IPS Awarded $5.5 Million Order From LG Shuguang Electronics: Sales To Mainland China Exceed $15.5 Million In Last 12 Months.

Business Editors

MARKHAM, Ontario--(BUSINESS WIRE)--June 20, 2000

Image Processing Systems Inc. (TSE:IPV) today announced a repeat order, valued at $5.5 million, from LG Shuguang Electronics Co., Ltd. (LGESG).

IPS will provide a complete turnkey Automated Display Inspection and Alignment (ADI) solution, integrating multiple ADI 8200 ITC and ADI 3200 systems, which will be used in the production of 15- and 17-inch colour display tubes (CDTs), a primary component in computer monitors. The ADI systems are currently scheduled for delivery in the third quarter to LGESG's new CDT manufacturing facility in Changsha, Hunan Province, China. This is the second major order from LGESG and brings our order backlog to $12.6 million. IPS previously provided LGESG $4.4 million of ADI systems for use in the production of large screen TV picture tubes ranging in sizes up to 33 inches.

LGESG is a joint venture between China's Shuguang Electronics and Korean-based LG Electronics Co., Ltd. (LGE). LGE is one of Korea's largest consumer electronics manufacturers with over 25,000 employees worldwide and 1999 sales of US$9.3 billion. This new factory that IPS is providing the equipment for is scheduled to begin production within the first half of next year and represents the latest addition to LGE's increasing investment in China. LG is building capacity to service the demand in China for TV's and computer monitors, which is expected to skyrocket in the near future. LGESG already manufactures picture tubes ranging in sizes from 21- to 34-inches for colour TVs. According to Yong-Ak Ro, President of LGE Holding Company for China, LGE plans "to take over 18 percent of the CDT market by 2005 to become the top 2 in CDTs in China."

"This latest order reinforces IPS's leadership position as an enabling technology supplier to the worldwide display industry and increases the company's penetration of the fast-growing Chinese market," comments Ken Wawrew, IPS President and CEO. "Over the last twelve months alone, IPS has received over $15.5 million in orders from factories in mainland China. Strong domestic demand for TVs and PCs will fuel additional production of display and picture tubes, colour TVs and PC monitors within mainland China. As China continues its rapid development, its market will continue to represent a major growth opportunity for IPS."

According to China's Ministry of Information Industry, the electronics industry's gross output value grew by approximately 21% to $70.2 billion in 1999. By 2010, according to the Ministry, mainland China will become the world's largest electronics and information products market in the world. More specifically, the growing popularity of the Internet in China continues to fuel demand for PCs and monitors. For example, the number of Internet users in China, including Hong Kong, has reached 12.3 million people, according to Internet analyst company Interactive Audience Measurement Asia. The Internet is still a relatively new phenomenon in China, and use is consequently growing extremely fast, with 56 percent of current users having begun using the Internet within the last 12 months.

About Image Processing Systems Inc.

IPS is a leading developer and global supplier of e-Vision (electronic vision) technology to manufacturers worldwide. The Company's patented Automated Display Inspection and Alignment (ADI) systems are used by most of the world's largest display manufacturers. IPS also provides advanced glass inspection solutions for the electronics and automotive industries, developed in close co-operation with key customers. IPS, an ISO 9001 and IQNET certified company, is listed on the Toronto Stock Exchange under the symbol IPV. Headquartered in Markham, Ontario, IPS has offices and representatives in Brazil, Canada, China, India, Japan, Korea, The Netherlands, Poland, Taiwan, the United Kingdom and the United States. For more information on IPS, please visit our Web site at www.ipsautomation.com.

To the extent that any of the statements discussed in this press release are forward-looking, such statements are subject to certain risks and uncertainties which could cause the actual results to differ materially from those projected, including, but not limited to, the timely development and acceptance of new products, delays in factory testing and acceptance, industry trends, technology or pricing competition and other risks. As a result, the Company's operating results may fluctuate, especially when measured on a quarterly basis. The Company assumes no obligation to update the information in this press release.