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<SEC-DOCUMENT>0000950123-10-008662.txt : 20100510
<SEC-HEADER>0000950123-10-008662.hdr.sgml : 20100510
<ACCEPTANCE-DATETIME>20100204132209
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950123-10-008662
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20100204

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LAWSON PRODUCTS INC/NEW/DE/
		CENTRAL INDEX KEY:			0000703604
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-MACHINERY, EQUIPMENT & SUPPLIES [5080]
		IRS NUMBER:				362229304
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		1666 E TOUHY AVE
		CITY:			DES PLAINES
		STATE:			IL
		ZIP:			60018-3640
		BUSINESS PHONE:		7088279666

	MAIL ADDRESS:	
		STREET 1:		1666 EAST TOUHY AVENUE
		CITY:			DES PLAINES
		STATE:			IL
		ZIP:			60018-3640
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>corresp</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">February&nbsp;4, 2010
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">U.S. Securities and Exchange Commission<BR>
Division of Corporation Finance<BR>
100 F Street N.E.<BR>
Mail Stop 4631<BR>
Washington, D.C. 20549<BR>
Attn: John Hartz, Senior Assistant Chief Accountant

</DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>RE:</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Lawson Products, Inc.</B><br>
<B>Form&nbsp;10-K for Fiscal Year Ended December&nbsp;31, 2008</B><br>
<B>Form&nbsp;10-K/A Filed April&nbsp;29, 2009</B><br>
<B>Form&nbsp;10-Q for the Period Ended September&nbsp;30, 2009</B><br>
<B>Form&nbsp;8-K Filed August&nbsp;25, 2009</B><br>
<B>File No.&nbsp;0-10546</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dear Mr.&nbsp;Hartz,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As Senior Vice President and Chief Financial Officer of Lawson Products, Inc. (&#147;Lawson&#148; or the
&#147;Company&#148;), I am responding to the letter from the staff of the Division of Corporation Finance of
the United States Securities and Exchange Commission (&#147;Staff&#148;) dated December&nbsp;31, 2009, containing
comments on the above-referenced filing. For your convenience, we have included in this letter
each of the Staff&#146;s comments before providing our response to that comment. As noted in our
responses below, all proposed revisions refer to Lawson&#146;s intended method for complying with the
Staff&#146;s comments in Lawson&#146;s future filings with the Commission, if appropriate, given the then
current facts and circumstances.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>FORM 10-K FOR FISCAL YEAR ENDED DECEMBER 31, 2008</B></U>
</DIV>

<!-- link2 "Item&nbsp;7. Management&#146;s Discussion and Analysis, page 13" -->

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Item&nbsp;7. Management&#146;s Discussion and Analysis, page 13</B></U><BR>
<U><B>Liquidity and Capital Resources, page 16</B></U>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In future filings please disclose the Amended Credit Facility&#146;s specific covenant ratios.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Response:</I></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In future filings, the Company will disclose the specific covenant ratio requirements listed
below and performance against those specific requirements. For the Staff&#146;s reference, the Company
filed a Form 8-K on August&nbsp;25, 2009 containing a new Credit Agreement which replaced the previous
Amended Credit Facility. Additionally, the Company entered into a Second Amendment to Credit
Agreement which was filed on a Form 8-K on February&nbsp;3, 2010. The significant covenants contained
in the Second Amendment to Credit Agreement dated January&nbsp;29, 2010 include:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Minimum cash plus accounts receivable plus inventory to total debt ratio of 2.0:1.0 at
the end of each quarter;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Minimum tangible net worth of $55.0&nbsp;million;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Minimum debt service coverage ratio of 1.20 commencing with fiscal year ending December
31, 2010;</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<!--TOC-->
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<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Minimum trailing twelve months consolidated EBITDA of $8.0&nbsp;million at the end of
December&nbsp;31, $9.5&nbsp;million for the twelve month period ended March&nbsp;31, 2010 and $10.0
million for the twelve month periods ended June&nbsp;30, 2010, September&nbsp;30, 2010 and December
31, 2010, respectively; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Other covenants including limitations on dividends, share purchases and acquisitions or
sale of property.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Critical Accounting Policies, page 18</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on the significance of your goodwill balance, the goodwill impairment charge you recorded
in 2008, and your market capitalization relative to the carrying value of equity, please revise
future filings to include a critical accounting policy detailing your process for evaluating
goodwill impairment. Refer to Section&nbsp;501.14 of the Financial Reporting Codification, SFAS 142, and
Release No.&nbsp;33-8350, Interpretation-Commission&#146;s Guidance Regarding Management&#146;s Discussion and
Analysis of Financial Condition and Results of Operations on our website at
<U>http://www.sec.gov/rules/interp/33-8350.htm#P180 57133</U> for guidance. Please supplementally
provide us your proposed disclosures.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Response:</I></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In future filings we will include a critical accounting policy detailing our process for
evaluating goodwill impairment. The following is our proposed disclosure:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Goodwill Impairment </I>&#150; Goodwill, all of which is included in our Lawson Products business unit,
is tested annually during the fourth quarter, or when events occur or circumstances change that
would more likely than not reduce the fair value of the reporting unit below its carrying
value. Impairment of goodwill is evaluated using a two step process. First the fair value of the
reporting unit is compared with its carrying amount, including goodwill. If the fair value of the
reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not
impaired, thus, the second step of the impairment test is unnecessary. If the carrying amount of
the reporting unit exceeds its fair value, the second step of the goodwill impairment test is
performed to measure the amount of impairment loss, if any.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We estimate the fair value of the Lawson Products business unit using a market approach, which
relies on the market value of companies that are engaged in a similar line of business. We also
prepare a discounted cash flow (&#147;DCF&#148;) analysis based on the operating plan to determine a range of
fair values. The DCF model relies on a number of assumptions that have a significant affect on the
resulting fair value calculation and may change in future periods. Estimated future cash flows are
affected both by future economic conditions outside the control of management and operating results
directly related to management&#146;s execution of our business strategy. Our DCF model is also affected
by our estimate of a discount rate that is consistent with the weighted average cost of capital
that we anticipate a potential market participant would use.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the fourth quarter of 2009, the calculated fair value of the Lawson business unit
exceeded its carrying value by approximately &#091;&#95;&#95;&#95;&#093; million using our most conservative estimate and,
therefore, was not considered impaired. Changes in the assumptions used in our DCF calculation
could have a material affect on the fair value estimate and could change our assessment of
impairment. A hypothetical 10% decrease in the estimated future annual cash flows generated by the
Lawson business unit would decrease
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">its estimated fair value by &#091;&#95;&#95;&#95;&#093; million. A hypothetical 100 basis point increase in the
discount rate would decrease its estimated fair value by &#091;&#95;&#95;&#95;&#093; million.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Please clarify how you determine your reporting units under SFAS 142. To the extent that any of
your reporting units have estimated fair values that are not substantially in excess of their
carrying value and goodwill for these reporting units, in the aggregate or individually, could
materially impact your operating results, please identify those reporting units and provide the
following disclosures:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The percentage by which fair value exceeds carrying value as of the most recent
step-one test.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The amount of goodwill allocated to the reporting unit.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A description of the assumptions that drive the estimated fair value.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A discussion of any uncertainties associated with the key assumptions. For example,
to the extent that you have included assumptions in your discounted cash flow model that
deviate from your historical results, please include a discussion of these assumptions.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A discussion of any potential events, trends and/or circumstances that could have a
negative effect on estimated fair value.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any other material and useful information you gather and analyze regarding the risks
of recoverability of goodwill.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If you have determined that estimated fair values substantially exceed carrying values for all
of your reporting units, please disclose that determination. Refer to Item&nbsp;303 of Regulation&nbsp;S-K
and Sections&nbsp;216 and 501.14 of the Financial Reporting Codification for guidance.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Response:</I></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following the guidance provided by Accounting Standards Codification (&#147;ASC&#148;) 350 (Previously
FAS 142) and ASC 280 (previously SFAS 131), goodwill impairment was analyzed in relation to the
appropriate reporting unit as reviewed by the Company&#146;s chief decision maker. The Company&#146;s chief
decision maker allocates resources and reviews the operating performance of four business units;
Lawson Products, Rutland Tools (which comprise the MRO segment), Assembly Component Systems (&#147;ACS&#148;)
and Automatic Screw Machine Parts (which comprise the OEM segment).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All of the goodwill on the balance sheet relates to a 2001 acquisition that only benefited the
Lawson Products business unit. The estimated fair value of the Lawson Products business unit
substantially exceeded its carrying value and goodwill as of the most recent testing date in the
fourth quarter of 2009. In future filings we will include the critical accounting policy, proposed
in our response to the Staff&#146;s comment #2 above, that provides details of our evaluation process
for goodwill impairment as well as the results of that evaluation.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Note E &#150; Goodwill, page 31</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Please expand your disclosures in future filings to describe the specific facts, circumstances,
and changed assumptions that resulted in the goodwill impairment that you recorded during the
fourth quarter of 2008 in accordance with paragraph 47 of SFAS 142.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Response:</I></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In future filings, the Company will expand its disclosures to include the specific facts,
circumstances and changed assumptions that resulted in the goodwill impairment recorded in the
fourth quarter of 2008 in accordance with paragraph 47 of SFAS 142. The Company expects the
disclosure to be as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company reviews goodwill annually during the fourth quarter, or when events occur or
circumstances change that would more likely than not reduce the fair value of the reporting unit
below its carrying value. Goodwill impairment is deemed to exist if the carrying amount of a
reporting unit exceeds its estimated fair value and the goodwill impairment charge, if any, is
measured as the difference between the carrying amount of the goodwill as compared to its estimated
fair value. In 2008, our ACS business unit carried a $2.3&nbsp;million goodwill balance related to a
1999 acquisition. In previous years, the operating results of ACS supported the goodwill balance
based on market prices of comparable businesses and discounted cash flow forecasts. During 2008,
ACS began to experience increases in commodity costs that led to lower gross margins and operating
results. Then, with the onset of the global worldwide recession in the fourth quarter of 2008, the
Company revised its forecast of future operating results significantly to reflect the new
unfavorable economic environment and determined, based on market prices of comparable businesses
and revised discounted cash flow forecasts, that the goodwill associated with ACS was fully
impaired. The Company recorded a charge of $2.3&nbsp;million for the year ended December&nbsp;31, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Controls and Procedures, page 43</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We note that your description of your disclosure controls and procedures does not appear to
conform to the definition provided in Rules&nbsp;13a-15(e) and 15d-15(e) of the Exchange Act. In future
filings, please revise your statement to ensure you describe your disclosure controls and
procedures in accordance with the two-part definition provided in Rules&nbsp;13a-15(e) and 15d- 15(e) of
the Exchange Act or simply state whether they are effective. Please confirm to us supplementally
that your disclosure control and procedures were effective in accordance with the two-part
definition.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Response:</I></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We confirm that our disclosure controls and procedures were effective in accordance with the
two-part definition provided in Rules&nbsp;13a-15(e) and 15d-15(e) of the Exchange Act as of the year
ended December&nbsp;31, 2008. In addition, in future filings we will revise our disclosure and clarify
our compliance by adopting the following disclosure:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the supervision and with the participation of our senior management, including our chief
executive officer and chief financial officer, we conducted an evaluation of the effectiveness of
the design and operation of our disclosure controls and procedures,
as defined in
<font style="white-space: nowrap">Rules&nbsp;13a-15(e)</font>
and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;), as of the
end of the period covered by this annual report (the &#147;Evaluation Date&#148;). Based on this evaluation,
our chief executive
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">officer and chief financial officer concluded as of the Evaluation Date that our disclosure
controls and procedures were effective such that (i)&nbsp;the information relating to Lawson, including
our consolidated subsidiaries, required to be disclosed in our Securities and Exchange Commission
(&#147;SEC&#148;) reports is recorded, processed, summarized and reported within the time periods specified
in SEC rules and forms, and (ii)&nbsp;include, without limitation, controls and procedures designed to
ensure that information required to be disclosed is accumulated and communicated to our management,
including our chief executive officer and chief financial officer, as appropriate to allow timely
decisions regarding required disclosure.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>FORM 10K/A FILED APRIL 29, 2009</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Compensation Discussion &#038; Analysis, page 5</B></U><BR>
<U><B>Elements of Total Compensation, page 7</B></U><BR>
<U><B>Annual Incentive Plan (&#147;AIP&#148;), page 8</B></U>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We note your disclosure in the table presenting the target bonuses and actual bonuses received
in 2008. Please tell us supplementally, with a view toward future disclosure, whether you assigned
particular weightings to each individual performance goals you identify for each named executive in
the fourth paragraph of this section to calculate the &#147;Bonus Awarded&#148; column of the table. If you
did not establish weightings for each individual performance measure, please tell us how you
ultimately determined the amount in the Bonus Awarded column for each named executive officer.
<U>See</U> Item&nbsp;402(b)(1)(v) of Regulation&nbsp;S-K.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Response:</I></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a reference to the Staff, and as disclosed on page 9 of Form&nbsp;10 K/A, for fiscal year 2008
actual bonuses under the Annual Incentive Plan (&#147;AIP&#148;) were awarded to the Named Executive Officers
(&#147;NEO&#148;) and were determined based on each executive&#146;s respective performance against their
individual goals. Individual weightings were assigned to each NEO&#146;s performance goals and the
payout determined based on achievement versus goals. The bonus payouts for each NEO other than the
CEO were based upon the CEO&#146;s evaluation of each NEO and recommendation to the Compensation
Committee, and for the CEO, based upon an evaluation by the Board of Directors. No bonus payments
were awarded to the NEO&#146;s for the corporate performance component as the Company did not meet its
corporate performance goals established for 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To address the Staff&#146;s comments, we will provide in future filings the following supplemental
disclosure in &#147;Item&nbsp;11. Executive Compensation&#148; (new proposed supplemental disclosure is
underlined).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Compensation Philosophy and Objectives</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Page 5 </B>The Company&#146;s executive compensation programs are designed to reward executives for the
development and execution of successful business strategies. In determining the type and amount of
compensation for each executive, we use both annual <U>cash compensation, which includes a base
salary and an annual incentive plan, and a long-term incentive opportunity. We believe the mix of
these three forms of compensation in the aggregate balance the reward for each</U> executive&#146;s
contributions to our Company. Our compensation programs are designed to encourage and reward the
creation of long-term shareholder value.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Page 6 </B>3. <I>Accountability for Individual Performance. </I>We believe teams and individuals should be
rewarded when their contributions are exemplary and significantly support Company performance and
value creation. <U>Accordingly, individual performance measures and goals, along with specific
weightings for each goal, are established for each participant in our annual incentive plan.</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Elements of Total Compensation-</B><B><I>Annual Incentive Plan (&#147;AIP&#148;)</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To address the Staff&#146;s comment regarding the AIP on page 8 of Form&nbsp;10 K/A, we are providing
the following supplementary information.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The remaining components of the AIP consisted of key individual performance measures and
weightings which were established for each of the named executive officers. Aggregate percentages
of the 2008 AIP opportunity that were based on individual objectives were as follows:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Thomas J. Neri &#151; 50%</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Neil E. Jenkins &#151; 60%</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Harry Dochelli &#151; 60%</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Stewart Howley &#151; 60%</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Specific weightings for each NEO&#146;s individual performance goals were as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">AIP</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Weight</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Thomas J. Neri:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Develop and begin to implement sales strategies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">20</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Corporate leadership</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">20</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Develop the senior management team</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">10</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Neil E. Jenkins:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Manage legal affairs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">40</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Develop and expand investor relations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">10</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Advise and serve as liaison for the Board of Directors</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">10</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Harry Dochelli:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Achieve sales goals in the MRO unit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">30</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Develop and implement sales strategy</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">20</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Recruit and reorganize the sales organization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">10</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stewart Howley:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Develop operating and sales strategies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">35</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Business development</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">15</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Development of pricing strategies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">10</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For 2008, each NEO was evaluated in aggregate based on the above objectives, and the AIP
bonuses were determined on that basis. In future filings, we will disclose similar information
based upon established individual performance weightings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>2004-2008 Long-Term Capital Accumulation Plan (&#147;LTCAP&#148;), page 9</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 13px; text-indent: -13px">7. Please tell us supplementally, with a view toward future disclosure, the overall LTCAP pool
amount as calculated pursuant to the first full paragraph on page 10.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Response:</I></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a reference to the Staff, and as disclosed on page 9 of Form&nbsp;10 K/A, the 2004-2008 Long
Term Capital Accumulation Plan (&#147;LTCAP&#148;) was a multi-year incentive plan that provided awards for
corporate performance over a five-year period. The overall target pool based upon various
forecasted assumptions set forth in 2004 was $22.5&nbsp;million, subject to periodic adjustments based
on projected and actual performance. As disclosed on page 10, the pool calculated based on
adjusted operating results achieved as of August&nbsp;31, 2008 and projected results for September&nbsp;1,
2008 through December&nbsp;31, 2008 was $8,232,000. At that time, the Compensation Committee also
proposed and the Board approved clarification to the calculation of the incentive EBITDA by
excluding certain extraordinary expenses from the calculation. These adjustments were related to
the unfavorable effects on the Company&#146;s value of various actions taken by prior management, who
were no longer participants in the plan. The Committee believed these adjustments were in the best
interests of the shareholders as they helped to fairly evaluate the current management team&#146;s
performance versus the goals of the LTCAP and retain the executives as required to complete the
Company&#146;s restructuring plan. The Compensation Committee then reduced the payouts to the
participants to $6,542,000 or 79% of the calculated LTCAP incentive pool. Excluding the various
adjustments approved by the Board as discussed above and in the 3<SUP style="font-size: 85%; vertical-align: text-top">rd</SUP> paragraph on page
10, the LTCAP as originally structured in 2004 would have not resulted in a payout to the remaining
named executive officers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 2004-2008 LTCAP has expired and replaced with the Long-Term Incentive Plan (&#147;LTIP&#148;) and as
a result, disclosure of the 2004-2008 LTCAP will not be presented in future filings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Stock Performance Rights (&#147;SPRs&#148;), page 11</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In future filings, please disclose how you determine the amount of SPRs awarded to each named executive officer. <U>See</U> Item&nbsp;402(b)(1)(v) of Regulation&nbsp;S-K.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Response:</I></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In future filings, the Company will disclose how SPR&#146;s are awarded to each named executive
officer in accordance with Item&nbsp;402(b)(1)(v) of Regulation&nbsp;S-K. To address the Staff&#146;s comments,
we will provide the following supplemental disclosure in &#147;Item&nbsp;11. Executive Compensation&#148; (new
proposed supplemental disclosure is underlined).
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Page 11</B><BR>
<I>Stock Performance Rights (&#147;SPRs&#148;)</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lawson evaluates potential shareholder equity dilution when issuing equity incentives. We
have generally believed that non-equity incentives, guided by strategic performance objectives, are
the best way to align executive interests with those of shareholders, create shareholder value, and
attract, retain and motivate executives. However, Lawson has granted SPRs primarily to members of
the Board of Directors to link a portion of compensation to the creation of shareholder value. In
2008, to supplement the Current LTIP, Lawson granted SPRs to executives as part of the current
restructuring of the Company and allows the executives to participate in future creation of
shareholder value. <U>The number of SPRs granted to each named executive officer was determined
by the Compensation Committee which took into consideration each executive&#146;s total compensation,
competitiveness as compared to market levels and competitive practices as it relates to the
granting of long-term incentives to comparable executives working for similar companies.</U>
Operating similarly to a stock option, the exercise price of an SPR is equal to the fair market
value of the Company&#146;s stock as of date of grant and value is only realized by the executive if the
stock price at the time of exercise is higher than at grant. The executive receives a cash payment
of the difference upon exercise. Generally, SPR grants have a three-year vesting schedule, with
awards vesting ratably over the requisite service period. The SPRs granted in 2008 expire 10&nbsp;years
from the date of grant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Certain Relationships and Related Transactions, page 27</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In future filings, please disclose whether your related party transaction policies and
procedures are in writing and, if not, how such policies and procedures are evidenced. See Item
404(b) (1)(iv) of Regulation&nbsp;S-K.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Response:</I></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In future filings, the Company will disclose that its related party transaction policies and
procedures are in writing in accordance with Item&nbsp;404(b)(1)(iv) of Regulation&nbsp;S-K. Following is the
proposed future disclosure.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s policy regarding related party transactions is outlined in the Code of Business
Conduct which is applicable to all employees and sales agents and is available on our website at
<I>lawsonproducts.com </I>in the investor relations corporate governance section. Additionally, all
directors and senior officers of the Company must complete an annual questionnaire in which they
are required to disclose in writing any related party transactions.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In future filings, pursuant to paragraph (b)&nbsp;of Item&nbsp;404 of Regulation&nbsp;S-K, please describe
your policies and procedures for review, approval, and ratification of any transaction required to
be disclosed under paragraph (a)&nbsp;of Item&nbsp;404. In particular, this includes a discussion of the
standards to be applied pursuant to such policies and procedures.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Response:</I></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In future filings, we will describe our policies and procedures for review, approval, and
ratification of any transaction required to be disclosed under paragraph (a)&nbsp;of Item&nbsp;404 pursuant
to paragraph (b)&nbsp;of Item&nbsp;404 of Regulation&nbsp;S-K as follows:
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s policy is for all transactions between the Company and any related person to be
promptly reported to the Company&#146;s Chief Ethics and Business Conduct Officer who will gather the
relevant information about the transaction and present the information to the Board of Directors or
one of its Committees. The Board then determines whether the transaction is a related party
transaction and approves, ratifies, or rejects the transaction. A majority of the members of the
Company&#146;s Board of Directors and a majority of independent and disinterested directors must approve
the transaction for it to be ratified. The Board of Directors only approves those proposed
transactions that are in, or not inconsistent with, the best interests of the Company and its
stockholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 2009</B></U>
</DIV>

<!-- link1 "Item&nbsp;2. Management&#146;s Discussion and Analysis, page 12" -->

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Item&nbsp;2. Management&#146;s Discussion and Analysis, page 12</B></U>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">11.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We note your disclosures on page 13 and 14 that the 2008 gross margin included a $2.4&nbsp;million
favorable inventory reserve adjustment. Please explain to us your basis for recording a favorable
inventory reserve adjustment since it appears to us that when an inventory reserve is recorded it
establishes a new cost basis.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Response:</I></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories consist principally of finished goods and are stated at the lower of cost or
market. Since we operate in the Maintenance, Repair and Operation (&#147;MRO&#148;) industry, most of our
products are typically not exposed to the risk of obsolescence due to technology changes. However,
some of our products do have a limited shelf life, and from time to time we add and remove items
from our catalogs, brochures or website for marketing and other purposes. In addition, we carry
varying levels of customer specific inventory.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To reduce our inventory to a lower of cost or market value, we record a reserve for
slow-moving and obsolete inventory based on historical experience and monitoring current inventory
activity. We use estimates to determine the necessity of recording these reserves based on
periodic detailed analyses using both qualitative and quantitative factors. As part of this
analysis, we consider several factors including the inventories length of time on hand, historical
sales, product shelf life, product life cycle, product classification, whether or not an item is in
a catalog or website and product obsolescence. In general, depending on product classification, we
reserve inventory with low turnover at higher rates than inventory with high turnover. It is the
Company&#146;s policy to not re-value inventory to the original cost basis subsequent to establishing a
new cost basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, we began an inventory reduction plan to reduce our overall inventory levels, which
included a large focus on selling our slow moving and obsolete inventory which was previously
reserved. This plan included selling slower moving items to customers as well as requesting
product returns to our vendors. As a result, our inventory reserves decreased based on the mix of
remaining inventory on hand.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe, based on our prior experience of managing and evaluating the recoverability of our
slow moving, excess and obsolete inventory, our established inventory reserves are adequate. In
future filings, the Company will expand its critical accounting policies and its Management&#146;s
Discussion and Analysis to reflect the information contained in this response.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->9<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>FORM 8-K FILED AUGUST 25, 2009</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">12.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Please file a complete copy of the Credit Agreement dated August&nbsp;21, 2009, including all
schedules and exhibits thereto, with your next Exchange Act report.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Response:</I></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company filed a Form 8-K on February&nbsp;3, 2010 which contained the Second Amendment to
Credit Agreement. As part of the
<font style="white-space: nowrap">Form 8-K,</font> the Company filed a complete copy of its Credit
Agreement dated August&nbsp;21, 2009 including all schedules and exhibits thereto.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">******
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I trust that the foregoing has been responsive to the Staff&#146;s comments. Additionally, Lawson
hereby acknowledges that:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Lawson is responsible for the adequacy and accuracy of the disclosure in the filing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Staff comments or changes to disclosure in response to Staff comments do not foreclose
the Commission from taking any action with respect to the filing; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Lawson may not assert Staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United States.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All inquiries, questions, comments, notices and orders with respect to this letter, should be
directed to the undersigned at (847)&nbsp;827-9666 x 2665 or via facsimile at (847)&nbsp;827-0063.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Sincerely,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><u>/s/ Ronald
J. Knutson&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>
Ronald J. Knutson<BR>
Senior Vice President and<BR>
Chief Financial Officer

</DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">cc:</TD>
    <TD>&nbsp;</TD>
    <TD>Anne McConnell, Division of Corporation Finance<br>
Bret Johnson, Division of Corporation Finance</TD>
</TR>
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->10<!-- /Folio -->
</DIV>




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