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Revision of Prior Year Immaterial Misstatements and Reclassifications

12 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Revision of Prior Year Immaterial Misstatements and Reclassifications

3. Revision of Prior Year Immaterial Misstatements and Reclassifications

During the Company’s preparation of its fiscal year 2017 financial statements, the Company assessed the materiality of certain prior year depreciation expense and income tax misstatements that could have a material impact if corrected in the current year. The misstatement in depreciation expense relates to certain leasehold improvements to which incorrect depreciable lives were assigned. The misstatement in income taxes relates to certain differences in deferred taxes in prior years, partially offset by income taxes payable. The Company has revised its consolidated financial statements as of and for the years ended September 30, 2016 and 2015, and the opening balance of retained earnings as of September 30, 2014.

The table below presents the impact of the revision in the Company’s consolidated financial statements:

	Fiscal Year Ended September 30, 2016							Fiscal Year Ended September 30, 2015
	As Previously Reported		Adjustments			As Revised		As Previously Reported		Adjustments			As Revised
Statements of Income/ Comprehensive Income:
Depreciation and amortization	$	7,173	$	155		$	7,328	$	6,894	$	151		$	7,045
Total operating expenses		114,012		155			114,167		114,571		151			114,722
Income from operations		20,848		(155	)		20,693		20,878		(151	)		20,727
Income before income taxes		12,997		(155	)		12,842		14,153		(151	)		14,002
Income taxes		2,657		(284	)		2,373		5,164		(53	)		5,111
Net income		10,340		129			10,469		8,989		(98	)		8,891
Net income attributable to RCIHH common shareholders		11,089		129			11,218		9,312		(98	)		9,214
Earnings per share - basic	$	1.12	$	0.01		$	1.13	$	0.90	$	(0.01	)	$	0.89
Earnings per share - diluted	$	1.10	$	0.01		$	1.11	$	0.90	$	(0.01	)	$	0.89
Comprehensive income	$	10,231	$	129		$	10,360	$	9,007	$	(98	)	$	8,909
Comprehensive income attributable to RCI Hospitality Holdings, Inc.		10,980		129			11,109		9,330		(98	)		9,232

	September 30, 2016
	As Previously Reported		Reclassifications			Adjustments			As Revised
Balance Sheets/Statements of Changes in Stockholders’ Equity
Property and equipment, net	$	142,003	$	(503	)	$	(427	)	$	141,073
Goodwill		45,921		(74	)		-			45,847
Intangibles, net		52,189		577			-			52,766
Total assets		276,488		-			(427	)		276,061
Accrued liabilities		12,806		-			2,580			15,386
Total current liabilities		24,457		-			2,580			27,037
Deferred tax liability		25,470		-			(2,204	)		23,266
Total liabilities		146,346		-			376			146,722
Retained earnings		62,909		-			(803	)		62,106
Total RCIHH stockholders’ equity		127,558		-			(803	)		126,755
Total stockholders’ equity		130,142		-			(803	)		129,339
Total liabilities and stockholders’ equity		276,488		-			(427	)		276,061

The net cash provided by or used in operating, investing and financing activities did not change as a result of the revision. Certain components of net cash provided by operating activities, as presented above, changed but net change amounted to zero for each prior year statement of cash flows presented.

During the quarter ended September 30, 2017, the Company revised its presentation of cost of goods sold in its consolidated statements of income. The Company determined that this revision is not material to any prior period and has reflected this revision in the results of operations for the fiscal years ended September 30, 2016 and 2015. This presentation did not affect total cost of goods sold, total operating expenses, income from operations, net income, or net income attributable to RCIHH common shareholders.

During the quarter ended September 30, 2017, we revised the classification of certain goodwill assets to indefinite-lived intangible assets in our September 30, 2016 consolidated balance sheet amounting to $74,000 to conform to GAAP. In the same period, we revised the classification of computer software from property and equipment, net to intangible assets with a net carrying value of $503,000 as of September 30, 2016.

During the year ended September 30, 2016 in relation to the sale of the 31% interest in Drink Robust, we previously reported a gain on sale of $641,000 and an impairment charge of $825,000 on the remaining 20% interest. We have revised the disclosure in Note 14 to our consolidated financial statements to disclose a loss on sale of $164,000. There is no impact in the financial statements since both the gain and impairment were included in other charges, net in the consolidated statement of income for the year ended September 30, 2016.