Lawson Products, Inc. (NASDAQ:LAWS) (“Lawson” or the "Company"), a distributor of products and services to the MRO marketplace, today announced its 2012 first quarter results for the period ending March 31, 2012. Thomas Neri, president and chief executive officer, commented, “During the quarter, we continued to face revenue and expense challenges resulting from the operational issues that followed our ERP implementation in the third quarter of 2011 and weakness in the government segment. The effect of our operational issues in the third quarter has had a lagging impact on our customer retention. While the first quarter results were disappointing, I am pleased that we have made progress in resolving many of our ERP-related operational issues. Our focus is now on strengthening our customer relationships and engaging our sales force in restoring sales momentum.” First Quarter Results Net sales for the first quarter of 2012 were $76.0 million versus $82.6 million in the first quarter of 2011. The $6.6 million decrease was primarily driven by a decline of $4.4 million in sales within the government segment within bases that support troop deployment. We also generated lower freight revenues and experienced higher customer attrition. The declines were partially offset by one additional selling day and an increase within the strategic account segment. Average daily sales decreased 9.5% from the prior year quarter and 2.2% from the fourth quarter of 2011. For the first quarter of 2012, gross profit was $41.3 million versus $49.9 million in the prior year period. The decrease as a percentage of sales from 60.5% to 54.4% was driven by lower freight recoveries, an increase in inventory reserves, and additional temporary labor. Additionally, a deliberate strategic shift toward higher volume national customers with lower margins and higher than normal attrition of smaller customers with higher margins negatively affected our results.