RCI Hospitality Holdings, Inc. (RICK), a $508 million market cap company specializing in the hospitality and restaurant industry with impressive gross profit margins of 84.5%, announced a change in its independent registered public accounting firm. The company's Audit Committee has approved the engagement of CBIZ (NYSE:CBZ) CPAs P.C. as its new auditor, replacing Marcum LLP, which had been associated with RCI Hospitality Holdings, Inc. for the fiscal years ending September 30, 2024, and September 30, 2023.
The transition, which took effect on January 22, 2025, follows the acquisition of Marcum LLP's attest business by CBIZ CPAs P.C. on November 1, 2024. The company's previous financial statements did not contain any adverse opinions or disclaimers and were not modified regarding audit scope or accounting principles.
Marcum's audits for the fiscal years in question did identify certain material weaknesses in RCI Hospitality's internal control over financial reporting. These weaknesses pertained to information technology general controls, controls over accounting for business combinations, and assessments of potential impairment.
According to InvestingPro data, despite these control issues, the company maintains a "GOOD" overall financial health score and generates annual revenue of $295.6 million. As a result, Marcum expressed an adverse opinion on the company's internal control over financial reporting for both fiscal years.
RCI Hospitality Holdings, Inc. has provided Marcum with a copy of the disclosures made in this SEC filing, and Marcum has submitted a letter to the SEC, dated January 24, 2025, agreeing with the statements made.
During the periods covered by Marcum's audits and the interim period up to January 22, 2025, RCI Hospitality Holdings, Inc. did not consult with CBIZ CPAs P.C. regarding any accounting principles or transactions that could have influenced the audit opinion on the company's financial statements, nor were there any disagreements or reportable events that would have required disclosure.
This change of certifying accountant is part of the company's regulatory filings and does not reflect any disputes or issues with the quality of Marcum LLP's audit work. The information in this article is based on a press release statement. InvestingPro analysis suggests the stock is currently undervalued, trading at $57.13 with a notably high P/E ratio of 176.75. Subscribers can access 12 additional ProTips and a comprehensive Pro Research Report, part of InvestingPro's coverage of 1,400+ US equities, for deeper insights into RICK's financial health and growth prospects.
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