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.



                     CONTENTS
 
                     Financial Highlights                                 1
                     Letter to our Stockholders                           2
                     Our Values and People                                4
                     Engineered Materials & Components (Arlon)            6
                     Replacement Products & Services (Kasco)             11
                     Directors and Management                            12
                     Financial History                                   13
                     Management's Discussion and Analysis                14
                     Quarterly Results of Operations                     16
                     Report of Independent Certified Public Accountants  17
                     Consolidated Financial Statements                   18
                     Notes to Consolidated Financial Statements          22

<TABLE>
FINANCIAL HIGHLIGHTS
(In thousands except per share data)
<CAPTION>
                                                           Percent Change
                             1997      1996      1995      97/96    96/95
<S>                          <C>       <C>       <C>       <C>      <C>
Net Sales                    $158,708  $150,234  $150,507  6%       0%
Operating Profit             $ 15,592  $ 14,956  $ 14,633  4%       2%
Net Income                   $  8,771  $  8,335  $  7,781  5%       7%
Diluted Earnings per Share   $   0.94  $   0.85  $   0.75  11%      13%
Cash Dividends per Share     $   0.20  $   0.20  $   0.20  0%       0%
Stockholders' Investment
  per Average Diluted Common
  Share Outstanding          $   5.61  $   5.02  $   4.60  12%      9%
Total Assets                 $109,286  $102,600  $ 98,196  7%       4%
Stockholders' Investment     $ 52,469  $ 49,464  $ 48,024  6%       3%
Average Diluted Common 
  Shares Outstanding            9,350     9,851    10,440  (5%)     (6%)
</TABLE>


Graphic - Bar Chart depicting Sales (y-axis) for five years - 1993 to
          1997 (x-axis):

  Year   Sales    
         (in thousands)

  1993   $134,958
  1994   $145,522
  1995   $150,507
  1996   $150,234
  1997   $158,708

Graphic - Bar Chart depicting Income from Continuing Operations (y-axis)
          for five years - 1993 to 1997 (x-axis): 

  Year   Income from Continuing Operations
         (in thousands)

  1993   $  817
  1994   $7,255
  1995   $7,781
  1996   $8,335
  1997   $8,771

Graphic - Bar Chart depicting Diluted Earnings per Share from Continuing
          Operations ( y-axis) for five years - 1993 to 1997 (x-axis):

  Year   Diluted Earnings per Share from Continuing Operations

  1993   $0.08
  1994   $0.69
  1995   $0.75
  1996   $0.85
  1997   $0.94






LETTER TO OUR STOCKHOLDERS

1997  was  another year of good progress for Bairnco.  Earnings  and  sales
increased.   Our  management teams improved.  The stream  of  new  products
continued to grow.  We repurchased more of our common stock.  Our financial
condition remained strong.

FINANCIAL RESULTS

1997  sales  of  $158,708,000  increased 5.6% from  $150,234,000  in  1996.
Arlon's  sales  increased  8.3%.   All markets  served  experienced  growth
although  there  was substantial volatility within the electronics  market.
Kasco's sales declined 0.2% as growth in the U.S. was offset by the planned
discontinuation  of  equipment sales in certain Canadian  markets  and  the
negative impact of the strong dollar on the "translation" of foreign sales.

In 1997, gross profit increased 2.8% to $53,996,000 from $52,536,000 in the
prior  year. Gross profit increased at both Arlon and Kasco with  increased
sales.  However, the strong dollar also negatively impacted the translation
of  foreign  gross profit.  Gross profit margins declined to 34%  from  35%
last  year.   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.  Research and  development  expenses
increased  17.2% as Bairnco continued to invest in the development  of  new
products and improved quality.

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

Income  before income taxes increased 4% to $13,758,000 in 1997 as compared
to  $13,231,000 in 1996.  The effective tax rate was 36.2% as  compared  to
37.0% in 1996.

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 last
year.   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 shares outstanding in 1996.

FINANCIAL MANAGEMENT

Return on capital employed decreased to 12.2% from 12.3% last year, as  the
positive  impact  of  many of the major capital expenditures  will  not  be
realized until 1998 and beyond.  Return on stockholders' investment in 1997
increased  to  17.4% compared to 17.2% last year.  Management continues  to
make  progress  towards  our  long-term  objectives  of  a  20%  return  on
stockholders' investment and a 15% return on total capital employed.

In  1997, 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
$2,008,000 still unused from the prior year authorization.  During the year
the  company  repurchased  424,800 shares for $3,255,000.   The  Board  has
authorized  management  to continue its stock repurchase  program  in  1998
subject to market conditions and capital requirements of the business.   At
year-end $3.75 million was available for additional stock repurchases.  The
Board  may  consider  additional authorizations if appropriate  during  the
year.

Working  capital as a percent of sales increased from 20.2% to 22.5%.   The
increase  is  primarily attributable to increased accounts receivable  from
strong  fourth  quarter  sales  and  growing  export  sales  and  increased
inventories.

Net  cash  flows provided by operating activities were $12,203,000.   These
cash  flows were more than sufficient to cover operating requirements, fund
Bairnco's  capital  expenditure program, pay dividends  and  generate  some
excess cash.  However the stock repurchasing program required $3,255,000 in
cash.    Consequently  1997  total  debt  increased  to  $30,318,000   from
$28,179,000  at the end of 1996.  Debt as a percent of equity increased  to
57.8%  from  57.0%  in 1996.  At year-end 1997 Bairnco  had  $15.7  million
available  under its revolving credit agreement, and $5.6 million available
under short-term lines of credit.

1997  capital  expenditures  were $8,789,000  as  compared  to  a  plan  of
$13,300,000.   Depreciation and amortization was $6,516,000.   Improvements
in  operating  efficiencies  in 1997 and planned  for  1998  permitted  the
postponement of some planned capital expenditures.  Approximately half  the
capital  expenditures  were  related to both increased  capacity  and  cost
reduction programs.

The  capital  expenditure  plan  for 1998 is approximately  $12.0  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 and capacity additions.  Approximately $3.0 million of
the  planned  capital  expenditures are for  additional  capacity  and  are
contingent upon the growth being realized.

DIVIDEND

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

MANAGEMENT

Effective  August  11,  1997,  James W. Lambert  was  appointed  Corporate
Controller  of  Bairnco Corporation.  Jim was formerly  Manager  of  Group
Financial  Planning and Analysis with Air Products and Chemicals  Inc.  of
Allentown, PA.  Jim filled the vacancy left when Elmer Pruim was appointed
President of Arlon's Adhesive and Films Division at the end of 1996.

Effective  December  15, 1997, Linda Metcalf resigned  as  Vice  President
Administration  and Secretary of Bairnco.  A search is currently  underway
to fill this position.

During  1997 the management development program, which is one of the  keys
to  our future success, continued to make progress in all operations.   To
further  push  the responsibility and authority closer to the marketplace,
to increase product development focus, and as a result of their individual
growth,  Eric Kleinschmidt was promoted to Business Unit Manager  of  ELCD
and  Chuck Roye was promoted to Business Unit Manager of STD.  The ongoing
improvement  and development of all our employees remains a  critical  and
never-ending element for Bairnco's success.

SUMMARY AND OUTLOOK

1997 was another year of progress for Bairnco.

Arlon's  results  continued to manifest the benefits of investing  in  the
development of new products, new markets, and of expanded sales, marketing
and research efforts.

Kasco North America's program to become the preeminent supplier of cutting
products and routine in-store equipment services was continued during  the
year.   Kasco's seasoning program for in-store meal preparation  continued
its  strong  growth.  The North American operations had  improved  results
from increased revenues in the US and from reduced costs from product line
pruning  in Canada.  European meat markets continued to recover  from  the
"Mad  Cow"  panic  of 1996.  We expect to see both improved  revenues  and
improved efficiencies in 1998 and beyond.

The  outlook for 1998 is for another year of improved sales and  earnings.
The  US  economy is again expected to experience slow growth  during  1998
with  inflation  remaining  under control and the  Federal  Reserve  Board
maintaining interest rates within recent historical bands.  We expect  the
combination  of  general economic growth, growth from  new  products,  and
higher  growth  in  certain niche markets 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 1998 a year of continuing improvement.

Respectfully yours,




Luke E. Fichthorn III
Chairman and CEO

Our values:

At Bairnco, our values are the core of our corporate culture.  They are the
basis for the decisions we make regarding the development and deployment of
our  people,  the  improvement and investment in  our  processes,  and  the
manufacture and distribution of our products.

We value:

  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.

PHOTO - Kasco employees review recipe instructions in the new seasoning
        test kitchen.  Employees will use the test kitchen for product 
        development and training.

Our people:

People  are  our most valuable asset.  We continuously invest in education,
communication, and reward programs to develop this vital resource.

Whether  it's  a  marketing specialist who is completing  her  MBA,  a  lab
technician  attending  a seminar on infrared spectroscopy  analysis,  or  a
machine operator receiving instruction on using a micrometer, we make  sure
our  employees  are  given  the opportunity to expand  their  skills.   Our
management  development  process includes the  identification  of  specific
employee  needs  and  also  sponsors group  training  for  supervisors  and
management.

We  foster  communication throughout the organization with cross functional
work  teams,  round  table  discussions,  plant  meetings,  "state  of  the
business"  meetings,  and  newsletters.  Many of our  employees  have  also
participated  in management training to enhance feedback and  communication
skills.

PHOTO - Arlon technicians use reference materials from their new R&D
        library and conference area.  We are committed to creating an 
        environment conducive to employee development and learning.

We  strive  to develop internal advancement programs for our employees  and
always look first within the organization when filling open positions.  All
of  our  employees  participate  in  incentive  programs:   from  corporate
accountants to band saw blade welding operators.  These incentive  programs
are tied to realistic performance goals.

We  believe  that development, education, communication, goal setting,  and
rewards are keys to the successful management of our people.

PHOTO - Arlon employees discuss process improvements and new product
        development within the Microwave Materials product line.  
        Cross-functional meetings facilitate information sharing and project
        management.




Our products, our processes:

We believe that the continuous improvement and development of our products
and processes are vital to our success.  Total customer satisfaction can
only be achieved by delivering products that meet and exceed customer
needs.  Because these customers needs continue to evolve, we are committed
to continuous investment in product development, process improvements,
capacity expansion, and research and development to insure we deliver
products that are competitive in the market.

PHOTO - An Arlon technical director reviews a polyimide reaction with a
        chemist.  Sharing knowledge is crucial to employee development.

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, which  withstand  high  continuous
operating  temperatures,  provide ease of field  reparability,  are  highly
reliable,   and  improve  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  laminates providing high yields and high performance for  temperature
and  frequency dependent microwave applications.  The applications for this
product  line include 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.

The  markets  served  by  Electronic  Substrates  and  Microwave  Materials
continue  to  migrate  toward lower cost solutions  to  allow  for  greater
commercialization and consumer penetration of electronic applications.   To
support  this trend we have made significant investments in new  equipment,
product development, and research and development:

  New lamination presses with increased capacity and the ability to press
    larger sheet sizes.
  New material handling equipment and clean rooms to improve efficiency and
    product quality.
  Research and development laboratory expansion to reduce time to market
    with new products.
  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 PTFE based laminate system that
    offers all the performance characteristics of PTFE with lower cost
    targeted for commercial applications.

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 technology such as in sophisticated 
        avionics used in commercial and military aircraft.

PHOTO - Arlon chemists study the reaction of a developmental resin in a new
        laboratory facility at Rancho Cucamonga, CA.  Arlon has made a major
        commitment to new product development by investing in facility and
        personnel additions.

PHOTO - The press operator explains the control panel on Rancho Cucamonga's,
        CA new press to lamination employees.  The new press has 
        approximately 30% more capacity than the older presses and can press
        a larger sheet to supply a wider variety of customer specified 
        finished panel sizes.

PHOTO - A new lamination press, lay up room, and material handling system
        at Arlon's Bear, DE facility will improve the production efficiency
        and the product quality of Arlon's Microwave Materials product line.

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 all the
        performance characteristics of 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 1997 we extended our  line  of
translucent  vinyl  for  back  lit applications  with  diffuser  films  and
additional  colors.  We also introduced several products  for  the  digital
imaging  market, including a vinyl for electrostatic printed graphics.   We
will continue to expand and improve our products for use in commercial  and
electrical signage and in fleet graphics in 1998.

Our  product  development  is supported with investments  in  manufacturing
process improvements, research and development and distribution.  In  1997,
these investments and improvements included:

  Optimization  of  production processes to  improve  the  quality  of  our
    translucent vinyl for back lit applications;
  Investment  in  new coating technology to reduce the variability  of  our
    films' thickness profile;
  Optimization  of chemical formulas to improve the physical properties  of
    our films;
  Decreased the production time of custom colored vinyl films;
  Increased research and development staff;
  Expanded regional distribution for improved product delivery.

We  will  continue  to make these investments because we are  committed  to
delivering high quality competitive products to our customers.

PHOTO - Arlon is an established fleet vinyl supplier, with fleet graphic
        installations around the world.  Arlon continues to make product
        advances in this market.

PHOTO - Arlon's engineers and operators review new coating heads on a vinyl
        coating line at the Santa Ana, CA facility.  This equipment upgrade
        has improved the film's thickness profile, leading to better physical
        properties and color consistency.

PHOTO - Calon translucent vinyl is used in back lit applications all over
        the world.  A complete line of translucent and diffuser film is 
        available, as well as a custom color program to match corporate 
        identification needs.

We  manufacture and market custom-engineered laminates and coated  products
under  the  Arlon  brand identity. Typical applications include  insulating
foam  tapes for thermopane windows, specialty 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  key  to  Arlon's  success in custom-engineered  laminates  and  coated
products is our knowledge base of materials technology, process technology,
and  customer applications.  In 1998 we will be expanding our research  and
development facilities and staff to support our strategy of increasing this
business.   Our  strategy  and knowledge base has  led  to  several  recent
product developments.

We  have expanded our product offering of specialty circuit materials  with
the  addition  of polyimide coated copper foils for use in printed  circuit
board manufacturing.

We  introduced  an  improved glazing tape, AWT2,  which  provides  enhanced
adhesive properties on vinyl, wood, and aluminum sash materials.

PHOTO - An engineer at Arlon's East Providence, RI facility is analyzing
        Duralon using a precision smoothness tester.  Duralon is a tear
        resistant paper/film/paper laminate whose applications include
        durable printing stock, envelopes, and printable file folders.

PHOTO - Arlon glazing tapes consist of 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.

PHOTO - Arlon produces electrical insulation over a broad performance range
        for use in motors, generators, and transformers.  Substrates used 
        include papers, fabrics, and dielectric films, which are combined
        with polymer adhesives and coatings.

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

  Silicone rubber for molding composites;
  Silicone rubber insulating tape for electric traction motor coil windings;
  Insulation for industrial flexible heaters;
  Thermal and electrical conductivity applications;
  Insulating tape for electrical splices.

The silicone rubber product line provides significant opportunity for Arlon
in a number of areas:

  The  product  line  and  equipment acquired in  1996  from  Permacel  was
integrated  into  our  business in 1997.  We fully realized  the  gains  in
capability  and  capacity  we expected with this  acquisition.   Additional
capacity is available for growth.

  Thermabond(R) is a compliant, thermally conductive silicone sheet adhesive
with  elastic  properties.   It  continues  to  penetrate  the  market  and
commercial  applications  continue to  be  identified.   In  1998  we  will
continue  to  focus  application  development  efforts  on  thermally   and
electrically  conductive  sheet  adhesives for  electrical  and  electronic
markets.

  Our  fusible  tape  business will benefit by the installation  of  a  new
extruder  line  completed  in  1997.   This  equipment  gives  us  improved
production capabilities and lower costs that allow us to more competitively
address retail applications and other commercial markets.

PHOTO - The new extruder installed at Arlon's Bear, DE facility increases
        the production capacity of silicone extruded fusible tape.  Arlon is
        poised to address new markets in silicone extruded tape using the 
        new extruder, along with a new oven and an automatic windup station.

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; Toronto, Canada; Gwent, Wales,  United
Kingdom;  and  Pansdorf, Germany.  In France, in addition to providing  its
replacement  products, Kasco distributes equipment used in the  supermarket
industry and in the food processing industry.

Kasco introduced several new products in 1997.  One of the most exciting is
the Predator Series of custom splitter blades.  These splitter blades offer
reduced workplace noise, peak high speed cutting performance, and increased
durability with a unique Gold Tooth Hardening process.

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.  To support this growing market,  Kasco  has  moved
seasoning  manufacturing from City of Industry, CA to  St.  Louis,  MO  and
built a formulation lab and test kitchen.

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  1997  Kasco
reorganized  this network to better serve its customers, and also  designed
an  extensive  training  program that will  be  implemented  in  1998.   In
addition,  Kasco  has  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
        with less waste, straighter cuts, less workplace noise, and less 
        operator fatigue.

PHOTO - Kasco's investment in seasoning production in 1997 included the
        form and fill machine featured here; other mixing, blending, and 
        handling equipment; and a new building to accommodate the expanded
        seasoning operation in St. Louis, MO.

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
   President
   Arlon Materials for Electronics

3. James W. Lambert
   Controller
   Bairnco Corporation

4. Elmer G. Pruim
   President
   Arlon Adhesives & Films

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

<TABLE>
FINANCIAL HISTORY
<CAPTION>
                                 1997      1996     1995     1994     1993
<S>                              <C>       <C>      <C>      <C>      <C>
Summary of Operations
($ in thousands)

Net sales                        $158,708  150,234  150,507  145,522  134,958
Gross profit                     $ 53,996   52,536   53,317   53,177   52,645
Earnings before interest, 
  charges & taxes (a)            $ 15,592   14,956   14,633   13,654   13,617
Operating profit                 $ 15,592   14,956   14,633   13,654    4,874
Interest expense, net            $  1,834    1,725    2,026    2,144    2,248
Income before income taxes       $ 13,758   13,231   12,607   11,510    2,626
Provision for income taxes       $  4,987    4,896    4,826    4,255    1,809
Income from continuing 
  operations                     $  8,771    8,335    7,781    7,255      817
Return from continuing 
  operations on:
    Net sales                    %    5.5      5.5      5.2      5.0      0.6
    Stockholders' investment     %   17.4     17.2     16.7     17.4      1.4
    Capital employed             %   12.2     12.3     11.9     10.6      2.0
                                                                           
Year-End Position 
($ in thousands)                                         

Working capital                  $ 35,712   30,341   28,350   26,277   20,098
Plant and equipment, net         $ 39,913   38,276   34,449   36,289   38,654
Total assets excluding  
  discontinued operations        $109,286  102,600   98,196   99,243   95,547
Net assets of discontinued
  operations                     $    --       --       --     3,529   12,434
Total assets                     $109,286  102,600   98,196  102,772  107,981
Total debt                       $ 30,318   28,179   24,578   31,775   43,718
Stockholders' investment         $ 52,469   49,464   48,024   43,997   38,515
Capital employed - total         $ 82,787   77,643   72,602   75,772   82,233
                                                                           
Per Common Share Data                                                      
Income from continuing 
  operations - Basic             $   0.96     0.85     0.75     0.69     0.08
Income from continuing
  operations - Diluted           $   0.94     0.85     0.75     0.69     0.08
Cash dividend                    $   0.20     0.20     0.20     0.20     0.20
Stockholders' investment         $   5.61     5.02     4.60     4.19     3.67
Market price:                                                              
    High                         $ 11-1/4    8-1/2    6        5-1/2    8-1/2
    Low                          $  6-3/8    5-1/2    3-7/8    3        3-3/8
                                                                           
Other Data (in thousands)                                                  
Depreciation and amortization    $  6,516    6,305    6,314    6,502    6,700
Capital expenditures             $  8,789   10,131    4,831    5,176    6,318
Average common shares outstanding   9,151    9,753   10,433   10,500   10,500
Diluted common shares outstanding   9,350    9,851   10,440   10,500   10,500
                                                                           
Current ratio                         2.6      2.4      2.2      2.0      1.8
Number of common stockholders       1,574    1,773    1,967    2,198    2,326
Average number of employees           850      825      874      915      920
Sales per employee               $186,710  182,100  172,200  159,040  146,700
                                                                           

(a) Excludes  impact of non-recurring litigation and restructuring costs of
    $8,743 (pre-tax) in 1993.
</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: 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% last year.  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.  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 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 last
year.   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.

Results of Operations: 1996 Compared to 1995

Net  sales for 1996 of $150,234,000 were level with net sales for  1995  of
$150,507,000.   Arlon's sales increased 4.1%.  Sales to  the  graphics  and
electrical  insulation  markets continued to grow which  more  than  offset
lower  sales  to the electronics industry caused by the industry  inventory
correction  primarily  in  the second and third  quarters.   Kasco's  sales
decreased  8.5%, part of which was consistent with the program  to  refocus
Kasco  North America on its core business and part of which was due to  the
severe impact of BSE ("mad cow disease") on meat consumption in Europe  and
its  attendant  impact  on Kasco's replacement and  equipment  business  in
Europe.

In 1996, gross profit decreased 1.5% to $52,536,000 from $53,317,000 in the
prior  year.  Gross profit margins declined to 35.0% from 35.4% last  year.
Arlon's gross profit increased 3.7% as a result of sales growth and  a  mix
change, which was partially offset by lower yields in two plants caused  by
the  gyrations in the electronics market during the year resulting in lower
gross  profit margins as a percent of sales.  Kasco's gross profit declined
8.6%  as  a  result of the sales decrease.  The program to refocus  Kasco's
North  America  operations  was substantially completed  and  gross  profit
margin increased 1.5% on lower sales.  However these improvements were more
than  offset  by  the $1.1 million reduced gross margin in Europe  most  of
which  occurred in the second and third quarters from the BSE panic.   Meat
consumption  and  the  confidence  of  the  European  meat  processing  and
distribution markets began to recover in the fourth quarter.

Selling  and  administrative  expenses  decreased  $1,104,000  or  2.9%  to
$37,580,000  from  $38,684,000  in 1995.  As  a  percent  of  sales,  these
expenses  decreased to 25.0% in 1996 from 25.7% in 1995.   Selling  expense
decreased  slightly.   Kasco's expenses were reduced  consistent  with  its
plan.   Arlon's sales and marketing expenses increased in accord  with  its
continued  investment  in  sales  and  marketing.  Administrative  expenses
continued  to  be  reduced both absolutely and as a  percentage  of  sales.
Research  and  development expenses increased 1.5% as Bairnco continued  to
invest in the development of new products and improved quality.

Operating  profit in 1996 was $14,956,000, or 10.0% of net sales,  compared
to operating profit in 1995 of $14,633,000, or 9.7% of net sales.

Net  interest  expense  decreased $301,000  or  14.9%  from  $2,026,000  to
$1,725,000.  The decrease was due primarily to lower interest rates.

Income  before  income  taxes increased 4.9%  to  $13,231,000  in  1996  as
compared to $12,607,000 in 1995.  The effective tax rate decreased to 37.0%
from  38.3%  in 1995 due primarily to the tax benefits attendant  with  the
establishment  of Bairnco's foreign sales corporation.  The  provision  for
income  taxes  in both years includes all applicable federal, state,  local
and foreign income taxes.

Net  income increased 7.1% to  $8,335,000 in 1996 as compared to $7,781,000
in  1995.  Earnings per share increased 13.3% to $.85 from $.75 last  year.
As  a  result of the stock repurchase program, the average number of shares
outstanding  in  1996  was 9,851,000, a 5.6% decrease from  the  10,440,000
average outstanding in 1995.


Liquidity and Capital Resources

At December 31, 1997, Bairnco had working capital of $35.7 million compared
to $30.3 million at December 31, 1996.  The increase in accounts receivable
relates primarily to the increased sales activity during the fourth quarter
of  1997 over that of the fourth quarter 1996 and to growing export  sales.
Inventories, which increased $2.9 million or 12.3%, were built in  response
to  increased  sales  and customer demand for reduced  lead  times.   Other
current assets decreased as a result of the anticipated tax refund received
during  the  first quarter 1997.  The increase in accounts payable  results
primarily from the corresponding increase in inventories.

At  December 31, 1997, $30.3 million of total debt was outstanding compared
to   $28.2  million  at  the  end  of  1996.   As  of  December  31,  1997,
approximately  $15.7  million  was  available  for  borrowing   under   the
Corporation's secured reducing revolving credit agreement, as amended.   In
addition, approximately $5.6 million was available under various short-term
domestic  and foreign uncommitted credit facilities.  Debt as a percent  of
equity increased slightly to 57.8% at the end of 1997 from 57.0% at the end
of 1996.
     
Bairnco  made $8.8 million of capital expenditures in 1997 as  compared  to
its   plan  of  approximately  $13.3  million.  Improvements  in  operating
efficiencies  in  1997 and planned for 1998 permitted the  postponement  of
some planned capital expenditures.  Total capital expenditures in 1998  are
expected  to be approximately $12.0 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  and
capacity  additions.   Approximately $3.0 million of  the  planned  capital
expenditures are for additional capacity and is contingent upon the  growth
being realized.

In  1997,  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 $2,008,000 still unused from the prior
year  $5,000,000  authorization.  During the year the  Company  repurchased
424,800  shares  for  $3,255,000.  The Board has authorized  management  to
continue  its stock repurchase program in 1998 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 1998.

Year 2000 Date Conversion

The  Corporation has evaluated and identified the risks of software failure
due  to  processing errors arising from calculations using  the  Year  2000
date.  A plan for conversion has been established to maintain the integrity
of  its  financial  systems  and ensure the reliability  of  its  operating
systems.   The  cost of achieving Year 2000 compliance is estimated  to  be
approximately $250,000, which includes software and installation, and  will
be incurred during 1998 and 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  9
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, 1997.

Outlook

Management is not aware of any adverse trends that would materially  affect
the  Company's  strong financial position.  The outlook  for  1998  is  for
improved  sales  and  earnings.  It is expected  that  the  combination  of
general  economic  growth, growth from new products, and higher  growth  in
certain  niche  markets 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      1st      2nd      2nd      3rd      3rd      4th      4th      Total     Total
               1997     1996     1997     1996     1997     1996     1997     1996     1997      1996
<S>            <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>       <C>    
Net Sales      $37,445  $38,094  $41,128  $37,323  $39,814  $36,152  $40,321  $38,665  $158,708  $150,234
Cost of sales   24,465   24,656   27,020   24,067   26,228   23,645   26,999   25,330   104,712    97,698
Gross Profit    12,980   13,438   14,108   13,256   13,586   12,507   13,322   13,335    53,996    52,536
Selling and
 administrative
 expenses        9,116    9,621    9,981    9,276    9,717    8,965    9,590    9,718    38,404    37,580
Operating
 Profit          3,864    3,817    4,127    3,980    3,869    3,542    3,732    3,617    15,592    14,956
Interest 
 expense, net      415      415      460      433      486      417      473      460     1,834     1,725
Income before 
 income taxes    3,449    3,402    3,667    3,547    3,383    3,125    3,259    3,157    13,758    13,231
Provision for 
 income taxes    1,276    1,293    1,320    1,348    1,218    1,187    1,173    1,068     4,987     4,896
Net Income     $ 2,173  $ 2,109  $ 2,347  $ 2,199  $ 2,165  $ 1,938  $ 2,086  $ 2,089  $  8,771  $  8,335

Basic Earnings
 per Share     $  0.23  $  0.21  $  0.26  $  0.22  $  0.24  $  0.20  $  0.23  $  0.22  $   0.96  $   0.85

Diluted 
 Earnings per 
 Share         $  0.23  $  0.21  $  0.25  $  0.22  $  0.23  $  0.20  $  0.23  $  0.22  $   0.94  $   0.85

Market Price:
 High          $ 7-5/8  $ 8-1/2  $ 8-3/8  $ 7-5/8  $    11  $ 7-3/8  $11-1/4  $ 6-7/8  $ 11-1/4  $  8-1/2
 Low             6-3/8    5-7/8    6-7/8    6-5/8        8    5-1/2   6-11/16   5-3/4     6-3/8     5-1/2
</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, 1998 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, 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 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, 1997 and 1996, and the related consolidated statements of
income, stockholders' investment and cash flows for each of the  three
years  in  the  period  ended  December  31,  1997.   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,  1997  and
1996,  and  the results of their operations and their cash  flows  for
each  of  the  three years in the period ended December 31,  1997,  in
conformity with generally accepted accounting principles.


Orlando, Florida
January 22, 1998



                                                  Arthur Andersen LLP

<TABLE>
CONSOLIDATED STATEMENTS OF INCOME

For the years ended December 31, 1997, 1996 and 1995
Bairnco Corporation and Subsidiaries
<CAPTION>

                                     1997          1996          1995
<S>                                  <C>           <C>           <C>
Net Sales                            $158,708,000  $150,234,000  $150,507,000
 Cost of sales                        104,712,000    97,698,000    97,190,000
Gross Profit                           53,996,000    52,536,000    53,317,000
 Selling and administrative expenses   38,404,000    37,580,000    38,684,000
Operating Profit                       15,592,000    14,956,000    14,633,000
 Interest expense, net                  1,834,000     1,725,000     2,026,000
Income before Income Taxes             13,758,000    13,231,000    12,607,000
 Provision for income taxes (Note 3)    4,987,000     4,896,000     4,826,000
Net Income                           $  8,771,000  $  8,335,000  $  7,781,000
                                                                           
Basic Earnings per Share of Common   
 Stock (Note 2)                      $       0.96  $       0.85  $       0.75
                                                                           
Diluted Earnings per Share of Common
 Stock (Note 2)                      $       0.94  $       0.85  $       0.75
                                                                           
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 BALANCE SHEETS
December 31, 1997 and 1996
Bairnco Corporation and Subsidiaries
<CAPTION>

                                              1997           1996
<S>                                           <C>            <C>
Assets                                                         
Current Assets:                                                            
 Cash and cash equivalents                    $  1,217,000   $    855,000
 Accounts receivable, less allowances of 
  $943,000 and $822,000, respectively           24,939,000     21,476,000
 Inventories:                                                             
  Raw materials and supplies                     5,646,000      4,733,000
  Work in process                                6,402,000      5,999,000
  Finished goods                                14,350,000     12,767,000
                                                26,398,000     23,499,000
 Deferred income taxes (Note 3)                  2,641,000      2,922,000
 Other current assets                            2,748,000      3,748,000
                         Total current assets   57,943,000     52,500,000
Plant and Equipment, at cost:                                              
 Land                                            1,541,000      1,560,000
 Buildings and leasehold interests and 
  improvements                                  16,659,000     16,451,000
 Machinery and equipment                        71,670,000     66,520,000
                                                89,870,000     84,531,000
 Less - Accumulated depreciation and 
  amortization                                 (49,957,000)   (46,255,000)
                                                39,913,000     38,276,000
Cost in Excess of Net Assets of Purchased 
 Businesses (Note 1)                             7,607,000      7,922,000
Other Assets (Note 1)                            3,823,000      3,902,000
                                              $109,286,000   $102,600,000

Liabilities and Stockholders' Investment                                   
Current Liabilities:                                                       
 Short-term debt (Note 5)                     $  3,018,000   $  3,337,000
 Current maturities of long-term debt (Note 5)       9,000        125,000
 Accounts payabl                                 8,661,000      7,383,000
 Accrued expenses (Note 4)                      10,543,000     11,314,000
                    Total current liabilities   22,231,000     22,159,000

Long-Term Debt (Note 5)                         27,291,000     24,717,000
Deferred Income Taxes (Note 3)                   4,098,000      3,114,000
Other Liabilities                                3,197,000      3,146,000
Stockholders' Investment (Notes 2, 5 and 6):                               
 Preferred stock, par value $.01, 5,000,000
  shares authorized, none issued                       --             --
 Common stock, par value $.01, 30,000,000 
  shares authorized, 11,160,774 and 11,155,499
  issued respectively                              112,000        112,000
 Paid-in capital                                49,030,000     49,004,000
 Retained earnings                              22,802,000     15,858,000
 Currency translation adjustment (Note 1)        1,572,000      2,282,000
 Treasury stock, at cost, 2,166,765 and 
  1,741,965 shares, respectively               (21,047,000)   (17,792,000)
               Total stockholders' investment   52,469,000     49,464,000
                                              $109,286,000   $102,600,000

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, 1997, 1996 and 1995
Bairnco Corporation and Subsidiaries
<CAPTION>

                                        1997         1996         1995
<S>                                     <C>          <C>          <C>
Cash Flows from Operating Activities:                                      
Income from continuing operations       $ 8,771,000  $ 8,335,000  $ 7,781,000
Adjustments to reconcile to net cash                                  
 provided by operating activities:
  Depreciation and amortization           6,516,000    6,305,000    6,314,000
  Loss on disposal of plant and 
   equipment                                 34,000      203,000      294,000
  Deferred income taxes                   1,265,000      373,000    1,561,000
  Change in operating assets and                                  
   liabilities:
    (Increase) in accounts receivable, 
     net                                 (3,463,000)      (4,000)    (587,000)
    (Increase) decrease in inventories   (2,899,000)     237,000   (3,694,000)
    Decrease (increase) in other 
     current assets                       1,000,000   (1,618,000)   3,205,000
    Increase (decrease) in accounts 
     payable                              1,278,000     (502,000)  (1,877,000)
    (Decrease) in accrued expenses         (771,000)    (451,000)  (1,019,000)
Cash provided by discontinued operations        --           --     1,988,000
Other                                       472,000      734,000      699,000
    Net cash provided by operating 
     activities                          12,203,000   13,612,000   14,665,000
                                                                           
Cash Flows from Investing Activities:                                      
Capital expenditures                     (8,789,000) (10,131,000)  (4,831,000)
Proceeds from sale of plant and 
 equipment                                  219,000      138,000      328,000
Proceeds from sale of discontinued 
 operations                                     --           --       100,000
    Net cash (used in) investing 
     activities                          (8,570,000)  (9,993,000)  (4,403,000)
                                                                           
Cash Flows from Financing Activities:                                      
Net borrowings (repayments) of 
 external debt                            2,434,000    3,968,000   (7,427,000)
Payment of dividends                     (1,827,000)  (1,937,000)  (2,087,000)
Purchase of treasury stock               (3,255,000)  (5,412,000)  (2,580,000)
Exercise of stock options                    26,000      472,000      560,000
    Net cash (used in) financing 
     activities                          (2,622,000)  (2,909,000) (11,534,000)
                                                                           
Effect of foreign currency exchange
 rate changes on cash and cash
 equivalents                               (649,000)    (463,000)     402,000
Net increase (decrease) in cash and 
 cash equivalents                           362,000      247,000     (870,000)
Cash and cash equivalents, beginning 
 of year                                    855,000      608,000    1,478,000
Cash and cash equivalents, end of year  $ 1,217,000  $   855,000  $   608,000
                                                                           
Supplemental Disclosures of Cash Flow                                  
 Information:
  
  Cash paid (received) during the year
   for:                                  
    Interest                            $ 1,824,000  $ 1,696,000  $ 1,992,000
    Income taxes                        $ 2,805,000  $ 5,378,000  $  (310,000)
  
  Non-cash investing activities:                                             
   Notes received from sale of
    discontinued operations             $       --   $       --   $ 2,500,000
                                                                           


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, 1997, 1996 and 1995
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, 1994  $109,000  $47,975,000  $ 3,766,000  $1,947,000   $ (9,800,000)

Net income                       --           --     7,781,000         --             --
Cash dividends ($.20 per 
  share)                         --           --    (2,087,000)        --             --
Issuance of 110,375 shares                                              
  pursuant to exercise of 
  stock options                2,000      558,000          --          --             --
Acquisition of treasury                                              
  stock (486,200 shares at 
  cost)                          --           --           --          --      (2,580,000)
Currency translation 
  adjustment (Note 1)            --           --           --      353,000            --
                                                                          
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)
                                                                          




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


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(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.


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  $6,333,000,  $6,123,000  and   $6,131,000   was
recognized during 1997, 1996 and 1995, 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 $5,625,000 and $5,833,000 at December 31,
1997  and 1996, respectively, is being amortized over 40 years. Accumulated
amortization at December 31, 1997 and 1996, was $1,504,000 and  $1,396,000,
respectively.  Amortization expense of $146,000, $149,000 and $150,000  was
recognized during 1997, 1996 and 1995, 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, 1997.


Intangibles:

   Intangible  assets  of purchased businesses, net  of  amortization,  are
included  in other assets and totaled $99,000 and $136,000 at December  31,
1997  and  1996,  respectively.   These  items  are  amortized  over  their
estimated  lives,  which  generally  range  from  three  to  twenty  years.
Amortization expense recognized was $37,000 during 1997 and $33,000  during
1996 and 1995.




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:

  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.


(2)  Earnings per Share

In February 1997, the Financial Accounting Standards Board issued Statement
of  Financial Accounting Standards ("SFAS") No. 128 "Earnings  Per  Share,"
effective for reporting periods ending after December 15, 1997.   SFAS  No.
128  requires  companies to present basic earnings per  share  ("EPS")  and
diluted  earnings  per  share, instead of primary  and  fully  diluted  EPS
previously   required.    The   new  standard  also   requires   additional
informational  disclosures  and  makes certain  modifications  to  the  EPS
calculations previously reported under Accounting Principles Board No. 15.

The  Corporation has adopted SFAS No. 128 effective December 15, 1997  and,
as  a  result, the Corporation's reported quarterly EPS for 1997 have  been
restated.  This accounting change had no effect on previously reported  EPS
data  for  1996  and  1995.   The  following disclosures  comply  with  the
requirements of SFAS No. 128.

<TABLE>
<CAPTION>
                                   1997         1996         1995
<S>                                <C>          <C>          <C>
Basic Earnings per Common Share:

Net Income                         $8,771,000   $8,335,000   $ 7,781,000
Average common shares outstanding   9,151,000    9,753,000    10,433,000
Basic Earnings Per Common Share    $     0.96   $     0.85   $      0.75

Diluted Earnings per Common Share:

Net Income                         $8,771,000   $8,335,000   $ 7,781,000
                                                               
Average common shares outstanding   9,151,000    9,753,000    10,433,000
Common shares issuable in respect
  to options issued to employees,
  with a dilutive effect              199,000       98,000         7,000
Total diluted common shares
  outstanding                       9,350,000    9,851,000    10,440,000

Diluted Earnings Per Common Share  $     0.94   $     0.85   $      0.75

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>





(3)  Income Taxes

The components of income from continuing operations before income taxes and
the  provisions  for  domestic  and  foreign  income  taxes  on  continuing
operations are as follows:

<TABLE>
<CAPTION>
                              1997          1996          1995
<S>                           <C>           <C>           <C>
Income before Income Taxes:
  Domestic                    $12,765,000   $13,176,000   $11,360,000
  Foreign                         993,000        55,000     1,247,000
Total Income before Income 
  Taxes                       $13,758,000   $13,231,000   $12,607,000

Provision for Income Taxes:
  Domestic:
    Currently payable         $ 3,616,000   $ 4,096,000   $ 1,671,000
    Deferred                    1,102,000       594,000     2,413,000
  Foreign:
    Currently payable             106,000       452,000       943,000
    Deferred                      163,000      (246,000)     (201,000)
Total Provision for Income 
  Taxes                       $ 4,987,000   $ 4,896,000   $ 4,826,000
</TABLE>

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


<TABLE>
<CAPTION>
                              1997          1996          1995
<S>                           <C>           <C>           <C>
Current Deferred Tax Items:
  Accrued Expenses            $ 1,584,000   $ 1,887,000   $ 2,211,000
  Inventories                     847,000       872,000       961,000
  Other                           210,000       163,000       224,000
    Net Current Deferred 
      Tax Asset                 2,641,000     2,922,000     3,396,000

Non-Current Deferred Tax 
  Items:
    Fixed Assets               (3,291,000)   (2,889,000)   (2,650,000)
    Pensions                   (1,051,000)   (1,149,000)     (938,000)
    Intangible Assets              21,000        15,000      (107,000)
    Other                         223,000       909,000       480,000
      Net Non-Current 
        Deferred Tax Liability (4,098,000)   (3,114,000)   (3,215,000)

      Net Deferred Tax 
        (Liability) Asset     $(1,457,000)  $  (192,000)  $   181,000
</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.

Other  current  assets  on the balance sheet include current  income  taxes
receivable  of  approximately $0.2 million at December 31,  1997  and  $1.1
million at December 31, 1996.

In  1997,  1996 and 1995 the Corporation's effective tax rates were  36.2%,
37.0%  and 38.3%, 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>
                              1997          1996          1995
<S>                           <C>           <C>           <C> 
Computed income taxes at 
  statutory rate              $ 4,678,000   $ 4,499,000   $ 4,287,000
State and local taxes, net of
  federal tax benefit             368,000       321,000       205,000
Dividend income                 1,303,000       198,000       193,000
Amortization of goodwill            9,000         9,000         9,000
Foreign income taxed at 
  different rates                 (69,000)      187,000       318,000
Tax credits                    (1,182,000)     (271,000)     (281,000)
Benefit of Foreign Sales 
  Corporation                    (289,000)     (413,000)          --
Other, net                        169,000       366,000        95,000
  Provision for income taxes  $ 4,987,000   $ 4,896,000   $ 4,826,000
</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
$2.3  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.


(4)  Accrued Expenses

Accrued  expenses consisted of the following as of December  31,  1997  and
1996, respectively:

                               1997           1996

Salaries and wages             $ 2,353,000    $ 2,708,000
Income taxes                       139,000        245,000
Insurance                        2,216,000      2,648,000
Litigation                       1,461,000      1,654,000
Other accrued expenses           4,374,000      4,059,000
     Total accrued expenses    $10,543,000    $11,314,000


(5)  Debt
  
Long-term debt consisted of the following as of December 31, 1997 and 1996,
respectively:

                               1997           1996

Revolving Credit Notes         $24,291,000    $21,707,000
Equipment Loans                        --         115,000
Industrial Revenue Bonds         3,000,000      3,000,000
Other                                9,000         20,000
                                27,300,000     24,842,000
Less Current Maturities              9,000        125,000
    Total                      $27,291,000    $24,717,000

The  Corporation  has  a  credit  agreement  ("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.   The  Credit  Agreement provides a secured,  reducing  revolving
credit  facility for a maximum loan commitment at December 31, 1997 of  $40
million and a letter of credit facility of $10 million, although the letter
of  credit facility may be increased up to $20 million with a corresponding
decrease  in  the revolving credit facility. At December 31,  1997,   $24.3
million  of revolving credit was outstanding and payable in 2000 and  2001.
In  addition, approximately $8.3 million of irrevocable standby letters  of
credit were outstanding under the Credit Agreement, which are not reflected
in the accompanying consolidated financial statements.  $5.0 million of the
letters  of  credit guarantee various trade and insurance  activities.   An
outstanding  $3.3 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,  1997,  were  6.4%  on  US
borrowings  and 4.1% to 8.0% 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 4.3% at December 31, 1997.

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, 2001.

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, 1997 the Corporation was in compliance with all covenants contained  in
the Credit Agreement.

The  Corporation  has  mortgages and other short-term debt  outstanding  at
rates of 4.2% to 6.0% due in 1998.

The  annual maturity requirements for long-term debt due after December 31,
1997, are summarized as follows:

  Year Ended December 31,
      1998                          $     9,000
      1999                                  --
      2000                            6,000,000
      2001                           18,291,000
      2002                                  --
    Due after December 31, 2002       3,000,000
  Total Long-Term Debt              $27,300,000


  
(6)  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 Corporations 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 1997,  1996
and 1995 were as follows:

<TABLE>
<CAPTION>
                             1997                1996                1995
                             Wtd Avg             Wtd Avg             Wtd Avg
                   1997      Exercise  1996      Exercise  1995      Exercise
                   Options   Price     Options   Price     Options   Price
<S>                <C>       <C>       <C>       <C>       <C>       <C> 
Outstanding at                                                             
  beginning of     684,225   $5.71     716,950   $5.56     982,150   $5.44
  year
Granted             33,400    8.24      78,000    6.32      21,600    4.70
Exercised           (5,275)   4.93     (93,000)   5.09    (110,375)   5.06
Canceled           (78,600)   5.39     (17,725)   5.28    (176,425)   5.13
Outstanding at                                                             
  end of year      633,750   $5.89     684,225   $5.71     716,950   $5.56
                                                                           
Exercisable at                                                             
  end of year      465,563   $5.70     501,513   $5.62     506,917   $5.48
                                                                  
</TABLE>

At  December  31, 1997, 1996 and 1995, 1,490,475, 1,495,925  and  1,556,200
shares, respectively, were available for option grants under the 1990 Plan.
The weighted average contractual life of the 633,750 options outstanding at
December  31,  1997  was 3.68 years.  There were no charges  to  income  in
connection  with  stock option grants or exercises during  1997,  1996  and
1995.


(7)  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.
Overfunded plans are those in which the amount provided for future benefits
(fair  value  of  plan assets) exceeds the accumulated  benefit  obligation
(actuarial  present value of benefits earned to date based on  present  pay
levels).

<TABLE>
<CAPTION>
                         1997          1997         1996          1996
                         Overfunded    Underfunded  Overfunded    Underfunded
<S>                      <C>           <C>          <C>           <C>
Actuarial present value                                       
  of benefit obligation:
    Vested               $(19,931,000) $(3,021,000) $(19,242,000) $(2,476,000)
    Non-vested               (292,000)     (15,000)     (225,000)     (24,000)
Accumulated benefit 
  obligation              (20,223,000)  (3,036,000)  (19,467,000)  (2,500,000)
Additional amounts                                                   
  related to projected 
  pay increases            (2,311,000)     (69,000)   (2,209,000)     (65,000)
Projected benefit 
  obligation              (22,534,000)  (3,105,000)  (21,676,000)  (2,565,000)
Plan assets at fair value  28,066,000    2,368,000    22,531,000    1,841,000
Plan assets in excess of                                                   
  (less than) projected 
  benefit obligation        5,532,000     (737,000)      855,000     (724,000)
Unrecognized net                                                   
  transition obligation       195,000      253,000       255,000      291,000
Unrecognized prior 
  service costs               (86,000)     409,000       (83,000)      94,000
Unrecognized net (gain)
  loss                     (2,796,000)     (43,000)    1,171,000      207,000
Adjustment to  recognize                                                   
  minimum liability               --      (550,000)          --      (527,000)
Prepaid (accrued)                                                   
  pension costs                                                   
  recognized in balance 
  sheet at September 30     2,845,000     (668,000)    2,198,000     (659,000)
Fourth quarter accruals       (72,000)     (53,000)      (91,000)     (64,000)
Fourth quarter 
  contributions                   --        55,000           --        65,000
Prepaid (accrued) pension
  costs at December 31   $  2,773,000  $  (666,000) $  2,107,000  $  (658,000)
</TABLE>


The  discount rate used in determining the actuarial present value  of  the
projected benefit obligations in the table above was 7.5% at both September
30,  1997 and 1996.  The rate of projected pay increases, where applicable,
was 5% at both September 30, 1997 and 1996.  The expected long-term rate of
return  on  retirement plan assets was 9% at both September  30,  1997  and
1996.

<TABLE>
Net periodic pension cost for the US plans included the following:
<CAPTION>
                              1997          1996          1995
<S>                           <C>           <C>           <C>
Service cost-benefits earned
  during the year             $   771,000   $   716,000   $   858,000
Interest cost on projected
  benefit obligation            1,823,000     1,695,000     1,646,000
Return on plan assets:
  Expected return-(gain)       (2,252,000)   (2,018,000)   (1,666,000)
  Asset (gain)                 (4,471,000)     (434,000)   (2,879,000)
    Actual return-(gain)       (6,723,000)   (2,452,000)   (4,545,000)

Net amortization and deferral   4,631,000       566,000    (3,135,000)
Net periodic pension cost     $   502,000   $   525,000   $ 1,094,000
</TABLE>


(8) Business Segment Data

The  Corporation operates two distinct businesses: Arlon -  Engineered
Materials  and Components' segment; and, Kasco - Replacement  Products
and  Services'  segment.   Information about the  Corporation's  major
lines of business for the years ended December 31, 1997, 1996 and 1995
is as follows:
  
<TABLE>
<CAPTION>
                       Segment                                 Depreciation
                       Operating                  Capital      and
         Net Sales     Profit(Loss) Assets        Expenditures Amortization
<S>      <C>           <C>          <C>           <C>          <C>
1997
Arlon    $112,036,000  $15,873,000  $ 65,525,000  $ 5,438,000  $3,665,000
Kasco      46,672,000    3,495,000    38,617,000    3,252,000   2,791,000
Corporate         --    (3,776,000)    5,144,000       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  $ 61,118,000  $ 7,255,000  $3,312,000
Kasco      46,785,000    2,649,000    35,161,000    2,830,000   2,933,000
Corporate         --    (3,852,000)    6,321,000       46,000      60,000
  Total  $150,234,000  $14,956,000  $102,600,000  $10,131,000  $6,305,000
  
1995
Arlon    $ 99,391,000  $15,389,000  $ 55,108,000  $ 1,999,000  $3,274,000
Kasco      51,116,000    2,889,000    38,690,000    2,805,000   2,975,000
Corporate         --    (3,645,000)    4,398,000       27,000      65,000
  Total  $150,507,000  $14,633,000  $ 98,196,000  $ 4,831,000  $6,314,000
</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, 1997, 1996 and 1995
is as follows:

<TABLE>
<CAPTION>
                                     Segment
                                     Operating
                   Net Sales         Profit           Assets
<S>                <C>               <C>              <C>
1997
United States      $136,010,000      $13,886,000      $ 92,393,000
Foreign              22,698,000        1,706,000        16,893,000
  Total            $158,708,000      $15,592,000      $109,286,000
  
1996
United States      $124,154,000      $14,564,000      $ 84,269,000
Foreign              26,080,000          392,000        18,331,000
  Total            $150,234,000      $14,956,000      $102,600,000
  
1995
United States      $122,510,000      $12,797,000      $ 77,917,000
Foreign              27,997,000        1,836,000        20,279,000
  Total            $150,507,000      $14,633,000      $ 98,196,000
</TABLE>


(9)  Contingencies

Bairnco  has been named as a defendant in a number of personal  injury  and
wrongful  death  cases in which it is alleged that Bairnco is  derivatively
liable for the asbestos-related claims against its former subsidiary, Keene
Corporation  ("Keene").  On December 6, 1993, Keene  filed  for  protection
under  Chapter  11  of the Bankruptcy Code.  On June  8,  1995,  the  Keene
Creditors'  Committee commenced an adversary proceeding in  the  Bankruptcy
Court  against  Bairnco,  certain of its present and  former  officers  and
directors,  and others alleging that the transfer of assets  for  value  by
Keene  to other subsidiaries of Bairnco, and the spin-offs of certain other
subsidiaries  by  Bairnco, were fraudulent and otherwise violative  of  law
(the  "Transactions  Lawsuit")  and seeking compensatory  damages  of  $700
million,  plus  interest  and  punitive  damages.   The  complaint  in  the
Transactions  Lawsuit  includes a count under the civil  RICO  statute,  18
U.S.C. Section 1964, pursuant to which compensatory damages are trebled.

Bairnco is party to a separate action brought by Keene in the United States
Bankruptcy Court for the Southern District of New York in which Keene seeks
the exclusive benefit of tax refunds attributable to the carryback by Keene
of  certain  net operating losses ("NOL Refunds"), notwithstanding  certain
provisions  of tax sharing agreements between Keene and Bairnco  (the  "NOL
Lawsuit").   (After  filing the NOL Lawsuit, Keene  ceded  control  of  the
action  to  the  Creditors'  Committee.)  Pending  resolution  of  the  NOL
Lawsuit, any refunds actually received are to be placed in escrow.  Through
December  31,  1997, 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.

Keene's  plan of reorganization was approved and became effective  on  July
31,  1996.   The  plan,  as approved, creates a Creditors  Trust  that  has
succeeded to all of Keene's asbestos liabilities, and also has succeeded to
the  right to prosecute both the Transactions Lawsuit and the NOL  Lawsuit.
The  plan  also  includes  a  permanent injunction  under  which  only  the
Creditors  Trust, and no other entity, can sue Bairnco in  connection  with
the claims asserted in these lawsuits.

By  order  entered April 10, 1997, the Transactions Lawsuit was transferred
from  the  Bankruptcy  Court to the United States District  Court  for  the
Southern  District of New York, where it will be litigated.   On  September
15,  1997,  Bairnco  and  other defendants filed  motions  to  dismiss  the
complaint  for  failure  to state a claim as well as  motions  for  summary
judgment  on  the grounds that the complaint is time-barred.   Briefing  on
these  motions  is complete.  Subsequent to year-end, the court  issued  an
opinion  granting the motions to dismiss four of the twenty-one  defendants
in the Transactions Lawsuit.  The court reserved decision on the motions of
the  other defendants. There can be no assurance that the remaining motions
will result in dismissal of the Transactions Lawsuit or any part thereof.

On  January  6, 1998, the Creditors Trust filed a motion, to which  Bairnco
consented, to have the NOL Lawsuit transferred from the Bankruptcy Court to
the District Court.  That motion is pending.

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, 1997.
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
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 24, 1998 at 10:00 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 Investor Relations at Bairnco's Corporate Office.


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