NORWELL, Mass., April 29, 2024 (GLOBE NEWSWIRE) — DIH Holding US, Inc. (“DIH”)(NASDAQ:DHAI), a leading global robotics and virtual reality (“VR”) technology provider in the rehabilitation and human performance industry, today announced financial results for the nine months ended December 31, 2023, which is the third quarter of the Company’s 2024 Fiscal Year, ending March 31, 2024.
Recent Highlights
Revenue of $47.1 million for the nine months ended December 31, 2023, representing growth of 42.1% over the prior year periodDevice revenue of $36.9 million, an increase of 47.3% over the prior year period; Services revenue of $8.8 million, an increase of 17.3% over the prior year period; Other revenues of $1.4 million, an increase of 129.8% over the prior year periodGross Profit for the period was $23.2 million, a 27.4% increase over the prior year periodAdjusted EBITDA for the period was $0.5 million
“We are excited to announce another strong quarter of company performance as we close out the first nine months of Fiscal Year 2024. We continue to see increased opportunity and positive momentum in expanding the business into new markets and geographies,” said Jason Chen, Chairman and CEO of DIH. “We saw significant revenue growth over the prior year as a result of an increase in device sales and our ability to efficiently sell into Europe, the Americas and Asia. As we enter our first quarter as a publicly traded company, our focus remains on generating stakeholder value and delivering a transformative rehabilitative care model around the world.”
Financial Results for the Nine Months Ended December 31, 2023
Revenue for the nine months ended December 31, 2023 was $47.1 million, an increase of 42% compared to the prior year period. The increase was due primarily to a higher number of devices sold, which consisted of an increase in sales to third-party customers and stronger sales volumes in Europe, the Americas and Asia.
Changes in foreign currency exchange rates had a favorable impact on our combined net sales in the nine months ended December 31, 2023, resulting in an increase of approximately $1.7 million. This was mainly driven by fluctuations in Euro valuations throughout the period.
Gross profit for the nine months ended December 31, 2023 was $23.2 million, a 27% increase compared to the prior period.
Selling, general and administrative expense for the nine months ended December 31, 2023 was $19.9 million, an increase of 9% compared to the prior period. The increase was primarily due to professional service and IT costs in preparation for the business combination with Aurora Technology Acquisition Corp. (ATAK) and becoming a publicly listed company, as well as personnel-related expenses such as payroll and pension. The increase was partially offset by a decrease in bad debt allowance and overhead expenses.
Research and development costs for the nine months ended December 31, 2023 were $5.9 million, a decrease of 1.8% compared to the prior period. The decrease was primarily due to a decrease in research and development material purchases, external consulting fees, and overhead expenses. The decrease was partially offset by an increase in personnel expenses.
Cash and cash equivalents on December 31, 2023 totaled $2.8 million.
About DIH Holding US, Inc.
DIH stands for the vision to “Deliver Inspiration & Health” to improve the functioning of millions of people with disability and functional impairments. DIH is a global solution provider in blending innovative robotic and virtual reality (“VR”) technologies with clinical integration and insights. Built through the mergers of global-leading niche technologies providers, DIH is positioning itself as a transformative total smart solutions provider and consolidator in a largely fragmented and manual-labor-driven industry.
Caution Regarding Forward-Looking Statements
This press release contains certain statements which are not historical facts, which are forward-looking statements within the meaning of the federal securities laws, for the purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These forward-looking statements include certain statements made with respect to the business combination, the services offered by DIH and the markets in which it operates, and DIH’s projected future results. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions provided for illustrative purposes only, and projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties that could cause the actual results to differ materially from the expected results. These risks and uncertainties include, but are not limited to: general economic, political and business conditions; the inability of the parties to consummate the proposed business combination or the occurrence of any event, change or other circumstances that could give rise to the termination of the business combination agreement, failure to realize the anticipated benefits of the business combination, including as a result of a delay in consummating the potential transaction or difficulty in integrating the businesses of DIH; the inability to maintain the listing of the DIH’s securities on Nasdaq; costs related to the proposed business combination; While DIH may elect to update these forward-looking statements at some point in the future, DIH specifically disclaims any obligation to do so.
Non-GAAP Financial Measure
DIH reports its financial results in accordance with GAAP. However, management believes that Adjusted EBITDA, a non-GAAP financial measure, provides investors with additional useful information in evaluating our performance. DIH calculates Adjusted EBITDA as net income (loss), adjusted to exclude: (1) taxes (2) interest expense (3) depreciation and amortization and (4) other non-recurring items. Adjusted EBITDA is a financial measure that is not required by or presented in accordance with GAAP. We believe that Adjusted EBITDA, when taken together with our financial results presented in accordance with GAAP, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of Adjusted EBITDA is helpful to our investors as they are measures used by management in assessing the health of our business, and evaluating our operating performance, as well as for internal planning and forecasting purposes. Management presented EBITDA in historical periods prior to the completion of the Business Combination with ATAK. Adjusted EBITDA is adjusted to exclude other non-recurring items such as transaction-related expenses. By providing Adjusted EBITDA, we believe we are enhancing investors’ understanding of our business and the results of operations.
Investor Contact
Greg Chodaczek
332-895-3230
Investor.relations@dih.com
DIH HOLDING US, INC. AND SUBSIDIARIESINTERIM CONDENSED COMBINED BALANCE SHEETS(UNAUDITED) (in thousands) As of December
31, 2023 As of March 31,
2023 Assets Current assets: Cash and cash equivalents $2,838 $5,560 Restricted cash 583 415 Accounts receivable, net of allowances of $964 and $1,771, respectively 5,556 6,079 Inventories, net 7,494 6,121 Promissory note – related party 405 — Due from related party 119 7,400 Other current assets 7,323 5,210 Total current assets 24,318 30,785 Property, and equipment, net 676 826 Capitalized software, net 2,093 2,203 Other intangible assets, net 380 380 Operating lease, right-of-use assets, net 5,081 3,200 Deferred tax assets 252 1 Other assets 48 39 Total assets $32,848 $37,434 Liabilities and Equity (Deficit) Current liabilities: Accounts payable $5,097 $3,200 Employee compensation 3,155 3,678 Due to related party — 7,322 Current maturities of long-term debt 1,135 1,514 Revolving credit facilities 10,311 12,976 Current portion of deferred revenue 6,860 8,395 Manufacturing warranty obligation 1,190 979 Current portion of long-term operating lease 1,787 1,255 Advance payments from customers 12,152 6,878 Accrued expenses and other current liabilities 13,175 12,411 Total current liabilities 54,862 58,608 Long-term debt, net of current maturities — 489 Non-current deferred revenues 4,284 2,282 Long-term operating lease 3,319 1,970 Deferred tax liabilities 388 391 Other non-current liabilities 3,943 2,748 Total liabilities $66,796 $66,488 Commitments and contingencies (Note 15) Equity (Deficit): Net parent company investment (37,140) (32,977)Accumulated other comprehensive income 3,192 3,923 Total (deficit) $(33,948) $(29,054)Total liabilities and (deficit) $32,848 $37,434 See accompanying notes to the condensed combined financial statements.
DIH HOLDING US, INC. AND SUBSIDIARIES
INTERIM CONDENSED COMBINED STATEMENTS OF OPERATIONS(UNAUDITED) (in thousands) For the Nine Months Ended December 31, 2023 2022 Revenue $47,121 $33,168 Cost of sales 23,945 14,983 Gross profit 23,176 18,185 Operating expenses: Selling, general, and administrative expense 19,892 18,270 Research and development 5,852 5,959 Total operating expenses 25,744 24,229 Operating loss (2,568) (6,044)Other income (expense): Interest expense (744) (575)Other income (expense), net (202) 690 Total other income (expense) (946) 115 Loss before income taxes (3,514) (5,929)Income tax expense (benefit) 638 770 Net loss $(4,152) $(6,699) See accompanying notes to the condensed combined financial statements.
DIH HOLDING US, INC. AND SUBSIDIARIESINTERIM CONDENSED COMBINED STATEMENTS OF COMPREHENSIVE LOSS(UNAUDITED) (in thousands) For the Nine Months Ended December 31, 2023 2022 Net loss $(4,152) $(6,699)Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments 471 538 Pension liability adjustments (1,202) (230)Other comprehensive (loss) income (731) 308 Comprehensive loss (4,883) (6,391)
DIH HOLDING US, INC. AND SUBSIDIARIESINTERIM CONDENSED COMBINED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)(UNAUDITED) (in thousands) Net Parent
Company
Investment Accumulated
Other
Comprehensive Income (Loss) Total Equity
(Deficit) Balance, March 31, 2022 $(30,503) $4,081 $(26,422)Net loss (6,699) – (6,699)Other comprehensive income, net of tax – 308 308 Balance, December 31, 2022 $(37,202) $4,389 $(32,813)
Net Parent
Company
Investment Accumulated
Other
Comprehensive Income
(Loss) Total Equity
(Deficit) Balance, March 31, 2023 $(32,977) $3,923 $(29,054)Net loss (4,152) – (4,152)Other comprehensive loss, net of tax – (731) (731)Net transactions with parent (11) – (11)Balance, December 31, 2023 $(37,140) $3,192 $(33,948) See accompanying notes to the condensed combined financial statements.
DIH HOLDING US, INC. AND SUBSIDIARIESINTERIM CONDENSED COMBINED STATEMENTS OF CASH FLOWS(UNAUDITED) (in thousands) For the Nine Months Ended December 31, 2023 2022 Cash flows from operating activities: Net loss $(4,152) $(6,699)Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 388 93 Provision for credit losses (807) 1,549 Allowance for inventory obsolescence 675 (205)(Gain) /Loss on disposal of fixed assets (15) (3)Pension contributions (478) (441)Pension (income) expense 201 (614)Foreign exchange (gain) loss 201 (685)Noncash lease expense 1,503 1,258 Noncash interest expense 2 177 Deferred income tax (258) (18)Changes in operating assets and liabilities: Accounts receivable 1,316 375 Inventories (1,748) (3,054)Due from related parties – (9)Due to related parties – 1,283 Other assets (1,979) (1,851)Operating lease liabilities (1,425) (1,111)Accounts payable 1,602 851 Employee compensation (549) 13 Other liabilities 202 591 Deferred revenue 819 1,048 Manufacturing warranty obligation 211 (116)Advance payments from customers 5,573 8,037 Accrued expense and other current liabilities 634 1,545 Net cash provided by operating activities 1,916 2,014 Cash flows from investing activities: Purchases of property and equipment (141) (52)Proceeds from sale of property and equipment 65 – Capitalized software development costs – (13)Payments to related party for promissory note (405) – Net cash used in investing activities (481) (65)Cash flows from financing activities: Payments on credit facilities (3,123) (2,074)Payments on long term debt (937) (692)Net cash used in financing activities (4,060) (2,766)Effect of currency translation on cash and cash equivalents 71 (232)Net decrease in cash, and cash equivalents, and restricted cash (2,554) (1,049)Cash, and cash equivalents, and restricted cash – beginning of year 5,975 3,687 Cash, and cash equivalents, and restricted cash – end of year $3,421 $2,638 Cash and cash equivalents – end of year $2,838 $2,247 Restricted cash – end of year 583 391 Total cash, and cash equivalents, and restricted cash – end of year $3,421 $2,638 Supplemental disclosure of cash flow information: Interest paid $740 $397 Income tax paid $- $17 Supplemental disclosure of non-cash investing and financing activity: Settlement of related party receivables and payables $7,322 $- See accompanying notes to the condensed combined financial statements.
DIH HOLDING US, INC. AND SUBSIDIARIESRECONCILIATION OF Non-GAAP FINANCIAL MEASURES(UNAUDITED) (in thousands) For Nine Months Ended December 31,
2023 2022
Net loss$(4,152) $(6,699)Adjusted to exclude the following: Taxes 638 770 Interest expense 744 575 Depreciation and amortization 388 93 Other non-recurring items (1) 2,837 125 Adjusted EBITDA$455 $(5,136) (1) Represents transaction-related expenses incurred in connection with the Business Combination with ATAK completed on February 7, 2024.