4. EARNINGS PER SHARE

6 Months Ended

Nov. 30, 2018

Earnings Per Share [Abstract]

4. EARNINGS PER SHARE

4. EARNINGS PER SHARE

Basic earnings per share is determined using the weighted average number of common shares outstanding during the period. Diluted earnings per share is determined using the weighted average number of common shares and potential common shares (representing the dilutive effect of stock options, RSUs and ESPP shares) outstanding during the period using the treasury stock method.

The following table presents the computation of basic and diluted net (loss) income 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,
	2018			2017		2018			2017
Numerator: Net (loss) income	$	(629	)	$	60	$	(2,144	)	$	70
Denominator for basic net (loss) income per share:
Weighted average shares outstanding		22,294			21,645		22,242			21,531
Shares used in basic net (loss) income per share calculation:		22,294			21,645		22,242			21,531
Effect of dilutive securities		--			1,238		--			1,406
Denominator for diluted net (loss) income per share		22,294			22,883		22,242			22,937
Basic net (loss) income per share	$	(0.03	)	$	0.00	$	(0.10	)	$	0.00
Diluted net (loss) income per share	$	(0.03	)	$	0.00	$	(0.10	)	$	0.00

For the purpose of computing diluted earnings per share, the weighted average number of potential common shares does 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 and six months ended November 30, 2018 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 3,373,000 shares of common stock, RSUs for 38,000 shares and ESPP rights to purchase 327,000 ESPP shares were outstanding as of November 30, 2018, but were not included in the computation of diluted net loss per share, because the inclusion of such shares would be anti-dilutive. Stock options to purchase 263,000 shares of common stock were outstanding as of November 30, 2017 but were not included in the computation of diluted net income per share, because the inclusion of such shares would be anti-dilutive. The 2,657,000 shares convertible under the convertible notes outstanding at November 30, 2018 and 2017 were not included in the computation of diluted net income (loss) per share, because the inclusion of such shares would be anti-dilutive.