9.	EARNINGS PER SHARE (EPS)

The Company computes earnings per share in accordance with GAAP, which provides for the calculation of basic and diluted earnings per share. 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).

	FOR THE QUARTER				FOR THE SIX MONTHS
	ENDED MARCH 31,				ENDED MARCH 31,
	2016		2015		2016		2015
Basic earnings per share:
Net income (loss) attributable to RCIHH’s shareholders	$	5,505	$	(2,841)	$	8,057	$	519
Average number of common shares outstanding		10,013		10,275		10,154		10,269
Basic earnings (loss) per share - net income attributable to RCIHH’s shareholders	$	0.55	$	(0.28)	$	0.79	$	0.05
Diluted earnings per share:
Net income (loss) attributable to RCIHH’s shareholders	$	5,505	$	(2,841)	$	8,057	$	519
Adustment. to net earnings from assumed conversion of debentures (1)		50		-		100		-
Adjusted net income (loss) attributable to RCIHH’s shareholders	$	5,555	$	(2,841)	$	8,157	$	519
Average number of common shares outstanding:
Common shares outstanding		10,013		10,275		10,154		10,269
Potential dilutive shares resulting from exercise of warrants and options (2)		-		-		-		4
Potential dilutive shares resulting from conversion of debentures (3)		202		-		202		-
Total average number of common shares outstanding used for dilution		10,215		10,275		10,356		10,273
Diluted earnings (loss) per share - net income attributable to RCIHH’s shareholders	$	0.54	$	(0.28)	$	0.79	$	0.05

(1) Represents interest expense on dilutive convertible debentures that would not occur if they were assumed converted.

(2) All outstanding warrants and options were considered for the EPS computation. Potential dilutive options and warrants of 121,180 and 242,400 for the six months ended March 31, 2016 and 2015, respectively, have been excluded from earnings per share due to being anti-dilutive.

(3) Convertible debentures (principal and accrued interest) outstanding at March 31, 2016 and 2015 totaling $2.3 million and $6.0 million, respectively, were convertible into common stock at a price of $10.00 to $12.50 per share in 2015 and $10.25 to $12.50 in 2016. No potential dilutive shares for each of the three and six month periods ended March 31, 2016 have been excluded from earnings per share due to being anti-dilutive. During the three and six month periods ended March 31, 2015, 524,194 shares have been excluded from earnings per share due to being anti-dilutive each period.

* EPS may not foot due to rounding.