3. EARNINGS PER SHARE

6 Months Ended

Nov. 30, 2013

Earnings Per Share

EARNINGS PER SHARE

3. EARNINGS PER SHARE

Earnings per share is computed based on the weighted average number of common and common equivalent shares (common stock options and ESPP shares) outstanding, when dilutive, during each period using the treasury stock method.

The following table presents the computation of basic and diluted net income (loss) per share attributable to Aehr Test Systems common shareholders (in thousands, except per share data):

	Three Months Ended					Six Months Ended
	November 30,					November 30,
	2013		2012			2013			2012
Numerator: Net income (loss)	$	137	$	(811	)	$	(29	)	$	(1,107	)
Denominator for basic net income (loss) per share:
Weighted-average shares outstanding		10,806		9,300			10,721			9,233
Shares used in basic net income (loss) per share calculation		10,806		9,300			10,721			9,233
Effect of dilutive securities		1,033		--			--			--
Denominator for diluted net income (loss) per share		11,839		9,300			10,721			9,233
Basic net income (loss) per share	$	0.01	$	(0.09	)	$	(0.00	)	$	(0.12	)
Diluted net income (loss) per share	$	0.01	$	(0.09	)	$	(0.00	)	$	(0.12	)

For the purpose of computing diluted earnings per share, weighted average potential common shares do not include stock options with an exercise price greater than the average fair value of the Company’s common stock for the period, as the effect would be anti-dilutive.  In the three months ended November 30, 2012 and the six months ended November 30, 2013 and 2012 potential common shares have not been included in the calculation of diluted net loss per share as the effect would be anti-dilutive.  As such, the numerator and the denominator used in computing both basic and diluted net loss per share for these periods are the same.  Stock options to purchase 262,998 shares of common stock were outstanding on November 30, 2013, but were not included in the computation of diluted net income per share, because the inclusion of such shares would be anti-dilutive.  Stock options to purchase 2,982,000 shares of common stock were outstanding on November 30, 2012, but were not included in the computation of diluted net loss per share, because the inclusion of such shares would be anti-dilutive.