SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

F O R M  10-K

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|[X]   |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]    
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|      |  | For the fiscal year ended January 1, 2000                                                                  |  | Commission File Number 1-313
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|[   ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

T H E   L A M S O N   &   S E S S I O N S   C O.

(Exact name of Registrant as specified in its charter)

|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Ohio                                                           |  | 34-0349210                       
|                                                               |  |                                  
|(State or other jurisdiction of
incorporation or organization) |  | (IRS Employer Identification No.)
|                                                              
|                                                              
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|25701 Science Park Drive
Cleveland, Ohio                       |  | 44122-7313                       
|                                                               |  |                                  
|(Address of principal executive offices)                       |  | (Zip Code)                       

Registrants telephone number, including area code: 216/464-3400

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

|                                 |  |                                               
|-------------------------------- |  | ----------------------------------------------
|Title of each class              |  | Name of each exchange on which registered     
|                                 |  |                                               
|Common Shares, without par value |  | New York Stock Exchange
Pacific Stock Exchange

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 by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to thisForm 10-K. [  ]

The aggregate market value of the voting stock held as of February 10,
2000 by non-affiliates of the Registrant: $76,981,064.

As of February 10, 2000 the Registrant had outstanding 13,453,251 common
shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the 2000 Annual Meeting of
Shareholders are incorporated by reference
into Part III.

1



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PART I

Item 1.  Business

The Lamson & Sessions Co., an Ohio corporation, (the Company or Lamson &
Sessions), founded in 1866, is a diversified manufacturer and distributor of a
broad line of thermoplastic electrical, consumer, telecommunications and fluid
drainage products for major domestic markets. The markets for thermoplastic
electrical conduit, related fittings and accessories, wiring devices and sewer
pipe include: the construction, utility and telecommunications industries,
municipalities, other government agencies, and contractors; and
Do-It-Yourself
(DIY) home remodelers.

Principal Products and Markets

The Company is engaged in the manufacture and distribution of a broad line of
thermoplastic electrical, telecommunication and engineered sewer products. In
addition, the Company distributes a wide variety of consumer electrical wiring
devices, home security devices, wireless electrical and other wireless
products.

All of the Companys thermoplastic electrical products compete with and serve
as substitutes for similar metallic products. The Companys engineered sewer
pipe products compete with and serve as substitutes for clay, concrete, ductile
iron, asbestos cement and polyethylene products. The Companys thermoplastic
electrical products offer several advantages over these other products.
Specifically, nonmetallic electrical conduit and related fittings and
accessories are generally less expensive, lighter and easier to install than
metallic products. Furthermore, thermoplastic electrical conduit does not rust,
corrode or conduct electricity. Thermoplastic sewer pipe weighs less than
alternative products, is easier and more economical to install, does not
degenerate due to chemical attack as do some competing products, and eliminates
avoidable problems which can be caused by infiltration and exfiltration.

Three markets are served, each of which has unique product and marketing
requirements. These markets are:

Carlon  Industrial, Residential, Commercial, Telecommunications and Utility
Construction: The major customers served are electrical contractors and
distributors, original equipment manufacturers, electric power utilities,
cable television (CATV), telephone and telecommunications companies. The
principal products sold by this segment include electrical and wire raceway
systems and a broad line of nonmetallic enclosures, outlet boxes and
electrical fittings. Examples of the applications for the products included
in this segment are multi-cell duct systems designed to protect underground
fiber optic cables allowing future cabling expansion and flexible conduit used
inside buildings to protect communications cable.

Lamson Home Products  Consumer: The major customers served are home centers
and mass merchandisers for the DIY home repair market. The
products included in this segment are light dimmers, fan speed controls, touch
controls, wireless door chimes, motion sensors and home security systems. In
addition, this segment supplies its market with products such as outlet boxes,
liquid tight conduit and electrical fittings.

PVC Pipe: This business segment supplies electrical, power and communications
conduit to the electrical distribution, retail, power utility and
telecommunications markets. In addition, it provides engineered sewer
products to various municipalities and private contractors for drainage
systems and sewer construction and rehabilitation. Principal products utilized
by the waste water market include closed profile engineered sewer pipe for new
sewer construction and existing sewer line rehabilitation. The products range
in diameter from 4 inches to 54 inches for sewer products and 1/2 inch to 6
inches for electrical conduit.

A breakdown of revenues as a percent of net sales by major business segment for
1999, 1998 and 1997, is as follows:

|                       |  |      |         |      |  |      |     |   |  |   |         |  |  |  |     |   |  |   |         |  |  |  |     |  
|---------------------- |  | ---- | ------- | ---- |  | ---- | --- | - |  | - | ------- |  |  |  | --- | - |  | - | ------- |  |  |  | --- | -
|(Dollars in thousands) |  | 1999 |         | 1998 |  | 1997
|                       |  |      |         |      |  |     
|Carlon                 |  | $    | 120,975 |      |  |      | 42  | % |  | $ | 109,458 |  |  |  | 40  | % |  | $ | 104,867 |  |  |  | 38  | %
|                      
|                      
|                      
|                      
|Lamson Home Products   |  |      | 53,401  |      |  |      | 18  | % |  |   | 50,348  |  |  |  | 19  | % |  |   | 50,819  |  |  |  | 19  | %
|                      
|                      
|                      
|                      
|PVC Pipe               |  |      | 117,005 |      |  |      | 40  | % |  |   | 111,108 |  |  |  | 41  | % |  |   | 116,094 |  |  |  | 43  | %
|                       |  |      |         |      |  |      |     |   |  |   |         |  |  |  |     |   |  |   |         |  |  |  |     |  
|                       |  | $    | 291,381 |      |  |      | 100 | % |  | $ | 270,914 |  |  |  | 100 | % |  | $ | 271,780 |  |  |  | 100 | %
|                       |  |      |         |      |  |      |     |   |  |   |         |  |  |  |     |   |  |   |         |  |  |  |     |  

See discussion of segment products in Note J of financial statements.

2



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Competition

Each of the three segments in which the Company presently operates is highly
competitive based on service, price and quality. Most of the competitors are
either national or smaller regional manufacturers who compete with limited
product offerings. Unlike a majority of the Companys competitors, the Company
manufactures a broad line of thermoplastic products, complementary fittings and
accessories. The Company believes that its products will continue to compete
favorably. However, certain of the Companys competitors have greater financial
resources than the Company, which could adversely affect the Company through
price competition strategies.

Distribution

The Company distributes its products through a nationwide network of more than
100 manufacturers representatives and a direct sales force of 42. Currently,
three manufacturers representatives maintain an inventory of the Companys
products.

Raw Materials

The Company is a large purchaser of pipe grade polyvinyl chloride (PVC)
resin. The Company has entered into resin supply contracts which should
stabilize its availability for the next several years.

Patents and Trademarks

The Company owns various patents, patent applications, licenses, trademarks and
trademark applications relating to its products and processes. While the
Company considers that, in the aggregate, its patents, licenses and trademarks
are of importance in the operation of its business, it does not consider that
any individual patent, license or trademark, or any technically related group,
is of such importance that termination would materially affect its business.

Seasonal Factors

Two of the Companys three business segments experience moderate seasonality
caused principally by a decrease in construction activity during the winter
months. They are subject also to the economic cycles affecting the
construction industry. The Companys consumer products business unit is
affected by consumer spending and consumer confidence.

Major Customers

Sales to Affiliated Distributors, a buying group within the Carlon and PVC Pipe
segments not otherwise affiliated with the Company, totaled approximately 17%
of net sales in 1999, 15% of net sales in 1998 and 13% of net sales in 1997.

Backlog

In the Companys three business segments, the order to delivery cycle ranges
from several days to a few weeks. Therefore, the measurement of backlog is not
a significant factor in the evaluation of the Companys prospects.

Research and Development

The Company is engaged in an aggressive product development program in an
effort to introduce innovative applications for thermoplastic and wireless
electrical products. The Company maintains a separate product development
center in Cleveland, Ohio to facilitate this effort and improve manufacturing
processes. The Company sponsored research and development activity totaled
$3.8 million, $3.7 million and $4.6 million in 1999, 1998 and 1997,
respectively.

Environmental Regulations

The Company believes that its current operations and its use of property, plant
and equipment conform in all material respects to applicable environmental laws
and regulations presently in effect. The Company has facilities at numerous
geographic locations, which are subject to a range of federal, state and local
environmental laws and regulations. Compliance with these laws has, and will,
require expenditures on a continuing basis.

Associates

At January 1, 2000, the Company had 963 associates, 762 of whom were employed
at the Companys manufacturing facilities and distribution centers. The
remainder of associates were primarily employed at the Companys corporate
headquarters and product development facilities.

3



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Foreign Operations

The net sales, operating earnings and assets employed outside the United States
are not significant. Export sales were approximately 2% of net sales in 1999,
1% of net sales in 1998 and 2% in 1997, and were made principally to countries
in North America.

Item 2.  Properties

The Company owns or leases manufacturing and distribution facilities, which are
suitable and adequate for the production and marketing of its products. The
Company owns executive and administrative offices, which are located in
Cleveland, Ohio, and occupy 68,000 square feet in a suburban office complex. The
Company also has research and development offices, located in Cleveland, Ohio,
which occupy leased space of 27,000 square feet. The following is a list of
the Companys manufacturing and distribution center locations:

|                                 |  |             |         | 
|-------------------------------- |  | ----------- | ------- | 
|                                 |  | Approximate
|Manufacturing
Facilities (Owned) |  | Square
Feet
|Woodland, California             |  |             | 66,000  | 
|                                
|                                
|                                
|                                
|High Springs, Florida            |  |             | 110,000 | 
|                                
|                                
|                                
|                                
|Clinton, Iowa                    |  |             | 124,000 | 
|                                
|                                
|                                
|                                
|Bowling Green, Ohio              |  |             | 67,000  | 
|                                
|                                
|                                
|                                
|Oklahoma City, Oklahoma          |  |             | 172,000 | 
|                                
|                                
|                                
|                                
|Nazareth, Pennsylvania           |  |             | 59,000  | 
|                                
|                                
|                                
|                                
|Pasadena, Texas                  |  |             | 48,000  | 
|                                
|                                
|                                
|                                
|                                
|                                
|                                
|                                
|                                
|                                
|                                
|                                
|Distribution Centers (Leased)   
|                                
|                                
|                                
|                                
|Columbia, South Carolina         |  |             | 350,000 | 
|                                
|                                
|                                
|                                
|Woodland, California             |  |             | 105,000 | 

The Company operated the above manufacturing facilities at approximately 93% of
their productive capacity in 1999.

Item 3.  Legal Proceedings

On September 23, 1999, the Company announced that a United States District
Court jury in the Northern District of Illinois found that the Company
willfully infringed on a patent held by Intermatic Incorporated of Spring
Grove, Illinois, relating to the design of an in-use weatherproof electrical
outlet cover, and awarded Intermatic $12.5 million in damages plus pre-judgment
interest of approximately $1.5 million. The court declined to increase the
damages with respect to the willfulness finding. The Company is pursuing a
vigorous appeal and believes it has meritorious positions that will
substantially reduce or eliminate the jury award. If, however, the appeal
process is not successful, the final resolution of the matter could have a
material adverse affect on the Companys financial position, cash flows and
results of operations. It is the Companys understanding that the appeal
process may require a one-to-two year period.

In addition, during the second quarter of 1999, the Company reached a
settlement on litigation involving environmental matters at a property sold by
the Company in 1981 whereby the Company agreed to incur costs of certain
remediation activities. The settlement did not have a material impact on the
Companys financial position or results of operations.

The Company has filed suit to recover damages related to the termination of the
agreement to sell its PVC Pipe business. It is premature to estimate the timing
for a resolution of this suit.

The Company is also a party to various other claims and matters of litigation
incidental to the normal course of its business. Management believes that the
final resolution of these matters will not have a material adverse affect on
the Companys financial position, cash flows and results of
operations.

Item 4.  Submission of Matters to Security Holders

None.

4



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EXECUTIVE OFFICERS OF THE REGISTRANT

JOHN B. SCHULZE

Chairman, President and Chief Executive Officer

Chairman, President and Chief Executive Officer since January 1990. Age 62.

JAMES J. ABEL

Executive Vice President, Secretary, Treasurer and Chief Financial Officer

Executive Vice President, Secretary, Treasurer and Chief Financial Officer
since September 1994. Previously was Executive Vice President, Treasurer and
Chief Financial Officer February 1993 
September 1994. Age 54.

CHARLES E. ALLEN

Senior Vice President

Senior Vice President since September 1989.
Age 59.

ALBERT J. CATANI, II

Vice President  Manufacturing

Vice President, Manufacturing since August 1995. Previously was Independent
Consultant, Environmental Growth Chambers, March 1995  August 1995. Previously
was Vice President, Operations, Universal Electronics, Inc., April 1993  March
1995. Age 52.

DONALD A. GUTIERREZ

Vice President  Carlon

Vice President, Carlon since March 1998. Previously was Vice President, Carlon
Electrical Products since July 1997. Previously was National Sales Manager
since January 1997. Previously was Manager, Distributor Sales August 1996 -
January 1997. Previously was in Marketing and Sales with General Electric 1979
- August 1996. Age 42.

CHARLES W. HENNON

Vice President and Chief Information Officer

Vice President and Chief Information Officer since April 1998. Previously was
Manager, Business Support Services with Ferro Corporation 1993  April 1998.
Age 54.

MELVIN W. JOHNSON

Vice President

Vice President since February 1991. Age 63.

ROBERT J. MOYER

Vice President  Supply Chain Management

Vice President, Supply Chain Management since July 1997. Previously was Vice
President, Distribution since April 1997. Previously was Vice President,
Supply Chain Management, Little Tikes Co., 1994  April 1997. Age 46.

LORI L. SPENCER

Vice President and Controller

Vice President and Controller since August 1997. Previously was Vice
President, Strategic Planning since February 1997. Previously was Director,
Financial Planning & Internal Audit, September 1994 
February 1997. Age 41.

NORMAN P. SUTTERER

Vice President  Lamson Home Products

Vice President  Lamson Home Products since March 1998. Previously was Vice
President, Carlon Telecom Systems since January 1994. Age 50.

5



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PART II

Item 5.  Market for the Registrants Common Stock and Related Security Holder Matters

The Companys Common Stock is traded on the New York Stock Exchange and the
Pacific Stock Exchange. High and low sales prices for the common stock are
included in Note L to the Consolidated Financial Statements. No dividends were
paid in 1999, 1998 or 1997. The approximate number of shareholders of record
of the Companys Common Stock at February 10, 2000 was 1,558.

6



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Item 6.  Selected Financial Data

FIVE-YEAR FINANCIAL SUMMARY

|                                             |                                                                              |      |  |      |                    |      |   |         |   |        |   |         |   |       |   |         |    |        |   |         |   |        |   |         |   |        | 
|-------------------------------------------- | ---------------------------------------------------------------------------- | ---- |  | ---- | ------------------ | ---- | - | ------- | - | ------ | - | ------- | - | ----- | - | ------- | -- | ------ | - | ------- | - | ------ | - | ------- | - | ------ | 
|                                             |                                                                              |      |  |      | Fiscal Years Ended
|                                             |                                                                              |      |  |      |                   
|(Dollars in thousands except per share data,
|shareholders, associates and percentages)    |                                                                              | 1999 |  | 1998 |                    | 1997 |   | 1996    |   | 1995  
|                                             |                                                                              |      |  |      |                    |      |   |         |   |       
|Operations:                                 
|                                            
|                                            
|                                            
|                                            
|                                             | Net sales                                                                    |      |  | $    |                    |      |   | 291,381 |   |        | $ | 270,914 |   |       | $ | 271,780 |    |        | $ | 289,052 |   |        | $ | 299,166 |  
|                                            
|                                            
|                                            
|                                            
|                                             | Cost of products sold                                                        |      |  |      |                    |      |   | 229,981 |   |        |   | 214,410 |   |       |   | 221,898 |    |        |   | 223,778 |   |        |   | 238,908 |  
|                                            
|                                            
|                                            
|                                            
|                                             | GROSS PROFIT                                                                 |      |  |      |                    |      |   | 61,400  |   |        |   | 56,504  |   |       |   | 49,882  |    |        |   | 65,274  |   |        |   | 60,258  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Operating expenses                                                           |      |  |      |                    |      |   | 48,054  |   |        |   | 47,584  |   |       |   | 52,377  |    |        |   | 53,135  |   |        |   | 46,220  |  
|                                            
|                                            
|                                            
|                                            
|                                             | OPERATING INCOME (LOSS)                                                      |      |  |      |                    |      |   | 13,346  |   |        |   | 8,920   |   |       |   | (2,495  | )  |        |   | 12,139  |   |        |   | 14,038  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Interest                                                                     |      |  |      |                    |      |   | 3,558   |   |        |   | 4,341   |   |       |   | 3,768   |    |        |   | 2,611   |   |        |   | 5,864   |  
|                                            
|                                            
|                                            
|                                            
|                                             | INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF
ACCOUNTING CHANGE |      |  |      |                    |      |   | 9,788   |   |        |   | 4,579   |   |       |   | (6,263  | )  |        |   | 9,528   |   |        |   | 8,174   |  
|                                            
|                                            
|                                            
|                                            
|                                             | Income tax (benefit)                                                         |      |  |      |                    |      |   | (9,000  | ) |        |   | (2,100  | ) |       |   | (1,550  | )  |        |   | (4,100  | ) |        |   | (3,900  | )
|                                            
|                                            
|                                            
|                                            
|                                             | INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE                  |      |  |      |                    |      |   |         |   | 18,788 |   |         |   | 6,679 |   |         |    | (4,713 | ) |         |   | 13,628 |   |         |   | 12,074 | 
|                                            
|                                            
|                                            
|                                            
|                                             | Cumulative effect of accounting change                                       |      |  |      |                    |      |   |         |   |        |   |         |   |       |   | (4,940  | ) 
|                                            
|                                            
|                                            
|                                            
|                                             | NET INCOME (LOSS)                                                            |      |  |      |                    |      |   | 18,788  |   |        |   | 6,679   |   |       |   | (9,653  | )  |        |   | 13,628  |   |        |   | 12,074  |  
|                                             |                                                                              |      |  |      |                    |      |   |         |   |       
|Year-End Financial Position:                
|                                            
|                                            
|                                            
|                                            
|                                             | Current Assets                                                               |      |  |      |                    |      | $ | 94,704  |   |        | $ | 83,975  |   |       | $ | 91,567  |    |        | $ | 90,945  |   |        | $ | 80,244  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Other Assets                                                                 |      |  |      |                    |      |   | 40,522  |   |        |   | 25,957  |   |       |   | 21,079  |    |        |   | 9,703   |   |        |   | 2,680   |  
|                                            
|                                            
|                                            
|                                            
|                                             | Property, Plant and Equipment                                                |      |  |      |                    |      |   | 48,093  |   |        |   | 50,735  |   |       |   | 56,329  |    |        |   | 60,473  |   |        |   | 51,747  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Total Assets                                                                 |      |  |      |                    |      |   | 183,319 |   |        |   | 160,667 |   |       |   | 168,975 |    |        |   | 161,121 |   |        |   | 134,671 |  
|                                            
|                                            
|                                            
|                                            
|                                             | Current Liabilities                                                          |      |  |      |                    |      |   | 56,223  |   |        |   | 47,278  |   |       |   | 57,580  |    |        |   | 51,906  |   |        |   | 49,584  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Long-Term Debt                                                               |      |  |      |                    |      |   | 36,919  |   |        |   | 40,807  |   |       |   | 44,712  |    |        |   | 36,911  |   |        |   | 24,842  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Other Long-Term Liabilities                                                  |      |  |      |                    |      |   | 26,808  |   |        |   | 28,451  |   |       |   | 29,702  |    |        |   | 27,517  |   |        |   | 29,326  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Shareholders Equity                                                         |      |  |      |                    |      |   | 63,369  |   |        |   | 44,131  |   |       |   | 36,981  |    |        |   | 44,787  |   |        |   | 30,919  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Working Capital                                                              |      |  |      |                    |      |   | 38,481  |   |        |   | 36,697  |   |       |   | 33,987  |    |        |   | 39,039  |   |        |   | 30,660  |  
|                                             |                                                                              |      |  |      |                    |      |   |         |   |       
|Statistical Information:                    
|                                            
|                                            
|                                            
|                                            
|                                             | Average number of dilutive common shares outstanding                         |      |  |      |                    |      |   | 13,482  |   |        |   | 13,488  |   |       |   | 13,349  |    |        |   | 13,641  |   |        |   | 13,404  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Number of shareholders of record                                             |      |  |      |                    |      |   | 1,558   |   |        |   | 1,687   |   |       |   | 1,832   |    |        |   | 1,987   |   |        |   | 2,162   |  
|                                            
|                                            
|                                            
|                                            
|                                             | Number of associates                                                         |      |  |      |                    |      |   | 963     |   |        |   | 983     |   |       |   | 1,044   |    |        |   | 1,164   |   |        |   | 1,048   |  
|                                            
|                                            
|                                            
|                                            
|                                             | Book value per share                                                         |      |  |      |                    |      | $ | 4.70    |   |        | $ | 3.27    |   |       | $ | 2.77    |    |        | $ | 3.28    |   |        | $ | 2.33    |  
|                                            
|                                            
|                                            
|                                            
|                                             | Market price per share                                                       |      |  |      |                    |      | $ | 4.88    |   |        | $ | 5.13    |   |       | $ | 5.81    |    |        | $ | 7.25    |   |        | $ | 7.75    |  
|                                            
|                                            
|                                            
|                                            
|                                             | Market capitalization                                                        |      |  |      |                    |      | $ | 65,584  |   |        | $ | 68,903  |   |       | $ | 77,970  |    |        | $ | 96,433  |   |        | $ | 103,011 |  
|                                            
|                                            
|                                            
|                                            
|                                             | Gross margin as a % of net sales                                             |      |  |      |                    |      |   | 21.1    | % |        |   | 20.9    | % |       |   | 18.4    | %  |        |   | 22.6    | % |        |   | 20.1    | %
|                                            
|                                            
|                                            
|                                            
|                                             | Operating expenses as a % of net sales                                       |      |  |      |                    |      |   | 16.5    | % |        |   | 17.6    | % |       |   | 19.3    | %  |        |   | 18.4    | % |        |   | 15.4    | %
|                                            
|                                            
|                                            
|                                            
|                                             | Operating margin as a % of net sales                                         |      |  |      |                    |      |   | 4.6     | % |        |   | 3.3     | % |       |   | (0.9    | %) |        |   | 4.2     | % |        |   | 4.7     | %
|                                            
|                                            
|                                            
|                                            
|                                             | Operating cash flow as a % of total debt                                     |      |  |      |                    |      |   | 29.9    | % |        |   | 19.5    | % |       |   | 6.2     | %  |        |   | 21.3    | % |        |   | 66.6    | %
|                                            
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|                                            
|                                            
|                                             | Long-term debt as a % of equity                                              |      |  |      |                    |      |   | 58.3    | % |        |   | 92.5    | % |       |   | 120.9   | %  |        |   | 82.4    | % |        |   | 80.3    | %
|                                            
|                                            
|                                            
|                                            
|                                             | Return on average equity from operations                                     |      |  |      |                    |      |   | 35.0    | % |        |   | 16.5    | % |       |   | (11.5   | %) |        |   | 36.0    | % |        |   | 55.1    | %
|                                             |                                                                              |      |  |      |                    |      |   |         |   |       
|Basic Earnings (Loss) Per Common Share:     
|                                            
|                                            
|                                            
|                                            
|                                             | Earnings (loss) before change in accounting principle                        |      |  |      |                    |      | $ | 1.40    |   |        | $ | 0.50    |   |       | $ | (0.35   | )  |        | $ | 1.02    |   |        | $ | 0.91    |  
|                                            
|                                            
|                                            
|                                            
|                                             | Cumulative effect of accounting change                                       |      |  |      |                    |      |   |         |   |        |   |         |   |       | $ | (0.37   | ) 
|                                            
|                                            
|                                            
|                                            
|                                             | Net earnings (loss)                                                          |      |  |      |                    |      | $ | 1.40    |   |        | $ | 0.50    |   |       | $ | (0.72   | )  |        | $ | 1.02    |   |        | $ | 0.91    |  
|                                            
|                                            
|                                            
|                                            
|Diluted Earnings (Loss) Per Common Share:   
|                                            
|                                            
|                                            
|                                            
|                                             | Earnings (loss) before change in accounting principle                        |      |  |      |                    |      | $ | 1.39    |   |        | $ | 0.50    |   |       | $ | (0.35   | )  |        | $ | 1.00    |   |        | $ | 0.90    |  
|                                            
|                                            
|                                            
|                                            
|                                             | Cumulative effect of accounting change                                       |      |  |      |                    |      |   |         |   |        |   |         |   |       | $ | (0.37   | ) 
|                                            
|                                            
|                                            
|                                            
|                                             | Net earnings (loss)                                                          |      |  |      |                    |      | $ | 1.39    |   |        | $ | 0.50    |   |       | $ | (0.72   | )  |        | $ | 1.00    |   |        | $ | 0.90    |  

7



---



Item 7.  Managements Discussion and Analysis of Financial Condition and
Results of Operations

Discussion of the Consolidated Statements of Operations

The Consolidated Statements of Operationspresent Lamson & Sessions operating
performance over the last three years.

Net Salesincreased in 1999 by 7.6% to $291 million. The largest increases
came in the Carlon business unit, which expanded sales by 10.5%, or $11.5
million. The segment has continued to gain market acceptance of its
engineered cable management products used in telecommunications network
construction both for inside premise and outside plant applications. Strong
construction markets and improved customer service led to solid growth across
the board in electrical products. Lamson Home Products grew net sales
by 6.1%,
or $3.1 million, in 1999 compared with 1998. Continued strong growth in the home
improvement market drove improved sales volume in electrical fittings, outlet
boxes and liquidtight tubing. This segment was negatively impacted by the
Hechingers bankruptcy as well as the elimination of unprofitable wiring device
products. Finally, the PVC Pipe business increased sales by 5.3% with the
electrical and telecommunication conduit growing by 8.1%, primarily from
increased resin costs which we were able to pass on to our
customers. This segment was negatively impacted by unexpected PVC resin
shortages during the third quarter, which limited its supply of conduit to the
electrical construction market. In addition, sales in large diameter sewer pipe
declined by 5.7% due to increased competition and a softening in demand for
rehabilitation pipe.

Net Sales of $271 million in 1998 were less than 1% lower than the $272
million reported in 1997. Overall volume in the commodity rigid pipe products
was up 2%, but average selling prices decreased by 6% due to lower raw
material costs that were passed on to customers. This sales decline was
partially offset by an 8% increase in sales of priority products, especially
large diameter sewer pipe, specialty extrusion, raceway systems and the
enclosure and electrical fitting products lines. During 1998, the Company
continued to eliminate many of its lower-margin products, primarily commodity
sewer pipe and wiring devices. These product line reductions lowered sales by
$4.8 million, or 1.8% compared with 1997.

Gross Marginswere 21.1% in 1999, a slight improvement from 20.9% in 1998.
The current years cost of products sold includes $2.1 million of costs for
the consolidation of distribution operations. They consist primarily of
associate relocation, training and start-up costs and asset dispositions.
Better product mix, distribution and freight cost savings were partially
offset by unfavorable volume variances caused by the raw material shortages
experienced during the peak construction season.

Gross Margin increased 13.6% to 20.9% of net sales in 1998
compared with 18.4%
in 1997. This improvement was a result of reduced raw material costs referred
to above, increased utilization of the Companys manufacturing plants, a shift
in sales mix to higher-margin products and improved manufacturing and
distribution cost controls. These improvements helped to offset $792,000 in a
restructuring charge consisting primarily of a write-down of certain inventory
to net realizable value. The charge, which is included in cost of products
sold, was incurred during the fourth quarter of 1998 and related to the
consolidation of the Companys distribution operations, which was completed
during the first half of 1999.

Operating Expensesin 1999 declined to 16.5% of net sales, 6.3% lower than the
17.6% in 1998. The Company continues to experience productivity improvements
from its infrastructure investments in management information systems and
associate training programs, which have resulted in lower staffing levels.
With the exception of higher commissions expense due to increased sales,
operating expenses actually declined by 1.3% from 1998.

Operating Expenses in 1998 decreased by 8.8% to 17.6% of net sales
compared with 19.3% in 1997. The decline is attributable to more efficient administrative
operations, elimination of excess costs from the Companys 1997 implementation
of new business processes and information technology and reduced pension
costs. This was partially offset by costs of $700,000 incurred in support of
the sale of the polyvinyl chloride (PVC) pipe business.

Interest Expense decreased 18% in 1999 to $3.6 million as a result
of lower average debt levels and improved operating results, from
$4.3 million in 1998.
Despite increasing market interest rates in the second half of the
year, the Company's average interest rate declined as its improved
operating performance provided for lower net rates under its
long-term secured credit agreement.

Interest Expense increased 15% to $4.3 million in 1998 from $3.8 million in
1997. This increase reflects the effect of operating losses incurred
in the second half of 1997
through the first quarter of 1998, which resulted in higher average debt
outstanding and borrowing rates in 1998.

Income Tax Benefit of $9 million was recognized by the
Company in 1999 (compared with
$2.1 million in 1998) from the reversal of a substantial portion of the
deferred tax valuation allowance, due to continued improvement in operating
performance and expectations about future years taxable income. Beginning in
2000, the Company expects to record a normalized tax provision.

An Income Tax Benefit of approximately $2.1 million in 1998 and $1.6 million in
1997 was generated from a reduction in the valuation allowance on the
Companys net deferred tax assets.

8



---



Discussion of the Consolidated Balance Sheets

The Consolidated Balance Sheetspresent the Companys financial position at
year-end, compared with the previous year-end. The statement provides
information to assist in assessing such factors as the Companys liquidity and
financial resources. The 1999 current ratio declined slightly to 1.7 versus
1.8 in 1998 mainly due to higher accounts payable balances reflecting the
higher raw material costs at the end of 1999. The total debt-to-equity ratio
declined $3.9 million, or 8.7%, in 1999 while equity increased 43.6% to $63.3
million, the highest level since 1991.

Accounts Receivableare primarily due from trade customers. Accounts
receivable increased approximately $5.6 million in 1999 from 1998, which is
the result of the 20% increase in sales during the fourth quarter of 1999 as
compared with the same period in 1998. Days sales outstanding are 47.5 for 1999
compared with 45.8 in 1998.

Inventoriesincreased 8.7%, or $3.4 million, in 1999 from 1998. This change
resulted primarily from increases in PVC resin costs during 1999 offset by
continued SKU reduction and improved inventory planning and control. Average
inventory turns increased to 4.7 times in 1999 compared with 4.4 times in 1998.

Pension Assetsincreased $3.7 million in 1999 from 1998. The Company
contributed $2 million to fully fund all qualified pension plans and continued
to experience favorable investment performance. It is expected in 2000 that
no contributions will be required for these plans.

Accounts Payableincreased by $8.2 million from 1998 which was caused by
higher PVC resin costs and operating levels in the
fourth quarter of 1999 compared with the same period in the prior year.

Long-Term Debtdecreased by $3.9 million during 1999. Strong operating cash
flow allowed the Company to pay down term and other debt without increases in
the revolver.

Post-Retirement Benefits and Other Long-Term Liabilitiesdeclined by $1.6
million which primarily was due to the payment on a settlement on litigation
involving environmental matters on a property previously sold by the Company
(see Note D).

Discussion of the Consolidated Statements of Cash Flows

The Consolidated Statements of Cash Flowspresent the cash inflows and
outflows from the Companys operating, investing and financing activities.
Cash and cash equivalents increased slightly at year-end 1999
compared with 1998.

Cash Flows From Operating Activities- The Company generated $13.9 million in
cash from continuing operations in 1999, an increase of 60% over the 1998 cash
flow from operations of $8.7 million. This increase in operating cash flow
reflects improved earnings which resulted in $23.5 million ($18.9 million in
1998) in earnings before interest, tax, depreciation and amortization
(EBITDA).

The Company generated $3 million in cash from operations in 1998, an increase
of 190% over the 1997 cash flow from operations of $3 million. The increase in
cash flow from operations in 1998 reflects an improved operating performance,
which resulted in $18.9 million in earnings before interest, tax, depreciation
and amortization (EBITDA).

Cash Flows From Investing Activities During 1999, the Company increased its
investments in property, plant and equipment to $7 million. The main areas of
expansion were the new distribution center in South Carolina, additions to
manufacturing capacity including machinery, molds and tooling, and continued
improvements to the Companys information systems infrastructure. The Company
expects to continue making manufacturing capacity additions and investments in
productivity improvements in order to be a more efficient producer and improve
customer service. Anticipated capital expenditures approximate $10 million
for 2000.

The Company reduced its purchases of
property, plant and equipment by $7 million to $4.5 million in 1998. These
additions were directed toward increased manufacturing capacity of priority
products and product line expansions.

9



---



Cash Flows From Financing Activities- The Company used $3.8 million of cash
in 1999 for financing activities. Due to improved operating cash flows, the
Company was able to pay down term debt and other obligations.

Based upon the Companys past performance and current expectations, management
believes that internally generated cash flows and existing capacity under the
secured credit agreement are adequate to fund the Companys 2000 cash needs
for capital expenditures and general operating requirements.

Impact of Year 2000

In prior years, the Company discussed the nature and progress of its plans to
become Year 2000 ready. In mid 1999, the Company completed its remediation and
testing of systems. As a result of these planning and implementation efforts,
the Company experienced no significant disruptions in mission critical
information technology and non-information technology systems and believes
those systems successfully responded to the Year 2000 date change. The Company
spent approximately $360,000 during 1999 in connection with remediating its
systems and equipment. The Company is not aware of any material problems
resulting from Year 2000 issues, either with its products, its internal
systems, or the products and services of third parties. The Company will
continue to monitor its mission critical computer applications, equipment,
suppliers and customers throughout the Year 2000 to ensure that any latent
Year 2000 matters that may arise are addressed promptly.

Outlook

The following paragraphs contain forward-looking comments. These comments are
subject to, and the actual future results may be impacted by, the cautionary
limitations and factors outlined in the following narrative comments.

In 1999, the Company experienced many challenges including the consolidation of
its distribution operations, significant increases in PVC resin costs and
unexpected resin shortages due to the Oklahoma City tornado, which created a
force majure condition at Lamsons primary resin supplier. Despite these
hurdles, the Company provided improved customer service, introduced several new
product lines and was able to maintain its margins despite significant raw
material cost increases arising from very tight market supply and demand
conditions. This resulted in an excess of 8% growth in sales and the Companys
best operating performance of the nineties.

The Company expects upward pressure on PVC resin prices throughout 2000 as no
increase in supply is anticipated until the end of 2001. The demand for the
Companys products follows new home sales and housing start
construction indexes, telecom
market construction, consumer confidence and consumer spending in
the DIY retail market, all of which should be fairly stable in 2000.

The Company intends to capitalize on favorable market conditions, improved
service levels, a stable economy and increased new product sales to achieve its
long-term growth goals of 10%-12% in sales.

The Company is well positioned in 2000 to take advantage of favorable market
conditions and operating efficiencies to meet its long-term goal of a
15%-20%
increase in net earnings.

The above statements contain expectations that are forward looking within the
meaning of the private Securities Litigation Reform Act of 1995. Actual
results may differ materially from those expected as a result of a variety of
factors such as (i) the volatility of polyvinyl chloride resin pricing, (ii)
changes in the pattern of construction spending in both the new construction
and repair and rehabilitation markets, (iii) changes in the number and
distribution of housing starts, (iv) fluctuations in the interest rate
affecting housing starts, (v) the ability of the Company to pass through raw
material cost increases to its customers and (vi) a reversal in the countrys
general pattern of economic stability affecting the markets for the Companys
products.

Item 7(a).  Not Applicable.

10



---



Item 8.  Financial Statements and Supplementary Data

CONSOLIDATED STATEMENTS OF OPERATIONS

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

(Dollars in thousands, except per share data)

|                                                                             |  |   |              |   |      |   |         |   |  |   |         |   | 
|---------------------------------------------------------------------------- |  | - | ------------ | - | ---- | - | ------- | - |  | - | ------- | - | 
|                                                                             |  |   | Fiscal Years
|                                                                             |  |   |             
|                                                                             |  |   | 1999         |   | 1998 |   | 1997   
|                                                                             |  |   |              |   |      |   |        
|NET SALES                                                                    |  | $ | 291,381      |   |      | $ | 270,914 |   |  | $ | 271,780 |  
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Cost of products sold                                                        |  |   | 229,981      |   |      |   | 214,410 |   |  |   | 221,898 |  
|                                                                             |  |   |              |   |      |   |         |   |  |   |         |  
|GROSS PROFIT                                                                 |  |   | 61,400       |   |      |   | 56,504  |   |  |   | 49,882  |  
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Operating expenses                                                           |  |   | 48,054       |   |      |   | 47,584  |   |  |   | 52,377  |  
|                                                                             |  |   |              |   |      |   |         |   |  |   |         |  
|OPERATING INCOME (LOSS)                                                      |  |   | 13,346       |   |      |   | 8,920   |   |  |   | (2,495  | )
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Interest                                                                     |  |   | 3,558        |   |      |   | 4,341   |   |  |   | 3,768   |  
|                                                                             |  |   |              |   |      |   |         |   |  |   |         |  
|INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE |  |   | 9,788        |   |      |   | 4,579   |   |  |   | (6,263  | )
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Income tax benefit                                                           |  |   | (9,000       | ) |      |   | (2,100  | ) |  |   | (1,550  | )
|                                                                             |  |   |              |   |      |   |         |   |  |   |         |  
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE                  |  |   | 18,788       |   |      |   | 6,679   |   |  |   | (4,713  | )
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Cumulative effect of accounting change                                       |  |   |              |   |      |   |         |   |  |   | (4,940  | )
|                                                                             |  |   |              |   |      |   |         |   |  |   |         |  
|NET INCOME (LOSS)                                                            |  | $ | 18,788       |   |      | $ | 6,679   |   |  | $ | (9,653  | )
|                                                                             |  |   |              |   |      |   |         |   |  |   |         |  
|BASIC EARNINGS (LOSS) PER COMMON SHARE:                                     
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Earnings (loss) before change in accounting principle                        |  | $ | 1.40         |   |      | $ | 0.50    |   |  | $ | (0.35   | )
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Cumulative effect of accounting change                                       |  |   |              |   |      |   |         |   |  |   | (0.37   | )
|                                                                             |  |   |              |   |      |   |         |   |  |   |         |  
|NET EARNINGS (LOSS)                                                          |  | $ | 1.40         |   |      | $ | 0.50    |   |  | $ | (0.72   | )
|                                                                             |  |   |              |   |      |   |         |   |  |   |         |  
|DILUTED EARNINGS (LOSS) PER COMMON SHARE:                                   
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Earnings (loss) before change in accounting principle                        |  | $ | 1.39         |   |      | $ | 0.50    |   |  | $ | (0.35   | )
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Cumulative effect of accounting change                                       |  |   |              |   |      |   |         |   |  |   | (0.37   | )
|                                                                             |  |   |              |   |      |   |         |   |  |   |         |  
|NET EARNINGS (LOSS)                                                          |  | $ | 1.39         |   |      | $ | 0.50    |   |  | $ | (0.72   | )
|                                                                             |  |   |              |   |      |   |         |   |  |   |         |  

See notes to consolidated financial statements.

11



---



CONSOLIDATED STATEMENTS OF CASH FLOWS

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

(Dollars in thousands)

|                                                                                     |                                                                  |                                                                  |        |              |        |      |        |        |         |   |         |         |        |  
|------------------------------------------------------------------------------------ | ---------------------------------------------------------------- | ---------------------------------------------------------------- | ------ | ------------ | ------ | ---- | ------ | ------ | ------- | - | ------- | ------- | ------ | -
|                                                                                     |                                                                  |                                                                  |        | Fiscal Years
|                                                                                     |                                                                  |                                                                  |        |             
|                                                                                     |                                                                  |                                                                  |        | 1999         |        | 1998 |        | 1997  
|                                                                                     |                                                                  |                                                                  |        |              |        |      |        |       
|OPERATING ACTIVITIES                                                                
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Net income (loss)                                                                    |                                                                  | $                                                                | 18,788 |              |        | $    | 6,679  |        |         | $ | (9,653  | )      
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Adjustments to reconcile net income (loss) to cash provided
by operating activities:
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Depreciation and amortization                                    |                                                                  |        | 10,136       |        |      |        | 9,957  |         |   |         | 8,719   |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Loss on disposal of assets                                       |                                                                  |        | 516          |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Deferred income taxes                                            |                                                                  |        | (9,000       | )      |      |        | (2,100 | )       |   |         | (1,450  | )     
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Cumulative effect of accounting change                           |                                                                  |        |              |        |      |        |        |         |   |         | 4,940   |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Net change in working capital accounts:                         
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     |                                                                  | Accounts receivable                                              |        |              | (5,596 | )    |        |        | (2,129  | ) |         |         | 3,675  |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     |                                                                  | Inventories                                                      |        |              | (3,399 | )    |        |        | 6,413   |   |         |         | (2,753 | )
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     |                                                                  | Prepaid expenses and other                                       |        |              | (2,041 | )    |        |        | 4,535   |   |         |         | (166   | )
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     |                                                                  | Accounts payable, accrued expenses and other current liabilities |        |              | 10,629 |      |        |        | (10,391 | ) |         |         | 6,012  |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Other long-term items                                            |                                                                  |        | (6,111       | )      |      |        | (4,243 | )       |   |         | (6,313  | )     
|                                                                                     |                                                                  |                                                                  |        |              |        |      |        |        |         |   |         |        
|Cash Provided by Continuing Operations                                               |                                                                  |                                                                  | 13,922 |              |        |      | 8,721  |        |         |   | 3,011   |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Cash Used for Previously-Owned Businesses                                            |                                                                  |                                                                  | (1,724 | )           
|                                                                                     |                                                                  |                                                                  |        |              |        |      |        |        |         |   |         |        
|CASH PROVIDED BY OPERATING ACTIVITIES                                                |                                                                  |                                                                  | 12,198 |              |        |      | 8,721  |        |         |   | 3,011   |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|INVESTING ACTIVITIES                                                                
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Net additions to property                                        |                                                                  |        | (7,563       | )      |      |        | (4,546 | )       |   |         | (11,584 | )     
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Net proceeds from sale of assets                                 |                                                                  |        |              |        |      |        |        |         |   |         | 1,413   |       
|                                                                                     |                                                                  |                                                                  |        |              |        |      |        |        |         |   |         |        
|CASH USED IN INVESTING ACTIVITIES                                                    |                                                                  |                                                                  | (7,563 | )            |        |      | (4,546 | )      |         |   | (10,171 | )      
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|FINANCING ACTIVITIES                                                                
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Net (payments) borrowings under secured credit agreement         |                                                                  |        | (3,000       | )      |      |        | (3,065 | )       |   |         | 7,817   |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Net change in long-term borrowings and capital lease obligations |                                                                  |        | (848         | )      |      |        | (751   | )       |   |         | (633    | )     
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Exercise of stock options                                        |                                                                  |        |              |        |      |        | 168    |         |   |         | 628     |       
|                                                                                     |                                                                  |                                                                  |        |              |        |      |        |        |         |   |         |        
|CASH (USED) PROVIDED BY FINANCING ACTIVITIES                                         |                                                                  |                                                                  | (3,848 | )            |        |      | (3,648 | )      |         |   | 7,812   |        
|                                                                                     |                                                                  |                                                                  |        |              |        |      |        |        |         |   |         |        
|INCREASE IN CASH                                                                     |                                                                  |                                                                  | 787    |              |        |      | 527    |        |         |   | 652     |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Cash at beginning of year                                                            |                                                                  |                                                                  | 1,937  |              |        |      | 1,410  |        |         |   | 758     |        
|                                                                                     |                                                                  |                                                                  |        |              |        |      |        |        |         |   |         |        
|CASH AT END OF YEAR                                                                  |                                                                  | $                                                                | 2,724  |              |        | $    | 1,937  |        |         | $ | 1,410   |        
|                                                                                     |                                                                  |                                                                  |        |              |        |      |        |        |         |   |         |        

See notes to consolidated financial statements.

12



---



CONSOLIDATED BALANCE SHEETS



THE LAMSON & SESSIONS CO. AND
SUBSIDIARIES


(Dollars in thousands)

|                                        |                                                                   |                                    |         |                      |        |      |         |        |        |   |         | 
|--------------------------------------- | ----------------------------------------------------------------- | ---------------------------------- | ------- | -------------------- | ------ | ---- | ------- | ------ | ------ | - | ------- | 
|                                        |                                                                   |                                    |         |                      |        | 1999 |         | 1998  
|                                        |                                                                   |                                    |         |                      |        |      |         |       
|ASSETS                                 
|                                       
|                                       
|                                       
|                                       
|CURRENT ASSETS                         
|                                       
|                                       
|                                       
|                                       
|                                        | Cash and cash equivalents                                         |                                    | $       | 2,724                |        |      | $       | 1,937  |       
|                                       
|                                       
|                                       
|                                       
|                                        | Accounts receivable, less allowances;
1999$2,078 and 1998$2,924 |                                    |         | 40,676               |        |      |         | 35,080 |       
|                                       
|                                       
|                                       
|                                       
|                                        | Inventories:                                                     
|                                       
|                                       
|                                       
|                                       
|                                        |                                                                   | Finished goods and work-in-process |         |                      | 36,778 |      |         |        | 33,873 |  
|                                       
|                                       
|                                       
|                                       
|                                        |                                                                   | Raw materials                      |         |                      | 5,783  |      |         |        | 5,289  |  
|                                        |                                                                   |                                    |         |                      |        |      |         |        |        |  
|                                        |                                                                   |                                    | 42,561  |                      |        |      | 39,162  |       
|                                       
|                                       
|                                       
|                                       
|                                        | Deferred tax assets                                               |                                    |         | 4,963                |        |      |         | 6,057  |       
|                                       
|                                       
|                                       
|                                       
|                                        | Prepaid expenses and other                                        |                                    |         | 3,780                |        |      |         | 1,739  |       
|                                        |                                                                   |                                    |         |                      |        |      |         |        |        |  
|                                        |                                                                   |                                    |         | TOTAL CURRENT ASSETS |        |      | 94,704  |        |        |   | 83,975  | 
|                                       
|                                       
|                                       
|                                       
|PENSION ASSETS                          |                                                                   |                                    | 19,046  |                      |        |      | 15,347  |       
|                                       
|                                       
|                                       
|                                       
|DEFERRED TAX ASSETS                     |                                                                   |                                    | 15,787  |                      |        |      | 5,693   |       
|                                       
|                                       
|                                       
|                                       
|OTHER ASSETS                            |                                                                   |                                    | 5,689   |                      |        |      | 4,917   |       
|                                       
|                                       
|                                       
|                                       
|PROPERTY, PLANT AND EQUIPMENT          
|                                       
|                                       
|                                       
|                                       
|                                        | Land                                                              |                                    |         | 3,588                |        |      |         | 3,588  |       
|                                       
|                                       
|                                       
|                                       
|                                        | Buildings                                                         |                                    |         | 22,251               |        |      |         | 21,592 |       
|                                       
|                                       
|                                       
|                                       
|                                        | Machinery and equipment                                           |                                    |         | 92,893               |        |      |         | 88,662 |       
|                                        |                                                                   |                                    |         |                      |        |      |         |        |        |  
|                                        |                                                                   |                                    | 118,732 |                      |        |      | 113,842 |       
|                                       
|                                       
|                                       
|                                       
|                                        | Less allowances for depreciation and amortization                 |                                    |         | 70,639               |        |      |         | 63,107 |       
|                                        |                                                                   |                                    |         |                      |        |      |         |        |        |  
|Total net property, plant and equipment |                                                                   |                                    | 48,093  |                      |        |      | 50,735  |       
|                                        |                                                                   |                                    |         |                      |        |      |         |        |        |  
|                                        |                                                                   |                                    |         | TOTAL ASSETS         |        | $    | 183,319 |        |        | $ | 160,667 | 
|                                        |                                                                   |                                    |         |                      |        |      |         |        |        |  

See notes to consolidated financial statements.

13



---



CONSOLIDATED BALANCE SHEETS

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

January 1, 2000 and January 2, 1999(Dollars in thousands, except per share data)

|                                                         |  |                                                                                                                                                                      |                                          |                           |         |         |        |      |         |         |        | 
|-------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------- | ------------------------- | ------- | ------- | ------ | ---- | ------- | ------- | ------ | 
|                                                         |  |                                                                                                                                                                      |                                          |                           |         | 1999    |        | 1998
|                                                         |  |                                                                                                                                                                      |                                          |                           |         |         |        |     
|LIABILITIES AND SHAREHOLDERS EQUITY                    
|                                                        
|                                                        
|                                                        
|                                                        
|CURRENT LIABILITIES                                     
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         |  | Accounts payable                                                                                                                                                     |                                          | $                         | 28,237  |         |        | $    | 20,077  |        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         |  | Accrued compensation and benefits                                                                                                                                    |                                          |                           | 9,184   |         |        |      | 8,459   |        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         |  | Other accrued expenses                                                                                                                                               |                                          |                           | 11,269  |         |        |      | 11,189  |        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         |  | Taxes                                                                                                                                                                |                                          |                           | 3,645   |         |        |      | 3,705   |        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         |  | Current maturities of long-term debt                                                                                                                                 |                                          |                           | 3,888   |         |        |      | 3,848   |        
|                                                         |  |                                                                                                                                                                      |                                          |                           |         |         |        |      |         |        
|                                                         |  |                                                                                                                                                                      |                                          | TOTAL CURRENT LIABILITIES |         |         | 56,223 |      |         |         | 47,278 | 
|                                                        
|LONG-TERM DEBT                                           |  |                                                                                                                                                                      | 36,919                                   |                           |         |         | 40,807 |     
|                                                        
|                                                        
|                                                        
|                                                        
|POST-RETIREMENT BENEFITS AND OTHER LONG-TERM LIABILITIES |  |                                                                                                                                                                      | 26,808                                   |                           |         |         | 28,451 |     
|                                                        
|                                                        
|                                                        
|                                                        
|SHAREHOLDERS EQUITY                                    
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         |  | Common shares, without par value, stated value of $0.10 per share, authorized 20,000,000
shares; outstanding13,453,251 shares in 1999
and 13,444,534 shares in 1998 |                                          |                           | 1,345   |         |        |      | 1,344   |        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         |  | Other capital                                                                                                                                                        |                                          |                           | 73,616  |         |        |      | 73,574  |        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         |  | Retained earnings (deficit)                                                                                                                                          |                                          |                           | (11,212 | )       |        |      | (30,000 | )      
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         |  | Accumulated other comprehensive income (loss)                                                                                                                        |                                          |                           | (380    | )       |        |      | (787    | )      
|                                                         |  |                                                                                                                                                                      |                                          |                           |         |         |        |      |         |        
|Total shareholders equity                               |  |                                                                                                                                                                      | 63,369                                   |                           |         |         | 44,131 |     
|                                                         |  |                                                                                                                                                                      |                                          |                           |         |         |        |      |         |        
|                                                         |  |                                                                                                                                                                      | TOTAL LIABILITIES & SHAREHOLDERS EQUITY |                           | $       | 183,319 |        |      | $       | 160,667 |       
|                                                         |  |                                                                                                                                                                      |                                          |                           |         |         |        |      |         |        

See notes to consolidated financial statements.

14



---



CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES(Dollars in thousands)

|                                                                  |                                                        |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |     |   |   |        |       |       |   |        |       |  
|----------------------------------------------------------------- | ------------------------------------------------------ | - | ------ |  | ------- | - | --------- |  | ---------------- | - | --------------- | - | ------------- | - | --------------------------- | --- | - | - | ------ | ----- | ----- | - | ------ | ----- | -
|                                                                  |                                                        |   |        |  |         |   |           |  |                  |   |                 |   |               |   | Accumulated Other          
|                                                                  |                                                        |   |        |  |         |   |           |  |                  |   |                 |   |               |   | Comprehensive Income (Loss)
|                                                                  |                                                        |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                            
|                                                                  |                                                        |   |        |  |         |   |           |  |                  |   | Retained        |   |               |   |                             |     |   |   |        |       | Total
|                                                                  |                                                        |   | Common |  | Other   |   | Earnings  |  | Foreign Currency |   | Minimum Pension |   | Shareholders'
|                                                                  |                                                        |   | Shares |  | Capital |   | (Deficit) |  | Translation      |   | Liability       |   | Equity       
|                                                                  |                                                        |   |        |  |         |   |           |  |                  |   |                 |   |              
|Balance at December 28, 1996                                      |                                                        | $ | 1,330  |  |         | $ | 72,792    |  |                  | $ | (27,026         | ) |               | $ | (279                        | )   |   | $ | (2,030 | )     |       | $ | 44,787 |      
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Net loss                                                          |                                                        |   |        |  |         |   |           |  |                  |   | (9,653          | ) |               |   |                             |     |   |   |        |       |       |   | (9,653 | )    
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Other comprehensive income (loss):                               
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Foreign currency translation
Minimum pension liability |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |     |   |   |        | 1,219 |       |   |        | 1,219 |  
|                                                                  |                                                        |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |     |   |   |        |       |       |   |        |      
|Total comprehensive income (loss)                                 |                                                        |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |     |   |   |        |       |       |   | (8,434 | )    
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Issuance of 113,100 common shares
under stock option plans        |                                                        |   | 11     |  |         |   | 617       |  |                  |   |                 |   |               |   |                             |     |   |   |        |       |       |   | 628    |      
|                                                                  |                                                        |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |     |   |   |        |       |       |   |        |      
|Balance at January 3, 1998                                        |                                                        | $ | 1,341  |  |         | $ | 73,409    |  |                  | $ | (36,679         | ) |               | $ | (279                        | )   |   | $ | (811   | )     |       | $ | 36,981 |      
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Net income                                                        |                                                        |   |        |  |         |   |           |  |                  |   | 6,679           |   |               |   |                             |     |   |   |        |       |       |   | 6,679  |      
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Other comprehensive income (loss):                               
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Foreign currency translation                           |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             | (72 | ) |   |        |       |       |   |        | (72   | )
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Minimum pension liability                              |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |     |   |   |        | 375   |       |   |        | 375   |  
|                                                                  |                                                        |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |     |   |   |        |       |       |   |        |      
|Total comprehensive income (loss)                                 |                                                        |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |     |   |   |        |       |       |   | 6,982  |      
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Issuance of 30,350 common shares
under stock option plans         |                                                        |   | 3      |  |         |   | 165       |  |                  |   |                 |   |               |   |                             |     |   |   |        |       |       |   | 168    |      
|                                                                  |                                                        |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |     |   |   |        |       |       |   |        |      
|Balance at January 2, 1999                                        |                                                        | $ | 1,344  |  |         | $ | 73,574    |  |                  | $ | (30,000         | ) |               | $ | (351                        | )   |   | $ | (436   | )     |       | $ | 44,131 |      
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Net income                                                        |                                                        |   |        |  |         |   |           |  |                  |   | 18,788          |   |               |   |                             |     |   |   |        |       |       |   | 18,788 |      
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Other comprehensive income:                                      
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Foreign currency translation                           |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             | 28  |   |   |        |       |       |   |        | 28    |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Minimum pension liability                              |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |     |   |   |        | 379   |       |   |        | 379   |  
|                                                                  |                                                        |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |     |   |   |        |       |       |   |        |      
|Total comprehensive income                                        |                                                        |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |     |   |   |        |       |       |   | 19,195 |      
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Issuance of 8,717 common shares
under deferred compensation plans |                                                        |   | 1      |  |         |   | 42        |  |                  |   |                 |   |               |   |                             |     |   |   |        |       |       |   | 43     |      
|                                                                  |                                                        |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |     |   |   |        |       |       |   |        |      
|Balance at January 1, 2000                                        |                                                        | $ | 1,345  |  |         | $ | 73,616    |  |                  | $ | (11,212         | ) |               | $ | (323                        | )   |   | $ | (57    | )     |       | $ | 63,369 |      
|                                                                  |                                                        |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |     |   |   |        |       |       |   |        |      

See notes to consolidated financial statements.

15



---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

Three fiscal years ended January 1, 2000

NOTE AACCOUNTING POLICIES

Fiscal Year: The Companys fiscal year end is the Saturday closest to December
31.

Principles of Consolidation and Presentation: The consolidated financial
statements include the accounts of the Company and all domestic and foreign
subsidiaries after elimination of intercompany items. Certain 1998 and 1997
items have been reclassified to conform with the 1999 financial statement
presentation.

Revenue Recognition: Revenues are derived from sales to unaffiliated customers
and are recognized when products are shipped and title has transferred.

Cash and Cash Equivalents: The Company considers all investments with an
original maturity of three months or less on their acquisition date to be cash
equivalents.

Inventories: Inventories are valued at the lower of first-in, first-out (FIFO)
cost or market.

Financial Instruments: The Companys carrying value of its financial
instruments approximates fair value.

Property and Depreciation: Property, plant and equipment are recorded at cost.
For financial reporting purposes, depreciation and amortization are computed
principally by the straight-line method over the estimated useful lives of the
assets. Buildings are depreciated over a period of up to 31.5 years.
Machinery and equipment is depreciated over periods ranging from 3 years to 15
years. Accelerated methods of depreciation are used for federal income tax
purposes.

Income Taxes: The Company accounts for income taxes using the provisions of
Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for
Income Taxes. Investment tax credits are recorded using the flow-through
method.

Research and Development Costs: Research and development (R&D) costs consist
of Company-sponsored activities to develop new value-added products. R&D
costs are expensed as incurred and expenditures were $3,800,000, $3,700,000 and
$4,600,000 in 1999, 1998 and 1997, respectively. R&D costs are included in
operating expenses in the Consolidated Statements of Operations.

Advertising Costs: Advertising costs are expensed as incurred and totaled
$2,300,000, $2,600,000 and $3,500,000 for 1999, 1998 and 1997, respectively.

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 amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.

16



---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE BLONG-TERM DEBT AND COMMITMENTS

Long-term debt consists of the following:

|                                   |          |      |              |        |  |   |        |        | 
|---------------------------------- | -------- | ---- | ------------ | ------ |  | - | ------ | ------ | 
|                                   |          |      | Fiscal Years
|                                   |          |      |             
|(Dollars in thousands)             |          | 1999 |              | 1998  
|                                   |          |      |              |       
|Secured Credit Agreement:         
|                                  
|                                  
|                                  
|                                  
|                                   | Term     |      | $            | 8,250  |  |   | $      | 11,250 | 
|                                  
|                                  
|                                  
|                                  
|                                   | Revolver |      |              | 23,000 |  |   |        | 23,000 | 
|                                   |          |      |              |        |  |   |        |       
|                                   |          |      | 31,250       |        |  |   | 34,250 |       
|                                  
|                                  
|                                  
|                                  
|Industrial Revenue Bonds           |          |      | 8,070        |        |  |   | 8,570  |       
|                                  
|                                  
|                                  
|                                  
|Building mortgage                  |          |      | 1,487        |        |  |   | 1,793  |       
|                                  
|                                  
|                                  
|                                  
|Other                              |          |      |              |        |  |   | 42     |       
|                                   |          |      |              |        |  |   |        |       
|                                   |          |      | 40,807       |        |  |   | 44,655 |       
|                                  
|                                  
|                                  
|                                  
|Less amounts classified as current |          |      | 3,888        |        |  |   | 3,848  |       
|                                   |          |      |              |        |  |   |        |       
|                                   |          | $    | 36,919       |        |  | $ | 40,807 |       
|                                   |          |      |              |        |  |   |        |       

The Company has a long-term $65,000,000 secured credit agreement. The agreement
was amended February 7, 2000 to extend the term to June 30, 2001. The
agreement is secured by the Companys accounts receivable, inventory and
property, plant and equipment. The agreement consists of both term and
revolving credit facilities with interest variable on both portions. The rate
paid varies based on the Companys financial performance and the pricing option
chosen. Borrowings under this agreement carry interest based on any of three
pricing options (prime rate, LIBOR or commercial paper), at the Companys
option, plus the applicable spread. Interest is paid in accordance with the
maturity of the pricing option selected. The term portion of this facility
carried interest at a weighted average rate of 9.1%, which is 3.0% over the
commercial paper rate at January 1, 2000, and requires principal payments of
$750,000 due the last day of each calendar quarter with a $4,500,000 balloon
payment due June 30, 2001. The revolving credit portion permits borrowings of
up to $50,000,000 at any time through June 30, 2001 and carries an average
variable rate of 8.79% at January 1, 2000. The agreement provides for the
payment of a commitment fee on the revolving line of credit of .375% per annum
on the average daily unused commitment. In addition to amounts borrowed,
letters of credit related to Industrial Revenue Bond financings and other
contractual obligations total approximately $13,500,000 under the agreement.

The Companys Industrial Revenue Bond financings include several issues due in
annual installments from 2000 through 2023 with interest at variable rates.
The weighted average rate for these bonds at January 1, 2000 was 4.28%. The
Company maintains letters of credit related to one of the Industrial Revenue
Bonds and other contractual obligations for approximately $3,900,000 with two
banks. The Companys headquarters is subject to a mortgage payable in equal
monthly installments through 2003 with interest at 8.625%.

The Companys credit agreements contain various restrictive covenants
pertaining to maintenance of debt service, tangible net worth, dividend
payments and certain other financial ratios.

The aggregate minimum combined maturities of long-term debt for the years 2001
through 2004 are approximately $29,219,000, $1,051,000, $1,054,000 and
$660,000, respectively, with $4,935,000 due thereafter.

Interest paid was $3,679,000, $4,253,000 and $3,895,000 in 1999, 1998 and 1997,
respectively.

Rental expense was $4,908,000, $4,092,000 and $4,656,000 in 1999, 1998 and
1997, respectively. Aggregate future minimum payments related to
non-cancelable operating leases with initial or remaining terms of one year or
more for the years 2000 through 2004 are approximately $4,060,000, $3,924,000,
$2,315,000, $1,897,000 and $1,467,000, respectively, with $7,105,000 due
thereafter.

17



---

\

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE CPENSION AND OTHER POST-RETIREMENT BENEFIT PLANS

The Company sponsors several qualified and nonqualified pension plans and other
post-retirement benefit plans for its current and former employees. The
following table provides a reconciliation of the changes in the benefit
obligations and fair value of plan assets over each of the two years in the
period ended January 1, 2000 and a statement of the funded status for both year
ends:

|                                |  |                  |        |                |  |      |        |      |  |   |        |   |  |   |        |  
|------------------------------- |  | ---------------- | ------ | -------------- |  | ---- | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                |  | Pension Benefits |        | Other Benefits
|                                |  |                  |        |               
|(Dollars in thousands)          |  | 1999             |        | 1998           |  | 1999 |        | 1998
|                                |  |                  |        |                |  |      |        |     
|Change in Benefit Obligation   
|                               
|                               
|                               
|                               
|Obligation at beginning of year |  | $                | 83,151 |                |  | $    | 78,821 |      |  | $ | 18,403 |   |  | $ | 18,287 |  
|                               
|                               
|                               
|                               
|Service cost                    |  |                  | 1,277  |                |  |      | 1,164  |      |  |   | 329    |   |  |   | 289    |  
|                               
|                               
|                               
|                               
|Interest cost                   |  |                  | 5,179  |                |  |      | 5,306  |      |  |   | 1,132  |   |  |   | 1,206  |  
|                               
|                               
|                               
|                               
|Plan participants contribution |  |                  |       |                |  |      |       |      |  |   | 100    |   |  |   | 93     |  
|                               
|                               
|                               
|                               
|Plan amendment                  |  |                  |       |                |  |      |       |      |  |   | (2,630 | ) |  |   |       |  
|                               
|                               
|                               
|                               
|Actuarial (gain) loss           |  |                  | (8,679 | )              |  |      | 4,788  |      |  |   | (1,304 | ) |  |   | 368    |  
|                               
|                               
|                               
|                               
|Benefits paid                   |  |                  | (6,849 | )              |  |      | (6,928 | )    |  |   | (1,990 | ) |  |   | (1,840 | )
|                                |  |                  |        |                |  |      |        |      |  |   |        |   |  |   |        |  
|Obligation at end of year       |  | $                | 74,079 |                |  | $    | 83,151 |      |  | $ | 14,040 |   |  | $ | 18,403 |  
|                                |  |                  |        |                |  |      |        |      |  |   |        |   |  |   |        |  

Effective January 1, 2000, the Company amended its salaried associates
retirement benefits program by phasing out certain medical benefits.

|                                               |  |                  |        |                |  |      |        |      |  |   |        |   |  |   |        |  
|---------------------------------------------- |  | ---------------- | ------ | -------------- |  | ---- | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                               |  | Pension Benefits |        | Other Benefits
|                                               |  |                  |        |               
|(Dollars in thousands)                         |  | 1999             |        | 1998           |  | 1999 |        | 1998
|                                               |  |                  |        |                |  |      |        |     
|Change in Plan Assets                         
|                                              
|                                              
|                                              
|                                              
|Fair value of plan assets at beginning of year |  | $                | 83,899 |                |  | $    | 76,747 |      |  |   |        |   |  |   |        |  
|                                              
|                                              
|                                              
|                                              
|Actual return on plan assets                   |  |                  | 9,210  |                |  |      | 9,257  |      |  |   |        |   |  |   |        |  
|                                              
|                                              
|                                              
|                                              
|Employer contributions                         |  |                  | 2,419  |                |  |      | 4,823  |      |  | $ | 1,890  |   |  | $ | 1,747  |  
|                                              
|                                              
|                                              
|                                              
|Plan participants contributions               |  |                  |        |                |  |      |        |      |  |   | 100    |   |  |   | 93     |  
|                                              
|                                              
|                                              
|                                              
|Benefits paid                                  |  |                  | (6,849 | )              |  |      | (6,928 | )    |  |   | (1,990 | ) |  |   | (1,840 | )
|                                               |  |                  |        |                |  |      |        |      |  |   |        |   |  |   |        |  
|Fair value of plan assets at end of year       |  | $                | 88,679 |                |  | $    | 83,899 |      |  | $ |       |   |  | $ |       |  
|                                               |  |                  |        |                |  |      |        |      |  |   |        |   |  |   |        |  

Plan assets include Company common shares with a fair market value at January
1, 2000 and January 2, 1999 of $3.3 million and $3.5 million, respectively.

|                                       |  |                  |        |                |  |      |        |      |  |   |         |   |  |   |         |  
|-------------------------------------- |  | ---------------- | ------ | -------------- |  | ---- | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                                       |  | Pension Benefits |        | Other Benefits
|                                       |  |                  |        |               
|(Dollars in thousands)                 |  | 1999             |        | 1998           |  | 1999 |        | 1998
|                                       |  |                  |        |                |  |      |        |     
|Funded Status                         
|                                      
|                                      
|                                      
|                                      
|Fund status at end of year             |  | $                | 14,600 |                |  | $    | 748    |      |  | $ | (14,040 | ) |  | $ | (18,403 | )
|                                      
|                                      
|                                      
|                                      
|Unrecognized actuarial loss (gain)     |  |                  | 1,565  |                |  |      | 12,007 |      |  |   | (2,517  | ) |  |   | (1,328  | )
|                                      
|                                      
|                                      
|                                      
|Unrecognized transition (asset)        |  |                  | (1,340 | )              |  |      | (1,429 | )    |  |   |         |   |  |   |         |  
|                                      
|                                      
|                                      
|                                      
|Unrecognized prior service cost (gain) |  |                  | 230    |                |  |      | 299    |      |  |   | (2,630  | ) |  |   |         |  
|                                       |  |                  |        |                |  |      |        |      |  |   |         |   |  |   |         |  
|Net amount recognized at end of year   |  | $                | 15,055 |                |  | $    | 11,625 |      |  | $ | (19,187 | ) |  | $ | (19,731 | )
|                                       |  |                  |        |                |  |      |        |      |  |   |         |   |  |   |         |  

18



---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE CPENSION AND OTHER POST-RETIREMENT BENEFIT PLANSContinued

The pension benefits table above provides information relating to the funded
status of all defined benefit pension plans on an aggregated basis. The
projected benefit obligation, accumulated benefit obligation, and fair value of
plan assets for the pension plans with accumulated benefit obligations in
excess of plan assets were $4.2 million, $3.9 million and $0 million,
respectively, as of January 1, 2000 and $4.5 million, $4.1 million and $0,
respectively, as of January 2, 1999.

The following table provides the amounts recognized in the consolidated balance
sheets for both years:

|                                       |  |                  |        |                |  |      |        |      |  |   |         |   |  |   |         |  
|-------------------------------------- |  | ---------------- | ------ | -------------- |  | ---- | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                                       |  | Pension Benefits |        | Other Benefits
|                                       |  |                  |        |               
|(Dollars in
thousands)                 |  | 1999             |        | 1998           |  | 1999 |        | 1998
|                                       |  |                  |        |                |  |      |        |     
|Prepaid benefit cost                   |  | $                | 19,046 |                |  | $    | 15,347 |      |  |   |         |   |  |   |         |  
|                                      
|                                      
|                                      
|                                      
|Accrued benefit liability              |  |                  | (4,085 | )              |  |      | (4,250 | )    |  | $ | (19,187 | ) |  | $ | (19,731 | )
|                                      
|                                      
|                                      
|                                      
|Intangible asset                       |  |                  | 37     |                |  |      | 92     |      |  |   |         |   |  |   |         |  
|                                      
|                                      
|                                      
|                                      
|Accumulated other comprehensive income |  |                  | 57     |                |  |      | 436    |      |  |   |         |   |  |   |         |  
|                                       |  |                  |        |                |  |      |        |      |  |   |         |   |  |   |         |  
|                                       |  | $                | 15,055 |                |  | $    | 11,625 |      |  | $ | (19,187 | ) |  | $ | (19,731 | )
|                                       |  |                  |        |                |  |      |        |      |  |   |         |   |  |   |         |  

The assumptions used in the measurement of the Companys benefit obligations at
January 1, 2000 and January 2, 1999 were:

|                               |  |                  |     |                |  |      |     |      |  |  |     |   |  |  |     |  
|------------------------------ |  | ---------------- | --- | -------------- |  | ---- | --- | ---- |  |  | --- | - |  |  | --- | -
|                               |  | Pension Benefits |     | Other Benefits
|                               |  |                  |     |               
|                               |  | 1999             |     | 1998           |  | 1999 |     | 1998
|                               |  |                  |     |                |  |      |     |     
|Discount rate                  |  |                  | 7.5 | %              |  |      | 6.5 | %    |  |  | 7.5 | % |  |  | 6.5 | %
|                              
|                              
|                              
|                              
|Expected return on plan assets |  |                  | 9.5 | %              |  |      | 9.5 | %    |  |  |     |   |  |  |     |  
|                              
|                              
|                              
|                              
|Rate of salary increase        |  |                  | 5.0 | %              |  |      | 5.0 | %    |  |  |     |   |  |  |     |  

For measurement purposes, a 9% average health care cost trend rate was used for
2000 (9.7% in 1999). The rate is assumed to decline gradually each year to an
ultimate rate of 5.5% in 2007 and thereafter. A 1% change in assumed health
care cost trend rates would have the following effects:

|                                               |  |             |     |             |  |   |      |  
|---------------------------------------------- |  | ----------- | --- | ----------- |  | - | ---- | -
|(Dollars in thousands)                         |  | 1% Increase |     | 1% Decrease
|                                               |  |             |     |            
|Net periodic benefit cost                      |  | $           | 159 |             |  | $ | (143 | )
|                                              
|                                              
|                                              
|                                              
|Accumulated post-retirement
benefit obligation |  | $           | 971 |             |  | $ | (874 | )



19



---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE CPENSION AND OTHER POST-RETIREMENT BENEFIT PLANSContinued

The components of net periodic benefit cost (income) are as follows:

|                              |  |      |                  |      |                |      |        |      |  |      |        |      |  |   |       |   |  |   |       |   |  |   |       |   | 
|----------------------------- |  | ---- | ---------------- | ---- | -------------- | ---- | ------ | ---- |  | ---- | ------ | ---- |  | - | ----- | - |  | - | ----- | - |  | - | ----- | - | 
|                              |  |      | Pension Benefits |      | Other Benefits
|                              |  |      |                  |      |               
|(Dollars in thousands)        |  | 1999 |                  | 1998 |                | 1997 |        | 1999 |  | 1998 |        | 1997
|                              |  |      |                  |      |                |      |        |      |  |      |        |     
|Service cost                  |  | $    | 1,277            |      |                | $    | 1,164  |      |  | $    | 922    |      |  | $ | 329   |   |  | $ | 289   |   |  | $ | 294   |  
|                             
|                             
|                             
|                             
|Interest cost                 |  |      | 5,179            |      |                |      | 5,306  |      |  |      | 5,483  |      |  |   | 1,132 |   |  |   | 1,206 |   |  |   | 1,027 |  
|                             
|                             
|                             
|                             
|Actual return on assets       |  |      | (9,210           | )    |                |      | (9,257 | )    |  |      | (9,552 | )    |  |   |       |   |  |   |       |   |  |   |       |  
|                             
|                             
|                             
|                             
|Net amortization and deferral |  |      | 1,743            |      |                |      | 2,339  |      |  |      | 3,356  |      |  |   | (115  | ) |  |   | (149  | ) |  |   | (278  | )
|                             
|                             
|                             
|                             
|Curtailment loss              |  |      |                  |      |                |      |        |      |  |      | 106    |      |  |   |       |   |  |   |       |   |  |   |       |  
|                             
|                             
|                             
|                             
|Defined contribution plans    |  |      | 709              |      |                |      | 853    |      |  |      | 771    |      |  |   |       |   |  |   |       |   |  |   |       |  
|                              |  |      |                  |      |                |      |        |      |  |      |        |      |  |   |       |   |  |   |       |   |  |   |       |   | 
|                              |  | $    | (302             | )    |                | $    | 405    |      |  | $    | 1,086  |      |  | $ | 1,346 |   |  | $ | 1,346 |   |  | $ | 1,043 |  
|                              |  |      |                  |      |                |      |        |      |  |      |        |      |  |   |       |   |  |   |       |   |  |   |       |   | 

In addition to the defined benefit plans described above, the Company also
sponsors defined contribution plans which cover substantially all full time
associates. Company contributions are based upon a fixed percentage of 50% of
voluntary employee contributions of up to 6% of wages.

The Company remains contingently liable for certain post-retirement benefits of
certain businesses previously sold.

NOTE DLITIGATION

On September 23, 1999, the Company announced that a United States District
Court jury in the Northern District of Illinois found that the Company
willfully infringed on a patent held by Intermatic Incorporated of Spring
Grove, Illinois, relating to the design of an in-use weatherproof electrical
outlet cover, and awarded Intermatic $12.5 million in damages plus pre-judgment
interest of approximately $1.5 million. The court declined to increase the
damages with respect to the willfulness finding. The Company is pursuing a
vigorous appeal and believes it has meritorious positions that will
substantially reduce or eliminate the jury award. If, however, the appeal
process is not successful, the final resolution of the matter could have a
material adverse affect on the Companys financial position, cash flows and
results of operations. It is the Companys understanding that the appeal
process may require a one-to-two year period.

In addition, during the second quarter of 1999, the Company reached a
settlement on litigation involving environmental matters at a property sold by
the Company in 1981 whereby the Company agreed to incur costs of certain
remediation activities. The settlement did not have a material impact on the
Companys financial position or results of operations.

The Company has filed a suit to recover damages related to the termination of
the agreement to sell its PVC Pipe business. It is premature to estimate the
timing for a resolution of this suit.

The Company is also a party to various other claims and matters of litigation
incidental to the normal course of its business. Management believes that the
final resolution of these matters will not have a material adverse affect on
the Companys financial position, cash flows and results of operations.

20



---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE EPREFERRED AND PREFERENCE STOCK

The Company has authorized 1,200,000 and 3,000,000 shares of Serial Preferred
and Preference Stock, respectively, none of which is issued or outstanding at
January 1, 2000. The Company has reserved for issuance 200,000 shares of
Cumulative Redeemable Serial Preference Stock, Series II, without par value
(Series II Preference Stock), which relates to the Rights Agreement, dated as
of September 8, 1998, between the Company and National City Bank (the Rights
Agreement).

Under the Companys Rights Agreement, each shareholder has the right to
purchase from the Company one one-hundredth of a share of the Series II
Preference Stock, subject to adjustment, upon payment of an exercise price of
$44.75. The Rights will become exercisable only after a person or group
acquires beneficial ownership of or commences a tender or exchange offer for
15% or more of the Companys Common Shares. Rights held by persons who exceed
that threshold will be void. In the event that a person or group acquires
beneficial ownership of 15% or more of the Companys Common Shares, or a 15%
shareholder merges into or with the Company or engages in one of a number of
self-dealing transactions, each Right would entitle its holder to purchase a
number of the Companys Common Shares (or, in certain cases, common stock of an
acquirer) having a market value of twice the Rights exercise price.

The Companys Board of Directors may, at its option, redeem all Rights for
$0.01 per Right, generally at any time prior to the Rights becoming
exercisable. The Rights will expire on September 20, 2008, unless earlier
redeemed, exchanged or amended by the Board of Directors.

NOTE FSTOCK COMPENSATION PLANS

On April 23, 1999, the Companys shareholders approved an additional 100,000
shares to be made available under the 1994 Nonemployee Directors Stock Option
Plan, bringing the total common shares authorized for issuance under this Plan
to 160,000. The stock options become exercisable one year after date of grant
and expire at the end of ten years. At January 1, 2000, a total of 99,000
shares were available for future grant of stock options under this Plan.

On May 5, 1998, the Companys 1988 Incentive Equity Performance Plan expired.
At January 1, 2000, there were options outstanding under the Plan representing
1,334,300 shares of the Companys common stock. The options outstanding under
the Plan may be exercised, pursuant to the terms of the stock option
agreements, through April 20, 2008.

On April 24, 1998, the 1998 Incentive Equity Plan, was approved by the
Companys shareholders for 650,000 shares of common stock. Under the 1998
Incentive Equity Plan, the Company is authorized to issue incentive stock
options (ISOs), non-qualified stock options, stock appreciation rights (SARs)
and restricted or deferred stock. Stock options generally become exercisable,
in part, one year after date of grant and expire at the end of ten years. At
January 1, 2000, under this Plan, a total of 326,783 shares were available for
future grant.

21



---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE FSTOCK COMPENSATION PLANS  Continued

A summary of the status of the Companys three stock compensation plans as of
January 1, 2000, January 2, 1999 and January 3, 1998, and changes during the
respective years then ended is presented below:

|                                                               |  |        |       |                |  |           |      |                |  |        |       |                |  |   |      |  |  |           |       |   |  |   |      | 
|-------------------------------------------------------------- |  | ------ | ----- | -------------- |  | --------- | ---- | -------------- |  | ------ | ----- | -------------- |  | - | ---- |  |  | --------- | ----- | - |  | - | ---- | 
|(Shares in thousands)                                          |  | 1999   |       | 1998           |  | 1997     
|                                                               |  |        |       |                |  |          
|                                                               |  |        |       |                |  | Weighted- |      |                |  |        |       | Weighted-      |  |   |      |  |  | Weighted-
|                                                               |  |        |       |                |  | Average   |      |                |  |        |       | Average        |  |   |      |  |  | Average  
|                                                               |  | Shares |       | Exercise Price |  | Shares    |      | Exercise Price |  | Shares |       | Exercise Price
|                                                               |  |        |       |                |  |           |      |                |  |        |       |               
|Outstanding at beginning of year                               |  |        | 1,473 |                |  | $         | 6.73 |                |  |        | 1,177 |                |  | $ | 6.83 |  |  |           | 1,138 |   |  | $ | 6.58 | 
|                                                              
|                                                              
|                                                              
|                                                              
|Granted                                                        |  |        | 341   |                |  |           | 5.00 |                |  |        | 461   |                |  |   | 6.91 |  |  |           | 251   |   |  |   | 7.91 | 
|                                                              
|                                                              
|                                                              
|                                                              
|Exercised                                                      |  |        |      |                |  |           |     |                |  |        | (30   | )              |  |   | 5.54 |  |  |           | (113  | ) |  |   | 5.55 | 
|                                                              
|                                                              
|                                                              
|                                                              
|Forfeited                                                      |  |        | (104  | )              |  |           | 7.66 |                |  |        | (135  | )              |  |   | 8.47 |  |  |           | (99   | ) |  |   | 8.16 | 
|                                                               |  |        |       |                |  |           |      |                |  |        |       |                |  |   |      |  |  |           |       |   |  |   |      | 
|Outstanding at end of year                                     |  |        | 1,710 |                |  | $         | 6.34 |                |  |        | 1,473 |                |  | $ | 6.73 |  |  |           | 1,177 |   |  | $ | 6.83 | 
|                                                               |  |        |       |                |  |           |      |                |  |        |       |                |  |   |      |  |  |           |       |   |  |   |      | 
|Options exercisable at year-end                                |  |        | 1,118 |                |  |           |      |                |  |        | 899   |                |  |   |      |  |  |           | 841   |   |  |   |      | 
|                                                              
|                                                              
|                                                              
|                                                              
|Weighted-average fair value of options
granted during the year |  |        |       |                |  | $         | 1.85 |                |  |        |       |                |  | $ | 2.55 |  |  |           |       |   |  | $ | 2.97 | 

The following table summarizes information about options outstanding at January
1, 2000:

|                |       |           |                     |                        |                     |                  |                  |           |  |                  |       |      |  |  |        |         |  |  |       |      | 
|--------------- | ----- | --------- | ------------------- | ---------------------- | ------------------- | ---------------- | ---------------- | --------- |  | ---------------- | ----- | ---- |  |  | ------ | ------- |  |  | ----- | ---- | 
|                |       |           | Options Outstanding |                        | Options Exercisable
|                |       |           |                     |                        |                    
|                |       |           |                     |                        |                     |                  | Weighted-Average
|Range of        |       | Shares    |                     | Remaining              |                     | Weighted-Average |                  | Shares    |  | Weighted-Average
|Exercise Prices |       | at 1/1/00 |                     | Contractual Life (Yrs) |                     | Exercise Price   |                  | at 1/1/00 |  | Exercise Price  
|                |       |           |                     |                        |                     |                  |                  |           |  |                 
|                | $0-5  |           |                     | 474,800                |                     |                  |                  | 6.40      |  |                  | $     | 4.78 |  |  |        | 162,800 |  |  | $     | 4.43 | 
|               
|               
|               
|               
|                | 5-10  |           |                     | 1,223,500              |                     |                  |                  | 5.97      |  |                  |       | 6.89 |  |  |        | 943,624 |  |  |       | 6.85 | 
|               
|               
|               
|               
|                | 10-15 |           | 11,500              |                        |                     |                  | 6.40             |           |  |                  | 10.24 |      |  |  | 11,500 |         |  |  | 10.24 |     

The Company applies Accounting Principles Board Opinion No. 25 Accounting for
Stock Issued to Employees and related interpretations in accounting for its
stock-based plans. Accordingly, compensation cost has not been recognized for
the fixed stock-based compensation plans. Had compensation expense been
recognized following SFAS No. 123, Accounting for Stock-Based Compensation,
the Companys proforma net income (loss) and earnings (loss) per share would
have been as follows:

|                                              |  |  |             |  |  |              |        |      |  |      |       |  |  |   |        |  
|--------------------------------------------- |  |  | ----------- |  |  | ------------ | ------ | ---- |  | ---- | ----- |  |  | - | ------ | -
|                                              |  |  |             |  |  | Fiscal Years
|                                              |  |  |             |  |  |             
|(Dollars in thousands, except per share data) |  |  |             |  |  | 1999         |        | 1998 |  | 1997
|                                              |  |  |             |  |  |              |        |      |  |     
|Net income (loss)                             |  |  | As reported |  |  | $            | 18,788 |      |  | $    | 6,679 |  |  | $ | (9,653 | )
|                                             
|                                             
|                                             
|                                             
|                                              |  |  | Pro forma   |  |  |              | 18,322 |      |  |      | 6,230 |  |  |   | (9,932 | )
|                                             
|                                             
|                                             
|                                             
|Basic earnings (loss) per share               |  |  | As reported |  |  | $            | 1.40   |      |  | $    | 0.50  |  |  | $ | (0.72  | )
|                                             
|                                             
|                                             
|                                             
|                                              |  |  | Pro forma   |  |  |              | 1.36   |      |  |      | 0.46  |  |  |   | (0.74  | )
|                                             
|                                             
|                                             
|                                             
|Diluted earnings (loss) per share             |  |  | As reported |  |  | $            | 1.39   |      |  | $    | 0.50  |  |  | $ | (0.72  | )
|                                             
|                                             
|                                             
|                                             
|                                              |  |  | Pro forma   |  |  |              | 1.36   |      |  |      | 0.46  |  |  |   | (0.74  | )

22



---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE FSTOCK COMPENSATION PLANS  Continued

For pro forma calculations, the fair value of each stock option grant is
estimated on the date of grant using the Black-Scholes option-pricing model
with the following weighted-average assumptions used for grants:

|                         |  |      |         |      |  |      |         |   |  |  |         |  
|------------------------ |  | ---- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | -
|                         |  | 1999 |         | 1998 |  | 1997
|                         |  |      |         |      |  |     
|Expected volatility      |  |      | 29.8    | %    |  |      | 30.0    | % |  |  | 28.9    | %
|                        
|                        
|                        
|                        
|Risk-free interest rates |  |      | 5.74    | %    |  |      | 5.62    | % |  |  | 6.34    | %
|                        
|                        
|                        
|                        
|Average expected life    |  |      | 5 years |      |  |      | 5 years |   |  |  | 5 years |  

NOTE GEARNINGS PER SHARE CALCULATION

The following table sets forth the computation of basic and diluted earnings
per share:

|                                                         |                                                          |      |              |        |  |      |   |        |  |  |   |        |  
|-------------------------------------------------------- | -------------------------------------------------------- | ---- | ------------ | ------ |  | ---- | - | ------ |  |  | - | ------ | -
|                                                         |                                                          |      | Fiscal Years
|                                                         |                                                          |      |             
|(Dollars and shares in thousands, except per share data) |                                                          | 1999 |              | 1998   |  | 1997
|                                                         |                                                          |      |              |        |  |     
|Basic Earnings (Loss) Per Share Computation             
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Net Income (Loss)                                        |      | $            | 18,788 |  |      | $ | 6,679  |  |  | $ | (9,653 | )
|                                                         |                                                          |      |              |        |  |      |   |        |  |  |   |       
|                                                         | Average Common Shares Outstanding                        |      |              | 13,448 |  |      |   | 13,433 |  |  |   | 13,349 |  
|                                                         |                                                          |      |              |        |  |      |   |        |  |  |   |       
|                                                         | Basic Earnings (Loss) Per Share                          |      | $            | 1.40   |  |      | $ | 0.50   |  |  | $ | (0.72  | )
|                                                         |                                                          |      |              |        |  |      |   |        |  |  |   |       
|Diluted Earnings (Loss) Per Share Computation           
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Net Income (Loss)                                        |      | $            | 18,788 |  |      | $ | 6,679  |  |  | $ | (9,653 | )
|                                                         |                                                          |      |              |        |  |      |   |        |  |  |   |       
|                                                         | Basic Shares Outstanding                                 |      |              | 13,448 |  |      |   | 13,433 |  |  |   | 13,349 |  
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Stock Options Calculated Under
the Treasury Stock Method |      |              | 34     |  |      |   | 55     | 
|                                                         |                                                          |      |              |        |  |      |   |        |  |  |   |       
|                                                         | Total Shares                                             |      |              | 13,482 |  |      |   | 13,488 |  |  |   | 13,349 |  
|                                                         |                                                          |      |              |        |  |      |   |        |  |  |   |       
|                                                         | Diluted Earnings (Loss) Per Share                        |      | $            | 1.39   |  |      | $ | 0.50   |  |  | $ | (0.72  | )
|                                                         |                                                          |      |              |        |  |      |   |        |  |  |   |       

NOTE HINCOME TAXES

The Company has recognized net federal income tax benefits as follows:

|                       |  |      |        |      |  |      |        |   |  |   |        |  
|---------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|(Dollars in
thousands) |  | 1999 |        | 1998 |  | 1997
|                       |  |      |        |      |  |     
|Current                |  | $    |       |      |  | $    |       |   |  | $ | (100   | )
|                       |  |      |        |      |  |      |        |   |  |   |        |  
|                       |  |      |        |      |  |      |        |   |  |   | (100   | )
|                      
|                      
|                      
|                      
|Deferred               |  |      | (9,000 | )    |  |      | (2,100 | ) |  |   | (1,450 | )
|                       |  |      |        |      |  |      |        |   |  |   |        |  
|                       |  | $    | (9,000 | )    |  | $    | (2,100 | ) |  | $ | (1,550 | )
|                       |  |      |        |      |  |      |        |   |  |   |        |  

23



---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE HINCOME TAXES  Continued

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and liabilities are presented below:

|                              |                                                      |      |              |        |   |   |        |         |  
|----------------------------- | ---------------------------------------------------- | ---- | ------------ | ------ | - | - | ------ | ------- | -
|                              |                                                      |      | Fiscal Years
|                              |                                                      |      |             
|(Dollars in thousands)        |                                                      | 1999 |              | 1998  
|                              |                                                      |      |              |       
|Deferred tax assets:         
|                             
|                             
|                             
|                             
|                              | Net operating loss carryforwards (Federal & State)   |      | $            | 18,700 |   |   | $      | 18,200  |  
|                             
|                             
|                             
|                             
|                              | Other accruals, credits and reserves                 |      |              | 6,300  |   |   |        | 8,100   |  
|                             
|                             
|                             
|                             
|                              | General business and alternative minimum tax credits |      |              | 2,600  |   |   |        | 2,700   |  
|                             
|                             
|                             
|                             
|                              | Post-retirement benefits other than pensions         |      |              | 7,000  |   |   |        | 7,000   |  
|                              |                                                      |      |              |        |   |   |        |        
|                              |                                                      |      | 34,600       |        |   |   | 36,000 |        
|                             
|                             
|                             
|                             
|                              | Less: valuation allowance                            |      |              | (2,600 | ) |   |        | (14,500 | )
|                              |                                                      |      |              |        |   |   |        |        
|                              | Total deferred tax assets                            |      |              | 32,000 |   |   |        | 21,500  |  
|                             
|                             
|                             
|                             
|Deferred tax liabilities:    
|                             
|                             
|                             
|                             
|                              | Tax in excess of book depreciation                   |      |              | 5,900  |   |   |        | 5,750   |  
|                             
|                             
|                             
|                             
|                              | Pensions                                             |      |              | 5,350  |   |   |        | 4,000   |  
|                              |                                                      |      |              |        |   |   |        |        
|                              | Total deferred tax liabilities                       |      |              | 11,250 |   |   |        | 9,750   |  
|                              |                                                      |      |              |        |   |   |        |        
|Total net deferred tax assets |                                                      | $    | 20,750       |        |   | $ | 11,750 |        
|                              |                                                      |      |              |        |   |   |        |        

The valuation allowance for net deferred tax assets decreased by $11,900,000 in
1999. The reduction was the result of net changes in temporary differences and
the reversal of $9,000,000 of the valuation allowance, based on
(i) improved operating results in 1999, (ii) projected operating results for
2000 and thereafter, and (iii) tax planning strategies available to the
Company. At January 1, 2000, the deferred tax asset valuation allowance is
primarily related to general business tax credit carryforwards and state net
operating loss carryforwards. The Company has available federal net operating
loss carryforwards totaling approximately $51 million, which expire in the
years 2004 to 2012. The Company also has available general business tax credit
carryforwards of $1.6 million which expire through 2011 and alternative
minimum tax credit carryforwards of approximately $1 million which may be
carried forward indefinitely.

The provision for income taxes is different than the amount computed using the
applicable statutory federal income tax rate with the differences summarized
below:

|                                         |                               |      |              |         |   |      |        |        |   |   |        |       | 
|---------------------------------------- | ----------------------------- | ---- | ------------ | ------- | - | ---- | ------ | ------ | - | - | ------ | ----- | 
|                                         |                               |      | Fiscal Years
|                                         |                               |      |             
|(Dollars in thousands)                   |                               | 1999 |              | 1998    |   | 1997
|                                         |                               |      |              |         |   |     
|Tax expense (benefit) at statutory rates |                               | $    | 3,426        |         |   | $    | 1,603  |        |   | $ | (3,921 | )    
|                                        
|                                        
|                                        
|                                        
|Adjustment due to:                      
|                                        
|                                        
|                                        
|                                        
|                                         | Change in valuation allowance |      |              | (11,900 | ) |      |        | (4,300 | ) |   |        | 1,900 | 
|                                        
|                                        
|                                        
|                                        
|                                         | Other                         |      |              | (526    | ) |      |        | 597    |   |   |        | 471   | 
|                                         |                               |      |              |         |   |      |        |        |   |   |        |      
|                                         |                               | $    | (9,000       | )       |   | $    | (2,100 | )      |   | $ | (1,550 | )    
|                                         |                               |      |              |         |   |      |        |        |   |   |        |      

In 1999 and 1997 the Company received income tax refunds of $78,000 and
$175,000, respectively, ($0 in 1998). Income taxes paid in 1998 were $11,000
($0 in 1999 and 1997).

24



---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE ICHANGE IN ACCOUNTING PRINCIPLE

As required by Emerging Issues Task Force (EITF) Issue No. 97-13, Business
Process Re-engineering Costs, the Company changed its accounting policy in the
fourth quarter of 1997, regarding its business and information technology
project. Prior to the issuance of the consensus opinion, substantially all
direct costs relating to the project were capitalized, including the portion
related to business process re-engineering. Under the EITF consensus, all costs
for business process re-engineering must be expensed as incurred and the
unamortized balance of these costs of $4.9 million were written off as a
cumulative effect adjustment in the fourth quarter of 1997.

NOTE JBUSINESS SEGMENTS

During 1999, the Company changed its segment reporting structure to match
managements internal reporting of business operations. Significant changes
include the segregating of the PVC Pipe business. All segment data has been
restated to conform with this revised presentation.

The Companys reportable segments are as follows:

Carlon  Industrial, Residential, Commercial, Telecommunications and Utility
Construction: The major customers served are electrical contractors and
distributors, original equipment manufacturers, electric power utilities,
cable television (CATV), telephone and telecommunications companies. The
principal products sold by this segment include electrical and wire raceway
systems and a broad line of nonmetallic enclosures, outlet boxes and
electrical fittings. Examples of the applications for the products included
in this segment are multi-cell duct systems designed to protect underground
fiber optic cables allowing future cabling expansion and flexible conduit used
inside buildings to protect communications cable.

Lamson Home Products  Consumer: The major customers served are home centers
and mass merchandisers for the DIY home repair market. The
products included in this segment are light dimmers, fan speed controls, touch
controls, wireless door chimes, motion sensors and home security systems. In
addition, this segment supplies its market with products such as outlet boxes,
liquidtight conduit and electrical fittings.

PVC Pipe: This business segment supplies electrical, power and communications
conduit to the electrical distribution, retail, power utility and
telecommunications markets. In addition, it provides engineered sewer
products to various municipalities and private contractors for drainage
systems and sewer construction and rehabilitation. Principal products utilized
by the waste water market include closed profile engineered sewer pipe for new
sewer construction and existing sewer line rehabilitation. The products range
in diameter from 4 inches to 54 inches for sewer products and 1/2 inch to 6
inches for electrical conduit.

25



---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE J  BUSINESS SEGMENTS  Continued

|                                                                                                                |  |      |         |      |  |      |         |   |  |   |         |  
|--------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- | - |  | - | ------- | -
|(Dollars in
thousands)                                                                                          |  | 1999 |         | 1998 |  | 1997
|                                                                                                                |  |      |         |      |  |     
|Net Sales                                                                                                      
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Carlon                                                                                                          |  | $    | 120,975 |      |  | $    | 109,458 |   |  | $ | 104,867 |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Lamson Home Products                                                                                            |  |      | 53,401  |      |  |      | 50,348  |   |  |   | 50,819  |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|PVC Pipe                                                                                                        |  |      | 117,005 |      |  |      | 111,108 |   |  |   | 116,094 |  
|                                                                                                                |  |      |         |      |  |      |         |   |  |   |         |  
|                                                                                                                |  | $    | 291,381 |      |  | $    | 270,914 |   |  | $ | 271,780 |  
|                                                                                                                |  |      |         |      |  |      |         |   |  |   |         |  
|Operating Income (loss)                                                                                        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Carlon                                                                                                          |  | $    | 15,065  |      |  | $    | 14,660  |   |  | $ | 9,251   |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Lamson Home Products                                                                                            |  |      | 1,135   |      |  |      | (1,783  | ) |  |   | (3,047  | )
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|PVC Pipe                                                                                                        |  |      | 5,814   |      |  |      | 4,113   |   |  |   | (918    | )
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Corporate Office (includes costs
associated with the
consolidation of distribution operations in 1999 and 1998) |  |      | (8,668  | )    |  |      | (8,070  | ) |  |   | (7,781  | )
|                                                                                                                |  |      |         |      |  |      |         |   |  |   |         |  
|                                                                                                                |  | $    | 13,346  |      |  | $    | 8,920   |   |  | $ | (2,495  | )
|                                                                                                                |  |      |         |      |  |      |         |   |  |   |         |  
|Depreciation and Amortization                                                                                  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Carlon                                                                                                          |  | $    | 3,737   |      |  | $    | 3,482   |   |  | $ | 3,068   |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Lamson Home Products                                                                                            |  |      | 2,792   |      |  |      | 2,618   |   |  |   | 2,465   |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|PVC Pipe                                                                                                        |  |      | 3,607   |      |  |      | 3,857   |   |  |   | 3,155   |  
|                                                                                                                |  |      |         |      |  |      |         |   |  |   |         |  
|                                                                                                                |  | $    | 10,136  |      |  | $    | 9,957   |   |  | $ | 8,688   |  
|                                                                                                                |  |      |         |      |  |      |         |   |  |   |         |  
|Total assets by business segment at January 1, 2000,
January 2, 1999 and December 31, 1998.                    
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Identifiable Assets                                                                                            
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Carlon                                                                                                          |  | $    | 52,326  |      |  | $    | 50,704  |   |  | $ | 51,528  |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Lamson Home Products                                                                                            |  |      | 30,658  |      |  |      | 31,542  |   |  |   | 37,707  |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|PVC Pipe                                                                                                        |  |      | 51,393  |      |  |      | 48,843  |   |  |   | 49,143  |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Corporate Office (includes deferred tax and pension assets)                                                     |  |      | 48,942  |      |  |      | 29,578  |   |  |   | 30,597  |  
|                                                                                                                |  |      |         |      |  |      |         |   |  |   |         |  
|                                                                                                                |  | $    | 183,319 |      |  | $    | 160,667 |   |  | $ | 168,975 |  
|                                                                                                                |  |      |         |      |  |      |         |   |  |   |         |  

Substantially all sales are made within North America. Net sales to a single
customer within the Carlon and PVC Pipe segments totaled approximately 17% in
1999, 15% in 1998 and 13% in 1997 of consolidated net sales.

NOTE KRESTRUCTURING CHARGE

During the fourth quarter of 1998 the Company recorded a restructuring charge
of $792,000 when it entered into a commitment to have a new distribution center
constructed in South Carolina in order to consolidate distribution activities.
The charge, which is included in cost of products sold, consisted primarily of
a write-down of certain inventory to net realizable value.

26



---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE LSUMMARY OF QUARTERLY RESULTS OF OPERATIONS(UNAUDITED)

(Dollars in thousands, except per share data)

|             |                |   |         |        |        |   |        |        |              |   |              |        |                |   |                  |       |                       |   |      |       |   |  |   |      |  |  |   |      | 
|------------ | -------------- | - | ------- | ------ | ------ | - | ------ | ------ | ------------ | - | ------------ | ------ | -------------- | - | ---------------- | ----- | --------------------- | - | ---- | ----- | - |  | - | ---- |  |  | - | ---- | 
|             |                |   |         |        |        |   |        |        |              |   | Net          |        | Basic Earnings |   | Diluted Earnings |       | Market
PricePer
Share
|             |                |   | Net     |        | Gross  |   | Income |        | (Loss) Per   |   | (Loss) Per   |        |               
|             |                |   | Sales   |        | Profit |   | (Loss) |        | Common Share |   | Common Share |        | High           |   | Low             
|             |                |   |         |        |        |   |        |        |              |   |              |        |                |   |                 
|Fiscal 1999:
|            
|            
|            
|            
|             | First quarter  |   | $       | 67,198 |        |   | $      | 15,452 |              |   | $            | 2,724  |                |   | $                | 0.20  |                       |   | $    | 0.20  |   |  | $ | 5.63 |  |  | $ | 4.75 | 
|            
|            
|            
|            
|             | Second quarter |   |         | 74,482 |        |   |        | 14,130 |              |   |              | 1,787  |                |   |                  | 0.13  |                       |   |      | 0.13  |   |  |   | 6.44 |  |  |   | 4.94 | 
|            
|            
|            
|            
|             | Third quarter  |   |         | 75,436 |        |   |        | 16,127 |              |   |              | 3,767  |                |   |                  | 0.28  |                       |   |      | 0.28  |   |  |   | 6.94 |  |  |   | 4.56 | 
|            
|            
|            
|            
|             | Fourth quarter |   |         | 74,265 |        |   |        | 15,691 |              |   |              | 10,510 | (1)            |   |                  | 0.78  |                       |   |      | 0.78  |   |  |   | 5.25 |  |  |   | 4.44 | 
|             |                |   |         |        |        |   |        |        |              |   |              |        |                |   |                  |       |                       |   |      |      
|Total        |                | $ | 291,381 |        |        | $ | 61,400 |        |              | $ | 18,788       |        |                | $ | 1.40*            |       |                       | $ | 1.39 |      
|            
|            
|            
|            
|Fiscal 1998:
|            
|            
|            
|            
|             | First quarter  |   | $       | 64,794 |        |   | $      | 13,373 |              |   | $            | (326   | )              |   | $                | (0.02 | )                     |   | $    | (0.02 | ) |  | $ | 7.44 |  |  | $ | 5.63 | 
|            
|            
|            
|            
|             | Second quarter |   |         | 71,168 |        |   |        | 15,240 |              |   |              | 2,351  |                |   |                  | 0.18  |                       |   |      | 0.17  |   |  |   | 7.63 |  |  |   | 5.63 | 
|            
|            
|            
|            
|             | Third quarter  |   |         | 73,160 |        |   |        | 16,195 |              |   |              | 3,611  |                |   |                  | 0.27  |                       |   |      | 0.27  |   |  |   | 6.56 |  |  |   | 3.88 | 
|            
|            
|            
|            
|             | Fourth quarter |   |         | 61,792 |        |   |        | 11,696 |              |   |              | 1,043  |                |   |                  | 0.08  |                       |   |      | 0.08  |   |  |   | 6.13 |  |  |   | 4.25 | 
|             |                |   |         |        |        |   |        |        |              |   |              |        |                |   |                  |       |                       |   |      |      
|Total        |                | $ | 270,914 |        |        | $ | 56,504 |        |              | $ | 6,679        |        |                | $ | 0.50*            |       |                       | $ | 0.50 |      



---

|*   |  | Earnings per share were computed on a stand-alone quarterly basis for
each respective quarter. Therefore, the sum of the quarters in 1999 and
1998 for Basic Earnings Per Common Share does not equal the years total
due to rounding.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) |  | Includes an income tax benefit of $6,900 in fourth quarter
compared to $700 in the previous six quarters.See Note H.                                                                                                                   

27



---



REPORT OF INDEPENDENT AUDITORS

Board of Directors and Shareholders
The Lamson & Sessions Co.

We have audited the accompanying consolidated balance sheets of The
Lamson & Sessions Co. and Subsidiaries as of January 1, 2000 and
January 2, 1999, and the related consolidated statements of
operations, shareholders equity and cash flows for each of the
three fiscal years in the period ended January 1, 2000. Our audits
also included the financial statement schedule listed in the Index
at Item 14 (a). These financial statements and schedule are the
responsibility of the Companys management. Our responsibility is
to express an opinion on these financial statements and schedule
based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of The Lamson & Sessions Co. and Subsidiaries at January 1,
2000 and January 2, 1999, and the consolidated results of their
operations and their cash flows for each of the three fiscal years in
the period ended January 1, 2000, in conformity with accounting
principles generally accepted in the United States. Also, in our
opinion, the related financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents
fairly in all material respects the information set forth therein.

As discussed in Note I to the financial statements, in 1997, the
Company changed its method of accounting for business process
re-engineering costs.



| | Ernst & Young LLP
| | -----------------

Cleveland, Ohio
February 7, 2000

28



---



STATEMENT OF MANAGEMENTS RESPONSIBILITY

We have prepared the financial statements and other financial information
contained in this Annual Report.

The management of Lamson & Sessions is primarily responsible for the
integrity of this financial information. The financial statements were
prepared in accordance with accounting principles generally accepted in
the United States and necessarily include certain amounts based on
managements reasonable best estimates and judgments, giving due
consideration to materiality. Financial information contained elsewhere
in this Annual Report is consistent with that contained in the financial
statements.

Management is responsible for establishing and maintaining a system of
internal control designed to provide reasonable assurance as to the
integrity and reliability of financial reporting. The concept of
reasonable assurance is based on the recognition that there are inherent
limitations in all systems of internal control, and that the cost of such
systems should not exceed the benefits to be derived therefrom.

To meet managements responsibility for financial reporting, we have
established internal control systems that we believe are adequate to
provide reasonable assurance that our assets are protected from loss.
These systems produce data used for the preparation of published financial
information and provide for appropriate reporting relationships and
division of responsibility. All significant systems and controls are
reviewed periodically by the internal audit group in order to ensure
compliance, and by our independent auditors to support their audit work.
It is managements policy to implement a high proportion of
recommendations resulting from these reviews.

The Audit Committee of the Board of Directors, composed solely of outside
directors, meets regularly with management, the internal auditor group and
our independent auditors to review accounting, auditing and financial
matters. Both the independent auditors and the internal auditor group
have free access to the Audit Committee, with or without management, to
discuss the scope and results of their audits and the adequacy of the
system of internal controls.

|                                                                                                                                                  |  | 
|------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|/s/  John B. Schulze
_____________________________________
John B. Schulze
Chairman of the Board, President and
Chief Executive Officer           | 
|                                                                                                                                                  | 
|/s/  James J. Abel
_____________________________________
James J. Abel
Executive Vice President, Secretary,
Treasurer and Chief Financial Officer | 
|                                                                                                                                                  | 
|/s/  Lori L. Spencer
_____________________________________
Lori L. Spencer
Vice President and Controller
Principal Accounting Officer             | 

29



---



PART II

Item 9.  Disagreements on Accounting and Financial Disclosure

None

PART III

Item 10.  Directors and Executive Officers of the Registrant

|    |  |                                                                                                                                                                                                                                                        
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Directors                                                                                                                                                                                                                                              
|   
|   
|   
|   
|    |  | The information set forth under the caption Election of Directors in
the Companys definitive proxy statement for its Annual Meeting of
Shareholders to be held April 28, 2000 is hereby incorporated by
reference.                                  
|   
|   
|   
|   
|(b) |  | Executive Officers  See Part I                                                                                                                                                                                                                        
|   
|   
|   
|   
|(c) |  | Compliance with Section 16 (a) of the Exchange Act.                                                                                                                                                                                                    
|   
|   
|   
|   
|    |  | The information set forth under the caption Section 16(a) Beneficial
Ownership Reporting Compliance in the Companys definitive proxy
statement for its Annual Meeting of Shareholders to be held April 28,
2000 is hereby incorporated by reference.

Item 11.  Executive Compensation

The information set forth under the caption Executive Compensation in the
Companys definitive proxy statement for its Annual Meeting of Shareholders to
be held April 28, 2000 is hereby incorporated by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

The information set forth under the captions Ownership of the Companys
Common Shares, Election of Directors and Security Ownership of Management
in the Companys definitive Proxy Statement for its Annual Meeting of
Shareholders to be held April 28, 2000 is hereby incorporated by reference.

Item 13.  Certain Relationships and Related Transaction

During the past fiscal year, the Company, in the normal course of business,
utilized the services of the law firm of Jones, Day, Reavis & Pogue, in which
Mr. Coquillette, a director of the Company, is a partner. The Company plans
to continue using the services of the firm in 2000.

30



---



PART IV

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



| |                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------
| | (a) The following documents are filed as part of this report:                                                         
|
| | Consolidated financial statements of The Lamson & Sessions Co. and
Subsidiaries are included in Item 8 of this report:

|   |  |                                                                                                                                                                                                                                          
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|1. |  | Financial Statements
Consolidated Statements of Operations for Fiscal Years Ended 1999,
1998 and 1997.                                                                                                                                   
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|   |  | Consolidated Statements of Cash Flows for Fiscal Years Ended 1999,
1998 and 1997.                                                                                                                                                        
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|   |  | Consolidated Balance Sheets at January 1, 2000 and January 2, 1999.                                                                                                                                                                      
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|   |  | Consolidated Statements of Shareholders Equity for Fiscal Years
Ended 1999, 1998 and 1997.                                                                                                                                              
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|   |  | Notes to Consolidated Financial Statements.                                                                                                                                                                                              
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|2. |  | Financial Statement Schedule                                                                                                                                                                                                             
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|   |  | Schedule II  Valuation and Qualifying Accounts and Reserves.                                                                                                                                                                            
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|   |  | All other schedules for which provision is made in the applicable
accounting regulations of the
Securities and Exchange Commission are not required under the
related instructions or are inapplicable and, therefore, have been
omitted.
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|3. |  | The exhibits listed in the accompanying Exhibit Index
and required by Item 601 of Regulation S-K (numbered in
accordance with Item 601 of Regulation S-K) are filed or
incorporated by reference as part of this Report.                 



| |                                                                                    
| | -----------------------------------------------------------------------------------
| | (b) Reports on Form 8-K                                                            
|
| | There were no reports on Form 8-K filed for the three months ended
January 1, 2000.
|
| | (c) Exhibits  See 14(a) 3.                                                        
|
| | (d) Financial Statement Schedule                                                   

31



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SCHEDULE II  Valuation and Qualifying Accounts and Reserves

(Dollars in thousands)

|                                                                           |  |        |              |          |            |            |       |  |  |   |       |        |  |  |            |   |  |   |       |  | 
|-------------------------------------------------------------------------- |  | ------ | ------------ | -------- | ---------- | ---------- | ----- |  |  | - | ----- | ------ |  |  | ---------- | - |  | - | ----- |  | 
|                                                                           |  |        | Balance at   |          | Charged to |            |       |  |  |   |       |        |  |  | Balance at
|                                                                           |  |        | Beginning of |          | Costs and  |            |       |  |  |   |       |        |  |  | End of    
|Description                                                                |  | Period |              | Expenses |            | Deductions |       |  |  |   |       | Period
|                                                                           |  |        |              |          |            |            |       |  |  |   |       |       
|Year Ended January 1, 2000                                                
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Allowances deducted from assets:                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Trade receivable allowances                                                |  | $      | 2,924        |          |            | $          | 574   |  |  | $ | 1,420 |        |  |  | (A         | ) |  | $ | 2,078 | 
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Inventory obsolescence reserve                                             |  |        | 1,189        |          |            |            | 1,369 |  |  |   | 1,528 |        |  |  | (B         | ) |  |   | 1,030 | 
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Other current and long-term assets                                         |  |        | 400          |          |            |            |       |  |  |   |       |        |  |  |            |   |  |   | 400   | 
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Accounts and loss reserves included in
current and long-term   liabilities |  |        | 5,404        |          |            |            |       |  |  |   | 1,724 |        |  |  | (D         | ) |  |   | 3,680 | 
|                                                                           |  |        |              |          |            |            |       |  |  |   |       |        |  |  |            |   |  |   |       | 
|Year Ended January 2, 1999                                                
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Allowances deducted from assets:                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Trade receivable allowances                                                |  | $      | 2,975        |          |            | $          | 1,000 |  |  | $ | 1,051 |        |  |  | (A         | ) |  | $ | 2,924 | 
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Inventory obsolescence reserve                                             |  |        | 760          |          |            |            | 1,365 |  |  |   | 936   |        |  |  | (B         | ) |  |   | 1,189 | 
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Other current and long-term assets                                         |  |        | 400          |          |            |            |       |  |  |   |       |        |  |  |            |   |  |   | 400   | 
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Accounts and loss reserves included in
current and long-term   liabilities |  |        | 5,419        |          |            |            |       |  |  |   | 15    |        |  |  | (D         | ) |  |   | 5,404 | 
|                                                                           |  |        |              |          |            |            |       |  |  |   |       |        |  |  |            |   |  |   |       | 
|Year Ended January 3, 1998                                                
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Allowances deducted from assets:                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Trade receivable allowances                                                |  | $      | 2,895        |          |            | $          | 1,022 |  |  | $ | 942   |        |  |  | (A         | ) |  | $ | 2,975 | 
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Inventory obsolescence reserve                                             |  |        | 606          |          |            |            | 420   |  |  |   | 266   |        |  |  | (B         | ) |  |   | 760   | 
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Other current and long-term assets                                         |  |        | 2,222        |          |            |            |       |  |  |   | 1,822 |        |  |  | (C         | ) |  |   | 400   | 
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Accounts and loss reserves included in
current and long-term   liabilities |  |        | 6,624        |          |            |            |       |  |  |   | 1,205 |        |  |  | (D         | ) |  |   | 5,419 | 
|                                                                           |  |        |              |          |            |            |       |  |  |   |       |        |  |  |            |   |  |   |       | 

Note A  Principally write-off of uncollectible accounts and disputed items, net of recoveries.

Note B  Principally the disposal of obsolete inventory.

Note C  Adjustment to reserves and collection of note receivable for previously sold businesses.

Note D  Principally payments on contractual obligations for previously owned businesses.

32



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Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized, on
this 2nd day of March 2000.

|   |  |                                                                                         
|-- |  | ----------------------------------------------------------------------------------------
|   |  | THE LAMSON & SESSIONS CO.                                                               
|  
|By |  | /s/ James J. Abel                                                                       
|   |  |                                                                                         
|   |  | James J. Abel
Executive Vice President, Secretary,
Treasurer and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated as of March 2, 2000.

|                                                   |  |                                                                                                         
|-------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------
|Signature                                          |  | Title                                                                                                   
|                                                   |  |                                                                                                         
|/s/ John B. Schulze
John B. Schulze                |  | Chairman of the Board, President
and Chief Executive Officer
(Principal Executive Officer)              
|                                                  
|/s/ James J. Abel
James J. Abel                    |  | Executive Vice President, Secretary,
Treasurer and Chief Financial Officer
(Principal Financial Officer)
|                                                  
|/s/ Lori L. Spencer
Lori L. Spencer                |  | Vice President and Controller
(Principal Accounting Officer)                                            
|                                                  
|/s/ James T. Bartlett*
James T. Bartlett           |  | Director                                                                                                
|                                                  
|/s/ Francis H. Beam, Jr.*
Francis H. Beam, Jr.     |  | Director                                                                                                
|                                                  
|/s/ Martin J. Cleary*
Martin J. Cleary             |  | Director                                                                                                
|                                                  
|/s/ William H. Coquillette*
William H. Coquillette |  | Director                                                                                                

33



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|                                                 |  |         
|------------------------------------------------ |  | --------
|/s/ John C. Dannemiller*
John C. Dannemiller     |  | Director
|                                                
|/s/ George R. Hill*
George R. Hill               |  | Director
|                                                
|/s/ A. Malachi Mixon, III*
A. Malachi Mixon, III |  | Director
|                                                
|/s/ John C. Morley*
John C. Morley               |  | Director
|                                                
|/s/ D. Van Skilling*
D. Van Skilling             |  | Director

|  |  |                                                                                                                                                                                                                                                                                                              
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* |  | The undersigned, by signing his name hereto, does sign and execute
this Annual Report on
Form 10-K pursuant to a Power of Attorney executed on behalf of
the above named
directors of The Lamson & Sessions Co. and filed herewith as Exhibit 24
on behalf of The
Lamson & Sessions Co. and each such person.
| 
| 
| 
| 
|  |  | March 2, 2000                                                                                                                                                                                                                                                                                                

|   |  |                                
|-- |  | -------------------------------
|By |  | /s/ James J. Abel              
|   |  |                                
|   |  | James J. Abel, Attorney-in-fact

34



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EXHIBIT INDEX

Exhibit No.

Management Contracts and Compensatory Plans required to be filed pursuant to
Item 14 of Form 10-K are identified with an asterisk (*).

|       |  |                                                                                                                                                                                                                                                                                             
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3(a)   |  | Amended Articles of Incorporation of the Company
(incorporated by reference to Exhibit 4(a) to the Companys
Registration Statement on Form S-8, (Registration No.
333-32875) filed with the Securities and Exchange Commission
on August 5, 1997).                                         
|      
|      
|      
|      
|3(b)   |  | Amended Code of Regulations of the Company (incorporated by
reference to Exhibit 3(b) to the Companys Annual Report on
Form 10-K for the year December 31, 1994).                                                                                                                          
|      
|      
|      
|      
|4(a)   |  | Specimen Certificate of Common Shares, without par value with
Rights legend (incorporated by reference to Exhibit 3 to the
Companys Registration Statement on Form 8-A filed with the
Securities and Exchange Commission on September 9, 1998).                                            
|      
|      
|      
|      
|4(e)   |  | Form of Rights Certificate (incorporated by reference to
Exhibit 4(oo) to the Companys Registration Statement on Form
8-A filed with the Securities and Exchange Commission on
September 9, 1998).                                                                                         
|      
|      
|      
|      
|4(g)   |  | Rights Agreement, dated as of September 8, 1998, by and
between the Company and National City Bank (incorporated by
reference to Exhibit 4.1 to the Companys Registration
Statement on Form 8-A filed with the Securities and Exchange
Commission on September 9, 1998).                   
|      
|      
|      
|      
|*10(a) |  | 1988 Incentive Equity Performance Plan (as amended as
of February 26, 1998) (incorporated by reference to the
Companys Registration Statement on Form S-3 (Registration No.
333-65795) filed with the Securities and Exchange Commission
on October 16, 1998).                             
|      
|      
|      
|      
|*10(b) |  | Form of Three-Year Executive Change-in-Control Agreement
between the Company and certain executive officers, filed
herewith.                                                                                                                                                                
|      
|      
|      
|      
|*10(c) |  | Form of Two-Year Executive Change-in-Control Agreement
between the Company and certain executive officers, filed
herewith.                                                                                                                                                                  
|      
|      
|      
|      
|*10(d) |  | Corporate Officers Incentive Compensation Plan (incorporated
by reference to Exhibit 10(d) to the Companys Annual Report
on Form 10-K for the year ended December 31, 1994).                                                                                                               
|      
|      
|      
|      
|*10(e) |  | Form of Amended and Restated Supplemental Executive
Retirement Agreement dated as of March 20, 1990 between the
Company and certain of its executive officers (incorporated by
reference to Exhibit 10(e) to the Companys Annual Report on
Form 10-K for the year ended December 30, 1995).
|      
|      
|      
|      
|*10(f) |  | The Companys Deferred Compensation Plan for Nonemployee
Directors (incorporated by reference to the Companys
Registration Statement, on Form S-8 (Registration No.
333-12585) filed with the Securities and Exchange Commission on
September 24, 1996).                                   
|      
|      
|      
|      
|*10(g) |  | Form of Indemnification Agreement between the Company and
the Directors and certain officers (incorporated by reference
to Exhibit 10(g) to the Companys Annual Report on Form 10-K
for the year ended December 31, 1994).                                                                 
|      
|      
|      
|      
|*10(h) |  | The Companys Long-Term Incentive Plan (incorporated by
reference to Exhibit 10(h) to the Companys Annual Report on
Form 10-K for the year ended December 28, 1996).                                                                                                                       

35



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|        |  |                                                                                                                                                                                                                                                                                            
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|       
|       
|       
|10(j)   |  | Mortgage and Security Agreement, dated October 29, 1993,
between The Lamson & Sessions Co. and PFL Life Insurance
Company (incorporated herein by reference to Exhibit 10(j) to
the Companys Annual Report on Form 10-K for the year ended
January 1, 1994).                              
|       
|       
|       
|       
|10(k)   |  | Asset Purchase Agreement between Iochpe-Maxion Ohio, Inc.
and The Lamson & Sessions Co. dated as of May 4, 1994
(incorporated by reference to Exhibit 10 to the Companys
Current Report on Form 8-K dated as of May 27, 1994).                                                            
|       
|       
|       
|       
|10(s)   |  | Amended and Restated Loan Agreement dated as of July 14,
1995 by and between the Company and General Electric Capital
Corporation (incorporated by reference to Exhibit 10(g) to the
Companys Quarterly Report on Form 10-Q for the period ended
July 1, 1995, the GECC Loan Agreement).
|       
|       
|       
|       
|10(t)   |  | Amendment No. 1 dated as of October 30, 1995, to the GECC
Loan Agreement (incorporated by reference to Exhibit 10(t) to
the Companys Annual Report on Form 10-K for the year ended
December 30, 1995).                                                                                    
|       
|       
|       
|       
|10(u)   |  | Amendment No. 2 and Consent dated as of November 8, 1995 to
the GECC Loan Agreement (incorporated by reference to Exhibit
10(u) to the Companys Annual Report on Form 10-K for the year
ended December 30, 1995).                                                                         
|       
|       
|       
|       
|10(v)   |  | Amendment No. 3 dated as of March 31, 1996, to the GECC Loan
Agreement (incorporated by reference to the Companys
Quarterly Report on Form 10-Q for the period ended March 30,
1996).                                                                                                     
|       
|       
|       
|       
|10(w)   |  | Amendment No. 4 dated as of October 25, 1996, to the GECC
Loan Agreement (incorporated by reference to Exhibit 10(w) to
the Companys Quarterly Report on Form 10-Q for the period
ended September 28, 1996).                                                                              
|       
|       
|       
|       
|10(y)   |  | Amendment No. 5 dated as of March 5, 1997, to the GECC Loan
Agreement (incorporated by reference to Exhibit 10(y) to the
Companys Annual Report on Form 10-K for the year ended
December 28, 1996).                                                                                       
|       
|       
|       
|       
|*10(z)  |  | The Companys Nonemployee Directors Stock Option Plan
(incorporated by reference to the Companys Registration
Statement on Form S-8 (Registration No. 033-62443) filed with
the Securities and Exchange Commission on September 8, 1995).                                                 
|       
|       
|       
|       
|10(aa)  |  | Amendment No. 6 dated as of July 24, 1997 to the GECC Loan
Agreement (incorporated by reference to Exhibit 10(aa) to the
Companys Quarterly Report on Form 10-Q for the period ended
July 5, 1997).                                                                                       
|       
|       
|       
|       
|10(ab)  |  | Amendment No. 7, dated as of January 30, 1998 to the GECC
Loan Agreement (incorporated by reference to Exhibit 10(ab) to
the Companys Annual Report on Form 10-K for the year ended
January 3, 1998).                                                                                     
|       
|       
|       
|       
|*10(ac) |  | Amendment to the 1988 Incentive Equity Performance Plan (as
amended as of February 26, 1998) (incorporated by reference to
the Companys Annual Report on Form 10-K for the year ended
January 3, 1998).                                                                                   
|       
|       
|       
|       
|*10(ad) |  | Amendment to The Lamson & Sessions Co. Deferred Savings
Plan (as amended February 26, 1998) (incorporated by reference
to the Companys Registration Statement on Form S-8
(Registration No. 333-46953) filed with the Securities and
Exchange Commission on February 26, 1998).           

36



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|        |  |                                                                                                                                                                                                                                                                                                                   
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|       
|       
|       
|*10(ae) |  | 1998 Incentive Equity Plan (incorporated by reference to
the Companys Registration Statement on Form S-8 (Registration
No. 333-61911) filed with the Securities and Exchange
Commission on August 20, 1998).                                                                                                     
|       
|       
|       
|       
|10(af)  |  | Amendment No. 8, dated as of January 29, 1999, to the GECC
Loan Agreement (incorporated by reference to Exhibit 10(ag) to
the Companys Annual Report on Form 10-K for the year ended
January 2, 1999).                                                                                                           
|       
|       
|       
|       
|*10(ag) |  | Amendment to the Nonemployee Directors Stock Option Plan
effective as of February 25, 1999 (incorporated by reference
to Exhibit 10(ah) to the Companys Annual Report on Form 10-K
for the year ended January 2, 1999).                                                                                          
|       
|       
|       
|       
|10(ah)  |  | Amendment No. 9, dated as of February 7, 2000, to the GECC
Loan Agreement, filed herewith.                                                                                                                                                                                                                        
|       
|       
|       
|       
|*10(aj) |  | Amendment to The Lamson & Sessions Co. Nonemployee
Directors Stock Option Plan (as amended and restated as of
April 23, 1999) (incorporated by reference to the Companys
Registration Statement on Form S-8 (Registration No.
333-93251) filed with the Securities and Exchange Commission
on December 21, 1999).
|       
|       
|       
|       
|*10(ak) |  | First Amendment to The Lamson & Sessions Co. Amended and
Restated Supplemental Retirement Agreement, filed herewith.                                                                                                                                                                                              
|       
|       
|       
|       
|*10(al) |  | Amendment No. 2 to The Lamson & Sessions Co. Nonemployee
Directors Stock Option Plan, filed herewith.                                                                                                                                                                                                             
|       
|       
|       
|       
|*10(am) |  | Amendment No. 3 to The Lamson & Sessions Co. 1988 Incentive
Equity Performance Plan, filed herewith.                                                                                                                                                                                                              
|       
|       
|       
|       
|*10(an) |  | Amendment No. 1 to The Lamson & Sessions Co. Long-Term
Incentive Plan, filed herewith.                                                                                                                                                                                                                            
|       
|       
|       
|       
|*10(ao) |  | Amendment No. 1 to The Lamson & Sessions Co. 1998 Incentive
Equity Plan, filed herewith.                                                                                                                                                                                                                          
|       
|       
|       
|       
|21      |  | Subsidiaries of the Registrant filed herewith.                                                                                                                                                                                                                                                                    
|       
|       
|       
|       
|23      |  | Consent of Independent Auditors filed herewith.                                                                                                                                                                                                                                                                   
|       
|       
|       
|       
|24      |  | Powers of Attorney filed herewith.                                                                                                                                                                                                                                                                                
|       
|       
|       
|       
|27      |  | Financial Data Schedule (Submitted for the SECs Information), filed herewith.                                                                                                                                                                                                                                    

37