Beacon Roofing Supply saw net income fall 43.2% year over year (YOY) to $27.4 million in the roofing distributor’s fiscal fourth quarter. The company cited lower gross margins and higher acquisition-related costs as the reasons for the large dip in profits YOY, according to its fourth quarter earnings report.

The company also announced executive vice president and CFO Joseph Nowicki will leave the company later in the fiscal year. Nowicki will remain CFO during the company’s nationwide search for his successor and will support the transition of his duties until his departure. The announcement marks the second change in executive leadership for Beacon in the calendar year. Previous president and CEO Paul Isabella left the company earlier in the year and Julian Francis took over Isabella’s duties beginning on Sept. 1.

For the full fiscal year, the distributor posted a net loss of $10.6 million, compared to a net income of $98.6 million in 2018. The fiscal year results were negatively impacted by higher acquisition-related costs compared to 2018 as well as an increase in interest expenses directly tied to the financing of Beacon’s acquisition of Allied Building Products.

While profits were down for Beacon in the fourth quarter, net sales increased 4.9% YOY to $2.03 billion in the fourth quarter. Consolidated residential roofing product sales increased 12.7% YOY, consolidated non-residential roofing product sales increased 2.4% YOY, and consolidated product sales decreased 3.2% YOY. Beacon’s existing market net sales increased 4.8% compared to the prior year, driven mainly by the 13.2% growth in the residential roofing category. Beacon’s 2019 fourth quarter had one more business day than 2018.

For the full fiscal year, Beacon’s net sales increased 10.7% to $7.11 billion from $6.42 billion in 2018. The increase in net sales for the full year was driven by a 10% increase in consolidated residential roofing product sales and a 17% increase in consolidated complementary product sales. Existing market net sales increased 3.3% compared to the 2018 fiscal year.

“We are now pivoting from a growth run via acquisitions to a focus on organic growth, gross margin expansion, and operating expense rigor,” Beacon’s new president and CEO Julian Francis said in a news release. “Several positive elements are evident in our fourth quarter performance, including 11.5% organic daily sales growth in residential roofing, continued strong operating cash flow, and positive SG&A expense leverage. I see tremendous opportunities to substantially improve upon Beacon’s financial performance.”

Herndon, Va.-based Beacon recorded a fourth quarter adjusted EBITDA—earnings before interest, taxes, depreciation, and amortization—of $169.1 million, compared to $178.3 million in the fourth quarter of 2018. Adjusted EBITDA for the full fiscal year fell $7.6 million to $476.0 million compared to 2018.

Below the operating line, interest expense was $41.6 million during the fourth quarter and $158.5 million for the full fiscal year. The company’s balance sheet lists goodwill as $2.5 billion of the company’s $6.4 billion in total assets. Long-term debt represents $2.5 billion of the company’s $4.1 billion in total liabilities.

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