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Lawson Products, Inc. (NASDAQ:LAWS), Des Plaines, IL, a distributor of products and services to the MRO marketplace, reported sales for the first quarter 2012 of $76 million, down from $82.6 million in the prior-year period. The decrease was driven by a decline of $4.4 million in sales within the government segment within bases that support troop deployment.
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The distributor said it also generated lower freight revenues and higher customer attrition.
Average daily sales decreased 9.5 percent from the prior-year quarter and 2.2 percent from the fourth quarter 2011.
Thomas Neri, president and CEO, said: "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."
Net loss of the quarter was $1.8 million, compared with net income of $2 million in the prior-year quarter.
Commenting on the results, Neri said: "We have put programs in place to immediately address the current sales and gross profit trends, while managing our overall operating costs. Many of our recent investments necessarily have been of a long-term, transitional character. We believe the continued investments we are making in our business, including our state-of-the-art distribution center in McCook, Illinois and our revamped website will significantly improve our overall customer experience."