SECURITIES & EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-Q
(Mark One)

     [X]  QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15(D) OF THE  SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2000
                               -------------

                                        or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from          to

Commission File No. 1-106
                    -----


                                 LYNCH CORPORATION

               (Exact name of Registrant as specified in its charter)


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


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

                                (914) 921-7601

               Registrant's telephone number, including area code


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

Yes  X    No
   -----    ----

Indicate the number of shares outstanding of each of the Registrant's classes of
Common Stock, as of the latest practical date.

            Class                           Outstanding at July 31, 2000
            -----                      ------------------------------------
Common Stock, no par value                           1,510,183

<PAGE>


                                        INDEX

                         LYNCH CORPORATION AND SUBSIDIARIES


PART I.     FINANCIAL INFORMATION


Item 1.  Financial Statements (Unaudited)

                  Condensed Consolidated Balance Sheets:
                    -      June 30, 2000
                    -      December 31, 1999

                  Condensed Consolidated Statements of Operations:
                    -      Three and six months ended June 30, 2000 and 1999

                  Condensed Consolidated Statements of Cash Flows:
                    -      Six months ended June 30, 2000 and 1999

                  Notes to Consolidated Financial Statements:


Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations


Item 3.  Quantitative and Qualitative Disclosure About Market Risk


PART II.    OTHER INFORMATION


Item 4.  Submission of Matters to a Vote of Security Holders

Item 6.  Exhibits and Reports on Form 8-K
(a)      Exhibits 27 - Financial Data Schedule
(b)      Reports on Form 8-K
         None









SIGNATURES

<PAGE>

Part 1 - FINANCIAL INFORMATION -
Item 1 - Financial Statements
<TABLE>
                       LYNCH CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                (In Thousands)
<CAPTION>
                                                                                         June 30               December 31
                                                                                          2000                    1999
                                                                                       (unaudited)                 (A)
                                                                                     -----------------       -----------------

ASSETS
CURRENT ASSETS
<S>                                                                                           <C>                     <C>
     Cash and Cash Equivalents                                                                $19,742                 $13,106
     Receivables, less allowances of $423 and $361                                             31,237                  24,642
     Inventories                                                                               33,364                  31,680
     Deferred income tax benefits                                                               9,010                   8,943
     Other current assets                                                                       1,063                   1,303
                                                                                     -----------------       -----------------

     TOTAL CURRENT ASSETS                                                                      94,416                  79,674
Restricted Cash                                                                                     -                  56,026

PROPRTY, PLANT AND EQUIPMENT
     Land                                                                                         672                     672
     Buildings and improvements                                                                11,028                  11,015
     Machinery and equipment                                                                   55,758                  54,529
                                                                                     -----------------       -----------------

                                                                                               67,458                  66,216
     Accumulated Depreciation                                                                (24,964)                (22,137)
                                                                                     -----------------       -----------------
                                                                                               42,494                  44,079

EXCESS OF COST OVER FAIR VALUE OF NET ASSETS ACQUIRED, NET                                     22,118                  22,020
OTHER ASSETS                                                                                    7,483                   9,393
                                                                                     -----------------       -----------------

    TOTAL ASSETS                                                                             $166,511                $211,192
                                                                                     =================       =================

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
     Notes payable to banks                                                                   $23,974                 $23,178
     Trade accounts payable                                                                    19,375                  14,404
     Accrued liabilities                                                                       16,862                  16,382
     Customer advances                                                                          3,327                     860
     Current maturities of long-term debt                                                       1,554                   1,636
                                                                                     -----------------       -----------------
     TOTAL CURRENT LIABILITIES                                                                 65,092                  56,460

LONG TERM DEBT                                                                                 58,952                 116,765
DEFERRED INCOME TAXES                                                                           6,229                   6,225
OTHER LONG TERM LIABILITIES                                                                     4,156                   4,866
MINORITY INTERESTS                                                                             11,464                  10,885

SHAREHOLDERS' EQUITY
   COMMON STOCK, NO PAR VALUE - 10,000,000 SHARES
     AUTHORIZED; 1,513,191 and 1,471,191 shares issued                                          5,139                   5,139
     respectively (at stated value)
   ADDITIONAL PAID-IN CAPITAL                                                                  10,111                   8,302
   RETAINED EARNINGS                                                                            5,470                   3,843
   ACCUMULATED OTHER COMPREHENSIVE INCOME                                                        (40)                    (40)
   TREASURY STOCK OF 3,008 and 61,008 SHARES, AT COST                                            (62)                 (1,253)
   TOTAL SHAREHOLDERS' EQUITY                                                                  20,618                  15,991
                                                                                     -----------------       -----------------


   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                $166,511                $211,192
                                                                                     =================       =================
<FN>
(A) The Balance  Sheet at December  31, 1999 has been  derived  from the Audited
Financial  Statements at that date, but does not include all of the  information
and footnotes required by generally accepted accounting  principles for complete
financial statements.
</FN>

                             See accompanying notes
</TABLE>
<PAGE>

<TABLE>


                       LYNCH CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                        (In thousands, except share amounts)



<CAPTION>
                                                                            Three Months              Six Months
                                                                            Ended June 30            Ended June 30
                                                                        -----------------------------------------------

                                                                           2000       1999          2000       1999
                                                                        ---------------------    -----------------------
<S>                                                                        <C>        <C>          <C>         <C>
     SALES AND REVENUES                                                    $53,008    $47,363      $105,482    $93,774

     Costs and expenses:
         Manufacturing cost of sales                                        45,448     41,014        91,775     82,785
         Selling and administrative                                          6,028      5,642        11,790     10,144
         Restructuring charge                                                    -          -           527        450
                                                                        ----------------------   -----------------------
     OPERATING PROFIT                                                        1,532        707         1,390        395

     Other income (expense):
         Investment Income                                                     273        (4)           961          7
         Interest expense                                                  (2,491)    (2,328)       (5,941)    (4,529)
                                                                        -----------------------  -----------------------
                                                                           (2,218)    (2,332)       (4,980)    (4,522)
                                                                        -----------------------  -----------------------
     LOSS FROM CONTINUING OPERATIONS BEFORE INCOME
        TAXES,  MINORITY INTERESTS, DISCONTINUED OPERATIONS AND
         EXTRAORDINARY ITEM                                                  (686)    (1,625)       (3,590)    (4,127)

     Benefit  from income taxes                                                 15        671         1,079      1,637
     Minority interests                                                        811        454         1,893      1,015
                                                                        -----------------------  -----------------------
     INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
        DISCONTINUED OPERATIONS AND EXTRAORDINARY ITEM                         140      (500)         (618)    (1,475)

     DISCONTINUED OPERATIONS:
          Income  (loss)  from  operations  of  Lynch  Interactive   Corporation
              distributed to shareholders  (less income tax (provision)  benefit
              of ($776) and $3,871
              and minority interests of $232 and $431)                           -        948             -    (8,517)

          Loss from  discontinued  operations  of  industrial  tape  segment  of
             Spinnaker  Industries (less  applicable  income tax benefit of $106
             and $753
             and minority interests of $138 and $558)                            -       (21)             -      (572)

     EXTRAORDINARY ITEM
          Gain  on early extinguishment of debt (less income tax provision of
          1,035 and $2,612 and minority interest of $1,091 and $2,472)         991          -         2,245
     $2,472)
                                                                        -----------------------  -----------------------
     NET INCOME (LOSS)                                                      $1,131       $427        $1,627  ($10,564)
                                                                         =========  =========     =========  =========
        Weighted average shares outstanding                              1,510,000  1,416,000     1,472,000  1,417,000
                                                                         =========  =========     =========  =========
     Basic and diluted earnings per share:

        Income ( Loss) from continuing operations before discontinued
        Operations and extraordinary item                                    $0.09    ($0.35)       ($0.42)    ($1.04)
         Income (loss) from Lynch Interactive Corporation                        -       0.67             -     (6.01)
         Income (loss) from discontinued operations                              -     (0.01)             -     (0.40)
         Extraordinary item                                                   0.66          -          1.53          -
                                                                        ----------------------   -----------------------
     NET INCOME (LOSS)                                                       $0.75      $0.30         $1.11    ($7.46)
                                                                         =========   =========    =========    =======
     See accompanying notes
</TABLE>
<PAGE>


<TABLE>

                       LYNCH CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (In Thousands)

<CAPTION>
                                                                                                        Six Months Ended
                                                                                                             June 30
                                                                                                 --------------------------------
                                                                                                     2000              1999
                                                                                                 -------------    ---------------

OPERATING ACTIVITIES

<S>                                                                                                    <C>             <C>
Net income (loss)                                                                                      $1,627          ($10,564)
Adjustment to reconcile net income (loss) to net cash provided by (used in)
   operating activities of continuing operations:
     Loss from operations of Lynch Interactive Corporation                                                  -              8,517
     Loss from operations of industrial tape segment                                                        -                572
     Extraordinary item                                                                               (2,245)                  -
     Depreciation and amortization                                                                      3,263              2,754
     Amortization of deferred financing charges                                                           402                435
     Deferred taxes                                                                                      (63)                  -
     Minority interests                                                                                   579            (1,015)
     Changes in operating assets and liabilities:
        Receivables                                                                                   (6,595)              1,011
        Inventories                                                                                   (1,684)            (3,081)
        Accounts payable and accrued liabilities                                                        7,918                411
        Other                                                                                             240                414
                                                                                                 -------------    ---------------

Cash provided by (used in) operating activities of continuing operations
                                                                                                        3,442              (546)
                                                                                                 -------------    ---------------

INVESTING ACTIVITIES

Capital expenditures                                                                                  (1,395)            (1,895)
Other                                                                                                       -              1,958
                                                                                                 -------------    ---------------

Cash provided by (used in) investing activities of continuing operations
                                                                                                      (1,395)                 63
                                                                                                 -------------    ---------------


FINANCING ACTIVITIES

Change in notes payable                                                                                   796           (11,608)
Repayment & buy back of long-term debt                                                               (54,650)            (4,183)
Deferred financing costs                                                                                 (69)              (145)
Sale of common stock                                                                                    3,000              (474)
Other                                                                                                   (514)                968
                                                                                                 -------------    ---------------
Cash (used in) operating activities of continuing operations
                                                                                                     (51,437)           (15,442)
                                                                                                 -------------    ---------------


Net decrease in cash and cash equivalents                                                            (49,390)           (15,925)
Cash provided by Lynch Interactive Corporation                                                              -              9,521
Cash provided by industrial tape segment                                                                    -              5,417
                                                                                                 -------------    ---------------


Decrease in cash and cash equivalents                                                                (49,390)              (987)
Cash and cash equivalents at beginning of period including
   %56,026 of Restricted Cash at December 31, 1999                                                     69,132              1,132

                                                                                                 -------------    ---------------

Cash and cash equivalents at end of period                                                            $19,742               $145
                                                                                                 =============    ===============
See accompanying notes
</TABLE>
<PAGE>




NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A.     Subsidiaries of the Registrant

As of June 30, 2000, the Subsidiaries of the Registrant are as follows:
<TABLE>

<CAPTION>
Subsidiary                                           Owned By Lynch
----------                                           --------------
<S>                                                  <C>
Lynch Display Technologies, Inc.                     100.0%
Lynch Systems, Inc.                                   92.0%
     Lynch International Holding Corporation          92.0%
     Lynch-AMAV LLC                                   69.0%
M-tron Industries, Inc.                              100.0%
     M-tron Industries, Ltd.                         100.0%
     Spinnaker Industries, Inc.                       47.6%(O/60.4%(V)
          Entoleter, Inc.                             47.6%(O/60.4%(V)
          Spinnaker Coating, Inc.                     47.6%(O/60.4%(V)
                Spinnaker Coating-Maine, Inc.         47.6%(O/60.4%(V)
          Spinnaker Electrical Tape Company           47.6%(0/60.4%(V)

Notes: (V)=Percentage voting control; (O)=Percentage of equity ownership.
</TABLE>


B.       Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States for interim  financial  information  and with the  instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the  information  and  footnotes  required by generally  accepted  accounting
principles for complete financial statements. In the opinion of management,  all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the six month period
ended June 30, 2000 are not  necessarily  indicative  of the results that may be
expected for the year ended December 31, 2000. For further information, refer to
the  consolidated  financial  statements and footnotes  thereto  included in the
Registrant's Annual Report on Form 10-K for the year ended December 31, 1999.

The accompanying  unaudited condensed  consolidated financial statements reflect
the  spin  off of  Lynch  Interactive  Corporation  ("Interactive")  from  Lynch
Corporation ("Lynch" or "Registrant") that occurred in the third quarter of 1999
(see  Note  D) and  the  sale  of  the  industrial  tape  segment  of  Spinnaker
Industries, Inc., that occurred in the third quarter of 1999 (see Note C).

C.       Discontinued Operations

In the third  quarter of 1999,  the Company's  48% owned  subsidiary,  Spinnaker
Industries,  Inc. sold its two industrial tape units,  Central  Products Company
and Spinnaker  Electrical,  which  comprised  its  industrial  tape segment,  to
Intertape Polymer Group, Inc. ("Intertape").  The consideration for the sale was
approximately  $105 million and 300,000 five-year warrants to purchase shares of
Intertape  common  stock at  $29.50  each.  Spinnaker  recognized  a gain on the
transactions of $24 million before tax and the Registrant recognized a similar
gain before income tax and minority  interests.  The agreement to sell Spinnaker
Electrical  was  completed  on July 30, 1999 and the  agreement  to sell Central
Products was completed on August 10, 1999. As a result, the Company's industrial
tape segment is being reported as a discontinued  operation in the  accompanying
condensed consolidated financial statements.  Accordingly,  operating results of
the industrial tape segment have been segregated from continuing  operations and
reported as a separate line item on the statements of operations. The industrial
tape segment's net sales were $29.3 million and $58.8 million,  respectively for
the three and six month periods ended June 30, 1999.

D.       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 ("Interactive") ("Spin Off"). Lynch completed the Spin Off
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  is listed on the American  Stock  Exchange under the
symbol "LIC".
<PAGE>

Interactive owns all of what was Lynch's multimedia and service businesses while
Lynch  retains  to  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 M-tron  Industries,  Inc. and
Lynch Systems, Inc.

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

Interactive's  net sales for the three and six month periods ended June 30, 1999
were $54.2 million and $102.9 million, 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 Interactive and was
included in the Spin Off.

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 became the employees of Interactive  and  Interactive  began  providing
certain corporate  management  services to Lynch,  which is charged a management
fee for these  services.  This charge was $60,000 and $180,000 for the three and
six months ended June 30, 2000, respectively.

Net assets of  approximately  $23 million were distributed to Interactive at the
Spin Off. Such amount was  subsequently  decreased in the fourth quarter of 1999
by $1.6 million to reflect a revision in the allocation of certain liabilities.


E.       Inventories

Inventories  are stated at the lower of cost or market  value.  At June 30, 2000
and  December  31,  1999,  inventories  were valued by three  methods:  last-in,
first-out (LIFO) - 18% specific  identification  - 80%, and first-in,  first-out
(FIFO) - 2%. At December 31, 1999, the respective percentages were 12%, 80%, and
8%, respectively.
<TABLE>

(In Thousands)
<CAPTION>
                                      June 30,            Dec. 31,
                                       2000                 1999
                                    ----------         --------------
<S>                                   <C>                  <C>
Raw materials                         $ 11,042             $10,407
Work in process                          2,372               2,114
Finished goods                          19,950              19,159
                                    ----------         --------------
  Total Inventories                   $ 33,364            $ 31,680
                                    ==========         ==============
</TABLE>

F.       Indebtedness

Spinnaker   Industries,   Inc.  maintains  revolving  lines  of  credit  at  its
subsidiaries which total $40 million,  of which $23.4 million was outstanding as
of June 30, 2000 and had $9.1 million of available borrowings.  These facilities
were refinanced in conjunction  with the sale of Central  Products and Spinnaker
Electrical.
<PAGE>

In general, the credit facilities are secured by property,  plant and equipment,
inventory,  receivables  and common  stock of certain  subsidiaries  and contain
certain covenants restricting distributions to the Registrant.
<TABLE>

<CAPTION>
Long term debt consists of:                                        June 30,            Dec.31,
                                                                     2000               1999
                                                                  ------------------ -----------
<S>                                                               <C>               <C>
Spinnaker Industries, Inc. 10.75% Senior Secured Note due 2006    $51,135           $108,585

10% Subordinated Note with PIK interest and
principal due on January 31, 2002                                   7,000              7,000

Other                                                               2,371              2,816
                                                                 ------------------ -----------
                                                                   60,506            118,401
Current Maturities                                                 (1,554)            (1,636)
                                                                  ------------------ ----------
                                                                  $58,952           $116,765
                                                                  ==============    ===========
</TABLE>

As of June 30,  2000  proceeds  from the sale of  Central  Products  (see Note C
above) have been  utilized in  accordance  with the terms of the Senior  Secured
Notes Indenture to either repay  indebtedness  or invest in the  adhesive-backed
paper  business.  During the second quarter of 2000,  Spinnaker  purchased $24.1
million  (par value) of the  outstanding  Senior  Notes on the open market at an
average price of 82.3% of par value  recognizing a pre-tax gain of $3.1 million.
The  Registrant  recognized  a similar  gain before  income  taxes and  minority
interest.  For the six months  ended June 30,  2000  Spinnaker  purchased  $57.5
million (par value) of these same rates at an average price of 83.1%  reflecting
a pre-tax  gain of $7.5  million  after the  charge off of  applicable  deferred
financing costs.

The Senior Note purchases to date and capital  expenditures in the business have
fully utilized the Restricted Proceeds from the above referenced sale.

During the second quarter of 2000, Lynch Systems entered into a project specific
line of credit for $800,000 related to a contract to deliver  equipment in 2001.
The Company has  guaranteed the full amount of the credit  facility.  During the
first half of 2000 the Company has guaranteed project specific credit facilities
for Lynch Systems totaling  approximately $8 million. At June 30, 2000 there are
no amounts  borrowed on these  facilities  and it is  expected  that any amounts
borrowed on these  facilities in the future will be repaid by the second quarter
of 2001.

G.     Earnings per share
       ------------------

Basic  earnings  per common  share  amounts are based on the  average  number of
common shares outstanding during each period,  excluding the dilutive effects of
options, warrants, and convertible securities of which there were none.

H.       Segment Information

After the distribution to shareholders of the stock of Interactive,  the Company
is engaged in the manufacture of adhesive-backed label stock,  frequency control
devices  and  other  manufacturing.  The  Company  measures  performance  of its
segments  primarily by revenues,  operating profit and EBITDA  (operating profit
before  income  taxes,   depreciation,   amortization  and  allocated  corporate
expenses). Except for Spinnaker (the adhesive-backed label stock business) using
approximately  $56.0  million  of  restricted  cash to  repurchase  debt and for
capital asset purchases.  Indentifiable  assets of each segment have not changed
materially since December 31, 1999.

EBITDA for  operating  segments is equal to operating  profit  before  interest,
taxes,  depreciation,  amortization.  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
interest and income taxes.  Prior to the Spin Off, Lynch  allocated a portion of
its general corporate expenses to its operating segments. Subsequent to the Spin
Off,  Interactive  is providing  certain  corporate  management  services to the
Registrant and charging a corporate overhead management fee while the Registrant
still  allocates a portion of its general  corporate  expenses to its  operating
segments.
<PAGE>

General  corporate  office  expenses  related  to  finance  and   administrative
functions  including  public  company  compliance  reporting,  bank and investor
relations,  taxes and 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 attributable to discontinued operations.
<TABLE>

<CAPTION>
                                                             Three Months Ended                 Six Months Ended
                                                                   June 30                          June 30
                                                        ------------------------------    -----------------------------
                                                             2000           1999               2000           1999
                                                        --------------- --------------    --------------- -------------

Revenues:
<S>                                                            <C>            <C>                <C>           <C>
  Adhesive-backed label stock                                  $37,332        $38,065            $77,618       $76,656
  Frequency control devices                                     10,074          6,946             18,484        12,371
  Other Manufacturing                                            5,602          2,352              9,380         4,747
                                                        --------------- --------------    --------------- -------------

  Consolidated Total                                           $53,008        $47,363           $105,482       $93,774
                                                        --------------- --------------    --------------- -------------

EBITDA
  Adhesive-backed label stock                                   $2,161         $2,341             $3,968        $4,689
  Frequency control devices                                      1,310            567              2,494         1,088
  Other manufacturing                                              766          (600)                615       (1,059)
  Corporate manufacturing expenses                               (587)          (167)            (1,141)         (838)
                                                        --------------- --------------    --------------- -------------

  Total manufacturing                                            3,650          2,141              5,936         3,880

  Corporate expenses                                             (379)          (123)              (756)         (240)
  Restructuring charge - Spinnaker                                   -              -              (527)         (450)
                                                        --------------- --------------    --------------- -------------

  Consolidated Total                                            $3,271         $2,018             $4,653        $3,190
                                                        --------------- --------------    --------------- -------------

Operating Profit
   Adhesive-backed label stock                                    $705         $1,399             $1,416        $2,646
   Frequency control devices                                     1,139            484              2,159           842
   Other manufacturing                                             633          (727)                349       (1,318)
   Corporate manufacturing expenses                              (491)          (268)            (1,101)         (945)
                                                        --------------- --------------    --------------- -------------

   Total manufacturing                                           1,986            888              2,823         1,225

   Unallocated corporate expenses                                (454)          (181)              (906)         (380)
   Restructuring charge - Spinnaker                                  -              -              (527)         (450)
                                                        --------------- --------------    --------------- -------------

   Consolidated Total                                           $1,532           $707             $1,390          $395
                                                        =============== ==============    =============== =============

Total Operating Profit for reportable segments                  $1,532           $707             $1,390          $395
Other profit or loss
   Investment Income                                               273            (4)                961             7
   Interest expense                                            (2,491)        (2,328)            (5,941)       (4,529)
                                                        --------------- --------------    --------------- -------------

Loss from continuing operations
   before income taxes, minority
   Interest discontinued operations
   and extraordinary items                                      $(686)       $(1,625)           $(3,590)      $(4,127)
                                                        =============== ==============    =============== =============
</TABLE>
<PAGE>


I.       Acquisitions

In October  1996,  Spinnaker  acquired  all of the  approximately  25%  minority
interest in its Spinnaker  Coating  subsidiary held by such  subsidiary's  other
shareholders.   The  terms  of  the  acquisition  involved  a  cash  payment  of
approximately  $2.3 million and the issuance of 9,613 shares of Common Stock. As
additional  consideration for the shares of capital stock of Spinnaker  Coating,
the  minority   shareholders   received  the  right  to  a  contingent   payment
("Contingent Value Rights" or "CVR's").

On May 4, 2000, Spinnaker  Electrical  Tape, a Spinnaker subsidiary,
acquired  all of the  CVR's  held by the  former  minority  ownership  group  of
Spinnaker Coating for $500,000 in cash. Accordingly,  the contingent payment was
recorded as an addition to goodwill during the second quarter of 2000.

J.       Accounting and Reporting Policies

Securities and Exchange  Commission's  Staff Accounting  Bulletin 101 summarizes
certain  of  the  staff's  views  in  applying  generally  accepted   accounting
principles to revenue recognition in the financial statements. The Registrant is
currently  assessing  the  impact,  if any,  that SAB will  have on its  revenue
recognition policy when it is adopted in the fourth quarter of 2000.


Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.
         -----------------------------------------------------------------------

Sales and Revenues

Revenues for the second quarter of 2000  increased by $5.6 million or 11.9%,  to
$53.0  million,  from the second  quarter of 1999.  Revenues  for the six months
ended June 30, 2000 increased by $11.7 million or 12.5% from the comparable 1999
period reflecting increased order flow.

Revenues from Spinnaker  Industries,  Inc.  continuing  operations  fell by $1.1
million between the two quarters primarily due to lower volumes in EDP and other
general purpose products and the timing of sales of pressure  sensitive  postage
paper stock.  The market's rapid  transition from EDP to thermal  transfer paper
stock technologies has exceeded management's expectations and as a result caused
Spinnaker to experience lower volumes and average selling prices,  as the market
balances quality and performance  against lower priced solutions.  Unit sales of
pressure  sensitive  postage  paper stock  continue to be impacted by the uneven
ordering  pattern of the Bureau of Printing and Engraving.  Spinnaker's  revenue
for the six  months  ended  June 30,  2000 were  $80.3  million,  exceeding  the
corresponding  1999 period by  approximately  $.6  million.  The increase in net
sales  for 2000 is  attributed  to  strong  sales in  pressure  sensitive  sheet
products, in which volumes increased  approximately 65% over the comparable 1999
period,  and  increased  sales  volume of  specialty  and  general-purpose  roll
products.   These  increases  were  substantially   offset  by  the  effects  of
outsourcing  the  manufacturing  and  sales  of dry gum and  other  conventional
product  lines in the fourth  quarter  of 1999.  Although  volumes  of  pressure
sensitive  postage material for the fist six months of 2000 declined compared to
the  corresponding  1999  period,  it was  substantially  offset by an increased
average  selling price.  Revenues at M-tron  increased by $3.1 million or 45% to
$10.1  million  for the three  month  period due to  increased  demand  from the
telecommunications  industry and increased  sales of new products.  Revenues for
the six month period  increased  $6.1 million or 49% to $18.5 million due to the
same factors.  Lynch Systems'  revenues for the second quarter increased by $3.6
million to $4.5  million  reflecting  increased  orders and sales of glass press
machines. Lynch Systems revenues for the six month period increased $5.0 million
to $6.7 million for the same reasons.

Operating  profit for the second  quarter 2000 increased by $0.8 million to $1.5
million  compared to the prior year. For the six month period  operating  profit
increased  by  $1.0  million  to  $1.4  million  compared  to the  1999  period.
Spinnaker's  operating  profit in the second quarter declined by $.3 million due
to lower  volumes,  and  reduction  in gross  margins  as a result  of the lower
pricing  noted above.  These  factors  also  affected the six month period where
there was an operating loss of $.2 million  compared to an operations  profit of
$1.6 million in 1999. The 1999 period  included a $.9 million gain from the sale
of operating assets.  For the second quarter M-tron's operating profit increased
by $0.7 million to $1.3 million due to increased sales volume  mentioned  above.
For the six months, M-tron's operating profits increased by $1.3 million to $2.2
million due to strong order flow and increased sales volume.  Lynch Systems' had
an operating profit of $.7 million compared to an operating loss of $1.0 million
in the second  quarter of 1999.  For the six month period Lynch Systems also had
an operating profit of $.3 million compared to an operating loss of $1.7 million
in the  comparable  period in 1999.  This  turnaround  for both periods at Lynch
Systems is due to the increased sales  mentioned above and better  absorption of
overhead.

Other Income (Expense), Net

Investment  income  increased  for the quarter and the six months due to the net
proceeds  of the 1999 sale of  Spinnaker's  industrial  tape  units,  which were
invested in short term instruments during the periods.

Interest  expense was $2.5 million for the quarter and increased by $.2 million.
During the six-month period ended June 30, 2000,  interest expense  increased by
$1.4 million.  These increases were primarily due to allocations during the 1999
periods of a portion of the interest expense to the discontinued industrial tape
segment until the time of their sale.

Tax Provision

The income tax benefit includes  federal,  as well as state and local taxes. The
tax  benefit  for the six  months  ended  June  30,  2000 and  1999,  represents
effective  tax  rates of 30% and 40%,  respectively.  The  differences  from the
federal  statutory rate are  principally due to the effect of state income taxes
and amortization of non-deductible goodwill.

Minority Interest

Minority  interests  contribution  to the net  income  (loss)  increased  by $.4
million for the quarter and $0.9 million for the six months, from the respective
prior year  periods of 1999 due to the  increased  net  losses  from  continuing
operations  at  Spinnaker  for both  periods and the  increase  in the  minority
interest percentage at this subsidiary.


Discontinued Operations

As a result of the Spin Off (see Note D), the Company's  multimedia and services
segments are being  reported as operations  distributed to  shareholders  in the
accompanying  condensed  consolidated financial statements for the 1999 periods.
Accordingly,   operating  results  of  Interactive  have  been  segregated  from
continuing  operations  and reported as a separate line item on the statement of
operations.

As a result of Spinnaker's  sale of its industrial  tape segment (see Note C) in
the third quarter of 1999, operating results of the industrial tape segment have
been  segregated  from  continuing  operations  and reported  separately  in the
statement of operations for 1999.

Net Income/Loss

Net income for the six months ended June 30, 2000 was $1.6 million, or $1.11 per
share, as compared to a net loss of ($10.6  million),  or $7.46 per share in the
previous year's six month period.  The absence of the losses in the discontinued
operations,  the gain on the early  extinguishement of debt at Spinnaker and the
improved operating results were the primary reasons for this turnabout.

Net income for the three months ended June 30, 2000 was $1.1 million or $.75 per
share as  compared to a net income of $.4 million or $.30 per share for the 1999
quarter.  The same  factors  mentioned  above were the  primary  reasons for the
improvement.

Backlog/New Orders

Total backlog of manufactured  products from  continuing  operations at June 30,
2000 was $41.5  million,  which  represents an increase of $6.2 million from the
backlog of $35.3 million at December 31, 1999. Increased order receipt at M-tron
accounted for the significant increase to the backlog at June 30, 2000.


FINANCIAL CONDITION

Liquidity/Capital Resources

As of June 30, 2000, the Company had current assets of $94.4 million and current
liabilities of $65.1  million.  Working  capital was therefore  $29.3 million as
compared to $23.2 million at December 31, 1999. The increase is primarily due to
the improved operating results.

First six months capital expenditures were $1.4 million in 2000 and $1.9 million
in 1999.  The  Company  plans to spend  approximately  $4.8  million  on capital
expenditures for the year and anticipates that it will have sufficient cash flow
from operations and borrowing  availability  under various credit  facilities at
its subsidiaries to fund such capital expenditure plans.

At June 30, 2000,  total debt was $84.5  million,  which was $57.1  million less
than the $141.6  million at the end of 1999.  The  reduction is primarily due to
principal  repayments  and debt  repurchases.  Long term  debt at June 30,  2000
included  $60.5 million of fixed interest rate debt, at an average cash interest
rate of 10.6% and $24.0  million of  variable  interest  rate debt at an average
interest  rate of 9.0%.  Additionally,  the Company  had unused  lines of credit
facilities  of which the  Spinnaker  Credit  Facility  is a major  portion.  The
Spinnaker Credit Facility is available to fund acquisitions and support periodic
fluctuations in working capital.  Credit availability under the Spinnaker Credit
Facility is subject to certain  variables,  such as  inventory  and  receivables
eligible  to be  included  in the  borrowing  base.  The  Company  is charged an
available credit fee of 0.375% per annum.  Outstanding  borrowings bear interest
at variable rates related to the prime interest rate or LIBOR. At June 30, 2000,
the  combined  effective  interest  rate  was  9.0%.  In  conjunction  with  the
industrial  tape sale,  the Spinnaker  Credit  Facility was  refinanced  and the
aggregate facility was decreased from $60 million to $40 million. The Refinanced
Credit  Facility will expire  December 31, 2001.  As of July 26, 2000  aggregate
availability  under the  Refinanced  Credit  Facility  was  approximately  $32.5
million, of which approximately $23.4 million was outstanding. During the second
quarter of 2000,  Lynch Systems  entered into a project  specific line of credit
for $800,000 related to a contract to deliver equipment in 2001. The Company has
guaranteed the full amount of the credit facility. During the first half of 2000
the Company has guaranteed  project specific credit facilities for Lynch Systems
totaling  approximately  $8  million.  At June 30,  2000  there  are no  amounts
borrowed on these facilities used for Lynch  Corporation and it is expected that
any  amounts  borrowed on these  facilities  in the future will be repaid by the
second quarter of 2001.

The Company does not at present  have credit  facilities  at the parent  company
level. Management believes it has adequate working capital at this level to fund
current operations into the near future.

Lynch  Corporation  may make  additional  acquisitions  which would  probably be
financed with a significant  component of debt. This acquisition debt as well as
current debt  outstanding  would contain  restrictions  on the amount of readily
available  funds  that  can  be  transferred  to  Lynch   Corporation  from  its
subsidiaries.

Accounting and Reporting Policies

Securities and Exchange  Commission's  Staff Accounting  Bulletin 101 summarizes
certain  of  the  staff's  views  in  applying  generally  accepted   accounting
principles to revenue recognition in the financial statements. The Registrant is
currently  assessing  the  impact,  if any,  that SAB will  have on its  revenue
recognition policy when it is adopted in the fourth quarter of 2000.


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
(approximately  $19.5 million at June 30, 2000). 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 by borrowing on a fixed long-term  basis.  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 June 30, 2000, approximately $24.0 million, or 28% 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 2000  average  interest  rate under  these
borrowings,  it is estimated that the Company's six months 2000 interest expense
would have changed by less than $.15 million.  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.
-----------------------
<PAGE>

Included in this Management  Discussion and Analysis of Financial  Condition and
Results  of  Operations  are  certain  forward   looking   financial  and  other
information,  including without limitation  matters relating to Spinnaker,  Year
2000 matters and Market Risk. It should be recognized that such  information are
projections,  estimates or  forecasts  based on various  assumptions,  including
without  limitation,   meeting  its  assumptions  regarding  expected  operating
performance  and other matters  specifically  set forth, as well as the expected
performance of the economy as it impacts the Registrant's businesses, government
and regulatory actions and approvals, and tax consequences, and the risk factors
and cautionary statements set forth in reports filed by Registrant and Spinnaker
with the Securities and Exchange  Commission.  As a result,  such information is
subject to uncertainties, risks and inaccuracies, which could be material.


Item 3.  Quantitative and Qualitative Disclosure About Market Risk

                  See "Market Risk" under Item 2 above.



PART II OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders
         ---------------------------------------------------

At the Annual Meeting of Stockholders of the Registrant held on May 11, 2000 the
following persons were elected as Directors with the following votes:
<TABLE>

<CAPTION>
         Name                              Votes For            Votes Withheld
         ----                              ---------            --------------
<S>                                         <C>                      <C>
E. Val Cerutti                              1,397,809                4,886
Robert E. Dolan                             1,397,704                4,991
Mario J. Gabelli                            1,397,764                4,931
Avrum Gray                                  1,397,709                4,986
Louis A. Guzzetti, Jr.                      1,397,649                5,046
Ralph R. Papitto                            1,397,809                4,886
</TABLE>

In addition, the sale of 100,000 shares of Registrant's Common Stock to Mario J.
Gabelli,  Registrant's  Chairman and Chief  Executive  Officer,  was ratified as
follows:

For:                   582,619
Against:                 3,954
Abstain:               403,092*
Broker Nonvotes:       413,092


*Mr.  Gabelli  abstained  with  respect to shares of  Registrant's  Common Stock
beneficially owned by him. Also, Amendments to Registrant's  Principal Executive
Bonus Plan were approved as follows:
For:      1,383,790
Against:     12,159
Abstain:      6,746

Item 6.  Exhibits and Reports on Form 8-K
                  (a)     Exhibits

                          27 -  Financial Data Schedule

                  (b)     Reports on Form 8-K

                          None

                                   SIGNATURES

Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                             LYNCH CORPORATION
                            (Registrant)

                             By: s/Roger J. Dexter
                                 Roger J. Dexter
                             Chief Financial Officer
August 14, 2000