Ladies and gentlemen, thank you for standing by. And welcome to the AMETEK’s First Quarter 2021 Earnings Call. Please note that today’s call is being recorded. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. I would now like to hand the conference over to your speaker for today, Kevin Coleman, Vice President, Investor Relations. Kevin, the floor is yours.

Thank you, Jake. Good morning and thank you for joining us for AMETEK’s first quarter 2021 earnings conference call. With me today are Dave Zapico, Chairman and Chief Executive Officer; and Bill Burke, Executive Vice President and Chief Financial Officer. During the course of today’s call, we will be making forward-looking statements which are subject to change based on various risk factors and uncertainties that may cause actual results to differ significantly from expectations. A detailed discussion of the risks and uncertainties that may affect our future results is contained in AMETEK’s filings with the SEC. AMETEK disclaims any intention or obligation to update or revise any forward-looking statements. Any references made on this call to 2020 or 2021 results will be on an adjusted basis, excluding after-tax, acquisition-related intangible amortization, and also excluding the gain from the sale of Reading Alloys in the first quarter of 2020, and the realignment charge taken in the first quarter of 2020. Reconciliations between GAAP and adjusted measures can be found in our press release and on the Investors section of our Web site. We’ll begin today’s call with prepared remarks by Dave and Bill, and then we’ll open it up for your questions. I’ll now turn the meeting over to Dave.

Thank you, Kevin, and good morning, everyone. AMETEK delivered excellent results in the first quarter with stronger than expected sales growth and outstanding operational execution leading to earnings above our expectations. We returned to organic sales growth earlier than expected and as the economy continues its recovery, we're experiencing strong orders growth resulting in a record backlog. Operationally, our businesses are performing at a high level, delivering impressive margin expansion and strong cash flows. Additionally, we started the year with a notable level of acquisition activity, deploying a record $1.85 billion on five acquisitions thus far in 2021. These acquisitions, combined with our strong first quarter results and solid orders momentum, led us to substantially increase our full year sales and earnings guidance. Before I get into the results for the quarter, I wanted to again thank all AMETEK colleagues for their continued hard work and efforts over the last year as we manage through the pandemic. AMETEK’s success in navigating this difficult environment is a testament to the dedicated and highly talented employees across the company. While we are encouraged with the acceleration of the vaccine rollout, we remain focused on the health and well being of our employees and we'll remain vigilant in ensuring proper safety protocols are being followed. Now, let me turn to the first quarter results. Overall, sales in the quarter were up 1% versus the prior year to $1.22 billion. Organic sales were up 1% with a divestiture of Reading Alloys being offset by a 2 point foreign currency tailwind. Overall, orders in the quarter were a record $1.4 billion, up 16% compared to the same period last year with organic orders up 9%. This led to a book to bill of 1.15 and a record backlog of $2 billion. We are encouraged by…

Thank you, Dave. As Dave highlighted, AMETEK began the year with outstanding results highlighted by strong sales and orders growth and a high quality of earnings. With that, I'll provide additional financial highlights for the quarter. First quarter general and administrative expenses were $18.6 million, up $3 million from the prior year, largely due to higher compensation expense. As a percentage of total sales, G&A was 1.5% in the quarter. For 2021, general and administrative expenses are now expected to be up approximately $12 million on a return of temporary costs, including compensation. The effective tax rate in the first quarter was 19.5%, which was essentially in line with the adjusted 19.4% reported in the same period last year. For 2021, we continue to expect our effective tax rate to be between 19% and 20%. And as we've stated in the past, actual quarterly tax rates can differ dramatically, either positively or negatively from this full year estimated rate. Our businesses continue to do an outstanding job managing their working capital. For the quarter, operating working capital was 14.2%, down 470 basis points from the 18.9% reported in the first quarter of 2020, just excellent work by our teams on the working capital front. Capital expenditures in the first quarter were $18 million. For the full year, we now expect capital expenditures to be approximately $120 million. Depreciation and amortization expense in the first quarter was $65 million. For all of 2021, we now expect depreciation and amortization to be approximately $300 million, including after tax acquisition-related intangible amortization of approximately $140 million or $0.60 per diluted share. As Dave highlighted, our businesses continue to generate tremendous levels of cash given our asset-light business model and strong working capital management. In the first quarter, both operating cash flow and free…

Thank you, Bill. Jake, can we please open the line for questions?

Thank you. [Operator Instructions]. Our first question comes from the line of Matt Summerville from D.A. Davidson. Your line is open.

Thanks. Good morning. Dave, could you maybe parse out the $0.28 change in guidance for the year? How much of that is being driven by a better than expected performance in the core business versus the M&A-driven accretion and all the deal flow as of late?

Yes, Matt. That's an excellent question. And it's really driven by a mix of different items. So we have the stronger than expected organic growth that drove Q1 of our guide. And then we have an improved guide for Q2. And both of those two together are about $0.10, $0.10 of the $0.28. Really, our second half is unchanged on a core basis. It's too early to change that. And then we have an additional $0.18 from the deal. So the way to think about that is [10%] (ph) from the core business, $0.18 from the deals, $0.28 in total.

Perfect. And then just in terms of price realization, maybe where you're at in Q1, and then where you were at in terms of price cost spread and what you expect for the balance of the year. Thank you.

Thanks, Matt. We're very pleased with our pricing. It continues to offset inflation. We achieved a bit more than 1.5% of price across our entire business. Total inflation was a bit less than 1%. So we're maintaining a positive spread between the two, which is our intention. And when you look out for all of '21, we expect to achieve slightly higher pricing than the 1.5% with slightly higher inflation. So we see both our pricing and inflation building a bit, and we'll strive to maintain a positive spread between price and inflation for the full year. And it's really -- it's driven by the highly differentiated nature of the AMETEK product portfolio. We have leadership positions in these markets around the globe and provide excellent value to our customers. So when we get cost increases, more than likely we can pass them on.

Great. Thank you, Dave.

Thank you, Matt.

Thank you. Next question comes from the line of Deane Dray from RBC Capital Markets. Your line is open.

Thank you. Good morning, everyone.

Good morning, Deane.

Dave, I’d love to get some context of this. And I’m not sure I'm supposed to use the word M&A spree, but it just -- a logjam has been broken here and maybe can you give us some context. Did the pricing get reasonable? You probably had all these assets on your radar screen before we went into COVID. So the lifting of COVID uncertainty certainly was a factor here. But just give us a context, because you don't often see a volume of deals that look to be great fits, but just happening in such a short amount of time.

Right. It's a great question. And I'll try to give you an overlay the way that we think about it. We've managed through many economic cycles and seeing the impact on M&A from the economic cycles. And it was no surprise then this particular downturn that deal activity dramatically slowed in 2020, and pent-up demand would drive a quick recovery. We talked about that last year. So our focus in 2020 was to make sure that we were well positioned for the rebound. And one of the ways we would be well positioned is we strengthen our balance sheet. And we built up our cash balances during the worst of the pandemic, and we exited the year with 1.2 billion in cash and net debt to EBITDA of 0.9. Look, as we talked about last year, we also focused on expanding our pipeline of opportunities. And we told you last year, we were busier than ever with pipeline development. And as you stated we've been working with these companies for over a year on these deals. And just through the first four months, the sellers wanted to sell the businesses like we thought and we have a dedicated team of people that are working for them. So we acquired five companies, deployed 1.85 billion in capital and they're highly strategic. And we're really excited for each of the companies we acquired. They fit perfectly with our acquisition strategy. Each has strong differentiated technology positions. They allow us to expand in attractive growth areas like embedded systems for aerospace and defense, testing for autonomous vehicles, 5G satellite communications, expanding our IoT capability, more capability in automation business, software for embedded systems. So we're really happy with the set of companies that we acquired. And importantly, each of these businesses are going…

That's really helpful. And you answered my question about the additional management capacity, because I can see you've got the capital to do more deals. And you did answer the question about the management capacity, that was really helpful. And I may have missed this, but within the increased guidance, what is the earnings contribution from the deals?

Yes. If you think about the $0.28 midpoint rise on our guidance, $0.18 is from the deals this year and the other $0.10 is from the organic operations of the company.

Got it. I appreciate it. Congrats on all that work.

Thank you, Deane.

Thank you. Next question comes from the line of Josh Pokrzywinski of Morgan Stanley. Your line is open.

Hi. Good morning, guys.

Good morning, Josh.

Dave, just to stick with the deals, I guess your first, Abaco, I guess we're getting to the point now where bolt-ons are starting to look a little bit less bolt-on and pretty large. Can you talk about maybe the complexion of the pipeline or maybe your own appetite to kind of be in that range maybe more consistently going forward? I think you've said it yourself that needle moving deals for AMETEK sort of have to get bigger over time, is that something that as you look out over kind of the range of properties that you think is possible, achievable, kind of consistent with the strategy here?

Yes, good questions. A few years ago, we let our investors know that we were expanding our deal pipeline to include slightly bigger businesses. And we included businesses that will be in the 200 million to 400 million range. And we deploy 1 billion plus capital on them, and Abaco is in that range. And we talked about doing a deal like that every so often. That doesn't necessarily mean that it's going to become our core, but those businesses are still working in our pipeline. But there are still many businesses that are, I’ll call them medium size that are the $100 million deals similar to NSI-MI and Magnetrol. Those are probably the most businesses of that size. And then we also had some smaller deals that they're really important strategically to operate and augment our internal growth. So you're going to see a mix of deals of those sizes. AMETEK is not going to buy a company our size or buy a company half our size. We just don't think that you can create value like that, but the size of the company now I think those companies in the $200 million to $400 million revenue makes sense, and you'll see those from us occasionally.

Got it, that's helpful. And then just moving over to the core business, it seems like order intake picked up pretty nicely here. You talked about record backlog. I guess the perception out there or maybe the history of AMETEK has been slightly longer cycle than maybe some of these book-and-turn only businesses and orders that tend to develop along with a recovery, but not necessarily day one. It seems like you've built up a little bit of momentum here. Can you maybe talk about where is that backlog growth stemming from, or what out there fundamentally in the marketplace has maybe picked up a little quicker than you otherwise would have expected?

Right. When you -- I’ll first unpack the orders a bit. We had a 9% organic order growth and it was broad-based in the company and EIG organic orders was 10%, EMG organic orders was 8%. So it was good to see broad-based orders. When you think about our portfolio, both EIG and EMG, we raised from mid single digits to high single digits. That's another indication of broad-based growth. I think that the overall company will grow sales sequentially each quarter. And as we look at our four market segments, process improved high single digits; power and industrial improved high single digits; automation and engineering improved high single digits; but the aerospace and defense segment, we continue to expect low to mid single digits with defense growing better than commercial. So when you think about the entire business, it really is going well. And I carve out the two long cycle businesses, oil and gas that we think will trend up in the second half of this year and the commercial aerospace business which will not trend up until 2023, maybe 2022, 2023. But the key point is, we have properly sized that business for the current level of activity and any small improvements along the way are going to be very profitable for us. So we look at it as really attractive. We're going to have the long cycle businesses kicking in down the road and we're already seeing the mid cycle pick up. So we're feeling pretty optimistic about the recovery.

Got it, that's helpful. Congrats on the quarter, all the deals and best of luck.

Thank you, Josh.

Thank you. Next question comes from the line of Allison Poliniak of Wells Fargo. Your line is open.

Hi. Good morning, guys.

Good morning, Allison.

And just sort of in line with that, sort of the mid and long cycle businesses, could you maybe talk about the core operating leverage that you expect to see this year based on some of the orders that are coming in for you, any color there?

Yes, that's a good question. We had excellent margin performance in the first quarter, strong margin improvements in both EIG and EMG, a strong execution, solid price inflation, excellent productivity. We're going to see for the year core incrementals of 35%, and that includes bringing all the temporary costs back into the business. And core operating margins will increase about 40 basis points. So we’ll grow margins. A key point though is the acquisitions are margin dilutive. So our reported margins will be down a bit, and that's kind of what we do. We acquire businesses that are lower margin than AMETEK. And over the course of a couple of years, three years, we bring them up to the AMETEK level when it's pretty hard to acquire businesses that are at the profitability level of AMETEK worth 29%, 30% EBITDA, and we have some room with all these businesses to improve profitability. So that's the way I think about the -- the core operating leverage on the business will be positive. And then the reported margins with the acquisitions will be margin dilutive.

Got it, thanks. And then working capital, obviously, an impressive number at 14.2% of sales. Would we expect that to maybe slip a little bit with the increase or is that sort of a sustainable level as you think about it?

Yes. Allison, I would expect that -- we'd expect that to probably come back. It would be adding some cost back to the balance sheet. Particularly as the sales grow, you're going to see some more receivables come on the balance sheet and we're going to be focused on making sure that we've got all the right inventory levels in the business to support the growth and make sure we're good to go and can support our customers as we move forward. So I think we did really well in the first quarter. I think -- while we did put receivables and inventories back up on the balance sheet, our teams did a great job getting advanced payments from customers and the like. So that was a good result, but I'd expect to see that trend up a bit over the course of the balance of the year.

Understood. Thank you.

Thank you, Allison.

Thank you. Next question comes from the line of Nigel Coe from Wolfe Research. Your line is open.

Thanks. Good morning, everyone.

Good morning, Nigel.

Good morning. So I want to go back to deal flow, because it's obviously -- by the way, congratulations on all the deals. You source and buy a lot of private companies, family held companies, and I've got to think there's got to be an increased interest in selling businesses ahead of any cap gains, tax rate changes and [inherent] (ph) tax changes. Are you seeing that yet? Have you seen more interest in maybe pulling the trigger on some disposables with these changes on the horizon?

They're a little bit of that, Nigel. But what I see is a lot of private owners -- and there were some private owners in this suite of businesses that we bought, they got through the pandemic and they're looking at a world that's changed, and they're looking at someone larger to provide some stability and some capital and some access to things that they didn't have access to. So I think it's more the uncertainty in the macro environment, the uncertainty driven by the pandemic, has certainly made private company owners more likely to consider the exit that they were maybe going to do a couple of years from now. That's what I think is happening and we're seeing a little bit of that.

Okay, that makes sense. And then EMG margins moving notably higher, pre-pandemic we’re sort of in the high teens, maybe 20% range, and now we're moving into the mid 20s. Do you think that that level is sustainable? I understand Reading Alloys came out, but do you think mid 20s is sort of the range for EMG from here.

They were a record margin this quarter at 24.7%, up 190 basis points and their margins have been growing nicely for a period of time. And when you look at that part of the business and you dissect what happened, the two very profitable parts of that business, our automation business and our defense businesses, both are firing on all cylinders and that drove the margins up. So it's really a mix among businesses within the EMG group that is driving the margins. And as long as those businesses stay strong, I would expect the margins to be good.

Okay. Thanks, Dave.

Thank you.

Thank you. Next question comes from the line of Scott Graham from Rosenblatt Securities. Your line is open.

Hi. Good morning, Dave and Bill.

Good morning, Scott. How are you doing?

All good. Always nice to wake up to this type of report. So I think we're about $50 million of temporary cost-outs last year. Bill, you touched on this a little bit within SG&A. How do you see those layering in this year?

Yes, I think there was 90 actually that was the temporary cost from last year, and we got the benefit of 50 million into 2021 for the structural restructuring, Scott.

Okay, sorry.

But what I’d say is in the second half of the year, you're going to see those temporary costs come back in. And a little bit came in, in the first quarter, a little more in the second quarter. But in the second half of the year, you're going to have -- they're all back in. So that's how we’ve modeled the year and we look at it.

Thank you for that. And I read your press release, I listened to your prepared remarks and really nary a peep on supply chain. And it's kind of like all the rage this quarter on conference calls and nothing from you guys. So could you maybe give us sort of your view of what you're seeing both internally and externally, things that could maybe not happening in the first quarter but maybe could back up into you -- again, not internally, but something externally that could back up into you? And in fact, does that as a concern plus the add backs of the costs, is that what's keeping the second half guidance in check?

You're right on, Scott. The supply chain -- there are certainly challenges in materials and logistics right now. Specifically, the semiconductor shortages have our attention and our supply chain team are working this issue aggressively. Our guidance reflects all known risks. This is a serious issue, and one that will likely be with us for some period of time. And we're managing this with our dedicated business unit supply chain personnel with an overlay of our company-wide global sourcing, and they're an effective team and we've done an effective job on it so far. But it is a serious issue. Our guidance reflects the known risks and we're confident we can deliver it. But it really -- we just felt it was too early in the year to improve the second half earnings and sales guidance because of that. We think it's a nice balance.

Makes sense. My last question is a question you've heard me ask before. I know you kind of went through the four big segments on their organic. Could you also throw in your outlooks for those segments?

Yes, sure. In process, we talked about it and it was up mid single digits in the quarter and returned to positive organic growth earlier than we expected. A little extra color there. Ultra Precision Technologies and our Materials Analysis divisions really had good quarters and they're seeing improving demand across a broad set of end markets. They’re in the research, semiconductor and industrial markets. We're also seeing very strong growth in orders across our process businesses. Organic quarters were up low double digit, so a little bit higher than AMETEK’s overall. And for the full year, we now expect those organic sales for our process businesses to be up high single digits versus the prior year. It was mid single digits in the original guide for the year and we’ve raised it to high single digits. So process orders look good, process is doing very well in Asia. And certain divisions are starting to fire on all cylinders. In our aerospace and defense business, our overall sales for A&D were down approximately 10% in the first quarter, modestly ahead of our expectation. And really there's a bifurcation going on there. The defense businesses remained robust with sales up low double digits on a percentage basis. Commercial aerospace are still feeling the effects of the pandemics. Year-on-year rates have declined or continuing to improve. But in the first quarter, commercial aerospace sales were down approximately 25%. So for all of '21, like I said before, we continue to expect low to mid single digit organic sales growth from our aerospace and defense business. We did not change the outlook on that segment as we did the other three. Power and industrial overall sales were up slightly from the prior year's first quarter. Very strong orders, up mid teens on orders. We now expect organic sales for our power and industrial businesses to be up high single digits and we changed that from up mid single digits in the first outlook for the year. And finally, our automation and engineered solutions, up modestly versus the prior year, while organic sales were up mid single digits. Overall, sales were impacted by the divestiture of Reading Alloys in the first quarter of last year. Sales across our automation businesses, as we mentioned in the prepared remarks, remained strong and we're seeing solid demand conditions across their international markets, in Asia and China in particular. And for all of 2021, we now expect automation and engineered solution businesses organic sales growth to be up high single digits with stronger growth in our automation businesses than our engineered solutions business. And so you end up with both EIG and EMG being up high single digits raised from mid single digits. Okay, Scott?

Awesome. Thank you for that summary, Dave.

Thank you.

Thank you. Next question comes from the line of Andrew Obin of Bank of America. Your line is open.

Good morning. This is David Ridley-Lane on for Andrew Obin. Qualitatively, do you think there was any pull forward or precautionary orders there in the first quarter? And were those a bit of a tailwind for the 9% organic orders growth you had in the quarter?

Good question. We have highly engineered products. So I don't think people are stocking them. But certainly in the current macro environment, people want to get their orders -- customers want to get their orders placed to make sure that they can get the products that they need. So we're seeing confident customers concerned about the global supply chain, and placing their orders earlier than expected.

And then the other question I have is on the trends by geography. We've heard Europe has been relatively slower. Interested in where you saw the largest inflection in your organic trends?

All of the geographies showed improvements. The U.S. was down mid single digits, improvements in most areas but the decline was driven by commercial aerospace and oil and gas. Really, it was the same picture in Europe where we were down mid single digits with good improvement, but weaknesses in commercial aero and oil and gas. And Asia was the star for us, a broad-based strength up mid 20s led by our automation business and our process business.

Thank you very much.

Thank you.

Thank you. Next question comes from the line of Rob Wertheimer of Melius Research. Your line is open.

Hi. Good morning.

Good morning, Rob.

My question is kind of a follow up on the supply chain question that was asked earlier. Your margin performance was quite good in the quarter on revenues that hadn't come back yet. I'm wondering how big, if any, you can quantify the supply chain drag. And maybe more importantly, do you have a sense as to whether you've reached the kind of maximum disruption point in 1Q and 2Q? Are things getting better or did folks pull out all the stops in 1Q to get stuff done throughout the supply chain that leaves more risk out there, just when can we sort of stop worrying about the issue? Thanks.

In Q1, we did an excellent job and we didn't have any inability to ship because of supply chain. And our teams are going to work on the full year and there are certainly challenges, but we have a good team working on them and going to solve them. I don't think we've seen the worst of it yet, just based on what's happening on semiconductors. I think some of the logistics issues we think will moderate during midyear, but the semiconductor shortages could continue into 2022. And there are higher prices you're dealing with or issues with the global supply chain recovering from a V-shaped recovery, and we have a really good supply chain capability. We're dealing with it effectively, but we're not immune to it. So we're doing our best to stay on top of it. In Q1, we didn't have any issues and our guidance reflects the known issues, and we're confident in our guidance.

Thank you.

Thank you, Rob.

Thank you. Next question comes from the line of Brett Linzey from Vertical Research Partners. Your line is open.

Hi. Good morning, all.

Good morning, Brett.

Hi. My first question is just on the defense business. It continues to grow with these acquisitions. And it's been an area that you've seen very strong growth. I'm just curious what that growth rate looks like over the next two to three years? I know you're on a variety of platforms. And then also just if you could maybe parse out U.S. versus international for defense specifically?

Yes, great questions, Brett. The first thing, defense is about 12% of the sales of AMETEK. And when we looked at Abaco, we wanted to make sure that we have a changing administration, we wanted to make sure we were able to grow through this. And if you look back at Abaco over the last three or four years, they grew about 16% and that's very, very excellent. It's healthy. We feel that embedded computing is among the most compelling growth opportunities in A&D to the substantial DoD focus on modernization and upgrades of existing defense platforms, because there's a focus on processing intensive and data intensive mission capabilities in the future. We also got comfortable with -- they've amassed over $1 billion in design wins that underpin the growth over the next several years. So that's all good. But at the same time, we think they're well positioned to offset any overall DoD funding headwinds, because of those factors. And we’ve modeled our top line as a high single digit grower versus the mid teens in the recent past. So we think we got a conservative model there. The management team of the business is still driving to those higher growth rates. But we modeled it conservatively. And when you look at AMETEK’s broader defense exposure beyond Abaco, right now, we're kind of in the right areas. There's a lot of electronics going in and we're in cooling and heating electronics in terms of the environmental controls, and it's been doing well for us. And we think this year for 2021 outside of Abaco, our core business will be up into high single digits in the defense market. And we went into the year saying mid single digits, but we had a very strong first quarter. So we improved the defense business to mid to high single digits.

Great. Thanks for that. And just back to M&A, great to see the velocity of deals pick back up. But given the potential tax changes and the fact that interactions are improving here, is the 1.8 billion of available capital the optimal range, but maybe you'd be comfortable flexing up even above that opportunistically as volumes pick back up and the fact we’re early in the recovery? Just curious on your flex up capacity.

Yes, sure. If you look at -- if we spent that 1.8 billion that we talked about, certainly there'd be more capacity available. Our leverage would still only be below 2.5 at that point in time. So we'd have additional room to flex up from there if the right deals came along. So from a balance sheet capacity, that's not an issue and it's always, as we say, it's all about making sure that we have the management capability to be able to bring in those deals effectively, and Dave touched on that earlier in his comments.

Yes. Our strategy is really not capacity constrained. Even at 2.5, we're well below our covenants. Our strategy is constrained by finding good deals that are differentiated that meet our requirements, so we can improve. So we're optimistic that we're going to be able to do that. And hopefully, we're talking to you again later this year. And we have a good pipeline, but it's really finding those deals that we get confident we can get a return. That's the key issue, Brett, not finding them.

Yes. Congrats on the quarter and the deal flow.

Thank you.

Thank you. Next question comes from the line of Joe Giordano of Cowen. Your line is open.

Hi. Good morning, everyone.

Hi, Joe. How are you doing?

Good. So we touched on supply chain a couple of times and you guys are doing a good job there. Just curious when you went through your diligence on all these deals, how did you get comfortable that you weren't bringing in potential problems? Like when I think about embedded computing and things like that, how do you get comfortable that the supply chains and the requirements there of the new businesses, or things that you can pop into your existing framework and not stress it too much?

Yes, that's a great question. And we obviously spent a lot of time on that. And based on our questions and Abaco in particular, they have all their -- they have committed order for their plan on 2021. So we pushed it and they responded, and it was an area of heavy focus on our diligence. You don't have full access to the business, but it's understood by the Abaco team, they were very good. And I think that we're well positioned to deal with the supply chain issues in that business.

And when I think about overall AMETEK now pro forma, not to give you guys more work, but how do we think about the segmentation structure? We got two segments, they're getting pretty large. Are they providing in your opinion like adequate transparency into the total company, or maybe do we have to think about a new structure?

Yes, we're not thinking about a new structure. We got the four sub-segments under the two reporting segments externally. So we have EIG and EMG. EIG is about two-thirds of the size of the company. EMG is about one-third. And we provide insight in revenue disaggregation into process, which is about 46% of the company pro forma. Aerospace and defense was about 19% of the company pro forma. Power and industrial which is about 14% of the company and automation and engineered solutions is about 22%. And power and industrial is 14%. So we're comfortable with it. And we think this structure is going to let us go and grow for the next few years.

Thanks, guys.

Thanks, Joe.

Thank you. There are no further questions. I would now like to turn the call back to Kevin for closing remarks.

Thank you everyone for joining our call today. And as a reminder, a replay of today's webcast can be accessed in the Investors section of ametek.com. Thanks and have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Have a great day.