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Revision of Prior Year Immaterial Misstatement

6 Months Ended

Mar. 31, 2019

Accounting Changes and Error Corrections [Abstract]

Revision of Prior Year Immaterial Misstatement

3. Revision of Prior Year Immaterial Misstatement

During the quarter ended December 31, 2018, the Company identified certain mechanical errors in our goodwill impairment analysis that was performed for our annual impairment testing for fiscal year ended September 30, 2018. These errors related to the use of an incorrect income tax rate assumption and the exclusion of certain debt service payments as part of our goodwill impairment testing for two of our reporting units, which resulted in a goodwill impairment charge of $834,000.

The Company assessed the materiality of these errors considering both qualitative and quantitative factors and determined that for both the quarter and fiscal year ended September 30, 2018, the errors were immaterial. The Company has decided to correct these immaterial errors as revisions to our previously issued financial statements and will adjust the Form 10-K when filed in succeeding periods of this fiscal year.

The tables below present the impact of the revision in the Company’s consolidated financial statements (in thousands):

	Fiscal Year Ended September 30, 2018
	As Previously Reported		Adjustments			As Revised
Statement of Income/Comprehensive Income:
Other charges, net	$	8,350	$	834		$	9,184
Total operating expenses		137,352		834			138,186
Income from operations		28,396		(834	)		27,562
Income before income taxes		18,676		(834	)		17,842
Net income		21,794		(834	)		20,960
Net income attributable to RCIHH common stockholders		21,713		(834	)		20,879
Earnings per share - basic	$	2.23	$	(0.08	)	$	2.15
Earnings per share - diluted	$	2.23	$	(0.08	)	$	2.15
Comprehensive income	$	22,014	$	(834	)	$	21,180
Comprehensive income attributable to RCI Hospitality Holdings, Inc.		21,933		(834	)		21,099

	September 30, 2018
	As Previously Reported		Adjustment			As Revised
Balance Sheet/Statement of Changes in Stockholders’ Equity
Goodwill	$	44,425	$	(834	)	$	43,591
Total assets		330,566		(834	)		329,732
Retained earnings		89,740		(834	)		88,906
Total RCIHH stockholders’ equity		154,269		(834	)		153,435
Total stockholders’ equity		154,166		(834	)		153,332
Total liabilities and stockholders’ equity		330,566		(834	)		329,732

The table below presents the impact of the revision in the Company’s notes to its consolidated financial statements related to unaudited quarterly results of operations (in thousands):

	Quarter Ended September 30, 2018
	As Previously Reported			Adjustment			As Revised
Income from operations	$	1,533		$	(834	)	$	699
Net loss attributable to RCIHH common stockholders		(2,672	)		(834	)		(3,506	)
Loss per share - basic	$	(0.27	)	$	(0.09	)	$	(0.36	)
Loss per share - diluted	$	(0.27	)	$	(0.09	)	$	(0.36	)

The consolidated statements of cash flows are not presented because there is no impact on total cash flows from operating activities, investing activities and financing activities. Certain components of net cash provided by operating activities changed, as caused by the revision, but the net change amounted to zero for both quarter and fiscal year ended September 30, 2018.