David Wilson: Sure, yeah. So we’re working with a number of participants in that space. And as we build capacity for our customers, they’re focusing on both long-game benefits as they position themselves for this as a long-term trend, but also they’re focusing on productivity improvements in their own factories and the advantages we can provide them with, whether that be for immediately growing demand or current demand. And there’s opportunities for us through the work we do with Intelligent Motion Solutions that help them with their productivity and cost savings to sell more. And so we’re seeing traction with the work we’re doing there.
Jonathan Tanwanteng: Great. Greg, if I could sneak one in there, what would you expect on a gross margin basis as we head into the fourth quarter, both what would normally be a seasonal thing and kind of the one-offs that you expect this quarter?
Gregory Rustowicz: Yeah, so we think we’re going to be in the 200 basis point plus from where we sit today sequentially, or from last year, sorry. So that puts it approximately at the 38% gross margin, but just the gross margin area.
David Wilson: And I think we noted in our prepared come up commentary, John, that we see upside potential and we’re working on that.
Operator: Our next question is from Walter Liptak with Seaport Research. Please proceed with your question.
Walter Liptak: Hi, thanks. Good morning, guys. I’m good quarter. Thanks. One to ask about Montratec and the sales came in a little bit stronger than I was expecting. And so I guess the question is, was there something that was pulled forward? What are we thinking now for sort of the 12-month revenue run rate for Montratec?
David Wilson: Sure, sure. So as Greg indicated in his prepared commentary, we shipped two large projects to Airbus and then to a large German EV manufacturer. And those were planned. We had visibility to that demand and to those shipments in the quarter. So they were elevated. And that’s not a quarterly run rate, if you will, right now for the business. But as we purchased the business, it was a $30 million business. And we had communicated that we anticipated we’d grow the business at roughly a 30% rate. And so I think that still remains intact and would anticipate that we’re a year later running at more of a $40 million rate. And as a project-focused business, it’s natural that that business will have a level of variability quarter-to-quarter.
And so that $15 million does not repeat itself in this coming quarter. But we continue to see really robust demand for that business. And we’re encouraged by the progress we’re making with our integration work, the opportunities for that business, not only through their historical channel of delivery or sales to customers, but also through what we’ve been able to enhance that with, with the combination of our businesses. So we really feel good about the early innings for that business and the growth trajectory that we think we can achieve over time.
Walter Liptak: Okay. That sounds great. And maybe a last one. The fourth quarter, I kind of look back at the data, tends to be a fairly big quarter. And I wonder, is there something seasonal about the order patterns where you get large project orders in your March quarter that shift during the year? And what’s the funnel looking like?
Gregory Rustowicz: Yeah, so I’ll take the first part of that, Walt. And so typically, from a seasonal perspective, you’re absolutely right. Q4 is our strongest quarter. And to put it into perspective, Q3 is our seasonally weakest quarter with the holiday season. So typically, there’s, optimism about the New Year. Our channel, in a lot of cases, has reduced their inventory levels as of the end of the calendar year. They might be year-end reporting companies. And so it’s important that they have their balance sheets where they want them. But now they’ve got to look to the future and look at what is their expected demand and so what inventory do they need. You’ve got new CapEx budgets that have been approved. And so from a project perspective, we’re starting to see activity where orders are going to be coming in related to those projects that we’ve been working on for quite a while.
And so we would expect those same trends to continue in our fiscal fourth quarter this year.
David Wilson: And I’d just add on relative to the funnel. We’re encouraged by the funnel at this point. While we saw orders increase in Europe, as I communicated earlier, we’re believing that the business resiliency is going to continue there as we’ve come off a low in our second quarter and have seen orders creep up in Q3. And we expect them to continue to move in the upward direction this quarter. And as I mentioned earlier, we see opportunities for our precision conveyance and lifting businesses that have sustainable trends. And we’re supported by a lot of macroeconomic trends. So we feel good about the position that we’re in. We, of course, remain cautiously optimistic and we’re paying attention to how things are developing. But at this point, we see the trends of positive order development continuing.
Operator: Our last question will be from Steve Ferazani with Sidoti and Company. Please proceed with your question.
Stephen Ferazani: Good morning, David. Greg, appreciate all the color on the call. I just did want to get back into the sales guidance for Q4. When we think about the growth, and I think you indicated maybe not as strong for Montratec in Q4, but if I back out Montratec, it would seem at minimum at the low end of guidance, you’re looking at an organic sales decline. Is that accurate year-over-year?
