit and other services performed by the Company's independent accountants. The
Compensation Committee sets compensation to be paid to executive officers and
other key employees and is charged with the administration of the Company's
Equity Compensation Plan.

<PAGE>
PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth information, as of September 30, 1996, with
respect to the beneficial ownership of shares of the Common Stock by (i) each
person known to the Company to own beneficially more than 5% of the aggregate
shares of Common Stock outstanding, (ii) each director and nominee for election
as a director, (iii) each of the five most highly compensated executive officers
and (iv) all directors and executive officers of the Company as a group. On
September 30, 1996, there were 25,708,448 shares of Common Stock outstanding.
Unless indicated, each of the persons in the table below has sole voting power
and sole dispositive power as to all of the shares shown as beneficially owned
by them.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO OFFERING NUMBER OWNED AFTER OFFERING
----------------------- OF SHARES -----------------------
NAME NUMBER PERCENT OFFERED NUMBER PERCENT
- ----------------------------------- ---------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Neil K. Braverman (1) ............. 4,176,120 16.01% 2,000,000 2,176,120 8.35%
1181 S. Rogers Circle
Suite 14
Boca Raton, Florida 33487

Irving Jaffe (2)(3) ............... 2,349,066 9.14% 1,000,000 1,349,066 5.25%
12671 High Bluff Drive
San Diego, California 92130

Richard Jaffe (3)(4) .............. 1,693,544 6.52% 200,000 1,493,544 5.75%
12671 High Bluff Drive
San Diego, California 92130

Eleanor Jaffe (3)(5) .............. 2,349,066 9.14% -- 1,349,066 5.25%
12671 High Bluff Drive
San Diego, California 92130

Ann Jaffe (6) ..................... 1,693,544 6.52% -- 1,493,544 5.75%
12671 High Bluff Drive
San Diego, California 92130

Jeanne D. Braverman (7) ........... 4,176,120 16.01% -- 2,176,120 8.35%
1181 S. Rogers Circle
Suite 14
Boca Raton, Florida 33487

TCW Group, Inc. (8) ............... 1,777,400 6.91% -- 1,777,400 6.91%
865 South Figueroa Street
Los Angeles, California 90017

FMR Corp. (8) ..................... 1,589,800 6.18% -- 1,589,800 6.18%
82 Devonshire Street
Boston, Massachusetts 02109

Travelers Group Inc. (8) .......... 1,337,386 5.20% -- 1,337,386 5.20%
388 Greenwich Street
New York, New York 10013

Cam L. Garner ..................... 2,000 * -- 2,000 *

Howard L. Shecter (9) ............. 20,000 * -- 20,000 *

Joseph Stemler (9) ................ 8,000 * -- 8,000 *

Jeffrey A. Martin (9) ............. 8,000 * -- 8,000 *

Lee Chee Ming ..................... 121,708 * -- 121,708 *

David L. Morash (9) ............... 20,000 * -- 20,000 *

All directors and executive
officers as a group
(16 persons)..................... 8,443,838 31.92% 3,200,000 5,243,838 19.82%
</TABLE>

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

* Does not exceed one percent.

(1) Includes 2,450,600 shares held by the Braverman Family Partnership, Ltd., a
family limited partnership of which Neil K. Braverman is the sole
shareholder of the general partner and a limited partner, 348,612 shares
held by Jeanne D. Braverman, Mr. Braverman's spouse, 977,176 shares held by
trusts for which Ms. Braverman serves as trustee, 31,732

(Footnotes continued on next page)

31
<PAGE>
(Footnotes continued from previous page)

shares held in trust for the benefit of Mr. Braverman and 368,000 shares
subject to exercisable options. In the event the Underwriters exercise their
over-allotment option in full, Mr. Braverman will sell 180,000 shares
pursuant to such option.

(2) Includes 870,930 shares held by Eleanor Jaffe, Irving Jaffe's spouse, and
1,167,104 shares held in trust for his benefit. In the event the
Underwriters exercise their over-allotment option in full, Mr. Jaffe will
sell 100,000 shares pursuant to such option.

(3) Includes the following number of shares for the following shareholders which

are held of record by Stanley Priskie or Stanley and Vilma Priskie: Irving
Jaffe--185,544; Richard Jaffe--185,544; and Eleanor Jaffe--50,488. The
Jaffes have advised the Company that an aggregate of 528,862 shares
(including the 421,576 shares referred to above) are beneficially owned by
the Jaffes and are held of record by the Priskies in nominee capacity. The
Priskies have advised the Company that they claim record and beneficial
ownership of the shares and dispute the Jaffes' claim. In 1993, the Jaffes
commenced a lawsuit against Stanley and Vilma Priskie in the Circuit Court
of Dade County, Florida, seeking, inter alia, the return of the disputed
shares. The matter has not yet been resolved.

(4) Includes 1,228,000 shares held by R and A Family Partnership, L.P., whose
general partner is a revocable family trust of which Richard Jaffe is a
trustee and beneficiary and 280,000 shares subject to exercisable option. In
the event the Underwriters exercise their over-allotment option in full, Mr.
Jaffe will sell 200,000 shares pursuant to such option.

(5) Includes 75,000 shares held by Irving Jaffe, Eleanor Jaffe's spouse,
1,167,104 shares held in trust for the benefit of Irving Jaffe, and 185,544
shares to which Irving Jaffe claims beneficial ownership, as further
described in note (3) above.

(6) Includes 1,228,000 shares held by R and A Family Partnership, L.P., whose
general partner is a revocable family trust of which Ann Jaffe is a trustee
and beneficiary,185,544 shares to which Richard Jaffe claims beneficial
ownership, as further described in note (3) above, and 280,000 shares
subject to exercisable options beneficially owned by Richard Jaffe.

(7) Includes 2,450,600 shares held by the Braverman Family Partnership, Ltd.
(see note 1), 31,732 shares held in trust for the benefit of Neil K.
Braverman, 368,000 shares subject to Mr. Braverman's exercisable options and
977,176 shares held by trust for which Mr. Braverman serves as trustee.

(8) As reported on Form 13F-E filed with the Securities and Exchange Commission
on November 15, 1996 in the case of FMR Corp., and as reported on Form 13F
filed with the Securities and Exchange Commission on October 28, 1996 in the
case of TCW Group, Inc. and on November 13, 1996 in the case of Travelers
Group Inc.

(9) Includes shares beneficially owned under currently exercisable options as
follows: David L. Morash--20,000; Jeffrey A. Martin--8,000; Howard L.
Shecter--20,000; Joseph Stemler--8,000.

<PAGE>
UNDERWRITING

Under the terms and subject to the conditions contained in the Underwriting
Agreement dated the date hereof, each Underwriter named below has severally
agreed to purchase, and the Selling Shareholders have agreed to sell to such
Underwriter, shares of Common Stock which equal the number of shares set forth
opposite the name of such Underwriter below.

<TABLE>
<CAPTION>
NUMBER OF
SHARES
----------
<S> <C>
Smith Barney Inc................................................................
Donaldson, Lufkin & Jenrette Securities Corporation.............................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.......................................................

----------
Total........................................................................... 3,200,000
----------
----------
</TABLE>

The Underwriters are obligated to take and pay for all shares of Common
Stock offered hereby (other than those covered by the over-allotment option
described below) if any such shares are taken.

The Underwriters, for whom Smith Barney Inc., Donaldson, Lufkin & Jenrette
Securities Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated
are acting as Representatives, propose initially to offer part of the shares of
Common Stock directly to the public at the public offering price set forth on
the cover page hereof and part of the shares to certain dealers at a price that
represents a concession not in excess of $ per share under the public
offering price. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of $ per share to certain other dealers. The
Representatives have advised the Company that the Underwriters do not intend to
confirm sales to any account over which they exercise discretionary authority.

The Selling Shareholders have granted to the Underwriters an option,
exercisable for 30 days from the date of this Prospectus, to purchase up to an
aggregate of 480,000 additional shares of Common Stock at the public offering
price set forth on the cover page hereof less underwriting discounts and
commissions. The Underwriters may exercise such option to purchase additional
shares solely for the purpose of covering over-allotments, if any, incurred in
connection with the sale of the shares offered hereby. To the extent such option

is exercised, each Underwriter will become obligated, subject to certain
conditions, to purchase approximately the same percentage of such additional
shares as the number set forth next to such Underwriter's name in the preceding
table bears to the total number of shares in such table.

In connection with this offering, the Underwriters and selling group
members (if any) or their respective affiliates who are qualifying market makers
may engage in passive market making transactions in the Common Stock on the
Nasdaq National Market in accordance with Rule 10b-6A under the Securities
Exchange Act of 1934, as amended (the 'Exchange Act'), during the two business
day period before commencement of offers or sales of the Common Stock offered
hereby. The passive market making transactions must comply with applicable
volume and price limits and be identified as such. In general, a passive market
maker may display its bid at a price not in excess of the highest independent
bid for such security. If all independent bids are lowered below the passive
market maker's bid, however, such bid must then be lowered when certain purchase
limits are exceeded. Passive market making may stabilize the market price of the
Common Stock at a level above that which might otherwise prevail and, if
commenced, may be discontinued at any time.

33
<PAGE>
The Company and the Selling Shareholders and the Underwriters have agreed
to indemnify each other against certain liabilities, including liabilities under
the Securities Act.

All of the Company's executive officers and directors, including the
Selling Shareholders, and certain other shareholders have agreed that they will
not, without the prior consent of Smith Barney Inc., directly or indirectly
offer to sell, sell or otherwise dispose of any shares of Common Stock of the
Company owned by them for a period of 90 days after the date of this Prospectus.
In addition, the Company has agreed that for a period of 90 days after the date
of this Prospectus, it will not, without the prior written consent of Smith
Barney Inc., directly or indirectly offer to sell, issue, distribute or
otherwise dispose of any equity securities or securities convertible into or
exchangeable for equity securities or any options, rights or warrants with
respect to any equity securities except for the issuance of the shares of Common
Stock offered hereby, the issuance of shares of Common Stock upon the exercise
of outstanding options and the issuances of options and shares of Common Stock
underlying options granted pursuant to the Company's Equity Compensation Plan.

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company and the Selling Shareholders by Morgan, Lewis & Bockius LLP, New York,
New York. Howard L. Shecter, a partner of Morgan, Lewis & Bockius LLP and a
director of the Company, holds, as of the date of this Prospectus, options to
purchase 46,000 shares of Common Stock of the Company, of which options to
purchase 14,000 shares are currently exercisable. The validity of the Common
Stock will be passed upon for the Underwriters by Dewey Ballantine, New York,
New York. As to matters of Florida law, Dewey Ballantine will rely on the
opinion of Morgan, Lewis & Bockius LLP.

EXPERTS

The consolidated balance sheets as of December 31, 1994 and 1995 and the
consolidated statements of operations, cash flows and shareholders' equity for
each of the three years in the period ended December 31, 1995, included in the
Company's 1995 Annual Report on Form 10-K and incorporated by reference in this
Prospectus, have been incorporated herein in reliance on the report of Coopers &
Lybrand L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing.

AVAILABLE INFORMATION

The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the 'Exchange Act'), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the 'Commission'). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities of the Commission, Judiciary Plaza,
450 Fifth Street, N.W., Washington, DC 20549, as well as at the following
Commission Regional Offices: Seven World Trade Center, 13th Floor, New York, NY
10048; and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies can be obtained from the Commission by mail at
prescribed rates. Requests should be directed to the Commission's Public
Reference Branch, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549.
Such material may also be accessed electronically by means of the Commission's
Web site on the Internet (http://www.sec.gov).

This Prospectus constitutes a part of a registration statement on Form S-3
(herein, together with all exhibits thereto, referred to as the 'Registration
Statement') filed by the Company with the Commission under the Securities Act of
1933, as amended (the 'Securities Act'), with respect to the securities offered
hereby. This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. Reference is hereby made to the
Registration Statement and to the exhibits thereto for further information with
respect to the Company and the securities offered hereby. Copies of the
Registration Statement and the exhibits thereto are on file at the offices of
the Commission and may be obtained upon payment of the prescribed fee or may be
examined without charge at the public reference facilities of the Commission
described above. Statements contained herein concerning the

34
<PAGE>
provisions of documents are necessarily summaries of such documents, and each
statement is qualified in its entirety by reference to the copy of the
applicable document filed with the Commission.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Commission (File No.
0-22726) are incorporated by reference in this Prospectus:

(1) Annual Report on Form 10-K for the year ended December 31, 1995.

(2) Quarterly reports on Form 10-Q for the quarters ended March 31,
1996, June 30, 1996 and September 30, 1996.

(3) The description of the Company's Common Stock which is contained
in the Company's Registration Statement on Form 8-A filed under the
Exchange Act on November 2, 1993.

All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by reference
into this Prospectus.

Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.

This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. These documents (not including exhibits to the
documents incorporated by reference unless such exhibits are specifically
incorporated by reference into the information that the Prospectus incorporates)
are available without charge to each person to whom a Prospectus is delivered
upon written or oral request. Requests should be directed to Safeskin
Corporation, 12671 High Bluff Drive, San Diego, California 92130, Attention:
Secretary (telephone number 619-794-8111).

<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, ANY SELLING SHAREHOLDER OR ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO
WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY,
THOSE TO WHICH IT RELATES IN ANY STATE TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO
MAKE SUCH OFFER IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES
NOT IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.......................... 3
The Company................................. 6
Risk Factors................................ 6
Use of Proceeds............................. 9
Recent Developments......................... 9
Price Range of Common Stock................. 10
Dividend Policy............................. 11
Capitalization.............................. 11
Selected Consolidated Financial Data........ 12
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................ 13
Business.................................... 18
Management.................................. 28
Principal and Selling Shareholders.......... 31
Underwriting................................ 33
Legal Matters............................... 34
Experts..................................... 34
Available Information....................... 34
Incorporation of Certain Documents by
Reference................................. 35
</TABLE>

3,200,000 SHARES

SAFESKIN CORPORATION

COMMON STOCK

[LOGO]

SAFESKIN (Registered)

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

P R O S P E C T U S

JANUARY , 1997

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

Smith Barney Inc.

Donaldson, Lufkin & Jenrette
Securities Corporation

Merrill Lynch & Co.

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

<PAGE>
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table shows the estimated expenses of the issuance and
distribution of the securities offered hereby, other than underwriting discounts
and commissions:

<TABLE>
<CAPTION>
SELLING
COMPANY SHAREHOLDERS
------- ------------
<S> <C> <C>
SEC Registration Fee................................................. $28,646 $ --
NASD Filing Fee...................................................... 9,953 --
Printing and Engraving............................................... * *
Legal Fees and Expenses.............................................. * *
Accounting Fees and Expenses......................................... * *
Blue Sky Qualification Fees and Expenses............................. 5,000 *
Miscellaneous........................................................ $ * $ *
------- ------------
Total........................................................... $ * $ *
------- ------------
------- ------------
</TABLE>

- ------------------
* To be supplied by amendment.

All of the amounts shown are estimates except for the fees payable to the
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc.

ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.

The Company's Amended and Restated Articles of Incorporation provide that
the Company shall, to the full extent permitted by Section 607.0850 of the
Florida Business Corporation Act, as amended from time to time ('FBCA'),
indemnify all persons whom it may indemnify pursuant thereto. In addition, the
Company's Articles of Incorporation limit the personal liability of its
directors to the full extent permitted by Section 607.0831 of the FBCA, as
amended from time to time.

Section 607.0850 of the FBCA permits a corporation, under specified
circumstances, to indemnify any person who was or is a party to any proceeding
brought by third parties by reason of the fact that they were or are directors,
officers, employees or agents of the Company, or that they were or are serving
at the request of the Company as a director, officer, employee or agent of

another corporation, partnership, joint venture, trust or other enterprise,
against liability and expenses actually and reasonably incurred in connection
with such proceeding, including any appeal thereof, if such person acted in good
faith and in a manner they reasonably believed to be in or not opposed to the
best interests of the corporation and, with respect to any criminal action or
proceeding, had no reason to believe their conduct was unlawful.

Section 607.0831 of the FBCA provides that the personal liability of a
director to the corporation or its shareholders for monetary damages for breach
of fiduciary duty as a director is limited to any breach or failure to perform
the director's duties which constitutes (i) acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law; (ii)
unlawful payments of distributions to shareholders as provided in Section
607.0834 of the FBCA; (iii) any transaction from which the director derived an
improper personal benefit; (iv) conscious disregard for the best interest of the
corporation, or willful misconduct, in a proceeding by or in the right of the
corporation to procure a judgment in its favor or by or in the right of a
shareholder; or (v) recklessness, bad faith, malicious purpose or with wanton
and willful disregard of human rights, safety or property in a proceeding by or
in the right of someone other than the corporation or a shareholder.

Pursuant to Florida law, the Company may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Company would have the power to indemnify him against such
liability

II-1
<PAGE>
under the applicable provisions of the Bylaws of the Company or applicable law.
The Company has such an insurance policy.

ITEM 16. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- ------------------------------------------------------------------------------------------------------
<S> <C>
1 Form of Underwriting Agreement.*
5 Opinion of Morgan, Lewis & Bockius LLP regarding legality.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5).
24 Powers of Attorney (included on the signature page).**
</TABLE>

- ------------------
* To be filed by amendment.

** Previously filed.

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and where applicable, each filing of an
employee benefit plan, annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4), or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-2

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No.1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Diego, State of
California, on December 30, 1996.

SAFESKIN CORPORATION

By: /s/ RICHARD JAFFE
---------------------------------
Richard Jaffe Chairman, President
and
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Amendment No.1 to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------------------- -------------------
<S> <C> <C>
/s/ RICHARD JAFFE Chairman, President, Chief Executive December 30, 1996
- ------------------------------------------ Officer and Director
Richard Jaffe

/s/ DAVID L. MORASH Executive Vice President and Chief December 30, 1996
- ------------------------------------------ Financial Officer
David L. Morash

* Vice President, Finance, Controller and December 30, 1996
- ------------------------------------------ Secretary
Seth S. Goldman

* Co-Chairman and Director December 30, 1996
- ------------------------------------------
Neil K. Braverman

* Director December 30, 1996
- ------------------------------------------

Cam L. Garner

* Chairman Emeritus and Director December 30, 1996
- ------------------------------------------
Irving Jaffe

* Director December 30, 1996
- ------------------------------------------
Howard L. Shecter

* Director December 30, 1996
- ------------------------------------------
Joseph Stemler

*By: /s/ DAVID L. MORASH
-------------------
David L. Morash, Attorney-in-fact
</TABLE>

II-3

<PAGE>
EXHIBIT 5

OPINION OF MORGAN, LEWIS & BOCKIUS LLP

December 30, 1996

Safeskin Corporation
12671 High Bluff Drive
San Diego, California 92130

RE: Safeskin Corporation -- Registration Statement on Form S-3
----------------------------------------------------------

Ladies and Gentlemen:

We have acted as counsel for Safeskin Corporation, a Florida
corporation (the "Company"), in connection with the preparation of the
registration statement (the "Registration Statement") filed by the Company with
the Securities and Exchange Commission pursuant to the Securities Act of 1933,
as amended (the "Act"), relating to the public offering of up to 3,680,000
presently issued and outstanding shares of the Company's common stock, $.01 par
value (the "Common Stock"), to be sold by the individuals listed as selling
shareholders in the Registration Statement (the "Selling Shareholders"),
including 480,000 shares of Common Stock subject to an over-allotment option.
In this connection, we have reviewed (a) the Registration Statement; (b) the
Company's Amended and Restated Articles of Incorporation; (c) the Company's
By-laws, as amended; (d) certain records of the Company's corporate proceedings
as reflected in its minute books; and (e) such other documents and records as
we have considered necessary or desirable in connection with this opinion. In
our examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with the original of all documents submitted to us as copies thereof. Our
opinion set forth below is limited to the Business Corporation Act of the State
of Florida.

Based upon the foregoing, we are of the opinion that the shares of
Common Stock to be sold by the Selling Shareholders as described in the
Registration Statement are duly authorized, validly issued, fully paid and
non-assessable.

We hereby consent to the use of this opinion as an Exhibit to the
Registration Statement and to all references to our firm in the Registration
Statement. In giving such consent, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Act and the rules and regulations of the Securities and Exchange Commission
thereunder.

Very truly yours,

/s/ MORGAN, LEWIS & BOCKIUS LLP

<PAGE>
EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in this Registration Statement
of Safeskin Corporation on Form S-3 of our report dated February 28, 1996 on our
audits of the consolidated financial statements and financial statement
schedules of Safeskin Corporation as of December 31, 1995 and 1994, and for each
of the three years in the period ended December 31, 1995. We also consent to the
reference to our Firm under the caption 'Experts.'

COOPERS & LYBRAND L.L.P.

San Diego, California
December 30, 1996