Item 2.05 Costs Associated with Exit or Disposal Activities.

On March 26, 2008, in response to current economic conditions, Lawson Products, Inc. ("Lawson") committed to implementing further cost reduction measures, which include (i) a reduction in force of approximately 11%, or approximately 150 employees, across the organization and (ii) the closure of its Dallas, TX distribution center. The reduction in force and closure of the distribution center are expected to be substantially complete by the end of the second quarter. As a result of these measures, as well as the previously announced closure of Lawson's Charlotte, NC distribution facility, Lawson expects to incur a charge of between $5.5 million and $7.0 million in the first quarter of 2009. Of this amount, approximately $5.0-$6.0 million is related to future cash severance payments of terminated employees and approximately $0.5-$1.0 million is related to non-cash writedowns of equipment and inventory. These cost reduction measures are expected to result in future annualized cost savings of between $10.0 million and $12.0 million.

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