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Heritage Distilling Co. Reports Full Year 2024 Financial Results

1. CASK reported EBITDA over $4.5 million and first-ever profitability. 2. Revenue grew 26.4% in Q4 2024 compared to Q4 2023. 3. Total liabilities decreased by $42.5 million due to IPO. 4. New markets and product launches expand growth potential in 2025. 5. Company initiated cost-reduction strategies to enhance efficiency.

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Why Very Bullish?

CASK's financial turnaround, with positive EBITDA and first-time profitability, indicates strong market confidence. Historical precedents show companies achieving profitability often see considerable stock price appreciation, supporting investor sentiment.

How important is it?

The article highlights significant milestones for CASK, such as positive financial performance and market expansion, which are crucial for investor analysis and confidence.

Why Long Term?

With ongoing growth initiatives, entering new markets, and effective cost management, CASK's positive trajectory is likely sustainable. Companies demonstrating long-term growth often attract investors looking for stable returns.

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Company achieves EBITDA exceeding $4.5 million and profitability with net income exceeding $0.7 million, or $0.05 per share, for full year 2024 Heritage reported Q4 2024 topline revenue increased 26.4% versus Q4 2023, eclipsing $3 million Heritage reported 5.4% year over year revenue growth GIG HARBOR, Wash., April 28, 2025 (GLOBE NEWSWIRE) --  Heritage Distilling Company, Inc. ("HDC" or "Heritage" or the “Company”) (Nasdaq: CASK), a leading craft distiller of innovative premium brands, today reported its full year 2024 financial results for the twelve-month period ended December 31, 2024. “2024 was a transformative year for Heritage. We successfully transitioned from a private company to a publicly traded company with our IPO in November, marking our debut on Nasdaq. This move strengthened our balance sheet, significantly reduced our liabilities, and put us in a position to grow significantly. I’m proud to report that we achieved positive EBITDA and net income for the first time in the Company’s history and increased our revenue year-over-year,” said Heritage Distilling co-founder and CEO, Justin Stiefel. “We operate in the rapidly growing craft spirits segment of the $288 billion spirits market. In addition to our financial progress, we expanded into new markets last year including Colorado, Kentucky, and Oklahoma, launched new products, and continued our support for non-profits and charities. With a reach in 47 states, we plan to keep extending our growth through online direct-to-consumer sales and via Company-owned and co-located tasting rooms, as well as through our Tribal Beverage Network (TBN). “With a solid financial foundation from which to build, Heritage is poised for continued expansion in 2025, with preliminary first quarter 2025 results already looking promising. We have also identified more than $1 million in annualized cost reductions already being put into place in 2025 as we work to get more efficient and preserve cash while focusing our resources on profitable growth.” Full Year 2024 Financial Highlights EBITDA: $4,539,962 for 2024 compared to $(32,834,439) for 2023Net income: $710,458 - This is the first time the Company has achieved profitabilityNet income per share: $0.05 per shareRevenue: Best topline revenue since COVID-19 pandemic, up 5.4% year over year, increasing $431,264 to $8,402,488 for 2024 compared to $7,971,224 in 2023.Gross profit: $2,125,847Total liabilities: Reduced by $42,482,429 year over yearAdjusted gross margin excluding unabsorbed overhead: 55.6% for 2024 compared to 54.8% for 2023Cash based operating expenses reduced by $1.1 million in 2024 vs 2023Q4 2024 gross revenue of $3,092,581 versus $2,445,840 for Q4 2023, an increase of 26.4% Company Achievements Announced for 2024 and Q1 2025 Added three new board members with substantial public company leadership credentials: Troy Alstead – 24-year veteran of Starbucks as CFO and COO; currently director for Harley-Davidson, Levi-Strauss, Array Technologies, OYO Global and RASA Indian Grill.Andrew Varga – 23-year veteran of Brown-Forman as CMO and CMO of Papa John’s InternationalMatt Swann – 10-year VP at Amazon, CTO at Booking.com, CIO for Citibank and currently a director at Payfare Inc. and Thredd Payments. Expanded wholesale distribution into Kentucky, Oklahoma and ColoradoOpened new Tribal Beverage Network “HDC” branded tasting room at the Angel of the Winds Casino and broke ground on two more new locations with Tribes in Oregon and ArizonaSaw its Cocoa Bomb chocolate whiskey win “World’s Best Flavored Whiskey” from Whiskey MagazineLaunched several new labels under its Salute Series brand, generating more than $2.4 million in retail sales since its launch, with more than 87% of it being sold through its high margin Direct to Consumer (DtC) channel, while raising more than $200,000 for military and first responder charitiesQ1 2025 sales of the Salute Series surpassing Q4 2024 sales via DtC channelAdditional annualized expense reductions greater than $1 million being implemented for 2025 Full Year 2024 Financial Results The Company reported net sales of approximately $8,402,488 and $7,971,224 for the years ended December 31, 2024, and 2023, respectively, an increase of approximately $431,264, or 5.4%, period over period. The increase in net sales resulted primarily from an increase in product sales of $1,478,451, or 28.8%, to $6,614,933 for the year ended December 31, 2024, compared to $5,136,482 for the year ended December 31, 2023, due mainly to the launch of the Special Operations Services product line in November 2023. The Company reported a positive EBITDA of $4,539,962 for 2024 compared to an EBITDA of $(32,834,439) for 2023. The Company reported net income of approximately $710,458 or $0.05 per share for the year ended December 31, 2024, compared to a net loss of $(36,798,419), or $(96.45) per share for the year ended December 31, 2023. $18,185,869 of 2024 net income and $(23,005,013) of 2023 net loss stemmed from the (increase)/decrease in fair value of certain convertible notes, warrants and contingencies, and gain on investment. The Company expects to incur operating losses and higher operating expenses for the foreseeable future as it continues to invest in inventory, digital marketing to support its online DtC sales of its high margin Salute Series line of super premium whiskeys, and the overall growth of the business. 2024 operating expenses on a cash basis (excluding expenses related to non-cash share-based RSU grant awards) were reduced by $1,065,803 compared to cash expenses for 2023 as the Company worked towards streamlining operations, exiting certain low margin contracts and third-party production efforts, instead focusing on higher margin products and services. In particular, cash-based sales and marketing expenses were reduced by $629,271 as the Company put more focus on its online DtC model, featuring its high margin Salute Series line of super premium whiskeys honoring active duty and retired military and first responders and their families. Cash based general and administrative expenses were reduced by $437,048 as the Company completed its initial public offering in November 2024. The Company noted reductions in liabilities of nearly $42.5 million year over year as a result of the closing of its IPO and the reclassification of the fair values of convertible notes and related warrant liabilities to stockholders’ equity. The overall reduction in liabilities also included a paydown of $8,465,877 in long term and short-term debt and other obligations through December 31, 2024. The Company noted it ended 2024 with strong sales of $3.1 million for the 4th quarter, improving sales by $0.6 million over 4th quarter 2023, an increase of 26.4%. The Company announced in February 2025 that it formalized a $15,000,000 equity line of credit, giving it access to more capital to help sustain and accelerate its growth. Management has identified more than $1,000,000 in annualized expense reductions slated for elimination in 2025 on top of the more than $1.0 million in expense reductions already realized in 2024 as the Company works to get more efficient, preserve cash and focus on products and activities leading to sustained profitability. Financial Results Additional information with respect to the Company’s business, operations and financial condition for the year ended December 31, 2024 is contained in the Company’s Annual Report on Form 10-K, which has been filed with the U.S. Securities and Exchange Commission (the “SEC”) at www.sec.gov. Use of Non-GAAP Measures Heritage Distilling’s management evaluates and makes operating decisions using various financial metrics. In addition to the Company's GAAP results, management also considers the non-GAAP measures of EBITDA, Adjusted EBITDA and Adjusted Gross Margin excluding unabsorbed overhead as supplements to GAAP results. Management believes these non-GAAP measures provide useful information about the Company's operating results and assists investors in comparing the Company's performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance. The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, expenses related to equity-based compensation and other one-time items. The Company defines Adjusted Gross Margin excluding unabsorbed overhead as GAAP gross profit adjusted for (excluding) unabsorbed overhead. The final tables below provide a reconciliation of these non-GAAP financial measures with the most directly comparable GAAP financial measure. About Heritage Distilling Company, Inc.Heritage is among the premier independent craft distilleries in the United States offering a variety of whiskeys, vodkas, gins, rums and ready-to-drink canned cocktails. Heritage has been North America's most awarded craft distillery by the American Distilling Institute for ten consecutive years out of the more than 2,600 craft producers. Beyond this remarkable achievement, Heritage has also garnered numerous Best of Class, Double Gold, and Gold medals at esteemed national and international spirits competitions. As one of the largest craft spirits producers on the West Coast by revenue, the company is expanding its presence nationwide through a diverse range of sales channels, including wholesale, on-premises venues, e-commerce and the innovative Tribal Beverage Network (TBN). The TBN initiative, a groundbreaking collaboration with Native American tribes, focuses on developing Heritage-branded distilleries, unique tribal brands and tasting rooms tailored to tribal communities. By serving patrons of tribal casinos and entertainment venues, the TBN creates meaningful economic and social benefits for participating tribes, while providing an additional avenue for tribes to exercise and strengthen their sovereignty. This unique partnership reflects Heritage’s commitment to innovation, community engagement and sustainable growth. Forward-Looking Statements This press release contains forward-looking statements, including statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements may be identified by words such as "aims," "anticipates," "believes," "could," "estimates," "expects," "forecasts," "goal," "intends," "may," "plans," "possible," "potential," "seeks," "will," and variations of these words or similar expressions that are intended to identify forward-looking statements. Any such statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements. These forward-looking statements include, without limitation, statements regarding current or anticipated results, anticipated growth, or benefits anticipated from the Company’s plans or results. Any forward-looking statements in this press release are based on Heritage’s current expectations, estimates and projections only as of the date of this release and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks of slowing growth for its online eCommerce sales, interruptions in that market segment, or the availability and pricing of bulk bourbon for its products. These and other risks concerning Heritage’s programs and operations are described in additional detail in its registration statement on Form S-1, and its quarterly 10-Q and annual 10-K filings, which are on file with the SEC. Heritage explicitly disclaims any obligation to update any forward-looking statements except to the extent required by law. Investor Contact        (800) 595-3550ir@heritagedistilling.com Financial Summary Tables The following financial information should be read in conjunction with the audited financial statements and accompanying notes filed by the Company with the Securities and Exchange Commission on Form 10-K for the period ended December 31, 2024, which can be viewed at www.sec.gov and in the investor relations section of the Company's website at ir.heritagedistilling.com. Heritage Distilling Holding Company, Inc.Consolidated Balance Sheets As of December 31,  2024  2023 ASSETS  Current Assets  Cash$453,162 $76,878 Accounts Receivable 638,890  721,932 Inventory 2,471,567  2,756,350 Other Current Assets 355,928  1,717,650 Total Current Assets 3,919,547  5,272,810    Long Term Assets  Property and Equipment, net of Accumulated Depreciation 5,449,412  6,428,112 Operating Lease Right-of-Use Assets, net 3,303,158  3,658,493 Investment in Flavored Bourbon LLC 14,285,222  10,864,000 Intangible Assets (Note 10) 421,151  0 Goodwill (Note 10) 589,870  0 Other Long Term Assets 31,666  44,817 Total Long Term Assets 24,080,479  20,995,422 Total Assets$28,000,026 $26,268,232    LIABILITIES & STOCKHOLDERS’ EQUITY / (DEFICIT)  Current Liabilities  Accounts Payable$4,979,353 $5,228,786 Accrued Payroll 950,974  1,321,298 Accrued Tax Liability 1,535,628  1,468,994 Other Current Liabilities 1,253,052  1,827,013 Operating Lease Liabilities, Current 1,131,545  1,294,706 Notes Payable, Current 3,758,595  14,270,956 Convertible Notes Payable (2022 and 2023 Convertible Notes) (including related party convertible notes of $0 and $17,220,203 as of December 31, 2024 and 2023, respectively) (See Notes 5 and 15) 0  36,283,891 Accrued Interest 202,367  1,152,998 Total Current Liabilities 13,811,514  62,848,642    Long Term Liabilities  Operating Lease Liabilities, net of Current Portion 2,810,015  3,081,924 Notes Payable, net of Current Portion 9,482,339  0 Convertible Notes Payable (2022 and 2023 Convertible Notes) (including a related party convertible note of $0 and $3,476,057 as of December 31, 2024 and 2023, respectively) 0  0 Convertible Notes Payable (Whiskey Notes) (including a related party convertible note of $390,607 and $0 as of December 31, 2024 and 2023, respectively) 0  1,452,562 Warrant Liabilities (2022 and 2023 Convertible Notes) (including a related party warrant liability of $0 and $340,918 as of December 31, 2024 and 2023, respectively) 0  794,868 Warrant Liabilities (Whiskey Notes) (including a related party warrant liability of $406,774 and $0 as of December 31, 2024 and 2023, respectively) 0  1,512,692 Accrued Interest, net of Current Portion 977,316  0 Other Long Term Liabilities 127,075  0 Total Long-Term Liabilities 13,396,745  6,842,046 Total Liabilities 27,208,259  69,690,688    Commitments and Contingencies (Note 13)     Stockholders’ Equity / (Deficit)  Preferred Stock, par value $0.0001 per share; 5,000,000 and 0 shares authorized; 500,000 and 0 shares designated Series A as of December 31, 2024 and 2023, respectively; 494,840 and 0 shares issued and outstanding as of December 31, 2024 and 2023, respectively 49  0 Common Stock, par value $0.0001 per share; 70,000,000 and 10,000,000 shares authorized as of December 31, 2024 and 2023 respectively; 5,273,611 and 381,484 shares issued and outstanding as of December 31, 2024 and 2023, respectively 556  67 Additional Paid-In-Capital 74,925,180  31,421,953 Accumulated Deficit (74,134,018) (74,844,476)Total Stockholders’ Equity / (Deficit) 791,767  (43,422,456)Total Liabilities & Stockholders’ Equity / (Deficit)$28,000,026 $26,268,232  Heritage Distilling Holding Company, Inc.Consolidated Statement of Operations For the Years EndedDecember 31,  2024  2023 NET SALES  Products$6,614,933 $5,136,482 Services 1,787,555  2,834,742 Total Net Sales 8,402,488  7,971,224    COST OF SALES  Products 6,173,189  4,963,176 Services 103,452  857,007 Total Cost of Sales 6,276,641  5,820,183 Gross Profit 2,125,847  2,151,041    OPERATING EXPENSES  Sales and Marketing 6,038,636  5,938,315 General and Administrative 11,006,021  7,477,285 Total Operating Expenses 17,044,657  13,415,600 Operating Loss (14,918,810) (11,264,559)   OTHER INCOME / (EXPENSE)  Interest Expense (2,535,701) (2,526,740)Gain on Investment 3,421,222  0 Change in Fair Value of Convertible Notes 14,028,067  (22,764,854)Change in Fair Value of Warrant Liabilities 736,580  (240,159)Change in Fair Value of Contingency Liability 0  0 Other Income / (Expense) (11,750) 4,893 Total Other Income / (Expense) 15,638,418  (25,526,860)Income / (Loss) Before Income Taxes 719,608  (36,791,419)Income Taxes (9,150) (7,000)Net Income / (Loss)$710,458 $(36,798,419)   Net Income / (Loss) Per Share, Basic$0.05 $(96.45)   Weighted Average Common Shares Outstanding, Basic 1,281,339  381,543    Net Income / (Loss) Per Share, Diluted (See Note 16)$(1.97)$(96.45)   Weighted Average Common Shares Outstanding, Diluted 7,077,759  381,543  Heritage Distilling Holding Company, Inc.Gross Profit Analysis excluding unabsorbed overhead  Years Ended December 31, (rounded to $000’s)   2024  2023 GAAP Total Net Sales $8,403,000 $7,972,000 GAAP Gross Profit  2,126,000  2,151,000 GAAP Gross Profit Additions/(Deductions):   Unabsorbed Overhead  2,550,000  2,215,000 Adjusted Gross Profit excluding unabsorbed overhead $4,676,000 $4,366,000 GAAP Gross Margin  25.3% 27.0%Adjusted Gross Margin excluding unabsorbed overhead  55.6% 54.8% Heritage Distilling Holding Company, Inc.EBITDA Analysis  Years Ended December 31, (rounded to $000’s)   2024  2023 Net Income (Loss) $710,000 $(36,798,000)Add (Deduct):   Income Tax  9,000  7,000 Interest Expense  2,536,000  2,527,000 Depreciation and Amortization  1,285,000  1,430,000 EBITDA $ 4,540,000  $ (32,834,000)Change in fair value of convertible notes  (14,028,000) 22,765,000 Change in fair value of warrant liabilities  (737,000) 240,000 Investment (Gain) Loss  (3,421,000) 0 Share-Based Compensation   4,892,000   19,000 Adjusted EBITDA $ (8,754,000)$ (9,810,000)     Heritage Distilling Holding Company, Inc.Non-Cash Share-Based Compensation  Years Ended December 31, (rounded to $000’s)    2024 2023ChangeProduction / Cost of Sales $178,000$-$178,000Sales and Marketing  730,000 - 730,000General and Administrative  2,414,000 6,000 2,408,000Subtotal Employee Compensation  3,322,000 6,000 3,316,000Professional Fees  1,570,000 13,000 1,557,000Total Non-Cash Share-Based Compensation $4,892,000$19,000$4,873,000

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