<PAGE>   1
 
================================================================================
 
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                           -------------------------
 
                                   FORM 10-Q
 
                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
 
                           -------------------------
 
For the Quarter Ended June 30, 1997              Commission File Number 33-52150
 
                                   IPC, INC.
             (Exact name of registrant as specified in its charter)
 
<TABLE>
<S>                           <C>
          Delaware                     36-3843663
(State or other jurisdiction        (I.R.S. Employer
     of incorporation)            Identification No.)
    100 Tri-State Drive
   Lincolnshire, Illinois                60069
   (Address of Principal               (Zip Code)
     Executive Office)
</TABLE>
 
       Registrant's Telephone number, including area code: (847) 945-9100
 
     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
 
     Yes  X   No ____
 
     At August 1, 1997, there were 120,890 shares of common stock, par value
$0.01 per share, outstanding.
================================================================================
<PAGE>   2
 
PART I. FINANCIAL INFORMATION
 
ITEM 1. FINANCIAL STATEMENTS
 
                                   IPC, INC.
 
                          CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                              JUNE 30,    DECEMBER 31,
                                                                1997          1996
                           ASSETS                             --------    ------------
<S>                                                           <C>         <C>
Current Assets:
  Cash and cash equivalents.................................  $   8,329    $   2,795
  Accounts receivable trade, net of allowance...............     67,068       51,638
  Inventories...............................................     53,506       49,023
  Prepaid expenses and other................................      6,327        5,395
                                                              ---------    ---------
     Total current assets...................................    135,230      108,851
                                                              ---------    ---------
Property, Plant and Equipment:
  Buildings and improvements................................     53,491       49,038
  Machinery and equipment...................................    249,091      231,526
  Construction in progress..................................     15,959        8,069
                                                              ---------    ---------
                                                                318,541      288,633
  Less -- Accumulated depreciation..........................   (136,699)    (123,957)
                                                              ---------    ---------
                                                                181,842      164,676
  Land......................................................      8,925        8,304
                                                              ---------    ---------
     Total property, plant and equipment....................    190,767      172,980
                                                              ---------    ---------
Other Assets:
  Goodwill, net of accumulated amortization.................     30,115       20,506
  Miscellaneous.............................................     12,227       11,118
                                                              ---------    ---------
     Total other assets.....................................     42,342       31,624
                                                              ---------    ---------
Total Assets................................................  $ 368,339    $ 313,455
                                                              =========    =========
           LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
  Current installments of long-term debt....................  $   8,012    $   5,921
  Accounts payable..........................................     35,795       36,748
  Accrued salary and wages..................................      6,730        8,603
  Self insurance reserves...................................      6,650        7,453
  Accrued rebates and discounts.............................      3,559        3,824
  Accrued interest..........................................      1,567        1,680
  Other accrued expenses....................................     12,733       12,110
                                                              ---------    ---------
     Total current liabilities..............................     75,046       76,339
                                                              ---------    ---------
Long-Term Debt..............................................    291,517      246,754
                                                              ---------    ---------
Other Long-Term Liabilities.................................      4,894        5,243
                                                              ---------    ---------
Deferred Income Taxes.......................................     10,482        8,770
                                                              ---------    ---------
Stockholders' Deficit:
  IPC, Inc. common stock, $.01 par value -- 200,000 shares
     authorized; and 120,890 shares issued and
     outstanding............................................          1            1
  Paid in capital in excess of par value....................     73,417       73,417
  Accumulated deficit.......................................    (86,119)     (95,905)
  Foreign currency translation adjustment...................       (899)      (1,164)
                                                              ---------    ---------
     Total stockholders' deficit............................    (13,600)     (23,651)
                                                              ---------    ---------
Total Liabilities and Stockholders' Deficit.................  $ 368,339    $ 313,455
                                                              =========    =========
</TABLE>
 
         The accompanying notes are an integral part of this statement.
 
                                        2
<PAGE>   3
 
                                   IPC, INC.
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                           QUARTER ENDED          SIX MONTHS ENDED
                                                              JUNE 30,                JUNE 30,
                                                        --------------------    --------------------
                                                          1997        1996        1997        1996
                                                          ----        ----        ----        ----
<S>                                                     <C>         <C>         <C>         <C>
Net sales...........................................    $136,170    $106,227    $264,034    $210,443
Cost of goods sold..................................     106,179      81,904     207,673     164,668
                                                        --------    --------    --------    --------
Gross profit........................................      29,991      24,323      56,361      45,775
                                                        --------    --------    --------    --------
Operating expenses:
  Selling...........................................       7,094       4,923      13,231       9,599
  Administrative....................................       7,954       6,091      16,236      12,533
  Amortization of intangibles.......................         341         118         512         258
                                                        --------    --------    --------    --------
Total operating expenses............................      15,389      11,132      29,979      22,390
                                                        --------    --------    --------    --------
Income from operations..............................      14,602      13,191      26,382      23,385
Interest expense....................................       8,067       7,274      15,706      14,940
                                                        --------    --------    --------    --------
Income before income taxes..........................       6,535       5,917      10,676       8,445
Income tax provision................................        (563)       (219)       (890)       (440)
                                                        --------    --------    --------    --------
Net income..........................................    $  5,972    $  5,698    $  9,786    $  8,005
                                                        ========    ========    ========    ========
</TABLE>
 
         The accompanying notes are an integral part of this statement.
 
                                        3
<PAGE>   4
 
                                   IPC, INC.
 
          CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                       IPC, INC.          PAID IN                        FOREIGN
                                     COMMON STOCK         CAPITAL                       CURRENCY
                                   -----------------    IN EXCESS OF    ACCUMULATED    TRANSLATION    STOCKHOLDERS'
                                   SHARES     AMOUNT     PAR VALUE        DEFICIT      ADJUSTMENT        DEFICIT
                                   ------     ------    ------------    -----------    -----------    -------------
<S>                                <C>        <C>       <C>             <C>            <C>            <C>
Balance at December 31, 1995...    120,890      $1        $73,417        $(117,648)      $(1,484)       $(45,714)
  Foreign currency translation
     adjustment................                                                              320             320
  Net income...................                                             21,743                        21,743
                                   -------      --        -------        ---------       -------        --------
Balance at December 31, 1996...    120,890       1         73,417          (95,905)       (1,164)        (23,651)
  Foreign currency translation
     adjustment................                                                              265             265
  Net income...................                                              9,786                         9,786
                                   -------      --        -------        ---------       -------        --------
Balance at June 30, 1997.......    120,890      $1        $73,417        $ (86,119)      $  (899)       $(13,600)
                                   =======      ==        =======        =========       =======        ========
</TABLE>
 
         The accompanying notes are an integral part of this statement.
 
                                        4
<PAGE>   5
 
                                   IPC, INC.
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                  SIX MONTHS ENDED
                                                                      JUNE 30,
                                                                --------------------
                                                                  1997        1996
                                                                  ----        ----
<S>                                                             <C>         <C>
Cash flows from operating activities:
  Net income................................................    $  9,786    $  8,005
  Adjustments to reconcile net income to net cash from
     operating activities:
     Depreciation of properties.............................      12,778      11,045
     Amortization of intangibles and debt issue costs.......       1,119         820
                                                                --------    --------
                                                                  23,683      19,870
  Change in operating assets and liabilities:
     Accounts receivable....................................     (12,104)        828
     Inventories............................................        (532)       (798)
     Prepaid expenses and other.............................        (809)        852
     Accounts payable.......................................      (5,184)     (3,517)
     Accrued expenses and other liabilities.................      (3,774)        227
                                                                --------    --------
       Net cash from operating activities...................       1,280      17,462
                                                                --------    --------
Cash flows from financing activities:
  Payment of senior credit facility.........................      (2,500)     (2,500)
  Proceeds from revolving credit facility...................      49,200          --
  Payment of revolving credit facility......................          --      (7,500)
  Payment of debt issue costs...............................        (327)       (191)
  Other, net................................................        (430)         --
                                                                --------    --------
       Net cash from (used by) financing activities.........      45,943     (10,191)
                                                                --------    --------
Cash flows from investing activities:
  Purchase of property, plant and equipment.................     (10,984)     (7,996)
  Acquisition of the OPS business of Viskase Limited........     (11,907)         --
  Acquisition of M&R Plastics, Inc..........................     (18,651)         --
  Other, net................................................        (147)        346
                                                                --------    --------
       Net cash used by investing activities................     (41,689)     (7,650)
                                                                --------    --------
Net increase (decrease) in cash and cash equivalents........       5,534        (379)
Cash and cash equivalents at beginning of period............       2,795       4,793
                                                                --------    --------
Cash and cash equivalents at end of period..................    $  8,329    $  4,414
                                                                ========    ========
Supplemental cash flow disclosures:
  Cash paid during the period for:
     Interest...............................................    $ 15,211    $ 14,399
     Income taxes...........................................       1,072         742
</TABLE>
 
         The accompanying notes are an integral part of this statement.
 
                                        5
<PAGE>   6
 
                                   IPC, INC.
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)
 
NOTE 1 -- ACCOUNTING AND REPORTING POLICIES
 
     In the opinion of management, the information in the accompanying unaudited
financial statements reflects all adjustments necessary for a fair statement of
results for the interim periods. These interim financial statements should be
read in conjunction with the financial statements and the notes thereto included
in the Annual Report on Form 10-K for the year ended December 31, 1996 (the
"Form 10-K") of IPC, Inc. ("IPC" or the "Company"). IPC is a wholly owned
subsidiary of Ivex Packaging Corporation ("Ivex").
 
     The Company's accounting and reporting policies are summarized in Note 2 of
the IPC Form 10-K.
 
  Accounts Receivable
 
     Accounts receivable at June 30, 1997 and December 31, 1996 consist of the
following:
 
<TABLE>
<CAPTION>
                                                             JUNE 30,    DECEMBER 31,
                                                               1997          1996
                                                             --------    ------------
<S>                                                          <C>         <C>
Accounts receivable......................................    $69,370       $53,718
Less -- Allowance for doubtful accounts..................     (2,302)       (2,080)
                                                             -------       -------
                                                             $67,068       $51,638
                                                             =======       =======
</TABLE>
 
  Inventories
 
     Inventories at June 30, 1997 and December 31, 1996 consist of the
following:
 
<TABLE>
<CAPTION>
                                                             JUNE 30,    DECEMBER 31,
                                                               1997          1996
                                                             --------    ------------
<S>                                                          <C>         <C>
Raw materials............................................    $27,561       $26,483
Finished goods...........................................     25,945        22,540
                                                             -------       -------
                                                             $53,506       $49,023
                                                             =======       =======
</TABLE>
 
NOTE 2 -- INCOME TAXES
 
     Income taxes are provided at the estimated annual effective tax rate which
differs from the federal statutory rate of 35% primarily due to net operating
loss carryovers and state and foreign income taxes.
 
NOTE 3 -- LONG-TERM DEBT
 
     At June 30, 1997 and December 31, 1996, the long-term debt of the Company
was as follows:
 
<TABLE>
<CAPTION>
                                                          JUNE 30,   DECEMBER 31,
                                                            1997         1996
                                                          --------   ------------
<S>                                                       <C>        <C>
Senior credit facility..................................  $101,700     $ 55,000
Industrial revenue bonds................................    38,293       38,293
12 1/2% IPC Notes, net of discount......................   157,395      157,340
Other...................................................     2,141        2,042
                                                          --------     --------
     Total debt outstanding.............................   299,529      252,675
Less -- Current installments of long-term debt..........    (8,012)      (5,921)
                                                          --------     --------
Long-term debt..........................................  $291,517     $246,754
                                                          ========     ========
</TABLE>
 
                                        6
<PAGE>   7
 
                                   IPC, INC.
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                             (DOLLARS IN THOUSANDS)
 
NOTE 4 -- ACQUISITIONS
 
     On January 17, 1997, IPC purchased substantially all of the assets,
excluding accounts receivable, of the OPS business of Viskase Limited located in
Sedgefield, England ("the Sedgefield, England OPS operations") for $11,907. On
February 21, 1997, IPC purchased all of the outstanding common stock of M&R
Plastics, Inc. ("M&R") located in Laval, Quebec for $18,651, including the
repayment of certain indebtedness of M&R and related acquisition fees and
expenses. The acquired businesses were financed through revolving credit
borrowings under IPC's senior credit facility. As a result of these borrowings,
IPC amended and restated its senior credit facility on March 24, 1997 to, among
other things, increase its revolving credit facility from $55,000 to $105,000.
Pro forma financial information associated with these acquisitions has not been
included because these acquisitions are not material to the Company's
consolidated financial statements.
 
NOTE 5 -- SUBSEQUENT EVENT -- INITIAL PUBLIC OFFERING
 
     On August 1, 1997, as part of a proposed strategy to refinance all or a
portion of its debt, Ivex filed a registration statement with the Securities and
Exchange Commission (the "SEC") for a proposed initial public offering of its
Common Stock. Such registration statement is publicly available through the
SEC's offices. There can be no assurance that such offering or refinancing will
be effected.
 
     Additionally, Ivex believes that, were the offering to be successfully
executed, such transaction would trigger a change in ownership of Ivex, as
defined under Section 382 of the Internal Revenue Code, resulting in a
limitation of the Company's ability to utilize its net operating loss carryovers
in the future.
 
                                        7
<PAGE>   8
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.
 
     References to the Company or IPC herein reflect the consolidated results of
IPC, Inc.
 
RESULTS OF OPERATIONS -- FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
 
  Net Sales
 
     The Company's net sales increased by 28.2% during the second quarter of
1997 over the Company's net sales during the corresponding period in 1996
primarily as a result of the third quarter 1996 acquisitions of Plastofilm
Industries, Inc. ("Plastofilm") and Trio Products, Inc. ("Trio") and the first
quarter 1997 acquisitions of the Sedgefield, England OPS operations and M&R. The
following table sets forth information with respect to net sales of the
Company's product groups for the periods presented:
 
<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED
                                                            -----------------------------------
                                                            JUNE 30,           JUNE 30,
                                                              1997       %       1996       %
                                                            --------     -     --------     -
                                                                  (DOLLARS IN THOUSANDS)
<S>                                                         <C>        <C>     <C>        <C>
Consumer Packaging........................................  $ 80,866    59.4   $ 53,557    50.4
Industrial Packaging......................................    55,304    40.6     52,670    49.6
                                                            --------   -----   --------   -----
     Total................................................  $136,170   100.0   $106,227   100.0
                                                            ========   =====   ========   =====
</TABLE>
 
     Consumer Packaging net sales increased by 51.0% during the second quarter
of 1997 from the corresponding period in 1996 resulting primarily from
incremental sales associated with the third quarter 1996 acquisitions of
Plastofilm and Trio and the first quarter 1997 acquisitions of the Sedgefield,
England OPS operations and M&R. The increase in sales also resulted from
increased unit sales volume of OPS sheet and film offset by decreased selling
price. During the second quarter of 1997, domestic production of extruded sheet
in pounds increased 2.9% while the average selling price per pound decreased
1.8% from the corresponding period in 1996. Sales of extruded OPS film pounds
increased 24.8% during the second quarter of 1997 while the average selling
price per pound of extruded OPS film decreased 6.4% from the corresponding
period in 1996. Sales of converted plastic and paper products, excluding the
sales relating to the newly acquired facilities, increased 12.4% during the
second quarter of 1997 over the second quarter of 1996 primarily due to new
product introductions in the supermarket and agricultural market segments.
 
     Industrial Packaging net sales increased by 5.0% during the second quarter
of 1997 from the corresponding period in 1996, primarily due to increased unit
volume of the Company's protective masking products and recycled and specialty
papers. The increase in net sales was partially offset by a decrease in the
average net selling price of the Company's protective masking products and
recycled and specialty paper. The number of tons of recycled and specialty paper
sold during the period increased 8.2%. However, the average net selling price of
the Company's recycled and specialty paper decreased 1.3% during the second
quarter of 1997 compared to the corresponding period in the prior year,
principally as a result of decreases in raw material costs.
 
  Gross Profit
 
     The Company's gross profit increased 23.3% during the second quarter of
1997 compared to the corresponding period in the prior year primarily as a
result of the increased sales volume and the incremental effects from the newly
acquired facilities. Gross profit margin was 22.0% and 22.9% during the second
quarter of 1997 and 1996, respectively. The decrease in gross profit margin
resulted from reduced margins in the Company's recycled and specialty paper
operations due to market conditions, the decreased profitability of the
Company's polymerization operations and increased material costs for the
Company's protective masking products. The decreased gross profit margin was
partially offset by gross profit margin improvements associated with the
increased production volume of the Company's converted plastic and paper
products.
 
                                        8
<PAGE>   9
 
  Operating Expenses
 
     Selling and administrative expenses increased 36.6% during the second
quarter of 1997 primarily as a result of the recently completed acquisitions. As
a percentage of net sales, selling and administrative expenses increased to
11.1% during the second quarter of 1997 compared to 10.4% during the same period
in the prior year primarily due to the higher selling and administrative
expenses at Plastofilm and Industrial Packaging.
 
     Amortization of intangibles increased 189.0% during the second quarter of
1997 compared to the same period in 1996 as a result of increased goodwill and
non-compete agreement amortization associated with the recently completed
acquisitions.
 
  Income from Operations
 
     Income from operations was $14.6 million during the second quarter of 1997
compared to income from operations of $13.2 million during the second quarter of
1996. The increase in income from operations is primarily a result of the
recently completed acquisitions and increased sales volume of Consumer Packaging
converted plastic and paper products. Operating margin was 10.7% for the second
quarter of 1997 compared to operating margin of 12.4% during the second quarter
of 1996. The decrease in operating margin is primarily due to the increased
selling and administrative expenses as a percentage of net sales and decreased
gross margin.
 
  Interest Expense
 
     Interest expense during the second quarter of 1997 was $8.1 million
compared to $7.3 million during the same period in 1996. The increase primarily
reflects greater outstanding aggregate indebtedness during 1997 as a result of
additional borrowings on IPC's Senior Credit Facility (the "Credit Facility") to
finance the recently completed acquisitions. The increase was partially offset
by decreased interest rates on the Credit Facility.
 
  Net Income
 
     Net income was $6.0 million during the second quarter of 1997 compared to
net income of $5.7 million in the prior year. The increase in net income is
primarily due to the increased income from operations.
 
  EBITDA
 
     EBITDA includes income from operations adjusted to exclude depreciation and
amortization expenses, goodwill write-off, acquisition related expenses and
restructuring charge. The Company believes that EBITDA provides additional
information for determining its ability to meet future debt service
requirements. However, EBITDA is not a defined term under generally accepted
accounting principles ("GAAP") and is not indicative of operating income or cash
flow from operations as determined under GAAP.
 
     The following table sets forth information with respect to EBITDA of the
Company's product groups for the periods presented.
 
<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED
                                             ----------------------------------------------
                                             JUNE 30,      % OF       JUNE 30,      % OF
                                               1997      NET SALES      1996      NET SALES
                                             --------    ---------    --------    ---------
                                                         (DOLLARS IN THOUSANDS)
<S>                                          <C>         <C>          <C>         <C>
Consumer Packaging.......................    $14,119       17.5       $10,388       19.4
Industrial Packaging.....................      9,189       16.6         9,809       18.6
Corporate Expense........................     (1,640)        --        (1,433)        --
                                             -------       ----       -------       ----
     Total...............................    $21,668       15.9       $18,764       17.7
                                             =======       ====       =======       ====
</TABLE>
 
                                        9
<PAGE>   10
 
     The Company's EBITDA increased 15.5% from $18.8 million to $21.7 million
and EBITDA margin decreased from 17.7% to 15.9% during the second quarter of
1997 compared to the same period in 1996. The 35.9%, or $3.7 million, increase
in Consumer Packaging's EBITDA in the current quarter is primarily attributable
to the incremental EBITDA from the recently completed acquisitions. The
increased sales volume and the improved gross margin on the Company's converted
plastic and paper products also contributed to the EBITDA increase. Consumer
Packaging's increased EBITDA was partially offset by the decreased profitability
of the Company's polymerization operations. The decrease in Industrial
Packaging's EBITDA of 6.3%, or $620,000, is primarily due to increased raw
material costs and increased operating expenses in the Company's protective
masking business.
 
RESULTS OF OPERATIONS -- FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
 
  Net Sales
 
     The Company's net sales increased by 25.5% during the six months ended June
30, 1997 over the Company's net sales during the corresponding period in 1996
primarily as a result of incremental sales volume associated with the recently
completed acquisitions (including Plastofilm, Trio, the Sedgefield, England OPS
operations and M&R) and significantly increased volume of extruded sheet and
film. The following table sets forth information with respect to net sales of
the Company's product groups for the periods presented:
 
<TABLE>
<CAPTION>
                                                          SIX MONTHS ENDED
                                           ----------------------------------------------
                                           JUNE 30,      % OF       JUNE 30,      % OF
                                             1997      NET SALES      1996      NET SALES
                                           --------    ---------    --------    ---------
                                                       (DOLLARS IN THOUSANDS)
<S>                                        <C>         <C>          <C>         <C>
Consumer Packaging.....................    $152,914       57.9      $103,495       49.2
Industrial Packaging...................     111,120       42.1       106,948       50.8
                                           --------      -----      --------      -----
     Total.............................    $264,034      100.0      $210,443      100.0
                                           ========      =====      ========      =====
</TABLE>
 
     Consumer Packaging net sales increased by 47.8% during the six months ended
June 30, 1997 from the corresponding period in 1996 primarily due to incremental
sales volume associated with the recently completed acquisitions, increased unit
sales volume of extruded OPS sheet and film and increased sales of converted
plastic and paper products. The increase in net sales was partially offset by
decreased average selling prices of OPS sheet and film. During the six months
ended June 30, 1997, domestic production of extruded OPS sheet in pounds
increased 18.7% while the average selling price per pound decreased 2.4% from
the corresponding period in 1996. Sales of extruded OPS film in pounds increased
32.5% during the first six months of 1997 and the average selling price per
pound decreased 6.2% from the corresponding period in 1996. Sales of converted
plastic and paper products, excluding the sales relating to the newly acquired
facilities, increased 8.0% during the six months ended June 30, 1997 over the
corresponding period in 1996 primarily due to new product introductions in the
supermarket and agricultural market segments.
 
     Industrial Packaging net sales increased by 3.9% during the six months
ended June 30, 1997 from the corresponding period in 1996, primarily due to
increased unit volume of the Company's protective masking products and increased
average selling price of the Company's recycled and specialty papers. The
increase in net sales was partially offset by a decrease in volume of the
Company's coated paper for stamp applications and decreased unit volume of the
Company's recycled and specialty paper. The average net selling price of the
Company's recycled and specialty paper increased 10.8% during the six months
ended June 30, 1997 compared to the corresponding period in the prior year.
However, the number of tons of recycled and specialty paper sold during the
period decreased 4.9% compared to the corresponding period in 1996.
 
  Gross Profit
 
     The Company's gross profit increased 23.1% during the six months ended June
30, 1997 compared to the corresponding period in the prior year primarily as a
result of the incremental effects of newly acquired facilities and increased
sales volume. The increased gross profit was partially offset by decreased
margins in the Company's recycled and specialty paper operations due to market
conditions and decreased profitability of
 
                                       10
<PAGE>   11
 
the Company's polymerization operations. Gross profit margin was 21.3% and 21.8%
during the six months ended June 30, 1997 and 1996, respectively.
 
  Operating Expenses
 
     Selling and administrative expenses increased 33.1% during the six months
ended June 30, 1997 primarily as a result of the recently completed
acquisitions. As a percentage of net sales, selling and administrative expenses
increased to 11.2% during the six months ended June 30, 1997 compared to 10.5%
during the same period in the prior year primarily due to the higher selling and
administrative expenses at Plastofilm and the additional management committed to
the Company's protective masking products group.
 
     Amortization of intangibles increased 98.4% during the six months ended
June 30, 1997 compared to the same period in 1996 as a result of increased
goodwill and non-compete agreement amortization associated with the recently
completed acquisitions.
 
  Income from Operations
 
     Income from operations was $26.4 million during the six months ended June
30, 1997 compared to income from operations of $23.4 million during the six
months ended June 30, 1996. The increase in income from operations is primarily
a result of the recently completed acquisitions and increased volume of extruded
OPS sheet and film during the six months ended June 30, 1997. Operating margin
was 10.0% for the six months ended June 30, 1997 compared to operating margin of
11.1% during the six months ended June 30, 1996. The decrease in operating
margin is primarily due to the increased selling and administrative expenses as
a percentage of net sales.
 
  Interest Expense
 
     Interest expense during the six months ended June 30, 1997 was $15.7
million compared to $14.9 million during the same period in 1996. The increase
reflects greater outstanding aggregate indebtedness during 1997 as a result of
additional borrowings under the Credit Facility to finance the recently
completed acquisitions. The increase was partially offset by decreased interest
rates on the Credit Facility.
 
  Net Income
 
     Net income was $9.8 million during the six months ended June 30, 1997
compared to net income of $8.0 million in the prior year. The increase in net
income during the first six months of 1997 is primarily due to increased income
from operations partially offset by higher interest expense.
 
  EBITDA
 
     EBITDA includes income from operations adjusted to exclude depreciation and
amortization expenses, goodwill write-off, acquisition related expenses and
restructuring charge. The Company believes that EBITDA provides additional
information for determining its ability to meet future debt service
requirements. However, EBITDA is not a defined term under GAAP and is not
indicative of operating income or cash flow from operations as determined under
GAAP.
 
                                       11
<PAGE>   12
 
     The following table sets forth information with respect to EBITDA of the
Company's product groups for the periods presented.
 
<TABLE>
<CAPTION>
                                                        SIX MONTHS ENDED
                                           -------------------------------------------
                                           JUNE 30,     % OF      JUNE 30,     % OF
                                             1997     NET SALES     1996     NET SALES
                                           --------   ---------   --------   ---------
                                                     (DOLLARS IN THOUSANDS)
<S>                                        <C>        <C>         <C>        <C>
Consumer Packaging.......................  $25,339      16.6      $19,167      18.5
Industrial Packaging.....................   17,516      15.8       18,452      17.3
Corporate Expense........................   (3,183)       --       (2,931)       --
                                           -------      ----      -------      ----
     Total...............................  $39,672      15.0      $34,688      16.5
                                           =======      ====      =======      ====
</TABLE>
 
     The Company's EBITDA increased 14.4% from $34.7 million to $39.7 million;
however, EBITDA margin decreased from 16.5% to 15.0% during the six months ended
June 30, 1997 compared to the same period in 1996. The 32.2%, or $6.2 million,
increase in Consumer Packaging's EBITDA during the six months ended June 30,
1997 is primarily attributable to the incremental EBITDA from the recently
completed acquisitions and to the increased sales of extruded sheet and film and
converted plastic and paper products. Consumer Packaging's increased EBITDA was
partially offset by the decreased profitability of the Company's polymerization
operations. The decrease in Industrial Packaging's EBITDA of 5.1%, or $936,000,
is primarily due to decreased gross profit associated with lower sales unit
volume of the Company's recycled and specialty paper and increased operating
expenses in the Company's protective masking business.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     Ivex conducts business through IPC and has no operations of its own. The
primary asset of Ivex is the common stock of IPC which has been pledged to
secure the obligations of IPC and the subsidiaries under IPC's Credit Facility.
Ivex is dependent on the cash flow of IPC and its subsidiaries in order to pay
the principal and interest on the 13 1/4% Senior Discount Debentures due March
15, 2005 (the "13 1/4% Discount Debentures); however, IPC has no contractual
obligations to distribute any such cash flow to Ivex. In addition, the Credit
Facility contains provisions that (except for certain limited exceptions)
prohibit the payment of dividends and distributions by IPC to Ivex. Moreover,
the indenture governing the 12 1/2% Senior Subordinated Notes due 2002 (the
"12 1/2% Subordinated Note Indenture") contains provisions that limit IPC's
ability to pay dividends and make distributions to Ivex.
 
     IPC's long-term debt, less current installments, increased to $291.5
million at June 30, 1997 from $246.8 million at December 31, 1996 primarily
reflecting borrowings under the Credit Facility of $49.2 million, $2.6 million
of scheduled debt reductions and the reclassification of $1.9 million to
current. The long-term debt of IPC, consists primarily of the $157.4 million of
IPC's 12 1/2% Senior Subordinated Notes (the "12 1/2% Subordinated Notes"), term
loans of $45.6 million and revolving credit facility borrowing of $49.2 million
under the Credit Facility, $37.6 million of industrial revenue bonds and other
debt of $1.7 million.
 
     At June 30, 1997, IPC had cash and cash equivalents of $8.3 million and
$52.2 million was available under the revolving credit portion of the Credit
Facility. IPC's working capital at June 30, 1997 was $60.2 million.
 
     The primary short-term and long-term operating cash requirements for IPC
are for debt service, working capital and capital expenditures. IPC expects to
rely on cash generated from operations, supplemented by revolving credit
facility borrowings under the Credit Facility (at June 30, 1997, $52.2 million
was available under the revolving credit portion of the Credit Facility), to
fund IPC's principal short-term and long-term cash requirements. IPC believes
that it should generate sufficient cash flows to service the cash interest
payments on the 12 1/2% Subordinated Notes through their maturity in 2002,
although there can be no assurances that such cash flows, if any, will be
adequate to service these interest payments. However, IPC and IPC's subsidiaries
may not generate sufficient cash flows to retire the $158.0 million principal
amount of 12 1/2% Subordinated Notes prior to or upon their maturity in 2002.
Consequently, all or a portion of the 12 1/2% Subordinated Notes may require
refinancing prior to the maturity thereof. IPC believes that its consolidated
 
                                       12
<PAGE>   13
 
cash flow from operations and access to debt financing in the public and private
markets should be sufficient to enable it to retire all or a portion of the
principal amount of the 12 1/2% Subordinated Notes and to refinance any
remaining principal amount of the 12 1/2% Subordinated Notes prior to or upon
their maturity, although there can be no assurance that this will be the case.
In the event that IPC is unable to retire or refinance the 12 1/2% Subordinated
Notes, IPC may be required to, among other things, seek appropriate waivers from
such creditors or recapitalize its capital structure. IPC is required to
maintain certain financial ratios and levels of net worth and future
indebtedness and dividends, among other things, are restricted under these
facilities.
 
     The 12 1/2% Subordinated Notes require semi-annual interest payments on
June 15 and December 15 and are subordinated in right of payment to all existing
and future senior indebtedness of IPC. The 12 1/2% Subordinated Notes are
redeemable at the option of IPC, in whole or in part, on or after December 15,
1997 at the following redemption prices (expressed in percentages of the
principal amount thereof), plus accrued interest to the date of redemption. If
redeemed during the twelve-month period beginning December 15,
 
<TABLE>
<CAPTION>
                            YEAR                                PERCENTAGE
                            ----                                ----------
<S>                                                             <C>
1997........................................................     106.250%
1998........................................................     103.125%
1999 and thereafter.........................................     100.000%
</TABLE>
 
     Each holder of the 12 1/2% Subordinated Notes may require IPC to repurchase
such holders' 12 1/2% Subordinated Notes in the event of a change of control at
101% of principal amount thereof, plus accrued interest to the date of
repurchase. The 12 1/2% Subordinated Note Indenture contains certain covenants
that, among other things, limit the ability of IPC to incur additional
indebtedness, pay dividends or repurchase stock.
 
     Ivex's primary long-term cash requirements are for the debt service
relating to the 13 1/4% Discount Debentures. Commencing on September 15, 2000,
cash interest on the 13 1/4% Discount Debentures will be payable semi-annually
and on March 15, 2005, the 13 1/4% Discount Debentures will mature and the
aggregate principal amount then outstanding will become due and payable. Ivex
will be dependent on the cash flow of IPC and IPC's subsidiaries in order to
meet its debt service obligations. Significant contractual and other
restrictions exist on the payment of dividends and the making of loans by IPC to
Ivex. In addition, as a result of the goodwill write-offs in 1993 and 1995,
IPC's ability to make distributions to Ivex under the 12 1/2% Subordinated Note
Indenture has been impaired; consequently this Indenture will require
modification before any such distributions to Ivex can be made. Regardless, IPC
and IPC's subsidiaries may not generate sufficient cash flows to distribute to
Ivex in order for Ivex to service the cash interest payments on the 13 1/4%
Discount Debentures that commence in September 2000 or to retire the $160
million principal amount of 13 1/4% Discount Debentures upon their maturity in
2005. Consequently, all or a portion of the 13 1/4% Discount Debentures may
require refinancing prior to such dates. Ivex believes that distributions from
IPC and its access to debt financing in the public and private markets should be
sufficient to enable it to retire all or a portion of the principal amount of
the 13 1/4% Discount Debentures and to refinance any remaining principal amount
of the 13 1/4% Discount Debentures upon their maturity in 2005, although there
can be no assurance that this will be the case. In the event that Ivex is unable
to service the cash interest payments on or to retire or refinance the 13 1/4%
Discount Debentures or is unable to obtain any required consents from the
holders of the 12 1/2% Subordinated Notes to make interest payments on the
13 1/4% Discount Debentures, Ivex may be required to, among other things, seek
appropriate waivers from such creditors or recapitalize its capital structure.
 
     The Credit Facility is comprised of $52.5 million in term loans, a $45.0
million letter of credit facility and a $105.0 million revolving credit facility
of which approximately $52.2 million was available as of June 30, 1997. The term
loans under the Credit Facility require quarterly payments of $1.3 million
through September 30, 1997; $1.9 million from December 31, 1997 through
September 30, 1998; $3.0 million from December 31, 1998 through September 30,
1999; $3.5 million from December 31, 1999 through September 30, 2000; $4.1
million from December 31, 2000 through June 30, 2001; and $5.4 million on
September 30, 2001. At the option of IPC, the term loans and borrowings on the
revolving credit facility accrue interest at the
 
                                       13
<PAGE>   14
 
LIBOR reserve adjusted rate, as defined in the Credit Facility, plus 2.25% or
the prime rate plus 1.0%. Such rates are subject to change based on IPC's
ability to achieve certain financial ratios as defined in the Credit Facility.
The Company's actual interest rate on the term loans and the revolving credit
facility as of June 30, 1997 was the LIBOR reserve adjusted rate, as defined,
plus 1.75% or prime rate plus 0.75%. Borrowings are secured by substantially all
the assets of IPC and its subsidiaries and the stock of IPC and IPC's
subsidiaries. The revolving credit facility and letter of credit facility
terminate on September 30, 2001. Under the Credit Facility, IPC is required to
maintain certain financial ratios and levels of net worth and future
indebtedness and dividends are restricted, among other things.
 
     During 1996, IPC entered into interest rate swap agreements for the term
loans for notional amounts totaling $60.0 million through January 19, 1999. Such
agreements effectively fix IPC's LIBOR base rate at 5.33% and income or expense
related to settlements under the swap agreements are recorded as adjustments to
interest expense in IPC's financial statements.
 
     IPC's industrial revenue bonds require monthly interest payments and are
due in varying amounts and dates through 2009. Certain letters of credit under
the Credit Facility provide credit enhancement for IPC's industrial revenue
bonds.
 
     Primarily as a consequence of the Company's 1993 and 1995 goodwill
write-offs, as of June 30, 1997, the Company's recorded assets are less than its
recorded liabilities by approximately $13.6 million. The Company believes that
its negative net worth will not have any material consequences on its operations
or its ability to obtain trade credit or financing.
 
     On January 17, 1997, IPC purchased substantially all of the assets,
excluding accounts receivable, of the Sedgefield, England OPS operations for
$11.9 million and on February 21, 1997, IPC purchased all of the outstanding
common stock of M&R located in Laval, Quebec for $18.7 million, including the
repayment of certain indebtedness of M&R and related acquisition fees and
expenses. The acquired businesses were financed through revolving credit
borrowings under IPC's senior credit facility.
 
     IPC made capital expenditures of $11.0 million and $8.0 million for the six
months ended June 30, 1997 and 1996, respectively. The Company was not committed
under any material contractual obligations for capital expenditures as of June
30, 1997.
 
     On August 1, 1997, as part of a proposed strategy to refinance all or a
portion of its debt, Ivex filed a registration statement with the Securities and
Exchange Commission (the "SEC") for a proposed initial public offering of its
Common Stock. Such registration statement is publicly available through the
SEC's offices. There can be no assurance that such offering or refinancing will
be effected.
 
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
     Certain statements in "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources"
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Reform Act"). Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the Company's actual performance and highly
leveraged financial condition (see "-- Liquidity and Capital Resources" above).
 
                                       14
<PAGE>   15
 
                           PART II. OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS.
 
     From time to time Ivex and its subsidiaries are involved in various
litigation matters arising in the ordinary course of business. Ivex believes
that none of the matters in which Ivex or its subsidiaries are currently
involved, either individually or in the aggregate, is material to Ivex or IPC.
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
 
     None.
 
                                   SIGNATURE
 
     Pursuant to the requirements 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.
 
                                          IPC, Inc.
 
                                          By:     /s/ FRANK V. TANNURA
 
                                            ------------------------------------
                                            Frank V. Tannura
                                            Vice President and Principal
                                              Financial Officer
 
August 1, 1997
(Date)
 
                                       15