Note 2 of the Notes to Consolidated Financial Statements of Lawson Products, Inc. included in its
Form 10-K for the year ended
December 31, 2010 describes a change in the classification of shipping
and handling costs from Selling, General and Administrative Expenses to Costs of Goods Sold. There
are no authoritative criteria for determining a ‘preferable’ classification of shipping and
handling costs based on the particular circumstances; however, we conclude that such change in the
classification of shipping and handling costs is to an acceptable alternative method which, based
on your business judgment to make this change and for the stated reasons, is preferable in your
circumstances.
