<PAGE>

================================================================================

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

                    For the fiscal year ended June 25, 1999

                                       OR

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934


                        Commission File Number 0-13914

                            TRIO-TECH INTERNATIONAL
            (Exact name of Registrant as specified in its Charter)


               California                                     95-2086631
     (State or other jurisdiction of                       (I.R.S. Employer
      incorporation or organization)                     Identification Number)

            355 Parkside Drive
          San Fernando, California                                91340
 (Address of principal executive offices)                      (Zip Code)


                 Registrant's Telephone Number:  818-365-9200

          Securities registered pursuant to Section 12(b) of the Act:


                                                        Name of each exchange
    Title of each class                                 On which registered
 Common Stock, no par value                                     AMEX


          Securities registered pursuant to Section 12(g) of the Act:
                                     None


     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed with the Commission 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   No

     Based on the closing sales price on September 16, 1999, the aggregate
market value of the voting stock held by nonaffiliates of the registrant was
$6,535,764. Number of shares of common stock outstanding as of September 16,
1999 is 2,751,635.

     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 the definitive proxy statement
incorporated by reference in Part III of this Form 10-K.  [_]


================================================================================
                                      -1-
<PAGE>

                            TRIO-TECH INTERNATIONAL

  INDEX TO CONSOLIDATED FINANCIAL INFORMATION, OTHER INFORMATION AND SIGNATURE


<TABLE>
<CAPTION>
                                                                                                          Page
                                                                                                          ------
<S>                                                                                                       <C>
FORM 10-K      COVER                                                                                           1

               INDEX                                                                                           2

Part I.                                                                                                        3
Item 1         Business                                                                                        3
Item 2         Properties                                                                                      9
Item 3         Legal Proceedings                                                                              10
Item 4         Submission of matters to a vote of security holders                                            10

Part II                                                                                                       11
Item 5         Market for registrant's common equity and related stockholder matters                          11
Item 6         Selected financial data                                                                        12
Item 7         Management's discussion and analysis of financial condition and results of operations          13
Item 7A        Quantitative and qualitative disclosures about market risk                                     15
Item 8         Financial statements and supplementary data                                                    15
Item 9         Changes in and disagreements with accountants on accounting and financial disclosure           15

Part III                                                                                                      15

Part IV                                                                                                       15
Item 14        Exhibits, financial statement schedules  and reports on Form 8-K                               15

Signature                                                                                                     17

Exhibits
               Independent Auditors' Report                                                                   18

               Consolidated Balance Sheets as of June 25, 1999 and June 26, 1998                              19

               Consolidated Statements of Income and Comprehensive Income (Loss) for the Years Ended
               June 25, 1999, June 26, 1998 and June 27, 1997                                                 20

               Consolidated Statements of Shareholders' Equity  for the Years Ended June 25, 1999, June
               26, 1998 and June 27, 1997                                                                     21

               Consolidated Statements of Cash Flows for the Years Ended June 25, 1999, June 26, 1998
               and June 27, 1997                                                                              22

               Notes to  Consolidated Financial Statements                                                    24
</TABLE>
                                      -2-
<PAGE>

                  NOTE CONCERNING FORWARD-LOOKING STATEMENTS

The discussions of the Company's business and activities set forth in this 10-K
and in other past and future reports and announcements by the Company may
contain forward-looking statements and assumptions regarding future activities
and results of operations of the Company.  In light of the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995, the Company
hereby identifies the following factors which could cause actual results to
differ materially from those reflected in any forward-looking statement made by
or on behalf of the Company: market acceptance of Company products and services;
changing business conditions or technologies in the semiconductor industry,
which could affect demand for the Company's products and services; the impact of
competition; problems with technology; product development schedules; delivery
schedules; changes in military or commercial testing specifications which could
affect the market for the Company's products and services; difficulties in
profitability integrating acquired businesses, if any, into the Company; risks
associated with conducting business internationally and especially in Southeast
Asia, including currency fluctuations and devaluation, currency restrictions,
local laws and restrictions and possible social, political and economic
instability; general and economic conditions; and other economic, financial and
regulatory factors beyond the Company's control.

                                    PART I

ITEM 1 - BUSINESS
-----------------

General
-------

Trio-Tech International designs, manufactures and sells equipment and systems
used in the manufacture and testing of semiconductor devices and electronic
components. In addition, the Company operates test facilities in the United
States, Europe and Southeast Asia that provide semiconductor testing services to
component manufacturers and users.

The Company's wet process equipment and temperature controlled chucks are used
to manufacture and test semiconductor wafers and other microelectronic
substrates in the "front-end" of the manufacturing process. The Company's
centrifuges, leak detectors, HAST systems, burn-in systems and rate of turn
tables are used primarily at the "back-end" of the semiconductor manufacturing
process to test finished semiconductor devices and electronic components.

Trio-Tech operates seven test facilities, one in the United States, one in
Europe and five in Southeast Asia. These provide customers a comprehensive range
of testing services, such as burn-in and life testing, for finished or packaged
components. Many manufacturers of semiconductors find it cost effective to sub-
contract these services to third parties.

Trio-Tech operations in Europe and Southeast Asia have active distribution
operations. These provide sales and support for Trio-Tech's equipment in these
regions and also distribute and support additional products from other
manufacturers. These products are complementary with the Company's products and
are used by the semiconductor and electronics industries.

Trio-Tech is actively pursuing a strategic plan for growth which is designed to
increase the Company's addressable market by expanding its product offerings
with equipment and services for the front-end of the manufacturing process to
complement its traditional niche in the back-end. The Company plans to achieve
this goal through a combination of new product development and acquisitions of
complementary products and companies.  The acquisition of Universal Systems, a
leader in the design and manufacture of wet process equipment, in November 1997,
was an important step in this direction. Another is the continuing development
of Trio-Tech's temperature controlled chucks and the development of its COBIS-II
burn-in systems.

The terms "Trio-Tech" and "the Company" refer to Trio-Tech International and/or
its subsidiaries.

Company History
---------------

<TABLE>
<S>       <C>
1958      Incorporated in California

1976      The Company formed Trio-Tech International Pte Ltd (TTIPte) in Singapore.

1984      The Company formed the European Electronic Test Center (EETC), a Cayman Islands subsidiary, to operate a test
          facility in Dublin, Ireland.

1985      The Company's Singapore subsidiary entered into a joint-venture agreement, Trio-Tech Malaysia, to operate a test
          facility in Penang.
</TABLE>

                                      -3-
<PAGE>

<TABLE>
<S>       <C>
1986      Trio-Tech International listed on the NASDAQ Small Cap market under the symbol TRTC.

1988      The Company acquired the Rotating Test Equipment Product Line of Genisco Technology Corporation.

1990      Trio-Tech International acquired Express Test Corporation in California.
          Trio-Tech Malaysia opened a new facility in Kuala Lumpur.

1992      Trio-Tech Singapore opened Trio-Tech Bangkok, Thailand

1994      Trio-Tech Malaysia started a new testing operation in Batang Kali.

1997      In November 1997, the Company acquired Universal Systems of Campbell, California.

1998      In September 1998, the Company listed on AMEX under the symbol TRT.
</TABLE>


Analysis of Sales
-----------------

The following table sets forth the percentage of revenues derived from product
sales, testing services and industry segments during the last three fiscal years
and the breakdown of revenues derived from customers in the United States,
Southeast Asia and Europe. The amounts represented in product sales and service
include revenues derived from the test equipment distribution business in
Singapore.  Approximately 71% of the Company's revenues are earned in Singapore,
Malaysia and Thailand.  These countries have been significantly affected and
will continue to be affected by currency volatility in the Southeast Asia
region.  See Note 12 to Consolidated Financial Statements, Business Segments,
for a more detailed description.


<TABLE>
<CAPTION>
                                                                             Year Ended
                             -------------------------------------------------------------------------------------------------
                                      June 25, 1999                     June 26, 1998                   June 27, 1997
                                     ---------------                   ---------------                 ---------------
                                                               (Dollar amounts in thousands)
Product and service sales by
region:
<S>                          <C>               <C>             <C>                <C>             <C>               <C>
United States                  $     4,690          22%         $       4,095         19%           $     2,409         11%
Southeast Asia                       8,615          41                  8,309         38                  6,694         31
Europe                                 637           3                  1,011          5                    441          2
                             -------------     -------         --------------     ------          -------------     ------
Total                          $    13,942          66%         $      13,415         62%           $     9,544         44%
                             =============     =======         ==============     ======          =============     ======

Testing services sales  by
region:
United States                  $       249           1%         $         312          1%           $       215          1%
Southeast Asia                       6,430          30                  7,586         35                 11,305         53
Europe                                 560           3                    539          2                    484          2
                             -------------     -------         --------------     ------          -------------     ------
Total                          $     7,239          34%         $       8,437         38%           $    12,004         56%
                             =============     =======         ==============     ======          =============     ======

Net sales:
Manufacturing                  $     6,853          32%         $       6,335         29%           $     6,334         29%
Testing                              7,239          34                  8,437         39                 12,004         56
Distribution                         7,089          34                  7,080         32                  3,210         15
                             -------------     -------         --------------     ------          -------------     ------
Total net sales                $    21,181         100%         $      21,852        100%           $    21,548        100%
                             =============     =======         ==============     ======          =============     ======
</TABLE>


Background Technology
---------------------

Semiconductor devices are fundamental building blocks used in electronic
equipment and systems.  Each semiconductor device consists of an integrated
circuit that performs electronic functions. Integrated circuits are manufactured
through a series of complex steps on a wafer substrate, which is usually made of
silicon and measures three to eight inches in diameter. A finished

                                      -4-
<PAGE>

wafer consists of many integrated circuits; each referred to as a "device" or
"die", the number depending on the area of the circuits and the size of the
wafer. Manufacturers have increasingly utilized larger diameter wafers, and the
transition to 300mm (12 inch) wafers is currently underway throughout the
industry.

Wafers are typically sent through a series of 100 to 300 process steps. At many
of the process steps the wafer is washed and dried using wet process stations.
The finished wafer is put through a series of tests where each device on the
wafer is tested for functionality. After testing, the wafer is diced and each
die is encapsulated in packaging material, usually plastic or ceramic, with lead
wires that allow mounting onto printed circuit boards. Finished devices are put
through a series of screening processes, such as burn-in and electrical testing,
to ensure they meet necessary performance and quality standards, before shipment
to the customer.  In 1997, the worldwide market for semiconductor devices was
estimated at $140 billion.

In addition to the growing demand for semiconductors, integrated circuits are
continually becoming more complex, with greater capacity, versatility and
smaller size. In order to fabricate these semiconductors, manufacturers must
continually improve their fabrication, packaging and test facilities. In 1997,
the world market for semiconductor manufacturing equipment was estimated at $30
billion.

The market for semiconductor manufacturing equipment can be divided into wafer
fabrication (front-end) and assembly, packaging and test (back-end). The front-
end equipment market is estimated to be approximately 70% of the total market
with back-end 20% and facilities 10% of the total market.

Trio-Tech's products and services are applicable at several stages of the
manufacturing and test processes. Its wet process benches are used at many wafer
fabrication stages. Its Artic temperature chucks are used to test semiconductor
wafers at accurately controlled temperatures.  Its component centrifuges, leak
detectors, HAST equipment and burn-in systems are all used to test and screen
finished semiconductor devices to ensure they meet the specifications required
by the manufacturers and customers.

Trio-Tech's test services are concentrated on the back-end screening and test of
semiconductor devices. With the high concentration of semiconductor assembly and
packaging facilities in Southeast Asia, a large demand exists for third party
test services in this region. Customers use third party test services especially
to accommodate fluctuations in output or to benefit from economies that can be
offered by third party service providers.

Products
--------

The Company designs and manufactures equipment for the manufacture and test of
semiconductor wafers, devices and other electronic components.

Wet Process Stations

Wet Process benches are used for cleaning, rinsing and drying semiconductor
wafers, magnetic disks, flat panel displays and other microelectronic
substrates. This product line, which is manufactured by the Company's subsidiary
Universal Systems, includes manual and automated wet process stations, and
features radial and linear robots, state-of-the-art PC touch-screen controllers
and sophisticated scheduling and control software.

Temperature Controlled Wafer Chucks

The Artic Temperature Controlled Chucks are used for test, characterization and
failure analysis of semiconductor wafers and other components at accurately
controlled hot and cold temperatures.  Several models are available with
temperature ranges from -65C to +400C and in diameters from 4 to 12 inch. These
systems provide excellent performance to meet the most demanding customer
applications. Several unique mechanical design features, for which patents are
pending, provide excellent mechanical stability under high probing forces and
across the temperature ranges.

Autoclaves and HAST (Highly Accelerated Stress Test) Equipment

Trio-Tech manufactures a range of autoclaves and HAST systems and specialized
test fixtures.  Autoclaves provide pressurized, saturated vapor (100% relative
humidity) test environments for fast and easy monitoring of integrated circuit
manufacturing processes. HAST equipment, which provides a pressurized high
temperature environment with variable humidity, is used to determine the
moisture resistance of plastic encapsulated devices. HAST provides a fast and
cost-effective alternative to conventional non-pressurized temperature and
humidity testing.

                                      -5-
<PAGE>

Burn-in Equipment and Boards

Trio-Tech manufactures burn-in systems, burn-in boards and burn-in board test
systems.   Burn-in equipment is used to subject semiconductor devices to
elevated temperatures while testing them electrically to identify early product
failures ("infant mortalities") as well as to assure long-term reliability.
Burn-in testing approximates, in a compressed time frame, the electrical and
thermal conditions to which the device would be subjected during its normal
life.

During 1998, the Company developed and launched its new COBIS-II burn-in system
that offers state-of-the-art dynamic burn-in capabilities and a Windows-based
operating system with full data logging and networking features.  The Company
also offers burn-in boards for its COBIS burn-in systems and other brands of
burn-in systems.  Burn-in boards are used to mount devices during high
temperature environmental stressing.

Component Centrifuges and Leak Detection Equipment

Component centrifuges and leak detection equipment are used to test the
mechanical integrity of ceramic and other hermetically sealed semiconductor
devices and electronic parts for high reliability and aerospace applications.
The Company's centrifuges are used to identify mechanical weaknesses of devices
by spinning them at a specified acceleration, creating a pressure of up to
30,000 g's (900,000 pounds per square inch).  The Company's leak detection
equipment is designed to detect leaks in hermetic packaging by first
pressurizing the devices in a tracer gas or fluid and then visually scanning for
bubble trails emanating from defective devices.

Rate of Turn Tables

The Company manufactures a range of rate-of turn tables which are used to
subject test parts to accurately controlled angular velocities and g-forces. The
systems are typically used to test accelerometers, gyroscopes, turn and bank
indicators, inertial platforms and other motion sensors. Applications include
automotive and aerospace markets.

Product Development
-------------------

The Company incurred research and development costs of $347,000 in fiscal 1999,
$158,000 in fiscal 1998 and $18,000 in fiscal 1997.

Artic Temperature Controlled Chucks

Trio-Tech is continuing to develop its range of Artic temperature controlled
chucks.  During 1999, the Company introduced a new range of chucks for
production wafer probing applications. These new chucks offer high levels of
mechanical stability under high probing loads. A triaxial guarding option is
available which enables very precise electrical measurements on the wafer.
Initial units have been installed and are currently operating in production
probing systems at one of the world's leading manufacturers of semiconductors
and computers.

Wet Process Stations

The Company's subsidiary, Universal Systems, is actively developing its line of
wet process equipment. During the year Universal launched its new model VLF-2002
Automated Wafer Processing Station. The first system was installed in one of
Silicon Valleys leading fabs, an experimental copper plating process for eight
inch diameter wafers. Universal also completed its first chemical dispense
system, model CD-2001, designed for automated delivery of process chemicals to
wet process equipment. Customer interest in these and other products is strong.

Testing Services
----------------

Trio-Tech owns and operates facilities that provide testing services for
semiconductor devices and other electronic components to meet the requirements
of military, aerospace, industrial and commercial applications.

The Company uses its own proprietary equipment for certain burn-in, centrifugal
and leak tests, and commercially available equipment for various other
environmental tests.  The Company conducts the majority of its testing
operations in Southeast Asia with facilities in Singapore, Malaysia and
Thailand.  Several of these facilities have ISO 9002 certification. The Company
also operates test facilities in San Fernando, California and Dublin, Ireland.

The testing services are used by manufacturers and purchasers of semiconductors
and other components who either do not have testing capabilities or whose in-
house screening facilities are not sufficient to test devices to military or
certain commercial

                                      -6-
<PAGE>

specifications. In addition, Trio-Tech provides overflow testing and independent
verification for companies with in-house capabilities.

Trio-Tech's laboratories perform a variety of tests, including stabilization
bake, thermal shock, temperature cycling, mechanical shock, constant
acceleration, gross and fine leak tests, electrical testing, static and dynamic
burn-in tests, and vibration testing.  The laboratories also perform
qualification testing, consisting of intense tests conducted on small samples of
output from manufacturers who require qualification of their processes and
devices.

Distribution Activities
-----------------------

The Company's Singapore subsidiary continues to develop its international
distribution division.  The distribution operation markets, sells and supports
Trio-Tech's products in Southeast Asia.  In addition to Trio-Tech's own
products, this operation also distributes other complementary products from
other manufacturers in the United States, Europe and Japan, including
environmental chambers, shakers and vibration systems,  solderability testers
and other manufacturing and test products.

Marketing, Distribution and Services
------------------------------------

The Company markets its products and services worldwide, both directly and
through independent sales representatives.  There are approximately 12 of these
representatives that operate within the United States and 7 in various foreign
countries.  The Company's marketing efforts in the United States are coordinated
from its headquarters in San Fernando, and its Far East and European marketing
efforts are assigned to its subsidiaries in Singapore and Ireland, respectively.
The Company advertises in trade journals and participates in trade shows.

The Company's products and services are purchased by independent testing
laboratories and by users and manufacturers of semiconductor devices, including,
IBM, AMD, Motorola, National Semiconductor, SGS Thomson. During the year ended
June 25, 1999, the Company had sales of $3,115,000 and $2,973,000 to Catalyst
Semiconductor and AMD, respectively.

Backlog
-------

The following table sets forth the Company's backlog at the dates indicated
(amounts in thousands):

<TABLE>
<CAPTION>
                                                     June 25, 1999                   June 26, 1998
                                                ------------------------        -----------------------
          <S>                                   <C>                             <C>
          Manufacturing backlog                   $                2,333          $               2,702

          Testing service backlog                                  2,979                          2,202

          Distribution backlog                                     1,858                          1,732
                                                ------------------------        -----------------------
                                                  $                7,170          $               6,636
                                                ========================        =======================
</TABLE>

Based upon past experience, the Company does not anticipate any significant
cancellations. The purchase orders for equipment call for delivery within the
next 12 months. Testing services backlog is scheduled to be performed within the
next year.  The Company does not anticipate any difficulties in meeting delivery
schedules.

Manufacturing and Supply
------------------------

The Company's products are designed by its engineers and are assembled and
tested at its facilities in San Fernando and San Jose, California, Singapore and
Ireland.  All parts and certain components are purchased from outside sources
for assembly by the Company.

Trio-Tech uses Fluorinert, a special indicator fluid sold by the 3M Company, in
its gross leak equipment. The Company has not experienced any difficulty in
obtaining Fluorinert to date.  There can be no assurance that the Trio-Tech will
not experience difficulties or delays in obtaining Fluorinert in the future. In
December 1998, the Company discontinued its Tracer-Flo product line and has no
future requirement for Krypton 85 gas.

Competition
-----------

The semiconductor equipment industry is highly competitive. The principal
competitive factors in the industry are product performance, reliability,
service and technical support, product improvements, price, established
relationships with customers

                                      -7-
<PAGE>

and product familiarity. The Company has competitors for its various products.
However, the Company believes its products compete favorably with respect to
each of these factors in the markets in which it operates. There can be no
assurance that competition will not increase or that the Company's technological
advantages may not be reduced or lost as a result of technological advances by
competitors or changes in semiconductor processing technology.

There are numerous testing laboratories in the areas in which the Company
operates that perform a range of testing services similar to those offered by
the Company.  Since the Company has sold and will continue to sell its products
to competing laboratories and other test products are available from other
manufacturers, the Company's competitors can offer the same testing
capabilities. This equipment is also available to semiconductor manufacturers
and users who might otherwise use outside testing laboratories, including the
Company, to perform environmental testing.  The existence of competing
laboratories and the purchase of testing equipment by semiconductor
manufacturers and users are potential threats to the Company's future revenues
and earnings from testing.

Patents
-------

Trio-Tech holds a United States Patent granted in 1987 in relation to its
pressurization humidity testing equipment.  The Company also holds a United
States Patent granted in 1994 on certain aspects of its Artic temperature test
systems.  In 1999, the Company filed a new United States patent application for
several aspects of its new range of Artic temperature chucks.

Government Regulation
---------------------

Up until December 1998 the Company supported the Tracer-Flo product line. The
Tracer-Flo process uses Krypton 85, an inert radioactive gas, the supply and
handling of which are subject to regulation by the United States Nuclear
Regulatory Commission (NRC) and the California Department of Health Physics.
The Company was obliged, therefore, to train the Tracer-Flo operators, which are
licensed by the State of California, and maintain records and control its
supplies of Krypton 85.  The California agency conducts periodic site
inspections, and the NRC monitors interstate shipments and can inspect the
Company's shipping records.  No security clearance is required to handle the
gas, which has a low level of radioactivity. This product line experienced
declining sales for several years. The Company discontinued manufacture and
support of this product line in December 1998.

Employees
---------

As of June 25, 1999, the Company had 49 employees in the United States, 256 in
Singapore, 200 in Malaysia, 34 in Bangkok, and 20 in Ireland for a total of 559.
None of the Company's employees is represented by a labor union.

                                      -8-
<PAGE>

ITEM 2 - PROPERTIES
-------------------

The following table sets forth information as to the location and general
character of the principal manufacturing and testing facilities of the
Registrant:

<TABLE>
<CAPTION>
                                                                                                      Owned (O)
                                                                               Approx.              or Leased (L)
                                                                               Sq. Ft.               Expiration
              Location                           Principal Use                 Occupied                 Date
------------------------------------        ----------------------          --------------      -------------------
<S>                                         <C>                             <C>                 <C>
355 Parkside Dr.                            Headquarters/                           21,000        (L) Jan. 2000
San Fernando, CA 9l340                      Manufacturing/
                                            Testing

6951-A Via Del Oro                          Manufacturing                           15,000        (L) Feb. 2004
San Jose, CA 95119

Abbey Road                                  Testing/Manufac-                        18,400        (O) *1
Deansgrange Co.                             turing
Dublin, Ireland

No. 5, Kian Teck Road                       Manufacturing                           30,000        (L) *2
Jurong Town, Singapore

1004, Toa Payoh North,                      Testing                                  6,833        (L) November 2000
HEX 07-01/07,                                                                                         July 2002
Singapore

Plot 1A, Phase 1                            Testing                                 49,924        (L) Aug. 2071
Bayan Lepas Free
Trade Zone
11900 Penang

Lot No. 6. Lorong                           Testing                                 23,000        (L) May 2000
Enggang 37 Ulu Kelang
Ampang Industrial Area.
Ulu Kelang, Selangor,
Kuala Lumpur

327, Chalongkrung Road,                     Testing                                 11,300        (O) *3
Lamplathew, Lat Krabang,
Bangkok 10520, Thailand

Lot No. B7, Kawasan MIEL                    Manufacturing                           24,142        (O)*4
Batang Kali, Phase II,
43300 Batang Kali
Selangor Darul Ehsan,
Malaysia
</TABLE>

*1   Purchased for 270,000 Irish Pounds, equivalent to approximately U.S.
     $261,000 based on the exchange rate as of June 28, 1985, of which
     approximately 30% was recovered by the Company as part of the grant monies
     received from the Industrial Development Authority of the Republic of
     Ireland.

                                      -9-
<PAGE>

*2   Purchased for S$1 million, equivalent to approximately U.S.$ 447,000 based
     on the exchange rate as of June 28,1985.  This amount was completely repaid
     in fiscal year 1991.  However, under Singapore law, this land may not be
     purchased outright.  Accordingly, the term for this land lease will expire
     in December 2030.  The Company has acquired the fullest ownership rights
     possible under Singapore law that includes an option to renew the lease at
     that time.

*3   Purchased for Thai Baht 13,500,000, equivalent to approximately U.S.
     $533,000 based on the exchange rate as of June 25, 1993.

*4   Purchased for Malaysia Ringgit 1,000,000, equivalent to U.S. $387,000 based
     on the exchange rate as at June 24, 1994. Accordingly, the term for this
     land lease will expire in October 2052.


ITEM 3 - LEGAL PROCEEDINGS
--------------------------

On August 24, 1995, the Company was served in a civil action brought by HM
Holdings, Inc. (HM) against 106 defendants, including the Company.  HM has paid
$3,750,000 to the Federal Environmental Protection Agency to settle a proceeding
alleging that HM's predecessor company caused soil and groundwater contamination
of the North Hollywood (California) Superfund Site and may have additional
liabilities.  HM alleges that the 106 defendants caused or contributed to the
contamination.  An additional legal matter may arise in part out of a related
suit by Lockheed Martin Corporation against HM and other defendants, possibly
including the Company (which has not been served in this related suit),
involving the nearby Burbank Superfund Site, which HM is seeking to settle and
to assign its claim against the 106 defendants to Lockheed Martin.  The Company
vacated its Burbank location in 1987.  The Company and its counsel have not yet
had the opportunity to investigate the allegations.  The Company believes its
liability insurance should cover this claim, but its insurers have not yet made
a decision regarding this matter.  Management, based on its present information,
believes that the outcome of this litigation will not materially affect the
Company's consolidated financial position or results of operations.

The Company is, from time to time, the subject of litigation claims and
assessments arising out of matters occurring in its normal business operations.
In the opinion of management, resolution of these matters will not have a
material adverse effect on the Company's financial statements.

There are no material proceedings to which any director, officer or affiliate of
the Registrant, any beneficial owner of more than five percent of the
Registrant's common stock or any associate of such person is a party that is
adverse to the Registrant or its properties.

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

None.

                                      -10-
<PAGE>

                                    PART II

ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK
---------------------------------------------

The Registrant's common stock is traded on the American Stock Exchange under the
symbol "TRT".  The following table sets forth, for the periods indicated, the
range of high and low sales prices of Trio-Tech International's Common Stock as
quoted by AMEX. These prices do not include retail mark-ups, markdowns or
commissions:

<TABLE>
<CAPTION>
                     Quarter Ended                    High                    Low
         ----------------------------            ------------            ------------
         <S>                                     <C>                     <C>
         Fiscal 1998
         ----------------------------
                  September 26, 1997                     8.83                    4.92
                  December 26, 1997                     11.67                    4.13
                  March 27, 1998                         6.50                    4.41
                  June 26, 1998                          5.25                    4.00

         Fiscal 1999
         ----------------------------
                  September 25, 1998                     4.75                    2.63
                  December 25, 1998                      3.25                    2.13
                  March 26, 1999                         3.69                    2.63
                  June 25, 1999                          3.67                    2.75
         ----------------------------

         Fiscal 2000
         ----------------------------
                  June 26, 1999 to                       4.88                    2.88
                  September 16, 1999
</TABLE>

The Registrant's common stock is held by approximately 625 shareholders of
record as of September 16, 1999. Approximately 1,658,254 shares are held by Cede
and Co., a clearinghouse that holds stock certificates in "street" name for an
unknown number of shareholders.

The Company has not declared any cash dividends on its common stock. Any future
determinations as to cash dividends will depend upon the earnings and financial
position of the Company at that time and such other factors as the Board of
Directors may deem appropriate. It is anticipated that no dividends will be paid
to holders of common stock in the foreseeable future.

                                      -11-
<PAGE>

ITEM 6 - SELECTED FINANCIAL DATA
(In thousands except share and per share data)

<TABLE>
<CAPTION>
                                    June 25,                June 26,               June 27,           June 28,          June 30,
                                     1999                     1998                  1997                1996              1995
                                  -------------           -----------           -----------          ------------      ------------

<S>                               <C>                     <C>                   <C>                  <C>               <C>
Statement of Operations
Net sales                          $    21,181             $   21,852           $    21,548           $    23,185       $    19,488

Income (loss) from Operations             (207)                   969                 3,057                 2,712             1,547

Net Income                                 195                    831                 1,002                   806               570

Net income per share :
    Basic                                 0.07                   0.34                  0.54                  0.45              0.31

Net income per share               $      0.07             $     0.34           $      0.54           $      0.45       $      0.33

Weighted average common
   shares outstanding:
    Basic                            2,745,000              2,413,000             1,850,000             1,793,000         1,743,000
    Diluted                          2,757,000              2,484,000             1,961,000             1,926,000         1,871,000

Balance Sheet

Current assets                     $    12,723             $   14,036           $    13,843           $    11,760       $     6,848
Current liabilities                      5,934                  7,439                 7,039                 8,169             5,159
Working capital                          6,789                  6,597                 6,804                 3,591             1,689

Total assets                            18,932                 19,331                18,528                17,416            12,646

Long-term debt and
   capitalized leases                      962                    426                   723                   688               597
Shareholders' equity               $     9,051             $    8,763           $     6,463           $     5,207       $     4,419
</TABLE>

                                      -12-
<PAGE>

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

The following discussion should be read in conjunction with the Company's
Financial Statements, including the related notes thereto, and other financial
information included herein. The information in this 10-K includes forward-
looking statements. In addition, past operating results are not necessarily
indicative of the results to be expected in future periods. See "Note Concerning
Forward-Looking Statements" prior to "Part I - Item 1 - Business" on page 3.

Year Ended June 25, 1999 ("1999") Compared to Year Ended June 26, 1998 ("1998")
-------------------------------------------------------------------------------

Net sales decreased by $671,000 or 3.1% from $21,852,000 in 1998 to $21,181,000
in 1999 due to the general slowdown in the semiconductor industry and the poor
economic conditions in Southeast Asia. Net sales for the Far East operations
decreased $850,000 or 5.3% from $15,895,000 in 1998 to $15,045,000 in 1999 due
mainly to lower testing volume in Malaysia and Singapore.

Cost of sales increased $1,484,000 or 10.6% from $14,020,000 in 1998 to
$15,504,000 in 1999. As a percentage of sales, it increased 9.0% from 64.2% in
1998 to 73.2% in 1999. This increase is primarily due to a shift in relative
sales from high margin test services to lower margin distribution sales.

Operating expenses decreased by $979,000 or 14.3% from $6,863,000 in 1998 to
$5,884,000 in 1999 as a result of a series of implemented cost controls.

Research and development expenses increased by $189,000 to $347,000 in 1999 from
$158,000 in 1998 due to the Company's commitment to the development of a range
of Artic Temperature Controlled Chucks.

Interest expense decreased in 1999 by $60,000 or 35.7%, from $168,000 in 1998 to
$108,000 in 1999, due to decreases in lines of credit.

Other income has increased by $293,000 or 58.1% from $504,000 in 1998 to
$797,000 in 1999 primarily due to disposal of marketable securities in Malaysia,
interest income earned on certificates of deposit, and service income earned by
providing installation services to a customer in Thailand.

Year Ended June 26, 1998 ("1998") Compared to Year Ended June 27, 1997 ("1997")
-------------------------------------------------------------------------------

Net sales increased by $304,000 or 1.4% from $21,548,000 in 1997 to $21,852,000
in 1998 despite the general slowdown in the semiconductor industry and the poor
economic conditions in Southeast Asia.  Net sales for the Far East operations
decreased $2,105,000 or 11.7% from $17,999,000 in 1997 to $15,895,000 in 1998
due mainly to lower testing volume in Malaysia and Singapore.

Cost of sales increased $1,320,000 or 10.4% from  $12,700,000 in 1997 to
$14,020,000 in 1998.  As a percentage of sales, it increased 5.3% from 58.9% in
1997 to 64.2% in 1998. This decline is primarily due to a shift in relative
sales from high margin test services to lower margin equipment sales.

Operating expenses increased by $1,072,000 or 18.5% partially due to the
addition of Universal Systems and the increase in research and development costs
with the remainder being from realized exchange losses due to the currency
crisis in Southeast Asia.

Interest expense increased in 1998 by $58,000 or 52.7%, from $110,000 in 1997 to
$168,000 in 1998.  This is a result of increased interest rates.

Other income has increased significantly from $460,000 in 1997 to $504,000 in
1998 primarily due to interest income earned on certificates of deposit and
service income earned by providing administrative services to a customer in
Thailand.

Net income decreased by $171,000 or 17.1% from $1,002,000 in 1997 to $831,000 in
1998 due mainly to lower testing volume in Malaysia.  Minority interest profit
allocation was significantly less in 1998 versus 1997 due to a decrease in
profits of the 55% owned Trio-Tech Malaysia.

                                      -13-
<PAGE>

Liquidity and Capital Resources
-------------------------------

Net cash generated by operating activities during the year ended June 25, 1999
was $49,000 compared to $222,000 generated by operating activities during the
year ended June 26, 1998. The negative cash flow from operating activities in
1999 was comprised of a decrease in accounts payable and accrued expenses of
$1,555,000 and an increase in accounts receivable of $336,000. These amounts
were partially offset by positive cash flow comprised of $195,000 from net
income, $1,222,000 of non-cash depreciation and amortization, a decrease in
inventories of $257,000 and a decrease in prepaid and other current assets of
$215,000.

Net cash used by investing activities during 1999 was $1,209,000 compared to
$687,000 generated by investing activities in the 1998 year. The net cash used
by investing activities was a result of capital expenditures of $1,863,000,
$1,161,000 of which was financed by capital leases, and an increase in
certificates of deposits of $552,000.

Net cash used by financing activities during 1999 was $629,000 compared to
$3,807,000 provided by financing activities in the 1998 year. The significant
cash outflows from financing activities include $789,000 of payments on lines of
credit, long term obligations and capitalized leases, this was partially offset
by a cash inflow of $214,000 from additional borrowing under lines of credit.

The Company's subsidiary, TTI Pte, has a secured credit agreement with a bank
that provides for a total line of credit of $3,125,000. The agreement contains
certain debt covenants including maintaining a minimum net worth of $2,400,000
at TTI Pte. Borrowings under the line were $214,000 and $481,000 at the end of
fiscal 1999 and 1998, respectively. The interest rate on borrowings is at the
bank's prime rate (6.25% at June 25, 1999) plus 1.25%. Borrowings under this
agreement are collateralized by substantially all of TTI Pte's assets. This line
of credit expires March 2000.

The Company's subsidiary, TTM, has a secured credit agreement with a bank that
provides for a total line of credit of $132,000. At June 25, 1999, there were no
borrowings outstanding. The line of credit bears interest at the bank's
reference rate (7.25% at June 25, 1999) plus 2.5%. This line of credit expires
May 2000.

The Company's subsidiary, TTBk, has a line of credit that provides for
borrowings of approximately $141,000. Interest on the line is at the bank's
reference rate (10.25% at June 25, 1999) plus 2.2%. There were no borrowings
against this line as of June 25, 1999. This line of credit does not have an
expiration date.

The Company's subsidiary, TT Ireland, has a credit agreement that provides for a
mortgage loan of $400,000. Borrowings under the mortgage loan amounted to
$263,000 as of June 25, 1999. Interest is at the bank's prime rate (2.65% at
June 25, 1999) plus 3.5%.

The Company obtained a revolving line of credit of $150,000 from a bank bearing
interest at 1.25% above the bank's reference rate (7.75% at June 25, 1999).
Borrowings under the line amounted to $150,000 as of June 25, 1999. This line of
credit expires February 2000.

Year 2000 Compliance Issue
--------------------------

The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a 2-
digit year is commonly referred to as the "Year 2000 Compliance" issue. As the
year 2000 approaches, such systems may be unable to accurately process certain
date-based information. The Company has reviewed all significant internal
applications and believes it has implemented modifications necessary to ensure
Year 2000 compliance, other than with respect to 55% owned Malaysia. The Company
anticipates that 55% owned Malaysia will be compliant by December 1999.

In addition, the Company is in the on-going process of communicating with others
with whom it does significant business, to determine their Year 2000 Compliance
readiness and the extent to which the Company is vulnerable to any third party
Year 2000 Compliance. However, there can be no guarantee that the systems of
other companies on which the Company's systems rely will be timely converted, or
that a failure to convert by another company, or a conversion that is
incompatible with the Company's systems, would not have a material adverse
effect on the Company.

The total cost to the Company of these Year 2000 Compliance activities has not
been and is not anticipated to be material to its financial position or to its
results of operations. These costs and the date on which the Company plans to
complete the Year 2000 Compliance modification and testing processes are based
on management's best estimates, which were derived utilizing numerous
assumptions of future events including the continued availability of certain
resources, third party modification plans and other factors. However, there can
be no guarantee that these estimates will be achieved and actual results could
differ from those plans.

Economic conditions in Southeast Asia
--------------------------------------

The Company's operations, balance sheet and cash flows have been affected by
recent economic instability in portions of Southeast Asia, which accounted for
approximately 71% of the Company's net sales in the year ended June 1999, 73% in
the year ended 1998 and 83% for year ended 1997. A recent currency devaluation
in Thailand and continuing currency weaknesses in Thailand, Malaysia and
Singapore have required downward accounting adjustments in the U.S. dollar value
of net assets located in those countries. Unsettled economic conditions in those
countries and elsewhere have had some effect on orders by semiconductor
companies for Trio-Tech's testing services. Although the Company has continued
to manage its operations profitably, extended economic instability could
adversely affect the Company's financial condition, results of operations or
cash flows. On September 1,

                                      -14-
<PAGE>

1998, the government of Malaysia announced its intention to limit the movement
of certain cash balances denominated in Malaysian currency.

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
--------------------------------------------------------------------

Not applicable.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------

The information called for by this item is included in the Company's
consolidated financial statements beginning on page 18 of this Annual Report on
Form 10-K.

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

None

                                   PART III

The information required by Part III is hereby incorporated by reference from
the Company's Proxy Statement to be filed with the Securities and Exchange
Commission within 120 days after the end of fiscal 1999.

                                    PART IV

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

(a) (1) and (2) FINANCIAL STATEMENTS AND SCHEDULES:

             The following financial statements, including notes thereto and the
             independent auditors' report with respect thereto, are filed as
             part of this Annual Report on Form 10-K, starting on page 18
             hereof:

             1.   Independent Auditors' Report
             2.   Consolidated Balance Sheets
             3.   Consolidated Statements of Income and Comprehensive Income
                  (Loss)
             4.   Consolidated Statements of Shareholders' Equity
             5.   Consolidated Statements of Cash Flows
             6.   Notes to Consolidated Financial Statements


(b)          REPORTS ON FORM 8-K:

               The Company did not file any reports on Form 8-K during the
               quarter ended June 25, 1999.


(c)  EXHIBITS:

Number                    Description                            Page Number
------                    -----------                            -----------
3.1     Articles of Incorporation, as currently in effect.
        [Previously filed as Exhibit 3.1 to the Annual
        Report on Form 10-K for June 24, 1988.]                   _______

3.2     Bylaws, as currently in effect.  [Previously filed
        as Exhibit 3.2 to the Annual Report on Form 10-K
        for June 24, 1988.]                                       _______

10.2    Real Estate Lease, dated September 29, 1987,
        between Stierlin Industrial Center and Registrant.
        [Previously filed as Exhibit 10.5 to the

                                      -15-
<PAGE>

        Registration Statement on Form S-1 (No. 2-87606).]        _______

10.3    Tenancy of Flatted Factory Unit, dated December 2,
        1982, between Jurong Town Corporation and
        Registrant.  [Previously filed as Exhibit 10.8
        to the Registration Statement on Form S-1
        (No. 2-87606).]                                           _______

10.4    Tenancy of Flatted Factory Unit, dated September 10,
        1982, between Jurong Town Corporation and
        Registrant.  [Previously filed as Exhibit 10.9
        to the Registration Statement on Form S-1
        (No. 2-8766).]                                            _______

10.5    Real Estate Lease, dated December 15, 1986,
        between San Fernando Associates and Registrant.
        [Previously filed as Exhibit 10.17 to the Annual
        Report on Form 10-K for June 28, 1987.]                   _______

10.9    Credit Facility Letter dated November 2, 1993, between
        Trio-Tech International Pte. Ltd. and Standard
        Chartered Bank. [Previously filed as Exhibit 10.9 to the
        Annual Report on Form 10-K for June 26, 1994.]            _______

10.10   1998 Stock Option Plan.  [Previously filed
        as Exhibit 1 to the Company's proxy statement filed under
        regulation 14A on October 27, 1997].                      _______

10.11   Directors Stock Option Plan.  [Previously filed
        as Exhibit 2 to the Company's proxy statement filed under
        regulation 14A on October 27, 1997].


10.12   Real Estate Lease dated February 1, 1999 between Martinvale
        Development Company and Universal Systems.

22.1    Subsidiaries of the Registrant (100% owned by the
        Registrant except as otherwise stated):

        Trio-Tech International Pte. Ltd., a Singapore Corporation

        Trio-Tech Test Services Pte. Ltd., a Singapore Corporation

        Trio-Tech Reliability Services, a California Corporation

        Express Test Corporation, A California Corporation

        European Electronic Test Center, Ltd., A Cayman Islands
         Corporation

        Trio-Tech Malaysia, a Malaysia Corporation
         (55% owned by the Registrant)

        Trio-Tech Kuala Lumpur, a Malaysia Corporation
         (100% owned by Trio-Tech Malaysia)

        Trio-Tech Bangkok, a Thailand Corporation

        Prestal Enterprise Sdn Bhd, a Malaysia Corporation
         (73% owned by the Registrant)

        KTS Incorporated, doing business as Universal Systems, a California
        Corporation

27.1    Financial Data Schedule

                                      -16-
<PAGE>

     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.

                            TRIO-TECH INTERNATIONAL


                               By:       /s/ Victor H.M. Ting
                                 ----------------------------
                                  VICTOR H.M. TING
                                  Vice President and
                                  Chief Financial Officer
                                  Date: October 4, 1999


Pursuant to the requirement 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.


                   /s/ A. Charles Wilson                 October 4, 1999
                  ---------------------------------
                  A. Charles Wilson, Director
                  Chairman of the Board


                   /s/ S. W. Yong                        October 4, 1999
                  ---------------------------------
                  S. W. Yong, Director
                  President and Chief Executive
                  Officer

                   /s/ Victor H.M. Ting                  October 4, 1999
                  ---------------------------------
                  Victor H.M. Ting
                  Vice President, Chief Financial
                  Officer and Principal Accounting
                  Officer


                   /s/ Jason T. Adelman                  October 4, 1999
                  ---------------------------------
                  Jason T. Adelman, Director


                   /s/ Frank S. Gavin                    October 4, 1999
                  ---------------------------------
                  Frank S. Gavin, Director


                   /s/ Richard M. Horowitz               October 4, 1999
                  ---------------------------------
                  Richard M. Horowitz, Director


                   /s/ F.D. (Chuck) Rogers               October 4, 1999
                  ---------------------------------
                  F.D. (Chuck) Rogers, Director


                   /s/ William L. Slover                 October 4, 1999
                  ---------------------------------
                  William L. Slover, Director

                                      -17-
<PAGE>

INDEPENDENT AUDITORS' REPORT


Board of Directors
Trio-Tech International
San Fernando, California:

We have audited the accompanying consolidated balance sheets of Trio-Tech
International and subsidiaries (the "Company") as of June 25, 1999 and June 26,
1998, and the related consolidated statements of income and comprehensive income
(loss), shareholders' equity, and cash flows for each of the three years in the
period ended June 25, 1999. 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, such consolidated financial statements present fairly, in all
material respects, the financial position of Trio-Tech International and
subsidiaries as of June 25, 1999 and June 26, 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
June 25, 1999 in conformity with generally accepted accounting principles.



DELOITTE & TOUCHE LLP

/s/  DELOITTE & TOUCHE LLP

Los Angeles, California
September 17, 1999

                                      -18-
<PAGE>

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
ASSETS                                            Notes             1999             1998
                                                ---------      -------------     -------------
<S>                                             <C>            <C>               <C>
CURRENT ASSETS:
   Cash                                                        $   1,593,000     $   3,305,000
   Cash deposits                                                   4,499,000         3,947,000
   Trade accounts receivable, less
      allowance for doubtful
      accounts of $219,000 in
      1999 and $468,000 in 1998                                    4,460,000         4,124,000
   Other receivables                                                 282,000           299,000
   Inventories                                    2                1,799,000         2,056,000
   Prepaid expenses and other
      current assets                                                  90,000           305,000
                                                               -------------     -------------
         Total current assets                     5               12,723,000        14,036,000


PROPERTY AND EQUIPMENT, Net                       3,5,7            5,538,000         4,669,000
OTHER ASSETS, Net                                 4                  671,000           626,000
                                                               -------------     -------------
TOTAL ASSETS                                                   $  18,932,000     $  19,331,000
                                                               =============     =============

CURRENT LIABILITIES:
   Lines of credit                                5            $     364,000     $     631,000
   Accounts payable                                                1,989,000         2,126,000
   Accrued expenses                               6                3,005,000         3,804,000
   Income taxes payable                                               71,000           690,000
   Current portion of long-term
   debt and capitalized leases                    7,9                505,000           188,000
                                                               -------------     -------------
         Total current liabilities                                 5,934,000         7,439,000
                                                               -------------     -------------
LONG-TERM DEBT AND
   CAPITALIZED LEASES,
   Net of current portion                         7,9                962,000           426,000
                                                               -------------     -------------
DEFERRED INCOME TAXES                             8                  582,000           581,000
                                                               -------------     -------------
MINORITY INTEREST                                                  2,403,000         2,122,000
                                                               -------------     -------------
COMMITMENTS AND CONTINGENCIES                     9
SHAREHOLDERS' EQUITY:                             10,11
   Common stock; authorized,
     15,000,000 shares; issued and
     outstanding, 2,741,334 shares
     (1999) and 2,747,586 shares
     (1998) stated at                                              8,654,000         8,708,000
   Retained earnings                                                 692,000           497,000
   Accumulated other comprehensive loss                             (295,000)         (442,000)
                                                               -------------     -------------
        Total shareholders' equity                                 9,051,000         8,763,000
                                                               -------------     -------------
TOTAL LIABILITIES AND
   SHAREHOLDERS' EQUITY                                        $  18,932,000     $  19,331,000
                                                               =============     =============
</TABLE>



                                 See notes to consolidated financial statements.

                                      -19-
<PAGE>

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)
-----------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                 Year Ended
                                                                 --------------------------------------------
                                                                     June 25,        June 26,       June 27,
                                                          Notes        1999            1998           1997
                                                         -------    -----------     -----------    -----------
<S>                                                      <C>        <C>             <C>            <C>
NET SALES                                                12         $21,181,000     $21,852,000    $21,548,000
COST OF SALES                                                        15,504,000      14,020,000     12,700,000
                                                                    -----------     -----------    -----------
GROSS PROFIT                                                          5,677,000       7,832,000      8,848,000

OPERATING EXPENSES:
  General and administrative                                          3,877,000       4,853,000      3,780,000
  Selling                                                             1,660,000       1,852,000      1,993,000
  Research and development costs                                        347,000         158,000         18,000
                                                                    -----------     -----------    -----------
     Total                                                            5,884,000       6,863,000      5,791,000
                                                                    -----------     -----------    -----------

INCOME (LOSS) FROM OPERATIONS                            12            (207,000)        969,000      3,057,000

OTHER INCOME (EXPENSES)
  Interest expense                                       5,7           (108,000)       (168,000)      (110,000)
  Other income                                                          797,000         504,000        460,000
                                                                    -----------     -----------    -----------
     Total                                                              689,000         336,000        350,000
                                                                    -----------     -----------    -----------
INCOME BEFORE INCOME TAXES AND
  MINORITY INTEREST                                                     482,000       1,305,000      3,407,000
INCOME TAXES                                             8               45,000         455,000      1,264,000
                                                                    -----------     -----------    -----------
INCOME BEFORE MINORITY INTEREST                                         437,000         850,000      2,143,000

MINORITY INTEREST                                                      (242,000)        (19,000)    (1,141,000)
                                                                    -----------     -----------    -----------

NET INCOME                                                              195,000         831,000      1,002,000

OTHER COMPREHENSIVE INCOME (LOSS):
  Foreign currency translation adjustment                               147,000      (2,164,000)        57,000
                                                                    -----------     -----------    -----------
COMPREHENSIVE INCOME (LOSS)                                         $   342,000     $(1,333,000)   $ 1,059,000
                                                                    ===========     ===========    ===========

EARNINGS PER SHARE:
  Basic                                                             $      0.07     $      0.34    $      0.51
                                                                    ===========     ===========    ===========
  Diluted                                                           $      0.07     $      0.33    $      0.51
                                                                    ===========     ===========    ===========

WEIGHTED AVERAGE NUMBER OF COMMON AND
  COMMON POTENTIAL SHARES OUTSTANDING
     Basic                                                            2,745,000       2,413,000      1,850,000
     Diluted                                                          2,757,000       2,484,000      1,961,000
</TABLE>
                                 See notes to consolidated financial statements.

                                     -20-
<PAGE>

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
-----------------------------------------------

<TABLE>
<CAPTION>
                                                Common Stock
                                     -------------------------------
                                                                                               Accumulated
                                                                                                  Other
                                       Number of                           Accumulated         Comprehensive
                                        Shares           Amount              Deficit          Income (loss)           Total
                                     ------------    ---------------    -----------------    ----------------    ---------------
   <S>                               <C>             <C>                <C>                  <C>                 <C>
   Balance, June 28, 1996               1,808,706      $   4,878,000      $    (1,336,000)     $    1,665,000      $   5,207,000

   Net income                                                                   1,002,000                              1,002,000

   Repurchase of common stock                (360)                                                                             -

   Exercise of stock options (Note
   10)                                    128,250            197,000                                                     197,000

   Foreign currency translation
   adjustment                                                                                          57,000             57,000

                                     ------------    ---------------    -----------------    ----------------    ---------------
   Balance, June 27, 1997               1,936,596          5,075,000             (334,000)          1,722,000      $   6,463,000

   Net income                                                                     831,000                                831,000

   Issuance of common stock               721,153          3,488,000                                                   3,488,000

   Exercise of stock options (Note
   10)                                     89,837            145,000                                                     145,000

   Foreign currency translation
   adjustment                                                                                      (2,164,000)        (2,164,000)

                                     ------------    ---------------    -----------------    ----------------    ---------------
   Balance, June 26, 1998               2,747,586          8,708,000              497,000            (442,000)     $   8,763,000

   Net income                                                                     195,000                                195,000

   Exercise of stock options (Note
   10)                                      7,500             12,000                                                      12,000

   Repurchase of common stock             (13,752)           (66,000)                                                    (66,000)

   Foreign currency translation
   adjustment                                                                                         147,000            147,000

                                     ------------    ---------------    -----------------    ----------------    ---------------
   Balance, June 25, 1999               2,741,334      $   8,654,000      $       692,000      $     (295,000)     $   9,051,000
                                     ============    ===============    =================    ================    ===============
</TABLE>

                                      -21-
<PAGE>

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                       Year Ended
                                                                      --------------------------------------------
                                                                         June 25,       June 26,         June 27,
                                                                           1999           1998             1997
                                                                      ------------    ------------    ------------
<S>                                                                   <C>             <C>             <C>
  CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                        $    195,000    $    831,000    $  1,002,000
    Adjustments to reconcile net income to
      net cash (used in) provided by operations:
    Depreciation and amortization                                        1,222,000         944,000       1,359,000
    (Gain)/loss on sale of property and equipment                            7,000         (10,000)         67,000
    Deferred income taxes                                                    1,000        (195,000)          5,000
    Minority interest                                                      149,000        (109,000)        991,000
    Changes in assets and liabilities:
      Accounts receivable                                                 (336,000)       (394,000)      1,106,000
      Other receivables                                                     17,000        (114,000)         18,000
      Inventories                                                          257,000        (224,000)       (363,000)
      Prepaid expenses and other current assets                            215,000         (21,000)       (144,000)
      Other assets                                                        (123,000)       (428,000)         14,000
      Accounts payable and accrued expenses                             (1,555,000)        (58,000)       (772,000)
                                                                      ------------    ------------    ------------
          Net cash (used in) provided by operating activities               49,000         222,000       3,283,000
                                                                      ------------    ------------    ------------

  CASH FLOWS FROM INVESTING ACTIVITIES:
    Certificates of deposit                                               (552,000)      3,157,000      (3,990,000)
    Capital expenditures                                                  (703,000)     (2,574,000)       (926,000)
    Proceeds from sale of property and equipment                            46,000         104,000         131,000
                                                                      ------------    ------------    ------------
          Net cash (used in) provided by investing activities           (1,209,000)        687,000      (4,785,000)
                                                                      ------------    ------------    ------------

  CASH FLOWS FROM FINANCING ACTIVITIES:
    Payments on lines of credit                                           (481,000)                       (120,000)
    Borrowings under lines of credit                                       214,000         501,000          25,000
    Principal payments of long-term obligations                           (308,000)       (327,000)       (461,000)
    Proceeds from long-term obligations                                                                    213,000
    Issuance of common stock                                                             3,669,000         197,000
    Repurchase of common stock                                             (54,000)        (36,000)
                                                                      ------------    ------------    ------------
          Net cash provided by (used in) financing activities             (629,000)      3,807,000        (146,000)
                                                                      ------------    ------------    ------------

  EFFECT OF EXCHANGE RATE ON CASH                                           77,000      (2,279,000)        402,000

  NET INCREASE/(DECREASE) IN CASH                                       (1,712,000)      2,437,000      (1,246,000)
  CASH, BEGINNING OF PERIOD                                              3,305,000         868,000       2,114,000
                                                                      ------------    ------------    ------------
  CASH, END OF PERIOD                                                 $  1,593,000    $  3,305,000    $    868,000
                                                                      ============    ============    ============
</TABLE>

                                                                       Continued



                                 See notes to consolidated financial statements.

                                      -22-
<PAGE>

<TABLE>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
   Cash paid during the period for:
<S>                                                        <C>                 <C>                 <C>
      Interest                                             $     104,000       $     254,000       $     117,000
      Income taxes                                         $     786,000       $   1,190,000       $     845,000
</TABLE>

NON-CASH INVESTING AND FINANCING ACTIVITIES

      During the year ended June 25, 1999, the Company financed acquisitions of
      equipment amounting to $1,161,000 under capital lease arrangements.

The fair value of the net assets acquired in connection with the purchase of
      Universal Systems (see Note 1) is summarized as follows:

<TABLE>
      <S>                                                                      <C>
      Net assets                                                               $     500,000
      Acquisition costs                                                               24,000
                                                                               -------------
      Purchase price                                                           $     524,000
                                                                               =============
</TABLE>

                                                                       Concluded




                                 See notes to consolidated financial statements.

                                      -23-
<PAGE>

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 25, 1999, JUNE 26, 1998, AND JUNE 27, 1997
--------------------------------------------------------------------------------

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Principles of Consolidation - Trio-Tech International and subsidiaries (the
    "Company" or "TTI") is a designer and manufacturer of equipment used to test
    the structural integrity of semiconductor devices that must meet high-
    reliability specifications. The Company also owns and operates testing
    facilities that perform structural and electronic testing of semiconductor
    devices and acts as a distributor of electronic testing equipment in
    Singapore and other Southeast Asian countries. The consolidated financial
    statements include the accounts of the Company and its principal
    subsidiaries: Trio-Tech International Pte Ltd (TTI Pte), Trio-Tech Test
    Services Pte Ltd (TTTS Pte), Express Test, European Electronic Test Centre
    (EETC), Trio-Tech Bangkok (TTBk), Trio-Tech Malaysia (TTM) (a 55%-owned
    subsidiary of TTI Pte), Prestal Enterprise Sdn Bhd (PESB) (a 73% owned
    subsidiary of TTI Pte) and Universal Systems. All material intercompany
    transactions, profits and balances have been eliminated.

    Use of Estimates - 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.

    Accounting Period - The Company's fiscal reporting period coincides with the
    52-53 week period ending on the last Friday in June.

    Cash and Cash Deposits - Cash and cash deposits consists of bank balances
    and amounts invested in interest earning instruments having a maturity of 12
    months or less.  Approximately $3,000,000 of cash is held in the Company's
    55% owned Malaysian subsidiary. Approximately $1,300,000 of this cash is
    denominated in the currency of Malaysia. On September 1, 1998, the
    government of Malaysia announced its intention to limit the movement of
    certain cash balances denominated in Malaysian currency.

    Inventories- Inventories are stated at the lower of cost, using the first-
    in, first-out (FIFO) method, or market.

    Property and Equipment - Property and equipment are stated at cost, less
    accumulated depreciation and amortization.  Depreciation and amortization
    are for provided over the estimated useful lives of the assets or the terms
    of the leases, whichever are shorter, using the straight-line method.
    Estimated useful lives range from 3 to 45 years. Capital grants from the
    Industrial Development Authority in Ireland are accounted for when claimed
    by reducing the cost of the related assets. The grants are amortized over
    the depreciable lives of those assets.

    Foreign Currency Translation - All assets and liabilities of operations
    outside the United States have been translated at the foreign exchange rates
    in effect at year-end.  Revenues and expenses for the year are translated at
    average exchange rates in effect during the year.  Unrealized translation
    gains and losses are not included in determining net income but are
    accumulated and reported as a separate component of shareholders' equity
    entitled accumulated other comprehensive loss.  Net realized gains and
    losses resulting from foreign currency transactions are credited or charged
    to income.

    In the current year 71% of the Company's revenues are earned in Singapore,
    Malaysia and Thailand. These countries have been significantly affected, and
    will continue to be affected, by currency volatility in the Southeast Asia
    Region.

    Other Assets - The excess of cost over net assets acquired is included in
    other assets and is being amortized over 5-10 years.  The Company reviews
    the carrying value of all intangible assets on a regular basis, and if
    future cash flows are believed insufficient to recover the remaining
    carrying value of an intangible asset, the carrying value is written down in
    the period the impairment is identified to its estimated fair value.

    Taxes on Income - Deferred income taxes are computed annually for
    differences between the financial statement basis and income tax basis of
    assets and liabilities. Such deferred income tax asset and liability
    computations are based on enacted tax laws and rates applicable to periods
    in which the differences are expected to reverse. Valuation allowances are
    established when necessary to reduce deferred income tax assets to the
    amount expected to be realized.

                                      -24-
<PAGE>

    Retained earnings - It is the intention of the Company to reinvest earnings
    of its foreign subsidiaries in the operations of those subsidiaries.
    Accordingly, no provision has been made for U.S. income and foreign
    withholding taxes that would result if such earnings were repatriated. The
    amount of earnings retained in foreign subsidiaries is $7,123,000 at June
    25, 1999.

    Revenue recognition - The Company recognizes revenue when products are
    shipped to customers or upon the completion of services.

    Research and Development Costs - The Company incurred research and
    development costs of $347,000 in 1999, $158,000 in 1998 and $18,000 in 1997
    that were charged to cost of sales as incurred.

    Purchase of Universal Systems - In November 1997, The Company purchased
    Universal Systems, a manufacturer of wet-process stations in Campbell,
    California. Universal was purchased for $524,000 that consisted of cash of
    $250,000, common stock of $250,000 and acquisition costs of $24,000.

    Stock Based Compensation - In October 1995, the Financial Accounting
    Standards Board (FASB) issued Statement of Financial Accounting Standards
    (SFAS) No. 123, Accounting for Stock-Based Compensation. The Company has
    determined that it will not change to the fair value method and will
    continue to use Accounting Principles Board Opinion No. 25 for measurement
    and recognition of employee stock-based transactions.

    Earnings per Share - The Company adopted SFAS No. 128, "Earnings per Share."
    SFAS 128 replaces the presentation of primary and fully diluted earnings per
    share ("EPS") with a presentation of basic EPS based upon the weighted-
    average number of common shares and also requires dual presentation of basic
    and diluted EPS for companies with "complex capital structures."  EPS for
    the current and prior periods has been presented in conformity with the
    provisions of SFAS 128.  The following table is a reconciliation of the
    weighted-average shares used in the computation of basic and diluted EPS for
    the years presented herein:

<TABLE>
<CAPTION>
                                                                  June 25,          June 26,          June 27,
                                                                   1999              1998              1997
                                                             ---------------   ---------------   ---------------
           <S>                                               <C>               <C>               <C>
           Net income used to compute basic
               and diluted earnings per share                  $     195,000     $     831,000     $   1,002,000
                                                             ---------------   ---------------   ---------------

           Weighted average number of common
               shares outstanding - basic                          2,745,000         2,413,000         1,850,000

           Dilutive effect of stock options and warrants              12,000            71,000           111,000

           Number of shares used to compute
                                                             ---------------   ---------------   ---------------
               diluted earnings per share                          2,757,000         2,484,000         1,961,000
                                                             ===============   ===============   ===============
</TABLE>

    Stock options and warrants that are antidilutive amounted to approximately,
    697,105 and 571,980 for the years ended June 25, 1999 and June 26, 1998.

    New Accounting Pronouncements - In June 1997, the FASB issued SFAS No. 133,
    Accounting for Derivative Instruments and Hedging Activities.  The Company
    anticipates adopting this standard for fiscal 2001. The Company is unable to
    determine whether the adoption will have a material impact on the financial
    position or results of operations of the Company.

    Reclassification - Certain reclassifications have been made to the previous
    year's financial statements to conform to current year presentation.

    Fair Values of Financial Instruments - The carrying value of trade accounts
    receivable, cash, cash deposits and accounts payable approximate the fair
    value due to their short-term maturities. The carrying values of the
    Company's lines of credit are considered to approximate their fair value
    because the interest rates are based on variable reference rates. The amount
    of long-term debt is not significant.

    Concentration of credit risk - Financial instruments that subject the
    Company to credit risk consists primarily of accounts receivable.
    Concentration of credit risk with respect to accounts receivable is
    generally diversified due to the number of entities composing the Company's
    customer base and their geographic dispersion. The Company had two major
    customers who accounted for 15% and 14% of the Company's net sales during
    fiscal year 1999; these customers represented 19% and 8% of accounts
    receivable at June 25, 1999. One major customer who accounted for 16% of the
    Company's net sales
                                      -25-
<PAGE>

    during fiscal year 1998 represented 9% of accounts receivable at June
    26, 1998. Two customers accounted for 13% and 22% of net sales during fiscal
    year 1997. The Company performs ongoing credit evaluations of its customers
    and maintains an allowance for potential credit losses. The allowance for
    doubtful accounts is composed of:

<TABLE>
<CAPTION>
                                                   June 25,                 June 26,                 June 27,
                                                    1999                     1998                     1997
                                              ----------------         ----------------         ----------------
             <S>                              <C>                      <C>                      <C>
             Beginning                          $      468,000           $      404,000           $      177,000
             Additions charged to
              cost and expenses                         55,000                   90,000                  376,000
             Recovered                                (229,000)
             Actual write-offs                         (75,000)                ( 26,000)                (149,000)
                                              ----------------         ----------------         ----------------
             Ending                             $      219,000           $      468,000           $      404,000
                                              ================         ================         ================
</TABLE>


2.  INVENTORIES

    Inventories consist of the following:

<TABLE>
<CAPTION>
                                                    June 25,                June 26,
                                                      1999                    1998
                                              ----------------         ----------------
             <S>                              <C>                      <C>
             Raw materials                      $      839,000           $      905,000
             Work in progress                          383,000                  696,000
             Finished goods                            577,000                  455,000
                                              ----------------         ----------------
                                                $    1,799,000           $    2,056,000
                                              ================         ================
</TABLE>

3.    PROPERTY AND EQUIPMENT

      Property and equipment consist of the following:

<TABLE>
<CAPTION>
                                                                  June 25,                     June 26,
                                                                   1999                         1998
                                                             ----------------             ----------------
             <S>                                             <C>                          <C>
             Building and improvements                         $    1,634,000               $    1,806,000
             Leasehold improvements                                 1,040,000                      928,000
             Machinery and equipment                                5,351,000                    9,525,000
             Furniture and fixtures                                   753,000                    1,713,000
             Equipment under capital leases                         1,736,000                      797,000
                                                             ----------------             ----------------
                                                                   10,514,000                   14,769,000

             Less:
                  Accumulated depreciation and
                   amortization                                     4,135,000                    9,427,000
                  Accumulated amortization on
                   equipment under capital leases                     841,000                      673,000
                                                             ----------------             ----------------
                      Net property and equipment               $    5,538,000               $    4,669,000
                                                             ================             ================
</TABLE>

    During the year ended June 25, 1999, the Company wrote-off approximately
    $6,000,000 in property and equipment that had been fully depreciated in
    prior years.

                                      -26-
<PAGE>

4.   OTHER ASSETS
      Other assets consist of the following:

<TABLE>
<CAPTION>
                                                                     June 25,         June 26,
                                                                      1999             1998
                                                                --------------     ------------
             <S>                                                <C>                <C>
             Cost in excess of net assets
                  acquired, net of accumulated
                  amortization of $603,000 (1999)
                  and $526,000 (1998)                             $    606,000     $    611,000
             Other                                                      65,000           15,000
                                                                --------------     ------------
             Total                                                $    671,000     $    626,000
                                                                ==============     ============
</TABLE>

5.   LINES OF CREDIT

      The Company's subsidiary, TTI Pte, has a secured credit agreement with a
      bank that provides for a total line of credit of $3,125,000. The agreement
      contains certain debt covenants including maintaining a minimum net worth
      of $2,400,000 at TTI Pte. Borrowings under the line were $214,000 and
      $481,000 at the end of fiscal 1999 and 1998, respectively. The interest
      rate on borrowings is at the bank's prime rate (6.25% at June 25, 1999)
      plus 1.25%. Borrowings under this agreement are collateralized by
      substantially all of TTI Pte's assets. This line of credit expires in
      March 2000.

      The Company's subsidiary, TTM has a secured credit agreement with a bank
      that provides for a total line of credit of $132,000. At June 25, 1999 and
      June 26, 1998, there were no borrowings outstanding. The line of credit
      bears interest at the bank's reference rate (7.25% at June 25, 1999) plus
      2.5%. This line of credit expires in May 2000.

      The Company's subsidiary, TTBk, has a line of credit that provides for
      borrowings of approximately $141,000. Interest on the line is at the
      bank's reference rate (10.25% at June 25, 1999) plus 2.2%. There were no
      borrowings against this line as of June 25, 1999. This line of credit does
      not have an expiration date.

      The Company obtained a revolving line of credit of $150,000 from a bank
      bearing interest at 1.25% above the bank's reference rate (7.75% at June
      25, 1999). Borrowings under the line amounted to $150,000 as of June 25,
      1999 and June 26, 1998. This line of credit expires in February 2000.


6.   ACCRUED EXPENSES

      Accrued expenses consist of the following:

<TABLE>
<CAPTION>
                                                                    June 25,          June 26,
                                                                     1999              1998
                                                                -------------     -------------
             <S>                                                <C>               <C>
             Payroll and related                                 $  1,236,000      $  1,280,000
             Other                                                  1,769,000         2,524,000
                                                                -------------      ------------
             Total                                               $  3,005,000      $  3,804,000
                                                                =============     =============
</TABLE>

                                      -27-
<PAGE>

7.  LONG-TERM DEBT AND CAPITALIZED LEASES

    Long-term debt and capitalized leases consist of the following:

<TABLE>
<CAPTION>
                                                                                June 25,                June 26,
                                                                                 1999                    1998
                                                                           ----------------        ----------------
             <S>                                                           <C>                     <C>
             Capitalized lease obligations, due in
                  various installments through 2004 bearing
                  interest at rates ranging from 3.5% to 9.00%,
                  collateralized by leased assets (see Note 9)               $    1,204,000          $      197,000

             Mortgage loan, due in monthly
                  installments through 2002, bearing
                  interest at 6.15%                                                 263,000                 294,000

             Mortgage loan, due in monthly
                  installments through 1998, bearing interest
                  at 1.0% above bank reference rate (15.75% at
                  June 26, 1998), collateralized by land and
                  building in TTBk.                                                       -                 123,000

                                                                           ----------------        ----------------
                                                                                  1,467,000                 614,000
                  Less current portion                                              505,000                 188,000
                                                                           ----------------        ----------------
                                                                             $      962,000          $      426,000
                                                                           ================        ================
</TABLE>
    Maturities of long-term debt as of June 25, 1999 are as follows (exclusive
    of capitalized lease obligations):

<TABLE>
<CAPTION>
             Fiscal
              Year
             ------
             <S>                                                           <C>
               2000                                                         $       98,000
               2001                                                                 74,000
               2002                                                                 91,000
                                                                           ---------------
                                                                            $      263,000
                                                                           ===============
</TABLE>

                                      -28-
<PAGE>

8.   TAXES ON INCOME

     The provision for income taxes consist of the following:

<TABLE>
<CAPTION>
                                                               Year Ended
                                       -------------------------------------------------------
                                           June 25,            June 26,            June 27,
                                             1999                1998                1997
                                       ---------------     ---------------     ---------------
           <S>                         <C>                 <C>                 <C>
           Current:
                Domestic                 $           -       $      24,000       $    (157,000)
                Foreign                         44,000             235,000           1,426,000
                                       ---------------     ---------------     ---------------
                                                44,000             259,000           1,269,000
                                       ---------------     ---------------     ---------------

           Deferred:
                Foreign                          1,000             196,000              (5,000)
                                       ---------------     ---------------     ---------------
                                         $      45,000       $     455,000       $   1,264,000
                                       ===============     ===============     ===============
</TABLE>

The pre-tax income (loss) before minority interest related to domestic and
foreign operations is as follows:

<TABLE>
<CAPTION>
                                                               Year Ended
                                       -------------------------------------------------------
                                           June 25,            June 26,            June 27,
                                             1999                1998                1997
                                       ---------------     ---------------     ---------------
           <S>                         <C>                 <C>                 <C>
           Domestic                      $    (500,000)      $     (18,000)      $    (137,000)
           Foreign                             982,000           1,323,000           3,544,000
                                       ---------------     ---------------     ---------------
                                         $     482,000       $   1,305,000       $   3,407,000
                                       ===============     ===============     ===============
</TABLE>

The reconciliation between the U.S. federal statutory tax rate and the effective
income tax rate is as follows:

<TABLE>
<CAPTION>
                                                                              Year Ended
                                                      -------------------------------------------------------
                                                          June 25,            June 26,            June 27,
                                                            1999                1998                1997
                                                      ---------------     ---------------     ---------------
        <S>                                           <C>                 <C>                 <C>
        Statutory federal tax rate                               35 %                35 %                35 %
        Foreign income taxed at lower rates                     (56)%               (11)%               (24)%
        Deferred income tax asset valuation
          allowance                                              36 %                 8 %                26 %
        Other                                                    (6)%                 3 %
                                                      -------------       -------------       -------------
        Effective rate                                            9 %                35 %                37 %
                                                      =============       =============       =============
</TABLE>

The Company files income tax returns in several countries. Income in one country
is not offset by losses in another country. Accordingly, no benefit is provided
for losses in countries except where the loss can be carried back against income
recognized in previous years. Income taxes are provided in those countries where
income is earned. The effect of providing tax against profits while not
providing benefit for losses results in an effective tax rate that differs from
the federal statutory rate.

                                      -29-
<PAGE>
Total rental expense on all operating leases, both cancelable and noncancelable,
amounted to $415,000 in 1999, $407,000 in 1998 and $371,000 in 1997. Total
rental income under sublease was $59,000 in 1999, $70,000 in 1998 and $138,000
in 1997.

The components of deferred income tax assets (liabilities) are as follows:

<TABLE>
<CAPTION>
                                                          June 25,            June 26,
                                                           1999                1998
                                                     --------------       -------------
    <S>                                              <C>                  <C>
    Deferred income tax assets:
      Net operating loss carry forward               $    1,515,000       $   1,245,000
      Provision for local tax                               173,000             189,000
      Provision for bad debts                               170,000             181,000
      Reserve for obsolescence                               78,000              42,000
      Other                                                  38,000              28,000
                                                     --------------       -------------
      Total deferred income tax assets                    1,974,000           1,685,000

    Deferred income tax liabilities:
      Depreciation                                          289,000            (315,000)
      Other                                                 293,000            (266,000)
                                                     --------------       -------------
      Total deferred income tax liabilities                 582,000            (581,000)
                                                     --------------       -------------
        Subtotal                                          2,556,000           1,105,000
    Valuation allowance                                  (1,974,000)         (1,685,000)
                                                     --------------       -------------
    Net deferred income tax liability                $     (582,000)      $    (581,000)
                                                     ==============       =============
</TABLE>


    At June 25, 1999 the Company has net operating loss carryforwards of
    approximately $3,497,000 available to offset future U.S. federal income
    taxes, which expire as follows: $2,394,000 in 2004, $151,000 in 2005,
    $170,000 in 2006 and $782,000 in 2019.



9.  COMMITMENTS AND CONTINGENCIES

    The Company leases certain of its facilities and equipment under long-term
    agreements expiring at various dates through 2071.  Certain of these leases
    require the Company to pay real estate taxes and insurance and provide for
    escalation of lease costs based on certain indices.  Future minimum payments
    under capital leases and noncancellable operating leases as of June 25, 1999
    are as follows:

<TABLE>
<CAPTION>
                                                                        Capital                                     Rental
    Fiscal Year                                                         Leases                                    Commitment
 ------------------                                              ------------------                          -----------------
 <S>                                                             <C>                                         <C>
   2000                                                                $    470,000                              $     488,000
   2001                                                                     395,000                                    307,000
   2002                                                                     351,000                                    269,000
   2003                                                                      90,000                                    258,000
   2004                                                                      73,000                                     75,000
   Thereafter                                                                                                        2,073,000
                                                                 ------------------                          -----------------
   Total future minimum lease payments                                    1,379,000                              $   3,470,000
                                                                                                             =================
   Less amount representing interest                                       (175,000)
                                                                 ------------------
   Present value of net minimum lease payments                            1,204,000
   Less current portion of capitalized lease obligations                   (424,000)
                                                                 ------------------
   Long-term obligations under capital leases                          $    781,000
                                                                ===================
</TABLE>



                                      -30-
<PAGE>

    On August 24, 1995, the Company was named in a civil action brought against
    106 defendants alleging that they may have caused or contributed to soil and
    groundwater contamination that required the plaintiff to pay $3,750,000 to
    the Federal Environmental Protection Agency to settle.  The Company has not
    yet had the opportunity to investigate the allegations.  In the opinion of
    management, based on its present information, this matter should not have a
    material impact on the Company's financial statements.

    The Company is, from time to time, the subject of litigation claims and
    assessments arising out of matters occurring in its normal business
    operations.  In the opinion of management, resolution of these matters will
    not have a material adverse effect on the Company's financial statements.

10. STOCK OPTIONS

    The Company has three stock option plans under which officers, directors and
    employees are eligible to receive options to purchase shares of the
    Company's common stock. One of these plans, adopted in 1988, has been
    terminated except for outstanding options, which are still exercisable, to
    purchase an aggregate of 188,000 shares. Additionally, the Board of
    Directors issues non-qualified options at their discretion at a price not
    less than fair market value at the date of grant.

    On December 8, 1997, the Company's shareholders approved the Company's 1998
    Stock Option Plan (the "1998 Plan") under which employees, officers,
    directors and consultants receive options to purchase the Company's common
    stock at a price that is not less than 100 percent of the fair market value
    at the date of grant. There are 300,000 shares authorized for grant under
    the 1998 Plan.

    On December 8, 1997, the Company's shareholders approved the Directors Stock
    Option Plan (the "Directors Plan") under which duly elected non-employee
    Directors and the President (if he or she is a director of the Company) of
    the Company (currently seven individuals) receive options to purchase the
    Company's common stock at a price of 85% of the fair market value of the
    underlying shares on the date of grant. The shares are nonqualified and
    there are 150,000 shares authorized for grant under the Directors Plan.

    The Company applies Accounting Principles Board Opinion No. 25, Accounting
    for Stock Issued to Employees, and related interpretations in accounting for
    its Plan. Accordingly, no compensation expense has been recognized. Had
    compensation cost for the Company's Plan been determined based upon the fair
    value at the grant date for awards under this Plan consistent with the
    methodology prescribed under SFAS No. 123, the Company's net income and
    earnings per share would have been reduced to the pro forma amounts
    indicated below:

<TABLE>
<CAPTION>
                                            Year Ended           Year Ended        Year Ended
                                          June 25, 1999        June 26, 1998      June 27, 1997
                                        ---------------      ---------------      -------------
           <S>                          <C>                  <C>                  <C>
           Net Income:
                As Reported                 $   195,000           $  831,000        $ 1,002,000
                Pro forma                   $  (204,000)          $  (25,000)       $   440,000

           Basic Earnings per Shares:
                As Reported                 $       .07           $     0.34        $      0.51
                Pro forma                   $      (.07)          $    (0.01)       $      0.23
</TABLE>

   The fair value of the options granted during fiscal 1999, 1998 and 1997 was
   $3.85, $7.19 and $5.50, respectively, on the date of grant using the Black
   Scholes option-pricing model with the assumptions listed below:

<TABLE>
<CAPTION>
                                            Year Ended           Year Ended      Year Ended
                                          June 25, 1999        June 26, 1998    June 27, 1997
                                          -------------        -------------    -------------
           <S>                            <C>                  <C>              <C>
           Volatility                              42.1%                49.3%          41.7%
           Risk free interest rate                 5.91%                5.69%           6.1%
           Expected life (years)                   2.65                  3.9            2.1%
</TABLE>

                                     -31-
<PAGE>


   The following tables summarize information concerning outstanding and
   exercisable options at June 25, 1999:

<TABLE>
<CAPTION>
                                                 Year Ended June 25, 1999
         -------------------------------------------------------------------------------------------------------
                     Options and Warrants Outstanding                        Options and Warrants  Exercisable
         -----------------------------------------------------------      --------------------------------------
              Number         Weighted Average            Weighted               Number               Weighted
            Outstanding          Remaining               Average             Exercisable             Average
           June 25, 1999     Contractual Life         Exercise Price        June 25, 1999         Exercise Price
         ---------------   -------------------   -------------------      ----------------   -------------------
         <S>               <C>                   <C>                      <C>                <C>
                  20,625                  0.45   $              2.17                20,625   $              2.17
                  36,375                  1.32                  3.00                36,375                  3.00
                  22,500                  1.32                  3.67                11,250                  3.67
                   1,313                  1.32                  3.00                 1,313                  3.00
                   5,625                  2.47                  3.67                 4,219                  3.67
                  30,000                  2.58                  4.67                30,000                  4.67
                  22,500                  2.58                  5.67                22,500                  5.67
                  15,000                  3.27                  5.34                15,000                  5.34
                  45,000                  3.27                  7.70                45,000                  7.70
                 349,600                  3.36                  7.00               349,600                  7.00
                  69,920                  3.36                  5.43                69,920                  5.43
                  34,960                  3.36                  7.00                34,960                  7.00
                  37,500                  3.36                  6.67                37,500                  6.67
                   5,000                  3.45                  7.00                 2,500                  7.00
                  45,000                  4.04                  3.69                45,000                  3.69
                  14,500                  4.04                  4.34                 3,625                  4.34
         ---------------   -------------------   -------------------      ----------------   -------------------
                 755,418                  3.14   $              6.17               729,387   $              6.07
         ===============   ===================   ===================      ================   ===================
</TABLE>

   Included in the total options and warrants outstanding at June 25, 1999 were
   518,230 warrants issued in fiscal 1997, and 1998, that permit purchase of
   common stock of the Company at an average price of $7.15.

       The following table summarizes the stock option activity for the three
years ended June 25, 1999:

<TABLE>
<CAPTION>
                                                                                                 Number of
                                               Stock Options                                      Shares
              ------------------------------------------------------------------------------    -----------
              <S>                                                                               <C>
              Balance at June 28, 1996 (weighted average price of $1.78 per share)                  301,796
                 Granted at a weighted average price of $5.50 per share                              28,500
                 Exercised at a weighted average price of $2.30 per share                          (128,250)
                 Canceled at a weighted average price of $1.52 per share                             (9,084)
                                                                                                -----------

              Balance at June 27, 1997 (weighted average price of $2.06 per share)                  192,962
                 Granted at a weighted average price of $7.19 per share                              87,500
                 Exercised at a weighted average price of $1.66 per share                           (87,774)
                                                                                                -----------

              Balance at June 26, 1998 (weighted average price of $4.77 per share)                  192,688
                 Granted at a weighted average price of $3.85 per share                              59,500
                 Exercised at a weighted average price of $1.60 per share                            (7,500)
                 Canceled at a weighted average price of $1.60 per share                             (7,500)

                                                                                                -----------
              Balance at June 25, 1999 (weighted average price of $4.77 per share)                  237,188
                                                                                                ===========

                                                                                                -----------
              Options exercisable at June 25, 1999                                                  173,178
                                                                                                ===========
</TABLE>

11.  SHAREHOLDERS' EQUITY

        In July 1997, the Board of Directors approved a three-for-two stock
        split. The date of distribution was October 7, 1997. All figures
        presented in these financial statements give effect to this stock split.

                                     -32-
<PAGE>

12.  BUSINESS SEGMENTS

        The Company operates principally in three industry segments, the
        designing and manufacturing of equipment (that tests the structural
        integrity of integrated circuits and other products), the testing
        service industry (that performs structural and electronic tests of
        semiconductor devices)and the distribution of various products from
        other manufacturers in Singapore and Southeast Asia.

        The allocation of the cost of equipment, the current year investment in
        new equipment and depreciation expense have been made on the basis of
        the primary purpose for which the equipment was acquired.

        The Company's wholly owned subsidiary, TTI Pte. in Singapore (including
        TTI Pte.'s wholly owned subsidiaries TTTS Pte and 55% owned joint
        venture of TTM) operates in the manufacturing, the testing service and
        the distribution industry segments.

        All intersegment sales are sales from the manufacturing segments to the
        testing and distribution segment. Corporate assets mainly consist of
        cash and prepaid expenses. Corporate expenses mainly consist of
        salaries, insurance, professional expenses and directors' fees.

<TABLE>
<CAPTION>
                                                                          1999                 1998                1997
                                                                   -----------------    -----------------   -----------------
              <S>                                                  <C>                  <C>                 <C>
              Revenues:
                 Manufacturing                                     $       7,923,000    $       7,669,000  $        7,316,000
                 Testing                                                   7,239,000            8,437,000          12,004,000
                 Distribution                                              7,111,000            6,661,000           3,216,000
                                                                   -----------------    -----------------   -----------------
                     Total revenues from reportable segments              22,273,000           22,767,000          22,536,000

                     Elimination of intersegment revenue                  (1,092,000)            (915,000)           (988,000)
                                                                   -----------------    -----------------   -----------------
                                                                   $      21,181,000           21,852,000          21,548,000
                                                                   =================    =================   =================
</TABLE>

                                      -33-
<PAGE>

<TABLE>
              <S>                                                  <C>                  <C>                 <C>
              Operating profit:
                 Manufacturing                                     $      (1,007,000)   $        (443,000)  $        (881,000)
                 Testing                                                   1,059,000              712,000           3,772,000
                 Distribution                                                325,000              643,000              20,000
                                                                   -----------------    -----------------   -----------------
                     Total operating profit                                  377,000              912,000           2,911,000
                                                                   -----------------    -----------------   -----------------
                 Corporate income (expenses)                                (584,000)              57,000             146,000
                                                                   -----------------    -----------------   -----------------
                     Total operating profit                        $        (207,000)   $         969,000   $       3,057,000
                                                                   =================    =================   =================


              Depreciation and amortization:
                 Manufacturing                                     $         425,000    $         301,000   $         263,000
                 Testing                                                     731,000              585,000           1,074,000
                 Distribution                                                 66,000               58,000              22,000
                                                                   -----------------    -----------------   -----------------
                     Total depreciation and amortization           $       1,222,000    $         944,000   $       1,359,000
                                                                   =================    =================   =================

              Capital expenditures:
                 Manufacturing                                     $         657,000    $         804,000   $         469,000
                 Testing                                                   1,052,000            1 741,000             452,000
                 Distribution                                                154,000               29,000               5,000
                                                                   -----------------    -----------------   -----------------
                     Total capital expenditures                    $       1,863,000    $       2,574,000   $         926,000
                                                                   =================    =================   =================

              Identifiable assets:
                 Manufacturing                                     $       6,835,000    $       7,345,000   $       4,027,000
                 Testing                                                   9,131,000            6,589,000          10,667,000
                 Distribution                                              2,605,000            5,171,000           3,818,000
                 Corporate                                                   361,000              226,000              16,000
                                                                   -----------------    -----------------   -----------------
                     Total assets                                  $      18,932,000    $      19,331,000   $      18,528,000
                                                                   =================    =================   =================


              Net sales into countries:
                 United States                                     $       7,482,000    $       5,143,000   $       2,952,000
                 Singapore                                                 6,934,000            6,955,000           6,483,000
                 Malaysia                                                  2,412,000            3,909,000           7,582,000
                 Thailand                                                  2,156,000            3,280,000           2,780,000
                 Other foreign countries                                   2,197,000            2,565,000           1,751,000
                                                                   -----------------    -----------------   -----------------
                     Total net sales into countries                $      21,181,000    $      21,852,000   $      21,548,000
                                                                   =================    =================   =================

              Long-lived assets:
                 United States                                     $       1,437,000    $       1,127,000   $         385,000
                 Singapore                                                 2,826,000            2,473,000           1,697,000
                 Malaysia                                                    688,000              380,000           1,116,000
                 Thailand                                                    959,000              995,000           1,130,000
                 Ireland                                                     299,000              320,000             357,000
                                                                   -----------------    -----------------   -----------------
                     Total long-lived assets                       $       6,209,000    $       5,295,000   $       4,685,000
                                                                   =================    =================   =================
</TABLE>

                                      -34-
<PAGE>

 13.  QUARTERLY FINANCIAL DATA (UNAUDITED)

      The Company's summarized quarterly financial data are as follows:

<TABLE>
<CAPTION>
Year ended June 26, 1998                                  SEP. 26,          DEC. 26,            MAR. 27,             JUN. 26,
                                                     ----------------   ---------------    ----------------    ------------------
<S>                                                  <C>                <C>                <C>                 <C>
Revenues                                             $     5,095,000    $    4,811,000     $     5,558,000     $       6,388,000
Expenses                                                   4,674,000         4,572,000           5,330,000             5,970,000
                                                     ----------------   ---------------    ----------------    ------------------

Income before income taxes and
        minority interest                                    421,000           239,000             228,000               418,000
Income taxes                                                 162,000            95,000             149,000                49,000
                                                     ----------------   ---------------    ----------------    ------------------
Income before minority interest                              259,000           144,000              79,000               369,000
Minority interest                                            (48,000)           37,000             127,000              (136,000)
                                                     ----------------   ---------------    ----------------    ------------------
Net income                                           $       211,000    $      181,000     $       206,000     $         233,000
                                                     ================   ===============    ================    ==================

Net income per share:
Basic                                                $          0.11    $         0.08     $          0.08     $            0.08
Diluted                                              $          0.10    $         0.08     $          0.08     $            0.08
                                                     ================   ===============    ================    ==================
</TABLE>

<TABLE>
<CAPTION>
Year ended June 25, 1999                                  SEP. 25,          DEC. 25,            MAR. 26,             JUN. 25,
                                                     ----------------   ---------------    ----------------    ------------------
<S>                                                  <C>                <C>                <C>                 <C>
Revenues                                             $     5,186,000    $    4,983,000     $     4,950,000     $       6,062,000
Expenses                                                   5,015,000         4,814,000           4,848,000             6,022,000
                                                     ----------------   ---------------    ----------------    ------------------

Income before income taxes and
        minority interest                                    171,000           169,000             102,000                40,000
Income taxes                                                 (80,000)         (104,000)            (83,000)              222,000
                                                     ----------------   ---------------    ----------------    ------------------
Income before minority interest                               91,000            65,000              19,000               262,000
Minority interest                                             10,000           (36,000)                  0              (216,000)
                                                     ----------------   ---------------    ----------------    ------------------
Net income                                           $       101,000    $       29,000     $        19,000     $          46,000
                                                     ================   ===============    ================    ==================

Net income per share:
Basic                                                $          0.04    $         0.01     $          0.01     $            0.02
                                                     ================   ===============    ================    ==================

Diluted                                              $          0.04    $         0.01     $          0.01     $            0.02
                                                     ================   ===============    ================    ==================
</TABLE>

                                      -35-