Company: IPST
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001788230-25-000062
Chunk: 250

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 2
Chunk 250
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000 in Products Gross Profits, and the resulting low Gross Margin of 2.8%, is after layering in the $461,000 in unabsorbed overhead costs. 

Gross Profit - Analysis of Exclusion of Unabsorbed Overhead

To provide a more detailed view to our performance for products and services based purely on the direct input costs we remove unabsorbed overhead expenses for the following analysis. Gross profit excluding unabsorbed overhead was approximately $485,000 and $681,000 for the three months ended March 31, 2025 and 2024, respectively, a decrease of approximately $196,000, or 28.8%, period over period, and included:

Three Months Ended March 31, (rounded to $000’s)Total Gross Profit - Excluding Unabsorbed Overhead20252024ChangeProducts$24,000 $19,000 $5,000 Add Back: Unabsorbed Overhead461,000 662,000 (201,000)     Products Gross Profit Excluding Unabsorbed Overhead485,000 681,000 (196,000)Services248,000 390,000 (142,000)     Total Gross Profit Excluding Unabsorbed Overhead$733,000 $1,071,000 $(338,000)

Three Months Ended March 31, (rounded to $000’s)Total Gross Margin - Excluding Unabsorbed Overhead20252024ChangeProducts2.8 %1.5 %1.3 %Add Back: Unabsorbed Overhead55.0 %53.7 %1.3 %     Products Gross Margin Excluding Unabsorbed Overhead57.9 %55.3 %2.6 %Services97.7 %82.3 %15.4 %     Total Gross Margin Excluding Unabsorbed Overhead67.1 %62.8 %4.3 %

Gross Margin excluding unabsorbed overhead of 67.1% for the three months ended March 31, 2025 compared to 62.8% for the same period in 2024 is a significant increase, as is the improvement compared to the 55.6% we reported for 

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the full year 2024, indicating our efforts aimed at reducing overhead expenses and focusing on high margin