Q3 2019 Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to <unk> Donnelley financial solutions third quarter earnings Conference call.
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I'd now like to hand your conference over to your hosts today, Justin Ritchie head of Investor Relations. Thank you. Please go ahead. Thank you Rob good morning, everyone and thank you for joining the Donnelley financial solutions third quarter 2019 results conference call.
This morning were released earnings report a copy of which can be found in the investor section of our website <unk> defense solutions Dot com.
During this call refer to forward looking statements that are subject to uncertainties for a complete discussion. Please refer to the cautionary statements included in our earnings release and further detailed on our annual report on Form 10-K , and other filings with the FCC.
Further we discuss non-GAAP financial information, we believe the presentation of non-GAAP financial information provided you with useful supplementary information for by her concerning the company's ongoing operations.
Inappropriate for way for you to validate the company's performance.
There however provided for informational purposes, only please refer to the press release unrelated footnotes forget financial information and a reconciliation of GAAP to non-GAAP financial information.
I'm joined this morning by Dan Leever, Dave Gardella can be Turner and time, yes, I'll now turn the call over to Dan.
Thank you Justin and good morning, everyone.
On today's call I will provide an update on our third quarter performance as well as detailed various operating highlights from across the business. Following my comments, Dave will provide additional detail on our third quarter financial results and update on guidance and some additional color on the fourth quarter. We we'll then open it up for Q anyway.
We recorded consolidated net sales of $195.9 million in the third quarter down 8.2% on an organic basis and below our expectations due largely to a week transactional environment, where the market slowdown in M&A activity, which we mentioned on the last earnings call continued.
Specifically, the third quarter global M&A market declined 21% for deal completions greater than $100 million. The weaker M&A activity also continued to be a headwind for venue.
Despite soft revenue performance, our third quarter adjusted EBITDA margin increased by 150 basis points year over year. This was driven by tight cost control and a shifting business mix lower margin printing distribution revenue was down 16.5% in the quarter, what we saw modest growth of 2.5% in SaaS sales.
SaaS revenue represented just over 23% of total revenue in the quarter.
Operating cash flow for the quarter was consistent with the third quarter of 2018.
Looking deeper into our third quarter transactional performance, despite fewer quarterly IPO filings year over year, we recognized increased domestic IPO related net sales in the quarter. This increase was partially driven by a handful of large projects, including two large deals where the client ended up with drawing their.
Actions, though the value of those deals to us was lower than if they had priced.
The increase in domestic IPO related net sales was offset by slower M&A activity, the 21% decline in global M&A completions over $100 million drove down total merger related SEC filings by 16% in the third quarter with filings over $2 billion segment, where defect.
In maintains very strong market share being down significantly more.
Our international transactional net sales were also down year over year, specifically in Asia, where geopolitical unrest led to a slowdown in transactional activities during the quarter.
Focusing on SaaS net sales growth was 2.5% in the quarter and made up 23.4% of third quarter net sales up 280 basis points year over year SaaS net sales growth was led by active disclosure at 12.8% driven by continued strong customer adoption.
During the quarter, we increased the number of third quarter active disclosure direct competitive wins year over year as our value proposition, including our strong services team continues to resonate with clients.
Sales of our venue data room, our largest SaaS offering in terms of sales were again below our longer term trend largely due to the more challenging M&A environment.
Overall, we anticipate improved SaaS net sales growth in the fourth quarter driven by active disclosure funds, we dark any bravia and are looking to carry this improvement into next year.
Moving now to operating highlights in capital markets. In addition to the continued growth of acted disclosure. The quarter. Also was also highlighted by strong domestic IPO net sales with defund again, maintaining its market share while supporting many of the higher profile transactions that came to market our clients recognize deepens.
Leadership in transactional filings proven out by the thousands of Ipos and other registration statements that we have handled over the last several years deepened platforms, including venue. He brevity inactive disclosure combined with the domain expertise provided by our services teams give us a competitive advantage and are the key to achieving our strategic.
Imperative to protect our core markets focusing on the Bravia one of our audit and consulting clients is now delivering $800000 an annual recurring revenue to deepen.
After starting with a 5000 dollar initial pilot with the Bravia back in 2016.
The adoption of the Bravia within this client is broad spanning several divisions, including advisory audit and tax and is yet another proof point of how defund solutions are helping to add value by eliminating time consuming and error prone tasks and in late October venue was awarded with its.
Second live Americas data room of the year award from the Global M&A network.
Switching to investment markets, we continue to drive new sales with our pro solution.
Signing up nine marquee clients in the quarter.
Firms choose our pro as it allows their teams to automate the creation of regulatory and compliance driven documents and forms incorporating workflow efficiencies within easy to use interface relying on familiar editing applications. Microsoft word an excel. We're also proud to announce that in addition to deepen winning the 2009.
Nick said, Nova award for innovation and product and marketing are reporting software was recently awarded the fund intelligence operations and service award for best regulatory reporting solution.
Before I turn it over to Dave I'd like to highlight the opportunity. We have ahead of us when the global transactional environment improves.
Over the last 12 months, we've experienced significant challenges from the turbulence in the capital markets environment, including the impact of the FCC shutdown at the beginning of the year over that timeframe. Our global transactional revenue has declined $44 million not only have we protected our market share, but we've also been aggressive in managing our cost structure.
Okay and been prudent with capital allocation as we navigate navigate through the cycle.
Our efforts in these areas keep us well positioned to capture the benefits of an improved transactional environment. When the cycle turns positive with that I will turn it over to Dave.
Thank you Dan and good morning, everyone.
Before I discuss our third quarter financial performance I'd like to recap a few significant items in the quarter that impact our year over year comparability.
As we've discussed on the last few earnings calls we completed the sale of our language solutions business in the third quarter of 2018.
Our third quarter 2019 results exclude language solutions, while the third quarter of 2018 includes language solutions through the disposition date of July 22nd 2018.
As Dan indicated on our last call the sale negatively impacted our third quarter reported net sales comparison by $3.2 million and negatively impacted our gross profit and non-GAAP adjusted EBITDA comparisons by approximately $1.2 million and zero point $5 million respectively income.
Most of next stranded costs.
Next we completed the sale leaseback of our Secaucus, New Jersey printing facility in the third quarter, resulting in net proceeds of approximately $21 million, which were used to reduce outstanding debt in the fourth quarter.
Please note that while the sale proceeds will not benefit free cash flow taxes and fees related to the sale transaction will negatively impact full year 2019 free cash flow by approximately $10 million.
Revisit this again later when I discuss our 2019 guidance.
Lastly, the effective income tax rate in the quarter.
Was 38.8% compared to 29.1% for the three months ended September 32018.
Effective income tax rate for the three months ended September Thirtyth 2019 reflects the recognition of a valuation allowance recorded in the international segment. During the third quarter of 2019, the valuation allowance increased our quarterly GAAP and non-GAAP tax expense by $1.9 million in the quarter.
Or approximately six cents per share.
This noncash charge is related to certain legal entities within our international segment that has had historical losses and for which we were historically recording it deferred tax asset related to such losses I will discuss this impact that this adjustment has on our forecasted tax rate.
Later in my remarks.
Keeping these items in mind, let's review the third quarter financial results.
As Dan mentioned earlier on a consolidated basis net sales for the third quarter were $195.9 million, a decrease of $21 million or 9.7% from the third quarter of 2018.
After adjusting for the sale of language solutions changes in foreign exchange rates and the acquisition of the Bravia organic net sales decreased 8.2%.
The year over year decline was largely driven by a decrease in global capital markets transactional activity as well as lower print and print related services in investment markets.
Focusing on transactional activity as mentioned earlier another strong domestic IPO quarter was offset by fewer M&A deals being completed when compared to the third quarter of 2018, resulting in transactional net sales being down from the third quarter of 2018 in total.
As I mentioned on last quarter's call this quarter would be a tough comparison as the third quarter of 2018 included a single very large M&A deal that totaled approximately $6 million in net sales.
Third quarter declines in our traditional capital markets and investment markets net net sales that I. Just detailed were partially offset by continued growth in our SaaS offerings led by active disclosure along with strong demand for funds, we dark in Europe .
Our third quarter gross margin was 38.1% or 40 basis points lower than the third quarter of 2018, primarily driven by a drop in higher margin capital markets transactional net sales.
non-GAAP SGN expense in the quarter was $43.5 million $8.8 million lower than the third quarter of 2018 as a percentage of revenue non-GAAP best DNA was 22.2% down 190 basis points compared to the third quarter of 2018.
The decrease in expense was primarily driven by the impact of cost control initiatives and lower variable compensation expense.
Our third quarter non-GAAP adjusted EBITDA was $31.1 million, a decrease of zero point $2 million from the third quarter of 2018 as decreased capital markets transactional activity and lower mutual fund print in print related services and investment markets were largely offset.
Growth in our SaaS offerings, the impact of cost control initiatives and lower variable compensation expense.
As I noted earlier the sale of language solutions negatively impacted the third quarter EBITDA comparison by approximately zero point $5 million.
Turning now to our segment results net sales and our USA segment were $173.7 million in the third quarter of 2019.
Decrease of 6.4% from last year's third quarter.
On an organic basis after adjusting for the sale of language solutions and the purchase of the Bravia net sales declined 6%.
Net sales in us capital markets decreased 5.9% on an organic basis.
Due primarily to lower transactional activity offset by continued growth in our SaaS offerings, primarily inactive disclosure.
Net sales in us investment markets decreased 6.4% on an organic basis, primarily driven by lower mutual fund print volumes and print related services.
non-GAAP adjusted EBITDA margin for the segment of 18.5% what was flat when compared to the third quarter of 2018 as the margin impact of reduced volume was offset by cost control initiatives and lower variable compensation expense.
Net sales in our international segment were $22.2 million in the third quarter of 2019.
Decrease of 29.3% from the third quarter of 2018.
On an organic basis, excluding the impact of the sale of the language solutions business and changes in foreign exchange rates net sales in the third quarter were down 21% due primarily to a decrease in transactional activity, primarily in Asia and lower mutual fund print in print related services. These days.
Lines were partially offset by growth in our SAS offerings, which continues to be driven by demand for funds, we dark in Europe .
non-GAAP adjusted EBITDA margin for the segment was 5% down 330 basis points due to the decrease level of transactional activity, partially offset by the impact of cost savings initiatives and lower variable compensation expense.
Our third quarter 2019, non-GAAP unallocated corporate expenses, excluding depreciation and amortization were $2.2 million a decrease of $3.4 million from the third quarter of 2018.
The decrease was primarily driven by the impact of cost savings initiatives and lower variable compensation expense.
Consolidated free cash flow in the quarter was $52.2 million $1.2 million unfavorable to the third quarter 2018, as decrease interest payments and improve working capital were offset by higher cash taxes and restructuring payments associated with our cost control efforts.
Our controllable working capital rate, which we define as accounts receivable plus inventory less accounts payable as a percentage.
As a percent of our trailing three month annualized net sales was 21% up 160 basis points from the third quarter of 2018, due primarily to increase vendor payments made in the quarter when compared to the third quarter of 2018.
We continue to actively focus on improving our management of working capital and expect the year over year trend in this ratio to improve ending the year at approximately 17.5%.
We ended the quarter with $364.1 million of total debt.
And $332 million of net debt with nothing drawn on our revolver and we had net available liquidity of $155.4 million.
As of September Thirtyth 2019, our non-GAAP net leverage ratio was 2.5 times up 0.5 times from September 32018.
We continue to target a leverage ratio in the range of 2.25 times to 2.75 times and expect to be below the low end to that range by the end of this year.
With that covered let me provide some color on our guidance.
As highlighted in this mornings press release, we are updating our full year 2019 guidance to reflect the continuing impacts of a weaker than expected transactional environment as well as the negative impact on free cash flow related to the sale leaseback of our secaucus print facility.
Specifically, we expect 2019 total net sales to be in the range of $870 million to $890 million.
Representing organic growth of approximately negative.
5% at the midpoint due primarily to lower year over year transactional net sales.
We expect our non-GAAP adjusted EBITDA.
To be approximately $135 million.
As lower profits from transactional activity are expected to be offset by benefits of our continued cost control efforts.
Depreciation and amortization is expected to be approximately $50 million.
We expect interest expense of approximately $34 million.
Our full year non-GAAP effective tax rate is expected to be approximately 32% up from our previous expectations due to the valuation.
Allowance I noted earlier.
We projected full year fully diluted weighted average share count to be approximately 35 million shares and lastly, we expect capital expenditures to be approximately $45 million with free cash flow in the range of 20% $25 million down from our previous guidance due to the impact.
Acts of decrease transactional activity as well as the $10 million of taxes and fees related to the sale leaseback of our secaucus facility.
I also want to add a quick reminder, regarding the impact of the language solution sale on a full year basis, the sale negatively impacts the year over year net sales comparison by $41.8 million and negatively impacts the gross profit and non-GAAP adjusted EBITDA comparisons by approximately.
Okay.
$12 million and $3 million, respectively inclusive of next stranded costs.
These impacts are all reflected in our full year guidance.
I should also note that all of these year over year impacts occurred during the first three quarters of the year. So our fourth quarter comparison is not affected by the sale.
Regarding our outlooks for the balance of the year, we're expecting fourth quarter net sales to be down approximately 3% year over year at the mid mid point of our guidance due largely to anticipated year over year declines in both international transactional and worldwide print related net sales regarding.
Realty, we expect our non-GAAP adjusted EBITDA margin to improve compared to the fourth quarter of 2018 as the impacts of lower transactional sales are expected to be more than offset by the benefits of our continued cost savings efforts.
That I'll turn it back to Dan Thank you Dave.
Third quarter results will impacted by a week transactional market environment included several proof points, indicating that our digital focused strategy is working.
Well also showing that we continued to protect our core markets and at the same time, demonstrating our ability to improve margins. We remain nimble focused on our long term strategy continuing to explore ways to accelerate our ability to more quickly evolve our revenue mix diligently managing costs, while keeping our clients employees and shareholders at the center.
What we do and with that let's open up the line for QNX.
Thank you.
A reminder to ask a question you will need to press star one on your telephone.
To withdraw your question press, the pound or hash key please standby, while we compile the Q and a roster.
Your first question comes from line that Charlie Strauzer from CGS. Your line is open.
Hi, good morning.
Yeah.
Obviously like the guidance a little bit here obviously.
Big surprise that transactional still hasn't recovered yet but.
This level of color on the assumptions, you're baking into the new guidance, especially on the topline if you could.
Yes, sure. So let me I'll start off and then Tom or Dave can weigh in.
So so couple of thoughts on our last two calls we've talked about the healthy deal pipeline and as we've seen with with the tail into Q2 uneven into in certainly in Q3 deals just haven't closed at the pace that we envisioned.
So as we think about Q4 were comfortable with the pipeline we have today.
But with two months left we're thinking that.
Or I should say our guidance incorporates the transactions market looking.
Consistent with what we saw in Q3.
We've talked about this inherent uncertainty given the product mix that we have and so.
As we think about managing costs and how we deploy capital.
Thats what sits at the disciplined approach that we've.
Taken and as I mentioned in my prepared remarks continue to see the mix shift.
That we talked about previously including at our May Investor Day, and so with software now at.
23.5% of excuse me of revenue.
We would expect this transition to to continue to take place.
And if you look at.
Asia had a pretty big drop off in the quarter, two and transactional what is Asia is kind of a percentage of revenue these days.
Yes.
Yes, Charlie let me, let me dig that up.
Come back yet.
Great and then just lastly, maybe talk a little bit more about that the efforts you had mentioned about transitioning more towards digital assets and and growth avenues. What does some of the things that you have a complete that you can share with us.
Sure. So when we think about our our core products of the platform. So active disclosure we've continued to see.
Good progress in terms of just just account wins.
And our service organization does a great job.
Behind the product Weve.
Don't don't see that changing certainly a healthy IPO market.
Would would help that.
Accelerate when we look at venue.
Clearly the biggest driver there and the biggest headwind that weve had thus far.
Has been the.
Soft M&A environment.
We've seen very good uptake of the product given.
The new improvements we've made with the product around the new you API and some of the added features and functionality that we've added to venue. So feel very good about the product, we just need an accommodative market right now.
For funds, we pointed to some of the the wins that we had in our pro which is a module of funds we dark.
Our reporting has also one industry awards and.
Continues to have a pretty nice position in the overall market. So.
We think there's good organic opportunity within all three of those products.
Markets accommodating and then.
Weve continue to look at.
Some added features and some added.
Raise of serving the existing customer base, both within corporations in the finance and.
Legal suite, including E Bravia, which has its own use case on the legal side. We've seen good uptake we mentioned it in our prepared remarks, and then also as a part of venue and through deeper integration with venue, which is now complete and in the market.
Charlie with respect to your question on Asia.
Last year was about 6% of our total revenue and within Asia, roughly 80% of that is transactional.
This year, we saw pretty substantial drop in the transactional revenue in Asia and that was really driving all the decline.
So this year Asia was about is about 4% of our our total revenue in the quarter.
Great. Thanks very much.
Thank you.
Your next question comes from the line of Peter Heckmann from D.A. Davidson and company. Your line is open.
Hey, guys. This is elecsys on for Pete.
Hi, Lexus.
Right. So firstly could you go into a little bit more detail on the revenue decline and investment markets and also venue.
Much of that was the lowest prints and M&A volumes, respectively versus any change in competitive dynamics or market share.
Okay.
Sure, Yes, so I think.
On on investment markets really driven by lower print volumes.
Across the across the board really there there were some timing shifts, but but generally lower volume drove investment markets down and then.
With respect to venue I don't think we're seeing any anything in terms of market share losses. In fact based on some of the data that we can gather it looks like we're doing pretty work pretty well from a share perspective.
But but our data room offering is closely tied to the M&A environment and so.
We think thats whats driving the the softness there yes, we don't have from a market perspective on venue great.
Insights either because the major competitors are private and or parts of large organizations that don't break out.
Their respective product separately.
But we've certainly seen.
Some upheaval in some of those organizations and so we.
As we get market information, we feel like we are.
Likely gaining share even in a relatively flat to slightly declining.
Performance and or.
Certainly holding share.
The only thing I'd add on.
Plexus, it's Tom Dooley I'd add on the venue because of what you're seeing with the transactional.
Business affecting.
Venue revenue as well as the capital markets transactions, we're pivoting the venue product with the help of be bravia to more of a corporate repository. So as we said we have the access to the corporations and as they are using venue, where the bravia, they're using it on a more recurring revenue basis throughout the year.
The documents are in the in the data room and then when transactional work comes up for compliance work comes up they can pull the documents were easily so it keeps us stickier and more embedded with declines.
Okay. Thanks, and then on the cost control initiatives that have been driving the EBITDA margin improvement I know that's baked into 2019 guidance, but what are your expectations for those who continue beyond 2019.
Yes, so there's a couple pieces of it I think.
Certainly we've done some headcount reductions in exited.
Certain leases things like that.
Thank you when you look at specifically in the third quarter. We also mentioned sorry, so if I if I stick with those we would view those as permanent reductions I think we in the third quarter. We also mentioned the lower variable comp expense, so bonus tied to financial performance targets.
Yeah.
In things like that we would expect that those get reset going into 2020.
Back to back to normalized levels, obviously subject to internal targets that we set here, yes, and the only I'd add to that is.
Some of this is a business mix shift and so supporting our clients in the way they want to work right drives a different mix of our revenue.
And then we're being very deliberate in terms of how we build our platform and digitize the operations within our business.
And that also results in additional efficiency so we.
Well, we will talk about cost saves in a given period.
They've we've we've been squeezing out cost digitizing the business, becoming more efficient.
Certainly since since we've been out on our own as a public company and we would expect those to continue for sure.
Okay got it and then just one last one I was there any pending regulatory changes that you're paying attention to that we should be monitoring.
Yes, let's it's Tom it's the big one for US is 33.
Comes into effect in 2021, and sort of the answers to the less questions is the same as we've been.
Marching our variable and fixed cost in terms of composition print and buying and distribution.
So when that 33 comes into effect we have to.
If you will right size of reset the the platform of fixed to variable to address that and it's mainly it's just to be clear. It's in the g. I am business. So that regular regulation will affect that that side of the house.
Okay. Thanks, Chris.
Thank you.
Your next question comes from Atlanta, Bill Warmington from Wells Fargo. Your line is open.
Good morning, everyone is check on for Bill.
Morning.
Given that you are on track to hit the low end view, our leverage range by the end of the year can we expect in updated capital allocation or should we should you expect it to be balanced moving forward.
Yes, I think we haven't changed our perspective I think when you look back Jake over the last.
Well three three years now since the spin and the priorities that we laid out at Investor day, it's been around managing leverage.
Obviously through debt repayment, we monetize the language solutions business.
I think when you look at the the leverage in our seasonality of cash flows and the unpredictability.
This year being a great example of the transactional market.
Not not planning on updating anything from a capital deployment perspective, I think that range is still appropriate.
Through the cycle and through through the seasonality of our cash flows puts us at different places during the year and so we will continue to be disciplined about all capital deployment, whether it be.
The internal organic growth around Capex, M&A et cetera.
Got it very helpful.
And.
The ongoing decline in print revenue is that benefiting working capital by freeing up any print inventory or is that not particularly large.
Yes, so we don't carry a whole lot of inventory.
Certainly from from an A. our perspective.
Theres Theres, a little bit of help there at that you get the natural help as revenue comes down but not significantly.
On the inventory line.
Got it. Thank you very much thank you.
As a reminder, that star one if you would like to ask a question. Your next question comes from the line of Michael Chill from JP Morgan Your line is open.
Hi, Good morning, Thanks for joining think my question.
Just one follow up on the mid cap allocation.
Yes, you provided just more specifically on on Capex I guess.
You talked about 20 point Capex coming down from 29 in levels I guess, one is that still the case.
And to maybe you can you give some color on the on the current priorities of reinvestment looking ahead.
Yes, sure. So yes that that is the cases, we mentioned.
On the prior call we have about $7 million that we spent in capital this year, which was.
Onetime digitization of our print assets. So we would take that off the top in terms of the balance of Capex.
A lot of it is capitalized technology development.
And.
We expect obviously, that's a priority for the company as we shift and evolve.
And but we are looking at efficiency options.
Relative to the overall capex that we spent in the business clearly we've been very disciplined around capital allocation, both as we've looked at M&A in the market.
Given given assets being an inflated prices.
And we have grown via in the technology area by spending more on technology development.
But as we're in the middle of our budget cycle right now.
Our intent would be to give you an update when we're back on the phone in February .
Okay, Great maybe I could just ask one on the software the fence revenues.
Certainly appreciate.
Volatility and not in the venue transactional piece.
So you can you give a sense of how much of this that's right. These are transactional versus versus more recurring.
I guess it forward to think about a more normalized mix.
As as kind of.
Which is a bigger piece of SaaS revenues.
Yes, yes, Mike Great question, So I think when we look at.
Venue to your point, obviously tied to the transactional.
Activity and then the two other.
Major SAS offerings active disclosure.
Which is recurring.
And fund suite arc on the investment market side is recurring.
And so from time to time will add some implementation another service revenue in there. So it won't be kind of a linear growth, there's some lumpiness there but broadly.
You know if you look at those two offerings. We would we would generally say those are recurring now venues the biggest piece.
Roughly.
Just under half of our total SaaS revenue and then the other two makeup make up the difference.
Okay. Thanks.
Thank you.
Your next question comes from line of rise Sharma from B. Riley FBR. Your line is open.
Hi, good morning, guys.
I wanted to follow I wanted to follow up on the SASSA revenue the SaaS revenue growth was up 12.8%.
Is that so while the the venue.
I understand this correctly, while the venue sales were were behind.
So is that.
Because active disclosure was higher than suite arc was highest seems like the growth rate.
He is higher than the first half growth rate in fast.
Yes, so the growth rate in.
I think the 12.8% that you referenced was specifically for active disclosure.
Venue venue was down slightly.
And.
The fund suite arc it was.
In the 11% ranch.
Worldwide basis.
Could you comment on the overall SaaS growth rate, then and also the non softer non software slash print.
Growth rate do you break it down.
So I'd say that again right.
Could you comment on the year to date sort of what growth rates SaaS is showing.
And also relative to the transactional piece of the business.
Yes, So I think it's I think it's in the and I don't have it broken out component by component, but roughly 6% or so on a on a year to date basis.
And then.
Transactional transactional revenue.
In total.
On a lack trailing 12 month basis is about $250 million and that's that's worldwide.
And Thats down about 44 million from.
A year ago on a trailing 12 month.
Got it Thats really helpful. And then any comment on the mix the services in the product mix is that is print declining at a faster pace in the second half than you did you expected, yes sure absolutely so.
Yes print in the third quarter was down 16.5% print distribution.
That is a faster pace than would be envision some of that's driven out of transactional decreases in a big piece of that as Dave mentioned in his comments driven out of the mutual fund side and health care side.
So you don't necessarily expect them to change if transactional activity was what was supposed to pick up.
Piece would pick up as well, yes. So just if we take a step back print print. This historically been down in the 6% range or so relatively consistent there theres obviously some.
Anomalies to that.
This quarter being one of them. So in a more normalized environment, we would expect print to be down in that 6% range or so and then as we've talked in the past.
The 30 East three regulation that Tom you Haas referenced comes into effect in 2021, so that will be more of an event that will take a chunk of print out at that time and will provide some additional details on that when we all connect.
In February .
Great. Thank you and Ed Roger.
I think I gave you a bad number on the funds. We'd argue was it was flat in the quarter.
Okay got it.
Got it thank you.
And we have no further questions at this time ill now turn the call back to Dan lead for closing remarks.
Great. Thank you and thank you everyone for joining him and we look forward to speaking with you soon.
Ladies and gentlemen.
This concludes today's conference call you may now disconnect.
Oh.