3. EARNINGS PER SHARE (''EPS'')

12 Months Ended

May 31, 2020

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,
	2020		2019		2018
Numerator: Net (loss) income	$	(2,802)	$	(5,235)	$	528
Denominator for basic net (loss) income per share:
Weighted-average shares outstanding		22,882		22,387		21,732
Shares used in basic net (loss) income per share calculation		22,882		22,387		21,732
Effect of dilutive securities.		--		--		1,050
Denominator for diluted net (loss) income per share		22,882		22,387		22,782
Basic net (loss) income per share	$	(0.12)	$	(0.23)	$	0.02
Diluted net (loss) income per share	$	(0.12)	$	(0.23)	$	0.02

    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, 2020 and 2019, 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 3,153,000 and 3,107,000 shares of common stock were outstanding on May 31, 2020 and 2019, 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 192,000 and 297,000 ESPP shares were outstanding on May 31, 2020 and 2019, 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 10,000 shares and 23,000 shares were outstanding on May 31, 2020 and 2019, 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 were not included in the computation of diluted net income (loss) per share, because the inclusion of such shares would be anti-dilutive.