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Earnings Per Share
 3 Months Ended
Dec. 31, 2016
Earnings per share attributable to RCIHH common shareholders  
Earnings Per Share

7. Earnings Per Share

 

Basic earnings per share (“EPS”) 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 restricted stock, stock options and warrants (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 restricted stock, 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).

 

The table below presents the reconciliation of the numerator and the denominator in the calculation of basic and diluted EPS (in thousands, except per share amounts):

 

    For the Three Months  
    Ended December 31,  
    2016     2015  
Numerator -            
Net income attributable to RCIHH common shareholders – basic   $ 2,898     $ 2,552  
Adjustment to net income from assumed conversion of debentures(2)     5       85  
Adjusted net income attributable to RCIHH common shareholders – diluted   $ 2,903     $ 2,637  
Denominator(1)(3)                
Weighted average number of common shares outstanding – basic     9,768       10,296  
Effect of potentially dilutive convertible debentures(2)     46       339  
Adjusted weighted average number of common shares outstanding – diluted     9,814       10,635  
                 
Basic earnings per share   $ 0.30     $ 0.25  
Diluted earnings per share   $ 0.30     $ 0.25  

 

(1) All outstanding restricted stock, warrants and options were considered for the EPS computation. Potentially dilutive options and warrants of 172,400 for the three months ended December 31, 2015 have been excluded from earnings per share due to their being anti-dilutive. No restricted stock or options were outstanding during the three months ended December 31, 2016.

 

(2) Convertible debentures (principal and accrued interest) outstanding at the beginning of the quarters ended December 31, 2016 and 2015 totaling $859,000 and $3.9 million, respectively, were convertible into common stock at a price of $10.25 and $12.50 per share in fiscal 2017 and $10.00, $10.25 and $12.50 per share in fiscal 2016.

 

(3) As of January 4, 2017, in relation to paying off certain convertible notes (see Note 11), the Company has no more outstanding restricted stock, stock options, warrants or convertible debt.