3. EARNINGS PER SHARE (EPS)

12 Months Ended

May 31, 2019

Earnings Per Share [Abstract]

3. EARNINGS PER SHARE (EPS)

3. EARNINGS PER SHARE (“EPS”):

    Basic EPS is determined using the weighted average number of common shares outstanding during the period. Diluted EPS 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):

	Year Ended May 31,
	2019			2018		2017
Numerator: Net (loss) income	$	(5,235	)	$	528	$	(5,653	)
Denominator for basic net (loss) income per share:
Weighted-average shares outstanding		22,387			21,732		16,267
Shares used in basic net (loss) income per share calculation		22,387			21,732		16,267
Effect of dilutive securities		—			1,050		—
Denominator for diluted net (loss) income per share		22,387			22,782		16,267
Basic net (loss) income per share	$	(0.23	)	$	0.02	$	(0.35	)
Diluted net (loss) income per share	$	(0.23	)	$	0.02	$	(0.35	)

    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 fiscal years ended May 31, 2019 and 2017, 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 3,107,000 and 3,074,000 shares of common stock were outstanding on May 31, 2019 and 2017, respectively, 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 1,313,000 shares of common stock were outstanding as of May 31, 2018 but were not included in the computation of diluted net income per share, because the inclusion of such shares would be anti-dilutive. ESPP rights to purchase 297,000 and 169,000 ESPP shares were outstanding on May 31, 2019 and 2017, respectively, but were not included in the computation of diluted net loss per share, because the inclusion of such shares would be anti-dilutive. RSUs for 23,000 shares and 32,000 shares were outstanding on May 31, 2019 and 2017, respectively, but were not included in the computation of diluted net loss per share, because the inclusion of such shares would be anti-dilutive. The 2,657,000 shares convertible under the Convertible Notes outstanding on May 31, 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.