<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, 1997

                                       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:

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                                                      Name of exchange on
    Title of each class                                which registered
    -------------------                                ----------------
<S>                                                  <C>
            None                                              None
</TABLE>

           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 15, 1997 as reported on the Nasdaq National Market, was approximately
$73,413,000. Shares of Common Stock held by each officer and director and by
each person who owns 5% 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 15, 1997 there were 6,672,251 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 on January 29, 1998.
<PAGE>   2
                  TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
                             INDEX TO ANNUAL REPORT
                                  ON FORM 10-K



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<S>                 <C>                                                                                               <C>
PART I


   Item  1:          Business.................................................................................          3
   Item  2:          Properties...............................................................................          8
   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 Equity and Related Stockholder Matters................         10
   Item  6:          Selected Financial Data..................................................................         10
   Item  7:          Management's Discussion and Analysis of Financial Condition and Results of
                         Operations...........................................................................         12
   Item  8:          Financial Statements and Supplementary Data..............................................         18
   Item  9:          Changes in and Disagreements with Accountants on Accounting
                         and Financial Disclosure.............................................................         18

PART III

   Item 10:          Directors and Executive Officers of the Registrant.......................................         19
   Item 11:          Executive Compensation...................................................................         19
   Item 12:          Security Ownership of Certain Beneficial Owners and Management...........................         19
   Item 13:          Certain Relationships and Related Transactions...........................................         19

PART IV

   Item 14:          Exhibits, Financial Statement Schedules and Reports on Form 8-K..........................         20


Signatures....................................................................................................         22
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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 under Management's Discussion and Analysis -
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 over 75 original equipment
manufacturer (OEM) customers that integrate them into computer-controlled,
application-specific products which are then sold to the 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 carton 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 recently launched new 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.

     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.

                                        3
<PAGE>   4
     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 market 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 printhead.

     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 is
in the process of developing a new generation of Ultrajet products called the
Ultrajet II. The first release will be an improved bar code printhead to replace
the successful Ultrajet 256/32. The Company believes that the new bar code
printhead has improved print quality and reliability required in the carton
coding market.

     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 sales of the
PixelJet are for addressing and for printing oriental characters onto corrugated
cartons where higher resolution is required.

     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 A3000TM 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 six basic ink products: PostBrite,
VersaPrint, FastDri, AllWrite, HiDef and JetWrite. All 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.

                                        4
<PAGE>   5
     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, 1995, 1996, and 1997 to these
three regions were as follows:

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                                                       TWELVE MONTHS ENDED SEPTEMBER 30,
                                                                (000'S OMITTED)
     Region                                   1995                    1996                     1997
     ------                                   ----                    ----                     ----
<S>                                          <C>                     <C>                      <C>    
     North America                           $12,130                 $17,994                  $21,507
     Europe                                    3,500                   5,986                    6,150
     Far East                                  1,700                   1,945                    2,626
                                             -------                 -------                  -------
     Total                                   $17,330                 $25,925                  $30,283
                                             =======                 =======                  =======
</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 the largest due to the strength of domestic
OEM customers, particularly those utilizing carton coding applications. European
sales are relatively flat due to the acquisition of one of the Company's
European customers, Cueprint, by a U.S. customer, Videojet Systems
International, and to the weakness of the European economy. The growing use of
the EAN128 bar code symbology in Europe is also placing demands on the Company's
products performance which the Company believes will be corrected with the
Ultrajet II printhead and a new ink. European customers are introducing the use
of Trident's products to stamp cancellation which is growing ink sales in the
region. The Far East 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.

     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.

     The sales organization is divided into the 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
an applications engineer. The Company's sales in the Far East are concentrated
in Japan, where the Company employs the services of two Japanese business
consultants. 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

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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. A business development group is responsible for finding and
establishing new markets which have significant revenue potential. The Company
has assigned engineering and marketing personnel to this group to develop
subsystems and modules for wide-area printing.

     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 over 75 OEM customers worldwide.
Historically, the Company has not required its OEM customers to display the
Trident label on their equipment and ink, although it plans to do so in the
future. 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 to protect them from
the use of other OEM's ink being sold to their customers.

     During the years ended September 30, 1995, 1996, and 1997 sales to the
following customers accounted for more than 10% of the Company's net sales:


<TABLE>
<CAPTION>
                                      Year Ended September 30,
Customer Name                  1995             1996             1997
-------------                  ----             ----             ----
<S>                            <C>             <C>               <C>
Marsh Company                   23%             22%               23%
Foxjet, Inc.                    11%             13%               9%
BancTec, Inc.                   13%             12%               8%
</TABLE>

     During the years ended September 30, 1995, 1996, and 1997, approximately
72%, 79% and 70%, 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 expended approximately $1,317,000, $2,326,000, and
$3,027,000 for research and development during the years ended September 30,
1995, 1996, and 1997, 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 cost 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

                                        6
<PAGE>   7
(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 five to
eight 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
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.
Development of new products using this technology should continue through July
of 1998. 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.

     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 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.

                                        7
<PAGE>   8
BACKLOG

     The order backlog as of September 30, 1997 was approximately $8.9 million
compared with $8.2 million as of September 30, 1996. 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.

     The Company is aware that Nu-Kote Holdings, Inc. has acquired a new ink jet
technology and has released a piezoelectric impulse ink jet printhead for
industrial and other applications. This printhead could be 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.

     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, 1997, Trident had 161 full time employees including
temporary direct employees. Of these employees, 22 were in sales and marketing,
32 were in engineering and research and development, 11 were in administration
and finance, 34 in production overhead and 47 were factory direct employees.
None of the Company's employees are represented by a labor union. The Company
expanded its engineering and marketing departments during fiscal year 1997 and
continues to do so during fiscal year 1998. Management believes that such
expansion is critical to its success. 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. The
Company has a European office located in Dublin, Ireland and a Midwest office
located in Park Ridge, Illinois. 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 1998. The buildings are
in good condition and have been extensively remodeled by the Company to
accommodate new processes and the growth in employees. More than 90% of the
available space is now in use. Subsequent to September 30, 1997, the Company
rented 6,000 square feet of additional office and research and development space
in New Milford, Connecticut under a one-year agreement. The Company intends to
seek

                                        8
<PAGE>   9
larger premises in 1998, likely in the same local area. The Company anticipates
that its facility related costs may increase in the event that it expands its
premises. 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

     To the Company's knowledge, there are no pending legal proceedings which
are material to the Company to which it is a party or to which any of its
property is subject.

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, 1997.

EXECUTIVE OFFICERS OF REGISTRANT

     The following table lists the names, ages and positions held with the
Company of all executive officers of the Registrant as of December 15, 1997.
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 . . . . . . .        43            President, Chief Executive Officer and Chief Operating Officer
   J. Leo Gagne . . . . . . . . .        41            Vice President and Chief Financial Officer
   Robert L. Rogers . . . . . . .        43            Vice President of Research
   Richard A. Cutting . . . . . .        54            Vice President of Engineering
</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 24 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. 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.

     RICHARD A. CUTTING joined the Company in October 1996 as Vice President of
Engineering. Prior to joining the Company, Mr. Cutting served as Program
Management Director for InterMatrix, Inc. from March, 1995 to October, 1996 and
as Executive Director, Program Management at Pitney Bowes, Inc. from December,
1992 to December, 1994, where he also served as Executive Director, Program
Integration from October, 1991 to November, 1992 and as Vice President Strategic
Planning and Central Engineering from May, 1988 to September, 1991. Mr. Cutting
holds a M.A. in Natural Sciences and Electrical Sciences Engineering from St.
John's College, Cambridge, England.

                                        9
<PAGE>   10
                                     PART II


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

     The Company's Common Stock has been included for quotation on the Nasdaq
National Market under the Nasdaq symbol "TRDT" since the Company's initial
public offering in February 1996. 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>
     1996:
           Second quarter (since February 29, 1996) .................    19.25           17.00
           Third quarter ............................................    24.75           17.00
           Fourth quarter ...........................................    22.00           16.00
     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
</TABLE>

     At December 15, 1997, the Company had 41 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
6,672,251 shares of Common Stock outstanding on December 15, 1997.

     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.

                                       10
<PAGE>   11
                   SELECTED CONSOLIDATED FINANCIAL INFORMATION
                        (IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>
                                                                          PRO FORMA
                                                       PREDECESSOR (1)    COMBINED (2)              THE COMPANY
                                                          FOR THE           FOR THE
                                                          9 MONTHS         12 MONTHS       ----------------------------------
                                                            ENDED            ENDED                  FISCAL YEARS
                                                        SEPTEMBER 30,     SEPTEMBER 30,    ----------------------------------
                                                            1993             1994          1995          1996            1997
                                                            ----             ----          ----          ----            ----
<S>                                                    <C>                <C>            <C>            <C>            <C>
CONSOLIDATED STATEMENT OF
  OPERATIONS DATA:
   Net sales .......................................      $  7,417          $12,493      $ 17,330       $ 25,925       $ 30,283
   Cost of sales ...................................         3,157            5,853         6,604          9,392         10,818
                                                          --------          -------      --------       --------       --------
   Gross profit ....................................         4,260            6,640        10,726         16,533         19,465
                                                          --------          -------      --------       --------       --------
   Operating expenses:                                                     
      Marketing and selling ........................           516              701           912          1,415          2,358
      Research and development .....................           625            1,078         1,317          2,326          3,027
      Write-off of in-process research and                                 
          development ..............................            --               --            --          3,052             --
      General and administrative ...................           587            1,137         1,580          2,405          2,134
      Amortization of intangibles ..................           252              486           802            800            802
      Amortization of deferred compensation ........            --               --         1,183            443             --
                                                          --------          -------      --------       --------       --------
   Total operating expenses ........................         1,980            3,402         5,794         10,441          8,321
                                                          --------          -------      --------       --------       --------
   Operating income ................................         2,280            3,238         4,932          6,092         11,144
   Interest (income) expense, net ..................           (10)             482         1,845            241         (1,072)
   Redeemable warrant interest charge ..............            --               --         4,561          1,710             --
                                                          --------          -------      --------       --------       --------
   Income (loss) before income taxes ...............         2,290            2,756        (1,474)         4,141         12,216
   Provision for income taxes ......................           954            1,280         1,965          2,752          4,703
                                                          --------          -------      --------       --------       --------
   Net income (loss) before extraordinary item .....         1,336            1,476        (3,439)         1,389          7,513
   Extraordinary item (net of  income tax benefit of                       
    $1,253).........................................            --               --            --         (1,803)            --
                                                          --------          -------      --------       --------       --------
   Net income ......................................      $  1,336          $ 1,476      $ (3,439)      $   (414)      $  7,513
                                                          ========          =======      ========       ========       ========
CONSOLIDATED BALANCE                                                       
  SHEET DATA:                                                              
   Working capital .................................      $  1,849          $ 2,103      $  3,232       $ 21,056       $ 23,518
   Total assets ....................................        11,736           20,967        23,133         38,331         40,907
   Total long-term debt ............................            --           14,738        12,361             --             --
   Redeemable common stock warrants ................            --               --         4,561             --             --
   Redeemable preferred stock ......................            --            3,123         3,311             --             --
   Stockholders' equity (deficit) ..................        10,389            1,072        (1,311)        35,962         37,889
</TABLE>
                                                                           
                                       11
<PAGE>   12
     (1) 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").

     (2) 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."

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 will be 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 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

                                       12
<PAGE>   13
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 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. Development of new products using this technology
should continue through July of 1998. 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, 1995, 1996, and 1997:


<TABLE>
<CAPTION>
                                                                                        YEARS ENDED SEPTEMBER 30,
                                                                            ----------------------------------------------------    
                                                                            1995                   1996                     1997
                                                                            ----                   ----                     ----
<S>                                                                       <C>                    <C>                      <C>
     Net sales............................................                 100.0%                 100.0%                   100.0%
     Cost of sales........................................                  38.1                   36.2                     35.7
                                                                           -----                  -----                    -----
     Gross profit.........................................                  61.9                   63.8                     64.3
                                                                           -----                  -----                    -----
     Operating expenses:
          Marketing and selling...........................                   5.3                    5.4                      7.8
          Research and development........................                   7.6                    9.0                     10.0
          Write-off of purchased in-process research
          and development.................................                     -                   11.8                        -
          General and administrative......................                   9.1                    9.3                      7.1
          Amortization of intangibles.....................                   4.6                    3.1                      2.6
          Amortization of deferred compensation...........                   6.8                    1.7                        -
                                                                           -----                  -----                    -----
     Total operating expenses.............................                  33.4                   40.3                     27.5
                                                                           -----                  -----                    -----
     Operating income.....................................                  28.5                   23.5                     36.8
     Interest (income) expense, net.......................                  10.7                    0.9                    ( 3.5)
     Redeemable warrant interest charge...................                  26.3                    6.6                        -
                                                                           -----                  -----                    -----
     Income (loss) before income taxes....................                 (8.5)                   16.0                     40.3
     Provision for income taxes...........................                 11.3                    10.6                     15.5
                                                                           -----                  -----                    -----
     Net income (loss) before extraordinary item..........                (19.8)                    5.4                     24.8
     Extraordinary item...................................                    -                    (7.0)                       -
                                                                           -----                  -----                    -----
     Net income (loss)....................................                (19.8)%                  (1.6)%                   24.8%
                                                                           =====                  =====                    =====
</TABLE>

     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.

                                       13
<PAGE>   14
     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.

     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.

     Fiscal 1996 Compared to Fiscal 1995.

     Net Sales. Net sales increased $8.6 million, or 50% to $25.9 million in
Fiscal 1996 from $17.3 million in Fiscal 1995. Approximately $5.1 million of the
increase in net sales was due to higher printhead unit volumes, particularly to
carton coding customers, and a 4.2% increase in average selling price per
printhead unit. Increased sales of the Ultrajet 256/32 printhead, as well as
sales of existing models accounted for the Fiscal 1996 printhead unit volume
increase. The increase in average selling price per printhead unit in Fiscal
1996 was attributable to an increase in the percentage of higher priced, newer
model printheads sold, such as the Ultrajet 192/32 and Ultrajet 256/32, to meet
the carton coding market's continuing needs for products with improved print
height capabilities. Sales of ink products increased 50% in

                                       14
<PAGE>   15
Fiscal 1996 as compared to Fiscal 1995 due to increased unit volumes of ink as
the installed base of printheads expanded during the year. Net sales to
international customers increased by $2.7 million, or 53%, in Fiscal 1996.

     Gross Profit. Gross profit increased by $5.8 million, or 54%, to $16.5
million in Fiscal 1996 from $10.7 million in Fiscal 1995. Gross profit as a
percentage of net sales increased from 61.9% in Fiscal 1995 to 63.8% in Fiscal
1996. The increase in gross profit as a percentage of sales was due to increased
average selling prices of the Company's printhead products and lower printhead
and ink costs.

     Marketing and Selling Expenses. Marketing and selling expenses increased
$503,000, or 55% to $1.4 million in Fiscal 1996 from $912,000 in Fiscal 1995 due
to an increase in personnel and associated travel expense and marketing
literature. As a percentage of net sales, these expenses increased to 5.4% in
Fiscal 1996 from 5.3% in Fiscal 1995. 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 $1.0 million, or 77%, to $2.3 million in Fiscal 1996 from $1.3 million
in Fiscal 1995. As a percentage of net sales, these expenses increased to 9.0%
in Fiscal 1996 from 7.6% in Fiscal 1995 due to the increases in engineering and
research and development spending to develop new technologies and products.
Research and development expenses were 10.7% for the three months ended
September 30, 1996 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 was no similar expenses in the year
ended September 30, 1995.

     General and Administrative Expenses. General and administrative expenses
increased $825,000, or 52%, to $2.4 million in Fiscal 1996 from $1.6 million in
Fiscal 1995. The increase in general and administrative expenses was due
principally to the write-off of a consulting agreement in the amount of $438,000
and additions of accounting and administrative personnel. As a percentage of net
sales, these expenses increased to 9.3% for Fiscal 1996 from 9.1% for Fiscal
1995. If the write-off of the consulting agreement had not occurred, these
expenses would have decreased to 7.6% of net sales for Fiscal 1996 due to the
increase in net sales without a corresponding increase in general and
administrative expenses.

     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 $800,000 and $802,000, respectively, did not
vary in amount for Fiscal 1996 as compared to Fiscal 1995. Amortization of
deferred compensation decreased by $740,000 or 62.6% to $443,000 for Fiscal 1996
because deferred compensation expense was fully amortized effective February,
1996.

     Interest Expense, net. Interest expense, net decreased $1.6 million to
$241,000 in Fiscal 1996 from $1.8 million in Fiscal 1995 due to the repayment of
debt with the proceeds from the initial public offering and increases in
interest income.

     Redeemable Warrant Interest Charge. During Fiscal 1995, the Company
expensed $4.6 million as redeemable warrant interest charges. This expense is
associated with the accretion in value of the NationsCredit Warrant. Redeemable
warrant interest charge decreased by $2.9 million, or 63% to $1.7 million for
Fiscal 1996 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 1996
was $2.8 million on income before income taxes of $4.1 million. The effective
tax rate for Fiscal 1996 differed from the statutory rate principally due to the
non-deductibility of the redeemable warrant interest charge, amortization of
deferred compensation and amortization costs related to excess of purchase price
over fair value of net assets acquired.

                                       15
<PAGE>   16
     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.

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. 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.

     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 new 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, 1997, approximately 70% of the Company's
net sales were to its top ten OEM customers, while approximately 23% of the
Company's net sales for this period were to Marsh Company. 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, 1997, approximately 71% 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, increased research and development expenses and general
economic conditions.

                                       16
<PAGE>   17
     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, 1997, the Company had
working capital of $23.5 million compared to $21.1 million at September 30,
1996. At September 30, 1997, the Company had cash and marketable securities of
$19.8 million. The primary investing and financing cash flows activities for the
year ended September 30, 1997 were the purchase of marketable securities of
$12.7 million and the purchase of treasury stock of $5.7 million, respectively.
Cash flows from operations of $8.9 million results primarily from net income of
$7.5 million plus depreciation and amortization of $1.2 million. The Company
also has a line of credit with Fleet Bank which allows them to borrow up to
$1,000,000. There were no borrowings under this line at September 30, 1997.

     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.

                                       17
<PAGE>   18
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

<TABLE>
<CAPTION>
<S>                                                                                                                          <C>
   Report of Independent Public Accountants................................................................................  F-1
   Consolidated Balance Sheets at September 30, 1996 and 1997..............................................................  F-2
   Consolidated Statements of Operations for the three years ended September 30, 1995,
     1996, and 1997........................................................................................................  F-3
   Consolidated Statements of Stockholders' Equity (Deficit) for the three years ended
     September 30, 1995, 1996, and 1997....................................................................................  F-4
   Consolidated Statements of Cash Flows for the three years ended September 30, 1995,
     1996, and 1997........................................................................................................  F-5
   Notes to Consolidated Financial Statements..............................................................................  F-6

   Financial Statement Schedules:

   Report of Independent Public Accountants on Financial Statement Schedule................................................ F-14
   Schedule II - Valuation and Qualifying Accounts......................................................................... F-15
</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: CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
        DISCLOSURE

     Not applicable

                                       18
<PAGE>   19
                                    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 1997 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 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 such Proxy Statement.

                                       19
<PAGE>   20
                                     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 Schedule - See Item 8 of Part II.
      (3)    Exhibits - See Exhibit Index at page 21 of this Form 10-K.
   (b)       Reports on Form 8-K - No reports on Form 8-K were filed during the
             quarter ended September 30, 1997.

                                       20
<PAGE>   21
                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
 Exhibit
 Number                              Description
 ------                              -----------
<S>        <C>
  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 ("Form 10-Q"))
  3.2      Form of Amended and Restated By-laws of Trident International, Inc.
           (incorporated herein by reference to the Form 10-Q)
  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 22, 1994 (incorporated herein by reference to the
           Registration Statement)
 *10.2     Consulting Agreement between the Company and R. Hugh van Brimer dated
           as of July 1, 1997
  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. dates 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 May 23, 1995
           (incorporated herein by reference to the Registration Statement)
  10.9     Lease by and between Oskar G. Rogg and Trident, Inc. for premises at
           1112 Federal Road, Brookfield, Connecticut dated as of May 23, 1995
           (incorporated herein by reference to the Registration Statement)
  10.10    Form of Amended and Restated 1994 Stock Option and Grant Plan
           (incorporated herein by reference to the Form 10-Q)
  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)
 *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
 *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
 *10.18    Commercial Promissory Financial Note between Fleet Bank and Trident
           International, Inc. dated as of September 30, 1997
  21.1     Schedule of Subsidiaries of Registrant (incorporated herein by
           reference to the Registration Statement)
 *23.1     Consent of Arthur Andersen LLP
  27.1     Financial Data Schedule
</TABLE>
  *        Filed herewith
  **       Certain portions of this documents have been omitted pursuant to a
           grant of confidential treatment request from the Securities and
           Exchange Commission ("the Commission"). The omitted portions have
           been filed separately with the Commission.


                                       21
<PAGE>   22
                                   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)

       December 19, 1997                          /s/  Elaine A. Pullen
Dated:-------------------------       By:--------------------------------------
                                                   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 19, 1997
         -----------------------------------                       Chairman of the Board
               (R. Hugh Van Brimer)                               

                                                                       President,                     December 19, 1997
               /s/ Elaine A. Pullen                             Chief Executive Officer
         -----------------------------------                          and Director
               (Elaine A. Pullen)                            (Principal Executive Officer)

                                                                     Vice President                   December 19, 1997   
                 /s/ J. Leo Gagne                             and Chief Financial Officer
         -----------------------------------                    (Principal Financial and
                 (J. Leo Gagne)                                   Accounting Officer)

              /s/ Robert S. Anderson                                    Director                      December 19, 1997
         -----------------------------------
               (Robert S. Anderson)

              /s/ Russell Greenberg                                     Director                      December 19, 1997
         -----------------------------------
               (Russell Greenberg)

                /s/ Bruce Johnston                                      Director                      December 19, 1997
         -----------------------------------
                (Bruce Johnston)

                                                                        Director
         -----------------------------------
              (Michael K. Lorelli)

                /s/ Norman Norris                                       Director                      December 19, 1997
         -----------------------------------
                 (Norman Norris)

                 /s/ John R. Webb                                       Director                      December 19, 1997
         -----------------------------------
                  (John R. Webb)
</TABLE>

                                       22
<PAGE>   23
                    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, 1996 and 1997 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, 1997. 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, 1996 and 1997, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended September 30, 1997 in conformity with generally
accepted accounting principles.


                                              /s/  Arthur Andersen LLP
                                              -------------------------------
                                              ARTHUR ANDERSEN LLP
Hartford, Connecticut
October 24, 1997

                                       F-1
<PAGE>   24
                  TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (000'S OMITTED)


<TABLE>
<CAPTION>
                                                                                                    SEPTEMBER 30,
                                                                                                  1996         1997
                                                                                                  ----         ----
<S>                                                                                             <C>          <C>
                                     ASSETS

CURRENT ASSETS:
 Cash and cash equivalents .................................................................    $ 17,349     $ 7,065
 Marketable securities .....................................................................          --      12,728
 Accounts receivable, net of allowance for doubtful accounts of $300,000
    in 1996 and 1997 .......................................................................       3,915       4,385
 Inventories ...............................................................................       1,563       1,745
 Deferred income taxes .....................................................................         431         465
 Other current assets ......................................................................         167         148
                                                                                                --------     -------
        Total current assets ...............................................................      23,425      26,536
LEASEHOLD IMPROVEMENTS AND EQUIPMENT, net ..................................................       1,443       1,924
DEFERRED INCOME TAXES ......................................................................         919         704
INTANGIBLE ASSETS, net of accumulated amortization of $1,824
  in 1996 and $2,625 in 1997 ...............................................................      12,544      11,743
                                                                                                --------     -------
                                                                                                $ 38,331     $40,907
                                                                                                ========     =======

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable .........................................................................    $    999     $ 1,540
  Accrued expenses .........................................................................       1,101       1,067
  Income taxes payable .....................................................................         269         411
                                                                                                --------     -------
        Total current liabilities ..........................................................       2,369       3,018
                                                                                                --------     -------
COMMITMENTS AND CONTINGENCIES (NOTE 14)
STOCKHOLDERS' EQUITY:
  Common Stock, $.01 Par value; 30,000,000 shares authorized; 7,010,234 and 7,167,981 shares
      issued and outstanding at september 30, 1996 and 1997, respectively ..................          70          72
  Additional paid-in capital ...............................................................      40,059      40,146
  Retained earnings (deficit) ..............................................................      (4,167)      3,346
                                                                                                --------     -------
                                                                                                  35,962      43,564
  Less - treasury stock at cost, 345,000 shares ............................................          --       5,675
                                                                                                --------     -------
        Total stockholders' equity .........................................................      35,962      37,889
                                                                                                --------     -------
                                                                                                $ 38,331     $40,907
                                                                                                ========     =======
</TABLE>

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

                                       F-2
<PAGE>   25
                  TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     (000'S OMITTED, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                                               YEARS ENDED SEPTEMBER 30,
                                                                           1995            1996           1997
                                                                           ----            ----           ----
<S>                                                                   <C>             <C>             <C>
NET SALES ........................................................    $    17,330     $    25,925     $    30,283
COST OF SALES ....................................................          6,604           9,392          10,818
                                                                      -----------     -----------     -----------
      Gross profit ...............................................         10,726          16,533          19,465
                                                                      -----------     -----------     -----------

OPERATING EXPENSES:
      Marketing and selling ......................................            912           1,415           2,358
      Research and development ...................................          1,317           2,326           3,027
      Write-off of purchased in-process research and development..             --           3,052              --
      General and administrative .................................          1,580           2,405           2,134
      Amortization of excess of purchase price over the fair value
         of net assets acquired and other intangibles ............            802             800             802
      Amortization of deferred compensation ......................          1,183             443              --
                                                                      -----------     -----------     -----------

            Total operating expenses .............................          5,794          10,441           8,321
                                                                      -----------     -----------     -----------
            Operating income .....................................         .4,932           6,092          11,144
OTHER (INCOME) EXPENSE:
      Interest (income) expense, net .............................          1,845             241          (1,072)
      Redeemable warrant interest charge .........................          4,561           1,710              --
                                                                      -----------     -----------     -----------
          Income (loss) before income taxes and extraordinary
             item.................................................         (1,474)          4,141          12,216
PROVISION FOR INCOME TAXES .......................................          1,965           2,752           4,703
                                                                      -----------     -----------     -----------
          Net income (loss) before extraordinary item ............         (3,439)          1,389           7,513
EXTRAORDINARY ITEM, net of income tax benefit of $1,253 ..........             --          (1,803)             --
                                                                      -----------     -----------     -----------
NET INCOME (LOSS) ................................................         (3,439)           (414)          7,513
INCREASE IN REDEMPTION VALUE OF PREFERRED STOCK ..................           (187)            (83)             --
                                                                      -----------     -----------     -----------
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS ..............    $    (3,626)    $      (497)    $     7,513
                                                                      ===========     ===========     ===========
NET INCOME (LOSS) PER COMMON SHARE:
      Net income (loss) before extraordinary item ................    $     (2.26)    $      0.26     $      1.05
      Extraordinary item, net of tax .............................             --           (0.36)             --
                                                                      -----------     -----------     -----------
      Net income (loss) ..........................................    $     (2.26)    $     (0.10)    $      1.05
                                                                      ===========     ===========     ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING .......................      1,603,562       5,030,112       7,151,722
                                                                      ===========     ===========     ===========
</TABLE>

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

                                       F-3
<PAGE>   26
                  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, 1994 .......       1,500,000       $ 15              --      $--      $  1,101       $    --       $   (44) 
  Net loss .......................              --         --              --       --            --            --        (3,439) 
  Issuance of common stock .......          60,000          1              --       --            59            --            --  
  Increase in redemption value
    of preferred stock ...........              --         --              --       --            --            --          (187) 
  Deferred compensation associated
    with issuance of contingent
    warrants .....................              --         --              --       --         1,626        (1,626)           --  
  Amortization of deferred
    compensation .................              --         --              --       --            --         1,183            --  
                                        ----------       ----       ---------      ---      --------       -------       -------  
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  
                                        ==========       ====       =========      ===      ========       =======       =======  
</TABLE>


                                        
                                        
<TABLE>
<CAPTION>
                                        TREASURY
                                         STOCK         TOTAL
                                         -----         -----
<S>                                    <C>           <C>
BALANCE September 30, 1994 .......      $    --       $  1,072
  Net loss .......................           --         (3,439)
  Issuance of common stock .......           --             60
  Increase in redemption value
    of preferred stock ...........           --           (187)
  Deferred compensation associated
    with issuance of contingent
    warrants .....................           --             --
  Amortization of deferred
    compensation .................           --          1,183
                                        -------       --------
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
                                        =======       ========
</TABLE>

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

                                       F-4
<PAGE>   27
                  TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (000'S OMITTED)



<TABLE>
<CAPTION>
                                                                                               YEARS ENDED
                                                                                               SEPTEMBER 30,
                                                                                    1995          1996          1997
                                                                                    ----          ----          ----
<S>                                                                               <C>           <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ..........................................................      $(3,439)      $   (414)      $  7,513
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
  Depreciation and amortization ............................................        1,542          1,315          1,152
  Amortization of deferred compensation ....................................        1,183            443             --
  Extraordinary item .......................................................           --          3,056             --
  Write-off of consulting agreement ........................................           --            438             --
  Gain (loss) on sale of fixed assets ......................................           (2)            --             --
  Deferred income taxes ....................................................          (18)        (1,162)           181
  Accretion of interest on zero coupon notes ...............................          243            108             --
  Accretion of redeemable warrant interest charge ..........................        4,561          1,710             --
  Changes in operating assets and liabilities:
     Accounts receivable ...................................................       (1,241)          (986)          (470)
     Inventories ...........................................................          539           (514)          (182)
     Other current assets ..................................................          (33)           (72)            19
     Accounts payable, accrued expenses and income taxes payable ...........          509            875            649
                                                                                  -------       --------       --------
        Net cash provided by operating activities ..........................        3,844          4,797          8,862
                                                                                  -------       --------       --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of marketable securities, net ..................................           --             --        (12,728)
  Purchases of leasehold improvements and equipment, net ...................         (440)          (848)          (832)
                                                                                  -------       --------       --------
        Net cash used in investing activities ..............................         (440)          (848)       (13,560)
                                                                                  -------       --------       --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock ...................................           60         28,264             55
  Payments of offering costs ...............................................           --         (1,065)            --
  Exercise of warrants and stock options ...................................           --            463             34
  Purchases of treasury stock ..............................................           --             --         (5,675)
  Repayments of long-term indebtedness .....................................         (750)       (17,250)            --
  Repayments on line-of-credit .............................................         (244)            --             --
                                                                                  -------       --------       --------
         Net cash (used in) provided by financing activities ...............         (934)        10,412         (5,586)
                                                                                  -------       --------       --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ...........................        2,470         14,361        (10,284)
CASH AND CASH EQUIVALENTS, beginning of period .............................          518          2,988         17,349
                                                                                  -------       --------       --------
CASH AND CASH EQUIVALENTS, end of period ...................................      $ 2,988       $ 17,349       $  7,065
                                                                                  =======       ========       ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the period for --
    Interest ...............................................................      $ 1,327       $  3,120       $     --
    Income taxes ...........................................................      $ 1,927       $  2,506       $  4,381
  Non-cash transactions --
     Increase in redemption value of preferred stock .......................      $   187       $     83       $     --
</TABLE>

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

                                       F-5
<PAGE>   28
                  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, the
fair value of the Company's marketable securities approximated its 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>   29
Leasehold improvements and equipment

     Leasehold improvements and equipment are comprised of the following:


<TABLE>
<CAPTION>
                                                                   September 30,
                                                                  (000's omitted)
                                                               1996              1997
                                                               ----              ----
<S>                                                           <C>               <C>
Leasehold improvements...........................             $  301            $  567
Machinery and equipment..........................              1,496             2,021
Furniture and fixtures...........................                165               207
                                                              ------            ------
                                                               1,962             2,795
Less - Accumulated depreciation and
  amortization...................................                519               871
                                                              ------            ------
                                                              $1,443            $1,924
                                                              ======            ======
</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, 1997. 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 liability is 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>   30
Net income (loss) per common share

     Primary earnings (loss) per common share is determined by deducting, where
applicable, the increase in redemption value of redeemable convertible
participating preferred stock from net income (loss) of the Company. This amount
is divided by the weighted average number of common shares and dilutive common
share equivalents outstanding, except that pursuant to the Securities and
Exchange Commission Staff Accounting Bulletins, common share equivalents issued
at prices below the anticipated public offering price during the twelve months
immediately preceding the initial public offering filing date have been included
in the calculation as if they were outstanding for all periods presented (using
the treasury stock method). Primary and fully diluted earnings (loss) per common
share are identical.

Effect of recent accounting pronouncements

     In March 1997, the Financial Accounting Standards Board issued SFAS No.
128, "Earnings Per Share", which establishes new standards for computing and
presenting earnings per share. SFAS No. 128 is effective for financial
statements issued for periods ending after December 31, 1997 and earlier
adoption is not permitted. The Company believes that the impact of adoption of
this statement will not have a material effect on the calculation of earnings
per share.

     In July 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income", which establishes standards for 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.

3. INVENTORIES:

     Inventories consisted of the following:


<TABLE>
<CAPTION>
                                                                    September 30,
                                                                   (000's omitted)
                                                                 1996           1997
                                                                 ----           ----
<S>                                                             <C>            <C>   
Raw materials...............................                    $  894         $  943
Work-in-process.............................                       331            511
Finished goods..............................                       338            291
                                                                ------         ------
                                                                $1,563         $1,745
                                                                ======         ======
</TABLE>

4. INTANGIBLE ASSETS:

     Intangible assets consisted of the following:


<TABLE>
<CAPTION>
                                                                     September 30,
                                                                    (000's omitted)
                                                                1996               1997
                                                                ----               ----
<S>                                                           <C>                 <C>
Excess of purchase price over fair value of
  net assets acquired...........................              $13,945             $13,945
Prepaid license fee.............................                  378                 378
Other...........................................                   45                  45
                                                              -------             -------
                                                               14,368              14,368
Less -- Accumulated amortization................                1,824               2,625
                                                              -------             -------
                                                              $12,544             $11,743
                                                              =======             =======
</TABLE>

                                       F-8
<PAGE>   31
5. ACCRUED EXPENSES:

     Accrued expenses consisted of the following:


<TABLE>
<CAPTION>
                                                                         September 30,
                                                                        (000's omitted)
                                                                     1996             1997
                                                                     ----             -----
<S>                                                                 <C>              <C>
   Bonuses payable.............................                     $  307            $  150
   Accrued warranty............................                        575               625
   Salaries payable............................                        126               172
   Other.......................................                         93               120
                                                                    ------            ------
                                                                    $1,101            $1,067
                                                                    ======            ======
</TABLE>

6. SIGNIFICANT CUSTOMERS:

     The largest customer of the Company was the only customer that accounted
for more than 10% of the Company's net sales with 23% of the Company's net sales
for the year ended September 30, 1997. Accounts receivable for this customer was
approximately $1,260,000 at September 30, 1997. The three largest customers each
accounted for more than 10% of the Company's net sales for each of the years
ended September 30, 1995 and 1996 and in the aggregate accounted for 47% of the
Company's net sales in each of those years. Accounts receivables from these
customers were approximately $1,714,000 and $1,736,000 at September 30, 1995 and
1996, respectively.

7. FOREIGN SALES:

     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,
                                  1995          1996           1997
                                  ----          ----           ----
<S>                              <C>           <C>            <C>    
Americas............             $12,130       $17,994        $21,507

Europe..............               3,500         5,986          6,150

Far East............               1,700         1,945          2,626
                                 -------       -------        -------
                                 $17,330       $25,925        $30,283
                                 =======       =======        =======
</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
will require extensive development work both on the solid ink itself and the ink
jet printheads used to apply that ink in commercial applications. The Company
plans to further develop this technology and develop new products using this
technology. This development process should continue until July of 1998.
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.

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.

                                       F-9
<PAGE>   32
10. LINE-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
are collateralized by all corporate assets. There were no outstanding borrowings
under this agreement at September 30, 1997.

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 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, 1997.

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, 3,689 shares were issued under the ESPP for $55,437. At September
30, 1997, the Company had a balance of 96,311 shares reserved for the ESPP.

Stock options

     Under the Company's 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, 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. Fair market value (as defined in the Plan) and 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, 1997, 726,900 shares were
available for granting of additional options.

     In October 1995, the Financial Accounting Standards Board issued SFAS No.
123, "Accounting for Stock-Based Compensation" (SFAS 123). SFAS 123 requires the
measurement of the fair value of stock options or warrants to be included in the
statement of income or disclosed in the notes to financial statements. The
Company has determined that it will continue to account for stock-based
compensation for employees under Accounting Principles Board Opinion No. 25 and
elect 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 and 1997 using the Black Scholes option pricing model prescribed by SFAS
123. The weighted average assumptions used are as follows:


<TABLE>
<CAPTION>
                                                           1996                         1997
                                                           ----                         ----
<S>                                                        <C>                          <C>  
Risk free interest rate                                    6.16%                        6.16%
Expected dividend yield                                       0%                           0%
Expected lives                                                5 years                      5 years
Expected volatility                                          49%                          49%
</TABLE>

                                      F-10
<PAGE>   33
     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 net income (loss) and pro forma net income (loss) per common share
would have been the following amounts:


<TABLE>
<CAPTION>
                                                                        1996                         1997
                                                                        ----                         ----
<S>                                                                   <C>                          <C>
Net income (loss):
    As reported (000's omitted)                                        $(414)                       $7,513
    Pro forma (000's omitted)                                           (414)                        7,466
Net income (loss) per common share:
    As reported                                                        (0.10)                         1.05
    Pro forma                                                          (0.10)                         1.04
</TABLE>

     Because 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, 1997, 1996 and 1995 and changes during the years then ended is presented in
the table and narrative below:


<TABLE>
<CAPTION>
                                                     1995                        1996                           1997
                                            ------------------------     -----------------------      --------------------------
                                                            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
Granted                                     108,000           3.52        26,000          13.69        139,100           17.73
Exercised                                         -              -         4,750           5.00          7,775            4.15
Canceled                                          -              -         1,500           5.00          7,800            8.99
                                            -------          -----       -------         ------        -------          ------
Outstanding at September 30,                108,000          $3.52       127,750         $ 5.52        251,275          $12.21
                                            =======          =====       =======         ======        =======          ======
Options exercisable at
   September 30,                                  0          $   -        22,250         $ 3.20         50,850          $ 5.10
                                            =======          =====       =======         ======        =======          ======
Weighted average fair value
   options granted during the year                                                       $ 6.81                         $ 9.02
                                                                                         ======                         ======
</TABLE>

     The following table represents weighted average price and life information
about significant option groups outstanding at September 30, 1997:


<TABLE>
<CAPTION>
                                                         Weighted
                                                         Average
                                                        Remaining                Weighted
        Range of                    Number             Contractual               Average                  Number
    Exercise Prices              Outstanding            Life (Yrs)            Exercise Price           Exercisable
    ---------------              -----------            ----------            --------------           -----------
<S>                              <C>                    <C>                    <C>                       <C>
$1.00                                38,000                 7                     $ 1.00                    18,000
$5.00                                51,100                 8                     $ 5.00                    23,100
$12.00 - $18.00                     115,175                 9                     $15.90                     9,750
$18.01 - $20.25                      47,000                 9                     $20.09                         0
                                    -------                                                                 ------
                                    251,275                                                                 50,850
                                    =======                                                                 ======
</TABLE>

                                      F-11
<PAGE>   34
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 years ended September 30, 1995, and 1996, the Company
expensed $4,561,000 and $1,710,000, respectively, 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 1996 and 1997, warrants to purchase 55,976 and
153,828 shares, respectively were exercised. At September 30, 1997, warrants to
purchase 25,388 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 years ended September 30, 1995 and 1996, was
$1,183,000 and $443,000, respectively.

12. INCOME TAXES:

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



<TABLE>
<CAPTION>
                                                                     For the Years Ended
                                                                         September 30,
                                                            --------------------------------------
                                                             1995             1996            1997
                                                             ----             ----            ----
<S>                                                         <C>             <C>             <C>
Current:
  Federal .........................................         $1,432          $3,314          $3,838
  State ...........................................            551             600             684
                                                            ------          ------          ------
                                                             1,983           3,914           4,522
                                                            ------          ------          ------
Deferred:
  Federal .........................................            (13)           (962)            154
  State ...........................................             (5)           (200)             27
                                                            ------          ------          ------
                                                               (18)         (1,162)            181
                                                            ------          ------          ------
Income tax before extraordinary item ..............         $1,965          $2,752          $4,703
                                                            ======          ======          ======
</TABLE>

                                      F-12
<PAGE>   35
     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,
                                                                                 ---------------------------
                                                                                  1995       1996       1997
                                                                                  ----       ----       ----
<S>                                                                               <C>         <C>        <C>
Statutory Federal tax rate ................................................       (34%)       34%        34%
State taxes net of Federal benefit ........................................        24          6          4
Non-deductible amortization of the excess of purchase price over fair value
  of net assets acquired ..................................................        10          4         --
Non-deductible redeemable warrant interest charge .........................       105         14         --
Benefit from foreign sales corporation ....................................        (3)        (3)        (2)
Non-deductible amortization of deferred compensation ......................        27          4         --
Other .....................................................................         4          7          3
                                                                                 ----        ---        ---
Effective tax rate before extraordinary item ..............................       133%        66%        39%
                                                                                 ====        ===        ===
</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,
                                           ------------------
                                           1996          1997
                                           ----          ----
<S>                                      <C>           <C>
Current:
    Accrued warranty expense ......      $   213       $   225
    Inventories ...................           77            97
    Allowance for doubtful accounts          111           108
    Other accrued expenses ........           30            35
                                         -------       -------
                                             431           465
                                         -------       -------
Non-Current:
    Depreciation and amortization .          (58)          (61)
    Intangible assets .............          977           765
                                         -------       -------
                                             919           704
                                         -------       -------
     Net deferred tax assets ......      $ 1,350       $ 1,169
                                         =======       =======
</TABLE>

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
$46,000, $69,000, and $98,000 for the years ended September 30, 1995, 1996, and
1997, respectively.

14. COMMITMENTS AND CONTINGENCIES:

     The Company leases certain operating facilities and equipment under
long-term, noncancelable operating leases. The leases for the operating
facilities expire June 30, 1998, and include an option to renew at prevailing
market rates for one three-year period. Approximate future minimum rental
commitments under noncancelable operating leases having a term in excess of one
year are approximately $78,000. Rental expense amounted to $130,000, $154,000,
and $180,000 for the years ended September 30, 1995, 1996 and 1997,
respectively.

     The Company entered into a three-year employment agreement with its chief
executive officer which requires minimum annual compensation through November
1997. The agreement also provides for 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.

                                      F-13
<PAGE>   36
    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, 1996 and 1997 and the related consolidated statements of
operations, stockholders' equity (deficit) and cash flows for the years ended
September 30, 1995, 1996, and 1997 included in this Form 10-K, and have issued
our report thereon dated October 24, 1997. 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-15 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 24, 1997

                                      F-14
<PAGE>   37
                  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
                       -----------                           ------               --------         ----------          ------
<S>                                                       <C>                    <C>               <C>              <C>
     Allowance for Doubtful Accounts -                                                           
       October 1, 1994 to September 30, 1995 . . . .        $  50,000             $170,000           $  -             $220,000
       October 1, 1995 to September 30, 1996 . . . .         $220,000             $ 80,000           $  -             $300,000
       October 1, 1996 to September 30, 1997 . . . .         $300,000             $      -           $  -             $300,000
</TABLE>

                                      F-15