Ladies and gentlemen, thank you for standing by, and welcome to the Donnelley Financial Solutions third quarter earnings conference call. At this time, all participants are in a listen-only mode. Please note that in order to ask a question during our Q&A session, press the star then one key on your telephone keypad. Please be advised that today's program is being recorded. I would now like to hand your conference over to your host 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 we released our earnings report, a copy of which can be found in the Investors section of our website at dfinsolutions.com. During this call, we refer to forward-looking statements that are subject to uncertainty. 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 SEC. Further, we will discuss non-GAAP financial information. We believe the presentation of non-GAAP financial information provides you with useful supplementary information concerning the company's ongoing operations and is an appropriate way for you to evaluate the company's performance. They are, however, provided for informational purposes only.
Please refer to the press release and related footnotes for GAAP financial information and a reconciliation of GAAP to non-GAAP financial information. I'm joined this morning by Daniel Leib, David Gardella, Kami Turner, and Tom Yuhas. I will 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 detail various operating highlights from across the business. Following my comments, Dave will provide additional detail on our third quarter financial results, an update on guidance, and some additional color on the fourth quarter. We will open it up for Q&A. 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 weak 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 print and distribution revenue was down 16.5% in the quarter, while we saw a 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 withdrawing their transactions, 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, a segment where DFIN 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 activity 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 ActiveDisclosure at 12.8%, driven by continued strong customer adoption.
During the quarter, we increased the number of third quarter ActiveDisclosure 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 ActiveDisclosure, Fund Suite Arc, and eBrevia, 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 ActiveDisclosure, the quarter was also highlighted by strong domestic IPO net sales, with DFIN again maintaining its market share while supporting many of the higher-profile transactions that came to market.
Our clients recognize DFIN's leadership in transactional filings, proven out by the thousands of IPOs and other registration statements that we have handled over the last several years. DFIN platforms, including Venue, eBrevia, and ActiveDisclosure, 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 eBrevia, one of our audit and consulting clients is now delivering $800,000 in annual recurring revenue to DFIN after starting with a $5,000 initial pilot with eBrevia back in 2016.
The adoption of eBrevia within this client is broad, spanning several divisions, including advisory, audit, and tax, and is yet another proof point of how DFIN solutions are helping to add value by eliminating time-consuming and error-prone tasks. In late October, Venue was awarded with its second consecutive 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 ArcPro solution, signing up nine marquee clients in the quarter. Firms choose ArcPro as it allows their teams to automate the creation of regulatory and compliance-driven documents and forms, incorporating workflow efficiencies with an easy-to-use interface relying on familiar editing applications, Microsoft Word and Excel.
We are also proud to announce that in addition to DFIN winning the 2019 Finovate Award for innovation in product and marketing, our ArcReporting software was recently awarded the Fund Intelligence Operations and Services 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 SEC shutdown at the beginning of the year. Over that time frame, 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 and been prudent with capital allocation as we 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. 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 have 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 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 $0.5 million respectively, inclusive of net stranded costs.
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. I'll revisit this again later when I discuss our 2019 guidance. The effective income tax rate in the quarter was 38.8% compared to 29.1% for the three months ended September 30, 2018. The effective income tax rate for the three months ended September 30th, 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 $0.06 per share. This non-cash charge is related to certain legal entities within our international segment that have historical losses, and for which we were historically recording a 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 eBrevia, 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. The third quarter declines in our traditional capital markets and investment markets net sales that I just detailed, were partially offset by continued growth in our SaaS offerings, led by ActiveDisclosure along with strong demand for Arc Suite 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 SG&A 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 SG&A 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 $0.2 million from the third quarter of 2018, as decreased capital markets transactional activity and lower mutual fund print and print-related services and investment markets were largely offset by 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 $0.5 million. Turning now to our segment results. Net sales in our U.S. segment were $173.7 million in the third quarter of 2019, a 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 eBrevia, net sales declined 6%. Net sales in U.S. capital markets decreased 5.9% on an organic basis, due primarily to lower transactional activity, offset by continued growth in our SaaS offerings, primarily in ActiveDisclosure. Net sales in U.S. 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% 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, a 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 and print-related services. These declines were partially offset by growth in our SaaS offerings, which continues to be driven by demand for Arc Suite in Europe.
Non-GAAP adjusted EBITDA margin for the segment was 5%, down 330 basis points due to the decreased 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 of 2018, as decreased interest payments and improved 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 percent of our trailing three-month annualized net sales, was 21%, up 160 basis points from the third quarter of 2018, due primarily to increased 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 30th, 2019, our non-GAAP net leverage ratio was 2.5 times, up 0.5 times from September 30th, 2018.
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 of that range by the end of this year. With that covered, let me provide some color on our guidance. As highlighted in this morning's 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-$890 million, representing organic growth of approximately -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 project a full-year, fully diluted weighted average share count to be approximately 35 million shares. Lastly, we expect capital expenditures to be approximately $45 million, with free cash flow in the range of $20 million-$25 million, down from our previous guidance due to the impacts of decreased 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 Solutions 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 $12 million and $3 million respectively, inclusive of net 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 are expecting fourth quarter net sales to be down approximately 3% year-over-year at the midpoint of our guidance, due largely to anticipated year-over-year declines in both international, transactional, and worldwide print-related net sales.
Regarding profitability, 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. With that, I'll turn it back to Dan.
Thank you, Dave. Our third quarter results, while impacted by a weak transactional market environment, included several proof points indicating that our digital-focused strategy is working, while also showing that we continue 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 of what we do. With that, let's open up the line for Q&A.
Thank you. As 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 stand by while we compile the Q&A roster. Your first question comes from the line of Charlie Strauzer from CJS. Your line is open.
Hi, good morning.
Morning, Charlie.
I was going to look at the guidance a little bit here. Obviously, not a big surprise that transactional still hasn't recovered yet, but give us a little bit more color on the assumptions you're baking into the new guidance, especially on the top line, if you could.
Yeah, sure. Let me start off, and then Tom or Dave can weigh in. A couple of thoughts. In our last two calls, we've talked about the healthy deal pipeline, and as we've seen with the tail end of Q2 and even certainly in Q3, the deals just haven't closed at the pace that we envisioned. As we think about Q4, we're 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, that's what sits at the disciplined approach that we've taken.
As I mentioned in my prepared remarks, continue to see the mix shift that we talked about previously, including at our May investor day. With software now at 23.5% of revenue, we would expect this transition to continue to take place.
If you look at I know Asia had a pretty big drop-off in the quarter too in transactional. What is Asia as kind of a percentage of revenue these days?
Yeah, Charlie, let me dig that up. I'll come back to you on it.
Great. Just lastly, Dan, maybe talk a little bit more about the efforts you had mentioned about transitioning more towards digital assets and growth avenues. What are some of the things that you have on the plate that you can share with us?
Yeah, sure. When we think about our core products and the platform, ActiveDisclosure, we've continued to see good progress in terms of just account wins, and our service organization does a great job behind the product. We don't see that changing. Certainly, a healthy IPO market would help that accelerate. When we look at Venue, clearly the biggest driver there and the biggest headwind that we've 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 UI and some of the added features and functionality that we've added to Venue. Feel very good about the product. We just need an accommodative market right now.
For Arc Suite, we pointed to some of the wins that we had in ArcPro, which is a module of Arc Suite. ArcReporting has also won industry awards and continues to have a pretty nice position in the overall market. We think there's good organic opportunity within all three of those products, markets accommodating. We've continued to look at some added features and some added ways of serving the existing customer base, both within corporations and the finance and legal suite, including eBrevia, which has its own use case on the legal side. We've seen good uptake. We mentioned it in our prepared remarks, 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 a pretty substantial drop in the transactional revenue in Asia, and that was really driving all the decline. This year, Asia is about 4% of 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 & Co. Your line is open.
Hey, guys, this is Alexis on for Pete.
Hi, Alexis.
Hi. Firstly, could you go into a little bit more detail on the revenue decline in Global Investment Markets and also Venue? How much of that was the lower print and M&A volumes respectively versus any change in competitive dynamics or market share?
Sure. Yeah. I think on Investment Markets really driven by lower print volumes across the board, really. There were some timing shifts, but generally lower volume drove Investment Markets down. Then, with respect to Venue, I don't think we're seeing anything in terms of market share losses. In fact, based on some of the data that we can gather, looks like we're doing pretty well from a share perspective. Our data room offering is closely tied to the M&A environment, and so we think that's what's driving the softness there.
We don't have, from a market perspective on Venue, great insights either because the major competitors are private and/or parts of larger organizations that don't break out their respective products separately. We've certainly seen some upheaval in some of those organizations. 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, Alexis, it's Tom. The only thing 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 eBrevia, to more of a corporate repository. As we have the access to the corporations and as they're using Venue with eBrevia, they're using it on a more recurring revenue basis throughout the year. The documents are in the data room, and then when transactional work comes up or compliance work comes up, they can pull the documents more easily. It keeps us stickier and more embedded with the clients.
Okay, thanks. 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 to continue beyond 2019?
Yeah. There's a couple pieces of it. I think, certainly, we've done some headcount reductions and exited certain leases, things like that. I think when you look at specifically in the third quarter, we also mentioned. If I stick with those, we would view those as permanent reductions. I think in the third quarter, we also mentioned the lower variable comp expense. Bonus tied to financial performance targets, and things like that. We would expect that those get reset going into 2020, back to normalized levels, obviously subject to internal targets that we set here.
The only thing 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, drives a different mix of our revenue. Then we're being very deliberate in terms of how we build our platform and digitize the operations within our business. That also results in additional efficiencies. While we'll talk about cost saves in a given period, we've been squeezing out costs, digitizing the business, becoming more efficient, certainly since we've been out on our own as a public company, and we would expect those to continue for sure.
Okay, got it. Just one last one. Are there any pending regulatory changes that you're paying attention to that we should be monitoring?
Yeah, Alexia, it's Tom. The big one for us is 33. It comes into effect in 2021. Sort of the answers to the last questions is the same as we've been watching our variable and fixed costs in terms of composition and print and bind and distribution. When that 33 comes into effect, we have to, if you will, rightsize or reset the platform of fixed and variable to address that. It's mainly, just to be clear, it's in the Global Investment Markets business, so that regulation will affect that side of the house.
Okay. Thanks, guys.
Thank you.
Your next question comes from the line of Bill Warmington from Wells Fargo. Your line is open.
Good morning, everyone. This is Jake on for Bill.
Morning.
Given that you are on track to hit the low end of your leverage range by the end of the year, can we expect an updated capital allocation, or should we continue to expect it to be balanced moving forward?
Yeah, I think we haven't changed our perspective. I think when you look back, Jake, over the last three years now since the spin and the priorities that we laid out at Investor Day, it's been around managing the leverage. Obviously, through debt repayment, we monetized the Language Solutions business. I think when you look at the leverage and our seasonality of cash flows and the unpredictability, this year being a great example of the transactional market, not planning on updating anything from a capital deployment perspective. I think that range is still appropriate. Through the cycle and through the seasonality of our cash flows, puts us at different places during the year. We'll 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. Is the ongoing decline in print revenue, is that benefiting working capital by freeing up any print inventory, or is that not particularly large?
Yeah. We don't carry a whole lot of inventory. Certainly from an AR perspective, there's a little bit of help there 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's star one if you would like to ask a question. Your next question comes from the line of Michael Cho from JP Morgan. Your line is open.
Hi. Good morning. Thanks for-
Morning
taking my question. Just wanted to follow up on the capital allocation thought you provided, just more specifically on CapEx. I guess, in the past, you talked about 2020 CapEx coming down from 2019 levels. I guess, one, is that still the case? Two, maybe you can give some color on the current priorities of reinvestments kind of looking ahead.
Yeah, sure. Yes, that is the case. As we mentioned on the prior call, we have about $7 million that we spent in capital this year, which was a one-time digitization of our print assets. We would take that off the top. In terms of the balance of CapEx, a lot of it is capitalized technology development. We expect, obviously, that's a priority for the company as we shift and evolve. We are looking at efficiency options relative to the overall CapEx that we spend in the business. Clearly, we've been very disciplined around capital allocation, both as we've looked at M&A in the market and given assets being at inflated prices, and we have grown in the technology area by spending more on technology development.
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 SaaS revenues. I certainly appreciate the volatility in the Venue transactional piece. Do you have a sense of how much of the SaaS revenues are transactional versus more recurring? And I guess, is there a way to think about a more normalized mix as kind of Venue approaches a bigger piece of SaaS revenues ahead?
Yeah, Mike, great question. I think, when we look at Venue, to your point, obviously tied to the transactional activity, and then the two other major SaaS offerings, ActiveDisclosure, which is recurring, and Arc Suite on the Global Investment Markets side is recurring. From time to time, we'll have some implementation and other service revenue in there. It won't be kind of a linear growth. There's some lumpiness there. Broadly, if you look at those two offerings, we would generally say those are recurring. Now, Venue is the biggest piece. Roughly just under half of our total SaaS revenue, the other two make up the difference.
Okay. Thank you.
Thank you.
Your next question comes from the line of Raj Sharma from B. Riley FBR. Your line is open.
Hi. Good morning, guys.
Morning.
I wanted to follow up on the SaaS revenue. The SaaS revenue growth was up 12.8%. While the Venue, if I understand this correctly, while the Venue sales were behind, is that because ActiveDisclosure was higher, Arc Suite was higher? It seems like the growth rate is higher than the first half growth rate in SaaS.
Yeah. The growth rate in, I think the 12.8% that you referenced, was specifically for ActiveDisclosure.
Venue was down slightly, and the Fund Suite Arc, it was in the 11% range on a worldwide basis.
Could you comment on the overall SaaS growth rate then, and also the non-software/print growth rate? Do you break it down?
Sorry, say that again, Raj.
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?
Yeah. I think it's in the. I don't have it broken out component by component, but roughly 6% or so on a year-to-date basis.
Got it.
Transactional revenue in total on a trailing 12-month basis is about $250 million, that's worldwide. That's down about $44 million from a year ago on a trailing 12-month.
Got it. That's really helpful. Then any comment on the mix, the services and the product mix? Is print declining at a faster pace in the second half than you expected?
Yeah, sure. Absolutely. Yeah, print in the third quarter was down 16.5%, print and distribution. That is a faster pace than would be envisioned. Some of that's driven out of transactional decreases, and a big piece of that, as Dave mentioned in his comments, driven out of the mutual fund side and healthcare side.
You don't necessarily expect that to change if transactional activity was to pick up, the print piece would pick up as well?
Just if we take a step back, print has historically been down in the 6% range or so, relatively consistent. There's obviously some anomalies to that, this quarter being one of them. In a more normalized environment, we would expect print to be down in that 6% range or so. As we've talked in the past, the 30e-3 regulation that Tom Yuhas referenced comes into effect in 2021. That will be more of an event that will take a chunk of print out at that time, and we'll provide some additional details on that when we all connect in February.
Great. Thank you.
Raj, I think I gave you a bad number on the Fund Suite Arc. It was flat in the quarter.
Okay. Got it. Thank you.
We have no further questions at this time. I'll now turn the call back to Dan Leib for closing remarks.
Great. Thank you, and thank you everyone for joining, and we look forward to speaking with you soon.