DIH Announces Third Quarter 2025 Financial Results

February 14, 2025 17:07 ET | Source: DIH Holding US, Inc. NORWELL, Mass., Feb. 14, 2025 (GLOBE NEWSWIRE) -- DIH Holding US, Inc. ("DIH")(NASDAQ:DHAI), a global provider of advanced robotic devices used in physical rehabilitation, which incorporates visual stimulation in an interactive manner to enable clinical research and intensive functional rehabilitation and training in patients with walking impairments, reduced balance and/or impaired arm and hand functions, today announced financial results for the third fiscal quarter ended December 31, 2024. Recent Highlights Revenue of $15.1 million for the quarter ended December 31, 2024, representing a decline of 21% over the prior year periodDevice revenue of $11.7 million and service revenue of $3.1 million for the quarter ended December 31, 2024, representing a decline of 26% and growth of 4%, respectively, over the prior year periodRevenue decline in Europe, Middle East and Africa (EMEA) and the Americas of 29% and 7%, respectively, over the prior year periodAnnounced collaborations with Nobis Rehabilitation Partners and Zahrawi Group, expanding our distribution network and device integration pipelineClosed on a public offering yielding gross proceeds of approximately $4.6 million before deducting placement agent's fees other offering expensesReiterated revenue guidance for the fiscal year 2025 to range between $60 and $67 million “Our third quarter results were in line with our expectations despite facing challenges with import restrictions related to the ongoing conflict between Russia and Ukraine and lower overall European sales volumes. We continue to position the company for future success through upgrades to our commercial organizations while also remaining focused on reaching our year-end revenue targets,” said Jason Chen, Chairman and CEO of DIH. "Interest in our products remains high, as evidenced by multiple recently formed partnerships, and the recent stock offering will enable us to continue working towards fulfilling this order demand. We remain confident for a strong finish through the remainder of fiscal year 2025 and are reiterating our full year revenue guidance range of $60 to $67 million." Financial Results for the Third Fiscal Quarter Ended December 31, 2024 Revenue for the three months ended December 31, 2024 decreased by $3.9 million, or 20.6%, to $15.1 million from $19.0 million for the three months ended December 31, 2023. The overall decrease was primarily due to a decrease in devices sold of $4.0 million, or 25.6% year over year. The decrease in devices revenue was primarily driven by lower sales volume in EMEA. In EMEA, we sell our equipment through a distributor network across Europe. One of our largest sales partners, which primarily operates in Eastern Europe, has been impacted by wartime import restrictions resulting from the ongoing conflict between Russia and Ukraine. The decrease was offset by a $0.1 million increase in service revenue for the three months ended December 31, 2024 compared to the three months ended December 31, 2023. Other revenue was consistent in the three months ended December 31, 2024 compared to that in the three months ended December 31, 2023. Total revenue in the EMEA and in the Americas decreased by $3.6 million and $0.3 million, respectively, to $8.7 million and $3.5 million for the three months ended December 31, 2024 compared to $12.3 million and $3.8 million for the three months ended December 31, 2023. The impact due to foreign currency translation gain was $0.2 million for the three months ended December 31, 2024. Gross profit for the third fiscal quarter ended December 31, 2024, was $7.2 million, a decrease of 30.4% compared to the prior year period. The decrease was driven by a decrease in sales of $3.9 million, primarily in the EMEA region. Cost of sales for the three months ended December 31, 2024 decreased by $0.8 million, or 8.7%, to $7.9 million from $8.6 million for the three months ended December 31, 2023. Selling, general and administrative expense for the three months ended December 31, 2024 increased by $2.8 million, or 50.6%, to $8.2 million from $5.4 million for the three months ended December 31, 2023. The increase was driven by a $1.1 million increase in employee compensation due to increase in headcount and stock compensation and $1.0 million increase in other overhead costs to support future sales growth. The increase is also attributable to $0.5 million increase in professional service costs in connection with the Company becoming a publicly listed company during the year. Research and development costs for the three months ended December 31, 2024 increased by $0.1 million, or 7.7%, to $1.8 million from $1.7 million for the three months ended December 31, 2023. The increase was primarily attributable to a $0.2 million increase in the amortization expense related to capitalized software that was ready for its intended use in July 2024. The increase was offset by a $0.1 million decrease in external consulting fees. Cash and cash equivalents on December 31, 2024 totaled $1.1 million. Fiscal Year 2025 Outlook The Company has reiterated its revenue guidance for fiscal year 2025 to range between $60 million and $67 million. Subsequent Events On February 3, 2025, the Company closed an offering of 5,937,100 Units (“Units”), each consisting of one share of common stock, par value $0.0001 per share, and one Class A warrant to purchase one share of common stock at a public offering price of $0.7832 per Unit, for gross proceeds of $4.6 million. The Units have no stand-alone rights and will not be certified or issued as stand-alone securities. The common stock and Class A warrants are immediately separable and were issued separately in this offering. Each Class A warrant was immediately exercisable for one share of common stock at an exercise price of $0.7832 per share (100% of the public offering price per Unit) and will expire on the fifth anniversary of the original issuance date. The offering resulted in a net proceeds of approximately $3.9 million, after deducting placement agent fees sand estimated offering expenses payable by the Company. Subsequent to the close of the stock offering, the conversion price of the Debentures and the exercise price of the warrants issued in connection with the convertible note changed to $0.7832 pursuant to the Purchase Agreement. The number of Common Stock issuable increased to 2,106,742 shares from 330,000 shares. About DIH Holding US, Inc. DIH stands for the vision to “Deliver Inspiration & Health” to improve the daily lives of millions of people with disabilities and functional impairments through providing devices and solutions enabling intensive rehabilitation. DIH is a global provider of advanced robotic devices used in physical rehabilitation, which incorporate visual stimulation in an interactive manner to enable clinical research and intensive functional rehabilitation and training in patients with walking impairments, reduced balance and/or impaired arm and hand functions. Built through the mergers of global-leading niche technology providers, DIH is a transformative rehabilitation solutions provider and consolidator of a largely fragmented and manual-labor-driven industry. Caution Regarding Forward-Looking Statement 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 ability of DIH to achieve its projected revenue, the failure of DIH realize the anticipated benefits of the recently-completed business combination and access to sources of additional debt or equity capital if needed. 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 Investor.relations@dih.com DIH HOLDING US, INC.CONSOLIDATED BALANCE SHEETS(in thousands, except share and per share data, unaudited) As of December 31, 2024 As of March 31, 2024 Assets Current assets: Cash and cash equivalents $1,120 $3,225 Accounts receivable, net of allowances of $240 and $667, respectively 3,834 5,197 Inventories, net 7,962 7,830 Due from related party 6,333 5,688 Other current assets 4,909 5,116 Total current assets 24,158 27,056 Property, and equipment, net 714 530 Capitalized software, net 1,768 2,131 Other intangible assets, net 380 380 Operating lease, right-of-use assets, net 3,735 4,466 Other tax assets 152 267 Other assets 907 905 Total assets $31,814 $35,735 Liabilities and Deficit Current liabilities: Accounts payable $3,945 $4,305 Due to related party 10,213 10,192 Advance payments from customers 9,476 10,562 Current portion of deferred revenue 6,644 5,211 Employee compensation 3,937 2,664 Current maturities of convertible debt, at fair value 1,918 — Current portion of long-term operating lease 1,331 1,572 Manufacturing warranty obligation 582 513 Accrued expenses and other current liabilities ($1,111 measured at fair value) 9,278 9,935 Total current liabilities 47,324 44,954 Notes payable - related party 8,648 11,457 Non-current deferred revenues 4,986 4,670 Long-term operating lease 2,443 2,917 Convertible debt, net of current maturities, at fair value 693 — Deferred tax liabilities 221 112 Other non-current liabilities 5,381 4,171 Total liabilities 69,696 68,281 Commitments and contingencies Deficit: Preferred stock, $0.00001 par value; 10,000,000 shares authorized; no shares issued and outstanding at December 31, 2024 and March 31, 2024 — — Common stock, $0.0001 par value; 100,000,000 shares authorized; 34,861,837 shares issued and outstanding at December 31, 2024; 34,544,935 shares issued and outstanding at March 31, 2024 3 3 Additional paid-in-capital 3,773 2,613 Accumulated deficit (39,484) (35,212)Accumulated other comprehensive income (loss) (2,174) 50 Total deficit (37,882) (32,546)Total liabilities and deficit $31,814 $35,735 DIH HOLDING US, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data, unaudited) Three Months EndedDecember 31, For the Nine Months Ended December 31, 2024 2023 2024 2023 Revenue $15,094 $19,011 $50,216 $45,116 Cost of sales 7,858 8,611 23,968 23,911 Gross profit 7,236 10,400 26,248 21,205 Operating expenses: Selling, general, and administrative expense 8,196 5,443 22,564 17,652 Research and development 1,786 1,659 5,341 4,681 Total operating expenses 9,982 7,102 27,905 22,333 Operating income (loss) (2,746) 3,298 (1,657) (1,128)Other income (expense): Interest expense (25) (185) (186) (460)Other income (expense), net (590) 237 (1,004) (181)Total other income (expense) (615) 52 (1,190) (641)Income (loss) before income taxes (3,361) 3,350 (2,847) (1,769)Income tax expense 367 381 1,425 659 Net Income (loss) $(3,728) $2,969 $(4,272) $(2,428) Net income (loss) per share, basic and diluted $(0.11) $0.12 $(0.12) $(0.10)Weighted average common shares outstanding, basic and diluted 34,645 25,000 34,578 25,000 DIH HOLDING US, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS(in thousands, unaudited) Three Months Ended December 31, For the Nine Months Ended December 31, 2025 2023 2024 2023 Net Income (loss) $(3,728) $2,969 $(4,272) $(2,428)Other comprehensive (loss) income, net of tax Foreign currency translation adjustments, net of tax of $0 (145) 636 (1,079) 876 Pension liability adjustments, net of tax of $0 (64) (704) (1,145) (1,064)Other comprehensive loss (209) (68) (2,224) (188)Comprehensive income (loss) $(3,937) $2,901 $(6,496) $(2,616) DIH HOLDING US, INC. AND SUBSIDIARIESCONDENSED COMBINED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)(in thousands, unaudited) For the Three Months Ended December 31, Common Stock Shares Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Equity (Deficit) Balance, September 30, 2024 34,544,935 $3 $3,323 $(35,756)$(1,965)$(34,395)Net loss — — — (3,728) — (3,728)Other comprehensive loss, net of tax — — — — (209) (209)Net transactions with parent 316,902 — 450 — — 450 Balance, December 31, 2024 34,861,837 $3 $3,773 $(39,484)$(2,174)$(37,882) Shares(1) Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Equity (Deficit) Balance, September 30, 2023 25,000,000 $2 $(1,898)$(32,166)$(409)$(34,471)Net loss — — — 2,969 — 2,969 Other comprehensive loss, net of tax — — — — (68) (68)Balance, December 31, 2023 25,000,000 $2 $(1,898)$(29,197)$(477)$(31,570) For the Nine Months Ended December 31, Common Stock Shares Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Equity (Deficit) Balance, March 31, 2024 34,544,935 $3 $2,613 $(35,212)$50 $(32,546)Net loss — — — (4,272) — (4,272)Out of period adjustment related to reverse recapitalization (Note 2) — — 710 — — 710 Other comprehensive loss, net of tax — — — — (2,224) (2,224)Stock Compensation 316,902 — 450 — — 450 Balance, December 31, 2024 34,861,837 $3 $3,773 $(39,484)$(2,174)$(37,882) Shares(1) Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Equity (Deficit) Balance, March 31, 2023 25,000,000 $2 $(1,898)$(26,769)$(289)$(28,954)Net loss — — — (2,428) — (2,428)Other comprehensive loss, net of tax — — — — (188) (188)Balance, December 31, 2023 25,000,000 $2 $(1,898)$(29,197)$(477)$(31,570) (1) All outstanding share and per-share amounts have been restated to reflect the reverse recapitalization as established in the Business Combination Agreement as described in Note 1 to the condensed consolidated financial statements. DIH HOLDING US, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands, unaudited) For the Nine Months Ended December 31, 2024 2023 Cash flows from operating activities: Net loss $(4,272) $(2,428)Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 611 230 Provision for credit losses (427) (815)Allowance for inventory obsolescence (67) 705 Stock compensation 450 — Pension contributions (475) (456)Pension expense 238 201 Change in fair value of convertible debt and warrant liability 1,193 — Foreign exchange (gain) loss (241) 181 Noncash lease expense 1,263 1,165 Noncash interest expense — 19 Deferred and other noncash income tax (income) expense 257 (237)Changes in operating assets and liabilities: Accounts receivable 1,762 1,298 Inventories (106) (2,186)Due from related parties (1,079) (294)Due to related parties 100 1,910 Other assets 114 (2,540)Operating lease liabilities (1,275) (1,352)Accounts payable (336) 1,484 Employee compensation 1,276 (603)Other liabilities 157 205 Deferred revenue 1,819 807 Manufacturing warranty obligation 75 189 Advance payments from customers (1,036) 4,992 Accrued expense and other current liabilities (849) 702 Net cash provided by (used in) operating activities (848) 3,177 Cash flows from investing activities: Purchases of property and equipment (444) (135)Net cash used in investing activities (444) (135)Cash flows from financing activities: Proceeds from issuance of convertible debt, net of issuance costs 2,809 — Payment on convertible debt (471) — Payments on related party notes payable (3,156) (4,543)Net cash used in financing activities (818) (4,543)Effect of currency translation on cash and cash equivalents 5 5 Net decrease in cash, and cash equivalents, and restricted cash (2,105) (1,496)Cash, cash equivalents and restricted cash - beginning of period 3,225 3,175 Cash, cash equivalents and restricted cash- end of period $1,120 $1,679 Supplemental disclosure of cash flow information: Interest paid $218 $442 Income tax paid $15 $— Supplemental disclosure of non-cash investing and financing activity: Accounts payable settled upon reverse recapitalization $710 $—

DIH Announces Third Quarter 2025 Financial Results

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