Our mission
          
Bairnco  is  an  organization of people committed to providing  value-added
industrial and commercial products and services to niche markets which meet
or   exceed  our  customers'  requirements  leading  to  the  creation   of
stockholder and employee value.

Our strategy
          
Bairnco  strives  to  develop  true  partnership  relationships  with   its
customers in selected markets through close cooperation in developing value-
added  solutions to their needs.  Bairnco seeks to identify and participate
in  those  markets  that will provide growth opportunities  due  to  either
technical developments or the changing needs of customers.

Bairnco implements this mission and strategy through two business segments:

Engineered  materials  and components are designed, manufactured  and  sold
under the Arlon brand identity.

Replacement  products and services are manufactured and  distributed  under
the Kasco brand identity.

Our objectives

Bairnco believes that concentrating its resources in selected market niches
can  provide  the basis to achieve both superior profitability and  growth.
Management's long term objectives are to achieve:

  15% compound rate of earnings growth
  
  20% return on stockholders' investment
  
  15% return on total capital employed.


Our values

Values are the core of Bairnco's corporate culture.  They are the basis for
the  decisions made regarding the development and deployment of people, the
improvement   and   investment  in  processes,  and  the  manufacture   and
distribution of products.

Bairnco's values are:
  Personal and corporate integrity
  The inevitability and opportunity of change
  Continuous improvement and development
  Total customer satisfaction
  Decentralized organization and empowered employees
  Superior rewards for superior performance
  Have fun - enjoy your work and your life.


                                                  
                     CONTENTS

                     Financial Highlights                                 1
                     Letter to Our Stockholders                           2
                     Engineered Materials & Components (Arlon)            4
                     Replacement Products & Services (Kasco)              7
                     Directors and Management                             8
                     Financial History                                    9
                     Management's Discussion and Analysis                10
                     Quarterly Results of Operations                     14
                     Report of Independent Certified Public Accountants  15
                     Consolidated Financial Statements                   16
                     Notes to Consolidated Financial Statements          20

<TABLE>
FINANCIAL HIGHLIGHTS
(In thousands except per share data)
<CAPTION>
                                                                Percent Change
                                     1998     1997     1996     98/97 97/96
<S>                                  <C>      <C>      <C>      <C>   <C>
Net Sales                            $156,456 $158,708 $150,234 (1%)  6%
Earnings before Interest, Provision
 for Litigation Costs and Taxes (a)  $ 12,029 $ 15,592 $ 14,956 (23%) 4%
Operating Profit                     $  4,529 $ 15,592 $ 14,956 (71%) 4%
Net Income                           $  1,594 $  8,771 $  8,335 (82%) 5%
Diluted Earnings per Share           $   0.18 $   0.94 $   0.85 (81%) 11%
Cash Dividends per Share             $   0.20 $   0.20 $   0.20 0%    0%
Stockholders' Investment per Average
 Diluted Common Share Outstanding    $   5.27 $   5.61 $   5.02 (6%)  12%
Total Assets                         $118,555 $109,286 $102,600 8%    7%
Stockholders' Investment             $ 46,438 $ 52,469 $ 49,464 (11%) 6%
Average Diluted Common Shares
 Outstanding                            8,818    9,350    9,851 (6%)  (5%)

(a) Excludes impact of provision for litigation costs of $7.5 million (pre-
    tax) in 1998.
</TABLE>

Graphic - Bar Chart depicting Sales (y-axis) for five years - 1994 to 
          1998 (x-axis):
                                         
  Year    Sales (in thousands) 

  1994    $145,522  
  1995    $150,507  
  1996    $150,234  
  1997    $158,708  
  1998    $156,456  

Graphic - Bar Chart depicting Operating Profit (y-axis) for five years - 1994
          to 1998 (x-axis): 

  Year    Operating Profit (in thousands)
  1994    $13,654
  1995    $14,633
  1996    $14,956
  1997    $15,592
  1998    $ 4,529
  1998(b) $12,029

(b) Excludes impact on operating profit of $7.5 million (pre-tax) provision 
    for litigation costs in the fourth quarter of 1998.

Graphic - Bar Chart depicting Net Income (y-axis) for five years - 1994
          to 1998 (x-axis):

  Year    Net Income (in thousands)
  1994    $7,255
  1995    $7,781
  1996    $8,335
  1997    $8,771
  1998    $1,594
  1998(b) $6,320

(b) Excludes impact on net income of $7.5 million (pre-tax) provision for
    litigation costs in the fourth quarter of 1998.

Graphic - Bar Chart depicting Diluted Earnings per Share (y-axis) for five
          years - 1994 to 1998 (x-axis):

  Year    Diluted Earnings per Share (in thousands)
  1994    $0.69
  1995    $0.75
  1996    $0.85
  1997    $0.94
  1998    $0.18
  1998(b) $0.72

(b) Excludes impact on diluted earnings per share of $7.5 million (pre-tax)
    provision for litigation costs in the fourth quarter of 1998.






LETTER TO OUR STOCKHOLDERS


1998  was a challenging year for Bairnco.  Weak markets and price pressures
resulted  in  lower  sales  and earnings.  While costs  were  reduced,  the
decision  was  made,  based on the future outlook,  to  both  preserve  and
continue  to  improve  the core management competencies.   We  continue  to
repurchase  our  stock.   An  acquisition that fits  Arlon  was  completed.
Bairnco's financial condition remains strong.
     
In  1998  the court in the Transactions Lawsuit issued a series of opinions
that  eliminated certain claims and parties from the case and set the stage
for  discovery  and  trial  as to the claims and parties  that  remain.  In
particular, the court dismissed the RICO claims; all claims against  third-
party professionals, including lawyers, accountants and investment bankers;
and  all claims against individuals with the exception of Bairnco's  former
chairman  and  president.  The court also narrowed  the  scope  of  certain
claims  against  Bairnco  and  the other corporate  defendants.   With  the
initial  motions  phase of the case now complete, Bairnco  is  prepared  to
mount  a  vigorous  defense on the merits.  Toward that end,  a  $7,500,000
provision for litigation costs was taken in the fourth quarter.

FINANCIAL RESULTS

1998 consolidated sales of $156,456,000 decreased 1.4% from $158,708,000 in
1997.   Arlon's  sales decreased 3.8%.  All markets served declined  during
the  year  after  a  strong first quarter.  The electrical  and  electronic
markets were the most depressed.  The drop in the electronic market due  to
the  Asian crisis adversely affected many of the end users of our products.
Others of our OEM final customers were hurt by low priced competition  from
Asian competitors.  Further penetration in new market segments offset  some
of  the  decline.  Kasco's sales increased 4.4% through growth in the  U.S.
base business, seasoning programs for in-store meal preparation, and in the
European operations.

In 1998, gross profit decreased 6.3% to $50,583,000 from $53,996,000 in the
prior year with gross profit margins declining to 32.3% from 34% last year.
Gross  profit  decreased at Arlon as the combined result  of  lower  sales,
lower  prices,  and  a continuing change in mix to lower margin  commercial
products  to  serve  the electronics and communications  markets.   Kasco's
gross profit decreased slightly due to the costs from discontinued products
and services.
     
Selling and administrative expenses, excluding the provision for litigation
costs,  increased  0.4%  to $38,554,000 from $38,404,000  in  1997.   As  a
percent  of sales, these expenses increased to 24.6% in 1998 from 24.2%  in
1997.    Research  and  development  expenses  increased  4.8%  as  Bairnco
continued  to  invest  in  the development of  new  products  and  improved
quality.   The  average number of employees was reduced by 3.3%  from  last
year. Productivity as measured by sales per employee increased 1.9%.

Earnings before interest, the provision for litigation costs and taxes were
$12,029,000 down 22.9% from $15,592,000 in 1997.  The decline is  primarily
attributable to reduced gross profit.

In  the  fourth  quarter of 1998 Bairnco recorded the  $7,500,000  pre  tax
provision for anticipated litigation costs.
     
Net interest expense increased from $1,834,000 to $1,998,000.  The increase
was  due to increased average debt outstanding primarily resulting from the
acquisition in the fourth quarter.

Income  before income taxes decreased to $2,531,000 in 1998 as compared  to
$13,758,000 in 1997. The effective tax rate was 37% as compared to 36.2% in
1997.

Net  income decreased to $1,594,000 from $8,771,000.  Diluted earnings  per
common  share  fell to $.18 from $.94 in 1997 as a result of the  decreased
operating income and the provision for litigation costs.  The provision for
litigation  costs  reduced net income in 1998 by  $4,726,000  or  $.54  per
share.    During  1998, Bairnco repurchased 737,400 shares  of  its  common
stock.   The  diluted  average number of shares  outstanding  in  1998  was
8,818,000  a  5.7%  decrease  from  the 9,350,000  diluted  average  shares
outstanding in 1997.

MII ACQUISITION

Effective October 31,1998 Bairnco purchased MII International, Inc.  ("MII"
-  formerly  the Marking Films and Engineered Coated Products unit  of  The
Meyercord  Co.) for approximately $8.3 million including the  repayment  of
its  debt.   Sales of MII for the six months ended September 30, 1998  were
approximately $6 million.

MII's  adhesive coated graphic films are used in a variety of  fleet,  rail
car,  and  shipping container marking applications; OEM  and  screen  print
applications;  and  other corporate specified programs.  MII's  engineered-
coated  products include transfer adhesives, single and double-faced tapes,
specialty-coated foils, and other custom coated products.  MII has a strong
presence in international markets.

The  acquisition complemented Arlon's graphic films and industrial products
with   product  line  extensions,  additional  brand  recognition,  product
development  synergies,  and penetration into  new  customer  segments  and
markets.   The  acquisition also expanded Arlon's  coating  and  converting
capacity.

FINANCIAL MANAGEMENT

Excluding  the  provision for litigation costs, return on capital  employed
decreased  to  8.9%  from  12.2%  last year  and  return  on  stockholders'
investment in 1998 decreased to 12.2% compared to 17.4% last year.

In  1998, Bairnco's Board of Directors authorized the repurchase of  up  to
$5,000,000 of its common stock.  This authorization was in addition to  the
$3.7  million still unused from the prior year authorization.   During  the
year  the  company repurchased 737,400 shares for $6.2 million.  The  Board
has  authorized management to continue its stock repurchase program in 1999
subject to market conditions and capital requirements of the business.   At
year-end $2.5 million was available for additional stock repurchases.   The
Board  may  consider  additional authorizations if appropriate  during  the
year.

In  the  fourth quarter Bairnco amended its $50,000,000 reducing  revolving
credit  agreement to extend the first commitment reduction date to December
31,  2000  and  the final maturity to December 31, 2003. At  year-end  1998
Bairnco  had $10.5 million available under its revolving credit  agreement,
and $4.3 million available under short-term lines of credit.

Working  capital  as  a  percent of sales decreased from  22.5%  to  21.3%.
Accounts receivable increased due to higher foreign sales.  However  higher
current  liabilities  as  a result of the provision  for  litigation  costs
resulted in lower working capital.

Net  cash  flows provided by operating activities were $14,116,000.   These
cash  flows were more than sufficient to cover operating requirements, fund
Bairnco's  capital  expenditure program, pay dividends,  purchase  treasury
stock  and  generate  some excess cash.  However, the acquisition  required
$8.3 million in additional funds. Consequently 1998 total debt increased to
$37,844,000  from $30,318,000 at the end of 1997.  Debt  as  a  percent  of
equity increased to 81.5% from 57.8% in 1997.

1998  capital  expenditures  were $5,976,000  as  compared  to  a  plan  of
$12,000,000.   Depreciation  and  amortization  was  $6,688,000.    Capital
expenditures  were  cut  back  in  light  of  changing  market  conditions.
Expenditures were focused on cost reduction projects, replacements and  new
MIS systems and hardware that were installed during the year.

The  capital  expenditure  plan  for 1999 is  approximately  $8.2  million.
Depreciation  and  amortization  is  estimated  to  be  approximately  $7.0
million.  The planned capital expenditures include cost reduction projects,
replacements,   quality   improvements,  new  product   developments,   new
processing  equipment,  MIS  hardware and software,  and  limited  capacity
additions.

DIVIDEND

The quarterly $.05 per share cash dividend was maintained during the year.

MANAGEMENT

During  1998 the management development program, which is one of the  keys
to  our  future  success, continued to make progress  in  all  operations.
Significant  additions  and  changes were made  to  strengthen  operations
management  which  has  lead  to  lower  scrap  and  started  to   improve
efficiencies.   Also we have further strengthened our sales  organizations
to  further  penetrate certain market segments.  During 1998, a  Six-Sigma
program  was initiated in two of our operations as part of our  continuous
improvement program.  For 1999, additional projects have been selected and
training  will be expanded to include representatives for all our domestic
operations.   We  expect this program to accelerate the  yields  from  our
continuous  improvement program.  The ongoing improvement and  development
of  all  our  employees  remains a critical and never-ending  element  for
Bairnco's success.

OUTLOOK

Our management team has action plans in place designed to recover most  of
the  ground  lost  in  1998.  In general we expect little  improvement  in
demand   from  our  industrial  markets  served.   Although  most  markets
stabilized  after  the  sharp  drop in the second  quarter  of  1998,  the
recovery from those low levels has been and is expected to be modest.

Arlon's  management team continues to improve efficiencies and quality  to
more effectively compete in the electronic, electric, graphic, custom  and
industrial markets.  Although there is no meaningful recovery expected  in
the  markets  served,  the  combined effect of the  acquisition,  improved
efficiencies, product developments and penetration of new market  segments
should return Arlon to growing sales and earnings.

Kasco  North  America's  programs to become  the  preeminent  supplier  of
cutting  products and routine in-store equipment services are  continuing.
Kasco's seasoning program for in-store meal preparation continued to grow.
Kasco  North  American operations earnings are expected  to  resume  their
improving  trend based on some increased market share but  primarily  from
cost  reductions and efficiency improvements that were made  in  1998  and
which  are  continuing in 1999.  Kasco's management expects  1999  to  see
Kasco back on its plan for continued improvements.

The  outlook  for  1999  is  for improved  sales  and  earnings.   The  US
industrial economy is expected to experience very slow growth during  1999
with  inflation  remaining  under control and the  Federal  Reserve  Board
maintaining  low interest rates.  Asia is expected to slowly  recover  but
represent  continued strong competition to industrial America.  We  expect
the  combination  of growth from new products, higher  growth  in  certain
niche  markets,  and  a full year of the results of the  acquisition  will
result  in increased sales. Improved earnings are expected both  from  the
increased  sales  and  from continuing efficiency  and  yield  improvement
programs.

The  continuing  dedication  and excellent performance  of  our  teammates
remains  the key to our past and future success.  We are all dedicated  to
making 1999 a year of continuing improvement.

Respectfully yours,



/s/ Luke E. Fichthorn III
Luke E. Fichthorn III
Chairman and CEO



Arlon Engineered Materials and Components

Bairnco   designs,  manufactures,  and  sells  engineered   materials   and
components for the electronic, industrial and commercial markets under  the
Arlon  brand identity.  These products are based on common technologies  in
coating, laminating, polymers, and dispersion chemistry.

Arlon  Materials  for Electronics has an international  reputation  as  the
premier supplier of high technology materials for the printed circuit board
industry.  These products are marketed principally to printed circuit board
manufacturers  and  OEM's by a direct sales force in  concert  with  strong
technical   support  teams  in  the  U.S.  and  through  distributors   and
manufacturers representatives in Europe, the Far East, and South America.

Our  Electronic  Substrates product line includes  high  temperature,  high
performance thermoset laminates and prepreg bonding plies used  in  circuit
boards  for sophisticated commercial applications and military electronics.
These  applications  require materials that withstand  high  continuous  or
widely varying operating temperatures, provide ease of field repairability,
are  highly  reliable, and improve board fabrication yields.   Intermediate
temperature laminates, which provide improved product reliability and  ease
of manufacture at a lower cost, are also key to the line.

The Microwave Materials product line offers application matched, reinforced
PTFE  and  other  resin  based laminates providing  high  yields  and  high
performance   for   low   signal-loss  and  frequency-dependent   microwave
applications.   The  applications for this product line  include  microwave
antennas,  digital  cordless  telephones, cellular  phone  systems,  direct
broadcast  satellite TV systems, personal communications  networks,  global
positioning  satellites, local area networks, collision avoidance  systems,
and radar detection systems.

Recently developed products which made commercial inroads in 1998 include:

 . Arlon's 25N series, a laminate system based on aromatic polyolefin  resin
  that  offers  many of the performance advantages of PTFE  materials  with
  the  cost  and processing advantages of traditional thermoset  materials,
  targeted for commercial electronics.
 . Arlon's  Thermount nonwoven, aramid reinforced materials that offer  many
  advantages  for  specialty  applications  at  a  more  attractive   cost-
  performance ratio than woven aramids.
 . Arlon's  AD Series substrate materials: a specialized PTFE based laminate
  system  that  offers  all the performance characteristics  of  PTFE  with
  lower cost targeted for commercial applications.
 . Arlon's  33N  and 35N polyimide laminate systems provide high temperature
  capability while reducing production time for board fabricators.

PHOTO - Coater operators inspect Thermount 85NT being produced at Arlon's
        Rancho Cucamonga, CA facility.  Thermount 85NT is a new product being
        widely used for surface mount applications in sophisticated commercial
        and military aircraft avionics circuit boards.

PHOTO - Lay up operators at the Bear, DE facility assemble Arlon's AD Series
        laminates in a new clean room. AD Series substrate materials designate
        a cost competitive PTFE based system that offers the performance
        characteristics of traditional PTFE at a lower cost.

Bairnco  manufactures  and markets, under the Calon brand  name,  cast  and
calendered  vinyl  films  in  a wide variety of  colors,  face  stocks  and
adhesive  systems.  These vinyl films are used in commercial and electrical
signage,  point of purchase displays, highway signage, fleet markings,  and
other commercial advertising applications.

We  have continued to invest in new product development and to improve  the
quality of our current product line. During 1998 we introduced ProFleet,  a
pressure  sensitive  vinyl  product specifically  designed  for  fleet  and
vehicle graphics.  ProFleet features an ultra-durable 2mil high performance
cast vinyl and an adhesive formulated to reduce installation time and labor
costs.   We  also  introduced  a product line  of  electrostatic  media  in
September 1998.  The Imageburst electrostatic media line includes StatPrint
HP, StatPrint Intermediate, StatPrint Promotional and overlaminates.

In November of 1998 we announced the purchase of MII International, Inc., a
manufacturer  of  adhesive  coated  films  for  use  in  the  graphics  and
industrial  markets.  MII's product lines complement Arlon's current  vinyl
product  lines, and will provide product line extensions, additional  brand
recognition,  product  development  synergies,  and  penetration  into  new
customer  segments and markets.  The acquisition has also expanded  Arlon's
coating and converting capacity.

PHOTO - Arlon's Imageburst StatPrint Intermediate - Series 4000 vinyl, in
        conjunction with the appropriate overlaminate, was used for the floor
        graphics created for collegiate basketball's 1998 Western Athletic
        Conference (WAC) games.  StatPrint 4000 is a 3-mil, calendered vinyl
        with permanent, clean-removing adhesive (up to 2 years).

PHOTO - Arlon's ProFleet vinyl, used for fleet markings and large format
        graphics, is specially designed for flat, riveted and corrugated
        surfaces.

PHOTO - Arlon has improved their line of translucent vinyl films.  The product
        has been modified for improved compatibility with thermoforming and
        improved flexibility.  This product improvement supports Arlon's sales
        in the electrical and commercial signage markets.

Arlon  also manufactures and markets custom-engineered laminates and coated
products. Typical applications include insulating foam tapes for thermopane
windows,   specialty  flexible  circuit  materials,  electrical  insulation
materials  for  motors  and  transformers, thermal  insulation  panels  for
appliances  and  cars,  identification cards and labels,  durable  printing
stock,  and  other  custom  engineered laminates  for  specific  industrial
applications.

The  keys  to  Arlon's  success in custom-engineered laminates  and  coated
products  are our knowledge base of materials and adhesives technology  and
our  understanding  of  customer applications.   Our  sales  engineers  and
product  managers are dedicated to understanding customer requirements  and
developing product specifications that meet those customer needs.

PHOTO - Arlon glazing tapes consist of a closed-cell copolymer foam coated
        on both sides with an aggressive acrylic adhesive system.  This
        adhesive system provides optimum compatibility with a variety of
        sash materials.

Bairnco  manufactures a line of silicone rubber materials used in  a  broad
range   of   consumer,   industrial  and  commercial   products.    Typical
applications and products include:

 . Silicone rubber for molding composites
 . Silicone rubber insulating tape for electric traction motor coil windings
 . Insulation for industrial flexible heaters
 . Silicone products for high temperature hose and duct markets
 . Insulating tape for electrical splices
 . Compliant, thermally or electrically conductive silicone sheet  adhesive
   known as ThermabondTM

In  1999  we  will  continue to focus application  development  efforts  on
thermally  and  electrically conductive sheet adhesives for electrical  and
electronic  markets, as well as broaden our hose and duct material  product
line.

PHOTO - An Arlon operator uses a micrometer to measure thickness of
        flexible heater material.  This production line performs precision
        calendering and fabric coating to produce a family of silicone
        products for industrial markets.


Kasco Replacement Products and Services

Kasco is the leading manufacturer and supplier of replacement products  and
services  principally to supermarkets; meat and deli operations; and  meat,
poultry and fish processing plants throughout the United States, Canada and
Europe.  These products and services include:

 . Band saw blades for cutting meat and fish
 . Chopper plates and knives for grinding meat
 . Seasoning products
 . Preventive maintenance for equipment in meat and deli operations
 . Other related butcher supply products.

Kasco  also manufactures small band saw blades for cutting metal and  wood,
and large band saw blades for use at lumber mills.  Kasco has manufacturing
operations  in  St.  Louis,  Missouri; Gwent, Wales,  United  Kingdom;  and
Pansdorf,  Germany.   In Canada and France, in addition  to  providing  its
replacement  products, Kasco distributes equipment used in the  supermarket
industry and in the food processing industry.

During 1998, Kasco made several product design improvements to its band saw
blades  and its chopper plates and knives.  Kasco has introduced a line  of
premium wood cutting band saw blades for use by professional cabinetry  and
furniture makers and serious hobbyists.

The Mealtime Solutions seasoning program continues to be a success as sales
for  home  meal  replacement items within supermarkets increase.   Mealtime
Solutions  offers  a package of seasoning blends, recipes and  instructions
which  allows a supermarket to present value-added products in  their  meat
and  deli  departments.  During 1998 Kasco developed  several  new  product
lines  which expand their Mealtime Solutions program into deli and  seafood
departments.

In  North America, Kasco supplies its products and services directly to the
supermarket and meat cutting industries through a continent-wide network of
service  professionals  and  exclusive distributors.   During  1998,  Kasco
increased  its  emphasis on preventive maintenance, increasing  the  value-
added service its network of professionals provides to customers.

PHOTO - Kasco's Mealtime Solutions seasoning program offers a package of
        seasoning blends, recipes, and instructions which allows a
        supermarket to present an attractive, ready-to-cook home meal to
        their customers.

PHOTO - The Predator Series of splitter blades from Kasco features a Gold
        Tooth Hardening process which offers high speed, high volume cutting
        and less waste, straighter cuts, less workplace noise, and less
        operator fatigue.




Directors

1.Luke E. Fichthorn III
  Chairman and CEO
  Bairnco Corporation

2.Charles T. Foley
  President
  Estabrook Capital Management, Inc.

3.Richard A. Shantz
  Private Investor

4.William F. Yelverton
  Independent Business Consultant


Management:

1.Jeffrey M. Berresford
  President
  Kasco Corporation

2.Robert M. Carini
  Vice President
  Arlon, Inc.

3.James W. Lambert
  Controller
  Bairnco Corporation

4.Elmer G. Pruim
  Vice President
  Arlon, Inc.

5.J. Robert Wilkinson
  Vice President Finance & Treasurer
  Bairnco Corporation

<TABLE>
FINANCIAL HISTORY
<CAPTION>
                                      1998     1997    1996    1995    1994
<S>                                   <C>      <C>     <C>     <C>     <C>
Summary of Operations ($ in thousands)
Net sales                             $156,456 158,708 150,234 150,507 145,522
Gross profit                          $ 50,583  53,996  52,536  53,317  53,177
Earnings before interest, provision
 for litigation costs & taxes (a)     $ 12,029  15,592  14,956  14,633  13,654
Operating profit                      $  4,529  15,592  14,956  14,633  13,654
Interest expense, net                 $  1,998   1,834   1,725   2,026   2,144
Income before income taxes            $  2,531  13,758  13,231  12,607  11,510
Provision for income taxes            $    937   4,987   4,896   4,826   4,255
Net income                            $  1,594   8,771   8,335   7,781   7,255
Return from operations on:                                                 
    Net sales                         %    1.0     5.5     5.5     5.2     5.0
    Stockholders' investment          %    3.1    17.4    17.2    16.7    17.4
    Capital employed                  %    3.3    12.2    12.3    11.9    10.6
                                                                           
Year-End Position ($ in thousands)                                         
Working capital                       $ 33,259  35,712  30,341  28,350  26,277
Plant and equipment, net              $ 41,402  39,913  38,276  34,449  36,289
Total assets excluding discontinued
 operations                           $118,555 109,286 102,600  98,196  99,243
Net assets of discontinued operations $     --      --      --      --   3,529
Total assets                          $118,555 109,286 102,600  98,196 102,772
Total debt                            $ 37,844  30,318  28,179  24,578  31,775
Stockholders' investment              $ 46,438  52,469  49,464  48,024  43,997
Capital employed                      $ 84,282  82,787  77,643  72,602  75,772
                                                                           
Per Common Share Data                                                      
Income from continuing operations:
 - Basic                              $   0.18    0.96    0.85    0.75    0.69
 - Diluted                            $   0.18    0.94    0.85    0.75    0.69
Cash dividend                         $   0.20    0.20    0.20    0.20    0.20
Stockholders' investment              $   5.27    5.61    5.02    4.60    4.19
Market price:                                                              
    High                              $ 11-3/8  11-1/4   8-1/2       6   5-1/2
    Low                               $ 5-9/16   6-3/8   5-1/2   3-7/8       3
                                                                           
Other Data (in thousands)                                                  
Depreciation and amortization         $  6,688   6,516   6,305   6,314   6,502
Capital expenditures                  $  5,976   8,789  10,131   4,831   5,176
Average common shares outstanding        8,655   9,151   9,753  10,433  10,500
Diluted common shares outstanding        8,818   9,350   9,851  10,440  10,500
                                                                           
Current ratio                              2.2     2.6     2.4     2.2     2.0
Number of common stockholders            1,436   1,574   1,773   1,967   2,198
Average number of employees                822     850     825     874     915
Sales per employee                    $190,340 186,710 182,100 172,200 159,040

                                                                         
(a) Excludes  impact  of  provision for  litigation  costs  of  $7.5  million
    (pre-tax) in 1998.
</TABLE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

The   following  discussion  should  be  read  in  conjunction   with   the
Consolidated Financial Statements and related notes which begin on page 18.

Results of Operations: 1998 Compared to 1997

1998 consolidated sales of $156,456,000 decreased 1.4% from $158,708,000 in
1997. Arlon's sales decreased 3.8%. All markets served declined during  the
year  after a strong first quarter.  The electrical and electronic  markets
were  the  most depressed.  The drop in the electronic market  due  to  the
Asian  crisis adversely affected many of the end users of Arlon's products.
Others  of  Arlon's OEM final customers were hurt by low priced competition
from  Asian competitors.  Further penetration in new market segments offset
some  of  the decline. Kasco's sales increased 4.4% through growth  in  the
U.S.  base business, seasoning programs for in-store meal preparation,  and
in the European operations.

In 1998, gross profit decreased 6.3% to $50,583,000 from $53,996,000 in the
prior year with gross profit margins declining to 32.3% from 34% last year.
Gross  profit  decreased at Arlon as the combined result  of  lower  sales,
lower  prices,  and  a continuing change in mix to lower margin  commercial
products  to  serve  the electronic/communication markets.   Kasco's  gross
profit  decreased slightly due to the costs from discontinued products  and
services.

In  1998  the court in the Transactions Lawsuit (refer to Note  11  to  the
Consolidated  Financial  Statements)  issued  a  series  of  opinions  that
eliminated certain claims and parties from the case and set the  stage  for
discovery  and  trial  as  to  the  claims  and  parties  that  remain.  In
particular, the court dismissed the RICO claims; all claims against  third-
party professionals, including lawyers, accountants and investment bankers;
and  all claims against individuals with the exception of Bairnco's  former
chairman  and  president.  The court also narrowed  the  scope  of  certain
claims  against  Bairnco  and  the other corporate  defendants.   With  the
initial  motions  phase of the case now complete, Bairnco  is  prepared  to
mount  a  vigorous  defense on the merits.  Toward that end,  a  $7,500,000
provision  for  litigation costs was taken in the fourth  quarter  of  1998
(refer to Note 2 to the Consolidated Financial Statements).

Selling and administrative expenses, excluding the provision for litigation
costs,  increased  0.4%  to $38,554,000 from $38,404,000  in  1997.   As  a
percent  of sales, these expenses increased to 24.6% in 1998 from 24.2%  in
1997.    Research  and  development  expenses  increased  4.8%  as  Bairnco
continued  to  invest  in  the development of  new  products  and  improved
quality.   Based  on sharp swings in order input throughout  the  year  and
management's  continuing  belief in the future  of  the  Corporation's  key
markets,  the  decision was made to cut costs but not to  impair  the  core
management  competencies that have been developed.  The average  number  of
employees was reduced by 3.3% from last year.  Productivity as measured  by
sales per employee increased 1.9%.

Earnings before interest, the provision for litigation costs and taxes were
$12,029,000 down 22.9% from $15,592,000 in 1997.  The decline is  primarily
attributable to reduced gross profit.

In  the  fourth  quarter  of 1998 Bairnco recorded the  $7,500,000  pre-tax
provision for anticipated litigation costs.

Net interest expense increased from $1,834,000 to $1,998,000.  The increase
was  due to increased average debt outstanding primarily resulting form the
acquisition in the fourth quarter.

Income  before income taxes decreased to $2,531,000 in 1998 as compared  to
$13,758,000 in 1997. The effective tax rate was 37% as compared to 36.2% in
1997.  The provision for income taxes in both years includes all applicable
federal,   state,  local  and  foreign  income  taxes.    Audits   of   the
Corporation's  consolidated  US  federal  income  tax  returns  have   been
completed for all years through 1992.

Net  income decreased to $1,594,000 from $8,771,000.  Diluted earnings  per
common  share  fell to $.18 from $.94 in 1997 as a result of the  decreased
operating income and the provision for litigation costs.  The provision for
litigation  costs  reduced net income in 1998 by  $4,726,000  or  $.54  per
share.

Results of Operations: 1997 Compared to 1996

Net  sales  for  the  year  ended  December  31,  1997  increased  5.6%  to
$158,708,000 from $150,234,000 in 1996. Arlon's sales increased 8.3% as all
markets served experienced growth although there was substantial volatility
within  the electronics market.  Kasco's sales declined 0.2% as  growth  in
the  US  markets, especially in the seasonings for ready-to-cook foods  for
supermarkets  and  special  products  areas,  was  offset  by  the  planned
discontinuation  of  equipment sales in certain Canadian  markets  and  the
negative  impact of currency translation rates on sales of Kasco's European
operations.

In 1997, gross profit increased 2.8% to $53,996,000 from $52,536,000 in the
prior  year.  Gross profit increased 2.6% at Arlon and 1.0% at  Kasco  with
increased  sales.   However, the strong US dollar also negatively  impacted
the translation of foreign gross profit.  Gross profit margins declined  to
34.0% from 35.0% in 1996.  Profit margins were lower primarily due to plant
and  labor  inefficiencies caused by swings in demand during the year,  new
equipment  start-ups at three plants, and the two week strike at the  Bear,
Delaware facility

Selling  and  administrative expenses increased 2.2%  to  $38,404,000  from
$37,580,000  in 1996.  As a percent of sales, these expenses  decreased  to
24.2%  in  1997  from  25.0%  in 1996.  Selling  expenses  were  relatively
unchanged.  General and administrative expenses increased $543,000 or  4.4%
reflecting  the  Company's  on-going investment in  recruiting,  management
development  and incentive compensation programs.  Research and development
expenses  increased 17.2% as Bairnco continued to invest in the development
of new products and improved quality.

Operating profit in 1997 was $15,592,000, or 9.8% of net sales, compared to
operating profit in 1996 of $14,956,000, or 10.0% of net sales.

Net  interest  expense  increased  $109,000  or  6.3%  from  $1,725,000  to
$1,834,000.  The increase was due to increased average debt outstanding.

Income  before  income  taxes increased 4.0%  to  $13,758,000  in  1997  as
compared to $13,231,000 in 1996.  The effective tax rate decreased to 36.2%
from  37.0%  in  1996  due  primarily to the tax  benefits  attendant  with
Bairnco's foreign sales corporation.

Net  income increased 5.2% to  $8,771,000 in 1997 as compared to $8,335,000
in  1996.  Diluted earnings per share increased 10.6% to $.94 from $.85  in
1996.   As a result of the stock repurchase program, the average number  of
diluted shares outstanding in 1997 was 9,350,000, a 5.1% decrease from  the
9,851,000 average outstanding in 1996.

Liquidity and Capital Resources

At December 31, 1998, Bairnco had working capital of $33.3 million compared
to $35.7 million at December 31, 1997.  The increase in accounts receivable
relates  primarily to the growth in export sales which have longer  payment
terms.   Current deferred tax assets increased with the increase in accrued
expenses primarily resulting from the $7.5 million provision for litigation
costs.  Other  current  assets  decreased primarily  as  a  result  of  the
settlement  of  certain non-trade related receivables in the first  quarter
1998.   The  increase in accrued expenses results primarily from  provision
for litigation costs.

As  of  December  31,  1998, the reducing revolving  credit  agreement  was
amended to extend the first commitment reduction date to December 31,  2000
and the final maturity to December 31, 2003.

At  December 31, 1998, $37.8 million of total debt was outstanding compared
to   $30.3  million  at  the  end  of  1997.   As  of  December  31,  1998,
approximately  $10.5  million  was  available  for  borrowing   under   the
Corporation's secured reducing revolving credit agreement, as amended.   In
addition, approximately $4.3 million was available under various short-term
domestic  and foreign uncommitted credit facilities.  Debt as a percent  of
equity increased to 81.5% at the end of 1998 from 57.8% at the end of 1997.
The  increase  was  due to the $7.5 million provision for litigation  costs
which  reduced  equity by $4,726,000 and the increased debt resulting  from
the MII acquisition and stock repurchase program.
     
Bairnco made $5,976,000 of capital expenditures in 1998 as compared to  its
plan   of   approximately   $12.0  million.   Capital   expenditures   were
significantly  reduced  in  light of changing market  conditions  and  were
focused  on  cost reduction projects, replacements and new MIS systems  and
hardware  that were installed during the year.  Total capital  expenditures
in  1999  are expected to be approximately $8.2 million.  Depreciation  and
amortization  is estimated to be approximately $7.0 million.   The  planned
capital expenditures include cost reduction projects, replacements, quality
improvements,  new  product  developments, new  processing  equipment,  MIS
hardware and software, and limited capacity additions.

In  1998,  Bairnco's Board of Directors authorized an additional $5,000,000
to  be  available  for  the ongoing repurchase of its  common  stock.   The
authorization  was in addition to the $3.7 million still  unused  from  the
prior  year  $5,000,000  authorization.  During 1998,  Bairnco  repurchased
737,400  shares of its common stock for $6.2 million.  The diluted  average
number of shares outstanding in 1998 was 8,818,000 a 5.7% decrease from the
9,350,000  diluted  average shares outstanding  in  1997.   The  Board  has
authorized  management  to continue its stock repurchase  program  in  1999
subject to market conditions and the capital requirements of the business.

Cash provided by operating activities plus the amounts available under  the
existing  credit  facilities  are expected  to  be  sufficient  to  fulfill
Bairnco's anticipated cash requirements in 1999.

Year 2000 Date Conversion

As  previously  stated in Bairnco's 1997 Annual Report on  Form  10-K,  the
Corporation  has  evaluated and identified its internal risks  of  software
failure  due to processing errors arising from calculations using the  Year
2000 date.  The plan that was established to maintain the integrity of  its
financial  systems and ensure the reliability of its operating  systems  is
proceeding  on schedule.  The total estimated cost of achieving  Year  2000
compliance  remains  at  approximately $250,000 and includes  software  and
installation  costs.   Of  this  amount, approximately  $175,000  had  been
incurred  through  December  31, 1998 with the  remainder  expected  to  be
incurred during 1999.

In  January of 1998 Bairnco adopted a formal plan to address the Year  2000
issue.   This plan has defined roles, identified staff members  to  execute
the  plan, set target dates, and provided a detailed budget.  The plan also
incorporates  the  use  of outside consultants.  The plan  is  periodically
updated  and modified, and progress is monitored against it to ensure  that
target  dates  are  being met and that the Corporation designates  whatever
resources are necessary to meet the plan's requirements.

Bairnco has compiled a checklist for all areas that may be affected by this
issue.   The  Corporation has formed task forces at each of  its  operating
divisions and charged them with doing thorough and complete audits of their
facilities  using the checklist as a guide.  The Corporation  is  aware  of
some  hardware  issues  and  has assembled a  plan  to  have  the  outmoded
equipment replaced during 1999.

Bairnco  has  assessed  the software in use at all of  its  operations  and
identified  applications that do not currently process using  a  four-digit
field to record the date.  The Corporation is in the process of adapting or
replacing  any  such  programs and expects to have the  work  completed  on
schedule.   Through  December 31, 1998, four of the  seven  North  American
locations' operating information technology ("IT") systems plus all of  the
European  locations' IT systems had been upgraded to be Year 2000 compliant
with the remaining four US locations expected to be completed by the end of
the second quarter of 1999.  These four divisions were in various stages of
validation and implementation of the upgraded systems.

Bairnco has contacted the majority of its suppliers and customers with whom
the  Corporation has a material business relationship regarding their  Year
2000 state of readiness.  The responses to date have indicated they are, or
expect to be, Year 2000 compliant.

Based  on  the  results  of  our efforts to date as  discussed  above,  the
Corporation believes it will not experience any material disruption in  its
operations due to Year 2000 issues with its computer software programs  and
operating systems or its interface with key suppliers and vendors. However,
the  implementation and validation of Bairnco's IT and non-IT systems,  and
the  evaluation  of  the state of readiness of Bairnco's material  business
partners  are ongoing.  The disruption in service of any critical suppliers
or  the  failure  of the Corporation's operating systems to  comply,  could
result  in  a shutdown of the operations affected for the duration  of  the
disruption.

The  Corporation  has not analyzed the risks of a "most  reasonably  likely
worst  case  scenario" nor has it developed a contingency plan  to  address
this  uncertainty.  The Corporation's efforts to date have been focused  on
ensuring  the  impact of Year 2000 issues is minimized.  It is management's
intention to analyze the risks of this uncertainty and determine whether to
develop  such a plan.  This process is scheduled for completion during  the
first half of 1999.

Other Matters

Bairnco  Corporation and its subsidiaries are defendants  in  a  number  of
legal actions and proceedings that are discussed in more detail in Note  10
to  the  Consolidated Financial Statements.  Management of Bairnco believes
that  the  disposition of these actions and proceedings  will  not  have  a
material  adverse effect on the consolidated results of operations  or  the
financial  position  of  Bairnco Corporation and  its  subsidiaries  as  of
December 31, 1998.

Outlook

Management is not aware of any adverse trends that would materially  affect
the  Company's  strong financial position.  The outlook  for  1999  is  for
improved sales and earnings.  It is expected that the combination of growth
from  new products, higher growth in certain niche markets and a full  year
of the results of the acquisition will result in increased sales.  Improved
earnings  are  expected  both  from increased  sales  and  from  continuing
efficiency and yield improvement programs.


<TABLE>
Quarterly Results of Operations (Unaudited)
(In thousands except per share data)
<CAPTION>
               1st               2nd               3rd               4th               Total
               1998     1997     1998     1997     1998     1997     1998     1997     1998     1997
<S>            <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>  
Net Sales      $ 42,125 $ 37,445 $ 37,651 $ 41,128 $ 37,747 $ 39,814 $ 38,933 $ 40,321 $156,456 $158,708
Cost of sales    28,442   24,465   24,905   27,020   25,922   26,228   26,604   26,999  105,873  104,712
Gross  Profit    13,683   12,980   12,746   14,108   11,825   13,586   12,329   13,322   50,583   53,996
Selling and
 administrative
 expenses         9,716    9,116    9,717    9,981    9,461    9,717    9,660    9,590   38,554   38,404
Provision for
 litigation
 costs               --       --       --       --       --       --    7,500       --    7,500       --
Operating
 Profit           3,967    3,864    3,029    4,127    2,364    3,869   (4,831)   3,732    4,529   15,592
Interest
 expense, net       481      415      508      460      502      486      507      473    1,998    1,834
Income before
 income taxes     3,486    3,449    2,521    3,667    1,862    3,383   (5,338)   3,259    2,531   13,758
Provision for
 income taxes     1,290    1,276      933    1,320      689    1,218   (1,975)   1,173      937    4,987
Net Income     $  2,196 $  2,173 $  1,588 $  2,347 $  1,173 $  2,165 $ (3,363)$  2,086 $  1,594 $  8,771

Basic Earnings
 per Share     $   0.25 $   0.23 $   0.18 $   0.26 $   0.14 $   0.24 $  (0.40)$   0.23 $   0.18 $   0.96
Diluted
 Earnings per
 Share         $   0.24 $   0.23 $   0.18 $   0.25 $   0.14 $   0.23 $  (0.40)$   0.23 $   0.18 $   0.94

Market Price:
 High          $ 11-3/8 $  7-5/8 $ 11-3/8 $  8-3/8 $  9-1/8 $     11 $  7-1/8 $ 11-1/4 $ 11-3/8 $ 11-1/4
 Low            9-13/16    6-3/8    8-7/8    6-7/8   5-9/16        8    5-3/4  6-11/16   5-9/16    6-3/8
</TABLE>




  "Safe Harbor" Statement under the Private Securities Reform Act of 1995

Certain  of the statements contained in this annual report (other than  the
financial statements and statements of historical fact), including, without
limitation,  statements as to management expectations and belief  presented
under   the   captions  "Letter  to  Our  Stockholders"  and  "Management's
Discussion  and Analysis", are forward-looking statements.  Forward-looking
statements  are  made  based  upon  management's  expectations  and  belief
concerning  future  developments  and  their  potential  effect  upon   the
Corporation.  There can be no assurance that future developments will be in
accordance  with  management's expectations or that the  effect  of  future
developments on the Corporation will be those anticipated by management.

The  Corporation wishes to caution readers that the assumptions which  form
the basis for forward-looking statements with respect to or that may impact
earnings  for the year ended December 31, 1999 and thereafter include  many
factors  that are beyond the Corporation's ability to control  or  estimate
precisely.  These risks and uncertainties include, but are not limited  to,
the  market  demand and acceptance of the Corporation's  existing  and  new
products;  the impact of competitive products;  changes in the  market  for
raw   or   packaging   materials  which  could  impact  the   Corporation's
manufacturing costs; changes in product mix; changes in the pricing of  the
products  of  the Corporation or its competitors; the loss of a significant
customer  or supplier; production delays or inefficiencies; disruptions  in
operations due to labor disputes; the unanticipated costs and disruption in
operations due to Year 2000 non-compliance; the costs and other effects  of
complying with environmental regulatory requirements; losses due to natural
disasters  where  the  Corporation is self-insured,  the  costs  and  other
effects of legal and administrative cases and proceedings, settlements  and
investigations;  and changes in US or international economic  or  political
conditions, such as inflation or deflation, or fluctuations in interest  or
foreign exchange rates.

While   the   Corporation  periodically  reassesses  material  trends   and
uncertainties  affecting  the  Corporation's  results  of  operations   and
financial condition in connection with its preparation of the stockholders'
letter  and  management's discussion and analysis contained in  its  annual
reports, the Corporation does not intend to review or revise any particular
forward-looking statement referenced herein in light of future events.


REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Stockholders of Bairnco Corporation:

   We  have  audited the accompanying consolidated balance  sheets  of
Bairnco  Corporation (a Delaware corporation) and subsidiaries  as  of
December 31, 1998 and 1997, and the related consolidated statements of
income, comprehensive income, stockholders' investment and cash  flows
for  each  of the three years in the period ended December  31,  1998.
These  financial  statements are the responsibility of  the  Company's
management.   Our  responsibility is to express an  opinion  on  these
financial statements based on our audits.

   We  conducted  our  audits in accordance  with  generally  accepted
auditing standards.  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 financial position
of  Bairnco Corporation and subsidiaries as of December 31,  1998  and
1997,  and  the results of their operations and their cash  flows  for
each  of  the  three years in the period ended December 31,  1998,  in
conformity with generally accepted accounting principles.


Orlando, Florida
January 21, 1999



                                                  Arthur Andersen LLP


<TABLE>
CONSOLIDATED STATEMENTS OF INCOME

For the years ended December 31, 1998, 1997 and 1996
Bairnco Corporation and Subsidiaries
<CAPTION>

                                     1998          1997          1996
<S>                                  <C>           <C>           <C>
Net Sales                            $156,456,000  $158,708,000  $150,234,000
Cost of sales                         105,873,000   104,712,000    97,698,000
Gross Profit                           50,583,000    53,996,000    52,536,000
Selling and administrative expenses    38,554,000    38,404,000    37,580,000
Provision for litigation costs
 (Note 2)                               7,500,000            --            --
Operating Profit                        4,529,000    15,592,000    14,956,000
Interest expense, net                   1,998,000     1,834,000     1,725,000
Income before Income Taxes              2,531,000    13,758,000    13,231,000
Provision for income taxes (Note 5)       937,000     4,987,000     4,896,000
Net Income                           $  1,594,000  $  8,771,000  $  8,335,000
                                                                           
Basic Earnings per Share of Common        
 Stock (Note 4)                      $       0.18  $       0.96  $       0.85
                                                                           
Diluted Earnings per Share of Common       
 Stock (Note 4)                      $       0.18  $       0.94  $       0.85
                                                                           
Dividends per Share of Common Stock  $       0.20  $       0.20  $       0.20

                                                                           


The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>

<TABLE>
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 1998, 1997 and 1996
Bairnco Corporation and Subsidiaries
<CAPTION>

                                     1998          1997          1996
<S>                                  <C>           <C>           <C>
Net Income                           $ 1,594,000   $ 8,771,000   $ 8,335,000
Other comprehensive income,
 net of tax:
  Foreign currency translation
   adjustment (Note 1)                   173,000      (710,000)      (18,000)
Comprehensive Income                 $ 1,767,000   $ 8,061,000   $ 8,317,000




The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>


<TABLE>
CONSOLIDATED BALANCE SHEETS
December 31, 1998 and 1997
Bairnco Corporation and Subsidiaries

<CAPTION>
                                                   1998          1997
<S>                                                <C>           <C>
Assets                                                         
Current Assets:                                                            
 Cash and cash equivalents                         $    822,000  $  1,217,000
 Accounts receivable, less allowances of
  $1,224,000 and $943,000, respectively              27,999,000    24,939,000
 Inventories:                                                              
  Raw materials and supplies                          5,701,000     5,646,000
  Work in process                                     6,604,000     6,402,000
  Finished goods                                     13,874,000    14,350,000
                                                     26,179,000    26,398,000
 Deferred income taxes (Note 5)                       4,137,000     2,641,000
 Other current assets                                 1,709,000     2,748,000
                             Total current assets    60,846,000    57,943,000
Plant and Equipment, at cost:                                              
 Land                                                 1,846,000     1,541,000
 Buildings and leasehold interests and improvements  18,115,000    16,659,000
 Machinery and equipment                             77,330,000    71,670,000
                                                     97,291,000    89,870,000
 Less - Accumulated depreciation and amortization   (55,889,000)  (49,957,000)
                                                     41,402,000    39,913,000
Cost in Excess of Net Assets of Purchased
 Businesses (Note 1)                                 11,840,000     7,607,000
Other Assets (Note 1)                                 4,467,000     3,823,000
                                                   $118,555,000  $109,286,000
                                                      
Liabilities and Stockholders' Investment                                   
Current Liabilities:                                                       
 Short-term debt (Note 7)                          $  4,373,000  $  3,018,000
 Current maturities of long-term debt (Note 7)               --         9,000
 Accounts payable                                     9,022,000     8,661,000
 Accrued expenses (Note 6)                           14,192,000    10,543,000
                        Total current liabilities    27,587,000    22,231,000
Long-Term Debt (Note 7)                              33,471,000    27,291,000
Deferred Income Taxes (Note 5)                        2,912,000     4,098,000
Other Liabilities                                     8,147,000     3,197,000
Stockholders' Investment (Notes 4, 7 and 8):                               
 Preferred stock, par value $.01, 5,000,000 shares
  authorized, none issued                                    --            --
 Common stock, par value $.01, 30,000,000 shares                          
  authorized, 11,187,224 and 11,160,774 issued,
  respectively                                          112,000       112,000
 Paid-in capital                                     49,165,000    49,030,000
 Retained earnings                                   22,670,000    22,802,000
 Currency translation adjustment (Note 1)             1,745,000     1,572,000
 Treasury stock, at cost, 2,904,165 and 2,166,765
  shares, respectively                              (27,254,000)  (21,047,000)
                   Total stockholders' investment    46,438,000    52,469,000
                                                   $118,555,000  $109,286,000
                                 

The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>

<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 1998, 1997 and 1996
Bairnco Corporation and Subsidiaries
<CAPTION>
         
                                      1998          1997         1996
<S>                                   <C>           <C>          <C>
Cash Flows from Operating Activities:                                      
Net income                            $  1,594,000  $ 8,771,000  $  8,335,000
Adjustments to reconcile to net cash                                  
 provided by operating activities:
  Depreciation and amortization          6,688,000    6,516,000     6,305,000
  (Gain) loss on disposal of plant
   and equipment                           (13,000)      34,000       203,000
  Deferred income taxes                 (2,751,000)   1,265,000       373,000
  Change in operating assets and                                  
   liabilities:
    (Increase) in accounts
     receivable, net                    (1,033,000)  (3,874,000)     (147,000)
    Decrease (increase) in inventories   2,117,000   (3,406,000)     (442,000)
    Decrease (increase) in other
     current assets                      1,125,000      956,000    (1,628,000)
    (Decrease) increase in accounts
     payable                               (38,000)   1,510,000      (460,000)
    Increase (decrease) in accrued
     expenses                            2,204,000     (480,000)     (426,000)
  Other                                  4,223,000      472,000       734,000
      Net cash provided by operating
       activities                       14,116,000   11,764,000    12,847,000
     
                                                                           
Cash Flows from Investing Activities:                                      
Capital expenditures                    (5,976,000)  (8,789,000)  (10,131,000)
Payment for purchased businesses,
 net of cash acquired                   (8,423,000)          --            --
Proceeds from sale of plant and
 equipment                                 123,000      219,000       138,000
      Net cash (used in) investing
       activities                      (14,276,000)  (8,570,000)   (9,993,000)
            
                                                                           
Cash Flows from Financing Activities:                                      
Net borrowings of external debt          7,746,000    2,434,000     3,968,000
Payment of dividends                    (1,726,000)  (1,827,000)   (1,937,000)
Purchase of treasury stock              (6,207,000)  (3,255,000)   (5,412,000)
Exercise of stock options                  135,000       26,000       472,000
      Net cash (used in) financing
       activities                          (52,000)  (2,622,000)   (2,909,000)
         
Effect of foreign currency exchange
 rate changes on cash and cash
 equivalents                              (183,000)    (210,000)      302,000
Net (decrease) increase in cash and
 cash equivalents                         (395,000)     362,000       247,000
Cash and cash equivalents, beginning
 of year                                 1,217,000      855,000       608,000
Cash and cash equivalents, end of
 year                                 $    822,000  $ 1,217,000  $    855,000
                                                                           
Supplemental Disclosures of Cash Flow                                  
 Information:
  Cash paid during the year for:                                             
   Interest                           $  2,008,000  $ 1,824,000  $  1,696,000
   Income taxes                       $  2,402,000    2,805,000     5,378,000
                                                                           


The  accompanying  notes  are an integral part of these  consolidated
financial statements.
</TABLE>


<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT

For the years ended December 31, 1998, 1997 and 1996
Bairnco Corporation and Subsidiaries
<CAPTION>
                                                             Currency           
                            Common   Paid-in     Retained    Translation  Treasury
                            Stock    Capital     Earnings    Adjustment   Stock
<S>                         <C>      <C>         <C>         <C>          <C>
Balance, December 31, 1995  $111,000 $48,533,000 $ 9,460,000 $2,300,000   $(12,380,000)

Net income                        --          --   8,335,000         --             --
Cash dividends ($.20 per
 share)                           --          --  (1,937,000)        --             --
Issuance of 93,000 shares                                               
 pursuant to exercise of
 stock options                 1,000     471,000          --         --             --
Acquisition of treasury                                               
 stock (803,900 shares
 at cost)                         --          --          --         --     (5,412,000)
Currency translation
 adjustment (Note 1)              --          --          --    (18,000)            --
 
Balance, December 31, 1996   112,000  49,004,000  15,858,000  2,282,000    (17,792,000)
         
Net income                        --          --   8,771,000         --             --
Cash dividends ($.20 per
 share)                           --          --  (1,827,000)        --             --
Issuance of 5,275 shares                                               
 pursuant to exercise of
 stock options                    --      26,000          --         --             --
Acquisition of treasury                                               
 stock (424,800 shares
 at cost)                         --          --          --         --     (3,255,000)
Currency translation
 adjustment (Note 1)              --          --          --   (710,000)            --
                                                                          
Balance, December 31, 1997   112,000  49,030,000  22,802,000  1,572,000    (21,047,000)
   
Net income                        --          --   1,594,000         --             --
Cash dividends ($.20 per
 share)                           --          --  (1,726,000)        --             --
Issuance of 26,450 shares                                               
 pursuant to exercise of
 stock options                    --     135,000          --         --             --
Acquisition of treasury                                               
 stock (737,400 shares
 at cost)                         --          --          --         --     (6,207,000)
Currency translation
 adjustment (Note 1)              --          --          --    173,000             --

Balance, December 31, 1998  $112,000 $49,165,000 $22,670,000 $1,745,000   $(27,254,000)
                    
                                                                          
The  accompanying  notes  are an integral part of these  consolidated
financial statements.
</TABLE>


(1)  Nature of Operations and Summary of Significant Accounting Policies

Nature of operations:

   Bairnco Corporation is a diversified multinational company that operates
two  business  sectors:  Engineered  Materials  and  Components  which  are
designed,  manufactured  and  sold  under  the  Arlon  brand  identity   to
electronic,  industrial and commercial markets worldwide; and,  Replacement
Products  and  Services  which are manufactured and distributed  under  the
Kasco  brand  identity principally to retail food stores and meat,  poultry
and fish processing plants throughout the United States, Canada and Europe.

   Arlon's products are based on a common technology in coating, laminating
and   dispersion  chemistry.  Arlon's  principal  products   include   high
performance  materials  for the printed circuit board  industry,  cast  and
calendered  vinyl  film systems, custom engineered laminates  and  pressure
sensitive  adhesive  systems, and calendered and extruded  silicone  rubber
insulation  products  used  in a broad range of  industrial,  consumer  and
commercial products.

   Kasco's  principal  products include replacement  band  saw  blades  for
cutting  meat,  fish,  wood  and metal, on-site  maintenance  services  and
seasonings  for ready-to-cook foods for the retail food industry  primarily
in  the meat and deli departments.  Kasco also distributes equipment to the
food industry in Canada and France.


Principles of consolidation:

  The  accompanying consolidated financial statements include the  accounts
of  Bairnco  Corporation and its subsidiaries (Bairnco or the  Corporation)
after   the   elimination  of  all  material  inter-company  accounts   and
transactions.

   The  preparation of consolidated financial statements in conformity with
generally  accepted  accounting  principles  requires  management  to  make
estimates  and assumptions that affect the reported amounts of  assets  and
liabilities and disclosure of contingent assets and liabilities at the date
of  the  consolidated  financial statements and  the  reported  amounts  of
revenues  and  expenses during the reporting period.  Actual results  could
differ from those estimates.


Consolidated statements of cash flows:

   The  Corporation considers cash in banks, commercial paper, demand notes
and  similar investments with a maturity of less than three months as  cash
and  cash  equivalents for the purposes of the consolidated  statements  of
cash flows.

   Certain  reclassifications were made to prior year balances in order  to
conform to the current year presentation.

Inventories:

   Inventories  are  stated  at cost, which is not  in  excess  of  market.
Inventory  costs  include  material, labor and  overhead.  Inventories  are
stated principally on a first-in, first-out (FIFO) basis.





Plant and equipment:

   The  Corporation  provides  for  depreciation  of  plant  and  equipment
principally  on  a  straight-line basis by charges  to  income  in  amounts
estimated  to  allocate the cost of these assets over their  useful  lives.
Rates  of  depreciation vary among the several classifications as  well  as
among  the  constituent items in each classification,  but  generally  fall
within the following ranges:

                                                          Years
  Buildings and leasehold interests and improvements      5 - 40
  Machinery and equipment                                 3 - 20

   When  property  is  sold or otherwise disposed of, the  asset  cost  and
accumulated  depreciation are removed from the accounts and  any  resulting
gain or loss is included in the statement of income.

   Leasehold interests and improvements are amortized over the terms of the
respective  leases,  or  over their estimated useful  lives,  whichever  is
shorter.

   Maintenance  and  repairs  are  charged  to  operations.   Renewals  and
betterments are capitalized.

   Accelerated  methods of depreciation are used for income  tax  purposes,
and  appropriate provisions are made for the related deferred income taxes.
Depreciation   expense  of  $6,509,000,  $6,333,000  and   $6,123,000   was
recognized during 1998, 1997 and 1996, respectively.


Cost in excess of net assets of purchased businesses:

   Cost  in excess of net assets of purchased businesses acquired prior  to
1971  of  approximately $3.5 million is not being amortized since,  in  the
opinion  of  management,  there  has been  no  diminution  in  value.   For
businesses acquired subsequent to 1970, the cost in excess of net assets of
purchased  businesses, aggregating $10,020,000 and $5,625,000  at  December
31,  1998  and 1997, respectively, is being amortized over 40  years.   The
increase  is  due  to  the  acquisition of MII (refer  to  Note  3  to  the
Consolidated Financial Statements).  Accumulated amortization  at  December
31,   1998   and   1997,  was  $1,665,000  and  $1,504,000,   respectively.
Amortization  expense  of  $147,000, $146,000 and $149,000  was  recognized
during 1998, 1997 and 1996, respectively.

   At  each balance sheet date, the Corporation evaluates the realizability
of  its  cost  in excess of net assets of purchased businesses  based  upon
expectations  of  non-discounted cash flows and operating income  for  each
division  having  a  material cost in excess of  net  assets  of  purchased
businesses  balance.  Based upon its most recent analysis, the  Corporation
believes that no material impairment of its cost in excess of net assets of
purchased businesses exists at December 31, 1998.

Intangibles:

   Intangible  assets  of purchased businesses, net  of  amortization,  are
included  in other assets and totaled $123,000 and $99,000 at December  31,
1998  and  1997,  respectively.   These  items  are  amortized  over  their
estimated  lives,  which  generally  range  from  three  to  twenty  years.
Amortization  expense  recognized was $32,000 during 1998,  $37,000  during
1997 and $33,000 during 1996.

Revenue recognition:

  Revenues are recognized when products are shipped or when services are
rendered.

Income taxes:

   The  Corporation accounts for income taxes using an asset and  liability
approach  that  requires  the  recognition  of  deferred  tax  assets   and
liabilities  for the expected future tax consequences of events  that  have
been  recognized in the Corporation's financial statements or tax  returns.
In  estimating future tax consequences, the Corporation generally considers
all  expected future events other than enactment of changes in the tax  law
or  changes  in tax rates.  Changes in tax laws or rates will be recognized
in  the  future  years in which they occur.  Temporary differences  between
income for financial reporting and income tax purposes arise primarily from
the  timing  of  the  deduction of certain accruals and  from  the  use  of
accelerated  methods  of  depreciation for income  tax  reporting  purposes
compared  to  the  method  of  depreciation used  for  financial  reporting
purposes.

Accrued expenses-insurance:

   Accrued  expenses-insurance represents the estimated costs of known  and
anticipated  claims  under the Corporation's general liability,  automobile
liability, property and workers compensation insurance policies for all  of
its  US  operations.  The Corporation provides reserves on reported  claims
and  claims incurred but not reported at each balance sheet date based upon
the estimated amount of the probable claim or the amount of the deductible,
whichever is lower.  Such estimates are reviewed and evaluated in light  of
emerging  claim  experience  and existing circumstances.   Any  changes  in
estimates from this review process are reflected in operations currently.

Stock options:

   The  Corporation accounts for stock options under Accounting  Principles
Board  Opinion No. 25 ("APB 25"), under which no compensation  expense  has
been recognized.  In October 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based  Compensation"  ("SFAS 123"),  which  is  effective  for  years
beginning   after  December  15,  1995.   SFAS  123  established  financial
accounting  and  reporting standards for stock-based employee  compensation
plans.   The statement defines a fair value based method of accounting  for
an  employee  stock option or similar equity instrument and encourages  all
entities  to  adopt  that  method of accounting  for  all  of  their  stock
compensation  plans.   However, it also allows an  entity  to  continue  to
measure compensation costs for those plans using the intrinsic value  based
method   of  accounting  prescribed  by  APB  25,  but  requires  pro-forma
disclosure  of  net  income  and earnings per  share  for  the  effects  on
compensation expense had the accounting guidance for SFAS 123 been adopted.
Compensation  costs  determined consistent with SFAS 123  did  not  have  a
material  impact on the accompanying consolidated net earnings and earnings
per share.

Translation of foreign currencies:

   Balance  sheet  accounts of foreign subsidiaries are translated  at  the
rates  of  exchange in effect at the balance sheet date  while  income  and
expenses are translated at the monthly average rates of exchange in  effect
during the year.

Fair value of financial instruments:

   The  carrying values of cash and cash equivalents, accounts  receivable,
accounts payable and accrued liabilities, approximate fair value due to the
short-term maturities of these assets and liabilities.

   The  carrying amount of the Corporation's short-term and long-term  debt
approximates  fair  value, since the debt is at  floating  rates  or  rates
approximating rates currently offered to the Corporation for  debt  of  the
same remaining maturities.

Comprehensive income:

   In  June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
("SFAS  130"),  which is effective for years beginning after  December  15,
1997.    SFAS  130  established  standards  for  reporting  and  displaying
comprehensive  income and its components in a full set  of  general-purpose
financial   statements.   This  statement  requires  that  all   items   of
comprehensive  income  are  classified  by  their  nature  in  a  financial
statement and that the accumulated balance of other comprehensive income be
displayed separately from retained earnings and additional paid-in  capital
in  the  equity  section  of  a statement of financial  position.   Bairnco
adopted  SFAS 130 effective January 1, 1998.  The comparative prior  period
financial  statements  have been reclassified to  conform  to  the  current
period presentation.

   Comprehensive  income  includes net income  as  well  as  certain  other
transactions  shown as changes in stockholders' investment.   For  Bairnco,
comprehensive  income  includes net income plus the  change  in  net  asset
values  of foreign divisions as a result of translating the local  currency
values  of net assets to US dollars at varying exchange rates.  Accumulated
other  comprehensive income consists solely of foreign currency translation
adjustments.   There  are currently no tax expenses or benefits  associated
with the foreign currency translation adjustments.

Reportable segments:

  In  June  1997, the Financial Accounting Standards Board issued Statement
of  Financial Accounting Standards No. 131, "Disclosures about Segments  of
an Enterprise and Related Information" ("SFAS 131"), which is effective for
fiscal years beginning after December 15, 1997.  SFAS 131 introduces a  new
model for segment reporting called the management approach.  The management
approach  is based on the way the chief operating decision-maker  organizes
segments  within  a  company for making operating decisions  and  assessing
performance.

  SFAS  131 requires disclosures for each segment that are similar to those
required under previous standards with the addition of quarterly disclosure
requirements  and  a  finer  partitioning of  geographic  disclosures.   It
requires  limited  segment data on a quarterly  basis.   It  also  requires
geographic  data  by  country,  as opposed to  broader  geographic  regions
permitted under previous standards.

  Bairnco  adopted  SFAS  131 effective January  1,  1998  and  prior  year
segment  information and disclosures have been restated, where  applicable,
to conform to the current year presentation.

Pension Accounting:

  In  February  1998,  the  Financial  Accounting  Standards  Board  issued
Statement   of   Financial  Accounting  Standards  No.   132,   "Employers'
Disclosures about Pensions and other Postretirement Benefits" ("SFAS 132"),
which  is  effective  for fiscal years beginning after December  15,  1997.
SFAS  132  standardizes the disclosure requirements for pensions and  other
postretirement benefits and requires additional information on  changes  in
the  benefit  obligations and fair value of plan assets  while  eliminating
certain prior disclosures that are no longer considered useful.
  
  Bairnco  adopted  SFAS  132 effective January  1,  1998  and  prior  year
pension disclosures have been restated, where applicable, to conform to the
current year presentation.
  


(2) Provision for Litigation Costs

  In  the  fourth  quarter of 1998, Bairnco recorded a  $7,500,000  pre-tax
provision  for  litigation costs.  The litigation provision  added  to  the
existing  reserves for asbestos-related litigation expenditures  due  to  a
change  in  the  estimate  to  defend the  Transaction  Lawsuit  (refer  to
Management's Discussion and Analysis and Note 11 to Consolidated  Financial
Statements).   $2.5  million  of this provision  for  litigation  costs  is
included  in  accrued expenses with the remaining $5.0 million included  in
other  liabilities in the Corporation's consolidated balance sheet for  the
year ended December 31, 1998.

  After  recognition  of  related tax benefits,  the  litigation  provision
reduced  net  income in 1998 by $4.7 million or approximately $.54  diluted
earnings per common share.

(3) Acquisition

  On  October  31, 1998, Bairnco purchased MII International, Inc.  ("MII")
for  approximately $8.3 million including the repayment of its  debt.   MII
manufactures  adhesive coated films for use in the graphics and  industrial
markets.   The transaction was accounted for as a purchase and was financed
with  long-term debt.  The purchase price exceeded the fair  value  of  net
assets acquired by approximately $4.0 million which is being amortized on a
straight-line basis over 40 years.  The results of operations  of  MII  are
included  in  the accompanying consolidated financial statements  from  the
date of acquisition.
  
  The  following  summarized  unaudited  pro  forma  financial  information
assumes the acquisition had occurred on January 1 of each year:
  
  Pro Forma Information
  (in thousands, except per share data)      1998      1997
  
  Net sales                                  $167,865  $174,184
  Net income                                 $  1,782  $  9,053
  Basic earnings per share                   $   0.21  $   0.99
  Diluted earnings per share                 $   0.20  $   0.97
  
  
  These amounts include MII's actual results in 1997 and for the first  ten
months  of 1998 prior to acquisition and actual results for the two  months
in  1998 after acquisition.  The amounts are based upon certain assumptions
and estimates, and do not reflect any benefit from economies which might be
achieved  from  combined  operations.   The  pro  forma  results   do   not
necessarily  represent results which would have occurred if the acquisition
had  taken place on the basis assumed above, nor are they indicative of the
results of future combined operations.
  
  
  (4)Earnings per Share

  The  Corporation accounts for earnings per share ("EPS") under  Financial
Accounting  Standards  No.  128, "Earnings Per Share"  ("SFAS  128").   The
following disclosures comply with the requirements of SFAS 128.

<TABLE>
<CAPTION>
                                     1998          1997          1996
<S>                                  <C>           <C>           <C>
Basic Earnings per Common Share:

Net Income                           $ 1,594,000   $ 8,771,000   $ 8,335,000
Average common shares outstanding      8,655,000     9,151,000     9,753,000
Basic Earnings Per Common Share      $      0.18   $      0.96   $      0.85

Diluted Earnings per Common Share:

Net Income                           $ 1,594,000   $ 8,771,000   $ 8,335,000
                                                               
Average common shares outstanding      8,655,000     9,151,000     9,753,000
Common shares issuable in respect
 to options issued to employees,
 with a dilutive effect                  163,000       199,000        98,000
  Total diluted common shares
   outstanding                         8,818,000     9,350,000     9,851,000

Diluted Earnings Per Common Share    $      0.18   $      0.94   $      0.85

   Basic earnings per common share were computed by dividing net income  by
the  weighted  average number of shares of common stock outstanding  during
the  year.   Diluted earnings per common share includes the effect  of  all
dilutive stock options.
</TABLE>


(5)  Income Taxes

  The  components  of  income before income taxes and  the  provisions  for
domestic and foreign income taxes are as follows:
<TABLE>
<CAPTION>
                                     1998          1997          1996
<S>                                  <C>           <C>           <C>
Income before Income Taxes:
 Domestic                            $ 1,187,000   $12,765,000   $13,176,000
 Foreign                               1,344,000       993,000        55,000
  Total Income before Income Taxes   $ 2,531,000   $13,758,000   $13,231,000

Provision for Income Taxes:
 Domestic:
  Currently payable                  $ 3,266,000   $ 3,616,000   $ 4,096,000
  Deferred                            (2,688,000)    1,102,000       594,000
 Foreign:
  Currently payable                      422,000       106,000       452,000
  Deferred                               (63,000)      163,000      (246,000)
   Total Provision for Income Taxes  $   937,000   $ 4,987,000   $ 4,896,000
</TABLE>

  Bairnco's  net  current and non-current deferred tax assets (liabilities)
include the following at December 31:

<TABLE>
<CAPTION>
                                     1998          1997          1996
<S>                                  <C>           <C>           <C>
Current Deferred Tax Items:
 Accrued Expenses                    $ 2,840,000   $ 1,584,000   $ 1,887,000
 Inventories                             977,000       847,000       872,000
 Other                                   320,000       210,000       163,000
  Net Current Deferred Tax Asset       4,137,000     2,641,000     2,922,000

Non-Current Deferred Tax Items:
 Fixed Assets                         (3,539,000)   (3,291,000)   (2,889,000)
 Pensions                             (1,273,000)   (1,051,000)   (1,149,000)
 Intangible Assets                       (13,000)       21,000        15,000
 Provision for Litigation Costs        1,700,000            --            --
 Other                                   213,000       223,000       909,000
  Net Non-Current Deferred Tax
   Liability                          (2,912,000)   (4,098,000)   (3,114,000)

  Net Deferred Tax Asset (Liability) $ 1,225,000   $(1,457,000)  $  (192,000)
</TABLE>

  Management  expects  that  future  operations  will  generate  sufficient
taxable  income  to realize the existing net temporary differences.   As  a
result,  the Corporation has not recorded any valuation allowances  against
its deferred tax assets.

  In  1998, 1997 and 1996 the Corporation's effective tax rates were 37.0%,
36.2%  and 37.0%, respectively, of income before income taxes.  An analysis
of  the differences between these rates and the US federal statutory income
tax rate is as follows:

<TABLE>
<CAPTION>
                                     1998          1997           1996
<S>                                  <C>           <C>            <C>
Computed income taxes at
 statutory rate                      $  861,000    $ 4,678,000    $4,499,000
State and local taxes, net of
 federal tax benefit                     64,000        368,000       321,000
Dividend income                              --      1,303,000       198,000
Amortization of goodwill                  9,000          9,000         9,000
Foreign income taxed at different
 rates                                  (98,000)       (69,000)      187,000
Tax credits                             (31,000)    (1,182,000)     (271,000)
Benefit of Foreign Sales Corporation   (270,000)      (289,000)     (413,000)
Other, net                              402,000        169,000       366,000
 Provision for income taxes          $  937,000    $ 4,987,000    $4,896,000
</TABLE>

  Audits  of  the  federal income tax returns of the  Corporation  and  its
subsidiaries have been completed through 1992.

  Provision  has  not  been  made  for US  income  taxes  on  approximately
$3.1  million  of  undistributed  earnings of  international  subsidiaries.
These earnings could become subject to additional tax if they were remitted
as   dividends  or  if  the  Corporation  should  sell  its  stock  in  the
subsidiaries.   It is not practicable to estimate the amount of  additional
tax that might be payable on the foreign earnings; however, the Corporation
believes that US foreign tax credits would largely eliminate any US  income
tax incurred.


(6)  Accrued Expenses

  Accrued  expenses consisted of the following as of December 31, 1998  and
1997, respectively:

                                1998          1997

Salaries and wages              $ 2,669,000   $ 2,353,000
Income taxes                        633,000       139,000
Insurance                         2,462,000     2,216,000
Litigation                        3,580,000     1,461,000
Other accrued expenses            4,848,000     4,374,000
     Total accrued expenses     $14,192,000   $10,543,000


(7)  Debt
  
  Long-term  debt consisted of the following as of December  31,  1998  and
1997, respectively:

                                1998          1997

Revolving Credit Notes          $30,471,000   $24,291,000
Industrial Revenue Bonds          3,000,000     3,000,000
Other                                    --         9,000
                                 33,471,000    27,300,000
Less Current Maturities                  --         9,000
    Total                       $33,471,000   $27,291,000

  On  December  31,  1998,  the Corporation's secured,  reducing  revolving
credit  agreement (the "Credit Agreement") with a consortium of four  banks
led  by Bank of America, Illinois, and including SunTrust Bank, First Union
Bank  of  Florida  and First National Bank of Maryland, was  amended.   The
amendment  effectively  extended the first  commitment  reduction  date  to
December  31,  2000  and the expiration date of the Credit  Agreement  from
December 31, 2001 to December 31, 2003.  The Credit Agreement also includes
a  letter  of credit facility of $7 million, although the letter of  credit
facility  may be increased up to $20 million with a corresponding  decrease
in  the revolving credit facility.  Effective December 31, 1998, the letter
of  credit  facility was increased by $2.0 million to $9.0 million  with  a
corresponding decrease in the revolving credit facility.  At  December  31,
1998,  $30.5  million of revolving credit was outstanding and payable  from
2001  through 2003. In addition, approximately $8.2 million of  irrevocable
standby  letters  of  credit were outstanding under the  Credit  Agreement,
which   are  not  reflected  in  the  accompanying  consolidated  financial
statements.  $5.2 million of the letters of credit guarantee various  trade
and  insurance  activities.  An outstanding $3.0 million letter  of  credit
supports the Industrial Revenue Bonds. Interest rates vary on the revolving
credit  and  are  set at the time of borrowing in relationship  to  one  of
several reference rates, as selected by the Corporation at the time of  the
borrowing.  Interest rates on the revolving credit outstanding at  December
31,  1998,  were  approximately  6.1% on  US  borrowings  and  ranged  from
approximately  3.9% to 7.1% on European borrowings.  A  commitment  fee  is
paid  on the unused portion of the total credit.  The interest rate on  the
Industrial Revenue Bonds was approximately 3.9% at December 31, 1998.

  Substantially  all  of  the  assets  of  the  Corporation  and   its   US
subsidiaries  are  pledged as collateral under the Credit Agreement,  which
expires on December 31, 2003.

  The  Credit  Agreement contains covenants, which require the  Corporation
to  meet  minimum interest coverage ratios, and which limit  the  ratio  of
total  debt  to  capital employed as defined in the  Credit  Agreement.  In
addition,  minimum levels of stockholders' investment must  be  maintained.
At  December 31, 1998 the Corporation was in compliance with all  covenants
contained in the Credit Agreement.

  The  Corporation has other short-term debt outstanding at rates  of  5.9%
to 6.5% due in 1999.
  
  The  annual  maturity requirements for long-term debt due after  December
31, 1998, are summarized as follows:

  Year Ended December 31,
      1999                   $        --
      2000                            --
      2001                     3,000,000
      2002                     3,000,000
      2003                    27,471,000
       Total Long-term Debt  $33,471,000


(8)  Stock Options

  The  Corporation has a stock incentive plan which was established in 1990
("1990 Plan").  The 1990 Plan permits the grant of options to purchase  not
more than 2,500,000 shares of common stock.  The 1990 Plan provides for the
grant  of  non-qualified options and options qualifying as incentive  stock
options  under the Internal Revenue Code to key employees and each  outside
Director  of  the Corporation at an option price equal to the  fair  market
value  on  the  date  of grant.  Non-qualified stock options  may  also  be
granted  at  book value.  The term of each option may not exceed  10  years
from  the  date  the  option becomes exercisable (or, in  the  case  of  an
incentive stock option, 10 years from the date of grant).

  A  senior executive of the Corporation presently holds performance based,
non-qualified stock options granted under the 1990 Plan to purchase a total
of 250,000 shares of common stock at option prices equal to the fair market
value on the date of grant.  Two-thirds of these performance options became
exercisable as a result of the Corporation's earnings performance  in  1992
and  1995  with the remaining one-third becoming fully exercisable  on  the
tenth  anniversary of the date of grant if the executive is still  employed
by  the  Corporation.  These options remain exercisable for ten years  from
the date they first become exercisable.

  Changes  in  the stock options granted under the 1990 Plan  during  1998,
1997 and 1996 were as follows:

<TABLE>
<CAPTION>
                             1998               1997               1996
                             Wtd Avg            Wtd Avg            Wtd Avg
                    1998     Exercise  1997     Exercise  1996     Exercise
                    Options  Price     Options  Price     Options  Price
<S>                 <C>      <C>       <C>      <C>       <C>      <C>
Outstanding at                                                             
 beginning of year  633,750  $5.89     684,225  $5.71     716,950  $5.56
Granted              52,625   8.20      33,400   8.24      78,000   6.32
Exercised           (26,450)  5.13      (5,275)  4.93     (93,000)  5.09
Canceled            (12,975)  6.75     (78,600)  5.39     (17,725)  5.28
Outstanding at                                                             
 end of year        646,950  $6.09     633,750  $5.89     684,225  $5.71
                                                                           
Exercisable at                                                             
 end of year        461,813  $5.79     465,563  $5.70     501,513  $5.62
</TABLE>
                                                                  

  At  December 31, 1998, 1997 and 1996, 1,450,825, 1,490,475 and  1,495,925
shares, respectively, were available for option grants under the 1990 Plan.
The weighted average contractual life of the 646,950 options outstanding at
December  31,  1998  was 3.17 years.  There were no charges  to  income  in
connection  with  stock option grants or exercises during  1998,  1997  and
1996.


(9)  Pension Plans

  The  Corporation has several pension plans which cover substantially  all
of  its employees.  The benefits paid under these plans generally are based
on  employees' years of service and compensation during the last  years  of
employment.   Annual contributions made to the US plans are  determined  in
compliance with the minimum funding requirements of ERISA using a different
actuarial  cost  method  and  actuarial  assumptions  than  are  used   for
determining pension expense for financial reporting purposes.  Plan  assets
consist  primarily  of  publicly traded equity and  debt  securities.   The
Corporation maintains unfunded supplemental plans in the United  States  to
provide  retirement  benefits  in  excess  of  levels  provided  under  the
Corporation's other plans.  The Corporation's foreign subsidiaries  provide
retirement  benefits  for employees consistent with  local  practices.  The
foreign  plans are not significant in the aggregate and therefore  are  not
included in the following disclosures.

  The following table describes the funded status of US pension plans:

<TABLE>
<CAPTION>
                                       1998               1997
<S>                                    <C>                <C>
Change in  Benefit Obligation:                
 Benefit obligation at September 30,
  1997 and 1996, respectively          $ 25,638,000       $ 24,241,000
 Service cost                               756,000            754,000
 Interest cost                            1,895,000          1,815,000
 Actuarial loss                           2,071,000            211,000
 Benefits paid                           (1,457,000)        (1,383,000)
 Benefit obligation at September 30,
  1998 and 1997, respectively            28,903,000         25,638,000

Change in Plan Assets:                                    
 Fair value of plan assets at                          
  September 30, 1997 and 1996,
  respectively                           30,433,000         24,371,000
 Actual return on plan assets             1,142,000          6,276,000
 Employer contributions                     667,000          1,148,000
 Benefits paid                           (1,436,000)        (1,362,000)
 Fair value of plan assets at                          
  September 30, 1998 and 1997,
  respectively                           30,806,000         30,433,000
                                                          
Funded status                             1,903,000          4,796,000
Unrecognized net transition obligation      349,000            447,000
Unrecognized prior service cost             266,000            323,000
Unrecognized net actuarial loss (gain)      744,000         (2,839,000)
Prepaid pension costs at September 30,
 1998 and 1997, respectively              3,262,000          2,727,000

Fourth quarter accruals                     (26,000)          (125,000)
Fourth quarter contributions                 52,000             55,000
Prepaid pension costs at yearend       $  3,288,000       $  2,657,000
</TABLE>

  The  projected  benefit  obligation, accumulated benefit  obligation  and
fair  value of plan assets for the pension plan with plan assets in  excess
of  accumulated  benefit  obligations  were  $25,448,000,  $22,705,000  and
$28,380,000,   respectively,  at  September  30,  1998,  and   $22,534,000,
$20,223,000  and  $28,066,000, respectively, at September  30,  1997.   The
projected benefit obligation, accumulated benefit obligation and fair value
of  plan  assets for the pension plans with accumulated benefit obligations
in  excess  of  plan  assets  were $3,455,000, $3,396,000  and  $2,426,000,
respectively,  at  September  30,  1998,  and  $3,105,000,  $3,036,000  and
$2,368,000, respectively, at September 30, 1997.

  The  discount rate used in determining the actuarial present value of the
projected benefit obligations in the table above was 7.0% at September  30,
1998  and 7.5% at September 30, 1997.  The rate of projected pay increases,
where applicable, was 5% at both September 30, 1998 and 1997.  The expected
long-term rate of return on retirement plan assets was 9% at both September
30, 1998 and 1997.

   Amounts recognized in the consolidated balance sheets of the Corporation
consist of the following:

<TABLE>
<CAPTION>
                                       1998               1997
<S>                                    <C>                <C>
Prepaid benefit cost                   $ 3,382,000        $ 2,845,000
Accrued benefit liability                 (969,000)          (668,000)
Intangible asset                           849,000            550,000
 Net amount recognized at September 30   3,262,000          2,727,000
Fourth quarter accruals                    (26,000)          (125,000)
Fourth quarter contributions                52,000             55,000
 Net amount recognized at December 31  $ 3,288,000        $ 2,657,000
</TABLE>


  Net periodic pension cost for the US plans included the following:
<TABLE>
<CAPTION>
                                       1998          1997          1996
<S>                                    <C>           <C>           <C>
Service cost-benefits earned
 during the year                       $  752,000    $  771,000    $  716,000
Interest cost on projected
 benefit obligation                     1,918,000     1,823,000     1,695,000
Expected return on plan assets         (2,722,000)   (2,252,000)   (2,018,000)
Amortization of net obligation at
 date of transition                        99,000        99,000        99,000
Amortization of prior service cost         56,000        61,000        26,000
Amortization of accumulated loss               --            --         7,000
 Net periodic pension cost             $  103,000    $  502,000    $  525,000
</TABLE>


(10)  Reportable Segment Data

Operating segments are components of an enterprise that:

a.Engage  in  business  activities from which they may  earn  revenues  and
     incur expenses,
b.Whose operating results are regularly reviewed by the company's chief
operating decision-maker to make decisions about resources to be allocated
to the segment and assess its performance, and
c.For which discrete financial information is available.

Operating   segments   with  similar  products  and  services,   production
processes,  types  of  customers,  and sales  channels  are  combined  into
reportable  segments for disclosure purposes.  Bairnco has  two  reportable
segments  - the Arlon Engineered Materials and Components segment  and  the
Kasco Replacement Products and Services segment.

The Arlon Engineered Materials and Components segment designs, manufactures
and  sells laminated and coated materials to the electronic, industrial and
commercial  markets under the Arlon and Calon brand names.  These  products
are  based  on  common technologies in coating, laminating,  polymers,  and
dispersion chemistry. Among the products included in this segment are  high
technology  materials for the printed circuit board industry,  vinyl  films
for   graphics  art  applications,  foam  tapes  used  in  window  glazing,
electrical  and  thermal insulation products, and silicone rubber  products
for insulating tapes and flexible heaters.

The Kasco Replacement Products and Services segment manufactures, sells and
services  products  and  equipment used  in  supermarkets,  meat  and  deli
operations,  and meat, poultry, and fish processing plants  throughout  the
United  States,  Canada and Europe.  It also manufactures and  sells  small
band  saw blades for cutting wood and metal, and large band saw blades  for
use at lumber mills.

Bairnco  evaluates segment performance based on income before interest  and
taxes and excluding allocation of headquarters expense.  Segment income and
assets  are  measured  on  a  basis that is  consistent  with  the  methods
described  in  the  summary  of significant accounting  policies.   Segment
assets  exclude  US  deferred income taxes and assets  attributable  to  US
employee  benefit programs.  Inter-segment transactions are  not  material.
No customer accounts for 10% or more of consolidated revenue.

Financial  information about the Corporation's operating segments  for  the
years ended December 31, 1998, 1997 and 1996 is as follows:

<TABLE>
<CAPTION>
                         Operating                     Capital       Depreciation/
            Net Sales    Profit (Loss)   Assets        Expenditures  Amortization
<S>         <C>          <C>             <C>           <C>           <C> 
1998                                                           
Arlon       $107,736,000 $ 12,698,000    $ 72,880,000  $ 2,925,000   $3,952,000
Kasco         48,720,000    3,085,000      38,215,000    3,022,000    2,676,000
Headquarters          --  (11,254,000)(a)   7,460,000       29,000       60,000
 Total      $156,456,000 $  4,529,000    $118,555,000  $ 5,976,000   $6,688,000
                                                               
1997                                                           
Arlon       $112,036,000 $ 15,873,000    $ 64,530,000  $ 5,438,000   $3,665,000
Kasco         46,672,000    3,495,000      37,703,000    3,252,000    2,791,000
Headquarters          --   (3,776,000)      7,053,000       99,000       60,000
 Total      $158,708,000 $ 15,592,000    $109,286,000  $ 8,789,000   $6,516,000
                                                               
1996                                                           
Arlon       $103,449,000 $ 16,159,000    $ 58,498,000  $ 7,255,000   $3,312,000
Kasco         46,785,000    2,649,000      35,328,000    2,830,000    2,933,000
Headquarters          --   (3,852,000)      8,774,000       46,000       60,000
 Total      $150,234,000 $ 14,956,000    $102,600,000  $10,131,000   $6,305,000

(a)  Includes  impact  of $7.5 million (pre-tax) provision  for  litigation
     costs.
</TABLE>

The  Corporation  has operations in Canada and several European  countries.
Information about the Corporation's operations by geographical area for the
years ended December 31, 1998, 1997 and 1996 is as follows:

                           Sales to External     Long-lived Segment
                           Customers             Assets
1998                                                        
United States              $133,005,000          $48,109,000
France                       12,821,000              218,000
Other Foreign                10,630,000            4,997,000
                                                            
1997                                                        
United States              $136,010,000          $42,478,000
France                       12,238,000              209,000
Other Foreign                10,460,000            5,169,000
                                                            
1996                                                        
United States              $124,154,000          $40,272,000
France                       12,179,000              267,000
Other Foreign                13,901,000            5,823,000
                                                            

 (11) Contingencies

Bairnco  and  its subsidiaries are among the defendants in  a  lawsuit
pending  in the U.S. District Court for the Southern District  of  New
York  (the "Transactions Lawsuit") in which it is alleged that Bairnco
and  others  are  derivatively liable for the asbestos-related  claims
against  its  former  subsidiary, Keene  Corporation  ("Keene").   The
plaintiffs  in  the  Transactions Lawsuit are the  trustees  of  Keene
Creditors  Trust ("KCT"), a successor in interest to  Keene.   In  the
Transactions Lawsuit complaint, the KCT alleges that certain sales  of
assets  by  Keene  to  other subsidiaries of Bairnco  were  fraudulent
conveyances  and otherwise violative of state law, as  well  as  being
violative  of  the  civil RICO statute, 18 U.S.C. Section  1964.   The
complaint  seeks  compensatory  damages  of  $700  million,  interest,
punitive damages, and trebling of the compensatory damages pursuant to
civil  RICO.  In a series of decisions that remain subject to  appeal,
the court has dismissed plaintiff's civil RICO claims; dismissed 14 of
the  21  defendants  named  in the complaint;  and  partially  granted
defendants'  motions  for summary judgment on statute  of  limitations
grounds.   Discovery  is now underway as to the remaining  claims  and
defendants.

  Keene was spun off in 1990, filed for relief under Chapter 11 of the
Bankruptcy  Code in 1993, and emerged from Chapter 11  pursuant  to  a
plan of reorganization approved in 1996 (the "Keene Plan").  The Keene
Plan  provided  for  the  creation of the  KCT,  and  transferred  the
authority  to  prosecute the Transactions Lawsuit  from  the  Official
Committee of Unsecured Creditors of Keene (which initiated the lawsuit
in  the  Bankruptcy Court in 1995) to the KCT.  The Keene Plan further
provided  that only the KCT, and no other entity, can sue  Bairnco  in
connection  with  the  claims in the Transactions  Lawsuit  complaint.
Therefore, although a number of other asbestos-related personal injury
and property damage cases against Bairnco nominally remain pending  in
courts  around the country, it is expected that the resolution of  the
Transactions Lawsuit in substance will resolve all such claims.

Bairnco  also  is the defendant in a separate action by the  KCT  (the
"NOL  Lawsuit"), also pending in the United States District Court  for
the  Southern  District  of  New York, in  which  the  KCT  seeks  the
exclusive  benefit  of tax refunds attributable to  the  carryback  by
Keene of certain net operating losses ("NOL Refunds"), notwithstanding
certain provisions of applicable tax sharing agreements between  Keene
and  Bairnco. (As with the Transactions Lawsuit, the NOL  Lawsuit  was
commenced  during Keene's Chapter 11 case and, pursuant to  the  Keene
Plan, the KCT became the plaintiff in the lawsuit and the lawsuit  was
moved  from  the  bankruptcy Court to the  District  Court.)   Pending
resolution of the NOL Lawsuit, any refunds actually received are to be
placed  in  escrow.   Through December 31, 1998,  approximately  $28.5
million of NOL Refunds had been received and placed in escrow.   There
can be no assurance whatsoever that resolution of the NOL Lawsuit will
result in the release of any portion of the NOL Refunds to Bairnco..

Bairnco  and its Arlon subsidiary also are among the defendants  in  a
third action by the KCT (the "Properties Lawsuit"), commenced December
8,  1998  and  pending  in the United States District  Court  for  the
Southern  District of New York.  In the Properties Lawsuit  complaint,
the  KCT seeks a declaratory judgment that it owns certain patents and
real  property  purchased by Arlon from Keene in 1989,  based  on  the
allegations  that technical title to these assets was not conveyed  at
the  time  of  the  sale  and  that no  proof  of  claim  specifically
referencing these assets was filed during Keene's Chapter 11 case.

Management  believes  that  Bairnco has meritorious  defenses  to  all
claims or liability purportedly derived from Keene and that it is  not
liable,   as  an  alter  ego,  successor,  fraudulent  transferee   or
otherwise,  for  the  asbestos-related claims against  Keene  or  with
respect to Keene products.

Bairnco Corporation and its subsidiaries are defendants in a number of
other actions. Management of Bairnco believes that the disposition  of
these  other actions, as well as the actions and proceedings described
above,  will  not  have a material adverse effect on the  consolidated
results of operations or the financial position of Bairnco Corporation
and its subsidiaries as of December 31, 1998.
CORPORATE INFORMATION

Corporate Office
Suite 300, 2251 Lucien Way
Maitland, Florida 32751
(407) 875-2222
www.bairnco.com

Principal Facilities
Bear, Delaware
East Providence, Rhode Island
Northbrook, Illinois
Rancho Cucamonga, California
St. Louis, Missouri
Santa Ana, California
Toronto, Ontario, Canada
Gwent, Wales, United Kingdom
Paris, France
Pansdorf, Germany

Transfer Agent and Registrar
Trust Company Bank
P.O. Box 4625
Atlanta, Georgia 30302
(404) 588-7815

Independent Certified Public Accountants
Arthur Andersen LLP
200 South Orange Avenue, Suite 2100
Orlando, Florida 32801
(407) 841-4601

Stock Listing
Bairnco common stock is listed on the New York Stock Exchange.
Symbol - BZ.

Annual Meeting
The annual stockholders meeting will be held at Bairnco's Corporate Office
on April 22, 1999 at 9:00 a.m.

Form 10-K
Stockholders may obtain without charge a copy of Bairnco's Form 10-K  filed
with  the  Securities  and  Exchange  Commission  by  writing  to  Investor
Relations at the Corporate Office address.

Investor Relations Information
Contact  J. Robert Wilkinson, Vice President Finance and Treasurer, Bairnco
Corporation
(407) 875-2222, extension 228.


                            BAIRNCO CORPORATION
                                     
                        Suite 300, 2251 Lucien Way
                          Maitland, Florida 32751
                               407-875-2222
                             FAX 407-875-3398
                              www.bairnco.com