<PAGE>   1
                                    FORM 10-K
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

(Mark One)

/x/   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934.

      For the fiscal year ended September 30, 1998

                                       OR

/ /   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
      EXCHANGE ACT OF 1934.

                         COMMISSION FILE NUMBER 0-27678
                           TRIDENT INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

                DELAWARE                                         06-6403301
     (State or other jurisdiction of                          (I.R.S. Employer
     incorporation of organization)                          Identification No.)

            1114 FEDERAL ROAD                                       06804
         BROOKFIELD, CONNECTICUT                                 (Zip Code)
(Address of principal executive offices)

       Registrant's telephone number, including area code: (203) 740-9333

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                                            Name of exchange on
          Title of each class                                which registered
                                                        
                 None                                            None
                                                   
           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT
                          COMMON STOCK, $0.01 PAR VALUE
                                (Title of Class)

    Indicate by check mark whether the Registrant(1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes  x  No
                                              ---    ---

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
           ---

    The aggregate market value of the voting stock held by non-affiliates of the
Registrant, based upon the closing sale price of Common Stock on December 7,
1998 as reported on the Nasdaq National Market, was approximately $55,143,000.
Shares of Common Stock held by each officer and director and by each person who
owns 10% or more of the outstanding Common Stock have been excluded in that such
persons may be deemed to be affiliates. This determination of affiliate status
is not necessarily a conclusive determination for other purposes.

    On December 7, 1998 there were 6,464,639 shares of Common Stock outstanding,
exclusive of treasury shares or shares held by subsidiaries of the Registrant.

    Part III incorporates information by reference from the definitive Proxy
Statement in connection with the Registrant's Annual Meeting of Shareholders to
be held in 1999.
<PAGE>   2
                  TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES

                             INDEX TO ANNUAL REPORT

                                  ON FORM 10-K

<TABLE>
<CAPTION>
                                                                                                              PAGE
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<S>               <C>                                                                                         <C>    
PART I

   Item  1:       Business..............................................................................       3
   Item  2:       Properties............................................................................       9
   Item  3:       Legal Proceedings.....................................................................       9
   Item  4:       Submission of Matters to a Vote of Security Holders...................................       9

PART II

   Item  5:       Market for the Registrant's Common  Stock and Related Stockholder Matters.............      11
   Item  6:       Selected Financial Data...............................................................      11
   Item  7:       Management's Discussion and Analysis of Financial Condition and Results of
                      Operations........................................................................      13
   Item 7A:       Quantitative and Qualitative Disclosures About Market Risk............................      19
   Item  8:       Financial Statements and Supplementary Data...........................................      19
   Item  9:       Changes in and Disagreements with Accountants on Accounting
                      and Financial Disclosure..........................................................      19

PART III

   Item 10:       Directors and Executive Officers of the Registrant....................................      20
   Item 11:       Executive Compensation................................................................      20
   Item 12:       Security Ownership of Certain Beneficial Owners and Management........................      20
   Item 13:       Certain Relationships and Related Transactions........................................      20

PART IV

   Item 14:       Exhibits, Financial Statement Schedules and Reports on Form 8-K.......................      21


Signatures .............................................................................................      24
</TABLE>




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                                     PART I

This Form 10-K contains forward looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. The Company's actual results could differ materially from those set
forth in the forward-looking statements. Factors that might cause such a
difference include those discussed herein under "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Business Environment
and Future Results."

ITEM 1: Business

COMPANY OVERVIEW

    Trident International, Inc. (hereafter, together with its consolidated
subsidiaries referred to as the "Company" or "Trident") designs, manufactures
and markets piezoelectric impulse ink jet subsystems including printheads, inks
and other consumables, and related components for the industrial market. The
Company's proprietary products are used for a variety of printing applications
which require high speed, good print quality, durable equipment and the ability
to change the printed text or pattern frequently. The Company's printing
subsystems are marketed worldwide, primarily through approximately 75 original
equipment manufacturer (OEM) customers that integrate them into
computer-controlled, application-specific products which are then sold to
end-users. The Company's contracts with its OEM customers also provide for
ongoing sales by the Company of consumables, consisting principally of inks and
printing subsystem components.

    The largest application in which the Company's products are used is carton
coding, which involves printing directly onto shipping cartons. Carton coding
systems which incorporate the Company's products allow end-users to print any
combination of high quality text, bar codes, and graphics directly onto blank
cartons as they move down an assembly or production line. The Company's products
allow this information to be changed frequently, even carton by carton. This
eliminates the need to maintain a substantial inventory of preprinted cartons or
labels, while also reducing production time and costs and allowing for frequent
changeover between products. Other current industrial applications for the
Company's products include check coding, addressing and business forms
imprinting, postal bar coding and stamp cancellation and garment pattern
plotting. The Company also has products for use in printing date and batch codes
onto items and primary packages.

PRODUCTS

    General. The Company specializes in the design and manufacture of
proprietary impulse ink jet imaging subsystems, including printheads, inks and
other consumables and related components. To support its OEM customers, Trident
also offers a comprehensive range of accessories and components, and a printhead
repair service. Trident is committed to providing its OEM customers and their
end-users with all of their piezoelectric impulse ink jet product and service
requirements.

    Imaging Subsystems. The Company has developed a series of imaging subsystems
which are based on its proprietary impulse ink jet technology. This technology
employs a piezoelectric crystal, which is a ferroelectric ceramic material that
changes shape when an electric field is applied across it. Thus, a voltage
applied across two faces can cause it to grow or shrink in length, or to be
distorted sideways, depending on the mode of operation selected. Trident's
patented technology utilizes the piezoelectric crystal as a piston opposite the
orifice through which the ink is projected onto the printing surface. A voltage
waveform is smoothly increased which causes sub-micron reductions in the length
of the piezoelectric crystal. This draws ink into the chamber preparing it for
firing onto the printing surface. Surface tension forces in the orifice prevent
air from entering the chamber, which would interfere with the printing process.
Next, the voltage across the piezoelectric crystal is rapidly reduced, which
allows the length of the crystal to return to its original size and create a
sudden pressure pulse inside the chamber, which forces a droplet of ink out of
the orifice. The process of printing each droplet takes approximately 0.0001
seconds.



                                       3
<PAGE>   4
    One of the principal advantages of the Company's technology is that
relatively large droplets can be generated at high frequencies and velocities.
The high pressures generated also enable more than one orifice to be placed in
each chamber, which increases the print area without adding chambers, thereby
avoiding additional cost. The arrangement of the piezoelectric crystal and ink
chambers found in the Company's printheads is proprietary to Trident. It enables
ink droplets to be formed at frequencies as high as 10,000 droplets per second
with an initial velocity of more than 10 meters per second. This enables the
droplets to travel across a small gap through the air, which is an important
feature in industrial marking applications where the printing surfaces are
rarely flat, smooth or traveling at a fixed distance from the printhead.

    The Company's printing products are modular to enable its OEM customers to
order the most suitable configuration for their system and to minimize
development and production costs. The imaging subsystem consists of a printhead,
tubing, cables and, at the option of the OEM, an ink reservoir and electronic
driver printed circuit boards. The printheads are available in a range of
orifice configurations according to the desired print height and resolution.
Some configurations are also available with either stainless steel or nickel
orifice plates depending on the selection of ink. The orifice plate can have
from one to eleven orifices for each chamber. The use of multiple orifices per
chamber in a liquid impulse ink jet printhead is proprietary to Trident. The
benefits are increased print area without added cost and complexity. Resolution
is sacrificed in applications where print height and cost are more critical,
such as bar coding, which does not require high vertical resolution. Multiple
printheads may be stacked to create even taller images.

    In the industrial market, the typical spacing between printed droplets is
five to seven thousandths of an inch, which provides a resolution of 140 to 200
dots per inch. In these industrial applications, resolution greater than 200
dots per inch is generally not required, while speed, print distance and print
area are often critical. By contrast, impulse ink jet printers developed for the
office and home markets are required to generate images with 300 to 1200 dots
per inch resolution, which creates a requirement for droplets which are
substantially smaller than those produced by the Company's technology and which
consequently cannot travel as far across air gaps to the printing surface. The
higher resolution and smaller droplet volume typical of the printers developed
for the office and home markets also reduce the printing speed when compared to
the Company's printheads.

    The Company's imaging subsystem products are priced according to the print
area (number of orifices), the type of ink and the ink reservoir. The typical
prices range from $800 for the Company's least expensive imaging subsystem to
$2,200 for its premium performance bar code product.

    The Company currently markets three printhead subsystems to OEM customers:

    Ultrajet(TM)

    The Ultrajet is a 32 channel printhead available with 3, 6 and 8 orifices
per channel configuration. The subsystem is utilized in current applications
including carton coding, check coding, addressing and business forms imprinting,
postal bar coding and stamp cancellation, and garment pattern plotting and
miscellaneous other porous media. The majority of the Company's current
printhead revenue derives from sales of the Ultrajet subsystem.

    The Company has released a new generation of Ultrajet products called the
Ultrajet II. This product is available with 3, 6 and 11 orifices per channel
configuration. It is available with V-300 and ScanTrue(TM) ink, a newly
developed pigment based ink. The Company believes that the UltraJet II printhead
has significant improvements over the Ultrajet. These improvements include
faster speed, improved print quality and enhanced reliability.

    PixelJet(TM)

    The PixelJet printhead was launched in 1997. It has 64 channels for higher
resolution printing and is available with one or two orifices per channel
configuration. The subsystem is constructed from stainless steel and is
therefore compatible with a wider range of ink chemistries. Initial applications
of the PixelJet are for addressing, where higher resolution is required, as well
as for textile applications.




                                       4
<PAGE>   5
    MicroCoder(TM)

    The MicroCoder printhead was also launched in 1997. It has 16 channels with
two orifices per channel. The printhead is available with AllWrite A3000(TM) ink
designed to print onto non-porous surfaces such as primary packages and
industrial parts. The Company believes that the MicroCoder-AllWrite A3000
combination provides unique competitive features and will compete effectively
with the more expensive and complex Continuous Ink Jet systems.

    Ink Products. The Company offers seven basic ink products: PostBrite,
VersaPrint, FastDri, AllWrite, HiDef, JetWrite and ScanTrue.

     ScanTrue is a recently developed pigment based ink. This ink was designed
to print UCC/EAN 128, I 2 of 5 and other tall bar codes on corrugated cartons.
It supports high resolution printing for narrow bar width requirements and
printing with greater edge definition. It has better light fastness and optical
density than dye based inks. ScanTrue also minimizes ink bleed on porous
surfaces.

    All inks except PostBrite (an ultraviolet fluorescent ink for postal bar
coding) are offered in black. The Company's VersaPrint products are also
available in red, blue and green colors. Most of the Company's inks are
manufactured from oil or glycol liquids and are, therefore, non-volatile and
non-toxic. Two exceptions are the FastDri and AllWrite inks which are formulated
for semi-porous and non-porous printing surfaces and, therefore, require small
quantities of volatile solvents to allow drying. While impulse ink jet ink for
non-porous surfaces typically require maintenance at start-up following shut
down periods of one or more hours, the AllWrite A3000 in combination with the
Company's patented printhead pulsing technique does not require additional
maintenance. The carton coding market uses mainly VersaPrint and HiDef inks
which are entirely non-volatile. This property provides end-user customers with
increased reliability, resulting in fewer production delays.

    Accessories and Options. The Company offers a range of accessories and
options to assist OEM customers in the development of systems. These are
sometimes employed by OEMs only for their initial evaluation of one of the
Company's products, while the OEMs develop their own version of the accessory
for the final production product. Larger volume producers are generally more
inclined to attempt to create their own accessories than smaller ones. Smaller
companies, or companies using systems in which the accessories represent a
relatively small percentage of the total system cost, are more likely to
purchase these components from Trident. An OEM may also purchase equipment from
Trident to repair and calibrate printheads itself, provided that it has been
trained and certified by Trident.

SALES AND MARKETING

    The Company sells its products both domestically and internationally through
OEMs and to major end-users who have in-house engineering resources capable of
developing a printing system utilizing the Company's products. The Company has
approximately 75 active customers worldwide, of which approximately one-half
currently purchase from five to several hundred printheads per month. Several of
the Company's OEM customers sell systems incorporating the Company's products
worldwide, although the Company recognizes sales to the region where the
products are billed.

    Sales are divided into three regions: North America, Europe and the Far
East. Sales for the years ended September 30, 1996, 1997, and 1998 to these
three regions were as follows:

<TABLE>
<CAPTION>
                                              TWELVE MONTHS ENDED SEPTEMBER 30,
                                                       (000'S OMITTED)        
                                              ---------------------------------

                  Region                       1996          1997          1998
                  ------                     -------       -------       -------
<S>                                          <C>           <C>           <C>    
                  North America              $17,994       $21,507       $24,082

                  Europe                       5,986         6,150         6,970

                  Far East                     1,945         2,626         1,780
                                             -------       -------       -------

                  Total                      $25,925       $30,283       $32,832
                                             =======       =======       =======
</TABLE>

    All sales are denominated in US dollars.

    The Company believes that international use of impulse ink jet applications
currently lags behind that of the U.S. The Company expects that the North
American region will continue to be its largest due to the strength of domestic
OEM customers, particularly those utilizing carton coding applications. European
sales improved during Fiscal 1998 due to increased activity with one major
customer and due to a European customer using Trident's products for stamp
cancellation, which is growing ink sales in the region. The growing use of the


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<PAGE>   6
EAN128 bar code symbology in Europe is placing demands on the Company's products
performance which the Company believes will be corrected with the Ultrajet II
printhead and ScanTrue inks. Sales to the Far East are down due in part to the
weak Asian economy. The Far East currently trails the rest of the world in
utilization of impulse ink jet printing technologies. The Company believes,
however, that the ability of systems using the Company's subsystems to print
certain Asian language characters and the continuing industrialization of Far
East/Pacific Rim countries will create additional demand for the Company's
products in that region.

    All of the Company's OEM customers are sub-licensed by the Company on a
non-exclusive basis to use the Company's products. New customers are required to
purchase an evaluation kit from the Company, which includes training on the
equipment and an evaluation kit license, before the Company agrees to fully
license the customer. Trident believes that this allows it to control the use of
the product and to ensure that it is applied competently and professionally in
the market. The Company's licenses provide for the ongoing purchase of ink from
the Company and the right to use the printheads and inks as a system. The
Company is aware of a small number of third-party ink manufacturers offering ink
for use with some of the Company's printheads. Use of these third-party inks
would be an unlicensed activity by the OEM and its end-user customer, and could
damage the Company's printheads which would void the warranty on such
printheads. Most of the Company's inks, bottles and cartridges are currently
protected by patents.

    During 1998, Andrew Borg joined the Company as Vice President of Worldwide
Marketing and Sales. Mr. Borg has fifteen years of experience in digital image
printing and processing.

    The sales organization is divided into the same three regions and each
region is managed by a local business manager. The Company believes that this
structure provides for optimum response and support to the local customer. The
Company's largest sales region is North America where, in addition to the
business manager, three application engineers respond to day-to-day customer
needs. The business manager and one of the application engineers are located in
Park Ridge, Illinois. The European business manager is located in Dublin,
Ireland along with a Manager of Major Accounts. The Company's sales in the Far
East are concentrated in Japan, where the Company employs a business manager and
uses the services of one Japanese technical consultant. Sales inquiries are
generally developed from word of mouth recommendations, product exhibits and
advertisements. Senior managers of the Company are frequently involved with
industry conferences, which also generate high visibility for the Company. The
marketing department is responsible for sales to new customers and for
developing an end-user identity for the Company. The marketing department is
organized in three business groups. These groups are responsible for market
development, product development, revenue growth and profitability with their
respective industry group.

    The Company's applications engineers provide training both at Trident and at
the customers' premises. They assist with diagnosing and solving end-user
problems as required. Service of the end-user system is provided by the OEM
customers or their distributors. In applications where products cannot be
shipped without the printed code or image, responsive service close to the
customers' sites is essential. Therefore, training the customer is a high
priority activity. The applications engineers also ensure that the OEMs have
properly designed their systems to optimize the performance of the printing
system.

    The Company sells its products to approximately 75 OEM customers worldwide.
Historically, the Company has not required its OEM customers to display the
Trident label on their equipment and ink. Some customers sell ink with the
Trident label. Others request the Company to manufacture ink with the OEM's
label attached. The Company also allows customers to package the ink in their
own containers in response to such customers' desires to differentiate
themselves as much as possible from their competitors.

    During the years ended September 30, 1996, 1997, and 1998 sales to the
following customers accounted for more than 10% of the Company's net sales:

<TABLE>
<CAPTION>
                                                       Year Ended September 30,
                                                       ------------------------
                  Customer Name                        1996      1997      1998
                  -------------                        ----      ----      ----
<S>                                                    <C>       <C>       <C> 
                  Videojet Systems
                  International, Inc.*                    5%        6%       33%

                  Marsh Company*                         22%       23%       --

                  Foxjet, Inc.                           13%        9%       11%

                  BancTec, Inc.                          12%        8%        7%
</TABLE>

    * Videojet Systems International, Inc. acquired Marsh Company in 1998.




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<PAGE>   7
    During the years ended September 30, 1996, 1997, and 1998, approximately
79%, 70% and 77%, respectively, of the Company's net sales were to its top ten
customers.

    The Company enters into sales and license agreements with its OEM customers
that provide the general terms on which sales of the Company's products will be
made. These agreements typically license the OEM's to manufacture, use and sell
equipment employing and including certain of the Company's proprietary
technology. The OEM customers generally agree to assign to the Company any
interest they obtain in any proprietary rights, including inventions and
resulting patents and patent applications and confidential technical
information, comprising improvements in or technology relating to the Company's
technology. The sales and license agreements are non-exclusive in nature and of
indefinite length but are terminable by either party upon material breach by the
other party.

ENGINEERING, RESEARCH AND DEVELOPMENT AND INTELLECTUAL PROPERTY

    The Company conducts engineering development programs for the purpose of new
product development, enhancing existing products and reducing manufacturing
costs. The Company produces all designs on a computer aided drafting system and
has invested in modeling software and other analytical tools. The engineering
and research functions are divided between two departments. The research
department concentrates on fundamental improvements in the Company's
understanding of the technology and in producing computer simulations of new
concepts to rapidly evaluate and optimize performance without requiring physical
prototypes to be made. The Company's research is performed primarily by its own
staff, although, outside development consultants are occasionally employed. The
engineering development department includes multiple disciplines for the
development of printheads, ink systems, inks and electronics printed circuit
boards. The Company has entered into a strategic alliance with Xennia
Technology, Ltd., (Xennia), a leading developer of ink for industrial and
commercial ink jet printing, under which Xennia will develop proprietary ink
formulations exclusively for the Company in industrial applications. The Company
expended approximately $2,326,000, $3,027,000, and $4,142,000 for research and
development during the years ended September 30, 1996, 1997, and 1998,
respectively.

    The Company's research and development objectives are to fully exploit the
benefits of its technology by creating computer models in order to design
products which increase the travel distance of the ink droplets through the air,
increase the frequency and velocity of droplet generation, increase channel
density and lower production costs through the use of innovative designs and
materials. The Company believes that its technology offers significant benefits
over other impulse ink jet technologies and that further advancements are
achievable.

    The Company operates under a patent portfolio covering its printheads, ink
delivery systems and inks. In addition to the Company's own patent applications,
the Company has an exclusive license from Dataproducts Corporation
(Dataproducts) to Dataproducts' rights and certain patents relating to liquid
inks and impulse ink jet printing (the Dataproducts License) within the
"industrial marking field". The technology used by the Company under the
Dataproducts License is integral to the Company's impulse ink jet products.
Several of the patents relating to this technology expire over the next four to
seven years. The Dataproducts License provides the Company with the right to use
Dataproducts' liquid ink technology, which rights are generally exclusive in
industrial markets, and nonexclusive in the general or office printing market.
The areas of preprinted documents and wide format liquid ink printing are shared
with Dataproducts.

    In March 1996, the Company acquired from Dataproducts Corporation a
non-exclusive license for patented solid ink jet printhead technology in certain
licensed industrial marking fields. This agreement allows the Company to use
these patents in the development and commercialization of its own solid ink
printhead. At the time of the purchase of the solid ink jet technology, certain
technological hurdles had not been overcome to enable the Company to
commercialize a product. Commercialization of this technology by the Company
will require extensive development work both on the solid ink itself and the ink
jet printheads used to apply that ink in commercial applications. Consequently,
the Company recorded a charge of approximately $3.1 million during Fiscal 1996
as a write-off of purchased in-process research and development to record the
cost of evaluating and acquiring this license. The Company intends to continue
to evaluate potential acquisitions and licenses of new technologies.

    Significant patents for which applications have been filed by the Company
and which are licensed from Dataproducts are directed to: the mode of operation
and structure of the piezoelectric transducer assembly; multiple orifices;
multiple drops that merge in flight or on the printing surface; a method to
prevent evaporative inks from clogging the orifices; method of melting and
delivery of ink to printheads; and numerous inks.

MANUFACTURING AND SUPPLIERS

    All of the Company's products are manufactured in Brookfield, Connecticut.
The assembly process for printheads essentially requires the high precision
assembly and testing of various purchased components, several of which are
proprietary to the Company and are custom-made according to the Company's
design. The assembly process includes several discrete steps, each of which is
considered a trade 


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<PAGE>   8
secret and has been developed and refined since the Company's inception. These
processes are closely monitored, in some cases using statistical process
control.

    One of the most critical components of the Company's printheads is the
orifice plate. The Company has two suppliers for its current production designs
which utilize nickel, and has developed a new technique for the manufacture of
stainless steel orifice plates working with a sole supplier. This supplier has
signed a development contract with the Company but does not yet have a full
production supply agreement. Any future interruption or termination of supplies
of these stainless steel orifice plates could have a material adverse effect on
the Company's business and results of operations.

    The Company's assembly operation is performed under filtered air hoods. The
assembly and test operations are organized into work cells and employ
just-in-time methodologies for work flow and materials control. Most of the
Company's production personnel are cross-trained in several operations,
affording greater flexibility to balance the production flow and to add new
employees.

    Due to the harsh nature of the industrial environment, printheads require
occasional repair for orifice clogs and physical damage. The Company offers its
customers this service at the facility in Brookfield, Connecticut. A rapid
turnaround is important to the customer and, therefore, the Company's repair
department has also been organized into a work cell. In addition, as the volume
of the installed base of printheads grows, the Company anticipates that repair
facilities will be opened in Europe and the Far East.

    All ink formulations and processes are the property of the Company. Pursuant
to the Company's supply agreement with Micropore, Inc. (Micropore), the Company
has agreed to purchase all of its requirements of certain of its current ink
products from Micropore.

    The Company's manufacturing-engineering and quality groups are responsible
for the productivity and quality improvements in production and for the
introduction of new products into production. Simultaneous engineering is
employed by the Company to ensure that new products are manufacturable and to
shorten the development time.

BACKLOG

    The order backlog as of September 30, 1998 was approximately $4.9 million
compared with $8.9 million as of September 30, 1997. This decrease is due
principally to a major customer changing its order policy from a twelve month
purchase order to 90 day purchase orders. Backlog consists of purchase orders
scheduled for shipment within 12 months following the order date. Purchasers of
standard products may generally cancel or reschedule orders without significant
penalty and, accordingly, the Company's backlog at any time is not necessarily
indicative of future sales.

COMPETITION

    The Company considers its direct competition to be other providers of
on-demand, variable information printers which primarily employ ink jet printing
technology and thermal transfer labeling systems.

    With respect to applications for carton coding, the Company's principal
competition is from manufacturers of thermal transfer labeling systems, which
apply labels either manually off-line, on-line with a label applicator, or
on-line with a print-and-apply system. These systems typically have an initial
purchase price comparable to that of ink jet coding systems sold by the
Company's OEMs, but the cost of labeling or coding using thermal transfer
labeling systems can be as much as ten times greater. These systems are provided
by companies such as Willett Systems Limited and Diagraph Corporation, who also
sell the Company's ink jet products, and by Zebra Technologies Corporation,
Intermec Corporation, Sato America, Inc., Datamax International Corp. and Weber
Marking Systems Inc. Simple alphanumeric codes are typically applied by
valve-jet ink jet systems which are manufactured by the Company's OEMs and do
not directly compete with the Company's current high resolution products.

    Competition in the Company's other applications is primarily from other ink
jet printing technologies. An example is the use of continuous ink jet systems
in the addressing and imprinting market which are manufactured by Scitex Digital
Printing, Inc. and Videojet Systems International, Inc. Other examples are the
use of bubble jet systems manufactured by Hewlett Packard for addressing and
solid ink piezo based systems manufactured by Markem, Inc. for carton coding.

    The Company is aware that Nu-Kote Holdings, Inc. (Nu-kote) has acquired a
new ink jet technology and has released a piezoelectric impulse ink jet
printhead for industrial and other applications. This printhead is being used
for applications for which the Company currently manufactures and markets ink
jet subsystems. It is unclear how much market penetration this printhead will
achieve, although it is anticipated that the price of this printhead will be
substantially lower than the price of comparable Trident printheads. In
November, 


                                       8
<PAGE>   9
1998, Nu-kote and certain of its subsidiaries filed for protection from
creditors under Chapter 11 of the Federal Bankruptcy law. It is unclear how this
filing may affect the commercialization of this printhead.

    The markets for the Company's products are highly competitive. The Company
believes that its ability to compete successfully depends upon a number of
factors both within and beyond its control, including product performance,
product features, product availability, price, quality, timing of new product
introductions by the Company and its competitors, customer support, and industry
and general economic trends. The Company seeks to compete by offering a broad
product line, emphasizing high performance and quality with a continuing
commitment to product improvements and new product introductions. The Company's
current and prospective competitors include many companies that have greater
financial, technical and marketing resources than the Company. There can be no
assurance that the Company will be able to compete successfully against current
and future competitors.

EMPLOYEES

    As of September 30, 1998, Trident had 150 full time employees including
temporary direct employees. Of these employees, 17 were in sales and marketing,
37 were in engineering and research and development, 15 were in administration
and finance, 2 in facilities, 31 in production overhead and 48 were factory
direct employees. None of the Company's employees are represented by a labor
union. The Company believes its relationships with its employees are good.

ITEM 2: PROPERTIES

    Trident's main facility consists of approximately 35,000 square feet of
leased space in Brookfield, Connecticut, divided between two buildings. One of
the buildings in Brookfield is occupied by sales and marketing, engineering and
research and development, and ink production. The other building is occupied by
administration and finance, production and production support. The leases expire
in 2003. The buildings are in good condition and have been extensively remodeled
by the Company to accommodate new processes and the growth in employees. The
Company has rented an additional 12,000 square feet of leased space in
Brookfield, Connecticut and is currently planning the renovation of this space
for ink production. This lease expires in 2003. The Company also rents 6,000
square feet of additional office and research and development space in New
Milford, Connecticut. The Company has a European office located in Dublin,
Ireland and a Midwest office located in Park Ridge, Illinois. The Company
believes it will have sufficient operating facilities for the foreseeable
future. One of the buildings currently leased by the Company in Brookfield is
located on property that may require remediation due to releases of hazardous
substances in prior operations by a previous occupant. The site investigation
and remediation, if needed, is subject to the Property Transfer Act program
administered by the Connecticut Department of Environmental Protection.

ITEM 3:  LEGAL PROCEEDINGS

    In December, 1997, the Company filed a civil action in the U.S. District
Court for the Southern District of Illinois charging Applied Technology Group of
Belleville, Illinois, AP Products, Inc. of Deer Park, New York, Renewable
Resources, Inc. of Deer Park, New York and Franklin, Tennessee and Independent
Ink, Inc. of Gardena, California with infringing two of the Company's patents.
Renewable Resources, Inc., Applied Technology Group and Independent Ink have
asserted claims against the Company for a declaration of noninfringement and
patent invalidity and unenforceability while also alleging violations of the
antitrust laws and unfair and fraudulent business practices relating to the
Company's sales of ink products.

ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    There were no matters submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year ended September 30, 1998.




                                       9
<PAGE>   10
EXECUTIVE OFFICERS OF THE REGISTRANT

    The following table lists the names, ages and positions held with the
Company of all executive officers of the Registrant as of December 7, 1998.
There were no family relationships between any director or executive officer of
the Company.

<TABLE>
<CAPTION>
              NAME                       AGE                                 POSITION
              ----                       ---                                 --------
<S>                                      <C>      <C>    
       Elaine A. Pullen ..........       44       President, Chief Executive Officer and Chief Operating Officer
       J. Leo Gagne ..............       42       Vice President and Chief Financial Officer
       Robert L. Rogers ..........       44       Vice President of Research
       Andrew S. Borg.............       44       Vice President of  Worldwide Marketing and Sales
</TABLE>

    ELAINE A. PULLEN joined the Company as President and Chief Operating Officer
in August 1994. She has been President since that time and, in addition, has
served as a director and Chief Executive Officer since April 1, 1995. Prior to
joining the Company, Ms. Pullen served as a director of Linx Printing
Technologies, PLC ("Linx") from September 1992 to August 1994, where she also
served as Business Operations Director from February 1994 to August 1994 and as
Engineering Director from September 1992 to February 1994. Prior to that, Ms.
Pullen served as President of Linx USA from 1991 to 1992, and as Vice President
of Applied Research and Engineering of Videojet Systems International, Inc. from
1988 to 1991. Ms. Pullen holds a B.S. in Applied Physics from the British
Institute of Physics. She has 25 years of experience in research and
development, marketing and operations management in the ink jet printing field.

    J. LEO GAGNE joined the Company as Vice President and Chief Financial
Officer in February, 1996. Prior to joining the Company, Mr. Gagne served as
Director - Enterprise Group of the Hartford office of Arthur Andersen LLP, where
he was employed since 1977. Mr. Gagne is a Certified Public Accountant and holds
a B.S. in Accounting from the University of Connecticut.

    ROBERT L. ROGERS joined the Company in 1989 as Director of Engineering. He
served as Director of Research and Development prior to his promotion to Vice
President of Research in August, 1996. Prior to 1989, Mr. Rogers was involved in
ink jet research at Exxon Enterprises Printing Systems, Inc. and Dataproducts
Corporation. Mr. Rogers holds a B.S. in Mechanical Engineering from Cornell
University.

    ANDREW S. BORG joined the Company in May 1998. Prior to joining the Company,
Mr. Borg served as Director of Corporate Communications Worldwide, and Director
of Marketing for Electronics for Imaging, Inc. from June 1996 to April 1998. Mr.
Borg served as Industry Marketing Manager, Digital Trade Services for Scitex
America Corporation form Marsh 1995 to June 1996. He was the Senior Director,
Strategic and Product Marketing for Splash Technologies, Inc. (formerly ColorAge
Inc.) from January 1993 to February 1995. Prior to that, Mr. Borg held a variety
of marketing positions at DuPont Printing and Publishing, E. I. Du Pont de
Nemours and Co., and Crosfield Electronics, Inc. Mr. Borg holds a Bachelor of
Arts degree with honors from Harvard College and a Master of Communication Arts
from the New York Institute of Technology. He is 44 years old.




                                       10
<PAGE>   11
                                     PART II

ITEM 5: MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

    The Company's Common Stock is quoted on the Nasdaq National Market under the
Nasdaq symbol "TRDT".

The following table set forth, for the periods indicated, the high and low
closing sales prices for the Common Stock on such market:

<TABLE>
<CAPTION>
                                                                                High         Low
                                                                                ----         ---
<S>                                                                             <C>         <C>  
            1997:
                 First quarter ...........................................      20.00       16.00
                 Second quarter..........................................       24.00       14.88
                 Third quarter ...........................................      24.75       17.25
                 Fourth quarter..........................................       18.00       14.13
             1998:
                 First quarter............................................      17.38       11.75
                 Second quarter...........................................      16.75       12.13
                 Third quarter............................................      18.38       14.50
                 Fourth quarter...........................................      17.50        8.38
</TABLE>

    At December 7, 1998, the Company had 27 holders of record of its Common
Stock, although the Company believes that the number of beneficial owners of its
Common Stock as of that date was substantially greater. There were 6,464,639
shares of Common Stock outstanding on December 7, 1998.

    The market price of the Company's Common Stock has fluctuated significantly
since the initial public offering in February 1996. The market price of the
Common Stock could be subject to significant fluctuation in the future based on
factors such as announcements of new products by the Company or its competitors,
quarterly fluctuations in Trident's financial results or other industrial
printing companies' financial results, changes in analysts' estimates of the
Company's financial performance, general conditions in the industrial printing
market and conditions in the financial markets. In addition, the stock market in
general has experienced extreme price and volume fluctuations, which have
particularly affected the market prices for many companies and which have often
been unrelated to the operating performance of the specific companies. There can
be no assurance that the market price of the Common Stock will not decline
substantially or otherwise continue to experience significant fluctuations in
the future.

DIVIDEND POLICY

    The Company has never paid cash dividends on its Common Stock. The Company
presently intends to retain all cash for use in the operation and expansion of
the Company's business and does not anticipate paying any cash dividends in the
near future.

ITEM 6: SELECTED FINANCIAL DATA

    The following selected consolidated financial data for each of the five
reporting periods presented has been derived from the audited consolidated
financial statements of the Company. The selected consolidated financial data
set forth below should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the consolidated
financial statements and notes thereto included elsewhere in this Form 10-K.




                                       11
<PAGE>   12
                   SELECTED CONSOLIDATED FINANCIAL INFORMATION

                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                               PRO FORMA
                                                              COMBINED (1)                       THE COMPANY
                                                              ------------   -----------------------------------------------------

                                                                FOR THE      
                                                               12 MONTHS
                                                                 ENDED                            FISCAL YEAR                      
                                                             SEPTEMBER 30,   -----------------------------------------------------
                                                                 1994          1995           1996           1997           1998
                                                               --------      --------       --------       --------       --------
<S>                                                            <C>           <C>            <C>            <C>            <C>     
CONSOLIDATED STATEMENT OF
  OPERATIONS DATA:
    Net sales ...........................................      $ 12,493      $ 17,330       $ 25,925       $ 30,283       $ 32,832
    Cost of sales .......................................         5,853         6,604          9,392         10,818         11,914
                                                               --------      --------       --------       --------       --------
    Gross profit ........................................         6,640        10,726         16,533         19,465         20,918
                                                               --------      --------       --------       --------       --------
    Operating expenses:
       Marketing and selling ............................           701           912          1,415          2,358          2,865
       Research and development .........................         1,078         1,317          2,326          3,027          4,142
       Write-off of in-process research and
            development .................................            --            --          3,052             --             --
       General and administrative .......................         1,137         1,580          2,405          2,134          2,973
       Amortization of intangibles ......................           486           802            800            802            751
       Amortization of deferred compensation ............            --         1,183            443             --             --
                                                               --------      --------       --------       --------       --------
    Total operating expenses ............................         3,402         5,794         10,441          8,321         10,731
                                                               --------      --------       --------       --------       --------
    Operating income ....................................         3,238         4,932          6,092         11,144         10,187
    Interest (income) expense, net ......................           482         1,845            241         (1,072)        (1,138)
    Other expense, net ..................................            --            --             --             --            207
    Redeemable warrant interest charge ..................            --         4,561          1,710             --             --
                                                               --------      --------       --------       --------       --------
    Income (loss) before income taxes ...................         2,756        (1,474)         4,141         12,216         11,118
    Provision for income taxes ..........................         1,280         1,965          2,752          4,703          4,052
                                                               --------      --------       --------       --------       --------
    Net income (loss) before extraordinary item .........         1,476        (3,439)         1,389          7,513          7,066
    Extraordinary item (net of  income tax benefit of
        $1,253) .........................................            --            --         (1,803)            --             --
                                                               --------      --------       --------       --------       --------
    Net income (loss) ...................................      $  1,476      $ (3,439)      $   (414)      $  7,513       $  7,066
                                                               ========      ========       ========       ========       ========
 CONSOLIDATED BALANCE
   SHEET DATA:
    Working capital .....................................      $  2,103      $  3,232       $ 21,056       $ 23,518       $ 26,603
    Total assets ........................................        20,967        23,133         38,331         40,907         43,340
    Total long-term debt ................................        14,738        12,361             --             --             --
    Redeemable common stock warrants ....................            --         4,561             --             --             --
    Redeemable preferred stock ..........................         3,123         3,311             --             --             --
    Stockholders' equity (deficit) ......................         1,072        (1,311)        35,962         37,889         40,589
</TABLE>




                                       12
<PAGE>   13
    (1) The pro forma combined statement of operations data for the 12 months
        ended September 30, 1994 represents the Predecessor's results from
        October 1, 1993 through June 23, 1994, and the Company's results from
        inception (June 24, 1994) through September 30, 1994, and does not
        purport to represent the results of operations as if Trident
        International, Inc.'s acquisition of the Predecessor (the "1994
        Acquisition") occurred on September 30, 1993. This information is
        presented to provide more meaningful period to period comparisons. See
        "Management's Discussion and Analysis of Financial Condition and Results
        of Operations." The Predecessor (the "Predecessor") refers to Trident,
        Inc., the Company's operating subsidiary prior to its acquisition on
        June 24, 1994 from Porelon, Inc. ("Porelon"), a wholly owned subsidiary
        of Johnson Worldwide Associates, Inc. ("JWA").

ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The Company designs, manufactures and markets impulse ink jet subsystems,
including printheads, inks and other consumables, and related components for the
industrial market. The Company markets its products worldwide principally to
OEMs, who integrate the products into systems which are then sold to end-users
directly or via distributors. The largest market segment currently addressed by
the Company's products is that of printing onto shipping cartons. Other
industrial market segments in which the Company's products are currently being
utilized include check coding, addressing and imprinting business forms, postal
bar coding and stamp cancellation and plotting garment patterns.

     The Predecessor was founded in 1989 as Trident, Inc. Shortly after its
incorporation, a majority interest in the Predecessor was purchased by JWA
through JWA's direct subsidiary, Porelon. At that time, the Predecessor also
obtained the Dataproducts License from Dataproducts Corporation, which gave the
Predecessor exclusive rights to a series of liquid ink jet technology patents
for use in the "industrial marking field." The technology covered by the
Dataproducts License is at the core of the Company's current line of industrial
printing subsystems. In December 1992, Porelon purchased the remaining minority
interests in the Predecessor and the Predecessor became a wholly-owned
subsidiary of Porelon.

     On June 24, 1994, the Company acquired all of the capital stock of the
Predecessor (the 1994 Acquisition). The aggregate cash consideration paid by the
Company in the 1994 Acquisition was approximately $19.9 million, including $1.0
million for a consulting agreement. The 1994 Acquisition has been accounted for
as a purchase and, accordingly, the total consideration has been allocated to
the assets acquired and liabilities assumed based on their estimated fair value
at the date of the 1994 Acquisition. The excess of the purchase price over the
fair value of the net assets acquired ($13.9 million) is being amortized over 20
years. Periodically, the Company evaluates the realizability of this asset based
upon expectations of undiscounted cash flows and operating income. Based upon
its most recent analysis, the Company believes that no impairment of the current
net book value of this asset exists. The $1.0 million payment made by the
Company under the consulting agreement was being amortized. The services
provided under the consulting agreement largely related to transition services
in connection with the establishment of stand-alone operations and assistance in
preparation for an initial public offering. Other long-term assets acquired in
the 1994 Acquisition are being depreciated over their respective useful lives of
5 years.

     In February 1996, the Company completed the initial public offering of its
common stock which provided proceeds, after underwriting discounts and
commissions, of $28.3 million. The Company incurred certain significant charges
relating to the 1994 Acquisition from the beginning of fiscal year 1996 through
the consummation of the offering. The Company incurred charges of $4.2 million,
net of related income tax benefits, comprised of $2.1 million of recurring
charges which were expensed through consummation of the offering and did not
recur thereafter, and $2.1 million of extraordinary or non-recurring charges
which were expensed at the closing of the offering. The Company used
approximately $10.8 million to repay the outstanding indebtedness under its
credit facility and $4.5 million to retire all of the $5.0 million in principal
amount of the zero coupon notes issued by the Company for $1.9 million in
connection with the 1994 Acquisition. The remaining net proceeds were used for
working capital and general corporate purposes. As a result of the offering, the
Company incurred extraordinary charges to earnings for approximately $2.2
million of unamortized original issue discount and approximately $898,000 of
unamortized financing costs relating to the credit facility and the zero coupon
notes. The Company also recognized a non-recurring charge of approximately
$438,000, representing the unamortized portion of the cost of the consulting
agreement as of the offering date, which was terminated at the time of the
offering. Collectively, these items resulted in extraordinary or non-recurring
charges to earnings of approximately $2.1 million, net of related income tax
benefits, at the time of the offering.

     In March 1996, the Company acquired from Dataproducts Corporation a
non-exclusive license for patented solid ink jet printhead technology in certain
licensed industrial marking fields. This agreement allows the Company to use
these patents in the development and commercialization of its own solid ink
printhead. At the time of the purchase of the solid ink jet technology, certain
technological hurdles had not been overcome to enable the Company to
commercialize a product. Commercialization of this technology by the


                                       13
<PAGE>   14
Company required extensive development work both on the solid ink itself and the
ink jet printheads used to apply that ink in commercial applications. The
Company has made significant progress and plans to further develop this
technology. Over the life of the development process, the Company anticipates
that it will have expended in excess of $750,000 to complete the development of
this technology. Consequently, the Company recorded a charge of approximately
$3.1 million during Fiscal 1996 as a write-off of purchased in-process research
and development to record the cost of evaluating and acquiring this license. The
Company intends to continue to evaluate potential acquisitions and licenses of
new technologies.

RESULTS OF OPERATIONS

    The following table sets forth certain operating data as a percentage of net
revenues for the years ended September 30, 1996, 1997, and 1998:

<TABLE>
<CAPTION>
                                                                       YEARS ENDED SEPTEMBER 30,
                                                                       -------------------------
                                                                     1996        1997        1998
                                                                    ------      ------      ------
<S>                                                                  <C>         <C>        <C>    
             Net sales .........................................     100.0%      100.0%     100.0 %
             Cost of sales .....................................      36.2        35.7        36.3
                                                                    ------      ------      ------
             Gross profit ......................................      63.8        64.3        63.7
                                                                    ------      ------      ------
             Operating expenses:
                  Marketing and selling ........................       5.4         7.8         8.7
                  Research and development .....................       9.0        10.0        12.6
                  Write-off of purchased in-process research
                  and development ..............................      11.8          --          --
                  General and administrative ...................       9.3         7.1         9.1
                  Amortization of intangibles ..................       3.1         2.6         2.3
                  Amortization of deferred compensation ........       1.7          --          --
                                                                    ------      ------      ------
             Total operating expenses ..........................      40.3        27.5        32.7
                                                                    ------      ------      ------
             Operating income ..................................      23.5        36.8        31.0
             Interest (income) expense, net ....................       0.9        (3.5)       (3.5)
             Other (income) expense, net .......................        --          --         0.6
             Redeemable warrant interest charge ................       6.6          --          --
                                                                    ------      ------      ------
             Income (loss) before income taxes .................      16.0        40.3        33.9
             Provision for income taxes ........................      10.6        15.5        12.4
                                                                    ------      ------      ------
             Net income (loss) before extraordinary item .......       5.4        24.8        21.5
             Extraordinary item ................................      (7.0)         --          --
                                                                    ------      ------      ------
             Net income (loss) .................................      (1.6)%      24.8%       21.5%
                                                                    ======      ======      ======
</TABLE>


                                       14
<PAGE>   15
    Fiscal 1998 Compared to Fiscal 1997.

    Net Sales. Net sales increased $2.6 million, or 8.4% to $32.8 million in
Fiscal 1998 from $30.3 million in Fiscal 1997. Printhead sales decreased by
approximately $1.0 million due to a decrease in printhead unit volume of 7.8%.
This decrease was partially offset by a 1.8% increase in average selling price
per printhead. Sales of ink products increased by 29.5% in Fiscal 1998 as
compared to Fiscal 1997 due to a 32.5% increase in the unit volume of ink. This
was partially offset by a reduction in ink average selling price of 2.2% as
customers obtained volume discounts. Net sales to international customers
decreased $27,000 or less than 1% in Fiscal 1998. This decline resulted from a
decrease in direct sales to Asian customers of 32.2% offset by a 13.3% increase
in direct sales to European customers.

    Gross Profit. Gross profit increased by $1.5 million, or 7.5%, to $20.9
million in Fiscal 1998 from $19.5 million in Fiscal 1997. Gross profit as a
percentage of net sales decreased from 64.3% in Fiscal 1997 to 63.7% in Fiscal
1998. The decrease in gross profit as a percentage of sales was due to increased
average unit cost of the Company's printhead products partially offset by higher
average selling price per printhead and a higher percentage of ink revenue.

    Marketing and Selling Expenses. Marketing and selling expenses increased
$507,000, or 21.5% to $2.9 million in Fiscal 1998 from $2.4 million in Fiscal
1997 due to an increase in salaries, recruiting, relocation, travel expenses and
marketing literature. As a percentage of net sales, these expenses increased to
8.7% in Fiscal 1998 from 7.8% in Fiscal 1997. The Company believes that
marketing and selling expenses will continue to increase in both dollar terms
and as a percentage of net sales as the Company introduces new products, opens
new markets and increases end user awareness.

    Research and Development Expenses. Research and development expenses
increased $1.1 million, or 36.8%, to $4.1 million in Fiscal 1998 from $3.0
million in Fiscal 1997. As a percentage of net sales, these expenses increased
to 12.6% in Fiscal 1998 from 10.0% in Fiscal 1997 due to the increases in
engineering and research and development spending to develop new technologies
and products. The increase was due to increases in payroll expense and
associated materials and tools expenses.

    General and Administrative Expenses. General and administrative expenses
increased $839,000, or 39.3%, to $3.0 million in Fiscal 1998 from $2.1 million
in Fiscal 1997. As a percentage of net sales, these expenses increased to 9.1%
in Fiscal 1998 from 7.1% in Fiscal 1997. The increase was principally due to
higher legal fees due to the Company's initiation of a patent infringement suit
against certain third party ink suppliers. Other increases were attributable to
increases in payroll, recruiting, professional fees and insurance.

    Amortization of Intangibles and Amortization of Deferred Compensation.
Amortization of the excess of purchase price over the fair value of net assets
acquired and other intangibles decreased $51,000, or 6.4%, to $751,000 in Fiscal
1998 from $802,000 in Fiscal 1997. The decrease was due to certain intangibles
becoming fully amortized.

    Interest (Income) Expense, net. Net interest income was $1.1 million for
Fiscal 1998 and 1997, respectively.

    Provision for Income Taxes. The effective tax rate for Fiscal 1998 was 36.4%
compared to an effective tax rate for Fiscal 1997 of 38.5%. The effective tax
rate for 1998 decreased due principally to increased research and development
tax credits. The effective tax rate for Fiscal 1998 differed from the statutory
rate principally due to state income taxes and the non-deductibility of
amortization costs related to the excess of purchase price over fair value of
assets acquired and tax credits.




                                       15
<PAGE>   16
    Fiscal 1997 Compared to Fiscal 1996.

    Net Sales. Net sales increased $4.4 million, or 17% to $30.3 million in
Fiscal 1997 from $25.9 million in Fiscal 1996. Approximately $1.1 million of the
increase in net sales was due to a 7.2% increase in average selling price per
printhead unit due to a change in product mix to the higher priced Ultrajet
256/32 printhead. This was partially offset by a 2.2% decrease in unit volume
sales. In certain cases, one Ultrajet 256/32 printhead replaces two printheads
of other configurations. Sales of ink products increased 39% in Fiscal 1997 as
compared to Fiscal 1996 due to a 55.0% increase in the unit volume of ink as the
installed base of printheads expanded during the year. This was partially offset
by a reduction of average selling price of 10.4% as customers obtained higher
volume discounts. Net sales to international customers increased by $845,000 or
10.7%,in Fiscal 1997.

    Gross Profit. Gross profit increased by $2.9 million, or 18%, to $19.5
million in Fiscal 1997 from $16.5 million in Fiscal 1996. Gross profit as a
percentage of net sales increased from 63.8% in Fiscal 1996 to 64.3% in Fiscal
1997. The increase in gross profit as a percentage of sales was due to increased
average selling prices of the Company's printhead products and a higher
percentage of ink revenue.

    Marketing and Selling Expenses. Marketing and selling expenses increased
$943,000, or 67% to $2.4 million in Fiscal 1997 from $1.4 million in Fiscal 1996
due to an increase in personnel and associated travel expense and marketing
literature. As a percentage of net sales, these expenses increased to 7.8% in
Fiscal 1997 from 5.4% in Fiscal 1996. The Company believes that marketing and
selling expenses will increase in both dollar terms and as a percentage of net
sales as the Company introduces new products, opens new markets and increases
end user awareness.

    Research and Development Expenses. Research and development expenses
increased $701,000, or 30%, to $3.0 million in Fiscal 1997 from $2.3 million in
Fiscal 1996. As a percentage of net sales, these expenses increased to 10.0% in
Fiscal 1997 from 9.0% in Fiscal 1996 due to the increases in engineering and
research and development spending to develop new technologies and products. The
increase was due to increases in payroll expense and contract research. Research
and development expenses were 10.6% of net sales for the three months ended
September 30, 1997 and the Company expects that the Company will continue to
make research and development expenditures at this level for the foreseeable
future.

    Write-off of Purchased In-Process Research and Development. In March 1996,
the Company acquired from Dataproducts Corporation a non-exclusive license for
patented solid ink jet printhead technology in certain licensed industrial
marking fields. This agreement allows the Company to use these patents in the
development and commercialization of its own solid ink printhead. The Company
recorded a charge of approximately $3.1 million during Fiscal 1996 as a
write-off of purchased in process research and development to record the cost of
evaluating and acquiring this license. There were no similar expenses in the
year ended September 30, 1997.

    General and Administrative Expenses. General and administrative expenses
decreased $271,000, or 11%, to $2.1 million in Fiscal 1997 from $2.4 million in
Fiscal 1996. Included in general and administrative expenses for the year ended
September 30, 1996 was the write-off of a consulting agreement in the amount of
$438,000. As a percentage of net sales, these expenses decreased to 7.1% for
Fiscal 1997 from 9.3% for Fiscal 1996. If the write-off of the consulting
agreement had not occurred, these expenses would have been 7.6% of net sales for
Fiscal 1996.

    Amortization of Intangibles and Amortization of Deferred Compensation.
Amortization of the excess of purchase price over the fair value of net assets
acquired and other intangibles of $802,000 and $800,000, respectively, did not
vary in amount for Fiscal 1997 as compared to Fiscal 1996. Amortization of
deferred compensation decreased by $443,000 to $0 for Fiscal 1997 because
deferred compensation expense was fully amortized effective February, 1996.

    Interest (Income) Expense, net. Net interest income was $1.1 million for
Fiscal 1997 compared to net interest expense of $241,000 for Fiscal 1996. This
was due to repayment of all outstanding borrowings with the proceeds of the
initial public offering and an increase in interest income on higher cash
balances.

    Redeemable Warrant Interest Charge. Redeemable warrant interest charge
decreased by $1.7 million to $0 for Fiscal 1997 because the redeemable warrants
were fully accreted as of February, 1996. (See Note 11 of "Notes to Consolidated
Financial Statements").

    Provision for Income Taxes. The provision for income taxes for Fiscal 1997
was $4.7 million on income before income taxes of $12.2 million. The effective
tax rate for Fiscal 1997 differed from the statutory rate principally due to
state income taxes and the non-deductibility of amortization costs related to
the excess of purchase price over fair value of assets acquired.




                                       16
<PAGE>   17
    Extraordinary Item. In connection with the initial public offering, the
Company expensed approximately $2.2 million of unamortized original issue
discount upon prepayment of certain zero coupon notes issued in the 1994
transaction and approximately $898,000 of unamortized deferred financing cost.
The extraordinary item represents the write-off of these items less a related
income tax benefit of approximately $1.3 million. There were no similar expenses
in 1997.

Business Environment and Future Results.

    The industrial printing industry is highly competitive and the Company
believes it will need to continue to develop new products and applications in
order to remain competitive. Several of the Company's competitors are larger and
have greater financial, research and development, marketing and other resources
than the Company. For example, Nu-Kote Holdings, Inc. released a piezoelectric
printhead intended for use in industrial printing and other applications. Also,
Markem Corporation has introduced a solid ink jet printer targeted for carton
marking and coding applications. No assurance can be given that the Company will
be able to compete successfully against current or future competitors or that
the competitive pressures faced by the Company will not adversely affect its
results of operations.

     The Company is aware that manufacturers of certain ink products are
claiming that their inks could be utilized with certain of the Company's impulse
ink jet printheads. Although the use of such other inks will void the Company's
warranties on its printheads, and could, in the Company's judgement, result in
inferior performance and permanent damage to its printheads, there can be no
assurance that the introduction and sale of such other inks will not have a
material adverse effect on the Company's financial condition or results of
operation or that end users will continue to purchase their ink requirements
from the Company. In December, 1997, the Company filed a civil action charging
several such manufacturers with infringing two of the Company's patents (see
"ITEM 3: Legal Proceedings"). This has resulted in counterclaims by two
defendants that include patent invalidity and antitrust violations. No assurance
can be given that the Company's litigation in this area will result in a
favorable decision, or that any adverse decision on the counterclaims would not
have a material adverse effect on the Company's results of operations.

    The markets for the Company's products are characterized by changing
technology, evolving industry standards and changing customer needs. The
Company's future success will depend in part on its ability to enhance its
current products and to develop new products on a timely and cost-effective
basis in order to respond to technological developments and changing customer
needs. There can be no assurance that the Company will be successful in
developing new products or enhancing its existing products on a timely or
cost-effective basis.

    New products could also have the effect of decreasing customer demand for
the Company's current products. Although the Company historically has not
experienced any material adverse impact on its business attributable to delays
in the introduction of new products, there can be no assurance that delays will
not occur in the future. The Company expects a component of its growth strategy
to be the acquisition of new technologies, whether through entering into
licensing arrangements, acquiring businesses owning desirable technology, or
otherwise. An example of this is the solid ink jet printing technology. There
can be no assurance that the Company's investments in new technologies,
including solid ink, will lead to the successful development of new products.

    The Company's net sales are dependent upon the ability of its OEM customers
to develop and sell products that incorporate the Company's impulse ink jet
products. Factors such as economic conditions, inventory position, limited
marketing resources and other factors affecting these OEM customers could have a
substantial impact upon the Company's financial results. No assurances can be
given that the Company's OEM customers will not experience financial or other
difficulties that could adversely affect their operations and, in turn, the
results of operations of the Company.

    For the year ended September 30, 1998, approximately 77% of the Company's
net sales were to its top ten OEM customers, while approximately 33% of the
Company's net sales for this period were to Videojet Systems International, Inc.
A significant diminution in the sales to or loss of any of the Company's major
customers would have a material adverse effect on the Company's results of
operations.

    For the year ended September 30, 1998, approximately 69% of the Company's
net sales were derived from carton coding and the Company anticipates that
carton coding will continue to account for a substantial portion of the
Company's total net sales. A reduction in demand for carton coding systems would
have a material adverse effect on the Company's business, results of operations
and financial condition.

    The Company's annual and quarterly operating results may fluctuate due to
factors such as the timing of new product announcements and introduction by the
Company and its competitors, market acceptance of new or enhanced versions of
the Company's products, changes in product mix, changes in manufacturing costs
or other expenses, competitive pricing pressures, the gain or loss of
significant customers, 


                                       17
<PAGE>   18
increased research and development expenses and general economic conditions.

    The trading price of the Company's Common Stock could be subject to wide
fluctuations in response to quarterly variations in the Company's operating
results, shortfalls in such operating results from levels forecast by securities
analysts and other events or factors. In addition, the stock market has, from
time to time, experienced extreme price and volume fluctuations that have often
been unrelated to the operating performance of the affected companies.

    In connection with the consummation of the Company's initial public offering
in February, 1996, the Company paid down all of its indebtedness and fully
amortized a number of expenses incurred in connection with the 1994 Acquisition.
As a result, period to period comparisons involving periods through March 31,
1996 may not necessarily be meaningful or indicative of trends in operating
results.

    Liquidity and Capital Resources. At September 30, 1998, the Company had
working capital of $26.6 million compared to $23.5 million at September 30,
1997. At September 30, 1998, the Company had cash and marketable securities of
$20.4 million. The primary investing and financing cash flows activities for the
year ended September 30, 1998 were the purchase of marketable securities of $1.8
million and the purchase of treasury stock of $4.4 million, respectively. Cash
flows from operations of $6.1 million results primarily from net income of $7.1
million plus depreciation and amortization of $1.2 million less increases in
current assets. The Company has a working capital line of credit with Fleet Bank
which allows it to borrow up to $1,000,000. In addition, the Company has an
acquisition line of credit with Fleet Bank which allows it to borrow up to
$10,000,000. There were no borrowings under these lines at September 30, 1998.

    The Company's long-term capital requirements will depend on numerous factors
including the rate at which the Company identifies, evaluates and acquires new
technologies, whether through entering into licensing arrangements or acquiring
businesses, the timing of the expansion of the Company's facilities and the
purchase of additional factory automation equipment. The Company believes that
it has sufficient cash resources to meet its anticipated needs for working
capital and capital expenditures through at least the next 12 months.

    Year 2000 Compliance. The "Year 2000" (or "Y2K") issue affects computer and
information technology ("IT") systems, as well as non-IT systems which may
include embedded technology such as micro-processors and micro-controllers (or
micro-chips) that have date sensitive programs that may not properly recognize
the year 2000. Systems that do not properly recognize such information could
generate inaccurate data or cause a system to fail, resulting in business
interruption. The Company is currently developing a plan to provide measured
assurances that its computer and IT-systems, non-IT systems, including
instruments and equipment, and those of third parties which have a material
relationship with the Company are or will be Y2K compliant.

    The Company expects to complete in January, 1999 a comprehensive inventory
and assessment of its existing IT and non-IT systems and those of third parties,
as well as planned and anticipated systems, and third parties' services which
the Company may purchase or use. Assessment will include identifying critical
systems - internal and external (including third parties) - in order to
formulate a remediation and verification plan. The Company currently believes
that remediation and verification, which includes obtaining written assurances
from key vendors and suppliers, as well as testing, will be completed by March
31, 1999.

    The Company believes, based on preliminary information, that the costs
associated with remediation and verification to become Y2K compliant will not
have a material adverse impact on the Company's financial position, results of
operations, or cash flow. In the event that the Company's Y2K compliance plan is
not successfully implemented, the Company may experience temporary disruptions
of the Company's operations - presuming broad Y2K compliance by general services
providers such as utilities, telephone, data transfer, and other government and
private entities. While the Company has not yet developed contingency plans for
such events, the Company expects to prepare such plans by March, 1999.

    Although the Company has taken steps to address the Y2K problem, there can
be no assurance that the failure of the Company and/or its material third
parties to timely attain Y2K compliance or that the failure and/or the impacts
of broader compliance failures by telephone, mail, data transfer or other
utility or general service providers or government or private entities will not
have a material adverse effect on the Company. Further, there can be no
assurance that the costs associated with achieving such compliance or any
failure to become Y2K compliant will not be material to the Company's financial
position, its results of operations, or its cash flows.

    The Company's discussion above regarding Y2K compliance contains several
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including,
without limitation, the Company's expectations as to the approximate time of
completion of (i) the inventory and assessment stage, (ii) the remediation and
verification stage, and (iii) its contingency plan, as well as the Company's
estimates of the costs involved in achieving Y2K compliance. The actual results
of the Company's Y2K compliance efforts could differ materially from those
projected in the forward-looking statements. Factors that might cause such a
difference include the availability of Y2K compliant replacement software and
hardware as 


                                       18
<PAGE>   19
well as qualified personnel and other information technology resources and the
actions of third parties and governmental agencies with respect to Y2K issues.

ITEM 7A:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    The Company sells products to customers located in Europe and the Far East.
All of these sales are denominated in U.S. dollars. In addition, the Company has
never entered into any derivative or other transactions for speculative
purposes.

ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

    The Company's financial statements and notes thereto are included elsewhere
in the report on Form 10-K as follows:

<TABLE>
<S>                                                                                                         <C>
  Report of Independent Public Accountants...............................................................    F-1
  Consolidated Balance Sheets at September 30, 1997 and 1998.............................................    F-2
  Consolidated Statements of Operations for the three years ended September 30, 1996,                       
    1997, and 1998.......................................................................................    F-3
  Consolidated Statements of Stockholders' Equity (Deficit) for the three years ended                       
    September 30, 1996, 1997, and 1998...................................................................    F-4
  Consolidated Statements of Cash Flows for the three years ended September 30, 1996,                       
    1997, and 1998.......................................................................................    F-5
  Notes to Consolidated Financial Statements.............................................................    F-6
                                                                                                            
  Financial Statement Schedules:                                                                            
                                                                                                            
  Report of Independent Public Accountants on Financial Statement Schedule...............................   F-16
  Schedule II - Valuation and Qualifying Accounts........................................................   F-17
</TABLE>

    All other schedules are omitted because they are not required, are not
applicable, or the information is included in the financial statements or notes
thereto.

ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

    Not applicable


                                       19
<PAGE>   20
                                    PART III

ITEM 10:  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    The information required by Item 10 of Form 10-K with respect to
identification of directors is incorporated by reference to the information
contained in Trident's definitive Proxy Statement for the Company's 1999 Annual
Meeting of Stockholders (the "Proxy Statement"), to be filed with the Securities
and Exchange Commission. For information with respect to the executive officers
of the Registrant, see "Executive Officers of the Registrant" at the end of Part
I of this report.

ITEM 11:  EXECUTIVE COMPENSATION

    The information required by Item 11 of Form 10-K is incorporated by
reference to such information contained in the Proxy Statement.


ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The information required by Item 12 of Form 10-K is incorporated by
reference to such information contained in the Proxy Statement.

ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    The information required by Item 13 of Form 10-K is incorporated by
reference to the information contained in the Proxy Statement.


                                       20
<PAGE>   21
    PART IV

ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

  (a)(1)  Financial Statements - See Item 8 of Part II.

     (2)  Financial Statement Schedules- See Item 8 of Part II.

     (3)  Exhibits - See Exhibit Index at pages 22 and 23 of this Form 10-K.

  (b)     Reports on Form 8-K - On September 21, 1998 the Company filed a
          Current Report on Form 8-K for the purposes of filing a press release
          the Company had issued on September 9, 1998 announcing estimated
          results for the quarter ended September 30, 1998.


                                       21
<PAGE>   22
    EXHIBIT INDEX

Exhibit
Number                                             Description

       3.1    Third Amended and Restated Certificate of Incorporation of Trident
              International, Inc. (incorporated herein by reference to the
              Company's quarterly report on Form 10-Q for the three months ended
              March 31, 1996)

       3.2    Form of Amended and Restated By-laws of Trident International,
              Inc. (incorporated herein by reference to the Form 10-Q for the
              three months ended March 31, 1996)

       4.1    Specimen certificate for shares of Common Stock, $.01 par value of
              the Company (incorporated herein by reference to the Company's
              Registration Statement on Form S-1 (File No. 33-80549)
              ("Registration Statement"))

       4.2    Warrant to Purchase 235,192 Shares of Common Stock of the Company
              dated as of June 24, 1994 (incorporated herein by reference to the
              Registration Statement)

       4.3    Registration Rights Agreement by and among Trident Holding Corp.,
              the Management Investors, the Brean Murray Investors, the West
              Point Investors, the TA Investors, and Nations Financial Capital
              Corporation dated June 24, 1994 (incorporated herein by reference
              to the Registration Statement)

       10.1   Employment Agreement between the Company and Elaine A. Pullen
              dated as of November 1, 1997 (incorporated herein by reference to
              the form 10-Q for the three months ended December 31, 1997.)

       10.2   Consulting Agreement between the Company and R. Hugh van Brimer
              dated as of July 1, 1998 (incorporated herein by reference to the
              form 10-Q for the three months ended June 30, 1998.)

       10.3   Stock Purchase and Restriction Agreement by and between the
              Company and Elaine A. Pullen dated as of October 27, 1994
              (incorporated herein by reference to the Registration Statement)

       10.4   Memorandum of Understanding by and between Trident, Inc. and
              Micropore, Inc. dated as of May 24, 1994 (incorporated herein by
              reference to the Registration Statement)

       10.5   License Agreement by and between Dataproducts Corporation and
              Trident, Inc. dated as of March 17, 1989 (incorporated herein by
              reference to the Registration Statement)

       10.6   Letter Amendment by and between Dataproducts Corporation and
              Trident, Inc. dated as of January 5, 1994 (incorporated herein by
              reference to the Registration Statement)

       10.7   Amendment to License Agreement by and between Dataproducts
              Corporation and Trident, Inc. dated as of March 17, 1989,
              effective as of December 1, 1992 (incorporated herein by reference
              to the Registration Statement)

       10.8   Lease by and between Oskar G. Rogg and Trident, Inc. for premises
              at 1114 Federal Road, Brookfield, Connecticut dated as of June 30,
              1998 incorporated herein by reference to the form 10-Q for the
              three months ended June 30, 1998.

       10.9   Lease by and between Oskar G. Rogg and Trident, Inc. for premises
              at 1112 Federal Road, Brookfield, Connecticut dated as of June 30,
              1998 incorporated herein by reference to the form 10-Q for the
              three months ended June 30, 1998.

       10.10  Third Amended and Restated 1994 Stock Option and Grant Plan
              (incorporated herein by reference to the Form 10-Q for the three
              months ended December 31, 1997.)

       10.11  Sales and License Agreement between Marsh Company and Trident,
              Inc. dated as of July 28, 1993 (incorporated herein by reference
              to the Registration Statement)

       10.12  Sales and License Agreement between Foxjet, Inc. and Trident, Inc.
              dated as of February 20, 1991 (incorporated herein by reference to
              the Registration Statement)

       10.13  Ink Jet Printer OEM Kit Agreement between BancTec, Inc. and
              Dataproducts, Corp. as assigned to Trident, Inc. on March 17, 1989
              (incorporated herein by reference to the Registration Statement)

     **10.14  Arrangements for the Purchase and Supply of Inks with Porelon
              Group dated August 7, 1996 (incorporated herein by reference to
              the Company's amended annual report on Form 10-K for the fiscal
              year ended September 30, 1996 (the "1996 Form 10-K/A"))

       10.15  Patent License Agreement dated March 15, 1996 between the Company
              and Dataproducts Corporation (incorporated herein by reference to
              the Form 10-Q for the three months ended March 31, 1996.)

       10.16  Lease by and between Oskar G. Rogg and Trident, Inc. for Premises
              at 1112 and 1114 Federal Road, Brookfield, Connecticut dated as of
              August 6, 1997 (incorporated herein by reference to the Company's
              annual report on form 10-K for the fiscal year ended September 30,
              1997.)

       10.17  Lease by and between Robert and Laura E. Lore and Trident, Inc.
              for Premises at 129 Danbury Road, New Milford, Connecticut dated
              as of October 23, 1997 (incorporated herein by reference to the
              Company's annual report on form 10-K for the fiscal year ended
              September 30, 1997).

      *10.18  Credit Agreement, Replacement Revolving Loan Note, and Continuing
              Guaranty Agreement between Fleet Bank and the Company dated July
              31, 1998.

       10.19  Employment Agreement between the Company and J. Leo Gagne dated as
              of June 1, 1998 (incorporated herein by reference to the Form 10-Q
              for the three months ended June 30, 1998).



                                       22
<PAGE>   23
       10.20  Letter of addendum to the leases for the premises located at 1114
              Federal Road and 1112 Federal Road, Brookfield, Connecticut dated
              July 20, 1998 (incorporated herein by reference to the form 10-Q
              for the three months ended June 30, 1998).

       *10.21 Lease by and between Thomas G. Taylor, John D. Gerrasoni, and
              Gordon E. Tayler, doing business as Modern Realty Associates and
              the Company for Premises located at 1120 Federal Road, Brookfield,
              Connecticut dated as of August 25, 1998.

       *21.1  Schedule of Subsidiaries of Registrant

       *23.1  Consent of Arthur Andersen LLP

       *27    Financial Data Schedule


    *Filed herewith

    ** Certain portions of this document have been omitted pursuant to a grant
of confidential treatment from the Securities and Exchange Commission ("the
Commission"). The omitted portions have been filed separately with the
Commission.




                                       23
<PAGE>   24
                                   SIGNATURES

    PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.

                                               Trident International, Inc.
                                                       (Registrant)       

    Dated:   December 21, 1998     By:        /s/  Elaine A. Pullen
                                       -----------------------------------------
                                                   Elaine A. Pullen
                                          President & Chief Executive Officer

    PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.

<TABLE>
<CAPTION>
       SIGNATURE                        TITLE                               DATE
       ---------                        -----                               ----
<S>                         <C>                                      <C>    
/s/ R. Hugh Van Brimer               Director and                    December 21, 1998
------------------------        Chairman of the Board             
   (R. Hugh Van Brimer)

                                     President,
 /s/ Elaine A. Pullen         Chief Executive Officer                December 21 , 1998
-----------------------             and Director        
    (Elaine A. Pullen)      (Principal Executive Officer)

                                    Vice President      
   /s/ J. Leo Gagne          and Chief Financial Officer             December 21, 1998
-----------------------       (Principal Financial and
      (J. Leo Gagne)             Accounting Officer)

/s/ Robert S. Anderson                 Director                      December 21, 1998
-----------------------
   (Robert S. Anderson)

 /s/ Russell Greenberg                 Director                      December 21, 1998
-----------------------
    (Russell Greenberg)

/s/ Michael K. Lorelli                 Director                      December 21, 1998
-----------------------
   (Michael K. Lorelli)

   /s/ Norman Norris                   Director                      December 21, 1998
-----------------------
      (Norman Norris)

   /s/ John R. Webb                    Director                      December 21, 1998
-----------------------
      (John R. Webb)
</TABLE>




                                       24
<PAGE>   25
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of
    Trident International, Inc.:

    We have audited the accompanying consolidated balance sheets of Trident
International, Inc. (a Delaware corporation) and subsidiaries as of September
30, 1997 and 1998 and the related consolidated statements of operations,
stockholders' equity (deficit) and cash flows for each of the three years in the
period ended September 30, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

    We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Trident
International, Inc. and subsidiaries as of September 30, 1997 and 1998, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended September 30, 1998 in conformity with generally
accepted accounting principles.


                                       /s/  Arthur Andersen LLP
                                       ARTHUR ANDERSEN LLP

Hartford, Connecticut
October 29, 1998

                                      F-1

<PAGE>   26

                  TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (000'S OMITTED)

<TABLE>
<CAPTION>
                                                                                   SEPTEMBER  30,
                                                                                   --------------
                                                                                 1997         1998
                                                                                 ----         ----
<S>                                                                           <C>         <C>       
                                     ASSETS
CURRENT ASSETS:
 Cash and cash equivalents ................................................   $ 7,065     $ 5,887
 Marketable securities ....................................................    12,728      14,541
 Accounts receivable, net of allowance for doubtful accounts of $300,000
    in 1997 and 1998 ......................................................     4,385       5,283
 Inventories ..............................................................     1,745       2,103
 Deferred income taxes ....................................................       465         464
 Other current assets .....................................................       148       1,076
                                                                              -------     -------
        Total current assets ..............................................    26,536      29,354
LEASEHOLD IMPROVEMENTS AND EQUIPMENT, net .................................     1,924       2,538
DEFERRED INCOME TAXES .....................................................       704         457
INTANGIBLE ASSETS, net ....................................................    11,743      10,991
                                                                              -------     -------
                                                                              $40,907     $43,340
                                                                              =======     =======
                               LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable ........................................................   $ 1,540     $ 1,336
  Accrued expenses ........................................................     1,067       1,049
  Income taxes payable ....................................................       411         366
                                                                              -------     -------
        Total current liabilities .........................................     3,018       2,751
                                                                              -------     -------
COMMITMENTS AND CONTINGENCIES (Note 14)
STOCKHOLDERS' EQUITY:
  Common Stock, $.01 par value; 30,000,000 shares authorized; 7,167,981 and
    7,180,939 shares issued and outstanding at September 30, 1997 and
    1998, respectively ....................................................        72          72
  Additional paid-in capital ..............................................    40,146      40,216
  Retained earnings .......................................................     3,346      10,412
                                                                              -------     -------
                                                                               43,564      50,700
  Less - Treasury stock at cost, 345,000 shares in 1997 and 646,600 in 1998     5,675      10,111
                                                                              -------     -------
        Total stockholders equity .........................................    37,889      40,589
                                                                              -------     -------
                                                                              $40,907     $43,340
                                                                              =======     =======
</TABLE>


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

                                      F-2

<PAGE>   27

                  TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     (000'S OMITTED, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>

                                                                                  YEARS ENDED SEPTEMBER 30,
                                                                                  -------------------------

                                                                             1996            1997           1998
                                                                             ----            ----           ----

<S>                                                                       <C>            <C>            <C>        
NET SALES .............................................................   $    25,925    $    30,283    $    32,832
COST OF SALES .........................................................         9,392         10,818         11,914
                                                                          -----------    -----------    -----------
      Gross profit ....................................................        16,533         19,465         20,918
                                                                          -----------    -----------    -----------
OPERATING EXPENSES:
      Marketing and selling ...........................................         1,415          2,358          2,865
      Research and development ........................................         2,326          3,027          4,142
      Write-off of purchased in-process research and development ......         3,052             --             --
      General and administrative ......................................         2,405          2,134          2,973
      Amortization of excess of purchase price over the fair value of
      net assets acquired and other intangibles........................           800            802            751
      Amortization of deferred compensation ...........................           443             --             --
                                                                          -----------    -----------    -----------
            Total operating expenses ..................................        10,441          8,321         10,731
                                                                          -----------    -----------    -----------
            Operating income ..........................................         6,092         11,144         10,187
OTHER (INCOME) EXPENSE:
      Interest (income) expense, net ..................................           241         (1,072)        (1,138)
      Other expense, net ..............................................            --             --            207
      Redeemable warrant interest charge ..............................         1,710             --             --
                                                                          -----------    -----------    -----------
          Income  before income taxes and extraordinary item ..........         4,141         12,216         11,118
PROVISION FOR INCOME TAXES ............................................         2,752          4,703          4,052
                                                                          -----------    -----------    -----------
          Net income before extraordinary item ........................         1,389          7,513          7,066
EXTRAORDINARY ITEM, net of income tax benefit of $1,253 ...............        (1,803)            --             --
                                                                          -----------    -----------    -----------
NET INCOME (LOSS) .....................................................          (414)         7,513          7,066
INCREASE IN REDEMPTION VALUE OF PREFERRED STOCK .......................           (83)            --             --
                                                                          -----------    -----------    -----------
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS ...................   $      (497)   $     7,513    $     7,066
                                                                          ===========    ===========    ===========
BASIC EARNINGS (LOSS) PER COMMON SHARE:
      Net income  before extraordinary item ...........................   $      0.28    $      1.07    $      1.06
      Extraordinary item, net of tax ..................................         (0.38)            --             --
                                                                          -----------    -----------    -----------
      Net income (loss) ...............................................   $     (0.10)   $      1.07    $      1.06
                                                                          ===========    ===========    ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING FOR BASIC EARNINGS PER SHARE
                                                                            4,770,743      7,039,157      6,636,313
                                                                          ===========    ===========    ===========
DILUTED EARNINGS (LOSS) PER COMMON SHARE:
     Net income before extraordinary item .............................   $      0.26    $      1.05    $      1.05
     Extraordinary item, net of tax ...................................         (0.36)            --             --
                                                                          -----------    -----------    -----------
     Net income (loss) ................................................   $     (0.10)   $      1.05    $      1.05
                                                                          ===========    ===========    ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING FOR DILUTED EARNINGS PER
SHARE .................................................................     5,030,112      7,151,722      6,742,586
                                                                          ===========    ===========    ===========
</TABLE>


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

                                      F-3

<PAGE>   28



                  TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                      (000'S OMITTED, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                        CLASS A
                                      COMMON STOCK                                     ADDITIONAL                  RETAINED
                                     $.01 PAR VALUE               COMMON STOCK           PAID-IN      DEFERRED     EARNINGS    
                                   SHARES        AMOUNT        SHARES       AMOUNT       CAPITAL    COMPENSATION   (DEFICIT)   
                                   ------        ------        ------       ------       -------    ------------   ---------   
<S>                              <C>           <C>            <C>         <C>          <C>          <C>          <C>           
BALANCE, September 30, 1995 ..    1,560,000    $       16            --   $       --   $    2,786   $     (443)   $   (3,670)  

  Net loss ...................           --            --            --           --           --           --          (414)  

  Conversion of Class A common
    Stock to common stock ....   (1,560,000)          (16)    1,560,000           16           --           --            --   

  Issuance of common stock ...           --            --     1,900,000           19       28,245           --            --   

  Payment of offering costs ..           --            --            --           --           --       (1,065)           --   


  Exercise of warrants and
options ......................           --            --       477,064            4          459           --            --   

  Conversion of preferred
stock to common stock ........           --            --     3,073,170           31        3,363           --            --   

  Conversion of redeemable
    Common stock warrants to
    Stockholders' equity .....           --            --            --           --        6,271           --            --   

  Increase in redemption value
of Preferred stock ...........           --            --            --           --           --           --           (83)  

  Amortization of deferred
    Compensation .............           --            --            --           --           --          443            --   

                                 ----------    ----------    ----------   ----------   ----------   ----------    ----------   
BALANCE, September 30, 1996 ..           --            --     7,010,234           70       40,059           --        (4,167)  
                                
  Net income .................           --            --            --           --           --           --         7,513   

  Issuance of common stock ...           --            --         3,689           --           55           --            --   

  Purchase of treasury stock .           --            --            --           --           --           --            --   

  Exercise of warrants and
    Options ..................           --            --       154,058            2           32           --            --   
                                 ----------    ----------    ----------   ----------   ----------   ----------    ----------   


BALANCE, September 30, 1997 ..           --            --     7,167,981           72       40,146           --         3,346   



  Net income .................           --            --            --           --           --           --         7,066   

  Issuance of common stock ...           --            --         4,396           --           50           --            --   

  Purchase of treasury stock .           --            --            --           --           --           --            --   

  Exercise of warrants and
    Options ..................           --            --         8,562           --           20           --            --   

                                 ----------    ----------    ----------   ----------   ----------   ----------    ----------   
BALANCE, September 30, 1998 ..           --    $       --     7,180,939   $       72   $   40,216   $       --    $   10,412   
                                 ==========    ==========    ==========   ==========   ==========   ==========    ==========   
</TABLE>


<TABLE>
<CAPTION>
                                  TREASURY                      
                                    STOCK          TOTAL        
                                    -----          -----        
<S>                               <C>           <C>        
BALANCE, September 30, 1995 ..    $       --    $   (1,311)     
                                                                
  Net loss ...................            --          (414)     
                                                                
  Conversion of Class A common                                  
    Stock to common stock ....            --            --      

  Issuance of common stock ...            --        28,264      
                                                                
  Payment of offering costs ..            --        (1,065)     
                                                                
                                                                
  Exercise of warrants and                                      
options ......................            --           463      
                                                                
  Conversion of preferred                                       
stock to common stock ........            --         3,394      
                                                                
  Conversion of redeemable                                      
    Common stock warrants to                                    
    Stockholders' equity .....            --         6,271      
                                                                
  Increase in redemption value                                  
of Preferred stock ...........            --           (83)     
                                                                
  Amortization of deferred                                      
    Compensation .............            --           443      
                                                                
                                  ----------    ----------      
BALANCE, September 30, 1996 ..            --        35,962      
                                                                
  Net income .................            --         7,513      
                                                                
  Issuance of common stock ...            --            55      
                                                                
  Purchase of treasury stock .        (5,675)       (5,675)     
                                                                
  Exercise of warrants and                                      
    Options ..................            --            34      
                                  ----------    ----------      
                                                                
                                                                
BALANCE, September 30, 1997 ..        (5,675)       37,889      
                                                                
                                                                
                                                                
  Net income .................            --         7,066      
                                                                
  Issuance of common stock ...            --            50      
                                                                
  Purchase of treasury stock .        (4,436)       (4,436)     
                                                                
  Exercise of warrants and                                      
    Options ..................            --            20      
                                                                
                                  ----------    ----------      
BALANCE, September 30, 1998 ..    $  (10,111)   $   40,589      
                                  ==========    ==========      
</TABLE>

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

                                      F-4

<PAGE>   29



                  TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (000'S OMITTED)


<TABLE>
<CAPTION>
                                                                                          YEARS ENDED
                                                                                         SEPTEMBER 30,
                                                                                         -------------
                                                                                  1996       1997        1998
                                                                                  ----       ----        ----
<S>                                                                            <C>         <C>         <C>     
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ..........................................................   $   (414)   $  7,513    $  7,066
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
  Depreciation and amortization ............................................      1,315       1,152       1,235
  Amortization of deferred compensation ....................................        443          --          --
  Extraordinary item .......................................................      3,056          --          --
  Write-off of consulting agreement ........................................        438          --          --
  Deferred income taxes ....................................................     (1,162)        181         248
  Accretion of interest on zero coupon notes ...............................        108          --          --
  Accretion of redeemable warrant interest charge ..........................      1,710          --          --
  Changes in operating assets and liabilities:
     Accounts receivable ...................................................       (986)       (470)       (898)
     Inventories ...........................................................       (514)       (182)       (358)
     Other current assets ..................................................        (72)         19        (928)
     Accounts payable, accrued expenses and income taxes payable ...........        875         649        (267)
                                                                               --------    --------    --------
        Net cash provided by operating activities ..........................      4,797       8,862       6,098
                                                                               --------    --------    --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of marketable securities, net ..................................         --     (12,728)     (1,813)
  Purchases of leasehold improvements and equipment, net ...................       (848)       (832)     (1,097)
                                                                               --------    --------    --------
        Net cash used in investing activities ..............................       (848)    (13,560)     (2,910)
                                                                               --------    --------    --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock ...................................     28,264          55          50
  Payments of offering costs ...............................................     (1,065)         --          --
  Exercise of warrants and stock options ...................................        463          34          20
  Purchases of treasury stock ..............................................         --      (5,675)     (4,436)
  Repayments of long-term indebtedness .....................................    (17,250)         --          --
                                                                               --------    --------    --------
         Net cash (used in) provided by financing activities ...............     10,412      (5,586)     (4,366)
                                                                               --------    --------    --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ...........................     14,361     (10,284)     (1,178)
CASH AND CASH EQUIVALENTS, beginning of period .............................      2,988      17,349       7,065
                                                                               --------    --------    --------
CASH AND CASH EQUIVALENTS, end of period ...................................   $ 17,349    $  7,065    $  5,887
                                                                               ========    ========    ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the period for --
    Interest ...............................................................   $  3,120    $     --          --
    Income taxes ...........................................................   $  2,506    $  4,381    $  3,800
  Non-cash transactions --
     Increase in redemption value of preferred stock .......................   $     83    $     --    $     --
</TABLE>



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

                                      F-5


<PAGE>   30



                  TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS:

    Trident International, Inc. (the Company) designs, manufactures and markets
impulse ink jet subsystems, including printheads, inks and other consumables,
and related components for the industrial market. The Company markets its
products worldwide principally to original equipment manufacturers (OEMs), who
integrate the products and systems which are then sold to end-users directly or
via distributors. The largest market application currently addressed by the
Company's products is that of printing onto shipping cartons. Other industrial
applications for which the Company's products are currently being utilized
include check coding, addressing and imprinting business forms, postal bar
coding and stamp cancellation and plotting garment patterns.

    In February 1996, Trident International, Inc. completed its initial public
offering of its common stock which provided proceeds, after underwriting
discounts and commissions, of $28,264,000. The Company used approximately
$10,755,000 to repay the outstanding indebtedness under a previously existing
credit facility (the Credit Agreement) and $4,500,000 to retire all of the
Company's zero coupon notes (see Note 9).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of consolidation

    The accompanying consolidated financial statements include the Company and
its wholly-owned subsidiaries, Trident, Inc. and Trident Overseas, F.S.C. All
significant intercompany balances and transactions have been eliminated in
consolidation.

Use of estimates in the preparation of financial statements

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Cash and cash equivalents

    For purposes of the consolidated statements of cash flows, the Company
considers all investment instruments purchased with a maturity of three months
or less to be cash equivalents.

Marketable securities

    The Company invests in marketable securities of highly rated financial
institutions and investment grade debt instruments and limits the amount of
credit exposure in any one entity. The Company has classified its marketable
securities as "available for sale" and accordingly carries such securities at
aggregate fair value. Unrealized gains or losses are included in stockholders'
equity as a component of additional paid-in capital. At September 30, 1997 and
1998, the fair value of the Company's marketable securities approximated their
cost.

    Inventories

    Inventories are stated at the lower of cost, under the first-in, first-out
(FIFO) method, or market and include materials, labor and manufacturing
overhead. The Company periodically evaluates the realizability of its
inventories and establishes a reserve for excess or obsolete inventories, as
necessary.

                                      F-6

<PAGE>   31


Leasehold improvements and equipment

    Leasehold improvements and equipment are comprised of the following:


<TABLE>
<CAPTION>
                                       September 30,
                                      (000's omitted)
                                       1997      1998
                                       ----     ----

<S>                                   <C>      <C>   
Leasehold improvements ............   $  567   $  975

Machinery and equipment ...........    2,021    2,614

Furniture and fixtures ............      207      303
                                      ------   ------

                                       2,795    3,892

Less - Accumulated depreciation and
  amortization ....................      871    1,354
                                      ------   ------

                                      $1,924   $2,538
                                      ======   ======
</TABLE>

    Leasehold improvements and equipment are stated at cost less accumulated
depreciation and amortization. Expenditures for repairs and maintenance are
charged to expense as incurred. Depreciation and amortization are computed using
the straight-line method over the following estimated useful lives:



<TABLE>
<CAPTION>
                                                                                 Years
<S>                                                                              <C>
             Leasehold improvements.................................                 6

             Machinery and equipment................................             5 - 7

             Furniture and fixtures.................................                10
</TABLE>

Intangible assets

    Intangible assets are stated at cost less accumulated amortization. The
excess of purchase price over fair value of net assets acquired is being
amortized on a straight-line basis over 20 years. Periodically, the Company
evaluates the realizability of this asset based upon expectations of
undiscounted cash flows and operating income. Based upon its most recent
analysis, the Company believes that no impairment of the excess of purchase
price over fair value of net assets acquired exists at September 30, 1998. Other
intangibles are amortized on a straight-line basis over their estimated useful
lives which are 5 years.

Revenue recognition

    Revenue is recorded upon the shipment of products.

Research and development costs

    The Company's research and development costs are charged to expense as
incurred.

Warranty costs

    The Company provides, by a current charge to operations, an amount it
estimates will be needed to cover future warranty obligations for products sold
during the applicable period which is generally between one and three years. The
related liabilities are included in accrued expenses in the accompanying
consolidated balance sheets.

Income taxes

    The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes". This
statement requires the Company to recognize deferred tax liabilities and assets
for the expected future tax consequences of events that have been recognized in
the Company's financial statements or tax returns. Under this method, deferred
tax liabilities and assets are determined based on the difference between the
financial statement carrying amounts and tax bases of assets and liabilities and
tax net operating loss carry forwards available for tax reporting purposes,
using applicable tax rates for the years in which the differences are expected
to reverse.

                                      F-7

<PAGE>   32


Net income (loss) per common share

         In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share",
which established new standards for computing and presenting earnings per share.
This new standard replaces the computation of primary earnings per share with a
new computation of basic earnings per share. Additionally, on February 4, 1998,
the Securities and Exchange Commission released Staff Accounting Bulletin (SAB)
No. 98 on computations of earnings per share, which changed the guidance on how
cheap stock is treated in earnings per share computations. SFAS No. 128 is
effective for financial statements issued for periods ending after December 15,
1997 and SAB No. 98 was effective on February 4, 1998. Accordingly, period
earnings per share data presented has been restated and all earnings per share
data presented is in accordance with SFAS No. 128 and SAB No. 98. As a result,
the Company's recorded earnings per share for the year ended September 30, 1997
were restated from $1.05 primary earnings per share to $1.07 basic earnings per
share.

     Basic earnings (loss) per common share are based on the average number of
common shares outstanding during the year. Diluted earnings per common share
assumes, in addition to the above, a dilutive effect of common share equivalents
during the year. Common share equivalents represent dilutive stock options and
warrants using the treasury stock method. The number of shares used in the
earnings (loss) per common share computation were as follows (in thousands):

<TABLE>
<CAPTION>
                                                                 For the Year Ended
                                                                 ------------------
                                                                1996    1997    1998
                                                                ----    ----    ----
<S>                                                            <C>     <C>     <C>  
Shares used in basic net income (loss) per
share calculations .........................................   4,771   7,039   6,636
Dilutive effect of stock options and warrants ..............     259     113     107
                                                               -----   -----   -----
Shares used in diluted net income (loss) per
share calculations .........................................   5,030   7,152   6,743
                                                               =====   =====   =====
</TABLE>



Effect of recent accounting pronouncements


    In July 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income", which establishes standards for the reporting
and display of comprehensive income and its components in a full set of general
purpose financial statements. The objective of the statement is to report a
measure of all changes in equity of an enterprise that result from transactions
and other economic events of the period other than transactions with owners
("comprehensive income"). SFAS No. 130 is effective for financial statements
issued for fiscal years beginning after December 15, 1997 with earlier
application permitted. The Company believes that the impact of adoption of this
statement will not have a significant effect on the Company's financial position
and results of operations.

    In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information", which requires disclosures for each
segment of an enterprise that are similar to those required under current
standards with the addition of quarterly disclosure requirements and a finer
partitioning of geographic disclosures. SFAS No. 131 is effective for financial
statements issued for periods beginning after December 15, 1997. The Company has
adopted this disclosure standard (see Note 7).

                                      F-8

<PAGE>   33


3. INVENTORIES:

    Inventories consisted of the following:


<TABLE>
<CAPTION>
                                                                         September 30,
                                                                      -------------------
                                                                        (000's omitted)
                                                                      1997           1998
                                                                      ----           ----
<S>                                                                 <C>            <C>   
             Raw materials.........................                 $  943          $1,237
             Work-in-process.......................                    511             502
             Finished goods........................                    291             364
                                                                    ------          ------
                                                                    $1,745          $2,103
                                                                    ======          ======
                                                                    
                                                                    
</TABLE>

4. INTANGIBLE ASSETS:

    Intangible assets consisted of the following:



<TABLE>
<CAPTION>
                                                             September 30,
                                                             -------------
                                                            (000's omitted)
                                                            1997      1998
                                                            ----      ----

<S>                                                        <C>       <C>
             Excess of purchase price over fair value of
               net assets acquired .....................   $13,945   $13,945
             Prepaid license fees ......................       378       378
             Other .....................................        45        45
                                                           -------   -------
                                                            14,368    14,368
             Less -- Accumulated amortization ..........     2,625     3,377
                                                           -------   -------
                                                           $11,743   $10,991
                                                           =======   =======
</TABLE>

5. ACCRUED EXPENSES:

    Accrued expenses consisted of the following:

<TABLE>
<CAPTION>
                                 September 30,
                                 -------------
                                (000's omitted)
                                 1997     1998
                                 ----     ----
<S>                             <C>      <C>
             Bonuses payable    $  150   $  100
             Accrued warranty      625      500
             Salaries payable      172      322
             Other ..........      120      127
                                ------   ------

                                $1,067   $1,049
                                ======   ======
</TABLE>

6. SIGNIFICANT CUSTOMERS:


<TABLE>
<CAPTION>
                                                                           1996         1997           1998
                                                                           ----         ----           ----
<S>                                                                     <C>           <C>           <C>
             Number of customers with sales greater than 10% of total            3             1             2
             Percentage of total sales represented by these customers           47%           23%           44%
             Accounts receivable from these customers ...............   $1,736,000    $1,260,000    $2,188,000
</TABLE>

                                      F-9

<PAGE>   34


7. SALES BY REGION AND PRODUCT:

    The Company sells into three major regions worldwide. Sales to these regions
are as follows (000's omitted):


<TABLE>
<CAPTION>
                                            FOR THE YEARS ENDED
                                               SEPTEMBER 30,
                                               -------------
                                         1996      1997       1998
                                         ----      ----       ----

<S>                                     <C>       <C>       <C>
             Americas .............     $17,994   $21,507   $24,082

             Europe ...............       5,986     6,150     6,970

             Far East .............       1,945     2,626     1,780
                                        -------   -------   -------
                                        $25,925   $30,283   $32,832
                                        =======   =======   =======
</TABLE>

The Company sells both printheads and ink products to its customers as well as
spare parts and repair service (referred to in the category labeled "Other").
Sales by product type are as follows (000's omitted):


<TABLE>
<CAPTION>
                                  FOR THE YEARS ENDED
                                     SEPTEMBER 30,
                                -----------------------
                                1996      1997     1998
                                ----      ----     ----
<S>                           <C>       <C>       <C>
             Printheads ...   $15,820   $16,580   $15,562

             Ink Products..     8,211    11,415    14,783

             Other ........     1,894     2,288     2,487
                              -------   -------   -------
                              $25,925   $30,283   $32,832
                              =======   =======   =======
</TABLE>


8. WRITE-OFF OF PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT:

    In March 1996, the Company acquired from Dataproducts Corporation a
non-exclusive license for patented solid ink jet printing technology in certain
licensed industrial marking fields. This agreement allows the Company to use
these patents in the development and commercialization of its own solid ink
printhead. At the time of the purchase of the solid ink jet technology, certain
technological hurdles had not been overcome to enable the Company to
commercialize a product. Commercialization of this technology by the Company
still will require extensive development work both on the solid ink itself and
the ink jet printheads used to apply that ink in commercial applications.
Consequently, during fiscal 1996, the Company recorded a charge of $3,052,000 as
a write-off of purchased in-process research and development to record the cost
of evaluating and acquiring this license.

                                      F-10

<PAGE>   35



9. EXTRAORDINARY ITEM:

    In connection with the initial public offering in 1996, the Company expensed
approximately $2,158,000 of unamortized original issue discount upon the
prepayment of the Company's zero coupon notes and approximately $898,000 of
unamortized deferred financing costs upon the repayment of the outstanding
balance under the Company's Credit Agreement. The write-off of these items, less
the related income tax benefit of approximately $1,253,000 has been reflected as
an extraordinary item in the consolidated statements of operations.

10. LINES-OF-CREDIT:

    The Company has a line of credit agreement with a bank which allows it to
borrow up to $1,000,000 at either the prime rate or LIBOR plus 1.5%. Borrowings
would be collateralized by all corporate assets. There were no outstanding
borrowings under this agreement at September 30, 1998.

    The Company also has an acquisition line of credit agreement with a bank
that allows it to borrow up to $10,000,000 at either the prime rate or LIBOR
plus 1.5%. Borrowings would be collateralized by all corporate assets. There
were no outstanding borrowings under this agreement at September 30, 1998.

11. STOCKHOLDERS' EQUITY:

Redeemable Convertible Participating Preferred Stock

    In June 1994, the Company authorized and issued 307,317 shares of Series A
Convertible Participating Preferred Stock, $.01 par value, with a redemption
feature (the Preferred Stock). Total proceeds from this sale were $3,073,170.
The holders were entitled to dividends at the same rate as dividends were paid
on the common stock. Each share of the Preferred Stock entitled the holder to
the number of votes per share equal to the number of shares of common stock into
which each share of Preferred Stock is then convertible. The Preferred Stock was
automatically converted into shares of common stock simultaneously with the
initial public offering of the Company's common stock.

Common and Preferred Stock

    In February, 1996, the Certificate of Incorporation was amended to authorize
30,000,000 shares of common stock, $.01 par value, and 5,000,000 shares of
undesignated preferred stock. All outstanding shares of Class A voting common
stock were converted to common stock. Class A voting common stock and Class B
non-voting common stock were canceled. There were no outstanding shares of
preferred stock at September 30, 1998.

Employee Stock Purchase Plan

    In January, 1997, the stockholders approved the Trident International, Inc.
Employee Stock Purchase Plan (ESPP). The ESPP allows eligible employees the
right to purchase common stock on a quarterly basis at the lower of 85% of the
market price at the beginning or end of each three-month offering period. During
fiscal 1997 and 1998, 3,689 and 4,396 shares were issued under the ESPP for
$55,437 and $50,050, respectively. At September 30, 1998, the Company had a
balance of 91,915 shares reserved for the ESPP.

Stock options

    Under the Company's Third Amended and Restated 1994 Stock Option and Grant
Plan (the Plan) the Company may grant options to purchase up to a maximum of
1,000,000 shares of common stock to employees, directors, consultants and other
key persons. Options granted may be incentive stock options or non-qualified
options and must be granted at a price not less than fair market value on the
date of grant. The vesting of these options is determined by the Board of
Directors. The options expire no later than 10 years from the date of grant. At
September 30, 1998, 505,152 shares were available for granting of additional
options.

                                      F-11

<PAGE>   36


     The Company accounts for stock-based compensation for employees under
Accounting Principles Board Opinion No. 25 and has elected the disclosure-only
alternative under SFAS 123. The Company has computed the pro forma disclosures
required under SFAS 123 for options granted in fiscal 1996, 1997, and 1998,
using the Black Scholes option pricing model prescribed by SFAS 123. The
weighted average assumptions used are as follows:


<TABLE>
<CAPTION>
                                                                         1996                   1997                   1998
                                                                         ----                   ----                   ----

<S>                                                                  <C>                    <C>                    <C>       
                        Risk free interest rate (range)              5.63% - 5.86%          6.21% - 6.66%          5.39% - 5.92%

                        Expected dividend yield                              0%                    0%                     0%

                        Expected lives                                  5 years                5 years                5 years

                        Expected volatility                                49%                     49%                    51%
</TABLE>

    Had compensation cost for the Company's stock option plan and employee stock
purchase plan been determined based on the fair value at the grant dates of
awards under these plans consistent with the method of SFAS 123, the Company's
earnings(loss) and pro forma earnings (loss) per common share would have been
the following amounts:


<TABLE>
<CAPTION>
                                                                              1996                    1997                    1998
                                                                              ----                    ----                    ----

<S>                                                                          <C>                     <C>                     <C>    
                  Net income (loss), as reported (000's omitted)             $(414)                  $7,513                  $7,066
                  Net income (loss), pro forma (000's omitted)                (414)                   7,466                   6,819

                  Basic earnings (loss) per common share,                                                             
                       pro forma                                             (0.10)                    1.07                    1.06
                  Basic earnings (loss) per common share,                                                             
                      pro forma                                              (0.10)                    1.06                    1.03
                  Diluted earnings (loss) per common share,
                      as reported                                            (0.10)                    1.05                    1.05
                  Diluted earnings (loss) per common share,
                     pro forma                                               (0.10)                    1.04                    1.01
</TABLE>

    Because the SFAS 123 method of accounting has not been applied to options
granted prior to October 1, 1995, the resulting pro forma compensation cost may
be not representative of that to be expected in future years.

    A summary of the status of the Company's stock options plan at September 30,
1996, 1997 and 1998 and changes during the years then ended is presented in the
table and narrative below:

<TABLE>
<CAPTION>
                                                                                                           
                                                   1996                    1997                       1998
                                                   ----                    ----                       ----
                                                       Weighted                Weighted                   Weighted
                                                        Average                 Average                    Average
                                                       Exercise                Exercise                   Exercise
                                            Options      Price      Options      Price       Options        Price
                                            -------      -----      -------      -----       -------        -----

<S>                                         <C>        <C>          <C>        <C>           <C>          <C>   
     Outstanding at October 1,               108,000    $ 3.52       127,750     $ 5.52         251,275    $12.21
     Granted                                  26,000     13.69       139,100      17.73         221,748     13.19
     Exercised                                 4,750      5.00         7,775       4.15           7,100      2.73
     Canceled                                  1,500      5.00         7,800       8.99          31,065     15.15
                                             -------    ------       -------    -------         -------    

     Outstanding at September 30,            127,750    $ 5.52       251,275    $ 12.21         434,858    $12.66
                                             =======    ======       =======    =======         =======    ======
     Options exercisable
     at September 30,                         22,250    $ 3.20        50,850    $ 5.10           98,675    $ 8.97
                                              ======    ======        ======    ======           ======    ======
     
     Weighted average fair value
        options granted during the year                 $ 6.81                  $ 9.02                     $ 6.71
                                                        ======                  ======                     ======
</TABLE>

                                      F-12

<PAGE>   37

    The following table represents weighted average price and life information
about significant option groups outstanding at September 30, 1998:



<TABLE>
<CAPTION>                                        
                                                 
                                                    Weighted Average 
                                                       Remaining      
         Range of Exercise             Number         Contractual      Weighted Average           Number
               Prices               Outstanding        Life (Yrs)       Exercise Price          Exercisable
               ------               -----------        ----------       --------------          -----------
<S>     <C>                         <C>             <C>                <C>                   <C>   
        $1.00                            33,000            6                $ 1.00                23,000

        $5.00                            46,850            7                $ 5.00                33,850

        $11.00 - $15.99                 219,058            9                $12.46                 8,750
   
        $16.00 - $20.25                 135,950            8                $17.64                33,075
                                        -------                                                   ------

                                        434,858                                                   98,675
                                       ========                                                   ======
</TABLE>


Redeemable warrants

    In June, 1994, under the Credit Agreement, the Issuer (the Lender) was
issued warrants with both the right to purchase shares of the Company's common
stock and the right to require the Company to repurchase some or all of the
warrants at the earlier of June 30, 1998 or the occurrence of certain events,
including repayment of the indebtedness under the Credit Agreement or upon a
qualified public offering.

    In connection with the Credit Agreement, the Company granted the Lender
warrants to purchase between 418,118 and 653,310 shares of common stock
depending upon the fair market valuation of the Company. These warrants had an
exercise price of $1.00 per share. The warrants contained a put option which
required that the Company purchase the warrants at the fair market value of the
Company's common stock, net of the associated warrant exercise price, at the
time the put option was exercised (the Option Price). The Company had the option
to repurchase the warrants at 110% of the Option Price at the earlier of June
30, 1998 or upon a qualified public offering, as defined.

    The Company accounted for the initial value of the redeemable warrants based
on their fair market value at the time the warrants were issued, using a formula
contained in a Warrantholders Rights Agreement entered into in connection with
the issuance of the warrants. The Company did not assign any value to the
warrants at the time of issuance, as their fair market value did not exceed the
warrant exercise price. Commencing at the beginning of fiscal 1995, the carrying
value of the redeemable warrants has been increased by periodic accretions, so
that their carrying amount would equal the mandatory redemption amount at the
time of the Company's initial public offering (the Offering). During the year
ended September 30, 1996, the Company expensed $1,710,000 of this estimated
cost. At the time of the initial public offering, these warrants were exercised
for 418,118 shares of common stock and the Company's liability for redeemable
common stock warrants was converted to stockholders' equity.

    Contingent warrants

    In June 1994, contingent warrants to purchase up to 235,192 shares of common
stock at $1.00 per share were granted on a pro rata basis to all of the
Company's common stockholders of record. These warrants were to become
exercisable in the event that the Lender was entitled to exercise warrants to
purchase less than 653,310 shares of common stock. In the event this occurred,
the holders of contingent warrants would be able to exercise warrants to
purchase shares of common stock for the difference between the amount of shares
the Lender exercised and 653,310 total shares of common stock. In connection
with the initial public offering, warrants to purchase 235,192 common shares
were issued. During Fiscal 1997 and 1998, warrants to purchase 153,828 and 1,568
shares, respectively were exercised. At September 30, 1998, warrants to purchase
23,820 shares of common stock at $1.00 per share were outstanding.

    In Fiscal 1995, the Company recorded deferred compensation expense of
$1,626,000 for the difference between the exercise price on the date of grant
and the deemed fair value of the warrants held by management at the time it was
probable that the number of warrants (108,400) which could be exercised could be
determined (the Offering Date). This amount was amortized over the period
commencing October 1, 1994 through the Offering Date. Deferred compensation
expense recognized during the year ended September 30, 1996, was $443,000.

                                      F-13

<PAGE>   38



12. INCOME TAXES:

    The provision (benefit) for income taxes includes the following (000's
omitted):



<TABLE>
<CAPTION>
                                            For the Years Ended
                                               September 30,
                                            -------------------
                                        1996        1997     1998
                                        ----        ----     ----
<S>                                    <C>        <C>       <C>    
Current:
  Federal ..........................   $ 3,314    $ 3,838   $ 3,248
  State ............................       600        684       556
                                       -------    -------   -------
                                         3,914      4,522     3,804
                                       -------    -------   -------
Deferred:
  Federal ..........................      (962)       154       211
  State ............................      (200)        27        37
                                       -------    -------   -------
                                        (1,162)       181       248
                                       -------    -------   -------
Income tax before extraordinary item   $ 2,752    $ 4,703   $ 4,052
                                       =======    =======   =======
</TABLE>

    The Company's effective tax rate, as a percent of income (loss) before
extraordinary item, differs from the statutory federal rate as follows:

<TABLE>
<CAPTION>
                                                     For the Years Ended
                                                        September 30,
                                                        -------------
                                                    1996    1997    1998
                                                    ----    ----    ----

<S>                                                 <C>     <C>     <C>
Statutory Federal tax rate ......................    34%     34%     34%


State taxes net of Federal benefit ..............     4       4       4

Non-deductible amortization of the excess of
purchase price over fair value of net
   assets acquired ..............................     4       1       1

Non-deductible redeemable warrant interest charge    14      --      --

Benefit from foreign sales corporation ..........    (3)     (1)     (1)

Non-deductible amortization of deferred
compensation ....................................     4      --      --
Benefit from R & D tax credits ..................    --      (1)     (2)


Other ...........................................     7       2      --
                                                    ---     ---     ---
Effective tax rate before extraordinary item.....    66%     39%     36% 
                                                    ===     ===     ===  
</TABLE>

    Deferred income taxes reflect the net tax effects of temporary differences
between the basis of assets and liabilities for financial reporting and income
tax purposes. The approximate tax effects of temporary differences which give
rise to net deferred tax assets are as follows (000's omitted):



<TABLE>
<CAPTION>
                                          September 30,
                                          -------------
                                        1997       1998
                                        ----       ----
<S>                                   <C>        <C>    
Current:
    Accrued warranty expense ......   $   225    $   180
    Inventories ...................        97        121
    Allowance for doubtful accounts       108        108
    Other accrued expenses ........        35         55
                                      -------    -------
                                          465        464
                                      -------    -------
Non-Current:
  Depreciation and amortization ...       (61)      (121)
  Intangible assets ...............       765        578
                                      -------    -------
                                          704        457
                                      -------    -------
     Net deferred tax assets ......   $ 1,169    $   921
                                      =======    =======
</TABLE>

                                      F-14

<PAGE>   39



13. EMPLOYEE BENEFIT PLAN:

    The Company has a defined contribution retirement plan which is available to
substantially all employees. The Company pays plan expenses and a matching
contribution of 50% of every qualifying dollar contributed by plan participants
to a maximum of 3% of compensation. Contributions by the Company amounted to
$69,000, $98,000, and $108,000 for the years ended September 30, 1996, 1997, and
1998, respectively.

14. COMMITMENTS AND CONTINGENCIES:

    The Company leases certain operating facilities and equipment under
long-term, noncancelable operating leases. There are two leases for the
Brookfield operating facilities, with one expiring June 30, 2003, and the other
expiring August 31, 2003. Each lease has an option to renew, one for three years
at prevailing market rates, and the other for five years. Approximate future
minimum rental commitments under noncancelable operating leases having a term in
excess of one year are approximately $1,013,000. Rental expense amounted to
$154,000, $180,000, and $254,000 for the years ended September 30, 1996, 1997
and 1998, respectively.

    The Company entered into a three-year employment agreement with its chief
executive officer which requires minimum annual compensation through October
2000. The agreement also provides for certain incentive bonus payments. The
Company has also entered into a two year contract with its chief financial
officer. The agreement requires minimum annual compensation through May 2000 as
well as certain incentive bonus payments.

    In 1994, the Company undertook an environmental compliance audit which
identified certain environmental deficiencies on properties leased by the
Company. The site of one of the Company's leased facilities was contaminated due
to prior uses by a prior occupant and may require remedial action. Although the
Company obtained an indemnification agreement with respect to such prior
contamination, if the Company is found to be liable as a result of any
contamination of the site, there can be no assurance that such indemnification
will be available or that, if available, it will be sufficient. While the
ultimate results of future claims, if any, against the Company with regard to
these matters cannot be determined, management does not anticipate that these
matters will have a material adverse impact on the consolidated results of
operations or financial position of the Company.

    In December, 1997, the Company filed a civil action against four companies,
charging them with infringing two of the Company's patents. Two of these
companies have since counterclaimed against the Company for a declaration of
noninfringement and patent invalidity while also alleging violations of the
antitrust laws relating to the Company's sales of ink products. Management does
not anticipate that these proceedings will have a material adverse impact on the
consolidated results of operations or financial position of the Company.

15. RELATED PARTY TRANSACTION:

   The Company has had legal services in the normal course of business with a
firm whose partner is also a director of the Company. Fees incurred from
services provided by the firm were approximately $190,000, $255,000 and
$620,000 for the years ended September 30, 1996, 1997 and 1998, respectively.
At September 30, 1997 and 1998 amounts due to the firm totaled approximately
$15,000 and $130,000, respectively. Management believes these services were
under terms no less favorable to the Company than those arranged with other
parties.

                                      F-15

<PAGE>   40


REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE

To the Board of Directors and Stockholders of
   Trident International, Inc.:

We have audited in accordance with generally accepted auditing standards, the
consolidated balance sheets of Trident International, Inc. and Subsidiaries as
of September 30, 1997 and 1998 and the related consolidated statements of
operations, stockholders' equity (deficit) and cash flows for the years ended
September 30, 1996, 1997, and 1998 included in this Form 10-K, and have issued
our report thereon dated October 29, 1998. Our audits were made for the purpose
of forming an opinion on the basic financial statements taken as a whole. The
accompanying schedule on page F-17 is the responsibility of the Company's
management and is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not part of the basic financial statements.
The information reflected in the schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.



                                            /s/  Arthur Andersen LLP
                                            ------------------------
                                              ARTHUR ANDERSEN LLP
Hartford, Connecticut
October 29, 1998


                                      F-16
<PAGE>   41


                  TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS


<TABLE>
<CAPTION>
                                                      Balance at       Charged to                        Balance at
                                                     Beginning of       Cost and                           End of
                  Description                           Period          Expenses         Deductions        Period
                  -----------                           ------          --------         ----------        ------

    Allowance for Doubtful Accounts -
<S>                                                  <C>               <C>               <C>             <C>     
      October 1, 1995 to September 30, 1996.           $220,000          $80,000           $    -         $300,000
      October 1, 1996 to September 30, 1997            $300,000           $    -           $    -         $300,000
      October 1, 1997 to September 30, 1998.           $300,000           $    -           $    -         $300,000
</TABLE>

                                      F-17