Jonathan H. Wolk, EVP, CFO, and Treasurer, MISTRAS Group, Inc.
Yes, in general, Andy, what we are trying to do is just make sure that we improve our alignment with our customers’ objective.
Sotirios J. Vahaviolos, Chairman, President, and CEO, MISTRAS Group, Inc.
Exactly.
Jonathan H. Wolk, EVP, CFO, and Treasurer, MISTRAS Group, Inc.
As they succeed, then we succeed. It is a virtuous relationship and it just strengthens the relationship between us and creates more value for both.
Andrew Wittmann, Robert W. Baird & Co.
Are you open to looking at potentially doing more fixed price contracting work in circumstances where you feel like you are better positioned or can manage that risk?
Sotirios J. Vahaviolos, Chairman, President, and CEO, MISTRAS Group, Inc.
In areas where we have years of experience and in specific examples, we will do that.
Andrew Wittmann, Robert W. Baird & Co.
Got you. Then just as we move into the oil sands. I know that has been an area of focus. I believe you started actually getting to work on some of those contracts now. Can you just talk about the ramp that you have seen so far and that you expect in the year ahead? Is this expected to be a substantial growth driver as you finish off the year, or a modest growth driver recognizing that in the last year you have won the Alaska contract, which now is anniversaried and this was kind of seen as the other big one. I guess just as you look at the topline, how much of a factor is the oil sands contract that you signed?
Sotirios J. Vahaviolos, Chairman, President, and CEO, MISTRAS Group, Inc.
Okay. First of all, we see modest increase, okay? That is as we said, we see modest increase, but what is important also, Andy, to mention because this question was before, is that the past two or three years we have really mentioned that we try to diversify. Our oil and gas business now is below 60%. If we take the oil and the chemical industry, we are below 6% where we used to be above 70% before. We are really doing all the things. The oil continues to grow for us, bringing us growth, but other areas grow faster than the oil and gas. Power generation, for instance, is a key area for us, that we really like to spend more and more time. We have already received contracts for that as I mentioned in the earnings call. That is really how we are trying to really predict the future.
Andrew Wittmann– Robert W. Baird & Co.
Got you. Maybe just one last one for me, I guess, for Jon. Jon, just on the cash flow, it sounds like you got the $20 million receivable in December, so that kind of makes sense and gets you back to probably closer to where you want to be or maybe above. As you look over the next year or two, balance sheet leverage on a debt to EBITDA basis on a trailing basis is over two times. I think you guys had said that you are a little bit closer to one time. Can you talk maybe, two angles to this question, about what kind of cash flows that you expect over the next year, two years and what does it mean for your ability and your desire to go after M&A targets recognizing that you do want to deleverage?
