EARNINGS PER SHARE (EPS)

3 Months Ended

Dec. 31, 2015

EARNINGS PER SHARE (EPS)

The Company computes earnings per share in accordance with GAAP. Basic earnings per share includes no dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company.

Potential common stock shares consist of shares that may arise from outstanding dilutive common stock warrants and options (the number of which is computed using the “treasury stock method”) and from outstanding convertible debentures (the number of which is computed using the “if converted method”). Diluted EPS considers the potential dilution that could occur if the Company’s outstanding common stock options, warrants and convertible debentures were converted into common stock that then shared in the Company’s earnings (as adjusted for interest expense that would no longer occur if the debentures were converted).

(in thousands, except per share data)	FOR THE QUARTER ENDED
	DECEMBER 31,
	2015		2014
Basic earnings per share:
Net income attributable to RCIHH shareholders	$	2,552	$	3,360
Average number of common shares outstanding		10,296		10,264
Basic earnings (loss) per share:
Net income (loss) attributable to RCIHH shareholders	$	0.25	$	0.33
Diluted earnings per share:
Net income attributable to Rick's shareholders	$	2,552	$	3,360
Adjustment. to net earnings from assumed conversion of debentures (1)		85		172
Adjusted net income (loss) attributable to RCIHH shareholders	$	2,637	$	3,532
Average number of common shares outstanding:
Common shares outstanding		10,296		10,264
Potential dilutive shares resulting from exercise of warrants and options (2)		-		5
Potential dilutive shares resulting from conversion of debentures (1)		339		660
Total average number of common shares outstanding used for dilution		10,635		10,929
Diluted earnings (loss) per share:
Net income (loss) attributable to Rick's shareholders	$	0.25	$	0.32

(1) All outstanding warrants and options were considered for the EPS computation. Potential dilutive options and warrants of 172,400 and zero for each of the three months ended December 31, 2015 and 2014 have been excluded from earnings per share due to being anti-dilutive.

(2) Convertible debentures (principal and accrued interest) outstanding at December 31, 2015 and 2014 totaling $3.9 million and $7.4 million, respectively, were convertible into common stock at a price of $10.00, $10.25 and $ 12.50 per share in each year.

*EPS may not foot due to rounding.