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DMC Global, Inc. (NASDAQ:BOOM)
Q1 2018 Earnings Call
April 25, 2019, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings and welcome to DMC Global First Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press *0 on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Geoff High, VP of Investor Relations.

Geoff High -- Vice President of Investor Relations and Corporate Communications

Hello and welcome to DMC's first quarter conference call. Presenting today are President and CEO, Kevin Longe; and CFO, Mike Kuta. I'd like to remind everyone that matters discussed during this call may include forward-looking statements that are based on our estimates, projections, and assumptions as of today's date and are subject to risks and uncertainties that are disclosed in our filings with the SEC.

Our business is subject to certain risks that could cause actual results to differ materially from those anticipated in our forward-looking statements. DMC assumes no obligation to update forward-looking statements that become untrue because of subsequent events. A webcast replay of today's call will be available at DMCGlobal.com after the call. In addition, a telephone replay will be available approximately two hours after the call. Details for listening to the replay are available in today's news release. And with that, I will now turn the call over to Kevin Longe. Kevin?

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Thanks, Geoff. Improved market conditions and increased customer demand resulted in a strong start to 2019 for DMC. First quarter sales were a record $1.1 million, up 49% versus the 2018 first quarter, and 11% sequentially. DynaEnergetics, our oilfield products business, reported sales of $79.8 million, up 63% from the 2018 first quarter and up 26% sequentially. The results reflected continued strong demand for DynaEnergetics intrinsically safe integrated switch detonators, and its Factory-Assembled, Performance-Assured well-perforating systems. First quarter sales at NobelClad, our composite metals business, were $20.3 million, up 12% versus the same quarter in 2018, and down 25% from last year's fourth quarter.

The sequential decline resulted from NobelClad's efforts during the fourth quarter to accelerated production and shipment on a large order for the chemical. NobelClad ended the first quarter with an order backlog of $40.5 million, up from $29.9 million at the end of last year's fourth quarter. Trailing 12-month book to bill ratio at the end of the quarter was 1.02 DMC reported a consolidated gross margin of 36%, up from 34% in the 2018 first quarter and up sequentially from 35%. The increase versus both periods reflects higher proportion of sales from DynaEnergetics and a higher-margin project mix at NobelClad. DynaEnergetics reported a gross margin of 39% versus 40% in the same quarter a year ago and flat versus last year's fourth quarter.

NobelClad's gross margin increased to 26% from 18% in the 2018 first quarter and 25% in the fourth quarter. Adjusted operating income was $20.5 million and excludes $78,000 in restructuring charges at NobelClad. Adjusted operating income at last year's first quarter was $8.6 million. DynaEnergetics reported first-quarter operating income of $23.1 million and NobelClad reported operating income of $1.8 million. DMC's first quarter adjusted net income was $15.2 million or $1.02 per diluted share versus adjusted net income of $7.2 million or $0.49 per diluted share in the 2018 first quarter. Adjusted EBITDA was $23.9 million up 105% from $11.6 million in last year's first quarter and up 41% from $16.9 million in the fourth quarter.

DynaEnergetics reported EBITDA of $24.5 million, while NobelClad reported adjusted EBITDA of $2.7 million. Our trailing 12-month return on invested capital at the end of the first quarter was 25%. Crude oil prices increased 32% during the first quarter, and well completion activity also improved. Against this backdrop, the unconventional well completion industry accelerated it shift toward Intrinsically Safe initiating systems and Factory Assembled; Performance Assured perforating systems from DynaEnergetics. The safety, reliability, and simplicity of these advanced systems is enabling customers to streamline their field assembly crews, reduced gun string assembly times, and complete more stages per day.

We are responding to this to this growth in demand with further additions to our manufacturing capacity. A third automated detonator assembly line recently commenced production at DynaEnergetics facility in Troisdorf, Germany and will begin installing an additional automated shaped charge line at our Bluhm, Texas plant later this quarter. NobelClad, our composite metals business also is reporting increased order activity. Demand from the refining and aluminum smelting industries has been particularly strong, and there also have been OK an uptick in awards of midsize projects.

The strong year-over-year "improvement in NobelClad's gross margin reflects the positive impact of consolidating NobelClad's European manufacturing facilities into our Liebenscheid, Germany plant as well as successful efforts to capture value for NobelClad's unique products and technologies. I want to thank our employees around the world for their continued dedication to DMC. Our growth and success would not be possible without their considerable efforts. I'll now turn the call over to Mike for further detail on our first quarter financial performance and look at our guidance. Mike?

Michael Kuta -- Chief Financial Officer

Thanks, Kevin, and hello everyone. Starting with our first quarter expenses, consolidated SG&A was $15.5 million or 15% of sales versus SG&A of $13.4 million or 20% of sales in last year's first quarter. First quarter amortization expense was $398,000, or less than 0.5% of sales. We ended the first quarter with cash and cash equivalents of $14.9 million. Net debt was $28.5 million versus $28 million at December 31, 2018. We generated $7 million in cash from operating activities during the first quarter which compares with $3 million of cash used in operating activities during the 2018 first quarter.

Turning to guidance, we anticipate second-quarter sales in a range of under $102-$107 million, up from the $8.9 million we reported in last year second quarter. We expect DynaEnergetics sales will be in a range of $82-$85 million versus $58.9 million reported in last year second quarter. Sales that NobelClad are expected in a range of $20-$22 million versus $22 million in the same quarter a year ago.

Second-quarter consolidated gross margin is expected to be in the 35% range, up from 33% in the 2018 second-quarter. The possibility of a sequential decline versus a 36% gross margin reported in the first quarter reflects potentially higher material costs as DynaEnergetics continues its transition to in-house manufacturing of components used in the DynaStage perforating system. We expect SG&A will be approximately $16.5 million versus the $15.5 million reported in last year second quarter. Amortization expense is expected to be approximately $400,000, and interest expense should be approximately $500,000. Second-quarter adjusted EBITDA is expected in a range of 22 to $24.5 million, up from $13.9 million in last year's first quarter.

We are updating our prior full year 2019 guidance and now expect sales in a range of $405-$425 million, up from a previously forecasted range of $350-$370 million. Sales in 2018 were $326.4 million. Sales at DynaEnergetics are expected in a range of $325-$340 million while anticipated sales at NobelClad remain in a range of $80-$85 million. We expect full year gross margin in the 35% range versus the 34% reported last year. SG&A is now expected in the range of $63-$66 million versus the $61.2 million reported last year.

Our expected full year amortization expense remains approximately $1.6 million, down from $2.9 million in 2018. Our full year estimate for interest expense is unchanged at $2-$2.25 million, and we are maintaining our expected effective tax rate of approximately 30%. Full year adjusted EBITDA is now expected in a range $90-$100 million, up from $59.6 million in 2018. We have increased our full-year adjusted net income per share to a range of $3.40 to $3.70, up from the $2.07 we reported last year. We are maintaining our capital expenditure forecast in a range of $25-$30 million. With that, we are ready to take any questions. Operator?

 ...

Questions and Answers:

Operator

At this time, we will be conducting a question and answer session. If you would like to ask a question, please press *1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press *2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the *key. Our first question comes from the line of Tommy Moll with Stephens, please proceed with your question.

Tommy Moll -- Stephens Incorporated -- Analyst

Good afternoon, thanks for taking my questions.

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Hi Tommy.

Tommy Moll -- Stephens Incorporated -- Analyst

If you look at the broader perforating market, it sounds like the shift to systems has accelerated pretty quickly in recent months. I wondered if you have any guess of where we are in terms of the percent penetration there for systems? Any idea of where that might head? And then as you think about the competitive dynamics within that system's bucket, what is the most unique aspect of your system and in the end is the system what determines market share or is it the energetics?

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Thank you for the compound question, Tommy.

Tommy Moll -- Stephens Incorporated -- Analyst

Four in one.

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Okay, first and foremost, and we'll use Spears data which they recently published this week, and they estimate the market size for perforating equipment to be $1.4 billion. We estimate that the North American market is the majority of that, around $1 billion in revenue this year. And we don't subscribe to the thought that the systems market is a niche, let alone a new niche; and we believe that the total available market is at least that $1 billion in revenue.

Regarding the competitive situation, first and foremost, safety around the well site in deploying perforating systems is of utmost importance. The performance of the shaped charges do the work. It's critically important. The well site and supply chain efficiency in the delivery mechanisms are important, and DMC or DynaEnergetics, our oilfield products division, they are a market leader in shaped charge technology and have a full suite of shaped charges from our FracTune to our DPEX our HaloFrac, we have rock optimize charges in a large technical data based that's been developed over the years working with leading E&P companies where we fine-tune the selection of charges for the rock formations that they're being used in. That's of utmost importance.

Our initiating system is truly unique in the industry. It's the only integrated, Intrinsically Safe switch detonator system that does not have any wire-rim. It's also easily deployed, and we've used that integrated switch detonator technology, our DynaSelect family of detonators to deploy different types of gun systems for different applications. And in the combination of the integrated switch detonator, the shaped charges, and the perforating gun systems is what we feel gives us our competitive advantage.

And we are capable of universally working on any well site, not just in North America, but around the globe with our initiating systems. Our shaped charges can be used in our guns; they can be used in open architecture guns. And our Factory Assemble, Performance Assured systems provide a superior end result which is unique in the industry. And so, we're not really competing in one little niche; we are supplying the entire market, a full suite of products and family of products.

Tommy Moll -- Stephens Incorporated -- Analyst

Thank you. And I'll try to shorten my approach here for the follow-up. You called out some margin impacts at DynaEnergetics relating to material costs for some components that you maybe start producing in-house or already are. Can you unpack that for us and just help us understand what the drivers are what the outlook is?

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Yes, and we're looking to improve our gross margin from where it is today. We have relatively stable pricing in the first quarter. Our revenue and number of units sold increased at a faster rate than we had originally expected. We also are in the process of getting our productivity up on the vertical integration that we put in place for making components we found ourselves in the first quarter having to outsource more components than what we expected in order to meet demand. And our -- we have room for margin improvement on our vertical integration as we pick up our productivity on this new process that we put in place.

At the same time, we hope to have a higher percentage of in source components going forward rather than outsource components which will improve our margin and so, we were not quite at halfway to our goal that we articulated in previous conference calls on an annual run rate, but we feel fairly strong that we'll be there in the second quarter of this year.

Tommy Moll -- Stephens Incorporated -- Analyst

Okay, thank you. That's all for me.

Operator

Our next question comes from the line of Stephen Gengaro with Stifel, please proceed with your question.

Stephen Gengaro -- Stifel -- Analyst

Thanks, good afternoon gentlemen. So, a couple of things, and I guess I'd start with this, is that when I look at your first quarter performance and the adjusted EBITDA, whether I look at it from an EBITDA perspective or earnings perspective, and I kinda look at your revenue expectations for the year. I'm struggling a little bit to understand based on the revenue guidance why the EBITDA guidance and EPS guidance may not be even a little bit higher. So, I'm just -- and I guess embedded in the question, is there something in the first quarter that led to an outside DynaEnergetics operating income margin?

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

So, for the balance of the year, the margin expectations have to do with the rising productivity and the insourcing versus outsourcing of components. In the first half of this year, we are much heavier on outsourcing than we are on insourcing of components. The DynaEnergetics gross margin was acceptable at 39%, we expected to be greater going forward, but we're also ramping up certain marketing and sales activities to help the industry understand the superior benefits of our products.

And so, there's costs both in our ramping up of our marketing and communications as well as our digitalization, as well as our insourcing and materials and the balance of that gives us the gross margin that we are forecasting for the year. Mike, do you want anything?

Michael Kuta -- Chief Financial Officer

Yeah and then Stephen, I'd say also we had a couple of discrete items in the quarter on the tax side, so our ETR was 24% in the first quarter, we expect full year to be around 30%. So, that's three-quarters of the year more of a 32% tax rate to get back to 30% in the full year.

Stephen Gengaro -- Stifel -- Analyst

Oh, so you're using 32% in the second quarter -- OK, OK. But -- OK. That's fine; maybe we can take a little more on -- I'm still trying to sort of triangulate the difference. When I look at your DynaEnergetics expectations for revenue going forward, are you -- what you looking at as far as kind of overall market activity? Are you -- is the revenue gonna come in line with what you see in the market or are you expecting any share and/or pricing changes?

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Yeah, we were pleased to see that the market started to pick up in the back half of the first quarter. Yeah, we expect the second, third, fourth quarters to be reasonably strong quarters. I believe Spears has the market frac stages up 7% year-over-year and 2019 versus 2018. And we see the shaped charge volume, because of the greater intensity of the shaped charge being up greater than the frac stages. And again, Spears estimated 20% per year in shaped charge growth versus 2018. Pricing, we focus on. First, performance -- safety, performance, quality, on-time delivery, our services support, building trusting relationships with our customers.

Price is not what we lead with to build our share. We have the nonprice factors determine whether we are getting business or not. So, we expect our pricing to be stable to hopefully improving as the year unfolds, and we generate a strong return for the customers that are deploying our products it is very important for us to get a strong return for our shareholders. And so, we're gonna endeavor to make sure that it's not price that's driving our business.

We apparently picked up share in the first quarter over the fourth quarter, perhaps more than what we expected, and we were pleased that we were able to pick up that share and maintain our pricing levels. So, we think that that situation will continue to the balance of the year.

Stephen Gengaro -- Stifel -- Analyst

Okay, great. Thank you.

Operator

Our next question comes from the line of Gerry Sweeney with Roth Capital Partners, please proceed with your question.

Gerry Sweeney -- Roth Capital -- Analyst

Hey, good afternoon Kevin, Mike, and Geoff, thanks for taking my call. So, I guess at the end of the day I guess the million-dollar question would be what percentage share of that 1.3 billion markets you can get. I'm not sure if you want to answer that directly, but if you don't, the two quick follow-ups would be how much growth do you have with existing customers and then if you're looking at that perforated market in general, how much growth do you think you have with companies that have not yet adopted? Are there any large potential service companies out there that you're sort of entertaining or looking at onboarding, etc.?

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Well, first and foremost, we're not trying to be all things all people and is very important for us to be able to serve and export our customers to the degree that they're making a commitment to DynaEnergetics and DMC. And so, we're very careful only onboard customers that we're bringing them onto the rate that we can meet their needs and support them. And so, that is a governing factor. We also respect our competition. We've got good competitors and are clearly determined on being in the systems market. We actually welcome the competition.

We believe that the North American unconventional energy market is a growing thriving market that's benefited from technology improvements like we've brought to the market as well as others. It's expanding the market faster globally than other energy sectors. And so, the more safety, reliability, operating efficiency, performance, oil recovery, that we bring in our competitors bring to this marketplace, the better the market is gonna be for all of us. And so, we are more focused on the things that drive the market and supporting our customers in the share follows those activities.

Gerry Sweeney -- Roth Capital -- Analyst

Got it. And then you've been speaking about supporting your customers. In the past, we talked about DynaStage just not a product, but maybe becoming a family of products. You've introduced the Trinity system, any comments on how the Trinity rollout is going as well? And also, any comments maybe on maybe some additional technologies that may be in the play plan?

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Yeah, the Trinity is in its infancy, it's just getting started. We're excited about the Trinity product line. It is a delivery system that has a number of operational benefits that does incorporate our proprietary initiating systems and shaped charges. We haven't been necessarily the best at naming some of our products, even at times we -- what started out as a product has become a family of products, and we have a pretty robust pipeline of technologies both in the shaped charge, in all three shaped charge initiating systems and the delivery systems for the guns to the market. And our, as I mentioned, in our annual shareholder letter our patent portfolio has increased dramatically over the last five years.

And so, this is not a one trick pony; it's a capability that we put in place both organizationally as well as technologically and in our product lines. And we expect to stay at the forefront of the underlying technologies in initiating systems, shaped charges, and the operating efficiency and supply chain issues at a well site. And OK, it's just a broad product line.

Gerry Sweeney -- Roth Capital -- Analyst

Okay, and finally, I noticed great quarter for NobelClad, those guys probably don't get as much attention as they used to, but I just want to the point that out that the -- congratulations for those guys as well so thanks, I'll jump back in the queue.

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

And for all of our NobelClad employees, who may be on the line, I echo Gerry's comments, and we appreciate all that you do and what you've enabled the company to do.

Operator

Our next question comes from the line of Edward Marshall with Sidoti and Company, please proceed with your question.

Edward Marshall -- Sidoti and Company -- Analyst

Hey Kevin, Mike, Geoff, how are you? So, I wanted to start with components versus systems and wanted to see if I could kind of look at DynaEnergetics in three buckets, guns, shaped charges versus switches. Can you kinda talk about maybe the weighting of the business today and maybe what was a year ago to get a better sense of growth rates in the different buckets there?

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Probably the clearest comparison is if we went back to 2013 when we first introduced our initiating systems and then in 2015 our DynaStage guns, are perforating systems. Back in 2013, 2014, 95%+ of our revenue was components. And as the initiating systems have taken hold in the perforating systems of taken hold, it's now moved to roughly in the first quarter 65% systems, and that's initiating systems and perforating systems. Compared to a smaller about years ago.

Edward Marshall -- Sidoti and Company -- Analyst

So, when you say initiating systems and perforating systems, I'm assuming the layman's terms for that is guns and switches? Does that mean also wired systems or wired initiating switches? Or I'm just trying to --

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Yeah, so our DynaSelect systems, our family of products, those are used by service companies for assembling perforating guns in their factory or at a well site. And our DynaStage is a fully integrated gun system that includes the shaped charges, the deck cord, as well as the carriers.

Edward Marshall -- Sidoti and Company -- Analyst

So, I guess going backward, if I looked at your guidance for the year of $325-$340 million of DynaEnergetics, for gun systems I think the math works out to about $250 million. Is that close to what you think the market sizes so far this year?

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

I think your --

Edward Marshall -- Sidoti and Company -- Analyst

You know thinking about your share of the market as well.

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Yeah, I think will probably be closer to $250 million in systems.

Edward Marshall -- Sidoti and Company -- Analyst

Okay, thanks. And did you give a share number?

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

No.

Edward Marshall -- Sidoti and Company -- Analyst

Okay, I guess OK that's simple math 250/1.3, right? So, I wanted to get your sense too if we look at the benefit of say prewired versus wireless switches, you mentioned in your prepared remarks about prewired. I just wanted to go back to that and see if you wanted to elaborate a little bit on the differences between prewired versus wireless and why you think wireless has the benefit?

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Yeah, with the wiring of a switch detonator whether it's done in the factory or in the field in a way that that's packaged is subject to stray currents, stray voltage, radiofrequency, where a wireless system and how we packaged it is not subject to those concerns. And so, it's a safety issue at the well site, and it's also productivity issue because our DynaSelect, being stray currents stray voltage radiofrequency safe, you can have parallel operations happening on a well site where that's less possible using other peoples wired systems.

Edward Marshall -- Sidoti and Company -- Analyst

Got it. And I guess looking at the competitive landscape; I just want to see what your view is on the competition. Is there any advantages to being fully integrated having the science of geology and geographic kind of studies to maybe integrate that into ultimately your shaped charges that might benefit one supplier over another? I'm just curious what you might think.

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Well, I think that the more knowledge that a company has the better in terms of how their products are used in the field which is why we've invested in our rock optimized shaped charges in our section 4 test facilities and we do a lot of development work with leading E&P companies. And so, we would support the premise that the more you know, the better you're going to be.

Edward Marshall -- Sidoti and Company -- Analyst

Right. I'm focusing, obviously, on this area because there's been, the comments earlier today which I'm sure you saw, and I think already commented indirectly upon today. I wanted to finally ask on NobelClad, we talk about look at the margin in that business of 26% gross margin, and I'm curious, there's a mix component of that, there's a European cost savings component of that. Can you kinda help me triangulate as to what was the biggest contributor, and I guess as we look through the remainder of the year at a similar sales run, absent mix, what might we see on that margin there? Thanks.

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

I'm very proud of the NobelClad team because through their -- it's a long cycle business and through the downcycle that they've been in and they are emerging from it made very healthy contribution margins and Mike, correct me if I'm wrong, but I think they had a 43% contribution margin?

Michael Kuta -- Chief Financial Officer

Correct.

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

And so, we benefited from a couple of percentage points in terms of contribution margin and a couple of percentage points and reduced factory overhead through our consolidation program over European facilities.

Edward Marshall -- Sidoti and Company -- Analyst

Got it. And finally, you know I want to go back to DynaEnergetics if I could, you talked about some capital investment that you're putting in. I think we previously talked about that capital investment bringing you to a $350 million run rate and revenue. Is the comments that you talked about today get you above that number or is that kinda where we are after that investment? On DynaEnergetics.

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Yeah, we're also making an investment. We clearly delivered close to $80 million in the first quarter which is a $320 million run rate if you will, and that's before our third shaped charge line [audio cuts out] our fourth detonator line in Germany and some additional metalworking equipment up and running. And so, we feel pretty comfortable that our capacity is in the $350-$400 million range.

Edward Marshall -- Sidoti and Company -- Analyst

So, you've moved higher to $350-$400 million in the most -- because I think last quarter or the quarter before it was about $350 million and included this investment. I'm just curious. Is that pricing? Is that -- did you free up additional capacity in the space we did you have more machinery?

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Well, we're getting more productivity. Having said that, with also did a lot more outsourcing in the first quarter. We're getting better as we bring these facilities and process these up to the level that we're producing today. And my $350 million is probably a little bit of spitballing so we're just getting more comfortable with the $350-$400 million range. But we don't --

Edward Marshall -- Sidoti and Company -- Analyst

So, it was understated initially is what you're saying.

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

We're comfortable with $350-$400 million, and again, we don't feel that we were supply constrained in the first quarter. We're meeting the needs of our customers, and we're equally focused broadening application of our products and product lines as we go forward.

Geoff High -- Vice President of Investor Relations and Corporate Communications

Ed, we need to -- we've got a bunch of questions and the queue, so we need to move on.

Operator

Our next question comes from the line of Jim McIlree with Chardan Capital, please proceed with your question

Jim Mcllree -- Chardan Capital -- Analyst

Thanks, good afternoon. On DynaEnergetics, were there any 10% customers.

Michael Kuta -- Chief Financial Officer

One, it's in the queue.

Jim Mcllree -- Chardan Capital -- Analyst

Okay. Thanks. And do you have a sense if customers are holding inventory, again, on DynaEnergetics? Do you have -- is this something where they might be pre-ordering and holding excess inventory in order to make sure they have the supply they need?

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Thank you for that. I don't think that there's a lot of inventory in the pipeline with our customers. One of the things that we market to them is that we're managing the supply chain for them by delivering a fully assembled perforating gun. And so, they're pretty much ordering to demand.

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Jim Mcllree -- Chardan Capital -- Analyst

Okay, thank you. And then the last one is, I'm sorry.

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Yeah, I don't think -- there may have been some hedging, but I wouldn't see it from where I'm sitting.

Jim Mcllree -- Chardan Capital -- Analyst

Okay. In my last question is on NobelClad. It just seems like you're being pretty conservative with guidance given the backlog that you have. I'm just wondering are you -- was there a huge order in Q1 and you are just expecting it to trail off a little bit going forward? Or again, it just seems that given the backlog, you know maybe guidance could be a little bit higher.

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Yeah, what we track in that business the trailing 12-month bookings level and our revenues are strongly correlated to that, and I believe our 12-month bookings are about $90ish million, and so some of that at this point will start shipping into the new year. But I actually don't think we that conservative on it.

Jim Mcllree -- Chardan Capital -- Analyst

Okay, very good, thanks a lot, I appreciate it. Good luck with everything.

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Yeah, thank you.

Operator

Our next question comes from the line of Ian MacPherson with Simmons, please proceed with your question.

Ian MacPherson -- Simmons Energy -- Analyst

Thanks, good afternoon gentlemen. Stephen asked about this earlier about the context of the market growth context of your guidance for DynaEnergetics. But I wanted to circle back to it. Your first have revenues is delivered and guided; they indicate a flattening of revenue growth which would be in contrast to the market share growth that you've been hoovering for a couple of years. I just wanted to ask, again, whether your guidance suggests a near or complete maturation of your market share this year? Or if you think that you have a view of the total market being a bit below par growth and you're gonna do a bit better than that in your base case? I know you can't see the December today, but just a little more context around what that full-year guidance number entails.

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Okay, well for us, it's not just the market share, it's the margin in being able to meet our customer needs. Particularly some of our customers have reduced their costs, the service companies, by having us be their manufacturer of choice of perforating systems and then they're deploying it. And so, it's very important to us that when we onboard a customer that we meet their needs, that we don't leave them empty-handed. If they're making a commitment to us, we want to make a commitment to them and have the capacity that they need in order to meet their customer requirements, the E&P.

And so, a combination of balance of onboarding customers, maintaining and growing margins is important, and we also, Ian, in the fourth quarter of 2018 showed this, we make a consumable that goes into the marketplace, and we have low visibility. And we saw a change in the fourth quarter that we weren't expecting compared to the third quarter and we saw a pickup in the first quarter that we weren't expecting to be as strong as it was in the fourth quarter. And so, there's also some balancing there of what we think the market is gonna be.

Ian MacPherson -- Simmons Energy -- Analyst

That's fair enough. And I appreciate the fact that you've been conservative with your guidance and tell now. So, we'll stay tuned. Thanks, Kevin.

Operator

As a reminder, if you would like to ask a question, please press *1 on your telephone keypad. Our next question comes from the line of Will Hamilton with Manatuck Hill Partners, please proceed with your question.

Will Hamilton -- Manatuck Hill Partners -- Analyst

Hey, good afternoon guys. Just, Kevin, in the past you shared the number of systems that you shipped for DynaEnergetics. Could you possibly sure that for this quarter?

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

We've somewhat moved away from reporting those numbers. Collectively on our initiating systems which includes our DynaSelect and our DynaStage systems, it was approximately north of about 300,000.

Michael Kuta -- Chief Financial Officer

About 330,000.

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Yeah, 330,000.

Will Hamilton -- Manatuck Hill Partners -- Analyst

And so, based on that and given stable pricing and how the quarter finished, you just commented that there's not a lot of inventory in the channel based on shipping to the field and shipping direct to the customer sorta being there, their own inventory. It would seem to suggest that March was maybe 40% or so of the quarter. So, are we talking $31-$32 million or so? Why can't we take that and extrapolate that for the three months of Q2? Is there something that we should know about just that it shouldn't be north of $90 million?

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Yeah, I think we started to see the second half of the quarter was stronger than the first half the quarter but not by a wide margin in terms of our revenues. And so, it was fairly balanced. The surprise was the strength of the first quarter for us compared to the fourth quarter. And we just had balance in our projections going forward. We also, if I could just state for everybody, we do respect or competition and their level of ingenuity, and they're focused on this area also, and we welcome that because we feel that that's gonna help to make this market more efficient and strengthen the overall size of the market as we go forward. And we expect to benefit from their contributions to those too.

Will Hamilton -- Manatuck Hill Partners -- Analyst

Okay. So, to the question about system revenues, I think you mentioned something maybe $250 million for the year, possibly in that range. Would you -- by then are we looking at systems being closer to 70%, ¾ of DynaEnergetics revenue?

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Yeah, we no longer -- when I started with the company six or seven years ago, we were selling than carrier systems in the marketplace. We don't do that anymore. We actually outsource the majority of our gun carrier systems. And so, when we say systems, we mean both initiating systems and perforating system and energetics and that's the primary source of our revenues. And we are probably moving more to an 80% systems company, and I actually stand corrected; I think we're closer to that I first quarter than we were -- than the 65% that I gave earlier.

Will Hamilton -- Manatuck Hill Partners -- Analyst

Okay. And lastly, the housekeeping question for Mike. What's the share count you're using for full-year earnings?

Michael Kuta -- Chief Financial Officer

I was using 15, 15.5.

Will Hamilton -- Manatuck Hill Partners -- Analyst

All right, thank you.

Operator

Ladies and gentlemen, we have reached the end of the question-and-answer session, and I would like to turn the call back to Kevin Longe for closing remarks.

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Thank you, everybody, for joining us today. We look forward to talking with you after we finish the second quarter. And again, I'd like to thank our customers and our employees for their commitment and also their efforts. Thank you.

...

Operator

That does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

Duration: 51 minutes

Call participants:

Geoff High -- Vice President of Investor Relations and Corporate Communications

Kevin T. Longe -- Chief Executive Officer, President & Executive Director

Michael Kuta -- Chief Financial Officer

Tommy Moll -- Stephens Incorporated -- Analyst

Stephen Gengaro -- Stifel -- Analyst

Gerry Sweeney -- Roth Capital -- Analyst

Edward Marshall -- Sidoti and Company -- Analyst

Jim Mcllree -- Chardan Capital -- Analyst

Ian MacPherson -- Simmons Energy -- Analyst

Will Hamilton -- Manatuck Hill Partners -- Analyst

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