FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

For the fiscal year ended December 31, 1999       Commission file number  1-106
--------------------------------------------                              -----
                                       OR

[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from          to


                                LYNCH CORPORATION
                                -----------------
             (Exact name of Registrant as specified in its charter)

       Indiana                                            38-1799862
       -------                                             ----------
 State of other jurisdiction                           (I.R.S. Employer
 Incorporation or organization                        Identification No.)



401 Theodore Fremd Avenue, Rye, NY                              10580
----------------------------------                              -----
Address of principal executive offices)                        (Zip Code)

Registrant's telephone number, including area code    (914) 921-7601
                                                      --------------

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

Title of each class                                      Name of each exchange
-------------------                                       on which registered
                                                          -------------------
Common Stock, No Par Value                            American 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  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 mark if  disclosure  of  delinquent  filers  pursuant to Item 405 of
Regulations S - K is not  contained  herein,  and will not be contained,  to the
best  of  the  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-K,  or any
amendment to this Form 10-K. [X]

The  aggregate  market  value of  voting  stock  held by  non-affiliates  of the
Registrant (based upon the closing price of the Registrant's Common Stock on the
American Stock Exchange on March 15, 2000 of $30 per share) was $32,048,000. (In
determining this figure, the Registrant has assumed that all of the Registrant's
directors  and  officers are  affiliates.  This  assumption  shall not be deemed
conclusive for any other purpose.)

The number of outstanding shares of the Registrant's  Common Stock was 1,510,183
as of March 29, 2000.


<PAGE>

                      DOCUMENTS INCORPORATED BY REFERENCE:

Part III: Certain  portions of Registrant's  Proxy Statement for the 2000 Annual
Meeting of Shareholders. FORWARD LOOKING INFORMATION

This Form 10-K contains certain forward looking information,  including, without
limitation, the exploring of options with respect to Spinnaker (Item 1.A (p.3));
strategic alternatives involving Entoleter (Item 1.A (p.4)); the search for ways
to  accelerate  growth  at M-tron  and to  provide  a more  financially  visible
investment,  (Item 1-C (p. 12); Item 7. "Management's Discussion and Analysis of
Financial  Condition and Results of Operations,"  including  without  limitation
Liquidity  and  Capital  Resources,  Year 2000 and Market  Risk;  and,  Notes to
Financial  Statements  (Item 14(a)  below).  It should be  recognized  that such
information  contains  estimates  or forecasts  based upon various  assumptions,
including the matters  referred to therein,  as well as meeting the Registrant's
internal performance  assumptions  regarding expected operating  performance and
the  expected  performance  of the economy and  financial  markets as it impacts
Registrant's   businesses.   As  a  result,   such  information  is  subject  to
uncertainties, risks and inaccuracies, which could be material.

                                     PART I

ITEM 1. BUSINESS

The Registrant, Lynch Corporation ("Lynch"), incorporated in 1928 under the laws
of the State of Indiana,  is a  diversified  holding  company with  subsidiaries
engaged in manufacturing.  Lynch's executive offices are located at 401 Theodore
Fremd Avenue, Rye, New York 10580-1430. Its telephone number is 914/921-7601.

Registrant's  business development strategy is to expand its existing operations
through  internal  growth  and  acquisitions.  It may  also,  from time to time,
consider the  acquisition of other assets or businesses  that are not related to
its present  businesses.  As used herein,  the  Registrant  includes  subsidiary
corporations.

On September 1, 1999, Registrant spun off to its shareholders the stock of Lynch
Interactive  Corporation,  which holds the  multimedia  and  service  operations
previously owned by Registrant and which accounted for  approximately 40% of the
Registrant's  1998 revenues and 47.6% of  Registrant's  total assets at December
31, 1998.

A.  Spinnaker Industries, Inc. ("Spinnaker")

Spinnaker's  Common Stock (1/10 vote per share) and Class A Common Stock (1 vote
per share) are listed on the American Stock Exchange under the symbols "SKK" and
"SKK.A." In August 1996, Spinnaker changed the name of its existing Common Stock
to Class A Common  Stock and  declared  a stock  dividend  of one share of a new
Common  Stock for each share of Class A Common  Stock  outstanding.  At March 1,
2000, Registrant owned 1,237,203 shares of Spinnaker Common Stock, approximately
32%  of  the  outstanding,  and  2,259,063  shares  of  Class  A  Common  Stock,
approximately  62% of the  outstanding.  On a combined  basis,  Registrant  owns
approximately 47.6% of the common equity and has a 60.4% voting interest.

Spinnaker is a leading  manufacturer and marketer of  adhesive-backed  material,
primarily for the pressure  sensitive  label stock  market.  Spinnaker has three
100% owned subsidiaries: Spinnaker Coating, Inc., ("Spinnaker Ohio") acquired in
1994, Spinnaker Coating-Maine,  Inc. ("Spinnaker Maine"),  acquired in 1998; and
Entoleter, Inc. ("Entoleter"), which Spinnaker owned prior to its acquisition in
1987. In 1996,  Spinnaker  acquired the remaining 19.9% of the outstanding stock
of Spinnaker Ohio (plus management stock options), which were owned primarily by
the management of Spinnaker Ohio, Boyle Fleming & Co., Inc. and Registrant,  for
an immediate payment and a contingent payment to be determined later (the amount
of the contingent payment is currently being determined).  Spinnaker Ohio, which
was founded in 1928 and was formerly called Brown-Bridge  Industries,  Inc., and
Spinnaker  Maine  (which  are  collectively  referred  to herein  as  "Spinnaker
Coating") are in the adhesive-backed label stock industry.

On July 30,  1999,  and August 10,  1999,  Spinnaker  sold its  industrial  tape
operations for approximately  $105 million plus 300,000 warrants to purchase the
common stock of Intertape  Polymer Group,  Inc.  (AMEX:ITP) at $29.50 per share.
The  industrial  tape  operation  generated  $121.8 million of net sales for the
fiscal year ended  December  31,  1998,  and $69.5  million of net sales in 1999
until the  effective  time of  disposition.  Registrant  has  stated  that it is
continuing  to  explore  all  options  with  respect  to  Spinnaker,   including
liquifying and monetizing  its  investment,  although there is no assurance that
any option will be implemented or, if implemented, would be successful.

Spinnaker's  adhesive-backed label stock business is conducted through Spinnaker
Coating.  With the  acquisition of the Spinnaker  Maine assets from S.D.  Warren
Company  ("Warren")  in March  1998,  Spinnaker  Coating  broadened  its product
offerings  and  further   established   itself  as  a  major   manufacturer   of
adhesive-backed  label  stock in the United  States.  Spinnaker  Ohio  primarily
manufactures custom, low-volume,  pressure sensitive products used for specialty
applications,  whereas  Spinnaker  Maine  manufactures  standard,  high  volume,
pressure sensitive products.  As a result,  Spinnaker Coating offers a full line
of more than 2,000  variations of  adhesive-backed  label stock that it sells in
roll and sheet form to over 1,000 printers,  paper  merchants,  industrial users
and major forms  manufacturers  and  distributors.  Customers  convert its label
stock into  labels  used for a broad  range of end use  applications,  including
bar-coding,  mailing and shipping, packaging for pharmaceutical,  food and other
consumer products,  office  identification  and business forms,  postage stamps,
decorative labels and other specialty  industrial uses. Spinnaker Coating is the
largest supplier of pressure  sensitive  postage stamp stock for ultimate use by
the United States  Postal  Service.  In 1995 and again in March 1998,  Spinnaker
Coating was selected to exclusively supply Paper Corporation of the U.S. and the
U.S.  Bureau of Engraving  and  Printing the label stock for  pressure-sensitive
postage stamps. The March 1998 contract, a five-year supply contract,  is valued
at approximately $75 million.

The Spinnaker  Maine assets were acquired from Warren for an aggregate  purchase
price of approximately  $51.8 million plus the assumption of certain liabilities
(excluding substantially all trade payables). The purchase price was paid by the
issuance of a 10% subordinated  convertible note (the "Note") to Warren,  in the
original  principal  amount  of $7.0  million,  and  the  remainder  with  funds
available under Spinnaker's  asset-backed  working capital revolving credit. The
Note is  convertible  into  shares of  Spinnaker's  common  stock,  no par value
("Common  Stock"),  on the basis of 40  shares  per  $1,000  of the  outstanding
principal  amount of the Note (or $25 per share),  subject to  adjustment as set
forth in the Note.

Spinnaker also  manufactures and markets  industrial  process  equipment and air
pollution control scrubbers through Entoleter.  Spinnaker is exploring strategic
alternatives with respect to Entoleter to improve shareholder value, including a
possible  split  off.  There is no  assurance  that such a  transaction  will be
effected, or if effected, would be successful.

Adhesive-backed Label Stock

Spinnaker Coating develops, manufactures and markets adhesive-backed label stock
that is  converted  by printers  and  industrial  users into  products  that are
utilized for marking,  identifying,  labeling and  decorating  applications  and
products.  During  1999,  Spinnaker  Coating's  products  were  offered in three
primary  adhesive  categories:  pressure  sensitive,  water  sensitive  and heat
sensitive.   Pressure  sensitive  products  constituted   approximately  94%  of
Spinnaker's  net sales of  adhesive-backed  label  stock  products,  while water
sensitive products  constituted 5% and heat sensitive products constituted 1% of
such sales.

Pressure  Sensitive.  Pressure  sensitive  products,  which are activated by the
application of pressure,  are  manufactured  with a  three-element  construction
consisting of face stock,  adhesive  coating and silicone  coated release liner.
The adhesive  product is sold in roll or sheet form for further  conversion into
products used primarily for marking,  identification  and promotional  labeling.
Spinnaker  Coating's  pressure sensitive products are sold under the trade names
Strip  Tac(R)  and Strip Tac  Plus(R).  Roll  pressure  sensitive  products  are
generally  sold to label  printers  that produce  products  used  primarily  for
informational  labels (shipping  labels,  price labels,  warning labels,  etc.),
product identification and postage stamps. Sheet pressure sensitive products are
sold to commercial  sheet  printers,  who provide  information  labels and other
products (such as laser printer stock).

Water  Sensitive.   Water  sensitive  products,   which  are  activated  by  the
application of water, include a broad range of paper and cloth materials, coated
with a variety of adhesives.  The adhesive  coated  products are sold in roll or
sheet form for further conversion to postage and promotional  stamps,  container
labels,  inventory  control labels,  shipping  labels and splicing,  binding and
stripping  tapes.  The  water  sensitive  line  is sold  under  the  trade  name
Pancake(R)  and consists of three  product  groups:  dry  process,  conventional
gummed and industrial. Dry process is sold primarily for label and business form
uses. Conventional gum products serve many of the same end uses for hand-applied
labels as dry  process  stock.  A major  portion of these  products  is sold for
government postage and promotional stamp uses.  Industrial  products are sold in
several niche markets,  such as electrical and other specialty  markets.  During
1999,  Spinnaker  entered into an aliance with Ivex Packaging  Corporation under
which Spinnaker  accepted  responsibility  for the sales and marketing of Ivex's
dry gum  products  and  Invex  agreed to accept  orders  for and to  manufacture
Spinnaker's dry gum and water activated  products.  As  compensation,  Spinnaker
receives a commission on all such sales.

Heat Sensitive.  Heat sensitive products, which are activated by the application
of heat, are manufactured by coating a face stock with either a hot melt coating
or an  emulsion  process  adhesive.  The  heat  sensitive  product  line is sold
primarily for labeling end uses, such as pharmaceutical bottles, meat and cheese
packages, supermarket scales, cassettes and bakery packages. The adhesive coated
product  is sold in  roll  or  sheet  form  for  further  conversion.  Spinnaker
Coating's heat sensitive products are sold under the trade name Heat Seal(R).

Marketing and Customers

Spinnaker Coating markets its broad range of products to a variety of customers.
Its marketing  strategy  focuses not only on products but also customer  service
and specific customer  applications.  Spinnaker has conducted  business with its
top 10  customers  for  approximately  19 years on  average.  During  1999,  one
customer accounted for approximately 12% of Spinnaker's net sales.

Spinnaker   Coating  generally  markets  its  products  through  its  own  sales
representatives to regional and national printers, converters and merchants. The
majority of sales  represent  product sold and shipped from Spinnaker  Coating's
facilities in Troy, Ohio and Westbrook,  Maine.  However,  to broaden its market
penetration,   Spinnaker   Coating  also  contracts  with  regional   processors
throughout the United States,  with whom Spinnaker  Coating stores product until
sold.  Generally,  these  processors  perform  both  slitting  and  distribution
services for Spinnaker Coating.

Manufacturing and Raw Materials

Spinnaker Coating  manufactures its adhesive-backed  label stock products at two
plants in Troy,  Ohio and the recently  acquired  facility in Westbrook,  Maine.
Spinnaker has made  approximately  $11.6 million in capital  expenditures at the
Ohio  facilities  over the last  four  years,  including  $4.0  million  for the
addition of a new production line for silicone coating.  During 1996, before the
addition of the new production line,  Spinnaker Coating  outsourced a portion of
its silicone liner requirements.

Raw materials are the most  significant  cost  component in Spinnaker  Coating's
production process.  The material component accounts for approximately 65-70% of
the total cost of its products,  with the most  important  raw  materials  being
paper  (gumming  kraft and face  stock),  adhesive  materials,  fiberglass,  and
polypropylene  resin.  These materials are currently  readily  available and are
procured from numerous suppliers.

See Item 2 below for a description of manufacturing and distribution facilities.

Competition

The  adhesive-backed  label stock industry is fragmented and highly competitive.
Spinnaker  Coating  competes  with  several  national  manufacturers,  including
Avery-Dennison  and Bemis, as well as a number of importers and smaller regional
manufacturers.  As a result of the  competitive  environment  in the  markets in
which Spinnaker Coating operates,  the company faces (and will continue to face)
pricing  pressure  on its  products.  As a  result  of  such  pricing  pressure,
Spinnaker Coating may in the future experience  reductions in the profit margins
on its sales,  or may be unable to pass future raw material  price  increases to
its customers (which would also reduce profit margins).

Backlog

Spinnaker  Coating's label stock backlog believed to be firm was $9.0 million at
December 31, 1999, as compared to $5.8 million at December 31, 1998.

Industrial Process Equipment Business

Through  Entoleter,  Spinnaker  engineers,  manufactures  and  markets a line of
industrial  process  equipment  and a line of air pollution  control  equipment.
Entoleter's  net sales consist  entirely of sales to commercial  and  industrial
customers.  Entoleter's sales were $7.0 million in 1999 compared to $7.6 million
in 1998.

General

Environmental Regulations

Spinnaker's  operations  are  subject  to  environmental  laws  and  regulations
governing  emissions  to the  air,  discharges  to  waterways,  and  generation,
handling,  storage,  transportation,  treatment and disposal of waste materials.
Spinnaker  is also  subject  to other  federal  and state  laws and  regulations
regarding  health and safety  matters.  Environmental  laws and  regulations are
constantly  evolving and it is  impossible to predict the effect that these laws
and regulations will have on Spinnaker in the future.  While Spinnaker  believes
it is currently in substantial  compliance with all such  environmental laws and
regulations,  there can be no assurance that it will at all times be in complete
compliance with all such requirements.  In addition, although Spinnaker believes
that  any  noncompliance  is  unlikely  to have a  material  adverse  affect  on
Spinnaker, it is possible.  Spinnaker has made and will continue to make capital
expenditures  to comply  with  environmental  requirements.  As is the case with
manufacturers in general, if a release of hazardous substances occurs on or from
Spinnaker's  properties  or any  associated  offsite  disposal  location,  or if
contamination  from  prior  activities  is  discovered  at  any  of  Spinnaker's
properties,  Spinnaker may be held liable and the amount of such liability could
be material.

Patents and Trademarks

Patents are held by Spinnaker with respect to the  manufacture of certain of its
products,  but its management  does not consider such patents to be important to
Spinnaker's operations. The patents expire over various lengths of time with the
last patent expiring in about 9 years.  Spinnaker has registered  several of its
trade names and trademarks for adhesive-backed materials.

International Sales

Spinnaker's  international  sales were $17.5  million,  $16.9  million and $10.0
million in 1999,  1998,  and 1997,  respectively.  Of the $17.5  million in 1999
international sales,  approximately 90% were represented by exports of Spinnaker
Coating. The substantial majority of these sales were to Canadian customers and,
consequently,  Spinnaker believes that the risks commonly  associated with doing
business  in  international   countries  are  minimal.   The   profitability  of
international  sales is  substantially  equivalent  to that of  domestic  sales.
Because international sales are transacted in United States dollars, payments in
many cases are secured by irrevocable letters of credit.

Employees

As of December 31, 1999,  Spinnaker employed  approximately 444 persons, of whom
400 were Spinnaker Coating employees and 36 were Entoleter employees. A majority
of its hourly employees are not represented by unions.  Spinnaker  Coating has a
labor agreement expiring in 2002 with the Paper, Allied-Industrial, Chemical and
Energy Workers Union AFL-CIO ("PACE") covering approximately 74 employees at its
Westbrook, Maine plant. A union election campaign is currently being led by PACE
at Spinnaker  Coating's  Troy,  Ohio facilities and an election is scheduled for
March 30, 2000. Entoleter's approximately 16 production employees are members of
the United  Electrical,  Radio and  Machine  Workers of America  Union.  After a
strike in 1999, a new collective  bargaining  agreement at Entoleter  expires in
April 2002.  Spinnaker  believes that its relations with its employees are good;
however,  there can be no assurance  that the Company will not  experience  work
stoppages or slowdowns in the future.

Additional Information

For further  information  on  Spinnaker,  reference is made to its Form 10-K and
other filings with the Securities and Exchange Commission.

B.       Lynch Systems, Inc.

Lynch Systems,  Inc.  ("LS"),  a 92% owned  subsidiary of  Registrant,  designs,
develops,  manufactures and markets a broad range of manufacturing equipment for
the  electronic  display  and  consumer  glass  industries.   LS  also  produces
replacement  parts for various  types of  packaging  and glass  container-making
machines which LS does not manufacture.

At year-end  1998,  LS,  through a  subsidiary,  entered  into a joint  venture,
Lynch-AMAV  LLC,  with AMAV GmbH of  Germany to develop  and  manufacture  glass
manufacturing equipment for the tableware industry. LS has a 75% interest in the
joint  venture.  The joint  venture  designs and  develops  feeders,  shears and
presses,  most of which are expected to be manufactured for the joint venture by
LS. LS  believes  that this joint  venture  will  expand  LS's  glass  tableware
equipment business, particularly in Europe. In 1999, Lynch-AMAV sold feeders and
shears for an aggregate price of approximately $1.5 million.

LS  manufactures  glass-forming  presses  and  electronic  controls  to  provide
high-speed  automated  systems to form  different  sizes of face  panels and CRT
display tubes for television screens and computer monitors, including presses to
build large screen televisions for the HDTV (high definition television) market.
LS also  manufactures and installs forming  equipment that sizes, cuts and forms
tableware such as glass tumblers,  plates,  cups, saucers and commercial optical
glass.  Additionally,  LS manufactures  and installs fire polishing,  electronic
controls and retrofit systems for CRT display and consumer glass presses.

The  production of glassware  entails the use of machines  which heat glass and,
using great pressure,  form an item by pressing it into a desired shape. Because
of the high cost of bringing  the machine and  materials  up to  temperature,  a
machine for producing  glassware  must be capable of running 24 hours a day, 365
days a year.

During 1999,  LS,  including  Lynch-AMAV,  rebuilt TV and  consumer  glass press
machines  for  customers,  as well as selling  feeders,  shears and spare parts.
However,  LS did not deliver any large TV glass press machines in either 1999 or
1998,  although it obtained an order for four large glass press  machines in the
second half of 1999.

At  December  31,  1999,  LS had  orders  for,  and  had in  various  stages  of
production,  a number of orders for large TV glass press machines as well as for
glass press machines,  feeders, shears and spare parts for the tableware market,
for a total sale price of approximately $17 million,  all of which are scheduled
to be delivered in 2000. There can be no assurance that LS can obtain orders for
additional large TV glass press orders to replace its present orders.

LS believes that in the worldwide pressware market it is the largest supplier to
glass  companies  that  do  not  manufacture   their  own  pressware   machines.
Competitors  include  various  companies  in Italy,  Japan,  Korea,  Germany and
elsewhere.  While several of the largest domestic and international producers of
glass pressware  frequently build their own  glass-forming  machines and produce
spare parts  in-house,  nearly all pressware  producers  have made  purchases of
machines and/or spare parts from LS.

International  Sales. During 1999,  approximately 75% of LS's sales were made to
international  customers as compared to approximately 60% in 1998. This increase
is related  primarily to the Lynch-AMAV  joint  venture.  The  profitability  of
international  sales is  approximately  equivalent  to that of  domestic  sales.
Because many  international  orders require partial advance  deposits,  with the
balance often secured by irrevocable letters of credit from banks in the foreign
country,  the  Registrant  believes  that  some  of the  credit  risks  commonly
associated  with doing  business in  international  markets are  minimized.  The
Registrant avoids currency exchange risk by transacting most international sales
in  United  States  dollars.  The East  Asian  financial  crisis  has had a very
substantial  adverse impact on LS,  particularly on its large TV press business,
although it did receive a large order for large TV press machines in the fall of
1999.

Backlog.  LS had an order backlog of  approximately  $17 million at December 31,
1999, compared with approximately $0.6 million at December 31, 1998. LS includes
as backlog those orders which are subject to written contract,  written purchase
orders  and  telephone   orders  from  long  standing   customers  who  maintain
satisfactory  credit  ratings.  In 1998,  LS received $2.4 million in connection
with the  cancellation  of a $16  million  order for large TV glass  presses and
parts,  which amount can be used by the customer as a credit for future  orders.
The $2.4 million amount is not included in backlog.

Raw Materials.  Raw materials are generally  available to LS in adequate  supply
from a number of suppliers.

Employees.  Lynch Systems employs  approximately 75 employees at its Bainbridge,
Georgia facility, none of whom belong to a union.

C.    M-tron Industries, Inc. ("M-tron")

M-tron,  a 100%  owned  subsidiary  of the  Registrant,  is a  manufacturer  and
importer  of quartz  crystal  products  and clock  oscillator  modules  used for
creating  precision carrier signals,  clocking digital  circuits,  and precision
time  base  references.  A quartz  crystal  is an  oscillating  component  which
provides  the  precision  reference  signal in a circuit.  Crystals  and crystal
oscillator   modules   are   used  in   microprocessor-related   equipment   and
telecommunications  equipment.  Frequency and time related products  essentially
use crystals or crystal  oscillators,  with the addition of electronic circuitry
vertically integrating the product.  Crystal and crystal oscillators are sold to
original  equipment  manufacturers and their assembly plant suppliers.  They are
sold directly through commissioned representatives and through distributors.

Registrant has been searching for ways to accelerate growth at M-tron as well as
providing  Registrant with a more  financially  visible  investment.  In January
2000,  Robert R. Zylstra joined M-tron as the new President and Chief  Executive
Officer, replacing Martin J. Kiousis who retired. There is no assurance that the
Registrant can accomplish its objectives with respect to M-tron.

For 1999, 1998, and 1997, M-tron's sales consisted of (in thousands):
<TABLE>
<CAPTION>

                                           1999           1998            1997
                                           ----           ----            ----
<S>                                      <C>             <C>             <C>
Crystals .......................         $10,492         $11,871         $12,611
Oscillator Modules .............          15,974          10,927          10,217
                                         -------         -------         -------
     Total .....................         $26,466         $22,798         $22,828
                                         -------         -------         -------
</TABLE>

Competition.  Quartz crystals and  oscillators are sold in a highly  competitive
industry.  There are numerous domestic and  international  manufacturers who are
capable of providing  quartz  crystals  and crystal  oscillators  comparable  in
quality  and  performance  to  M-tron's  products.   International  competitors,
particularly  from the Far East,  continue to dominate the United States market.
M-tron seeks to manufacture  smaller,  high  performance  orders of crystals and
oscillators, which it believes it can competitively fill based upon performance,
quality,  order  response time and a high level of engineering  support.  M-tron
performs  quality control tests on all products it imports from the Far East and
resells domestically and internationally.

International Sales. M-tron's international sales in 1999 were approximately 40%
of  total  sales  and  were   concentrated  in  Canada.   The  profitability  of
international sales has been substantially equivalent to that of domestic sales.
Because of the  concentration  in Canada,  M-tron  believes that risks  commonly
associated with doing business in international countries are minimized.

Backlog. M-tron had backlog orders of approximately $6.8 million at December 31,
1999,  compared  with $3.5  million at December  31,  1998.  M-tron  includes as
backlog  those orders which are subject to specific  production  release  orders
under written contracts,  verbal and written orders from distributors with which
M-tron has had long-standing  relationships,  as well as written purchase orders
from sales representatives.  M-tron believes that all of the backlog at December
31, 1999, will be shipped during 2000.

Raw Materials. To the extent possible, M-tron's raw materials are purchased from
multiple sources. Of primary  significance are quartz crystal bars and the bases
used for mounting certain finished  crystals.  M-tron currently has at least two
qualified  vendors for each of these items.  No shortages  have  occurred in the
recent past nor are any anticipated in the near future.

Employees.  M-tron  employs  approximately  180 employees at its Yankton,  South
Dakota facility, none of whom belong to a union.

IV.   OTHER INFORMATION

While the Registrant  holds  licenses and patents of various  types,  Registrant
does not believe they are critical to its overall operations.

The Registrant conducts product  development  activities with respect to each of
its major lines of business. Currently, such activities are directed principally
toward the  improvement of existing  products,  the  development of new products
and/or diversification.  The cost of such activities (excluding costs associated
with Spinnaker's tape division,  which was sold in 1999), which have been funded
entirely  by  the  Registrant,  amounted  to  approximately  $571,000  in  1999,
$1,030,000 in 1998 and $1,022,000 in 1997.

The capital  expenditures,  earnings and competitive position of Registrant have
not been materially affected to date by compliance with current federal,  state,
and local laws and  regulations  relating to the protection of the  environment;
however,  Registrant  cannot predict the effect of future laws and  regulations.
The  Registrant  has not  experienced  difficulties  relative  to fuel or energy
shortages.  See also "Environmental  Regulations" under Item 1. Business A. - A.
Spinnaker Industries, Inc. for more information with respect to Spinnaker.

No portion of the business of the Registrant is regarded as seasonal.

There  were  no  customers  in  1999  or  1998  that  represent  10% or  more of
consolidated  revenues.  The Registrant does not believe that it is dependent on
any single customer.

Additional  information  with  respect  to each  of the  Registrant's  lines  of
business  is  included  in  Note  14 to the  Consolidated  Financial  Statements
included as Item 14(a) below.

V.   EXECUTIVE OFFICERS OF THE REGISTRANT

Pursuant  to General  Instruction  G (3) of Form  10-K,  the  following  list of
executive officers of the Registrant is included in Part 1 of this Annual Report
on Form  10-K in lieu of being  included  in the  Proxy  Statement  for the 1999
Annual Meeting of  Shareholders.  Such list sets forth the names and ages of all
executive  officers of Registrant  indicating all positions and offices with the
Registrant held by each such person and each such person's principal occupations
or employment during the past five years.
<TABLE>
<CAPTION>

         Name                                     Offices  and Positions Held                       Age

<S>                              <C>                                                                 <C>
Mario J. Gabelli                 Chairman   (since   1986)   and   Chief    Executive    Officer      57
                                 (1986-January  2000);  Chairman and Chief Executive  Officer of
                                 Lynch Interactive  Corporation (since September 1999); Chairman
                                 and Chief  Executive  Officer  (since  March  1980) of  Gabelli
                                 Funds,  Inc., a private company which makes investments for its
                                 own  account;  and  Chairman  and Chief  Executive  Officer  of
                                 Gabelli  Asset  Management  Inc.  (since  1999),  a NYSE listed
                                 holding company for subsidiaries  engaged in various aspects of
                                 the securities business.

Louis A. Guzzetti, Jr.           President and Chief  Executive  Officer  (since  January 2000);      61
                                 President and Chief Executive  Officer of Envirosource,  Inc. a
                                 NASDAQ listed company (1986-1999)

George E. Fuehrer                Vice  President-Business   Development  (since  January  2000);      51
                                 Senior Vice  President  of Planning  and  Business  Development
                                 (1997-1999) and  President/Executive  Vice President of Imsamet
                                 Division (1994-1997) of Envirosource, Inc.


Roger J. Dexter                  Controller  and Chief  Financial  Officer  (since  March 2000);      56
                                 Financial  Consultant  (1995-1999),   including  consulting  to
                                 Registrant,  Lynch  Interactive  Corporation and Gabelli Funds,
                                 Inc.

Robert E. Dolan                  Chief  Financial  Officer  (February   1992-January  2000)  and      48
                                 Controller (May 1990-January 2000).

Robert A. Hurwich                Vice  President-Administration,  Secretary  &  General  Counsel      58
                                 (since February 1994).
</TABLE>

The executive  officers of the Registrant  are elected  annually by the Board of
Directors  at its  organizational  meeting  in May and  hold  office  until  the
organizational  meeting in the next year and until their  respective  successors
are chosen and qualified.

ITEM 2. PROPERTIES

Registrant   and  Lynch   Interactive   Corporation   share   space   containing
approximately 5,000 square feet in Rye, New York, for use as executive offices.

During the first half of 2000  Spinnaker  will move its  corporate  headquarters
from Dallas, Texas to Troy, Ohio, where it has major facilities.

Spinnaker Coating owns two manufacturing facilities, Plant One and Plant Two, in
Troy, Ohio. Plant One is a 200,000 square foot complex and Plant Two is a 98,000
square foot facility.  There are  approximately  five undeveloped  acres of land
adjacent to Plant Two that are available for expansion.  Spinnaker  Coating also
leases a 58,000 square foot  facility in Troy,  Ohio, on a month to month basis.
The facilities house manufacturing, administrative and shipping operations.

In connection with Spinnaker Coating's acquisition of the Spinnaker Maine assets
from S.D.  Warren in March 1998,  the parties  entered into a site lease,  which
provides for Warren's  lease of a portion of its  Westbrook,  Maine  facility to
Spinnaker.  Such lease is for a term of 99 years,  provides  for nominal rent of
$1.00 per year,  with an option to purchase  for $1.00.  The  facility  contains
approximately 151,000 square feet. Spinnaker Coating also leases a 15,000 square
foot facility (expiring April 2004) at Westbrook. Spinnaker's plants are subject
to security interests relating to its indebtedness.

Entoleter owns a manufacturing  plant  containing  72,000 square feet located on
approximately 5 acres of land in Hamden, Connecticut.  The land and building are
subject to a mortgage and security agreement executed in support of a bank loan.
Entoleter  also  owns  approximately  6  unimproved  acres  located  in  Hamden,
Connecticut adjacent to its property.

LS's operations are housed in two adjacent  buildings  situated on 3.19 acres of
land in Bainbridge,  Georgia.  In January 1997, LS completed an expansion of its
manufacturing  capacity at this site,  which added  approximately  15,000 square
feet, bringing total  manufacturing  space to approximately  73,000 square feet.
Finished  office area in the two buildings  totals  approximately  17,000 square
feet. All such properties are subject to security deeds relating to loans.

M-tron's  operations  are housed in two separate  facilities  in Yankton,  South
Dakota.  These  facilities  contain  approximately  51,000  square  feet  in the
aggregate.  One facility owned by M-tron  contains  approximately  35,000 square
feet and is situated on  approximately  5 acres of land.  This land and building
are subject to a mortgage  executed in support of a bank loan. The other Yankton
facility  containing  approximately  16,000  square feet is leased,  which lease
expires on September 30, 2000, with options to extend the lease to 2006.

During  1999 and 1998,  Registrant's  manufacturing  facilities  (except for LS)
operated in the aggregate at a relatively high level of capacity utilization.

It is  Registrant's  opinion that the  facilities  referred to above are in good
operating condition and suitable and adequate for present uses.

ITEM 3.    LEGAL PROCEEDINGS

In the normal course of business  subsidiaries  of the Registrant are defendants
in certain product  liability,  worker claims and other  litigation in which the
amounts being sought may exceed  insurance  coverage  levels.  The resolution of
these  matters  is  not  expected  to  have a  material  adverse  effect  on the
Registrant's consolidated financial condition or operations.

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

Not applicable.



<PAGE>




                                     PART II

ITEM 5.   MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
          STOCKHOLDER MATTERS

The Common Stock of Lynch  Corporation  is traded on the American Stock Exchange
under the symbol "LGL." The market price highs and lows in consolidated  trading
of the Common Stock during the two years ended  December 31, 1999 and 1998,  are
as follows:
<TABLE>
<CAPTION>
                                                              Three Months Ended
1999                     March 31   June 30       Sept. 30          Dec. 31
                         --------   -------       --------         --------
                                               7/1-9/1- 9/2-9/30
<S>                       <C>        <C>       <C>   <C>        <C>
High .............        85 1/2      84       87    34 3/4      26 1/2
Low ..............        70 1/2      77 1/4   78    26 1/2      18 7/8
</TABLE>

<TABLE>
<CAPTION>

1998                     March 31   June 30    Sept. 30        Dec. 31
                          ------     ------     ------          ------

<S>                      <C>            <C>        <C>         <C>
High .............       109            113        100 1/2     82
Low ..............        77 1/4         88         76         69 1/2
</TABLE>


At March 15, 2000, the Company had 901 shareholders of record.

On  September  1, 1999,  the  Company  spun off the shares of Lynch  Interactive
Corporation to its shareholders. As a result, stock prices before and after that
date are not comparable. The high and low sales prices of Lynch Interactive from
September 1, 1999 to December 31, 1999, were $102 1/2 and $42, respectively, and
the closing price at December 31, 1999, was $99 7/8.

The Board of  Directors  has  adopted a policy of not paying cash  dividends,  a
policy which is reviewed annually.  This policy takes into account the long term
growth   objectives  of  the  Company,   especially  its  acquisition   program,
shareholders'  desire for capital appreciation of their holdings and the current

<PAGE>

tax law disincentives for corporate dividend distributions. Accordingly, no cash
dividends have been paid since January 30, 1989 and none are expected to be paid
in 2000.

ITEM 6. SELECTED FINANCIAL DATA
<TABLE>

                       LYNCH CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED SELECTED FINANCIAL DATA

                   (Adjusted to Reflect Discontinued Operations and
                   Spin Off of Lynch Interactive Corporation)
                     (in thousands except per share amounts)

<CAPTION>
                                                                       Year Ended December 31 ( a )
                                                         1999        1998         1997        1996         1995
                                                         ----        ----         ----        ----         ----

<S>                                                  <C>          <C>          <C>          <C>          <C>
Revenues..........................................   $ 194,222    $ 187,644    $ 153,735    $ 166,976    $ 157,146
Operating Profit (b)..............................          85        4,074        6,730        8,473       11,945
Net Financing Activities..........................      (9,528)      (8,392)      (4,884)      (5,166)      (3,463)
Gain in Sale of Subsidiary Stock and Other
  Operating Assets................................        --          2,090          (91)       5,072         --
Income (Loss) from Continuing Operatins before
  Income Taxes, Minority Interests, Discontinued
  Operation and Extraordinary Items...............      (9,443)      (2,228)       1,755        8,379        8,482
(Provision) Benefits For Income Taxes.............       2,544        1,408         (301)      (3,571)      (3,267)
Minority Interest.................................       2,647        1,107         (121)        (119)        (634)
                                                         ------        ------       ------       ------       ------
Income (Loss) From Continuing Operations Before
  Discontinued Operations and Extraordinary Item..      (4,252)         287        1,333        4,689        4,581
Operations of Lynch Interactive Corporation (f)         (7,493)       4,929       (3,349)        (818)         467
Discontinued Operations (c)......................         (572)      (1,859)        (862)         173           97
Minority Interests
Gain (Loss) on Sale of Spinnaker's Industrial
  Tape Segment...................................        10,431         --           --           --           --
Extraordinary Items (d)                                     303         --           --         (1,348)        --
                                                         ------        ------       ------       ------       ------
Net Income (Loss)...............................        $ (1,583)     $3,357      $( 2,878)    $ 2,696)     $ 5,145
                                                        ========      ========    =========    ========     ========

Per Common Share (e)
  Income (Loss) from Continuing Operation
  Befopre Discontinued Operations and
  Extraordinary Items...........................
     Basic......................................        $  (3.00)     $   .20      $   .94      $  3.38     $  3.32
     Diluted....................................        $  (3.00)         .20          .94         3.34        3.25
  Net Income (Loss)
     Basic......................................           (1.12)        2.37        (2.03)        1.94        3.73
     Diluted....................................           (1.12)        2.37        (2.03)        1.92        3.66

Cash, Securities and Short-Term Investments.....        $  13,106      $ 1,132     $  6,499    $  10,561    $  5,405
Restricted Cash (h)                                        56,026           --           --           --          --
Total Assets (Net of Discontinue Operations(c)(f)         211,192      251,658      183,720      144,417     144,984
Long-Term Debt (g) .............................          116,765      126,976      116,159       96,577      62,557
Shareholders Equity (Deficit)(f)................           16,442       11,441       14,464       (6,083)      6,085
<FN>

Notes:

(a)  The data  presented  herein  reflect  the  spin  off of  Lynch  Interactive
     Corporation  (Interactive)  from  the  Company  and the  sale by  Spinnaker
     Industries,  Inc. (Spinnaker), a 47.6% owned consolidated subsidiary of the
     Company,  of its industrial tape units, all of which transactions  occurred
     in the third quarter of 1999.  Accordingly,  the operating  results of both
     Interactive  and the  industrial  tape  segment have been  segregated  from
     continuing  operations  of the  Company and are  reported as separate  line
     items.  The data presented also includes  results of the business  acquired
     from S. D. Warren  (name  changed to  Spinnaker  Coating-Maine,  Inc.) from
     March 17, 1998.

(b)  Operating  profit is sales and  revenues  less  operating  expenses,  which
     excludes  investment  income,  interest  expense,  share of  operations  of
     affiliated companies, minority interests and taxes.

(c)  Discontinued  operations  of  the  industrial  tape  segment  of  Spinnaker
     Industries(See   Note  3  to   Financial   Statements)and   Lynch   Tri-Can
     International in 1995 and 1996.

(d)  Gain (loss) on early extinguishment of debt at Spinnaker in 1996 and 1999

(e)  Based on weighted average number of common shares outstanding - restated to
     conform to SFAS #128 in 1996 and prior years.

(f)  No cash  dividends  have been  declared  over the period.  In 1999 for each
     share of Lynch  Common  Stock,  shareholders  received  one  share of Lynch
     Interative  Corporation in a Spin Off of the multimedia and  transportation
     business. (See Note 4 to Financial Statements).  In 1997, for each share of
     Lynch  Common   Stock,   shareholders   received  one  share  of  East/West
     Communications,  Inc., an F- block PCS licensee  with  licenses  covering a
     population of 20 million.

(g)  Includes  $115.6  million of  long-term  debt at December 31, 1999 of 47.6%
     owned Spinnaker Industries.

(h)  See  dicussion of  Restricted  Cash in Note 6-Notes  Payable and  Long-Term
     Debt.
</FN>
</TABLE>


<PAGE>


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

RESULTS OF OPERATIONS

YEAR 1999 COMPARED TO 1998

The accompanying audited consolidated  financial statements reflect the Spin Off
of Lynch Interactive  Corporation  (Interactive) from Lynch Corporation  (Lynch)
that  occurred  in the  third  quarter  of 1999 and  also the sale by  Spinnaker
Industries,  Inc. (Spinnaker),  a consolidated subsidiary of the Company, of its
two industrial tape units,  Central Products  Company and Spinnaker  Electrical,
that also  occurred in the third  quarter of 1999.  Accordingly,  the  operating
results of both Interactive and the industrial tape segment have been segregated
from  continuing  operations  of the Company and are  reported as separate  line
items on the financial  statements as discontinued  operations.  The comparative
amounts for 1998 have also been restated to reflect the above transactions.  The
ensuing narrative  considers these changes and only includes  discussions of the
Company as it is currently composed.  EBITDA is presented because it is a widely
accepted  financial  indicator  of value and ability to incur and service  debt.
EBITDA is not a substitute  for  operating  income or cash flows from  operating
activities in accordance with generally accepted accounting principles.

Revenues for the year ended December 31, 1999 were $194.2  million,  an increase
of $6.6 million from the comparable 1998 period. Spinnaker's 1999 net sales were
$162.1 million,  compared to $159.1 million in 1998. The growth in net sales for
1999  is  attributed  to  approximately  $7.6  million  in net  sales  from  the
acquisition of Coating-Maine  and higher unit sales of certain label stocks from
1998,  which were offset by increased  domestic  capacity and the  disruption of
business  at  Entoleter  from a  mid-summer  labor  dispute.  Revenues at M-tron
increased by $3.7 million due to  increased  demand from the  telecommunications
industry and  increased  sales of new  products.  Lynch  Systems'  revenues were
essentially flat.

Operating  profit for 1999 declined by $4.0 million from the operating profit in
the  prior  year.   Spinnaker's   operating  profit  declined  by  $3.7  million
principally  due to lower gross margins as a result of the lower pricing and the
impact of the  Entoleter  labor  dispute,  partially  offset by gains on sale of
fixed assets and lower selling,  general and administrative  expenses.  M-tron's
operating profit increased by $.4 million due to increased volume.

Subsequent to the spin off of Interactive,  the Company, with the concurrence of
the  holders  of all  outstanding  SAR units,  terminated  its SAR  program  for
corporate management, including all outstanding units, thus eliminating possible
future profit and loss and cash flow distortions associated with the program. As
a result of the  termination,  the Company  recorded  approximately  $700,000 of
related corporate expense.

In order to improve  operational  efficiencies,  Spinnaker Coating  restructured
operations at its Maine unit in early 2000.  Also, in view of the narrowed scope
of the  Spinnaker  business  as a  result  of the  sale of the  industrial  tape
business,  steps  are being  taken to reduce  Spinnaker  corporate  overhead  by
transferring  functions  from the  Dallas  headquarters  to the  main  Spinnaker
Coatings  office in Ohio.  As a result,  Spinnaker  has  announced it expects to
record a charge of approximately $500,000 in the first quarter of 2000.

Investment  income  increased due to the investment in short term  securities of
approximately $75 million in proceeds  remaining,  after payment of certain debt
obligations,  from the sale by Spinnaker of its Central  Products and Electrical
Tape businesses.

Interest  expense was $11.9 million and increased from the prior year due to the
allocation of a portion of the interest  associated  with the  Spinnaker  10.75%
Senior Secured Notes Due 2006 (the Senior Notes) to the discontinued  industrial
tape segment that ceased at the time of their sale in the third quarter of 1999.
Interest  expense  also  increased  due to higher  debt  levels  resulting  from
Spinnaker's acquisition of the Warren assets.

Interest  expense  from  continuing  operations  is subject  to certain  matters
associated  with the use of the net  proceeds  from the sales of the  industrial
tape units of  Spinnaker,  including  retirement  of senior  debt or  "permitted
investments" as defined under the Indenture.

The income tax benefit includes  federal,  as well as state and local taxes. The
tax benefit for the year ended December 31, 1999, and 1998, represents effective
tax rates of 27% for 1999 and 63% for 1998.  The  differences  from the  federal
statutory  rate  are  principally  due to the  effect  of  state  income  taxes,
operating losses of subsidiaries and amortization of non-deductible goodwill.

Minority  interests  contribution  to the net income  (loss)  increased  by $1.5
million  for the year  from the  prior  year due to the  increased  losses  from
continuing operations at Spinnaker and the January 1, 1999, repurchase of M-tron
minority interest.

On August 12, 1999,  the Board of Directors  approved a plan to  distribute  the
stock  of  Lynch  Interactive  Corporation  on  a  one  for  one  basis  to  the
shareholders of Lynch  Corporation ( the spin off). Lynch completed the spin off
of Lynch Interactive Corporation on September 1, 1999, to stockholders of record
on August 23, 1999.  Pursuant to the spin off, each Lynch  shareholder  received
one share of Interactive stock for each share of Lynch owned. Lynch had received
a private  letter  ruling from the  Internal  Revenue  Service that the spin off
would be tax free to Lynch shareholders. Interactive has listed its stock on the
American Stock Exchange. (LIC)

Interactive owns all of what was Lynch's multimedia and service businesses while
Lynch  retains the  manufacturing  businesses.  Interactive  owns the  telephone
companies,  television  interests and PCS  interests,  as well as the 55% equity
interest of the Morgan Group, Inc. In addition,  Interactive owns a 13.6% equity
interest  in  Spinnaker  Industries,  Inc.  Lynch owns a 48% equity  interest in
Spinnaker  after the spin  off,  as well as M-tron  Industries,  Inc.  and Lynch
Systems, Inc.

As a result of the spin off, the Company's  multimedia and services segments are
being reported as operations  distributed to  shareholders  in the  accompanying
consolidated  financial  statements.  Accordingly,  operating  results  of Lynch
Interactive  Corporation  have been segregated  from  continuing  operations and
reported  as a separate  line item on the  statement  of  operations.  Lynch has
restated its prior year financial statements to present the operating results of
Lynch  Interactive on a comparable  basis.  Interactive's  net sales were $204.6
million for the year ended  December  31,  1999,  and $205.1  million and $194.1
million for the fiscal years ended December 31, 1998 and 1997, respectively.

Prior to the spin off,  Lynch  Interactive  recorded a $15.4  million  valuation
reserve  due to the  decline  in  market  value of its  investment  in  personal
communications  licenses.  As a result,  Lynch Interactive reported an operating
loss for the first eight months of 1999.

In the third  quarter of 1999,  Spinnaker  sold its two  industrial  tape units,
Central Products Company and Spinnaker Electrical, which comprise its industrial
tape segment. Accordingly, operating results of the industrial tape segment have
been  segregated  from  continuing  operations  and reported  separately  in the
statement of operations. Lynch has restated its prior years financial statements
to  present  the  operating   results  of  the  industrial  tape  segment  as  a
discontinued operation. The industrial tape segment's net sales, up to the point
of its sale, were $69.5 million for the year ended December 31, 1999, and $121.8
million and $119.7  million for the fiscal  years  ended  December  31, 1998 and
1997, respectively.

Net loss for the year ended December 31, 1999, was $1.6 million,  or ($1.12) per
share, which compares to the net income of $3.4 million, or $2.37 per share, for
the same period of 1998 due primarily to the operating  losses  mentioned  above
and the loss incurred by Interactive,  offset by Spinnaker's gain on sale of its
industrial tape units ($10.4 million after income taxes and minority interest).

Total backlog of  manufactured  products at December 31, 1999 was $35.3 million,
which  represents  an increase of $25.5 million from the backlog of $9.8 million
at December 31, 1998.  All  operating  units  contributed  significantly  to the
increase  in backlog at December  31,  1999.  Included in this  backlog for both
periods is a $2.4 million  payment  from a customer  for an earlier  glass press
order at Lynch Systems which was  subsequently  cancelled.  The customer can use
this amount for future orders and, if not  utilized,  will be forfeited to Lynch
Systems.  Included in the backlog at December 31, 1999,  is a $14 million  order
for large glass press machines at Lynch Systems.  In connection with this order,
Lynch Systems has obtained a substantial  credit facility to protect advances by
the customer and for working capital.

YEAR 1998 COMPARED TO 1997

Revenues  increased to $187.6 million in 1998 from $153.7 million in 1997, a 22%
increase. The acquisition made during 1998 by Spinnaker Industries, Inc. was the
most  significant  contributor  to this increase.  On March 17, 1998,  Spinnaker
acquired  from  S.  D.  Warren  its  assets  in  Westbrook,  Maine  utilized  to
manufacture  pressure  sensitive label stock.  This operation  contributed $47.0
million to Spinnaker's revenue increase. Spinnaker Coating, Inc. (Ohio) reported
small revenue  decreases  during 1998 as a result of higher unit volume,  but at
overall lower prices, while Spinnaker's Entoleter subsidiary had a 39% increase.
Lynch Systems'  revenues  decreased by $13 million from 1997 to 1998 due to lack
of order  activity  for CRT glass  press  machines.  During 1998 and early 1999,
Lynch  Systems added  several new consumer  glass press  machines to its product
offerings  in an  effort to be less  dependent  on  orders  for CRT glass  press
machines in the future.

Operating  profits for 1998 were $4.1  million,  down from $6.7 million in 1997.
Operating  profits  fell by $2.6  million due to the EBITDA  increase  offset by
increased  depreciation and amortization of $1.7 million  associated with the S.
D. Warren acquisition.

Effective  September 30, 1998, the Company  amended its SAR (stock  appreciation
rights) Program so that the SARs become  exercisable only in the event the price
for the Company's  shares double from the SAR grant price within five years from
the  original  issuance.  The grant  prices of the 42,700  SARs  outstanding  at
December 31, 1998 range from $63.03 to $84.63. On December 31, 1998, the closing
price of the Company's  common shares in trading on the American  Stock Exchange
was $70.50.  This  amendment  eliminated  the  recording  of the profit and loss
effect from changes in the market price in the  Company's  common stock until it
is probable  that the SARs will become  exercisable.  During  1997,  the Company
recorded  $0.4  million SAR expense and in 1998,  prior to the  amendment of the
program, $0.2 million in SAR income.

Investment income was approximately $.2 million in 1998 and $.3 million in 1997.

Interest  expense  increased  by $2.8  million  in 1998  compared  to 1997.  The
increase is due primarily to the effect of financing  the Spinnaker  acquisition
of the Warren assets.

On July 31, 1998,  Spinnaker  Industries,  Inc. completed the acquisition of the
electrical  tape division of tesa tape, inc. A portion of the purchase price was
satisfied by the issuance of 200,000 shares, subject to certain adjustments,  of
Spinnaker's  Class A common  stock.  As a result of this  issuance,  the Company
recorded a gain on sale of  subsidiary  stock of $2.1  million,  or $1.2 million
($0.87 per share) after income taxes.

The 1998 tax benefit of $1.4 million,  includes  federal,  state and local taxes
and represents an effective rate of 63% versus 17.2% effective tax rate in 1997.
The  difference  in the  effective  rates is primarily due to the effects of the
amortization  of  goodwill,  the  state  and local  income  taxes and  losses of
subsidiaries.

During 1998,  minority  interest  was income of $1.1 million  versus $.1 million
expense in 1997. The variance was primarily  associated with  additional  losses
recorded by Spinnaker (61% owned subsidiary by the Company at December 31, 1998)
during 1998.

LIQUIDITY AND CAPITAL RESOURCES

At December  31,  1999,  the Company  had  current  assets of $79.7  million and
current  liabilities  of $56.5  million.  Working  capital was  therefore  $23.2
million as compared to $18.8  million at December  31,  1998.  The  increase was
primarily  due to the  increase  in cash and  reduction  of short  term  working
capital  debt at  Spinnaker  resulting  from  the  sale of its  industrial  tape
segment.

Capital expenditures were $3.8 million in 1999 and $3.3 million in 1998. Overall
2000 capital  expenditures are expected to be approximately  25% higher than the
1999 level.

At December 31, 1999,  total debt was $141.6  million,  which was $12.6  million
more than the $129.0 million at the end of 1998.  Debt at year end 1999 included
$118.4  million of fixed  interest  rate debt,  at an average  interest  rate of
10.7%,  and $23.2 million of variable  interest rate debt at an average interest
rate of 8.1%.  Additionally,  the  Company had $7.9  million in unused  lines of
credit at December 31, 1999, of which $7.1 million was attributed to Spinnaker.

Since 1987,  the Board of Directors of Lynch has  authorized  the  repurchase of
400,000 common shares. At December 31, 1999, Lynch's remaining  authorization is
to repurchase  an additional  161,000  shares of common  stock.  In 1999,  8,130
shares were purchased for treasury at a cost of $525,000.

The Board of  Directors  has  adopted a policy of not paying cash  dividends,  a
policy which is reviewed annually.  This policy takes into account the long term
growth   objectives  of  the  Company,   especially  its  acquisition   program,
shareholders'  desire for capital appreciation of their holdings and the current
tax law disincentives for corporate dividend distributions. Accordingly, no cash
dividends have been paid since January 30, 1989 and none are expected to be paid
in 2000.

In  March,  2000  Lynch  Systems  completed  a project  specific  line of credit
totaling  $7.1  million  related to a contract  to  deliver  equipment  in 2000.
Substantially  all assets of Lynch  Systems are pledged in support of the credit
facility. In addition,  the Company has guaranteed the full amount of the credit
facility  and has pledged $4 million of its  Spinnaker  Class A Common  Stock as
additional collateral.

Lynch Corporation maintains an active acquisition program and generally finances
each  acquisition  with a significant  component of debt. This  acquisition debt
contains  restrictions  on the  amount of  readily  available  funds that can be
transferred  to the  parent  company  from its  subsidiaries.  As the  result of
acquisitions, Lynch consolidated, Spinnaker and certain acquisition subsidiaries
have relatively high debt to equity ratios.

The Company has a significant  need for resources to fund the  operations of the
holding  company and future  growth.  There  currently is no credit  facility in
place at the Lynch  corporate  level,  and the Company is currently  considering
various long and short term financing arrangements.  One alternative could be to
sell a portion  or all of  certain  investments  in  operating  entities  either
directly or through an  exchangeable  debt  instrument.  Additional  debt and/or
equity  financing  vehicles  at  corporate  and/or  subsidiaries  are also being
considered.  While management expects to obtain adequate financing  resources to
enable the company to meet its obligations,  there is no assurance that such can
be readily obtained or at reasonable costs.

The  Company is  exploring  all options  with  respect to  Spinnaker,  including
liquifying and monetizing its investment,  and searching for ways to provide the
Company with a more financially visible investment with respect to M-tron. There
is no assurance that any transaction will be implemented.

In March,  2000, the Company completed the previously  announced sale of 100,000
shares of its common stock to its Chairman at $30 per share, or $3 million. This
transaction is subject to shareholder  ratification at the Company's 2000 annual
meeting. These funds will be available for general corporate purposes.

YEAR 2000

The Company had  initiated a  comprehensive  review of its  computer  systems to
identify  the  systems  that  could be  affected  by the "Year  2000"  issue and
developed an  implementation  plan to resolve the issue. The Year 2000 issue was
the result of computer  programs  being  written  using two digits  (rather than
four) to define the applicable  year. Any of the Company's  programs or programs
utilized  by  vendors  to the  Company  that have  time-sensitive  software  may
recognize  a date using "00" as the year 1900  rather  than the year 2000.  This
could have resulted in a major system failure or  miscalculation.  The Company's
Year 2000  review was  performed  primarily  by internal  staff,  and in certain
operations  supplemented  by  outside  consultants.  The  principal  Information
Technology  (IT)  systems  for the Company  are sales  order  entry,  shop floor
control,  inventory control and accounting. The Year 2000 may have also impacted
various non-IT systems,  including among other things  security  systems,  HVAC,
elevator systems, and communications systems. In addition, each of the Company's
businesses  may have been  impacted  by the Year 2000  readiness  of third party
vendors/suppliers.

The assessment phase for the Company's manufacturing businesses was completed by
the 4th quarter of 1999. Based upon its identification  and assessment  efforts,
the  Company  determined  that  certain of its  computer  and  software  used in
manufacturing and accounting systems required replacement or modification.  Such
replacements  and  modifications  were completed in the 4th quarter of 1999. The
total  cost  of  Year  2000  remediation  was  $0.2  million.   A  comprehensive
contingency plan had been completed in the 4th quarter of 1999.

The assessment, implementation and contingency plans for the Company's Year 2000
program were based on  management's  estimates and were developed using numerous
assumptions of future events,  some of which were beyond the Company's  control.
The  Company  believed  that with  modifications  to existing  software  and the
conversion  to new  software,  the Year 2000  issue  would not pose  significant
operational problems for the Company as a whole.

The Company  experienced  no  significant  occurrences  related to the Year 2000
issue.

MARKET RISK

The Company is exposed to market risk  relating to changes in the general  level
of U.S. interest rates. Changes in interest rates affect the amounts of interest
earned  on  the  Company's  cash  equivalents  and  short-term  investments  and
restricted  cash.  The  Company  generally  finances  the  debt  portion  of the
acquisition  of long-term  assets with fixed rate,  long-term  debt. The Company
generally  maintains  the majority of its debt as fixed rate in nature either by
borrowing  on a fixed  long-term  basis or, on a limited  basis,  entering  into
interest rate swap  agreements.  The Company does not use  derivative  financial
instruments for trading or speculative purposes. Management does not foresee any
significant  changes in the strategies  used to manage interest rate risk in the
near future,  although the strategies  may be  reevaluated as market  conditions
dictate.

At December 31,  1999,  approximately  $23.2  million,  or 16% of the  Company's
long-term debt and notes payable bears interest at variable rates.  Accordingly,
the Company's earnings and cash flows are affected by changes in interest rates.
Assuming the current level of  borrowings  for variable rate debt and assuming a
one  percentage  point  change in the 1999  average  interest  rate under  these
borrowings,  it is estimated that the Company's  1999 and 1998 interest  expense
would have changed by $.2 million and $.5 million, respectively. In the event of
an adverse  change in interest  rates,  management  would likely take actions to
further  mitigate its exposure.  However,  due to the uncertainty of the actions
that would be taken and their  possible  effects,  the analysis  assumes no such
actions.  Further,  the analysis  does not consider the effects of the change in
the level of overall economic activity that could exist in such an environment.

ITEM 7A.          QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The  information  required by this Item 7A is included under the caption "Market
Risk" in  "Management's  Discussion  and  Analysis of  Financial  Condition  and
Results of Operations" in Item 7.

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         See Item 14(a).

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

Not applicable.


                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The  information  required  by  this  Item  10 is  included  under  the  caption
"Executive  Officers of the  Registrant" in Item 1 hereof and included under the
captions  "Election of Directors" and "Section 16(a)  Reporting" in Registrant's
Proxy  Statement  for  its  Annual  Meeting  of  Shareholders  for  2000,  which
information is incorporated herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION

The  information  required  by  this  Item 11 is  included  under  the  captions
"Compensation of Directors," "Executive  Compensation,"  "Executive Compensation
and Benefits Committee Report on Executive Compensation" and "Performance Graph"
in Registrant's Proxy Statement for its Annual Meeting of Shareholders for 2000,
which information is incorporated herein by reference.  The Performance Graph in
the Proxy  Statement  shows that  Registrant's  Common Stock under performed the
American  Stock  Exchange  Market  Value  Index and a combined  peer group index
(telephone  communications,  except radio telephone operations,  converted paper
and paperboard and trucking except local) in 1998 and out performed said indices
in  1997,  1996 and  1995.  As a  result  of the  spin off of Lynch  Interactive
Corporation, performance for 1999 was not comparative.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this Item 12 is included under the caption "Security
Ownership of Certain  Beneficial  Owners and  Management,"  in the  Registrant's
Proxy  Statement  for  its  Annual  Meeting  of  Shareholders  for  2000,  which
information is included herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  information  required  by  this  Item  13 is  included  under  the  caption
"Executive Compensation",  and "Transactions with Certain Affiliated Persons" in
the  Registrant's  Proxy  Statement for its Annual Meeting of  Shareholders  for
2000, which information is included herein by reference.


<PAGE>



                                     PART IV

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

(a)               The following documents are filed as part of this Form 10-K
                   Annual Report:

                  (1)       Financial Statements:

                  The  Report  of   Independent   Auditors  and  the   following
                  Consolidated  Financial Statements of the Company are included
                  herein:

                  Consolidated Balance Sheets at December 31, 1999 and 1998

                  Consolidated Statements of Operations - Years ended December
                   31, 1999, 1998, and 1997

                  Consolidated  Statements of Shareholders' Equity - Years ended
                    December 31, 1999, 1998, and 1997

                  Consolidated  Statements of Cash Flows - Years ended  December
                   31, 1999, 1998, and 1997

                  Notes to Consolidated Financial Statements

                  (2)  Financial Statement Schedules as of December 31, 1999
                  and 1998 and for the three years ended December 31, 1999:

                  Schedule I - Condensed Financial Information of Registrant

                  Schedule II - Valuation and Qualifying Accounts

                  All  other  schedules  for  which  provision  is  made  in the
applicable  accounting  regulation of the Securities and Exchange Commission are
not required under the related instructions, or are inapplicable,  and therefore
have been omitted.

(3)      Exhibits:  See the Exhibit Index on pages 67-70 of this Form 10-K
                  Annual Report.

         See Page 2 above re Forward Looking Information.
         -----------------------------------------------

(b)             Reports on Form 8-K:

         A Form 8-K dated October 6, 1999,  was filed relating to Lynch Systems,
         Inc.'s receipt of a large order and settlement of a lawsuit.

(c)         The  following  Exhibits  listed in the Exhibit Index are filed with
            this Form 10-K Annual Report:

         *10(u)   -     Letter of Understanding between Registrant and
                        Louis A. Guzzetti.

         21       -     Subsidiaries of the Registrant

         23       -     Consent of Ernst & Young LLP

         24       -     Powers of Attorney

         27       -     Financial Data Schedule

*  Management contact or compensatory arrangement


(d)           Financial Statement Schedules:

              Financial Statement Schedules are listed in response to
              Item 14(a)(2)





<PAGE>




REPORT OF INDEPENDENT AUDITORS

Shareholders and Board of Directors
Lynch Corporation

We  have  audited  the  accompanying   consolidated   balance  sheets  of  Lynch
Corporation  and  subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of operations,  shareholders' equity, and cash flows for
each of the three years in the period ended  December 31, 1999.  Our audits also
included the financial  statement  schedules  listed in the index at Item 14(a).
These financial statements and schedules are the responsibility of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements and schedules 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 Lynch
Corporation and  subsidiaries at December 31, 1999 and 1998 and the consolidated
results of their  operations and their cash flows for each of the three years in
the period ended  December 31, 1999, in conformity  with  accounting  principles
generally  accepted in the United  States.  Also,  in our  opinion,  the related
financial  statement  schedules,  when  considered  in  relation  to  the  basic
financial  statements taken as a whole, present fairly, in all material respects
the information set forth therein.


                                             /s/ ERNST & YOUNG LLP

Stamford, Connecticut
March 28, 2000


<PAGE>
<TABLE>


                       LYNCH CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)

<CAPTION>

ASSETS                                                             December 31     December 31
                                                                      1999             1998
CURRENT ASSETS:
<S>                                                                   <C>          <C>
     Cash and cash equivalents ....................................   $  13,106    $   1,132
     Trade accounts receivables, less allowances of $361 and $395 .      24,642       25,320
     Inventories ..................................................      31,680       28,396
     Deferred income taxes ........................................       8,943       11,714
     Other current assets .........................................       1,303        1,787
     Net current assets of subsidiaries distributed to shareholders        --         58,047
     Net current assets of discontinued operations ................        --         36,226
                                                                      ---------    ---------
TOTAL CURRENT ASSETS ..............................................      79,674      162,622

Restricted Cash ...................................................      56,026         --

PROPERTY, PLANT AND EQUIPMENT:
     Land .........................................................         672          672
     Buildings and Improvements ...................................      11,015       12,585
     Machinery and Equipment ......................................      54,529       51,306
                                                                      ---------    ---------
                                                                         66,216       64,563
    Accumulated Depreciation ......................................     (22,137)     (17,534)
                                                                      ---------    ---------
                                                                         44,079       47,029
EXCESS OF COST OVER FAIR VALUE OF NET ASSETS
   ACQUIRED, NET ..................................................      22,020       21,075
OTHER ASSETS ......................................................       9,393        7,328
NET NON - CURRENT ASSETS OF SUBSIDIARIES DISTRIBUTED
  TO SHAREHOLDERS .................................................        --        170,295
NET NON - CURRENT ASSETS OF DISCONTINUED OPERATIONS ...............        --         71,651
                                                                      ---------    ---------
TOTAL ASSETS ......................................................   $ 211,192    $ 480,000
                                                                      =========    =========

</TABLE>
See accompanying notes


<PAGE>
<TABLE>

                     LYNCH CORPORATION AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEET
                               (In Thousands)
<CAPTION>

                                                               December 31      December 31
                                                                  1999             1998
CURRENT LIABILITIES
<S>                                                         <C>          <C>
   Notes payable to banks ...............................   $  23,178    $  59,686
     Trade accounts .....................................      14,404       18,178
     Accrued interest payable ...........................       2,426        2,575
     Accrued liaiblites .................................      13,956        3,580
     Customer advances ..................................         860        2,406
     Current maturities of long-term debt ...............       1,636        2,027
     Net current liabilities of subsidiaries
       distributed to shareholder .......................        --         37,240
     Net current liabilities of discontinued operations .        --         18,162
                                                            ---------    ---------
TOTAL CURRENT LIABILITIES ...............................      56,460      143,854

LONG-TERM DEBT ..........................................     116,765      126,976
DEFERRED INCOME TAXES ...................................       6,225       11,715
OTHER LONG-TERM LIABILITIES .............................       4,866        2,182
MINORITY INTERESTS ......................................      10,885        3,999
NET NON-CURRENT LIABILITIES OF SUBSIDIARIES
  DISTRIBUTED TO SHAREHOLDERS ...........................        --        147,600
NET NON-CURRENT LIABILITIES OF DISCONTINUED
   OPERATIONS ...........................................        --          3,881


COMMITMENT AND CONTINGINCIES

SHAREHOLDERS' EQUITY
  COMMON STOCK, NO PAR VALUE - 10,000,000 SHARES
    AUTHORIZED; 1,471,191 shares issued (at stated value)       5,139        5,139
  ADDITIONAL PAID-IN CAPITAL ............................       8,302        8,554
  RETAINED EARNING ......................................       3,843       26,771
  ACCUMULATED OTHER COMPREHENSIVE INCOME(LOSS) ..........         (40)          59
  TREASURY STOCK OF 61,008 AND 52,943 SHARES AT COST ....      (1,253)        (730)
                                                            ---------    ---------
                                                               15,991       39,793
                                                            ---------    ---------
                                                            $ 211,192    $ 480,000
                                                            =========    =========
</TABLE>
See accompanying notes


<PAGE>
<TABLE>

                      LYNCH CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except share amounts)
<CAPTION>

                                                                    Years Ended December 31
                                                               1999           1998           1997
<S>                                                        <C>            <C>            <C>
SALES AND REVENUES .....................................   $   194,222    $   187,644    $   153,735


Costs and expenses:
   Manufacturing .......................................       172,567        162,735        126,570
   Selling and Administrative ..........................        21,570         20,835         20,435
                                                           -----------    -----------    -----------
  OPERATING PROFIT .....................................            85          4,074          6,730

Other Income (expense):
  Investment Income ....................................         2,354            199            305
  Interest Expense .....................................       (11,882)        (8,591)        (5,189)
  Gain on Sale of Stock by Subsidiary ..................          --            2,090            (91)
                                                           -----------    -----------    -----------
                                                                (9,528)        (6,302)        (4,975)
                                                           -----------    -----------    -----------

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
  INCOME TAXES, MINORITY INTERESTS, DISCONTINUED
  OPERATIONS AND EXTRAORDINARY ITEM ....................        (9,443)        (2,228)         1,755

Benefit (provision) for income taxes ...................         2,544          1,408           (301)
Minority interests .....................................         2,647          1,107           (121)
                                                           -----------    -----------    -----------

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
DISCONTINUED OPERATIONS AND EXTRAORDINARY ITEM .........        (4,252)           287          1,333

DISCONTINUED OPERATIONS:
 Income (loss) from operations of Lynch Interactive
 Corporation distributed to shareholders (less income
 Tax (provision) benefit of $3,068, ($5,012), and $3,848
 and minority interests of $578, $1,226, and $714)......        (7,493)         4,929         (3,349)

(Loss) from discontinued operations of Industrial
  tape segment (less income tax benefit of $308,
  $2,192, and $226 and minority interests of $558,
  $1,429, and $239) ....................................          (572)        (1,859)          (862)


Gain on sale of Industrial tape segment
 (less income tax provision of $6,495 and
  minority interest of $7,013) .........................        10,431           --             --

EXTRAORDINARY ITEM:
  Gain on early extinguishment of debt (less
  income tax provision of 4355 and minority
  interest of $300) ....................................           303           --             --
                                                           -----------    -----------    -----------
NET INCOME (LOSS) ......................................   $    (1,583)   $     3,357    $    (2,878)
                                                           ===========    ===========    ===========
Weighted average shares outstanding ....................     1,415,000      1,418,000       1,415,00

Basic and diluted earnings (loss) per share:

Income (loss) from continuing operations
 before discontinued operations ........................   $     (3.00)   $       .20    $      0.94
Income (loss) from operations of
   Lynch Interactive Corporation .......................         (5.30)          3.48          (2.37)
Income (loss) from gain on sale and operations
  of industrial tape segement ..........................          6.97          (1.31)         (0.61)
Extraordinary item .....................................           .21           --             --
                                                           -----------    -----------    -----------
NET INCOME (LOSS) ......................................   $     (1.12)   $      2.37    $     (2.03)
                                                           ===========    ===========    ===========
</TABLE>

Accmpanying notes

<PAGE>

<TABLE>


                       Lynch Corporation and Subsidiaries
                 Consolidated Statements of Shareholders' Equity

                   For the Three Years Ended December 31, 1999
                    (In Thousands except for shares of common
                                     stock)
<CAPTION>

                                                                                    ACCUMULATED
                                                             ADDITIONAL                OTHER
                             SHARES OF COMMON   COMMON        PAID-IN    RETAINED  COMPREHENSIVE     TREASURY
                            STOCK OUTSTANDING   STOCK         CAPITAL    EARNINGS      INCOME          STOCK         TOTAL
                               ------------   ----------   -----------   ------------ ------------  ----------      ---------
<S>                              <C>          <C>          <C>             <C>          <C>          <C>
BALANCE AT DEC 31, 1996 .....    1,391,034    $    5,139   $    8,417      $  26,472         --      $   (1,105)     $ 38,923
Issuance of Treasury Stock ..       26,014          --            313          --            --             359           672
Capital transactions of The
 Morgan Group, Inc.                   --            --            (86)         --            --            --             (86)
Dividend of East/West
 Communications, Inc.                 --            --           --            (180)         --            --            (180)
Net income (loss) for year ..         --            --           --          (2,878)         --            --          (2,878)
                                ----------    ----------   ----------    ----------    ----------    ----------    ----------
BALANCE AT DEC 31, 1997 .....    1,417,048         5,139        8,644        23,414          --            (746)       36,451
Issuance of Treasury Stock ..        1,200          --             74          --            --              16            90
Capital transactions of The
 Morgan Group, Inc.                   --            --          (164)          --            --            --            (164)
Net income (loss) for year ..         --            --           --           3,357          --            --           3,357
Other comprehensive income             --            --           --            --              59          --              59
                                ----------    ----------   ----------    ----------    ----------    ----------    ----------
BALANCE AT DEC 31, 1998 .....    1,418,248         5,139        8,554        26,771            59          (730)       39,793
   Purchase of Treasury Stock       (8,065)         --             --          --            --            (523)         (523)
Capital transactions of The
 Morgan Group, Inc.                   --            --          (252)          --            --            --            (252)
Dividend of Lynch
   Interactive Corporation           --            --           --         (21,345)          (59)          --         (21,404)
Net income (loss) for year           --            --           --          (1,583)          --            --          (1,583)
Other comprehensive income           --            --           --             --            (40)          --             (40)
                                ----------    ----------   ----------    ----------    ----------    ----------    ----------
BALANCE AT DEC 31, 1999 .....    1,410,183    $    5,139   $    8,302    $    3,843    $      (40)   $   (1,253)   $   15,991
                                ----------    ----------   ----------    ----------    ----------    ----------    ----------
</TABLE>


<PAGE>
<TABLE>

                      LYNCH CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>

(In Thousands)                                                                Years Ended December 31
                                                                    -----------------------------------------
                                                                            1999      1998          1997
                                                                    -----------------------------------------
OPERATING ACTIVITIES
<S>                                                                     <C>            <C>          <C>
Net income (loss)                                                       ($1,583)       $3,357       ($2,878)
Adjustments to reconcile net income (loss) to net
   cash provided by operating activities of continuing operations:
Adjustment from discontinued operations:
   (Income) loss from operations of Lynch Interactive Corporation          7,493      (4,929)          3,349
   Loss from operations of industrial tape segment                           572        1,859            862
   Gain on sale of industrial tape segment                              (10,431)            -              -
Extraordinary item                                                         (303)            -              -
   Depreciation and amortization                                           7,020        5,165          3,216
   Amortization of deferred financing charges                                786          771            632
   Gain on sale of stock by subsidiary corporation                            --      (4,778)          (169)
   Deferred taxes                                                          3,281      (1,488)        (1,279)
   Minority interests                                                      6,886      (2,536)          (367)
   Gain on sale of fixed assets                                            (854)            -              -
   Changes in operating assets and liabilities:                                -            -              -
       Receivables                                                           678        2,560          1,959
       Inventories                                                       (3,284)        2,270             22
       Accounts payable and accrued liabilities                          (7,897)        8,317        (3,450)
       Other                                                               1,144        (728)          (479)
                                                                    -------------   ----------   ------------

Cash provided by operating activities of continuing operations             3,508        9,840          1,418
                                                                    -------------   ----------   ------------

INVESTING ACTIVITIES

Capital Expenditures                                                     (3,795)      (3,297)        (3,231)
Investment in Spinnaker Coating - Maine                                        -     (47,933)              -
Proceeds from sale of industrial tape segment                            104,450            -              -
Proceeds from sale of fixed assets                                         2,403        2,696              -
Other                                                                        509        (128)        (1,339)
                                                                    -------------   ----------   ------------

Cash provided by (used in) investing activities of
   continuing operations                                                 103,567     (48,662)        (4,570)
                                                                    -------------   ----------   ------------

FINANCING ACTIVITIES

Net borrowings (repayments) of notes payable                            (36,127)       42,268          1,121
Issuance of long-term debt                                                     -        6,025          1,262
Repayment of long-term debt                                             (10,937)      (1,954)        (1,991)
Deferred financing costs                                                   (580)        (726)              -
(Purchase) sale of treasury stock                                          (775)           90            672
Other                                                                          -        (841)            755

                                                                    -------------   ----------   ------------
Cash provided by (used in) financiging activities of
   continuing operations                                                (48,419)       44,862          1,819
                                                                    -------------   ----------   ------------

Net increase (decrease) in cash and cash equivalents                      58,656        6,040        (1,333)
Cash provided by (used by) Lynch Interactive Corporation                   3,599      (1,880)          (557)
Cash provided by (used by) industrial tape segment                         5,745      (7,025)            864
                                                                                      -------
                                                                    -------------                ------------

Increase (decrease) in cash and cash equivalents                          68,000      (2,865)        (1,026)
Cash and cash equivalents at beginning of period                           1,132        3,997          5,023
                                                                    -------------   ----------   ------------

Cash and cash equivalents at end of period, including
   $56,026 of Restricted Cash at December 31, 1999                       $69,132       $1,132         $3,997
                                                                    =============   ==========   ============
</TABLE>
                       Lynch Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements
                               December 31, 1999

1.       Accounting and Reporting Policies

Principles of Consolidation

The consolidated  financial statements include the accounts of Lynch Corporation
(the "Company" or "Lynch") and entities in which it has majority voting control.
All material  intercompany  transactions  and accounts  have been  eliminated in
consolidation.  See Note 4 for  details  of the  spin  off of Lynch  Interactive
Corporation which occurred on September 1, 1999.

Uses of Estimates

The  preparation  of  consolidated   financial  statements  in  conformity  with
accounting   principles   generally  accepted  in  the  United  States  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.

Cash Equivalents

Cash  equivalents  consist of highly liquid  investments with a maturity of less
than three months when purchased.

At December 31, 1999 and 1998,  assets of $1.1 million and $1.3  million,  which
are  classified  as cash and cash  equivalents,  are  invested in United  States
Treasury  money  market  funds  for which  affiliates  of the  Company  serve as
investment managers to the respective funds.

Restricted Cash

At  December  31,  1999 the Company  had $56  million of  Restricted  Cash.  See
discussion of Restricted Cash in Note 6 - Notes Payable and Long-Term Debt.

Property, Plant and Equipment

Property,  plant and equipment are recorded at cost and include expenditures for
additions  and major  improvements.  Maintenance  and  repairs  are  charged  to
operations  as  incurred.  Depreciation  is  computed  for  financial  reporting
purposes using the  straight-line  method over the estimated useful lives of the
assets,  which  range  from 3  years  to 35  years.  For  income  tax  purposes,
accelerated depreciation methods are used.

Excess of Cost over Fair Value of Net Assets of Companies Acquired

Excess of cost over fair value of net assets of companies acquired (goodwill) is
being  amortized on a  straight-line  basis over periods  ranging from twenty to
forty years. The Company periodically reviews goodwill to assess recoverability,
and  impairments  would  be  recognized  in  operating  results  if a  permanent
diminution in value were to occur. The Company measures the potential impairment
of recorded goodwill by the undiscounted  value of expected future cash flows in
relation to its net capital  investment in the subsidiary.  Based on its review,
the Company does not believe that an  impairment  of its goodwill has  occurred.
Excess  of cost over  fair  value of net  assets  acquired  include  acquisition
intangibles of $23.4 million and $21.6 million, net of accumulated  amortization
of $1,391,000 and $574,000 at December 31, 1999 and 1998, respectively.

Revenue Recognition

Revenues, with the exception of certain long-term contracts discussed below, are
recognized on shipment.

Research and Development Costs

Research and development costs are charged to operations as incurred. Such costs
were $571,000, $1,030,000, and $1,022,000 in 1999, 1998, and 1997, respectively.

Earnings Per Share

In 1997, the Company  adopted  Financial  Accounting  Standards  Board Statement
("SFAS") No. 128, "Earnings Per Share". SFAS No. 128 replaced the calculation of
primary and fully diluted earnings per share with basic and diluted earnings per
share.  Unlike primary earnings per share, basic earnings per share excludes any
dilutive  effects of options,  warrants,  and  convertible  securities.  Diluted
earnings per share are very similar to the  previously  reported  fully  diluted
earnings  per share.  The  Company's  basic and diluted  earnings  per share are
equivalent as the Company has no dilutive securities.

Segment Information

Effective  December 1998, the Company adopted SFAS No. 131,  "Disclosures  About
Segments of an Enterprise and Related Information". SFAS No. 131 superseded SFAS
No. 14, "Financial  Reporting for Segments of a Business  Enterprise".  SFAS No.
131  establishes  new  standards  for  reporting   information  about  operating
segments. SFAS No. 131 requires disclosure of selected financial and descriptive
information  for  each  operating   segment  based  on   management's   internal
organizational decision-making structure.  Additional information is required on
a  company-wide  basis  for  revenues  by  product  or  service,   revenues  and
identifiable  assets by geographic  location and information  about  significant
customers.  The adoption of SFAS No. 131 did not affect results of operations or
financial position, but did affect the disclosure of segment information.  Prior
year amounts have been  reclassified to conform to the  requirements of SFAS No.
131. See Note 14.

Pension and Other Post-Retirement Benefits

In February 1998,  the FASB issued SFAS No. 132,  "Employers  Disclosures  About
Pensions  and Other  Post-Retirement  Benefits",  which is an  amendment to SFAS
No.'s 87, 88, and 106. This SFAS revises  employers'  disclosures  about pension
and other post-retirement  benefits plans. It does not change the measurement or
recognition of those plans.  The adoption of SFAS No. 132 in 1998 did not have a
significant  impact on the Company's  consolidated  financial  statements as the
Company's benefit plans are not material.

Accounting for Long-Term Contracts

Lynch  Systems,  Inc., a 91% owned  subsidiary  of the Company is engaged in the
manufacture   and   marketing  of   glass-forming   machines   and   specialized
manufacturing  machines.  Certain  sales  contracts  require an advance  payment
(usually  15% of the  contract  price)  which  is  accounted  for as a  customer
advance.  The contractual  sales prices are paid either (i) as the manufacturing
process  reaches  specified  levels of  completion or (ii) based on the shipment
date. Guarantees by letter of credit from a qualifying financial institution are
required for most sales  contracts.  Because of the specialized  nature of these
machines  and the period of time needed to  complete  production  and  shipping,
Lynch Systems  accounts for these contracts  using the  percentage-of-completion
accounting method as costs are incurred. At December 31, 1999 and 1998, costs in
excess of billings were $95,000 and $0, respectively.

Impairments

The Company accounts for impairments of long-lived assets in accordance with the
provisions of SFAS No. 121,  "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of". The Company periodically  assesses
the net realizable value of its long-lived  assets and evaluates such assets for
impairment  whenever  events or changes in  circumstances  indicate the carrying
amount  of an asset  may not be  recoverable.  For  assets  to be held and used,
impairment is determined  to exist if estimated  undiscounted  future cash flows
are less than the carrying amount.  For assets to be disposed of,  impairment is
determined  to exist if the  estimated  net  realizable  value is less  than the
carrying amount.

Stock Based Compensation

The  Company  accounts  for stock  based  compensation  in  accordance  with the
provisions of SFAS No. 123, "Accounting for Stock Based Compensation".  SFAS No.
123  establishes a fair value method of accounting  and reporting  standards for
stock based  compensation  plans.  However as  permitted  by SFAS No.  123,  the
Company has elected to continue to apply the provisions of Accounting Principles
Board Opinion  ("APB") No. 25, if the exercise  price of the Company's  employee
stock options was not less than the market price of the underlying  stock on the
date of grant, no compensation expense is recognized. The Company is required to
disclose the pro forma net income  (loss) and net income  (loss) per share as if
the fair value  method  defined  in SFAS No. 123 had been  applied to all grants
made on or after January 1, 1995. See Note 8 for pro forma disclosures.

Fair Value of Financial Instruments

Cash and cash equivalents,  trade accounts  receivable,  short-term  borrowings,
trade  accounts  payable  and  accrued  liabilities  are  carried  at cost which
approximates fair value due to the short-term maturity of these instruments. The
carrying account of the Company's borrowings under its revolving lines of credit
approximates  fair value, as the  obligations  bear interest at a floating rate.
The  fair  value of  other  long-term  obligations  approximates  cost  based on
borrowing  rates for similar  instruments,  excluding the Spinnaker  Industries,
Inc. ("Spinnaker")  senior-secured debt with a carrying value of $109 million at
December  31,  1999 and $115  million at  December  31, 1998 and a fair value of
between $87.8 million and $92.3 million,  and $100.1 million,  respectively,  at
December 31, 1999 and 1998, based on quoted market prices.

Issuance of Stock by Subsidiaries and Investees

Changes  in the  Company's  equity  in a  subsidiary  or an  investee  caused by
issuance of the  subsidiary's or investees'  stock are accounted for as gains or
losses where such issuance is not part of a broader reorganization (see Note 9).

Reclassifications

The consolidated  financial statements reflect the spin off of Lynch Interactive
Corporation  (Interactive)  from Lynch  Corporation  that  occurred in the third
quarter of 1999 and also the sale by Spinnaker Industries,  Inc. (Spinnaker), of
its two industrial tape units, Central Products Company and Spinnaker Electrical
that also  occurred in the third  quarter of 1999.  Accordingly,  the  operating
results of both Interactive and the industrial tape segment have been segregated
from  continuing  operations  of the Company and are  reported as separate  line
items on the financial  statements as discontinued  operations.  The comparative
amounts  for 1998 and  1997  have  also  been  restated  to  reflect  the  above
transactions.

Certain  other  amounts  in the 1998 and 1997  financial  statements  have  been
reclassified to conform to the 1999 presentation.  These other reclassifications
are immaterial to the consolidated financial statements taken as a whole.

Recent Accounting Pronouncements

In June 1998,  the  Financial  Accounting  Standards  Board issued SFAS No. 133,
"Accounting  for  Derivative  Instruments  and  Hedging  Activities",  which  is
required  to be adopted in years  beginning  after June 15,  2000.  SFAS No. 133
requires the Company to recognize all  derivatives  on the balance sheet at fair
value.  Derivatives  that are not hedges must be adjusted to fair value  through
income.  If the  derivative  is a hedge,  depending  on the nature of the hedge,
changes in fair value are either  offset  against  the  changes in fair value of
assets and  liabilities  through  earnings or recognized in other  comprehensive
income until the hedged item is recognized in earnings. Because of the Company's
minimal use of derivatives,  management does not anticipate that the adoption of
SFAS No.  133 will  have a  significant  effect  on its  earnings  or  financial
position.

2.       Acquisitions

On July 31, 1998,  the  Company's  subsidiary,  Spinnaker,  acquired  tesa tape,
Inc.'s  pressure-sensitive  electrical tape product line and its Carbondale,  IL
manufacturing plant (the "Spinnaker Electrical Acquisition"). The purchase price
totaled $10.7  million,  comprised of 200,000  shares of Spinnaker  common stock
(subject to adjustment) valued at $3.7 million,  $4.5 million in term debt, $2.0
million in cash, and a $0.5 million  subordinated  note.  The acquired  business
produces  electrical  tape for insulating  motors,  coils and  transformers  for
customers  in Europe,  Canada and the U.S.  This company was  subsequently  sold
within the industrial tape segment. See Note 3 - Discontinued Operations.

On March 17, 1998, Spinnaker  Coating-Maine,  Inc., a wholly owned subsidiary of
Spinnaker,  acquired the assets of the pressure-sensitive  adhesive-backed label
stock  business of S. D. Warren (the "S.D.  Warren  Acquisition").  The purchase
price  was  approximately   $51.8  million,   plus  the  assumption  of  certain
liabilities  and  transaction  costs,  and was  funded by  issuing  the seller a
convertible  subordinated  note of $7.0  million  with the  remainder  funded by
Spinnaker's  revolving credit  facility.  As a result of this  transaction,  the
Company  recorded  approximately  $23.1  million  in  goodwill  which  is  being
amortized over 30 years.

All of the above acquisitions were accounted for as purchases,  and accordingly,
the assets  acquired and  liabilities  assumed were recorded at their  estimated
fair market  values on their  respective  dates of  acquisition.  The  operating
results of the acquired companies are included in the Consolidated Statements of
Operations  from their  respective  acquisition  dates  except for the tesa tape
acquisition, which is included in discontinued operations.

The following unaudited pro forma information shows the results of the Company's
operations  presented  as if  the S.  D.  Warren  Acquisition  was  made  at the
beginning  of 1997.  The  unaudited  pro forma  information  is not  necessarily
indicative  of the  results  of  operations  that would  have  occurred  had the
transactions  been made at that date nor is it necessarily  indicative of future
results of operations.
<TABLE>
<CAPTION>

                                        For the years ended December 31
                                    (In thousands, except per share amounts)
                                             1998        1997

<S>                                        <C>         <C>
Sales ..................................   $ 199,758   $ 217,614
                                           =========   =========
Income (loss) from continuing operations   $  (3,053)  $   2,274
                                           =========   =========

Net income (loss) ......................   $   3,197   $  (1,937)
                                           =========   =========
Basic and diluted earnings per share:
Income (loss) from continuing operations   $   (2.15)  $    1.61
                                           =========   =========

Net income (loss).......................   $    2.25   $   (1.37)
                                           =========   =========
</TABLE>



3.       Discontinued Operations

On April 9, 1999,  Spinnaker  entered  into a  definitive  agreement to sell its
industrial  tape  segment  to  Intertape  for  approximately  $105  million  and
five-year  warrants to purchase  300,000  shares of Intertape  common stock (New
York Stock Exchange Symbol "ITP") at an exercise price of $29.50 per share.  The
warrants  were valued at  approximately  $3.0  million  using the  Black-Scholes
option pricing model and are reflected in other assets.  Accordingly,  operating
results of the  industrial  tape segment have been  segregated  from  continuing
operations and reported as a separate line item on the statement of operations.

The sale of the two  industrial  tape  businesses  closed on August 10, 1999 and
July 30, 1999, respectively.  The Company recorded gains totaling $17.4 million,
net of applicable income taxes of approximately  $6.5 million.  Spinnaker offset
the cash tax liability by utilizing net operating loss carry forwards.

The Company has restated its prior financial statements to present the operating
results  of  the  industrial  tape  segment  as a  discontinued  operation.  The
industrial tape segment net sales were $69.5 million,  $121.8 million and $119.7
million for the periods ended December 31, 1999 (through the date of sale), 1998
and 1997, respectively.

General  corporate  office  expenses  related  to  finance  and   administrative
functions  including  public  company  compliance  reporting,  bank and investor
relations,   taxes  other  than  income  taxes  and  holding  company   payroll,
historically  allocated and charged to the industrial tape segment were reversed
and allocated back to continuing operations.  These expenses were not considered
to be  directly  attributed  to  discontinued  operations.  Historical  expenses
allocated back to continuing  operations totaled $1.0 million,  $1.5 million and
$0.9  million  in  the  periods  ended   December  31,  1999,   1998  and  1997,
respectively.

Interest expense  attributed to the Senior Notes and related deferred  financing
has  historically  been allocated based on the pro rata share of subsidiary debt
obligations  retired with the proceeds from the issuance of the Senior Notes, to
total debt obligations retired. The Senior Note proceeds were used to extinguish
certain  outstanding  term and revolver  obligations  in October 1996.  Interest
expenses  charged to the  discontinued  industrial  tape  segment  totaled  $5.2
million for the period  ended  December 31, 1999 and $8.5 million in the periods
ended December 31, 1998 and 1997.

The assets and liabilities of the industrial tape segment of Spinnaker  included
in the accompanying  consolidated  balance sheet at December 31, 1998 consist of
the following (in thousands):
<TABLE>

<S>                                                   <C>
Accounts receivable, net ..........................   $14,815
Inventories, net ..................................    18,167
Prepaids and other ................................     3,244
                                                      -------
Current assets of discontinued operations .........   $36,226
                                                      =======

Property, plant and equipment, net ................   $48,312
Goodwill and other assets .........................    23,339
                                                      -------
Non-current assets of discontinued operations .....   $71,651
                                                      =======

Accounts Payable ..................................   $13,720
Accrued liabilities ...............................     4,442
                                                      -------

Current liabilities of discontinued operations ....   $18,162
                                                      =======

Non-current liabilities  of discontinued operations   $ 3,881
                                                      =======
</TABLE>


4.           Spin Off

On August 12, 1999,  the Board of Directors  approved a plan to  distribute  the
stock  of  Lynch  Interactive  Corporation  on  a  one  for  one  basis  to  the
shareholders of Lynch Corporation  ("spin off"). Lynch completed the spin off of
Lynch  Interactive   Corporation   ("Interactive")  on  September  1,  1999,  to
stockholders of record on August 23, 1999.  Pursuant to the spin off, each Lynch
shareholder  received  one share of  Interactive  common stock for each share of
Lynch  owned.  Lynch had  received a private  letter  ruling  from the  Internal
Revenue  Service  that  the spin  off  would be tax free to Lynch  shareholders.
Interactive is listed on the American Stock Exchange under the symbol "LIC".

Interactive  owns all of what were  Lynch's  multimedia  and service  businesses
while  Lynch  retained  the  manufacturing  businesses.   Interactive  owns  the
telephone companies,  television interests and PCS interests, as well as the 55%
equity interest of The Morgan Group, Inc. In addition,  Interactive owns a 13.6%
equity interest in Spinnaker Industries, Inc. Lynch owns a 47.6% equity interest
in Spinnaker (60.4% of voting interest),  as well as 100% of M-tron  Industries,
Inc. and 92% of Lynch Systems, Inc.

As a result,  the Company's  multimedia and services segments are being reported
as operations  distributed  to  shareholders  in the  accompanying  consolidated
financial  statements.  Accordingly,  operating  results  of  Lynch  Interactive
Corporation  have been segregated  from continuing  operations and reported as a
separate line item on the statements of operations.

Lynch has restated its prior year financial  statements to present the operating
results of the Company on a  comparable  basis.  Interactive's  net sales were $
204.6  million,  $205.2  million,  and $194.1 million for the fiscal years ended
December 31, 1999, 1998, and 1997, respectively.

In the third  quarter of 1999,  Lynch  acquired  by merger,  all of the stock of
Central Scott Telephone  Company.  This company became part of Lynch Interactive
and was included in the spin off.

Lynch  Interactive  and Lynch have  entered into  certain  agreements  governing
various ongoing relationships, including the provision of support services and a
tax  allocation  agreement.  The  tax  allocation  agreement  provides  for  the
allocation of tax  attributes  to each company as if it had actually  filed with
the respective  tax  authority.  At the spin off, the employees of the corporate
office  of  Lynch   Corporation   became  the  employees  of  Lynch  Interactive
Corporation and Lynch  Interactive  Corporation  began providing certain support
services to Lynch.  The Company was charged a management  fee for these services
amounting to approximately $200,000 in 1999.

The net assets of Interactive  included in the accompanying audited consolidated
balance sheet as of December 31, 1998 consist of the following: (in thousands)

<TABLE>

<S>                                                          <C>
Cash, cash equivalents and marketable securities .........   $ 27,988
 Accounts receivable, net ................................     18,853
Deferred income taxes ....................................      4,265
Prepaid expenses and other ...............................      6,941
                                                             --------
Current assets of subsidiaries distributed to shareholders   $ 58,047
                                                             ========

Property,  plant and  equipment,  net ....................   $ 91,183
Goodwill .................................................     47,740
Investment  in and  advances to PCS license  holders .....     23,360
Other  assets ............................................      8,012
                                                             --------
Non-current  assets of subsidiaries
  distributed to  shareholders ...........................   $170,295
                                                             ========

Notes payable ............................................   $  2,037
Accounts payable .........................................      4,662
Accrued liabilities ......................................     21,902
Current portion of long term debt ........................      8,639
                                                             --------
Current liabilities of subsidiaries
  distributed to shareholders ............................   $ 37,240
                                                             ========

Long Term Debt............................................   $119,024
Deferred income tax ......................................     13,062
Other  long term debt ....................................      4,987
Minority interest ........................................     10,527
                                                             --------
Non-current liabilities and
 minority interest of subsidiaries
 distributed to shareholders .............................   $147,600
                                                             ========
</TABLE>

The net assets distributed to interactive were estimated to be $ 23.0 million at
September 1, 1999. Such amount was subsequently  decreased in the fourth quarter
by $1.6 million to reflect revised estimates of liabilities distributed.

5.           Inventories

Inventories are stated at the lower of cost or market value.  Inventories valued
using the last-in, first-out (LIFO) method comprised approximately 12% and 9% of
consolidated   inventories   at  December  31,  1999  and  1998,   respectively.
Inventories  at Spinnaker  Coating,  80% and 82% of  inventories at December 31,
1999 and  1998,  respectively,  are  valued  using the  specific  identification
method.  The  balance of  inventories  are valued  using the  first-in-first-out
(FIFO) method.
<TABLE>
<CAPTION>
                               December 31
                             1999        1998
                              (In Thousands)

<S>                          <C>       <C>
Raw materials and supplies   $10,407   $ 7,711
Work in progress .........     2,114     1,273
Finished goods ...........    19,159    19,412
                             -------   -------
   Total .................   $31,680   $28,396
                             =======   =======
</TABLE>

Current cost exceeded the LIFO value of  inventories by $829,000 and $880,000 at
December 31, 1999 and 1998, respectively.

6.           Notes Payable and Long-term Debt
<TABLE>

Long-term debt consists of (all interest rates are at December 31, 1999):
<CAPTION>
                                                                                 December 31
                                                                                1999     1998
                                                                               (In Thousands)

<S>                        <C>
Spinnaker Industries, Inc. 10.75% Senior
   Secured Notes due 2,006 .............................................   $ 108,585    $ 115,000
Unsecured note issued in connection with
   acquisition at a fixed interest rate of 10% .........................       7,000        7,500
Other ..................................................................       2,816        6,503
                                                                           ---------    --------
                                                                             118,401     129,003
Current maturities .....................................................      (1,636)      (2,027)
                                                                           ---------    --------
                                                                           $ 116,765    $126,976
                                                                           =========    ========
</TABLE>

On October 23, 1996,  Spinnaker completed the issuance of $115,000,000 of 10.75%
senior-secured  debt  due  2006.  The  debt  proceeds  were  used to  extinguish
substantially  all  existing  bank  debt,  bridge  loans  and lines of credit at
Spinnaker  and  its two  major  operating  subsidiaries,  Central  Products  and
Spinnaker  Coating.  Financing  costs were incurred by Spinnaker in  conjunction
with the  issuance  of the  10.75%  senior  secured  notes and  other  financing
activities.  These  financing  costs are deferred and amortized over the term of
the related debt.  Unamortized  financing costs of $5.4 million and $5.7 million
at December 31, 1999 and 1998, respectively, are included in other assets.

The notes are redeemable,  in whole or in part, at the option of Spinnaker on or
after  October 15,  2001,  at  redemption  prices  beginning  at 105.375% of the
principal  amount declining to 100% of the principal amount on October 15, 2005,
plus  accrued and unpaid  interest.  The notes are  unconditionally  guaranteed,
jointly and severally, by Spinnaker's subsidiaries, Spinnaker Coating, Inc., and
Entoleter, Inc.

Spinnaker  completed  the sale of Central  Products on August 10, 1999 and $18.2
million of the proceeds were used to repay the working  capital  revolver  debt.
Any net cash proceeds from the sale of Central Products ("Restricted  Proceeds")
not invested in any business within 270 days after the sale of Central  Products
or not used  within that time to  permanently  reduce  indebtedness  (other than
subordinated debt) shall be deemed to be excess proceeds.  At December 31, 1999,
the amount of net cash  proceeds,  which are restricted in their future use, has
been classified as Restricted Cash on the Company's balance sheet. If any excess
proceeds  exist  270 days  after  the sale of  Central  Products,  Spinnaker  is
obligated  to utilize  those  proceeds to make an offer to  purchase  the Senior
Notes at par plus accrued interest.

During the third and fourth quarters of 1999,  Spinnaker  Electrical purchased a
total of $6.4 million of the  outstanding  Senior Notes on the open market at an
average  price of 81.5% of par value.  The  Company  has  recorded a gain on the
early  extinguishment of debt of approximately  $303,000,  which amount has been
reduced by the write-off of a proportional  amount of deferred  financing  costs
and after giving effect to taxes and minority interest.

The proceeds from the sale of Spinnaker Electrical,  an unrestricted  subsidiary
under the Indenture,  were used to repay  approximately  $6.9 million of certain
term debt and working  capital  revolver  debt  collateralized  by the assets of
Spinnaker  Electrical.  The  remaining  net  proceeds  will be used for  general
corporate  purposes,  which  may  include  purchasing  Senior  Notes in the open
market.  Other options  include  acquisitions,  capital  expenditures,  and / or
repurchase  shares of Spinnaker  common stock.  Subsequent to December 31, 1999,
Spinnaker utilizing the Restricted Proceeds, purchased $33.4 million (par value)
of outstanding  Senior Notes on the open market at an average price of 83.6%. In
addition,  Spinnaker  purchased  all of the Senior Note  holdings  of  Spinnaker
Electrical at 81.5% of par value, plus accrued interest,  representing Spinnaker
Electrical's cost basis.

At  December  31,  1998,  the  Company  had two lines of credit  totaling  $20.0
million,  of which $4.9 million was available.  In conjunction with the spin off
of Lynch Interactive,  these credit facilities were transferred from the Company
to Interactive.

On a consolidated  basis, at December 31, 1999,  Lynch maintains  short-term and
long-term  line  of  credit  facilities   totaling  $43.7  million  (subject  to
limitations  that  reduce the  availability  to $35.4  million),  of which $12.3
million  was  available  for  future  borrowings.   Spinnaker  Industries,  Inc.
maintains lines of credit at its subsidiaries which in the aggregate total $40.0
million  (subject to limitations that reduce the availability to $32.0 million),
of which $11.5 million was available at December 31, 1999. These facilities,  as
well as facilities at other  subsidiaries  of Lynch,  generally limit the credit
available  under the lines of credit to certain  variables,  such as inventories
and receivables,  and are secured by the operating assets of the subsidiary, and
include  various  financial  covenants.  At December  31, 1999, $ 3.7 million of
these total  facilities  expire within one year and  subsequent to year-end were
extended to March of 2001.  The weighted  average  interest rate for  short-term
borrowings at December 31, 1999 was 8.05%. The Company pays fees ranging from 0%
to 0.375% on its unused lines of credit.

In general,  the long-term debt facilities are secured by  substantially  all of
the Company's property,  land and equipment,  inventory,  receivables and common
stock  of  certain  subsidiaries  and  contain  certain  covenants   restricting
distributions  to Lynch. At December 31, 1999, and 1998,  substantially  all the
subsidiaries' net assets are restricted.

Cash payments for interest were $10.6 million, $7.2 million and $4.8 million for
the years ended December 31, 1999, 1998 and 1997, respectively.

Aggregate principal maturities of long-term debt for each of the next five years
are as  follows:  2000 -- $ 1.6  million;  2001 -- $ .4  million;  2002 -- $ 7.4
million; 2003 -- $ .6 million and 2004 -- $0 million.

7.        Minority Interests and Related Party Transactions

On July 31, 1998,  Spinnaker  completed the  acquisition of the electrical  tape
division of tesa tape,  inc.  (see Note 2). A portion of the purchase  price was
200,000  newly  issued  shares of  Spinnaker  Class A common  stock  (subject to
certain  adjustments).  In accordance with the Company's  policy, as a result of
this  issuance,  the Company  recorded a pre-tax gain on the sale of  subsidiary
stock of $2.1 million in 1998.

On June 13, 1994, Spinnaker entered into a management agreement (the "Management
Agreement") with Boyle,  Fleming & Co., Inc. ("BF"),  of which a former Director
of the Company is a principal, to assume the management of Spinnaker.  Effective
August 31, 1996, the  Management  Agreement was terminated at which time Messrs.
Boyle and Fleming became  employees of Spinnaker.  Spinnaker and BF also entered
into a  Warrant  Purchase  Agreement  in 1994,  pursuant  to  which BF  received
warrants to purchase  common stock of Spinnaker  (equating to a 20% ownership of
Spinnaker  at that  time) at any time on or before  June 30,  1999,  subject  to
certain restrictions. The remaining warrants were exercised in January 1998. Mr.
Boyle is  currently  a member of the  Office  of the  Chairman  and Mr.  Fleming
remains President.

On October 23, 1996,  concurrent  with the  issuance of the $115 million  senior
notes (see Note 6),  Spinnaker  acquired the remaining 25% minority  interest in
its Spinnaker Coating subsidiary.  The terms of the acquisition  involved a cash
payment of  approximately  $2.3  million  and the  issuance  of 9,613  shares of
Spinnaker Common Stock. In addition, as part of the consideration for the shares
of capital stock of Spinnaker Coating,  the minority  shareholders  received the
right to a  contingent  payment,  which is  exercisable  at any time  during the
period  beginning  October 1, 1998 and ending September 30, 2000. The contingent
payment is based upon the  percentage  of the capital  stock owned by the former
Spinnaker Coating entity at the time of the merger multiplied by the fair market
value of the capital  stock of Spinnaker  Coating,  as  determined in accordance
with certain  economic  assumptions  and including an adjustment  for a minority
ownership  discount,  as  of  the  date  such  right  is  exercised,   less  the
consideration  received at closing.  The contingent price is payable through the
issuance  of  Common  Stock of  Spinnaker,  unless  Spinnaker  elects to pay the
contingent  price in cash.  If such  payments are made in cash,  they could give
rise  to  a  default  under  the  Senior  Notes,   unless  there  is  sufficient
availability  under provisions  regarding  restricted  payments contained in the
Senior  Notes.  The  amount  of  the  contingent   payment  is  currently  being
determined. Any contingent consideration paid in the future will be allocated to
goodwill.

In connection with the purchase of the Spinnaker Coating minority interest,  all
the  Spinnaker  Coating  options  were  accelerated  and  in  turn  certain  key
executives of Spinnaker Coating  management  exercised those options to purchase
71,065 shares of Spinnaker  Coating common stock at various prices between $7.16
and $14.69 per share,  for a total of approximately  $670,000.  The options were
originally  granted  in 1994 and were  issued  at not less than 100% of the fair
market value of the common stock at the date of grant.

8.           Stock Option Plans

In accordance with Spinnaker's  directors stock option plan, Spinnaker may grant
stock options to directors who are not employees of Spinnaker. In February 1996,
Spinnaker  granted  30,000  stock  options for the purchase of one share each of
Spinnaker  Class A Common Stock and  Spinnaker  Common Stock at a total price of
$40 per option  exercised  (adjusted  for the stock  dividend in August 1996) to
qualifying  directors.  The  options  vest over a two-year  period  with  15,000
options becoming  exercisable two years after the grant date. The options expire
on the fifth  anniversary  after the grant  date or 30 days  after the  director
ceases to be a director.  In January of 1997,  under the same  terms,  Spinnaker
issued  10,000 stock options for the purchase of one share of Common Stock at an
exercise price of $27 per share. As permitted by SFAS No. 123, Spinnaker elected
to  account  for these  options  under  APB No.  25 and as such no  compensation
expense was  recorded  because the option  exercise  price was not less than the
market  price  at  the  date  of  grant.  All of  these  options  are  currently
outstanding and exercisable.

Pro forma information regarding net income and earnings per share is required by
SFAS No. 123, and has been  determined  as if Spinnaker  had  accounted  for its
director stock options under the fair value method of that  statement.  The fair
value for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted-average assumptions:  risk-free
interest rates of 6.09%-5.58%;  dividend yields of 0%, volatility factors of the
expected  market  price  of  the   Spinnaker's   common  stock  of  .50;  and  a
weighted-average  expected  life of the options of 3 years.  For purposes of pro
forma  disclosures,  the  estimated  fair value of the options is  amortized  to
expense over the options vesting  period.  The estimated  weighted-average  fair
value per  option  is  approximately  $14.62  and  $10.40  for the 1997 and 1996
options,  respectively.  The pro forma  effect on  Lynch's  1999,  1998 and 1997
operations is as follows (in thousands, except for per share amounts):
<TABLE>
<CAPTION>

                                            --------------------------------------------
                                                  1999          1998           1997
                                            --------------------------------------------
         <S>                                     <C>             <C>         <C>
         As reported:
            Net Income (loss)                    $ (1,583)       $ 3,357      $ (2,878)
            Per share:
               Basic                             $  (1.12)       $  2.37      $  (2.03)
               Diluted                                                           (2.03)
         Pro forma:
            Net income (loss)                    $ (2,832)       $ 3,326      $ (2,950)
            Per share:
               Basic                             $  (2.00)       $  2.35      $  (2.08)
               Diluted
                                                    (2.00)          2.35         (2.08)

</TABLE>


9.           Shareholders' Equity

The Board of Directors has  authorized  the purchase of up to 400,000  shares of
Common Stock. Through December 31, 1999, 238,991 shares had been purchased at an
average cost of $14.88 per share.

In January  1994,  an officer was granted stock options to purchase up to 24,516
shares of Lynch common stock at an exercise price of $23.125,  the closing price
on the date of grant.  These  options were  exercised in January 1997 and shares
were issued from Treasury.

On  February  1, 1996,  the  Company  adopted a plan to provide a portion of the
compensation  for its directors in common  shares of the Company.  The amount of
common  stock is based upon the market  price at the end of the  previous  year.
Through December 31, 1999, 4,126 shares have been awarded under this program.

On February 29, 1996, the Company  adopted a Stock  Appreciation  Rights program
for certain employees. To date, 43,000 of Stock Appreciation Rights ("SAR") have
been granted at prices  ranging from $63 to $85 per share (pre spin off prices).
Upon the  exercise of a SAR, the holder is entitled to receive an amount in cash
equal to the amount by which the market value of the  Company's  common stock on
the exercise  date exceeds the grant price of the SAR.  Effective  September 30,
1998, the Company  amended the SAR Program so that the SAR's became  exercisable
only if the  market  price  for the  Company's  shares  exceeds  200% of the SAR
exercise  price  within  five years from  original  grant date.  This  amendment
eliminated  the recording of the profit and loss effect of the SAR's for changes
in the market price in the Company's common stock until it becomes probable that
the SAR's will become  exercisable.  The net income  (expense)  relating to this
program, prior to the time of the amendment,  was $185,000 in income in 1998 and
($439,000) of expense in 1997.

Subsequent to the spin off of Interactive,  the Company, with the concurrence of
the  holders  of all  outstanding  SAR units,  terminated  its SAR  program  for
corporate management, including all outstanding units, thus eliminating possible
future profit and loss and cash flow distortions  associated with the progam. As
a result of the  termination,  the Company  recorded  approximately  $700,000 of
related corporate expense in the fourth quarter.

10.           Income Taxes

The Company  files  consolidated  federal  income tax returns  which include all
subsidiaries  including  Interactive  through  the  date of the  spin  off,  but
excluding Spinnaker for all periods.


<PAGE>



Deferred  income  taxes  for  1999  and  1998  are  provided  for the  temporary
differences  between  the  financial  reporting  basis  and the tax basis of the
Company's  assets  and  liabilities.   Cumulative   temporary   differences  and
carryforwards at December 31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>

                                     December 31, 1999     December 31, 1998
(In thousands)                         Deferred Tax             Deferred Tax
                                Asset       Liability        Asset     Liability
<S>                              <C>        <C>         <C>        <C>
Inventory reserve ............   $  1,493       --      $    451       --
Fixed assets written up under
   Purchase accounting and
   Tax over book depreciation        --     $  6,782        --     $ 11,144
Discount on long-term debt ...       --         --          --       (1,783)
Basis difference in subsidiary
   and affiliate stock .......       --        1,105        --        1,123
Net operating losses of
Subsidiaries .................        850       --         7,166       --
Other reserves and accruals ..      6,600       --         1,622       --
Other ........................         --    (1,662)       2,475      1,231
                                  -------  --------     --------   --------
Total deferred income taxes ..   $  8,943   $  6,225      11,714   $ 11,715
                                 ========   ========    ========   ========

</TABLE>

Spinnaker has net operating loss  carryforwards of approximately $2.2 million at
December 31, 1999 which expire in 2018.

The  provision  (benefit)  for  income  taxes  from  continuing   operations  is
summarized as follows:
<TABLE>
<CAPTION>

(In Thousands)                                       1999       1998        1997
Current:
<S>                                                <C>        <C>        <C>
   Federal .....................................   $  (158)   $ 2,048    $ 5,171
   State and local .............................      --          921        250
                                                     -------    -------   ------
Deferred: ......................................      (158)     2,969      5,421
                                                     -------    -------   ------
   Federal .....................................    (2,386)    (3,435)    (5,069)
   State and local .............................      --         (942)       (51)
                                                    -------    -------   ------
                                                      (2,386)  (4,377)    (5,120)
                                                     -------    -------   ------
                                                     $(2,544)  $(1,408)   $  301
                                                     =======    =======   ======

</TABLE>






A  reconciliation  of the provision  (benefit) for income taxes from  continuing
operations and the amount computed by applying the statutory  federal income tax
rate to income before income taxes, minority interest and extraordinary item:
<TABLE>
<CAPTION>

(In Thousands)                                   1999        1998        1997

<S>                                             <C>        <C>        <C>
Tax at statutory rate .......................   $(3,211)   $  (757)   $   597
Increases (decreases):
State and local taxes, net of federal benefit      --         (288)       135
Amoritization of goodwill ...................        60         81        129
Operating losses of subsidiaries ............       164       (546)      (126)
Additional tax provision... .................       338       --         --
Other .......................................       105        102       (434)
                                                ------      ------      ------
                                                $(2,544)   $(1,408)   $   301
                                                 =======    =======    =======
</TABLE>


11.           Employee Benefit Plans

The  Company,  through  its  operating  subsidiaries,  has  several  and various
employee retirement type plans including defined benefit,  defined contribution,
multi-employer,  profit  sharing,  and 401 (k) plans.  The following  table sets
forth the consolidated expenses for these plans (dollars in thousands):
<TABLE>
<CAPTION>

(In Thousands)          1999      1998      1997

<S>                    <C>      <C>      <C>
Defined Contribution   $  561   $  643   $  839
Defined Benefit ....      166      150      473
Multi-Employer .....      121       80      173
                       ------   ------   ------
   Total ...........   $  848   $  873   $1,485

</TABLE>



The  Company's  most  significant  benefit plans are  maintained by  Spinnaker's
Coating business. Following are details of those plans:

The net  periodic  pension  cost for the year ended  December  31, 1999 and 1998
included the following components:
<TABLE>
<CAPTION>

                                                 1999      1999     1998     1998
                                                -------------------------------------
                                                Union   Non-Union   Union    Non-Union
                                                -------------------------------------

<S>                                                <C>      <C>      <C>     <C>
Service Cost - benefits earned during the period   $ 105    $ 137    $  69   $ 100
Interest cost on projected benefit obligation ..      21       51       11      50
Expected return on assets ......................      (6)      (9)    --      --
Recognized (gains) or losses ...................       1      (13)    --      --
                                                   -----    -----    -----   -----
Net periodic pension cost ......................   $ 121    $ 166    $  80   $ 150
                                                   -----    -----    -----   -----
</TABLE>

Theforegoing  measurement of net periodic pension cost is based on the following
   assumptions:

<TABLE>
<S>                                     <C>     <C>     <C>     <C>
Weighted-average discount rate ...      8.00%   8.00%   7.50%   7.50%
Weighted-average rate
   of compensation increase ......        N/A   4.00%     N/A   4.00%
Weighted-average expected
  long-term rate of return on plan      8.00%   8.00%   8.00%   8.00%
</TABLE>

The following table sets forth the union and non-union plans' benefit obligation
information as of December 31, 1999 and 1998:
<TABLE>
<CAPTION>

                                                   1999      1999        1998       1998
                                                  ----------------------------------------
                                                   Union    Non-Union    Union     Non-Union
                                                  -----------------------------------------
                                                             (In Thousands)
<S>                                                <C>        <C>        <C>       <C>
Benefit obligation at acquisition date .........   $   288    $ 1,081    $   186   $   835
Service cost - benefits earned during the period
                                                       106        137         69       100
Interest cost on projected benefit obligation ..        21         51         11        50
Actuarial (gains) losses .......................       (44)      (504)        22        96
Benefits paid ..................................        (1)        (2)      --        --
                                                   -------    -------    -------   -------
Benefit obligation at end of year ..............   $   370    $   763    $   288   $ 1,081
                                                   -------    -------    -------   -------

</TABLE>


There were no plan assets for the union and  non-union  plans as of December 31,
1999 and 1998.

The following  table sets forth the union and non-union  plans' funded status as
of December 31, 1999 and 1998:
<TABLE>
<CAPTION>

                                            1999      1999        1998        1998
                                          -----------------------------------------
                                          Union      Non-Union    Union     Non-Union
                                           ----------------------------------------
                                                      (In thousands)
<S>                                        <C>        <C>        <C>        <C>
Funded status ..........................   $  (173)   $  (481)   $  (288)   $(1,081)
Unrecognized actuarial (gains) losses
                                               (25)      (398)        22         96
                                           -------    -------    -------    -------
Net amount recognized ..................   $  (198)   $  (879)   $  (266)   $  (985)
                                           -------    -------    -------    -------
Amounts recognized in the balance sheet:
Net amount recognized ..................   $  (198)   $  (879)   $  (266)   $  (985)
                                           -------    -------    -------    -------
</TABLE>

Spinnaker Coating has a defined  contribution plan that covers substantially all
of  its  employees.  Under  the  plan,  Spinnaker  Coating  can  match,  at  its
discretion,  up to  50%  of  employee  contributions  not  exceeding  8% of  the
employee's  compensation.  Amounts  contributed to the plan by Spinnaker Coating
are 20% vested each year for five years. On the acquisition  date,  employees of
Spinnaker  Coating who were previously  employed by  Kimberly-Clark  Corporation
received   vesting   rights  based  on  the  years  of  credited   service  with
Kimberly-Clark   Corporation.   Spinnaker   Coating  recorded  expense  for  its
contributions under the plan of approximately  $542,000,  $559,000, and $442,000
in 1999, 1998 and 1997, respectively.

12.           Commitments and Contingencies

In the normal course of business  subsidiaries  of the Company are defendants in
certain  product  liability,  worker  claims and other  litigation  in which the
amounts being sought may exceed  insurance  coverage  levels.  The resolution of
these  matters  is not  expected  to have a  material  effect  on the  Company's
financial condition or operations.

Future minimum rental payments under long-term  non-cancelable  operating leases
are as follows at December 31, 1999 (in thousands):

<TABLE>
<S>                                                                     <C>
2000--------------------------------------------------------            $ 278
2001--------------------------------------------------------              256
2002--------------------------------------------------------              256
2003--------------------------------------------------------              283
2004--------------------------------------------------------              281
Thereafter--------------------------------------------------              200
                                                                        -------
                                                                       $1,554
</TABLE>

Rent expense under operating leases were  $1,222,000,  $952,000 and $416,000 for
the years ended  December 31,  1999,  1998 and 1997,  respectively.  The Company
leases  certain  property and  equipment,  including  warehousing  and sales and
distribution  equipment,  under  operating  leases  that  extend from one to ten
years.  Certain of these leases have renewal options and escalation  provisions.
The Company is party to a lease for its corporate  office for an annual  payment
of approximately $30,000 with an affiliate of its Chairman.

13.           Segment Information

The Company has two reportable  business segments.  The larger of the two is the
manufacture  and sale of  adhesive  backed  label  stock for labels and  related
applications.  The  other  reportable  segment  is the  manufacture  and sale of
frequency control devices (quartz crystals and oscillators). The Company is also
engaged in the manufacture  and sale of glass forming,  impact milling and other
equipment,  and these results are combined and reported as Other  Manufacturing.
Each  of  the  businesses  is  located  domestically,   and  export  sales  were
approximately  $22.6 million in 1999, $21.2 million in 1998 and $26.2 million in
1997.  For the  years  ended  December  31,  1999,  1998 and  1997 one  customer
accounted for $18.3 million, $17.7 million, and $21.4 million,  respectively, of
the  adhesive-backed  label stock  segment's  net sales.  The Company  considers
concentrations of credit risk to be minimal due to its diverse customer base.

EBITDA  (before  corporate  allocation)  for  operating  segments  is  equal  to
operating  profit before  depreciation,  amortization  and  allocated  corporate
expenses.  EBITDA  is  presented  because  it  is a  widely  accepted  financial
indicator  of value and  ability  to incur  and  service  debt.  EBITDA is not a
substitute  for  operating  income or cash flows from  operating  activities  in
accordance with generally accepted accounting principles.

Operating profit (loss) is equal to revenues less operating expenses,  excluding
unallocated general corporate  expenses,  interest and income taxes. The Company
allocates a portion of its general corporate expenses to its operating segments.
Such allocation was $ 300,000 per year during the years ended December 31, 1999,
1998 and 1997,  respectively.  Identifiable  assets of each industry segment are
the assets used by the segment in its  operations  excluding  general  corporate
assets.  General  corporate  assets are principally  cash and cash  equivalents,
short-term investments and certain other investments and receivables.
<TABLE>
<CAPTION>

                                                     Years ended December 31
                                                  1999        1998         1997
(In thousands)
Revenues
<S>                                              <C>          <C>          <C>
Adhesive-backed label stock ..................   $ 155,112    $ 151,561    $ 106,787
Frequency control devices ....................      26,484       22,798       22,828
Other manufacturing ..........................      12,626       13,285       24,120
                                                 ---------    ---------    ---------
Consolidated total ...........................   $ 194,222    $ 187,644    $ 153,735
                                                 =========    =========    =========
EBITDA (before corporation allocation)

Adhesive-backed label stock ..................   $   8,889    $  12,010    $   9,027
Frequency control devices ....................       2,640        2,073        2,199
Other manufacturing ..........................      (1,188)      (1,411)       1,206
Corporate manufacturing expenses .............      (2,681)      (2,903)      (2,112)
                                                 ---------    ---------    ---------
Total manufacturing ..........................       7,474        9,769       10,320
Corporate expenses, gross ....................      (1,266)        (530)        (374)
                                                 ---------    ---------    ---------
Consolidated total ...........................   $   6,208    $   9,239    $   9,946
                                                 =========    =========    =========


Operating Profit
Adhesive-backed label stock ..................   $   4,155    $   8,104    $   6,923
Frequency control devices ....................       1,800        1,428        1,612
Other manufacturing ..........................      (1,821)      (1,922)         850
Corporate manufacturing expenses .............      (2,894)      (3,006)      (2,279)
                                                 ---------    ---------    ---------
Total manufacturing ..........................       1,240        4,604        7,104
Unallocated corporate expense ................      (1,155)        (530)        (374)
                                                 ---------    ---------    ---------
Consolidated Total ...........................   $      85    $   4,074    $   6,730
                                                 =========    =========    =========
Depreciation and Amortization
Adhesive-backed label stock ..................   $   4,785    $   3,906    $   2,104
Frequency control devices ....................         740          645          589
Other manufacturing ..........................         528          511          356
Corporate manufacturing expenses .............         967          874          726
                                                 ---------    ---------    ---------

Consolidated Total ...........................   $   7,020    $   5,936    $   3,775
                                                 =========    =========    =========

Capital expenditures

Adhesive-backed label stock ..................   $   2,625    $   2,219    $   1,854
Frequency control devices ....................         804          878          688
Other manufacturing ..........................         366          200          689
                                                 ---------    ---------    ---------
Consolidated Total ...........................   $   3,795    $   3,297    $   3,231
                                                 =========    =========    =========
Total Assets
Adhesive-backed label stock ..................   $ 116,021    $ 105,759    $  49,018
Frequency control devices ....................      10,940        8,898        8,858
Other manufacturing ..........................      76,668       19,392       27,892
Discontinued Operations:
   Lynch Interactive .........................        --        228,342      234,376
   Industrial tape business ..................        --        107,877       93,752
General Corporate ............................       7,563        9,732        9,740
                                                 ---------    ---------    ---------
Consolidated Total ...........................   $ 211,192    $ 480,000    $ 423,636
                                                 =========    =========    =========

Total operating profit for reportable segments   $      85    $   4,074    $   6,730
Other profit or loss:
  Investment income ..........................       2,354          199          305
  Interest expense ...........................     (11,882)      (8,591)      (5,189)
 Gain on sales of subsidiary stock ...........        --          2,090          (91)
                                                 ---------    ---------    ---------
Income (loss) from continuing operations
  before income taxes, minority interests
   and extraordinary item ....................   $  (9,443)   $  (2,228)   $   1,755
                                                 =========    =========    =========

</TABLE>




14.      Quarterly Results of Operations (unaudited)

The following is a summary of the quarterly  results of operations for the years
ended December 31, 1999 and 1998 (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                 1999 Three Months Ended
                                       Mar. 31(a)    June 30   Sep. 30 (b)  Dec. 31 (b)

<S>                                     <C>         <C>         <C>         <C>
Sales and revenues ..................   $ 46,411    $ 47,363    $ 51,070    $ 49,378
Operating profit ....................       (312)        701       1,013      (1,317)
Income (loss) from continuing
   Operations .......................       (975)       (500)       (617)     (2,160)
Net income (loss) ...................    (10,991)        427       7,892       1,089

Basic and diluted earnings per share:
   Income (loss) from continuing
   operations
Net income (loss) ...................      (0.69)      (0.35)      (0.44)      (1.53)
                                           (7.75)       0.30        5.59        (.77)


                                                1998 Three Months Ended
                                         Mar. 31      June 30   Sep. 30(c)   Dec. 31

Sales and revenues ..................   $ 39,505    $ 49,505    $ 49,824   $ 49,257
Operating profit (loss) .............      1,242       1,575       1,663       (385)
Income (loss) from continuing
   Operations .......................        (98)       (358)      1,070     (3,507)
Net income (loss) ...................       (436)      1,324       2,149        320

Basic and diluted earnings per share:

Income (loss) from continuing
   operations .......................      (0.06)      (0.26)       0.76      (2.48)

Net income (loss) ...................      (0.30)       0.93        1.52       0.22

<FN>


NOTE:

a)   Includes  write down of PCS licenses of $15.4 million of Lynch  Interactive
     Corporation

b)   Includes  gain on sale of  Industrial  Tape  Segment of  Spinnaker of $10.4
     million after income taxes, and minority interest.

c)   Includes gain on sale of subsidiary stock of $2,127.

</FN>
</TABLE>

15.       Subsequent Events

In March 2000 Lynch Systems completed a project specific line of credit totaling
$7.1 million related to a contract to deliver  equipment in 2000.  Substantially
all assets of Lynch  Systems are pledged in support of the credit  facility.  In
addition,  the Company has guaranteed the full amount of the credit facility and
has pledged $4 million of its Class A Common Stock of  Spinnaker  as  additional
collateral.

In March,  2000 the Company  completed the previously  announced sale of 100,000
shares of its common stock to its Chairman at $30 per share, or $3 million. This
transaction  is subject to  shareholder  approval at the  Company's  2000 annual
meeting. These funds will be available for general corporate purposes.

SCHEDULE I
<TABLE>

                 CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                        LYNCH CORPORATION (PARENT COMPANY)
                            CONDENSED BALANCE SHEETS

<CAPTION>
                                                        December 31
                                                 -------------------------
ASSETS                                            1999              1998
                                                 --------------------------
CURRENT ASSETS
<S>                                                   <C>       <C>
  Cash and Cash Equivalents .......................   $ 1,154   $   291
   Marketable Securities and Short Term Investments        24       874
   Deferred Income Taxes ...... ...................       412       140
   Other Current Assets ...........................        81        40
                                                      -------   -------
                                                        1,671     1,345
OFFICE EQUIPMENT - Net ..............................      --        52

OTHER ASSETS (Principally investments in and
  amounts due from consolidated subsidiaires)......    16,643    72,729
                                                      -------   -------
TOTAL ASSETS ......................................   $18,314   $74,126
                                                      =======   =======

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITITES ..............................   $ 2,110   $22,832

LONG TERM DEBT ....................................      --       8,623
DEFERRED INCOME TAXES ......... ...................      --         980
LONG TERM LIABILITIES .............................       213      --
DEFERRED CHARGES ..................................      --       1,898

SHAREHOLDERS' EQUITY
    Common Stock                                        5,139     5,139
    Other Shareholders' Equity                         10,852    34,654
                                                      -------   -------
TOTAL SHAREHOLDERS' EQUITY ........................   $15,991   $39,793
                                                      -------   -------
Total Liabilities and Shareholders' Equity ........   $18,314   $74,126
                                                      =======   =======
</TABLE>
See accompanying Notes to Condensed Financial Information


<PAGE>
<TABLE>


                 CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                     LYNCH CORPORATION (PARENT COMPANY)
                     CONDENSED STATEMENTS OF OPERATIONS
<CAPTION>
                                                                Years Ended December 31
                                                          -----------------------------------
                                                            1999       1998        1997
                                                          -----------------------------------

<S>                                                            <C>        <C>        <C>
Interest, Dividends & Gains on Sale of Marketable Securities   $    17    $   128    $   377
Interest & Other Income from Subsidiaries                           23         35         35
                                                                -------    -------    -------
TOTAL INCOME ...............................................        40        163        412

Costs & Expenses:
Unallocated Corporate Administrative Expense ...............     1,155      1,371      1,436
Interest Expense ...........................................         7      1,394      1,257
Interest Expense to Subsidiaries ...........................        23        830        741
                                                               -------    -------    -------
TOTAL COSTS AND EXPENSES....................................     1,185      3,595      3,434
                                                               -------    -------    -------
LOSS BEFORE INCOME TAXES AND EQUITY IN NET
 (LOSS) OF SUBSIDIARIES .....................................    (1,145)   (3,432)   (3,022)

Income Tax Benefit .........................................        321     1,648      1,142
Equity in Net Income (Loss) of Subsidiaries ................      (759)     5,141       (998)

NET INCOME (LOSS) ..........................................   ($1,583)   $ 3,357    ($2,878)
                                                                =======   =======     =======
</TABLE>
See accompanying Notes to Condensed Financial Information


<TABLE>


                 CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                       LYNCH CORPORATION (PARENT COMPANY)
                       CONDENSED STATEMENTS OF CASH FLOW

<CAPTION>
                                                     Year Ended December 31
                                                    -----------------------------
                                                      1999        1998      1997
                                                    ---------   --------  -------
Cash provided from (used in)
<S>                                                <C>        <C>            <C>
  Operating Activities                             $   405    $ 1,049        (25)
                                                    -------    -------    -------

INVESTING ACTIVITIES:
Investment in Lynch Manufacturing ................       981      3,000      1,135
Investment and Advances to Brighton Communications      --         --          (17)
Investment in and advances to PCS Partnerships ...      --        3,692     (8,628)
Other ............................................
                                                        --         (176)       (94)
                                                     -------    -------    -------
NET CASH PROVIDED FROM (USED IN) INVESTING
   ACTIVITIES ....................................       981      6,515     (7,604)
                                                     -------    -------    -------
FINANCING ACTIVITIES:
Net Borrowings ...................................      --       (7,564)     7,179
Lines of Credit ..................................      --         --         --
(Purchase) Sale of Treasury Stock ................      (523)      --          672
Other ............................................      --         --         --
                                                     -------    -------    -------
NET CASH (USED IN) PROVIDED FROM FINANCING
   ACTIVITIES ....................................      (523)    (7,564)     7,851
                                                      -------    -------    -------

TOTAL INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS ...................................       863          1        222

CASH AND CASH EQUIVALENTS AT BEGINNING
   OF YEAR                                                291        290         68
                                                      -------    -------    -------

CASH AND CASH EQUIVALENTS AT END OF YEAR .........    $ 1,154    $   291    $   290
                                                      =======    =======    =======
</TABLE>

See accompanying Notes to Condensed Financial Information



NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE A - BASIS OF PRESENTATION

In the parent  company's  financial  statements,  the  Company's  investment  in
subsidiaries  is stated at cost plus  equity in  undistributed  earnings  of the
subsidiaries.

NOTE B - SPIN OFF OF LYNCH INTERACTIVE CORPORATION

On August 12, 1999,  the Board of directors  approved a plan to  distribute  the
stock  of  Lynch  Interactive  Corporation  on  a  one  for  one  basis  to  the
shareholders of Lynch Corporation  ("spin off"). Lynch completed the spin off of
Lynch  Interactive   Corporation   ("Interactive")  on  September  1,  1999,  to
stockholders of record on August 23, 1999.  Pursuant to the spin off, each Lynch
shareholder  received  one share of  Interactive  common stock for each share of
Lynch  owned.  Lynch had  received a private  letter  ruling  from the  Internal
Revenue  Service  that  the spin  off  would be tax free to Lynch  shareholders.
Interactive is listed on the American Stock Exchange under the symbol "LIC".

NOTE C - DIVIDENDS FROM SUBSIDIARIES

Cash  dividends paid to Lynch  Corporation  from the  Registrant's  consolidated
subsidiaries  were $0 in 1999,  $3,060,000  in 1998 and  $1,195,000  in 1997. No
other dividends were received from subsidiaries or investees.

NOTE D - LONG-TERM DEBT

At  December  31, 1998 the Company  had a note  payable to a  subsidiary  with a
principal  amount of $6.0 million at a fixed interest rate of 6%, due 2001. Such
note was transferred to Lynch Interactive in connection with the spin-off.


NOTE E - SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR ADDITIONAL
         INFORMATION.


<TABLE>


                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                       LYNCH CORPORATION AND SUBSIDIARIES
                  YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<CAPTION>

                                   COLUMN A          COLUMN B           COLUMN C           COLUMN D          COLUMN E
                                                    ADDITIONS           ADDITIONS
                                   BALANCE AT                           CHARGED TO
                                   BEGINNING     CHARGED TO COSTS    OTHER ACCOUNTS                       BALANCE AT END
                                   OF PERIOD       AND EXPENSES         DESCRIBE          DEDUCTIONS         OF PERIOD
                                                                                                         DESCRIBE (B)
DESCRIPTION
<S>                               <C>                <C>                   <C>          <C>                    <C>
YEAR ENDED DECEMBER 31, 1999
  ALLOWANCE FOR UNCOLLECTIBLE     $ 395,000          $ 81,000                $ 0         $115,000               $361,000

YEAR ENDED DECEMBER 31, 1998                                                             $910,000(A)
   ALLOWANCE FOR UNCOLLECTIBLE   $1,448,000          $723,000                $ 0         $866,000               $395,000

YEAR ENDED DECEMBER 31, 1997
   ALLOWANCE FOR UNCOLLECTIBLE   $1,525,000          $742,000                $ 0         $819,000             $1,448,000


<FN>
(A)      ALLOCATION OF VALUATION ACCOUNT TO SEGMENTS SOLD OR SPUN OFF
(B)      UNCOLLECTIBLE ACCOUNTS WRITTEN OFF ARE NET OF RECOVERIES
</FN>
</TABLE>


<PAGE>





LYNCH CORPORATION

By:s/LOUIS A. GUZZETTI
----------------------
     LOUIS A. GUZZETTI
      Chief Executive Officer (Principal
       Executive 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 and on the dates indicated.
<TABLE>
<CAPTION>

         Signature                        Capacity                                       Date
<S>                                 <C>                                                <C>
* MARIO J. GABELLI                  Chairman of the Board of
------------------
  MARIO J. GABELLI                  Directors and Director                              March 28, 2000


s/LOUIS A. GUZZETTI                 Principal Executive Officer                         March 28, 2000
-------------------
  LOUIS A. GUZZETTI                 and Director


* E. VAL CERUTTI                    Director                                            March 28, 2000
----------------
  E. VAL CERUTTI


*AVRUM GRAY                         Director                                            March 28, 2000
-----------
 AVRUM GRAY


* RALPH R. PAPITTO                  Director                                            March 28, 2000
------------------
  RALPH R. PAPITTO


* ROBERT E. DOLAN                   Director                                            March 28, 2000
------------------
  ROBERT E. DOLAN


s/ROGER J. DEXTER
   ROGER J. DEXTER                   (Principal Financial
                                     and Accounting Officer)                            March 28, 2000


By:ROBERT A. HURWICH
--------------------
    ROBERT A. HURWICH
    Attorney-in-fact for Messrs.
    Gabelli, Cerutti, Gray and
    Papitto

</TABLE>



                                EXHIBIT INDEX

Exhibit No.                                          Description

         3                 (a) Restated  Articles of Incorporation of Registrant
                           (incorporated  by  reference  to Exhibit  3(a) of the
                           registrant's  Annual Report on Form 10-K for the year
                           ended December 31, 1987).

                  (b)      By-laws of the Registrant, (incorporated by reference
                           to the Exhibit 3(b) of the Registrant's Annual Report
                           on Form 10-K for the year ended December 31, 1987).

         4        (a)      Purchase Agreement, dated October 18, 1996 (the
                           "Purchase Agreement") among Spinnaker Industries,
                           Inc., a Delaware corporation  ("Spinnaker"),
                           Brown-Bridge Industries,  Inc., a Delaware
                           corporation   ("Brown-Bridge"),   Central  Products
                           Company,  a  Delaware  corporation  ("Central
                           Products"),  and Entoleter,  Inc.,  ("Entoleter")
                           and together with Brown-Bridge and Central Products,
                           (the "Guarantors") and BT Securities Corporation
                           (the "Initial Purchaser")  (incorporated by reference
                           to Exhibit 4.1 to Registrant's Form 8-K, dated
                           October 23, 1996).

                  (b)      Indenture  dated,  October 23, 1996, among Spinnaker,
                           the  Guarantors  and the  Chase  Manhattan  Bank,  as
                           Trustee  (incorporated by reference to Exhibit 4.3 to
                           Registrant's Form 8-K, dated April 19, 1996.

                    (b)(i) First  Supplemental  Indenture  dates as of March 17,
                         1998,  among  Spinnaker   Industries,   Inc.,   Central
                         Products Company,  Entoleter,  Inc.  Spinnaker Coating,
                         Inc.,  Spinnaker  Coating-Maine,  Inc.  and  the  Chase
                         Manhattan Bank, as Trustee  (incorporated  by reference
                         by   Exhibit   99.6  to  the  Form  8-K  of   Spinnaker
                         Industries,  Inc.  dated as of  March  17,  1998.)  (c)
                         Credit  Agreement (the  "Spinnaker  Credit  Agreement")
                         amended as of December 31, 1997, among Central Products
                         Company,  Brown-Bridge Industries,  Inc. and Entoleter,
                         Inc.  as  Borrowers,   Spinnaker  Industries,  Inc.  as
                         Guarantor, each of the financial institutions listed on
                         Schedule  1  thereto,  BT  Commercial  Corporation,  as
                         Agent,  Transamerican  Business Credit Corporation,  as
                         Collateral  Agent, and Bankers Trust Company as Issuing
                         Bank  (incorporated  by  reference  to Exhibit  99.1 to
                         Registrant's Form 8-K dated October 23, 1996)..

                    (c)(i) Fourth  Amendment to the Spinnaker  Credit  Agreement
                         (incorporated  by  reference to Exhibit 9.3 to the Form
                         8-K of Spinnaker Industries, Inc. dated as of March 17,
                         1998).

                    (c)(ii)  Fifth  Amendment  to  Spinnaker   Credit  Agreement
                         (incorporated  by  reference to Exhibit 9.4 to the Form
                         8-K of Spinnaker Industries, Inc. dated as of March 17,
                         1998).

                    (c)(iii) Sixth Amendment to the Spinnaker  Credit  Agreement
                         (incorporated  by  reference by Exhibit 9.5 to the Form
                         8-K of Spinnaker Industries, Inc. dated as of March 17,
                         1998).

The  Registrant,  by signing this Form 10-K Annual Report,  agrees to furnish to
the Securities and Exchange  Commission a copy of any long-term debt  instrument
where  the  amount  of the  securities  authorized  thereunder  does not  exceed
10percent of the total assets of the Registrant on a consolidated basis.

          10               *(a)  Lynch  Corporation  401(k)  Savings  Plan
                           (incorporated  by  referenceExhibit   10(b)  to
                           Registrant's  Report  Form  10-K  for the  year
                           ended December 31, 1995).

                     (b)   Stock  Purchase  Agreement,  dated  January 19, 1994,
                           between Registrant and Mario J. Gabelli (incorporated
                           by reference to Exhibit II of Amendment  Number 36 to
                           Schedule 13D filed by Mario J. Gabelli and affiliated
                           companies on January 19, 1994).

                    (c)    Acquisition     Agreement    between     Brown-Bridge
                           Acquisition     Corporation    and    `Kimberly-Clark
                           Corporation,  dated June 15, 1994  (exhibit  omitted)
                           (incorporated   by  reference  to  Exhibit  10(c)  to
                           Registrant's Form 10-Q for the quarter ended June 10,
                           1994).+

                    *(d) Management Agreement, dated as of June 10, 1994, by and
                         among  Boyle,  Fleming,  George & Co.,  Inc. and Safety
                         Railway Service Corporation  (incorporated by reference
                         by Exhibit 7.1 to the Registrant's Form 8-K, dated June
                         13, 1994). (e) Warrant  Purchase  Agreement dated as of
                         June 10, 1994,  by and among Boyle,  Fleming,  George &
                         Co.,  Inc.  and  Safety  Railway  Service   Corporation
                         (incorporated   by  reference  by  Exhibit  7.1  t  the
                         Registrant's Form 8-K, dated June 13, 1994).

                    (f)    A Warrant,  dated as of June 10,  1994,  executed  by
                           Safety Railway Service  Corporation  (incorporated by
                           reference  to Exhibit 7.1 to  Registrant's  Form 8-K,
                           dated June 12, 1994).

                    (g)    Asset Purchase Agreement,  dated as of June 15, 1994,
                           between  Kimberly-Clark  Corporation and Brown-Bridge
                           Acquisition Corp. (Exhibits omitted) (incorporated by
                           reference to Exhibit 10(c) to Registrant's  Form 10-Q
                           for the quarter ended June 30, 1994).+

                    (h)    Stock  Purchase  and Loan  Program  (incorporated  by
                           reference to Exhibit 10(p) to Registrant's  Form 10-K
                           for the year ended December 31, 1994).

                    (i)    Shareholders' and Voting  Agreement,  dated September
                           16, 1994,  among Safety Railway Service  Corporation,
                           Brown-Bridge   Industries,   Inc.   and   the   other
                           stockholders   of   Brown-Bridge   (incorporated   by
                           reference to Exhibit 10(q) to Registrant's  Form 10-K
                           for the year ended December 31, 1994).

                    (j)    Put Option Agreement, dated September 16, 1994, among
                           Safety  Railway  Service  Corporation,   Brown-Bridge
                           Industries,   Inc.   and  certain   stockholders   of
                           Brown-Bridge  (incorporated  by  reference to Exhibit
                           10(q) to  Registrant's  Form 10-K for the year  ended
                           December 31, 1994).

                    (k)    Directors Stock Plan

                    (l)    Amended Phantom Stock Plan (incorporated by reference
                           to Exhibit  10(p) to  Registrant's  Form 10-Q for the
                           year ended September 30, 1998).

                    (m)  Stock  and  Asset  Purchase  Agreement,   dated  as  of
                         September  27,  1995,  by and  among  Central  Products
                         Acquisition Corp.  Unisource  Worldwide,  Inc. and Alco
                         Standard  Corporation  (incorporated  by  reference  to
                         Exhibit 7.1 to Registrant's Form 8-K, dated October 18,
                         1885).+

                    (n)  Agreement  and Plan of  Merger  (Brown-Bridge  Minority
                         Interest), by and among Spinnaker Industries,  Inc., BB
                         Merger  Corp.,  Brown-Bridge  Industries,  Inc. and the
                         stockholder of Brown-Bridge Industries, Inc. on Exhibit
                         A thereto (incorporated by reference to Exhibit 99.2 to
                         Registrant's  Form 8-K,  dated  April 19,  1996).+  (o)
                         Lease Agreement  between  Registrant and Gabelli Funds,
                         Inc.  (incorporated by reference to Exhibit 10(a)(a) to
                         Registrant's  Form 10-Q for the Quarter Ended March 31,
                         1998).

                    (p)  Asset  Purchase  Agreement,  dated as of  November  18,
                         1997, by and between S.D. Warren Company ("Seller") and
                         Spinnaker Industries,  Inc.  (incorporated by reference
                         to Exhibit 2.1 to the Form 8-K of Spinnaker Industries,
                         Inc., dated as of March 17, 1998).

                    (p)(i) First  Amendment to Asset Purchase  Agreement,  dated
                         March 17, 1998, by and between S. D. Warren Company and
                         Spinnaker Industries,  Inc.  (incorporated by reference
                         by Exhibit 4.2 to the Form 8-K of Spinnaker Industries,
                         Inc.,   dated  as  of   March   17,   1998).+   (p)(ii)
                         Subordinated  Note,  dated  March 17,  1998,  issued by
                         Spinnaker  Industries,  Inc. to S.D.  Warren Company in
                         the  original  principal  amount of $7 million  bearing
                         interest  at a rate of 20% per annum  (incorporated  by
                         reference  to Exhibit 4.1 to the Form 8-K of  Spinnaker
                         Industries, Inc., dated as of March 17,k 1998).

                    (p)(iii) Site Separation and Service Agreement , dated March
                         17, 1998,  between S.D.  Warren  Company and  Spinnaker
                         Industries,  Inc. (incorporated by reference by Exhibit
                         99.1 t the  Form  8-K of  Spinnaker  Industries,  Inc.,
                         dated March 17, 1998).

                    (p)(iv) Lease Agreement,  dated March 17, 1998, between S.D.
                         Warren   Company   and   Spinnaker   Industries,   Inc.
                         (incorporated  by reference by Exhibit 99.2 to the Form
                         8-K of Spinnaker  Industries,  Inc.,  dated as of March
                         17,  1998.)  (q)  Stock  Purchase   Agreement   between
                         Spinnaker Industries, Inc. and Intertape Polymer Group,
                         Inc., dated April 9, 1999 (incorporated by reference to
                         Exhibit 2.1 to  Spinnaker  Industries,  Inc.  Form 8-K,
                         dated August 16, 1999).

                    (r)  Asset  Purchase  Agreement  by  and  among  Registrant,
                         Spinnaker Electrical Tape Company and Intertape Polymer
                         Group,  Inc.,  dated  April 9,  1999  (incorporated  by
                         reference to Exhibit 2.2 to Spinnaker Industries,  Inc.
                         Form  8-K,  dated  August  16,  1999.  (s)  Information
                         Statement    of   Lynch    Interactive    Corporation's
                         (incorporated  by  reference  to Exhibit  99.1 to Lynch
                         Interactive Corporation's Form 10-A-1, dated August 18,
                         1999).

                    (t)  Separation  Agreement,  dated as of  August  31,  1999,
                         between  Registrant and Lynch  Interactive  Corporation
                         (incorporated  by  reference  to  Exhibit  2  to  Lynch
                         Interactive  Corporation's Form 10A-1, dated August 18,
                         1999).

                    *(u) Letter of Understanding between Registrant and Louis A.
                         Guzzetti. ++

                    16   Letter   Re:    Change   in    Certifying    Accountant
                         (incorporated   by   reference   to   Exhibit   16   to
                         Registrant's Form 8-K, dated March 19, 1996).

                    21   Subsidiaries of the Registrant.  ++ 23 Consent of Ernst
                         & Young ++ 24 Powers of Attorney.  ++ 27 Financial Data
                         Schedule ++

*Management contract or compensatory arrangement.

+ Registrant  agrees to furnish a supplemental  copy of any omitted  schedule to
the Securities and Exchange Commission upon request.

++ Filed herewith

The Exhibits  listed above have been filed  separately  with the  Securities and
Exchange  Commission in conjunction with this Annual Report on Form 10-K or have
been  incorporated  by  reference  into this Annual  Report on Form 10-K.  Lynch
Corporation  will furnish to each of its shareholders a copy of any such Exhibit
for a fee equal to Lynch Corporation's cost in furnishing such Exhibit. Requests
should be  addressed  to the Office of the  Secretary,  Lynch  Corporation,  401
Theodore Fremd Avenue, Rye, New York 10580.