DIH Reports First Half Fiscal 2024 Financial Results
- Revenue increased by $10.0 million, or 57.7%, to $27.3 million compared to the same period last year.
- Device sales revenue saw a significant surge of 73.9% in the six months ended September 30, 2023.
- DIH became publicly listed on Nasdaq Global Markets after merging with Aurora Technology Acquisition Corp.
- The introduction of Armeo®Spring Pro to the device portfolio highlights growth prospects for the company.
- Foreign currency exchange rates positively impacted combined net sales by approximately $0.7 million.
- Cost of sales increased by $7.7 million, primarily driven by an increase in device sales and additional costs for slow-moving parts.
- Selling, general, and administrative expenses rose by $1.8 million, mainly due to professional service and IT costs related to the business combination.
- Research and development costs decreased slightly by $0.1 million.
- DIH's cash and cash equivalents stood at $2.0 million as of September 30, 2023.
- None.
Insights
The reported revenue growth of 57.7% for DIH Holding US, Inc. is a robust indicator of the company's market expansion and increased demand for its rehabilitation and human performance products. The significant 73.9% increase in device sales, particularly in diverse regions such as Europe, the Americas and Asia, suggests a successful scaling of operations and an effective market penetration strategy. This level of growth surpasses the average for the medical device sector, which is notable given the competitive landscape and regulatory hurdles often faced by companies in this space.
However, the substantial increase in cost of sales by 109.7% raises questions about scalability and cost management. While the cost increase correlates with higher sales, the company will need to ensure that margins are maintained as they expand. The increase in inventory reserve for slow-moving parts and service parts costs may indicate challenges in inventory management or a strategic buildup in anticipation of future growth. Investors will be watching closely to see if DIH can optimize its supply chain to maintain profitability as it scales.
DIH's financial performance, with a significant top-line growth, is a positive sign for investors, reflecting a strong market position and potential for future earnings. However, the company's cash and cash equivalents of $2.0 million as of September 30, 2023, might raise concerns regarding liquidity, especially in the context of their increased operational expenses and the costs associated with the business combination with Aurora Technology Acquisition Corp. The balance between leveraging growth opportunities and maintaining financial stability will be critical for DIH's continued success on the Nasdaq Global Markets.
The favorable impact of foreign currency exchange rates, contributing approximately $0.7 million to net sales, is also noteworthy. While beneficial in this reporting period, reliance on such variable factors can introduce volatility to earnings. Investors may seek reassurance that the company's core financial health is not overly dependent on exchange rate fluctuations, which are inherently unpredictable.
The introduction of the Armeo®Spring Pro to the upper extremity device portfolio aligns with industry trends towards personalized and advanced rehabilitation technologies. This expansion can be seen as a strategic move to capture a larger share of the market and address unmet needs within the rehabilitative care model. As the company transitions to a publicly traded entity, the ability to innovate and rapidly respond to market needs will be pivotal in maintaining the growth trajectory and competing with established players in the medical technology field.
The decrease in research and development costs, albeit slight, may be an area of interest for stakeholders. Continuous investment in R&D is crucial for maintaining a competitive edge, especially in the high-tech medical device industry. The reported decrease could be a strategic reallocation of resources following the recent product introduction, but it will be important for DIH to balance cost-saving measures with the necessity of ongoing innovation.
NORWELL, Mass., Feb. 20, 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 reported financial results for the six months ended September 30, 2023.
Recent Highlights
- Revenue of
$27.3 million for the 6 months end September 30, 2023, representing growth of57.7% over the prior year period - Revenue from device sales in the 6 months end September 30, 2023 increased by
73.9% - Publicly listed on Nasdaq Global Markets following completion of the business combination with Aurora Technology Acquisition Corp (ATAK) on February 7, 2024
- Introduction of the Armeo®Spring Pro to the upper extremity device portfolio
“We are very pleased with the Company’s performance in the first half of Fiscal Year 2024 as we’re continuing to penetrate new and existing markets, seeing strong growth momentum throughout the first two quarters after strong growth in the prior year,” said Jason Chen, Chairman and CEO of DIH. “I’m excited by the significant growth opportunities ahead of us as we begin to operate as a publicly traded company; and look forward to connecting with the many valued stakeholders in DIH’s mission to advance our vision for a transformative rehabilitative care model.”
First Half 2024 Financial Results
Revenue for the six months ended September 30, 2023 increased by
Changes in foreign currency exchange rates had a favorable impact on our combined net sales in six months ended September 30, 2023, resulting in an increase of approximately
Cost of sales for the six months ended September 30, 2023 increased by
Selling, general and administrative expense for the six months ended September 30, 2023 increased by
Research and development costs for the six months ended September 30, 2023 decreased by
As of September 30, 2023 DIH’s cash and cash equivalents amounted to
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.
Investor Contact
Greg Chodaczek
332-895-3230
Investor.relations@dih.com
| DIH HOLDING US, INC. AND SUBSIDIARIES INTERIM CONDENSED COMBINED BALANCE SHEETS (UNAUDITED) (in thousands) | ||||||||
| As of September 30, 2023 | As of March 31, 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,987 | $ | 5,560 | ||||
| Restricted cash | 501 | 415 | ||||||
| Accounts receivable, net of allowances of | 4,891 | 6,079 | ||||||
| Inventories, net | 8,170 | 6,121 | ||||||
| Promissory note - related party | 405 | — | ||||||
| Due from related party | 119 | 7,400 | ||||||
| Other current assets | 5,611 | 5,210 | ||||||
| Total current assets | 21,684 | 30,785 | ||||||
| Property, and equipment, net | 632 | 826 | ||||||
| Capitalized software, net | 2,293 | 2,203 | ||||||
| Other intangible assets, net | 380 | 380 | ||||||
| Operating lease, right-of-use assets, net | 4,887 | 3,200 | ||||||
| Deferred tax assets | — | 1 | ||||||
| Other assets | 46 | 39 | ||||||
| Total assets | $ | 29,922 | $ | 37,434 | ||||
| Liabilities and Equity (Deficit) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 5,638 | $ | 3,200 | ||||
| Employee compensation | 3,684 | 3,678 | ||||||
| Due to related party | — | 7,322 | ||||||
| Current maturities of long-term debt | 1,472 | 1,514 | ||||||
| Revolving credit facilities | 10,931 | 12,976 | ||||||
| Current portion of deferred revenue | 8,992 | 9,374 | ||||||
| Current portion of long-term operating lease | 1,675 | 1,255 | ||||||
| Advance payments from customers | 9,918 | 6,878 | ||||||
| Accrued expenses and other current liabilities | 12,692 | 12,411 | ||||||
| Total current liabilities | 55,002 | 58,608 | ||||||
| Long-term debt, net of current maturities | — | 489 | ||||||
| Non-current deferred revenues | 3,906 | 2,282 | ||||||
| Long-term operating lease | 3,238 | 1,970 | ||||||
| Deferred tax liabilities | 409 | 391 | ||||||
| Other non-current liabilities | 3,281 | 2,748 | ||||||
| Total liabilities | $ | 65,836 | $ | 66,488 | ||||
| Commitments and contingencies (Note 15) | ||||||||
| Equity (Deficit): | ||||||||
| Net parent company investment | (39,093 | ) | (32,977 | ) | ||||
| Accumulated other comprehensive income | 3,179 | 3,923 | ||||||
| Total (deficit) | $ | (35,914 | ) | $ | (29,054 | ) | ||
| Total liabilities and (deficit) | $ | 29,922 | $ | 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 Six Months Ended September 30, | |||||||||
| 2023 | 2022 | ||||||||
| Revenue | $ | 27,314 | $ | 17,325 | |||||
| Cost of sales | 14,736 | 7,028 | |||||||
| Gross profit | 12,578 | 10,297 | |||||||
| Operating expenses: | |||||||||
| Selling, general, and administrative expense | 13,713 | 11,837 | |||||||
| Research and development | 3,763 | 3,857 | |||||||
| Total operating expenses | 17,476 | 15,694 | |||||||
| Operating loss | (4,898 | ) | (5,397 | ) | |||||
| Other income (expense): | |||||||||
| Interest expense | (500 | ) | (411 | ) | |||||
| Other income (expense), net | (430 | ) | 325 | ||||||
| Total other income (expense) | (930 | ) | (86 | ) | |||||
| Loss before income taxes | (5,828 | ) | (5,483 | ) | |||||
| Income tax expense (benefit) | 278 | (34 | ) | ||||||
| Net loss | $ | (6,106 | ) | $ | (5,449 | ) | |||
See accompanying notes to the condensed combined financial statements. | |||||||||
| DIH HOLDING US, INC. AND SUBSIDIARIES INTERIM CONDENSED COMBINED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) (in thousands) | ||||||||
| For the Six Months Ended September 30, | ||||||||
| 2023 | 2022 | |||||||
| Net loss | $ | (6,106 | ) | $ | (5,449 | ) | ||
| Other comprehensive (loss) income, net of tax: | ||||||||
| Foreign currency translation adjustments | (314 | ) | 1,486 | |||||
| Pension liability adjustments | (430 | ) | (226 | ) | ||||
| Other comprehensive (loss) income | (744 | ) | 1,260 | |||||
| Comprehensive loss | $ | (6,850 | ) | $ | (4,189 | ) | ||
See accompanying notes to the condensed combined financial statements. | ||||||||
| DIH HOLDING US, INC. AND SUBSIDIARIES INTERIM 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 | (5,449 | ) | - | (5,449 | ) | |||||||||
| Other comprehensive income, net of tax | - | 1,260 | 1,260 | |||||||||||
| Net transactions with parent | (4 | ) | - | (4 | ) | |||||||||
| Balance, September 30, 2022 | $ | (35,956 | ) | $ | 5,341 | $ | (30,615 | ) | ||||||
| Net Parent Company Investment | Accumulated Other Comprehensive Income (Loss) | Total Equity (Deficit) | ||||||||||||
| Balance, March 31, 2023 | $ | (32,977 | ) | $ | 3,923 | $ | (29,054 | ) | ||||||
| Net loss | (6,106 | ) | - | (6,106 | ) | |||||||||
| Other comprehensive loss, net of tax | - | (744 | ) | (744 | ) | |||||||||
| Net transactions with parent | (10 | ) | - | (10 | ) | |||||||||
| Balance, September 30, 2023 | $ | (39,093 | ) | $ | 3,179 | $ | (35,914 | ) | ||||||
See accompanying notes to the condensed combined financial statements. | ||||||||||||||
| DIH HOLDING US, INC. AND SUBSIDIARIES INTERIM CONDENSED COMBINED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) | ||||||||
| For the Six Months Ended September 30, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (6,106 | ) | $ | (5,449 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 211 | 235 | ||||||
| Allowance for doubtful accounts | (870 | ) | 97 | |||||
| Allowance for inventory obsolescence | 708 | (121 | ) | |||||
| Gain on disposal of fixed assets | - | (3 | ) | |||||
| Pension contributions | (324 | ) | (296 | ) | ||||
| Pension (income) expense | 136 | (245 | ) | |||||
| Foreign exchange (gain) loss | 428 | (320 | ) | |||||
| Noncash lease expense | 1,000 | 935 | ||||||
| Noncash interest expense | 2 | 68 | ||||||
| Deferred income tax | 12 | (89 | ) | |||||
| Changes in operating assets and liabilities: | - | |||||||
| Accounts receivable | 2,004 | 1,996 | ||||||
| Inventories | (2,470 | ) | (1,568 | ) | ||||
| Due from related parties | - | (60 | ) | |||||
| Due to related parties | - | (1 | ) | |||||
| Other assets | (150 | ) | (916 | ) | ||||
| Operating lease liabilities | (898 | ) | (798 | ) | ||||
| Accounts payable | 1,840 | 754 | ||||||
| Employee compensation | (81 | ) | 316 | |||||
| Other liabilities | 74 | 424 | ||||||
| Deferred revenue | 1,604 | 206 | ||||||
| Advance payments from customers | 2,992 | 7,847 | ||||||
| Accrued expense and other current liabilities | (2 | ) | 735 | |||||
| Net cash provided by operating activities | 110 | 3,747 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (49 | ) | (15 | ) | ||||
| Proceeds from sale of property and equipment | 62 | - | ||||||
| Payments to related party for promissory note | (405 | ) | - | |||||
| Net cash used in investing activities | (392 | ) | (15 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Payments on credit facilities | (2,679 | ) | (1,462 | ) | ||||
| Payments on long term debt | (625 | ) | (465 | ) | ||||
| Net cash used in financing activities | (3,304 | ) | (1,927 | ) | ||||
| Effect of currency translation on cash and cash equivalents | 99 | (262 | ) | |||||
| Net decrease in cash, and cash equivalents, and restricted cash | (3,487 | ) | 1,543 | |||||
| Cash, and cash equivalents, and restricted cash - beginning of year | 5,975 | 3,687 | ||||||
| Cash, and cash equivalents, and restricted cash - end of year | $ | 2,488 | $ | 5,230 | ||||
| Cash and cash equivalents - end of year | $ | 1,987 | $ | 4,832 | ||||
| Restricted cash - end of year | 501 | 398 | ||||||
| Total cash, and cash equivalents, and restricted cash - end of year | $ | 2,488 | $ | 5,230 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Interest paid | $ | 498 | $ | 346 | ||||
| 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. | ||||||||
FAQ
What was DIH Holding US, Inc.'s revenue for the six months ended September 30, 2023?
How much did the revenue increase compared to the prior year period?
What was the growth percentage in device sales revenue for DIH Holding US, Inc. in the six months ended September 30, 2023?
When did DIH Holding US, Inc. become publicly listed?
What new device was introduced to DIH Holding US, Inc.'s portfolio?
How much did cost of sales increase by for the six months ended September 30, 2023?
What was the primary reason for the increase in selling, general, and administrative expenses for DIH Holding US, Inc.?
How much did research and development costs decrease by for the six months ended September 30, 2023?
What was DIH Holding US, Inc.'s cash and cash equivalents as of September 30, 2023?
