Lynch Interactive Announces Third Quarter Earnings.

RYE, N.Y. -- Lynch Interactive Corporation (Pink Sheets([R]): LICT) announced today its third quarter earnings results (see the attached summary).

THIRD QUARTER RESULTS

During the third quarter of 2006 our revenues were $24.8 million, as compared to $24.2 million in the third quarter of 2005. EBITDA (earnings before interest, taxes, depreciation and amortization) generated by our operating subsidiaries was $12.3 million during the quarter as compared to $12.2 million generated last year. The inclusion of Cal-Ore for the full quarter in 2006 compared to one month in 2005 added $1.2 million to revenue and $0.8 million to EBITDA. In addition, Central Utah's EBITDA showed marked improvement, due to higher interstate traffic and the anticipated better margins from its CATV operation. Offsetting these improvements were regulatory true-ups recorded in the 2005 third quarter which increased that period's revenue and EBITDA by $0.9 million. In addition, scheduled regulated revenue and EBITDA declines in Michigan and New York resulted from state mandated extended areas calling and program phase outs, respectively. 2005 EBITDA also included a $1.1 million gain on the sale of 62% of the Company's alarm customers. Corporate office expenses were $1.1 million as compared to $1.2 million last year. Our operating subsidiaries are in the process of developing and launching several wireless and wireline opportunities which will provide an excellent complement to our strong RLEC base and continue to provide the communities that we serve with the telecommunication and data transport tools necessary to compete.

OUTLOOK FOR FULL YEAR

It is the Company's current expectation that Full Year Revenues will be about $98 million, and full Year EBITDA from our operating subsidiaries will be about $47 million as compared to 2005 revenues and EBITDA of $93.7 million and $45.8 million respectively. Capital expenditures in 2006 are expected to be approximately $13 million.

BALANCE SHEET/CASH FLOW/CAPITAL STRUCTURE

At September 30, 2006, the Company had approximately $41 million in cash and $199 million in total debt. Due to numerous debt covenants and other restrictions, the Company does not have direct access to the majority of this cash which is held in various subsidiary companies.

In 2006, the Company sold shares of Hector Communications for net proceeds of $4.2 million and a pre-tax gain of $3.2 million (the third quarter included proceeds of $1.7 million and a gain of $1.3 million.)

SETTLEMENT REGARDS TO THE GOVERNMENT

In July, the Company, along with the other defendants, reached a settlement with the United States Government and Mr. Taylor regarding the False Claims Act litigation, which is described in detail in our Annual Reports. The Company's share of the settlement was approximately $36 million, of which approximately $26 million has been expensed in the second quarter of 2006, the remaining having been expensed in previous periods.

To fund the final payments associated with this litigation, the Company's Line of Credit was expanded from $10 to $30 million. In September 2006, in conjunction with the refinancing of certain subsidiaries, such line was reduced from $30 million to $20 million. The expansion was supported by a Letter of Credit by our Chairman. The total Line of Credit expires on December 15, 2006. The Company is currently working to put in place replacement financing prior to the due date. The replacement will most likely be expansion of debt facilities at the subsidiary level, replacement of the current facility at the corporate office, sale of certain of the Company's assets, and/or other financing arrangements including an equity type offering, possibly through a rights offering.

MONETIZATION OF ASSETS AND SPINCO

As previously announced, the Company is in the process of evaluating and retaining an investment banker to help us formulate a strategic and financial plan to maximize shareholder value and provide a strong financial platform to fund these growth objectives. The Company anticipates that as part of this plan, it will continue to repurchase shares of our common stock in the open market, subject to regulatory and financial constraints, and develop plans to harvest some assets and distribute others to our shareholders.

This release contains certain forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including without limitation, full year revenue, EBITDA and capital expenditure expectations, and anticipated financing and corporate transactions. It should be recognized that such information is based upon certain assumptions, projections and forecasts, including without limitation business conditions and financial markets, regulatory and other approvals, and the cautionary statements set forth in documents filed by Interactive on its website, www.lynchinteractivecorp.com. As a result, there can be no assurance that any possible transactions will be accomplished or be successful or that financial targets will be met, and such information is subject to uncertainties, risks and inaccuracies, which could be material.

Lynch Interactive Corporation is a holding company with subsidiaries in telecommunications and multimedia, and actively seeks acquisitions, principally in its existing business areas.

Lynch Interactive is listed on the Pink Sheets([R]) under the symbol LICT. Its World Wide Web address is: http://www.lynchinteractivecorp.com.

Release: 06-19

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