Craft distiller Heritage Distilling Co. (Nasdaq: CASK) reported its full year 2024 financial results for the twelve-month period ended December 31, 2024.

“2024 was a transformative year for Heritage,” Heritage Distilling co-founder and CEO Justin Stiefel said in a news release. “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.”

The company also expanded into new markets last year, including Colorado, Kentucky, and Oklahoma, launched new products, and continued support for non-profits and charities. 

“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,” Stiefel said. “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 2023
• Net income: $710,458 – This is the first time the Company has achieved profitability
• Net income per share: $0.05 per share
• Revenue: 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: $2,125,847
• Total liabilities: Reduced by $42,482,429 year over year
• Adjusted gross margin excluding unabsorbed overhead: 55.6% for 2024 compared to 54.8% for 2023
• Cash based operating expenses reduced by $1.1 million in 2024 vs 2023
• Q4 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 International
  • Matt 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 Colorado
• Opened 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 Arizona
• Saw its Cocoa Bomb chocolate whiskey win “World’s Best Flavored Whiskey” from Whiskey Magazine
• Launched 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 charities
• Q1 2025 sales of the Salute Series surpassing Q4 2024 sales via DtC channel
• Additional 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. 

Heritage 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.

Heritage noted it ended 2024 with strong sales of $3.1 million for the 4^th quarter, improving sales by $0.6 million over 4^th 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.

Read more: Heritage Distilling Releases Green Beret Tribute Whiskey

About Heritage Distilling Company, Inc.

Heritage Distilling is among the independent craft distilleries in the United States offering a variety of whiskeys, vodkas, gins, rums and ready-to-drink canned cocktails. 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. For more information, visit https://heritagedistilling.com/.