Recently, the overall M&A market activity has been muted. Yet, with JBT’s always-on posture, we have maintained an active pipeline including proprietary opportunities. Moreover, we believe our strong balance sheet and ability to create value through globalization of regional technology, supply chain synergies, leveraging our digital infrastructure and keen aftermarket focus are distinct advantages. As always, we will maintain a thoughtful and disciplined approach, assuring that all transactions meet our strategic and financial objectives, while preserving an appropriate debt leverage ratio. During the third quarter, we made an investment in the Denmark-based company, Innospexion, to advance JBT’s value proposition in the poultry, meat and seafood markets.
Innospexion is an innovative bone detection system that has raised the standard for accurate identification of even the smallest bones. The system reduces false detection rates, lowers rework labor and cuts product yield loss, all while enhancing food safety and quality. Through our new partnership with Innospexion, this cutting-edge bone technology solution is now available to JBT customers worldwide. Of course, none of JBT’s progress would be possible without the commitment of our employees around the globe. Thank you for your dedication and service to our customers. With that, let’s take your questions. Operator?
Operator: Thank you. [Operator Instructions] And we’ll go first this morning to Mig Dobre at RW Baird.
Mig Dobre: Great. Thank you. Good morning, everyone.
Brian Deck: Good morning.
Mig Dobre: I guess, where I’m looking to start is getting a little more context around what you’re seeing from a demand standpoint. Europe and Asia, you talked about being a little bit better. So, I don’t know if there’s sort of something specific that’s driving things over there. Because obviously, from a macro standpoint, neither region seems to be doing, frankly, all that great. So, I’m kind of curious what’s changing over there for your business?
Brian Deck: Yeah, it’s interesting. I would say, generally speaking, when you think about geographies and end markets in general, it’s kind of all over the board and mixed. That said, what we have seen in Europe over the last 30 days and at the end of the quarter and as we enter the fourth quarter here, some strengthening in Northern Europe, which has been the weakest area for the last several quarters in Europe in general, while Southern Europe has been a little bit stronger, and Middle East has been a little bit stronger. So, we are starting to see some benefits there. Germany still remains pretty tepid. But as a whole, just in terms of where penetrated in our product lines, we are seeing some pickup in activity. North America, as we mentioned, is actually — if you exclude poultry, which is hard to do because it’s such a big market for us, otherwise, it’s kind of been okay, right, not awful.
But obviously, poultry kind of leads the way there in terms of its impact on JBT.
Mig Dobre: In the poultry market, is that comment just relevant for the OE component of the business, or has there been an impact on aftermarket parts, that sort of thing as well?
Brian Deck: It’s mostly related to the equipment side of the business. And as I mentioned, we are seeing some improvement in the fundamentals in terms of input costs as well as wholesale prices. So that’s the good news. It has impacted some of the aftermarket, but the more meaningful, obviously, is on the equipment side.
Mig Dobre: Okay. Then I guess my — the final question on demand, just to sort of level set expectations here. Your fourth quarter guidance implies that normal sort of seasonal uptick in revenue in Q4 relative to Q3. I’m sort of curious if you expect that to be reflected in incoming orders as well. So, I recognize that you probably can’t guide to book-to-bill for the fourth quarter. But as it stands right now, do you expect a significant backlog burn in the fourth quarter? Or is demand in terms of incoming orders sort of consistent with this seasonal uptick that you normally get in the fourth quarter?
