Beacon Roofing Supply posted third quarter net sales of $1.92 billion, a marginal 0.5% decrease from the same period in 2018. The dealer also recorded a net income of $31 million for the quarter, falling 37% year over year (YOY), according to Beacon’s third quarter earnings report. Third quarter results for Beacon were negatively impacted by reduced gross margins and higher operating costs, according to the company.

Residential roofing product sales increased 2.9% YOY, while non-residential roofing product sales decreased 2.4% and complementary product sales fell 3.6% YOY. The dealer’s existing market sales also decreased 1.1% compared to the previous year. Beacon attributed the decline in existing market sales to higher rainfall levels across the U.S. during its third quarter, which negatively impacted contractor installations. The company estimated there were 25-30% more rain days in the third quarter compared to the same period a year ago.

“Although our fiscal third quarter results fell short of expectations, there were several positives supporting optimism for the fourth quarter and fiscal year 2020,” president and CEO Paul Isabella said in a public statement. “Most notably, we saw a 3% organic sales increase within our residential product line, our 2nd consecutive quarter of positive growth.”

Isabella said the higher number of rain days translated into approximately $85 million of sales impact, affecting the company’s gross margins and operating expense leverage. Isabella said the company reduced its debt and experienced positive results in its digital platform, Beacon Pro+. July results for the platform were “favorable” on a daily basis, suggesting demand remains healthy for the platform.

Herndon, Va.-based Beacon recorded a third quarter adjusted EBITDA—earnings before interest, taxes, depreciation, and amortization—of $157.8 million, down nearly $30 million from the third quarter in 2018.

Below the operating line, interest expense rose to $38.1 million. The company’s balance sheet lists goodwill as $2.5 billion of its $6.5 billion in total assets. On the liabilities side, long-term debt totals $2.5 billion.

Beacon Roofing Supply, the third largest company on the 2019 ProSales 100, operates more than 500 branches throughout all 50 U.S. states and six Canadian provinces.