IPS Automation Rebounds From Two Quarters of Losses

After reporting losses in the first and second quarters, Image Processing Systems Inc. (IPS, Markham, ON)—under its trade name IPS Automation—posted a profit in its third quarter of this year. The third quarter results show improved earnings as a direct result of the restructuring of operations in the first half of the year and stronger sales for both the Chicago-based TMC and IPS Canadian operations.

IPS develops production-line inspection systems for manufacturers that assure the final quality of a variety of products. Its ADI Systems are used worldwide by electronics manufacturers of television and computer monitor picture tubes. The Chicago-based TMC division specializes in high-quality, high-speed packaging and cartoning systems.

A turnaround in the Asian markets strengthened revenues for IPS vision systems while engineering and manufacturing efficiencies have allowed TMC to ship more machines in this quarter. Consolidated revenues for the third quarter ended December 31, 1998 were $12.2 million, which is an increase of 30% over the same period last year. The third quarter revenues represent an increase of $8.2 million over the revenues for the second quarter. Earnings for the third quarter were $44,000 compared to a loss of $427,000 for the same quarter last year and a loss of $2.8 million in the second quarter of this year. This third quarter profit includes a charge of $225,000 due to foreign currency exchange losses.

TMC represented $6.7 million of the third quarter revenues up from $2.8 million in the second quarter. A solid order backlog allowed TMC to manufacture and ship ten more machines than the previous quarter. IPS vision systems represented $5.5 million of third quarter revenues up from $1.2 million in the second quarter. A rebound in Asian sales totaling over $4 million was the primary reason for the revenue increase at the Canadian operation.

Revenues for the nine months ended December 31, 1998 were $22.1 million, an increase of 25% over the same period last year. The nine-month net loss was $5.3 million compared to $1.4 million in the previous year. The order backlog now totaling $17.5 million is geographically well diversified over Europe, North America, and Asia.