The common ancestor is your parents. Your children and your sister's children are first cousins. Your grandchildren and your sister's grandchildren are second cousins. Your great-grandchildren and your sister's great-grandchildren are third cousins.
Informing you that they have three grandchildren would be easier if there were names, dates, and ages, of the grandparents and grandchildren. This does not have enough information to state whether or not they do have three grandchildren.
Eugene Krabs. From spongebob Eugene Skinner, founder of Eugene, Oregon Eugene Glukh (TehRockLord), a minor YouTube star from NC Eugene Levy, Jewish-Canadian Actor Eugene Debs Eugene Simon, English actor