Revision of Prior Year Immaterial Misstatement

12 Months Ended

Sep. 30, 2020

Accounting Changes and Error Corrections [Abstract]

Revision of Prior Year Immaterial Misstatement

4. Revision of Prior Year Immaterial Misstatement

During the fourth quarter ended September 30, 2020, the Company identified an error in the calculation of income taxes in relation to a disposed entity during the fiscal 2019 first quarter ended December 31, 2018. The error related to the recognition of income tax receivable on the disposed entity. The Company determined the amount of the income tax receivable to be recognized with a consequent credit to income tax expense as $1.1 million.

The Company assessed the materiality of the error considering both qualitative and quantitative factors and determined that the error was immaterial for fiscal 2019 but material if recorded as an out-of-period adjustment in fiscal 2020. Therefore, the Company has decided to correct the error as a revision to our previously issued financial statements and has adjusted this Form 10-K insofar as fiscal 2019 is concerned.

The tables below present the impact of the revision in the Company’s consolidated financial statements (in thousands, except per share amounts):

	Fiscal 2019
	First Quarter			Full Year
Consolidated Statement of Income/Comprehensive Income:
As previously reported —
Income tax expense	$	1,811		$	4,863
Net income	$	6,404		$	19,326
Net income attributable to RCIHH common stockholders	$	6,344		$	19,175
Earnings per share - basic and diluted	$	0.65		$	1.99
Comprehensive income	$	6,404		$	19,106
Comprehensive income attributable to RCIHH common stockholders	$	6,344		$	18,955
Adjustments —
Income tax expense	$	(1,119	)	$	(1,119	)
Net income	$	1,119		$	1,119
Net income attributable to RCIHH common stockholders	$	1,119		$	1,119
Earnings per share - basic and diluted	$	0.12		$	0.12
Comprehensive income	$	1,119		$	1,119
Comprehensive income attributable to RCIHH common stockholders	$	1,119		$	1,119
As revised —
Income tax expense	$	692		$	3,744
Net income	$	7,523		$	20,445
Net income attributable to RCIHH common stockholders	$	7,463		$	20,294
Earnings per share - basic and diluted	$	0.77		$	2.10
Comprehensive income	$	7,523		$	20,225
Comprehensive income attributable to RCIHH common stockholders	$	7,463		$	20,074

	December 31, 2018		March 31, 2019		June 30, 2019		September 30, 2019		December 31, 2019		March 31, 2020		June 30, 2020
Consolidated Balance Sheet:
As previously reported —
Accounts receivable, net	$	5,583	$	5,579	$	5,001	$	6,289	$	3,131	$	3,559	$	5,529
Total current assets	$	25,067	$	21,859	$	22,597	$	34,771	$	30,899	$	26,767	$	28,350
Total assets	$	349,522	$	350,873	$	350,878	$	353,637	$	376,173	$	361,896	$	360,374
Retained earnings	$	95,179	$	101,623	$	106,976	$	107,049	$	112,404	$	108,584	$	102,837
Total RCIHH stockholders’ equity	$	159,133	$	163,971	$	168,921	$	168,457	$	167,371	$	161,504	$	155,757
Total equity	$	159,090	$	163,936	$	168,906	$	168,301	$	167,205	$	161,276	$	155,435
Adjustments —
Accounts receivable, net	$	1,119
Total current assets	$	1,119
Total assets	$	1,119
Retained earnings	$	1,119
Total RCIHH stockholders’ equity	$	1,119
Total equity	$	1,119
As revised —
Accounts receivable, net	$	6,702	$	6,698	$	6,120	$	7,408	$	4,250	$	4,678	$	6,648
Total current assets	$	26,186	$	22,978	$	23,716	$	35,890	$	32,018	$	27,886	$	29,469
Total assets	$	350,641	$	351,992	$	351,997	$	354,756	$	377,292	$	363,015	$	361,493
Retained earnings	$	96,298	$	102,742	$	108,095	$	108,168	$	113,523	$	109,703	$	103,956
Total RCIHH stockholders’ equity	$	160,252	$	165,090	$	170,040	$	169,576	$	168,490	$	162,623	$	156,876
Total equity	$	160,209	$	165,055	$	170,025	$	169,420	$	168,324	$	162,395	$	156,554

The consolidated statement of cash flows are not presented because there is no impact on total cash flows from operating, investing, and financing activities. Certain components of net cash provided by operating activities changed due to the revision but the net change amounted to zero for both the quarter ended December 31, 2018 and fiscal year ended September 30, 2019.

RCI HOSPITALITY HOLDINGS, INC.

Notes to Consolidated Financial Statements