California
|
|
94-2424084
|
(State
or other jurisdiction of incorporation or
organization)
|
|
(I.R.S.
Employer Identification No.)
|
400 Kato
Terrace
Fremont,
CA
|
|
94539
|
(Address of
principal executive offices)
|
|
(Zip
Code)
|
Large
accelerated filer ☐
|
Accelerated
filer ☐
|
Non-accelerated
filer ☒
|
Smaller
reporting company ☒
|
Emerging
growth company ☐
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
4
|
|
|
|
5
|
|
|
|
6
|
|
|
|
7
|
|
|
|
22
|
|
|
|
27
|
|
|
|
27
|
|
|
|
|
|
|
|
28
|
|
|
|
28
|
|
|
|
28
|
|
|
|
28
|
|
|
|
28
|
|
|
|
28
|
|
|
|
29
|
|
|
|
30
|
|
November
30,
|
May
31,
|
|
2018
|
2018
|
|
(1)
|
|
ASSETS
|
|
|
Current
assets:
|
|
|
Cash
and cash equivalents
|
$14,002
|
$16,848
|
Accounts
receivable, net
|
3,868
|
2,856
|
Inventories
|
9,983
|
9,049
|
Prepaid
expenses and other current assets
|
688
|
703
|
|
|
|
Total
current assets
|
28,541
|
29,456
|
|
|
|
Property
and equipment, net
|
1,074
|
1,203
|
Other
assets
|
286
|
296
|
|
|
|
Total
assets
|
$29,901
|
$30,955
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$1,953
|
$1,762
|
Accrued
expenses
|
1,487
|
1,646
|
Customer
deposits and deferred revenue, short-term
|
2,068
|
1,630
|
Current
portion of long-term debt
|
6,110
|
6,110
|
|
|
|
Total
current liabilities
|
11,618
|
11,148
|
|
|
|
Deferred
rent
|
147
|
63
|
Deferred
revenue, long-term
|
252
|
459
|
|
|
|
Total
liabilities
|
12,017
|
11,670
|
|
|
|
Aehr
Test Systems shareholders' equity:
|
|
|
Common
stock, $0.01 par value: Authorized:
75,000 shares; Issued
and outstanding: 22,356 shares and 22,143
shares at November 30, 2018 and May
31, 2018, respectively
|
224
|
221
|
Additional
paid-in capital
|
83,830
|
83,041
|
Accumulated
other comprehensive income
|
2,241
|
2,292
|
Accumulated deficit
|
(68,393)
|
(66,249)
|
|
|
|
Total
Aehr Test Systems shareholders' equity
|
17,902
|
19,305
|
Noncontrolling
interest
|
(18)
|
(20)
|
|
|
|
Total
shareholders' equity
|
17,884
|
19,285
|
|
|
|
Total
liabilities and shareholders' equity
|
$29,901
|
$30,955
|
|
Three Months Ended
|
Six Months Ended
|
||
|
November 30,
|
November 30,
|
||
|
2018
|
2017
|
2018
|
2017
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$5,911
|
$7,923
|
$10,651
|
$14,893
|
Cost
of sales
|
3,513
|
4,792
|
6,700
|
8,844
|
Gross
profit
|
2,398
|
3,131
|
3,951
|
6,049
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling,
general and administrative
|
1,977
|
1,854
|
3,856
|
3,645
|
Research
and development
|
986
|
1,090
|
2,102
|
2,045
|
Total
operating expenses
|
2,963
|
2,944
|
5,958
|
5,690
|
|
|
|
|
|
(Loss)
income from operations
|
(565)
|
187
|
(2,007)
|
359
|
|
|
|
|
|
Interest
expense, net
|
(74)
|
(105)
|
(152)
|
(212)
|
Other
income (expense), net
|
29
|
(7)
|
38
|
(67)
|
|
|
|
|
|
(Loss)
income before income tax expense
|
(610)
|
75
|
(2,121)
|
80
|
|
|
|
|
|
Income
tax expense
|
(19)
|
(15)
|
(23)
|
(10)
|
Net
(loss) income
|
(629)
|
60
|
(2,144)
|
70
|
Less:
Net income attributable to the noncontrolling
interest
|
--
|
--
|
--
|
--
|
|
|
|
|
|
Net (loss) income
attributable to Aehr Test Systems
common shareholders
|
$(629)
|
$60
|
$(2,144)
|
$70
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) income per share
|
|
|
|
|
Basic
|
$(0.03)
|
$0.00
|
$(0.10)
|
$0.00
|
Diluted
|
$(0.03)
|
$0.00
|
$(0.10)
|
$0.00
|
|
|
|
|
|
Shares
used in per share calculations:
|
|
|
|
|
Basic
|
22,294
|
21,645
|
22,242
|
21,531
|
Diluted
|
22,294
|
22,883
|
22,242
|
22,937
|
|
Three Months Ended
|
Six Months Ended
|
||
|
November 30,
|
November 30,
|
||
|
2018
|
2017
|
2018
|
2017
|
|
|
|
|
|
Net (loss)
income
|
$(629)
|
$60
|
$(2,144)
|
$70
|
|
|
|
|
|
Other comprehensive
(loss) income, net of tax:
Net change in
unrealized loss on investments
|
--
|
(3)
|
--
|
(3)
|
Net
change in cumulative translation adjustments
|
(34)
|
1
|
(49)
|
60
|
|
|
|
|
|
Total comprehensive
(loss) income
|
(663)
|
58
|
(2,193)
|
127
|
Less: Comprehensive
income attributable to the
noncontrolling interest
|
1
|
--
|
2
|
--
|
|
|
|
|
|
Comprehensive
(loss) income, attributable
to Aehr Test Systems common
shareholders
|
$(664)
|
$58
|
$(2,195)
|
$127
|
|
Six Months
Ended
|
|
|
November
30,
|
|
|
2018
|
2017
|
Cash
flows from operating activities:
|
|
|
Net
(loss) income
|
$(2,144)
|
$70
|
Adjustments
to reconcile net (loss) income to net cash used
in operating activities:
|
|
|
Stock-based
compensation expense
|
480
|
580
|
Recovery of doubtful accounts
|
(3)
|
(14)
|
Depreciation
and amortization
|
230
|
190
|
Changes
in operating assets and liabilities:
|
|
|
Accounts
receivable
|
(1,068)
|
592
|
Inventories
|
(935)
|
(1,249)
|
Prepaid
expenses and other current assets
|
23
|
(1,135)
|
Accounts
payable
|
302
|
(1,005)
|
Accrued
expenses
|
(175)
|
5
|
Customer
deposits and deferred revenue
|
231
|
(178)
|
Deferred
rent
|
84
|
--
|
Income
taxes payable
|
18
|
(9)
|
Net
cash used in operating activities
|
(2,957)
|
(2,153)
|
|
|
|
Cash
flows from investing activities:
|
|
|
Purchases
of investments
|
--
|
(5,972)
|
Purchases
of property and equipment
|
(103)
|
(313)
|
Net
cash used in investing activities
|
(103)
|
(6,285)
|
|
|
|
Cash
flows from financing activities:
|
|
|
Proceeds
from issuance of common stock under
employee plans, net of taxes paid related to
share settlement of equity awards
|
312
|
601
|
Net
cash provided by financing activities
|
312
|
601
|
|
|
|
Effect
of exchange rates on cash and cash equivalents
|
(98)
|
(7)
|
|
|
|
Net
decrease in cash and cash
equivalents
|
(2,846)
|
(7,844)
|
|
|
|
Cash
and cash equivalents, beginning of period
|
16,848
|
17,803
|
|
|
|
Cash
and cash equivalents, end of period
|
$14,002
|
$9,959
|
|
|
|
Supplemental
disclosure of non-cash flow information:
|
|
|
Transfers
of property and equipment to inventories
|
$--
|
$372
|
|
Three Months Ended
|
Six Months Ended
|
||
|
November 30,
|
November 30,
|
||
|
2018
|
2017
|
2018
|
2017
|
Type
of good / service:
|
|
|
|
|
Systems
|
$3,712
|
$5,030
|
$5,518
|
$8,506
|
Contactors
|
943
|
1,867
|
2,096
|
4,544
|
Services
|
1,256
|
1,026
|
3,037
|
1,843
|
|
$5,911
|
$7,923
|
$10,651
|
$14,893
|
|
|
|
|
|
Product
lines:
|
|
|
|
|
Wafer-level
|
$4,226
|
$2,812
|
$6,195
|
$6,965
|
Test
During Burn-In
|
1,685
|
5,111
|
4,456
|
7,928
|
|
$5,911
|
$7,923
|
$10,651
|
$14,893
|
|
Three Months Ended
|
Six Months Ended
|
||
|
November 30,
|
November 30,
|
||
|
2018
|
2017
|
2018
|
2017
|
Geographic
region:
|
|
|
|
|
United
states
|
$4,509
|
$1,964
|
$7,204
|
$3,254
|
Asia
|
1,334
|
5,909
|
3,068
|
11,569
|
Europe
|
68
|
50
|
379
|
70
|
|
$5,911
|
$7,923
|
$10,651
|
$14,893
|
|
Three Months Ended
November 30,
|
Six Months Ended
November 30,
|
||
|
2018
|
2017
|
2018
|
2017
|
Timing
of revenue recognition:
|
|
|
|
|
Products
and services transferred at a
point in time
|
$5,272
|
$7,387
|
$9,390
|
$13,887
|
Services
transferred over time
|
639
|
536
|
1,261
|
1,006
|
|
$5,911
|
$7,923
|
$10,651
|
$14,893
|
|
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
|
|
Cost
|
Gross Unrealized Loss
|
Estimated Fair Value
|
|
|
|
|
Cash
|
$1,961
|
$--
|
$1,961
|
Cash
equivalents:
|
|
|
|
Money
market funds
|
6,050
|
--
|
6,050
|
U.S.
Treasury securities
|
5,991
|
--
|
5,991
|
Total
Cash equivalents
|
12,041
|
--
|
12,041
|
Total
Cash and Cash equivalents
|
$14,002
|
$--
|
$14,002
|
Long-term
investments:
|
|
|
|
Certificate
of deposit
|
$80
|
$--
|
$80
|
Total
Cash, Cash equivalents and Investments
|
$14,082
|
$--
|
$14,082
|
|
Cost
|
Gross Unrealized Loss
|
Estimated Fair Value
|
|
|
|
|
Cash
|
$3,132
|
$--
|
$3,132
|
Cash
equivalents:
|
|
|
|
Money
market funds
|
7,733
|
--
|
7,733
|
U.S.
Treasury securities
|
5,983
|
--
|
5,983
|
Total
Cash equivalents
|
13,716
|
--
|
13,716
|
Total
Cash and Cash equivalents
|
$16,848
|
$--
|
$16,848
|
Long-term
investments:
|
|
|
|
Certificate of deposit
|
$80
|
$--
|
$80
|
Total
Cash, Cash equivalents and Investments
|
$16,928
|
$--
|
$16,928
|
|
Balance as of
|
|
|
|
|
November 30, 2018
|
Level 1
|
Level 2
|
Level 3
|
Money
market funds
|
$6,050
|
$6,050
|
$--
|
$--
|
U.S.
Treasury securities
|
5,991
|
5,991
|
--
|
--
|
Certificate
of deposit
|
80
|
--
|
80
|
--
|
Assets
|
$12,121
|
$12,041
|
$80
|
$--
|
|
Balance as of
May 31, 2018
|
Level 1
|
Level 2
|
Level 3
|
Money
market funds
|
$7,733
|
$7,733
|
$--
|
$--
|
U.S.
Treasury securities
|
5,983
|
5,983
|
--
|
--
|
Certificate
of deposit
|
80
|
--
|
80
|
--
|
Assets
|
$13,796
|
$13,716
|
$80
|
$--
|
|
November 30,
|
May 31,
|
|
2018
|
2018
|
Raw
materials and sub-assemblies
|
$6,613
|
$5,747
|
Work
in process
|
3,119
|
3,068
|
Finished
goods
|
251
|
234
|
|
$9,983
|
$9,049
|
|
Three Months Ended
|
Six Months Ended
|
||
|
November 30,
|
November 30,
|
||
|
2018
|
2017
|
2018
|
2017
|
|
|
|
|
|
Balance
at the beginning of the period
|
$160
|
$119
|
$135
|
$113
|
|
|
|
|
|
Accruals
for warranties issued during
the period
|
71
|
152
|
146
|
246
|
Consumption
of reserves
|
(68)
|
(138)
|
(118)
|
(226)
|
|
|
|
|
|
Balance
at the end of the period
|
$163
|
$133
|
$163
|
$133
|
|
November 30,
|
May 31,
|
|
2018
|
2018
|
Customer
deposits
|
$1,625
|
$1,340
|
Deferred
revenue
|
443
|
290
|
|
$2,068
|
$1,630
|
|
Cumulative Translation Adjustments
|
Unrealized Loss on Investments, Net
|
Total
|
|
|
|
|
Balance
at May 31, 2018
|
$2,292
|
$--
|
$2,292
|
Other
comprehensive (loss) income before reclassifications
|
(51)
|
--
|
(51)
|
Amounts
reclassified out of AOCI
|
--
|
--
|
--
|
Other
comprehensive (loss) income, net of tax
|
(51)
|
--
|
(51)
|
Balance
at November 30, 2018
|
$2,241
|
$--
|
$2,241
|
|
Three Months Ended
|
Six Months Ended
|
||
|
November 30,
|
November 30,
|
||
|
2018
|
2017
|
2018
|
2017
|
Stock-based
compensation in the form of employee stock options, RSUs and ESPP
purchase rights, included in:
|
|
|
|
|
Cost
of sales
|
$23
|
$57
|
$59
|
$79
|
Selling,
general and administrative
|
136
|
218
|
284
|
368
|
Research
and development
|
65
|
89
|
137
|
133
|
Total
stock-based compensation
|
$224
|
$364
|
$480
|
$580
|
|
Three Months Ended
|
Six Months Ended
|
||
|
November 30,
|
November 30,
|
||
|
2018
|
2017
|
2018
|
2017
|
|
|
|
|
|
Expected
term (in years)
|
5
|
4
|
5
|
4
|
Volatility
|
0.70
|
0.74
|
0.72
|
0.77
|
Risk-free
interest rate
|
3.01%
|
1.92%
|
2.84%
|
1.77%
|
Weighted
average grant date fair value
|
$1.21
|
$1.93
|
$1.38
|
$2.22
|
|
|
Three and Six Months Ended
|
|
|
November 30, 2018
|
|
|
|
Expected term (in years)
|
|
0.5-2.0
|
Volatility
|
|
0.48-0.64
|
Expected dividend
|
|
$0.00
|
Risk-free interest rates
|
|
2.40%-2.82%
|
Estimated forfeiture rate
|
|
0%
|
Weighted average grant date fair value
|
|
$1.15
|
|
Available
|
|
Shares
|
Balance,
May 31, 2018
|
1,812
|
|
|
Options
granted
|
(441)
|
RSUs
granted
|
--
|
Shares
cancelled
|
13
|
Shares
expired
|
(11)
|
|
|
Balance,
August 31, 2018
|
1,373
|
Options
granted
|
(248)
|
RSUs
granted
|
--
|
Shares
cancelled
|
45
|
Shares
expired
|
(33)
|
|
|
Balance,
November 30, 2018
|
1,137
|
|
Outstanding Options
|
||
|
|
Weighted
|
|
|
Number
|
Average
|
Aggregate
|
|
of
|
Exercise
|
Intrinsic
|
|
Shares
|
Price
|
Value
|
Balances,
May 31, 2018
|
2,859
|
$2.04
|
$1,987
|
|
|
|
|
Options
granted
|
441
|
$2.40
|
|
Options
cancelled
|
(13)
|
$1.64
|
|
Options
exercised
|
(98)
|
$1.12
|
|
|
|
|
|
Balances,
August 31, 2018
|
3,189
|
$2.12
|
$1,757
|
|
|
|
|
Options
granted
|
248
|
$2.03
|
|
Options
cancelled
|
(45)
|
$2.70
|
|
Options
exercised
|
(19)
|
$1.09
|
|
|
|
|
|
Balances,
November 30, 2018
|
3,373
|
$2.11
|
$679
|
|
|
|
|
Options
fully vested and expected to vest
at November 30, 2018
|
3,337
|
$2.11
|
$678
|
|
Options
Outstanding at November 30,
2018
|
Options
Exercisable at November 30,
2018
|
|||||
Range
of Exercise
Prices
|
Number
Outstanding Shares
|
Weighted Average
Remaining Contractual Life (Years)
|
Weighted Average
Exercise Price
|
Number
Exercisable Shares
|
Weighted Average
Remaining Contractual Life (Years)
|
Weighted Average
Exercise Price
|
Aggregate
Intrinsic Value
|
$0.59-$0.97
|
249
|
0.27
|
$0.66
|
249
|
0.27
|
$0.66
|
|
$1.09-$1.28
|
498
|
1.22
|
$1.28
|
498
|
1.22
|
$1.28
|
|
$1.68-$2.06
|
713
|
4.87
|
$1.84
|
344
|
3.53
|
$1.77
|
|
$2.10-$2.81
|
1,651
|
4.13
|
$2.43
|
1,143
|
3.13
|
$2.45
|
|
$3.46-$3.93
|
262
|
5.66
|
$3.86
|
114
|
5.72
|
$3.76
|
|
$0.59-$3.93
|
3,373
|
3.69
|
$2.11
|
2,348
|
2.61
|
$1.98
|
$653
|
|
November 30,
|
May 31,
|
|
2018
|
2018
|
United
states
|
$1,033
|
$1,156
|
Asia
|
38
|
40
|
Europe
|
3
|
7
|
|
$1,074
|
$1,203
|
|
Three Months Ended
|
Six Months Ended
|
||
|
November 30,
|
November 30,
|
||
|
2018
|
2017
|
2018
|
2017
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
Cost
of sales
|
59.4
|
60.5
|
62.9
|
59.4
|
Gross
profit
|
40.6
|
39.5
|
37.1
|
40.6
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling,
general and administrative
|
33.5
|
23.4
|
36.2
|
24.5
|
Research
and development
|
16.7
|
13.7
|
19.7
|
13.7
|
|
|
|
|
|
Total
operating expenses
|
50.2
|
37.1
|
55.9
|
38.2
|
|
|
|
|
|
(Loss)
income from operations
|
(9.6)
|
2.4
|
(18.8)
|
2.4
|
|
|
|
|
|
Interest
expense, net
|
(1.3)
|
(1.3)
|
(1.4)
|
(1.4)
|
Other
income (expense), net
|
0.6
|
(0.2)
|
0.3
|
(0.5)
|
|
|
|
|
|
(Loss)
income before income tax expense
|
(10.3)
|
0.9
|
(19.9)
|
0.5
|
|
|
|
|
|
Income
tax expense
|
(0.3)
|
(0.1)
|
(0.2)
|
--
|
Net
(loss) income
|
(10.6)
|
0.8
|
(20.1)
|
0.5
|
Less:
Net income attributable to the
noncontrolling interest
|
--
|
--
|
--
|
--
|
|
|
|
|
|
Net
(loss) income attributable to Aehr
Test Systems common shareholders
|
(10.6)%
|
0.8%
|
(20.1)%
|
0.5%
|
Exhibit No.
|
|
Description
|
|
|
|
|
Certification of Chief Executive Officer pursuant to Rules
13a-14(a) and 15d-14(a) promulgated under the Securities Exchange
Act of 1934, as amended, as adopted pursuant to Section 302(a) of
the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of Chief Financial Officer pursuant to Rules
13a-14(a) and 15d-14(a) promulgated under the Securities Exchange
Act of 1934, as amended, as adopted pursuant to Section 302(a) of
the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Aehr Test
Systems
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date: January 14,
2019
|
By:
|
/s/ GAYN
ERICKSON
|
|
|
|
Gayn
Erickson
|
|
|
|
President and Chief
Executive Officer
|
|
|
|
|
|
Date: January 14,
2019
|
By:
|
/s/ KENNETH B.
SPINK
|
|
|
|
Kenneth B. Spink |
|
|
|
Vice President of
Finance and Chief Financial
Officer
|
|
|
|
|
|
Date: January 14,
2019
|
|
|
|
|
|
/s/ GAYN
ERICKSON
|
|
|
|
Gayn
Erickson
|
|
|
|
President and Chief
Executive Officer
|
|
|
|
|
|
Date: January 14,
2019
|
|
|
|
|
|
/s/ KENNETH B.
SPINK
|
|
|
|
Kenneth B.
Spink
|
|
|
|
Vice President of
Finance and Chief Financial Officer
|
|
|
|
|
|
Date: January 14,
2019
|
|
|
|
|
|
/s/ GAYN
ERICKSON
|
|
|
|
Gayn
Erickson
|
|
|
|
President and Chief
Executive Officer
|
|
|
|
|
|
Date: January 14,
2019
|
|
|
|
|
|
/s/ KENNETH B.
SPINK
|
|
|
|
Kenneth B.
Spink
|
|
|
|
Vice President of
Finance and Chief Financial Officer
|
|
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Nov. 30, 2018 |
Dec. 31, 2018 |
|
Document And Entity Information | ||
Entity Registrant Name | AEHR TEST SYSTEMS | |
Entity Central Index Key | 0001040470 | |
Document Type | 10-Q | |
Document Period End Date | Nov. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --05-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 22,355,831 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Nov. 30, 2018 |
May 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in thousands) | 75,000 | 75,000 |
Common stock, shares issued (in thousands) | 22,356 | 22,143 |
Common stock, shares outstanding (in thousands) | 22,356 | 22,143 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Nov. 30, 2018 |
Nov. 30, 2017 |
Nov. 30, 2018 |
Nov. 30, 2017 |
|
Income Statement [Abstract] | ||||
Net sales | $ 5,911 | $ 7,923 | $ 10,651 | $ 14,893 |
Cost of sales | 3,513 | 4,792 | 6,700 | 8,844 |
Gross profit | 2,398 | 3,131 | 3,951 | 6,049 |
Operating expenses: | ||||
Selling, general and administrative | 1,977 | 1,854 | 3,856 | 3,645 |
Research and development | 986 | 1,090 | 2,102 | 2,045 |
Total operating expenses | 2,963 | 2,944 | 5,958 | 5,690 |
(Loss) income from operations | (565) | 187 | (2,007) | 359 |
Interest expense, net | (74) | (105) | (152) | (212) |
Other income (expense), net | 29 | (7) | 38 | (67) |
(Loss) income before income tax expense | (610) | 75 | (2,121) | 80 |
Income tax expense | (19) | (15) | (23) | (10) |
Net (loss) income | (629) | 60 | (2,144) | 70 |
Less: Net income attributable to the noncontrolling interest | 0 | 0 | 0 | 0 |
Net (loss) income attributable to Aehr Test Systems common shareholders | $ (629) | $ 60 | $ (2,144) | $ 70 |
Net (loss) income per share basic | $ (0.03) | $ 0.00 | $ (0.10) | $ 0.00 |
Net (loss) income per share diluted | $ (0.03) | $ 0.00 | $ (0.10) | $ 0.00 |
Shares used in per share calculations: basic (in thousands) | 22,294 | 21,645 | 22,242 | 21,531 |
Shares used in per share calculations: diluted (in thousands) | 22,294 | 22,883 | 22,242 | 22,937 |
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Nov. 30, 2018 |
Nov. 30, 2017 |
Nov. 30, 2018 |
Nov. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (629) | $ 60 | $ (2,144) | $ 70 |
Other comprehensive (loss) income, net of tax: | ||||
Net change in unrealized loss on investments | 0 | (3) | 0 | (3) |
Net change in cumulative translation adjustments | (34) | 1 | (49) | 60 |
Total comprehensive (loss) income | (663) | 58 | (2,193) | 127 |
Less: Comprehensive income attributable to the noncontrolling interest | 1 | 0 | 2 | 0 |
Comprehensive (loss) income, attributable to Aehr Test Systems common shareholders | $ (664) | $ 58 | $ (2,195) | $ 127 |
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands |
6 Months Ended | ||||
---|---|---|---|---|---|
Nov. 30, 2018 |
Nov. 30, 2017 |
||||
Cash flows from operating activities: | |||||
Net (loss) income | $ (2,144) | $ 70 | |||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | |||||
Stock-based compensation expense | 480 | 580 | |||
Recovery of doubtful accounts | (3) | (14) | |||
Depreciation and amortization | 230 | 190 | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable | (1,068) | 592 | |||
Inventories | (935) | (1,249) | |||
Prepaid expenses and other assets | 23 | (1,135) | |||
Accounts payable | 302 | (1,005) | |||
Accrued expenses | (175) | 5 | |||
Customer deposits and deferred revenue | 231 | (178) | |||
Deferred rent | 84 | 0 | |||
Income taxes payable | 18 | (9) | |||
Net cash used in operating activities | (2,957) | (2,153) | |||
Cash flows from investing activities: | |||||
Purchases of investments | 0 | (5,972) | |||
Purchases of property and equipment | (103) | (313) | |||
Net cash used in investing activities | (103) | (6,285) | |||
Cash flows from financing activities: | |||||
Proceeds from issuance of common stock under employee plans, net of taxes paid related to share settlement of equity awards | 312 | 601 | |||
Net cash provided by financing activities | 312 | 601 | |||
Effect of exchange rates on cash and cash equivalents | (98) | (7) | |||
Net decrease in cash and cash equivalents | (2,846) | (7,844) | |||
Cash and cash equivalents, beginning of period | 16,848 | [1] | 17,803 | ||
Cash and cash equivalents, end of period | 14,002 | 9,959 | |||
Supplemental disclosure of non-cash flow information: | |||||
Transfer of property and equipment to inventories | $ 0 | $ 372 | |||
|
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCCOUNTING POLICIES |
6 Months Ended |
---|---|
Nov. 30, 2018 | |
Accounting Policies [Abstract] | |
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCCOUNTING POLICIES | 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial information has been prepared by Aehr Test Systems, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations.
In the opinion of management, the unaudited condensed consolidated financial statements for the interim periods presented have been prepared on a basis consistent with the May 31, 2018 audited consolidated financial statements and reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the condensed consolidated financial position and results of operations as of and for such periods indicated. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2018. Results for the interim periods presented herein are not necessarily indicative of results which may be reported for any other interim period or for the entire fiscal year.
PRINCIPLES OF CONSOLIDATION. The condensed consolidated financial statements include the accounts of Aehr Test Systems and its subsidiaries (collectively, the "Company"). All significant intercompany balances have been eliminated in consolidation. For the Company’s majority owned subsidiary, Aehr Test Systems Japan K.K., the noncontrolling interest of the portion the Company does not own was reflected on the Condensed Consolidated Balance Sheets in Shareholders’ Equity and in the Condensed Consolidated Statements of Operations.
ACCOUNTING ESTIMATES. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used to account for sales and revenue allowances, the allowance for doubtful accounts, inventory valuations, income taxes, stock-based compensation expenses, and product warranties, among others. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ materially from those estimates.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. The Company’s significant accounting policies are disclosed in the Company’s Annual Report on Form 10-K for the year ended May 31, 2018. There have been no significant changes in the Company’s significant accounting policies during the three and six months ended November 30, 2018 except for revenue recognition. |
2. RECENT ACCOUNTING PRONOUNCEMENTS |
6 Months Ended |
---|---|
Nov. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
2. RECENT ACCOUNTING PRONOUNCEMENTS | 2. RECENT ACCOUNTING PRONOUNCEMENTS
Accounting Standards Adopted
Revenue Recognition In May 2014, the FASB issued Accounting Standards Codification (“ASC”) Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), which has been subsequently updated (collectively “ASC 606”). The core principle of the standard is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The new standard defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price, and allocating the transaction price to each distinct performance obligation. The standard permits the use of either the retrospective or modified retrospective transition methods. It also requires expanded disclosures including the nature, amount, timing, and uncertainty of revenues and cash flows related to contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract.
The Company adopted ASC 606 on June 1, 2018, the first day of fiscal 2019, using the modified retrospective method. The Company applied ASC 606 to all contracts not completed as of the date of adoption in order to determine any adjustment to the opening balance of retained earnings. Under the modified retrospective adoption method, the comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods, ASC 605, "Revenue Recognition", which is also referred to herein as "legacy GAAP."
The adoption of ASC 606 did not have a material impact on the Company’s consolidated financial statements as of June 1, 2018. No adjustment was recorded to accumulated deficit as of the adoption date and reported revenue would not have been different under legacy GAAP. Additionally, the Company does not expect the adoption of the revenue standard to have a material impact to the Company’s net income on an ongoing basis.
Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued authoritative guidance related to the classification of certain cash receipts and cash payments on the statement of cash flows. The Company adopted this new standard in fiscal year 2019. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial statements.
Intra-Entity Asset Transfers In October 2016, the FASB issued an accounting standard update that requires recognition of the income tax consequences of intra-entity transfers of assets (other than inventory) at the transaction date. The Company adopted this new standard in fiscal year 2019. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial statements.
Restricted Cash In November 2016, the FASB issued authoritative guidance related to statements of cash flows. This guidance clarifies that amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of period total amounts shown on the statement of cash flows. The Company adopted this new standard in fiscal year 2019. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial statements.
Income Taxes On December 22, 2017, the US government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the US tax code including but not limited to (1) reducing the US federal corporate tax rate from 34% to 21%; (2) requiring companies to pay a one-time transition tax on certain repatriated earnings of foreign subsidiaries; (3) generally eliminating US federal income taxes on dividends from foreign subsidiaries; (4) requiring a current inclusion in US federal income of certain earnings of controlled foreign corporations; (5) creating a new limitation on deductible interest expense; (6) changing rules related to the uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017, and (7) repeals the corporate alternative minimum tax regime, or AMT, effective December 31, 2017 and permits existing minimum tax credits to offset the regular tax liability for any tax year. Consequently, the Company has accounted for the reduction of $6.4 million of deferred tax assets with an offsetting adjustment to the valuation allowance for the fiscal year ended 2018, and recorded a benefit of $90,000 for the Company’s Federal refundable AMT credit.
On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) which provides guidance on accounting for the tax effects of the Tax act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740, Income taxes. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. There are also certain transitional impacts of the Tax Act. As part of the transition to the new territorial tax system, the Tax Act imposes a one-time repatriation tax on deemed repatriation of historical earnings of foreign subsidiaries. The company is not subject to the transition tax. The one-time transition tax is based on post-1986 earnings and profits that were previously deferred from U.S. income tax. The Company has finalized its calculation of the total post-1986 earnings and profits for its foreign corporations. Based on the Company’s net operating loss carryovers and valuation allowance, there is no impact to its consolidated financial statements as a result of the completion of the analysis.
Accounting Standards Not Yet Adopted
Financial Instruments In January 2016, the FASB issued an accounting standard update related to recognition and measurement of financial assets and financial liabilities. This standard changes accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. In addition, it clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. This standard is effective for us in fiscal year 2020. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements.
In June 2016, the FASB issued an accounting standard update that requires measurement and recognition of expected credit losses for financial assets held based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. The accounting standard update will be effective for the Company beginning in the first quarter of fiscal 2021 on a modified retrospective basis, and early adoption in fiscal 2020 is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.
Leases In February 2016, the FASB issued authoritative guidance related to leases. This guidance requires management to present all leases greater than one year on the balance sheet as a liability to make payments and an asset as the right to use the underlying asset for the lease term. This new standard will be effective for us in fiscal year 2020, with early adoption permitted. The Company is currently evaluating the impact of adopting this new guidance on its consolidated financial statements.
|
3. REVENUE |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3. REVENUE | 3. REVENUE
Revenue recognition
The Company recognizes revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services by following a five-step process, (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price, and (5) recognize revenue when or as the Company satisfies a performance obligation, as further described below.
Performance obligations include sales of systems, contactors, spare parts, and services, as well as, installation and training services included in customer contracts.
A contract’s transaction price is allocated to each distinct performance obligation. In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled. The Company generally does not grant return privileges, except for defective products during the warranty period.
For contracts that contain multiple performance obligations, the Company allocates the transaction price to the performance obligations on a relative standalone selling price basis. Standalone selling prices are based on multiple factors including, but not limited to historical discounting trends for products and services and pricing practices in different geographies.
Revenue for systems and spares are recognized at a point in time, which is generally upon shipment or delivery. Revenue from services is recognized over time as services are completed or ratably over the contractual period of generally one year or less.
The Company has elected the practical expedient under ASC 606 to not assess whether a contract has a significant financing component as The Company’s standard payment terms are less than one year.
Disaggregation of revenue
The following tables show revenues by major product categories. Within each product category, contract terms, conditions and economic factors affecting the nature, amount, timing and uncertainty around revenue recognition and cash flow are substantially similar.
The Company’s revenues by product category are as follows (in thousands):
The following presents information about the Company’s operations in different geographic areas. Net sales are based upon ship-to location (in thousands):
With the exception of the amount of service contracts and extended warranties, the Company’s product category revenues are recognized at point in time when control transfers to customers.
Contract balances
A receivable is recognized in the period the Company delivers goods or provides services or when the Company’s right to consideration is unconditional. The Company usually does not record contract assets because the Company has an unconditional right to payment upon satisfaction of the performance obligation, and therefore, a receivable is more commonly recorded than a contract asset.
Contract liabilities include payments received in advance of performance under a contract and are satisfied as the associated revenue is recognized. Contract liabilities are reported on the Condensed Consolidated Balance Sheets at the end of each reporting period as a component of deferred revenue. Contract liabilities as of November 30, 2018 and May 31, 2018 were $2,321,000 and $2,089,000, respectively. During the three and six months ended November 30, 2018, the Company recognized $392,000 and $994,000, respectively, of revenues that were included in contract liabilities as of May 31, 2018.
Remaining performance obligations
On November 30, 2018, the Company had $695,000 of remaining performance obligations, which were comprised of deferred service contracts and extended warranty contracts not yet delivered. The Company expects to recognize approximately 35% of its remaining performance obligations as revenue in fiscal 2019, and an additional 65% in fiscal 2020 and thereafter. The foregoing excludes the value of other remaining performance obligations as they have original durations of one year or less, and also excludes information about variable consideration allocated entirely to a wholly unsatisfied performance obligation.
Costs to obtain or fulfill a contract
The Company generally expenses sales commissions when incurred as a component of selling, general and administrative expense as the amortization period is typically less than one year. Additionally, the majority of the Company’s cost of fulfillment as a manufacturer of products is classified as inventory and fixed assets, which are accounted for under the respective guidance for those asset types. Other costs of contract fulfillment are immaterial due to the nature of the Company’s products and their respective manufacturing process.
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4. EARNINGS PER SHARE |
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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):
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.
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5. CASH, CASH EQUIVALENTS AND INVESTMENTS |
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Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5. CASH, CASH EQUIVALENTS AND INVESTMENTS | 5. CASH, CASH EQUIVALENTS AND INVESTMENTS
The following table summarizes the Company’s cash, cash equivalents and investments by security type at November 30, 2018 (in thousands):
Long-term investments are included in other assets on the accompanying condensed consolidated balance sheet at November 30, 2018.
The following table summarizes the Company’s cash, cash equivalents and investments by security type at May 31, 2018 (in thousands):
Long-term investments are included in other assets on the accompanying consolidated balance sheet at May 31. 2018.
Unrealized gains and temporary losses on investments classified as available-for-sale are included within accumulated other comprehensive income (“AOCI”), net of any related tax effect. Upon realization, those amounts are reclassified from AOCI to results of operations.
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6. FAIR VALUE OF FINANCIAL INSTRUMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6. FAIR VALUE OF FINANCIAL INSTRUMENTS | 6. FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company’s financial instruments are measured at fair value consistent with authoritative guidance. This authoritative guidance defines fair value, establishes a framework for using fair value to measure assets and liabilities, and disclosures required related to fair value measurements.
The guidance establishes a fair value hierarchy based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels:
Level 1 - instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets.
Level 2 - instrument valuations are obtained from readily-available pricing sources for comparable instruments.
Level 3 - instrument valuations are obtained without observable market values and require a high level of judgment to determine the fair value.
The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of November 30, 2018 (in thousands):
The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of May 31, 2018 (in thousands):
The U.S. Treasury Securities have maturities of three months.
There were no financial liabilities measured at fair value as of November 30, 2018 and May 31, 2018.
There were no transfers between Level 1 and Level 2 fair value measurements during the three and six months ended November 30, 2018.
The carrying amounts of financial instruments including cash, cash equivalents, receivables, accounts payable and certain other accrued liabilities, approximate fair value due to their short maturities. Based on the borrowing rates currently available to the Company for loans with similar terms, the carrying value of the debt approximates the fair value.
The Company has, at times, invested in debt and equity of private companies, and may do so again in the future, as part of its business strategy.
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7. ACCOUNTS RECEIVABLE, NET |
6 Months Ended |
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Nov. 30, 2018 | |
Accounts Receivable, Net, Current [Abstract] | |
7. ACCOUNTS RECEIVABLE, NET | 7. ACCOUNTS RECEIVABLE, NET
Accounts receivable represent customer trade receivables and is presented net of allowance for doubtful accounts of $0 at November 30, 2018 and $4,000 at May 31, 2018. Accounts receivable are derived from the sale of products throughout the world to semiconductor manufacturers, semiconductor contract assemblers, electronics manufacturers and burn-in and test service companies. The Company’s allowance for doubtful accounts is based upon historical experience and review of trade receivables by aging category to identify specific customers with known disputes or collection issues. Uncollectible receivables are recorded as bad debt expense when all efforts to collect have been exhausted and recoveries are recognized when they are received.
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8. INVENTORIES |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
8. INVENTORIES | 8. INVENTORIES
Inventories are comprised of the following (in thousands):
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9. PRODUCT WARRANTIES |
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Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9. PRODUCT WARRANTIES | 9. PRODUCT WARRANTIES
The Company provides for the estimated cost of product warranties at the time revenues are recognized on the products shipped. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers, the Company’s warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from the Company’s estimates, revisions to the estimated warranty liability would be required.
The standard warranty period is one year for systems and ninety days for parts and service.
The following is a summary of changes in the Company's liability for product warranties during the three and six months ended November 30, 2018 and 2017 (in thousands):
The accrued warranty balance is included in accrued expenses on the accompanying condensed consolidated balance sheets.
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10. CUSTOMER DEPOSITS AND DEFERRED REVENUE, SHORT-TERM |
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Customer Deposits And Deferred Revenue Short-term | ||||||||||||||||||||||||||||||||||||||||||||||
10. CUSTOMER DEPOSITS AND DEFERRED REVENUE, SHORT-TERM | 10. CUSTOMER DEPOSITS AND DEFERRED REVENUE, SHORT-TERM
Customer deposits and deferred revenue, short-term (in thousands):
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11. INCOME TAXES |
6 Months Ended |
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Nov. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
11. INCOME TAXES | 11. INCOME TAXES
Income taxes have been provided using the liability method whereby deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and net operating loss and tax credit carryforwards measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse or the carryforwards are utilized. Valuation allowances are established when it is determined that it is more likely than not that such assets will not be realized.
Since fiscal 2009, a full valuation allowance was established against all deferred tax assets as management determined that it is more likely than not that certain deferred tax assets will not be realized.
The Company accounts for uncertain tax positions consistent with authoritative guidance. The guidance prescribes a “more likely than not” recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company does not expect any material change in its unrecognized tax benefits over the next twelve months. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income taxes.
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740, Income taxes. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements.
As part of the transition to the new territorial tax system, the Tax Act imposes a one-time repatriation tax on deemed repatriation of historical earnings of foreign subsidiaries. The company is not subject to the transition tax. The one-time transition tax is based on post-1986 earnings and profits that were previously deferred from U.S. income tax. The Company has finalized its calculation of the total post-1986 earnings and profits for its foreign corporations. Based on the Company’s net operating loss carryovers and valuation allowance, there is no impact to its consolidated financial statements as a result of the completion of the analysis.
The new law effective December 31, 2017 repeals the corporate alternative minimum tax, or AMT, regime and permits existing minimum tax credits to offset the regular tax liability for any tax year. Further, the credit is refundable for any tax year beginning after December 31, 2017 and before December 31, 2020 in an amount equal to 50% of the excess of the minimum tax credit over the allowable credit for the year against the regular tax liability. Any unused minimum tax credit carryforward is refundable in the following year. As result, the company recorded a benefit of $90,000 in the third quarter of fiscal 2018 for its Federal refundable AMT credit.
In addition, the reduction of the U.S. federal corporate tax rate reduces the corporate tax rate to 21%, effective January 1, 2018. Consequently, the Company has accounted for the reduction of $6.4 million of deferred tax assets with an offsetting adjustment to the valuation allowance.
Although the Company files U.S. federal, various state, and foreign tax returns, the Company’s only major tax jurisdictions are the United States, California, Germany and Japan. Fiscal years 1997 through 2018 remain subject to examination by the appropriate governmental agencies due to tax loss carryovers, research and development tax credits, or other tax attributes from those years.
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12. LONG-TERM DEBT |
6 Months Ended |
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Nov. 30, 2018 | |
Long-term Debt, Unclassified [Abstract] | |
12. LONG-TERM DEBT | 12. LONG-TERM DEBT
On April 10, 2015, the Company entered into a Convertible Note Purchase and Credit Facility Agreement (the “Purchase Agreement”) with QVT Fund LP and Quintessence Fund L.P. (the “Purchasers”) providing for (a) the Company’s sale to the Purchasers of $4,110,000 in aggregate principal amount of 9.0% Convertible Secured Notes due 2017 (the “Convertible Notes”) and (b) a secured revolving loan facility (the “Credit Facility”) in an aggregate principal amount of up to $2,000,000. On August 22, 2016 the Purchase Agreement was amended to extend the maturity date of the Convertible Notes to April 10, 2019, decrease the conversion price from $2.65 per share to $2.30 per share, decrease the forced conversion price from $7.50 per share to $6.51 per share, and allow for additional equity awards.
The Convertible Notes bear interest at an annual rate of 9.0% and will mature on April 10, 2019 unless repurchased or converted prior to that date. Interest is payable quarterly on March 1, June 1, September 1 and December 1 of each year. Debt issuance costs of $356,000, which were accreted over the term of the original loan using the effective interest rate method, were offset against the loan balance.
The conversion price for the Convertible Notes is $2.30 per share and is subject to adjustment upon the occurrence of certain specified events. Holders may convert all or any part of the principal amount of their Convertible Notes in integrals of $10,000 at any time prior to the maturity date. Upon conversion, the Company will deliver shares of its common stock to the holder of Convertible Notes electing such conversion. The Company may not redeem the Convertible Notes prior to maturity.
The maximum amount of $2,000,000 drawn against the Credit Facility has been converted to Convertible Notes, and at November 30, 2018 there was no remaining balance available to be drawn on the Credit Facility.
The Company’s obligations under the Purchase Agreement are secured by substantially all of the assets of the Company.
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13. STOCKHOLDERS' EQUITY, COMPREHENSIVE INCOME AND STOCK-BASED COMPENSATION |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
13. STOCKHOLDERS' EQUITY, COMPREHENSIVE INCOME AND STOCK-BASED COMPENSATION | 13. STOCKHOLDERS’ EQUITY, COMPREHENSIVE INCOME AND STOCK-BASED COMPENSATION
ACCUMULATED OTHER COMPREHENSIVE INCOME
Changes in the components of AOCI, net of tax, were as follows (in thousands):
STOCK-BASED COMPENSATION
Stock-based compensation expense consists of expenses for stock options, restricted stock units, or RSUs, and employee stock purchase plan, or ESPP, purchase rights. Stock-based compensation expense for stock options and ESPP purchase rights is measured at each grant date, based on the fair value of the award using the Black-Scholes option valuation model, and is recognized as expense over the employee’s requisite service period. This model was developed for use in estimating the value of publicly traded options that have no vesting restrictions and are fully transferable. The Company’s employee stock options have characteristics significantly different from those of publicly traded options. For RSUs, stock-based compensation cost is based on the fair value of the Company’s common stock at the grant date. All of the Company’s stock-based compensation is accounted for as an equity instrument. See Note 10 in the Company’s Annual Report on Form 10-K for fiscal 2018 filed on August 28, 2018 for further information regarding the 2016 Equity Incentive Plan and the Amended and Restated 2006 ESPP.
The following table summarizes the stock-based compensation expense for the three and six months ended November 30, 2018 and 2017 (in thousands):
As of November 30, 2018 and 2017, there were no stock-based compensation expenses capitalized as part of inventory.
During the three months ended November 30, 2018 and 2017, the Company recorded stock-based compensation expense related to stock options and RSUs of $166,000 and $207,000, respectively. During the six months ended November 30, 2018 and 2017, the Company recorded stock-based compensation expense related to stock options and RSUs of $339,000 and $408,000, respectively.
As of November 30, 2018, the total compensation expense related to unvested stock-based awards under the Company’s 2016 Equity Incentive Plan, but not yet recognized, was approximately $1,582,000, which is net of estimated forfeitures of $4,000. This expense will be amortized on a straight-line basis over a weighted average period of approximately 3.2 years.
During the three months ended November 30, 2018 and 2017, the Company recorded stock-based compensation expense related to the ESPP of $58,000 and $157,000, respectively. During the six months ended November 30, 2018 and 2017, the Company recorded stock-based compensation expense related to the ESPP of $141,000 and $172,000, respectively.
As of November 30, 2018, the total compensation expense related to purchase rights under the ESPP but not yet recognized was approximately $217,000. This expense will be amortized on a straight-line basis over a weighted average period of approximately 1.3 years.
Valuation Assumptions
Valuation and Amortization Method. The Company estimates the fair value of stock options granted using the Black-Scholes option valuation model and a single option award approach. The fair value under the single option approach is amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period.
Expected Term. The Company’s expected term represents the period that the Company’s stock-based awards are expected to be outstanding and was determined based on historical experience, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior as evidenced by changes to the terms of its stock-based awards.
Volatility. Volatility is a measure of the amounts by which a financial variable such as stock price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company uses the historical volatility for the past four or five years, which matches the expected term of most of the option grants, to estimate expected volatility. Volatility for each of the ESPP’s four time periods of six months, twelve months, eighteen months, and twenty-four months is calculated separately and included in the overall stock-based compensation expense recorded.
Risk-Free Interest Rate. The Company bases the risk-free interest rate used in the Black-Scholes option valuation model on the implied yield in effect at the time of option grant on U.S. Treasury zero-coupon issues with a remaining term equivalent to the expected term of the stock awards including the ESPP.
Fair Value. The fair value of the Company’s stock options granted to employees for the three and six months ended November 30, 2018 and 2017 were estimated using the following weighted average assumptions in the Black-Scholes option valuation model:
The fair values of the ESPP purchase rights granted for the three and six months ended November 30, 2018 were estimated using the following weighted-average assumptions:
There were no ESPP purchase rights granted to employees for the three and six months ended November 30, 2017. During the three and six months ended November 30, 2018, ESPP purchase rights of 327,000 were granted. Total ESPP shares issued during the three and six months ended November 30, 2018 and 2017 were 64,000 and 116,000 shares, respectively. As of November 30, 2018, there were 430,000 ESPP shares available for issuance.
The following tables summarize the Company’s stock option and RSU transactions during three and six months ended November 30, 2018 (in thousands):
The following table summarizes the stock option transactions during the three and six months ended November 30, 2018 (in thousands, except per share data):
The options outstanding and exercisable at November 30, 2018 were in the following exercise price ranges (in thousands, except per share data):
The total intrinsic value of options exercised during the three and six months ended November 30, 2018 was $23,000 and $162,000, respectively. The total intrinsic value of options exercised during the three and six months ended November 30, 2017 was $269,000 and $745,000, respectively. The weighted average remaining contractual life of the options exercisable and expected to be exercisable at November 30, 2018 was 3.67 years.
There were no RSUs granted to employees during the three and six months ended November 30, 2018, and during the three months ended November 30, 2017. During the six months ended November 30, 2017, RSUs for 64,000 shares were granted to employees. The market value on the date of the grant of these RSUs was $3.93 per share. During the three and six months ended November 30, 2018, 4,000 and 9,000 RSUs became fully vested, respectively. During the three and six months ended November 30, 2017, 4,000 and 7,000 RSUs became fully vested respectively. As of November 30, 2018, 38,000 RSUs remain unvested which had an intrinsic value of $72,000. 89,000 RSUs were unvested at November 30, 2017 which had an intrinsic value of $227,000.
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14. SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
14. SEGMENT INFORMATION | 14. SEGMENT INFORMATION
The Company has only one reportable segment. The information for revenue category by type, product line, geography and timing of revenue recognition, is summarized in Note “3. REVENUE.”
Property and equipment information is based on the physical location of the assets. The following table presents property and equipment information for geographic areas (in thousands):
There were no revenues through distributors for the three and six months ended November 30, 2018 and 2017.
The Company’s Japanese and German subsidiaries primarily comprise the foreign operations. Substantially all of the sales of the subsidiaries are made to unaffiliated Japanese or European customers. Net sales from outside the United States include those of Aehr Test Systems Japan K.K. and Aehr Test Systems GmbH.
Sales to the Company’s five largest customers accounted for approximately 94% and 83% of its net sales in the three and six months ended November 30, 2018, respectively. Three customers accounted for approximately 55%, 13% and 13% of the Company’s net sales in the three months ended November 30, 2018. Four customers accounted for approximately 33%, 16%, 15% and 13% of the Company’s net sales in the six months ended November 30, 2018. Sales to the Company’s five largest customers accounted for approximately 94% and 96% of its net sales in the three and six months ended November 30, 2017, respectively. Two customers accounted for approximately 43% and 34% of the Company’s net sales in the three months ended November 30, 2017. Two customers accounted for approximately 43%, and 39% of the Company’s net sales in the six months ended November 30, 2017. No other customers represented more than 10% of the Company’s net sales in the three and six months ended November 30, 2018 and 2017. |
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCCOUNTING POLICIES (Policies) |
6 Months Ended |
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Nov. 30, 2018 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial information has been prepared by Aehr Test Systems, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations.
In the opinion of management, the unaudited condensed consolidated financial statements for the interim periods presented have been prepared on a basis consistent with the May 31, 2018 audited consolidated financial statements and reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the condensed consolidated financial position and results of operations as of and for such periods indicated. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2018. Results for the interim periods presented herein are not necessarily indicative of results which may be reported for any other interim period or for the entire fiscal year.
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PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION. The condensed consolidated financial statements include the accounts of Aehr Test Systems and its subsidiaries (collectively, the "Company"). All significant intercompany balances have been eliminated in consolidation. For the Company’s majority owned subsidiary, Aehr Test Systems Japan K.K., the noncontrolling interest of the portion the Company does not own was reflected on the Condensed Consolidated Balance Sheets in Shareholders’ Equity and in the Condensed Consolidated Statements of Operations.
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ACCOUNTING ESTIMATES | ACCOUNTING ESTIMATES. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used to account for sales and revenue allowances, the allowance for doubtful accounts, inventory valuations, income taxes, stock-based compensation expenses, and product warranties, among others. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ materially from those estimates.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. The Company’s significant accounting policies are disclosed in the Company’s Annual Report on Form 10-K for the year ended May 31, 2018. There have been no significant changes in the Company’s significant accounting policies during the three and six months ended November 30, 2018 except for revenue recognition.
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RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS
Accounting Standards Adopted
Revenue Recognition In May 2014, the FASB issued Accounting Standards Codification (“ASC”) Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), which has been subsequently updated (collectively “ASC 606”). The core principle of the standard is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The new standard defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price, and allocating the transaction price to each distinct performance obligation. The standard permits the use of either the retrospective or modified retrospective transition methods. It also requires expanded disclosures including the nature, amount, timing, and uncertainty of revenues and cash flows related to contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract.
The Company adopted ASC 606 on June 1, 2018, the first day of fiscal 2019, using the modified retrospective method. The Company applied ASC 606 to all contracts not completed as of the date of adoption in order to determine any adjustment to the opening balance of retained earnings. Under the modified retrospective adoption method, the comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods, ASC 605, "Revenue Recognition", which is also referred to herein as "legacy GAAP."
The adoption of ASC 606 did not have a material impact on the Company’s consolidated financial statements as of June 1, 2018. No adjustment was recorded to accumulated deficit as of the adoption date and reported revenue would not have been different under legacy GAAP. Additionally, the Company does not expect the adoption of the revenue standard to have a material impact to the Company’s net income on an ongoing basis.
Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued authoritative guidance related to the classification of certain cash receipts and cash payments on the statement of cash flows. The Company adopted this new standard in fiscal year 2019. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial statements.
Intra-Entity Asset Transfers In October 2016, the FASB issued an accounting standard update that requires recognition of the income tax consequences of intra-entity transfers of assets (other than inventory) at the transaction date. The Company adopted this new standard in fiscal year 2019. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial statements.
Restricted Cash In November 2016, the FASB issued authoritative guidance related to statements of cash flows. This guidance clarifies that amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of period total amounts shown on the statement of cash flows. The Company adopted this new standard in fiscal year 2019. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial statements.
Income Taxes On December 22, 2017, the US government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the US tax code including but not limited to (1) reducing the US federal corporate tax rate from 34% to 21%; (2) requiring companies to pay a one-time transition tax on certain repatriated earnings of foreign subsidiaries; (3) generally eliminating US federal income taxes on dividends from foreign subsidiaries; (4) requiring a current inclusion in US federal income of certain earnings of controlled foreign corporations; (5) creating a new limitation on deductible interest expense; (6) changing rules related to the uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017, and (7) repeals the corporate alternative minimum tax regime, or AMT, effective December 31, 2017 and permits existing minimum tax credits to offset the regular tax liability for any tax year. Consequently, the Company has accounted for the reduction of $6.4 million of deferred tax assets with an offsetting adjustment to the valuation allowance for the fiscal year ended 2018, and recorded a benefit of $90,000 for the Company’s Federal refundable AMT credit.
On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) which provides guidance on accounting for the tax effects of the Tax act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740, Income taxes. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. There are also certain transitional impacts of the Tax Act. As part of the transition to the new territorial tax system, the Tax Act imposes a one-time repatriation tax on deemed repatriation of historical earnings of foreign subsidiaries. The company is not subject to the transition tax. The one-time transition tax is based on post-1986 earnings and profits that were previously deferred from U.S. income tax. The Company has finalized its calculation of the total post-1986 earnings and profits for its foreign corporations. Based on the Company’s net operating loss carryovers and valuation allowance, there is no impact to its consolidated financial statements as a result of the completion of the analysis.
Accounting Standards Not Yet Adopted
Financial Instruments In January 2016, the FASB issued an accounting standard update related to recognition and measurement of financial assets and financial liabilities. This standard changes accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. In addition, it clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. This standard is effective for us in fiscal year 2020. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements.
In June 2016, the FASB issued an accounting standard update that requires measurement and recognition of expected credit losses for financial assets held based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. The accounting standard update will be effective for the Company beginning in the first quarter of fiscal 2021 on a modified retrospective basis, and early adoption in fiscal 2020 is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.
Leases In February 2016, the FASB issued authoritative guidance related to leases. This guidance requires management to present all leases greater than one year on the balance sheet as a liability to make payments and an asset as the right to use the underlying asset for the lease term. This new standard will be effective for us in fiscal year 2020, with early adoption permitted. The Company is currently evaluating the impact of adopting this new guidance on its consolidated financial statements.
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3. REVENUE (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue | The Company’s revenues by product category are as follows (in thousands):
The following presents information about the Company’s operations in different geographic areas. Net sales are based upon ship-to location (in thousands):
With the exception of the amount of service contracts and extended warranties, the Company’s product category revenues are recognized at point in time when control transfers to customers.
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4. EARNINGS PER SHARE (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per share | 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):
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5. CASH, CASH EQUIVALENTS AND INVESTMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, cash equivalents and investments by security type | The following table summarizes the Company’s cash, cash equivalents and investments by security type at November 30, 2018 (in thousands):
The following table summarizes the Company’s cash, cash equivalents and investments by security type at May 31, 2018 (in thousands):
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6. FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value by hierarchy | The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of November 30, 2018 (in thousands):
The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of May 31, 2018 (in thousands):
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8. INVENTORIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories are comprised of the following (in thousands):
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9. PRODUCT WARRANTIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liability for product warranties | The following is a summary of changes in the Company's liability for product warranties during the three and six months ended November 30, 2018 and 2017 (in thousands):
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10. CUSTOMER DEPOSITS AND DEFERRED REVENUE, SHORT-TERM (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||
Customer Deposits And Deferred Revenue Short-term | ||||||||||||||||||||||||||||||||||||||||||||||
Customer deposits and deferred revenue | Customer deposits and deferred revenue, short-term (in thousands):
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13. STOCKHOLDERS' EQUITY, COMPREHENSIVE INCOME AND STOCK-BASED COMPENSATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the components of AOCI | Changes in the components of AOCI, net of tax, were as follows (in thousands):
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Compensation costs related to the Company's stock-based compensation | The following table summarizes the stock-based compensation expense for the three and six months ended November 30, 2018 and 2017 (in thousands):
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Fair value assumptions for option valuation model | The fair value of the Company’s stock options granted to employees for the three and six months ended November 30, 2018 and 2017 were estimated using the following weighted average assumptions in the Black-Scholes option valuation model:
The fair values of the ESPP purchase rights granted for the three and six months ended November 30, 2018 were estimated using the following weighted-average assumptions:
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Stock option and RSU transactions | The following tables summarize the Company’s stock option and RSU transactions during three and six months ended November 30, 2018 (in thousands):
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Stock option transactions | The following table summarizes the stock option transactions during the three and six months ended November 30, 2018 (in thousands, except per share data):
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Options outstanding | The options outstanding and exercisable at November 30, 2018 were in the following exercise price ranges (in thousands, except per share data):
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14. SEGMENT INFORMATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company's operations in different geographic areas | The following table presents property and equipment information for geographic areas (in thousands):
|
3. REVENUE (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Nov. 30, 2018 |
Nov. 30, 2017 |
Nov. 30, 2018 |
Nov. 30, 2017 |
|
Net sales | $ 5,911 | $ 7,923 | $ 10,651 | $ 14,893 |
Systems | ||||
Net sales | 3,712 | 5,030 | 5,518 | 8,506 |
Contactors | ||||
Net sales | 943 | 1,867 | 2,096 | 4,544 |
Services | ||||
Net sales | 1,256 | 1,026 | 3,037 | 1,843 |
Wafer-level | ||||
Net sales | 4,226 | 2,812 | 6,195 | 6,965 |
Test During Burn-In | ||||
Net sales | $ 1,685 | $ 5,111 | $ 4,456 | $ 7,928 |
3. REVENUE (Details 1) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Nov. 30, 2018 |
Nov. 30, 2017 |
Nov. 30, 2018 |
Nov. 30, 2017 |
|
Net sales | $ 5,911 | $ 7,923 | $ 10,651 | $ 14,893 |
US | ||||
Net sales | 4,509 | 1,964 | 7,204 | 3,254 |
Asia | ||||
Net sales | 1,334 | 5,909 | 3,068 | 11,569 |
Europe | ||||
Net sales | $ 68 | $ 50 | $ 379 | $ 70 |
3. REVENUE (Details 2) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Nov. 30, 2018 |
Nov. 30, 2017 |
Nov. 30, 2018 |
Nov. 30, 2017 |
|
Net sales | $ 5,911 | $ 7,923 | $ 10,651 | $ 14,893 |
Products and services transferred at a point in time | ||||
Net sales | 5,272 | 7,387 | 9,390 | 13,887 |
Services transferred over time | ||||
Net sales | $ 639 | $ 536 | $ 1,261 | $ 1,006 |
3. REVENUE (Details Narrative) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Nov. 30, 2018 |
Nov. 30, 2018 |
May 31, 2019 |
May 31, 2018 |
|
Revenue from Contract with Customer [Abstract] | ||||
Contract liabilities | $ 2,321 | $ 2,321 | $ 2,089 | |
Recognition of contract liabilities | 392 | 994 | ||
Remaining performance obligations | $ 695 | $ 695 | ||
Remaining performance obligation revenue recognition | 35.00% |
4. EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Nov. 30, 2018 |
Nov. 30, 2017 |
Nov. 30, 2018 |
Nov. 30, 2017 |
|
Earnings Per Share [Abstract] | ||||
Numerator: Net (loss) income | $ (629) | $ 60 | $ (2,144) | $ 70 |
Denominator for basic net (loss) income per share: Weighted average shares outstanding (in thousands) | 22,294 | 21,645 | 22,242 | 21,531 |
Shares used in basic net (loss) income per share calculation (in thousands) | 22,294 | 21,645 | 22,242 | 21,531 |
Effect of dilutive securities (in thousands) | 0 | 1,238 | 0 | 1,406 |
Denominator for diluted net (loss) income per share (in thousands) | 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 |
4. EARNINGS PER SHARE (Details Narrative) - shares |
6 Months Ended | |
---|---|---|
Nov. 30, 2018 |
Nov. 30, 2017 |
|
Employee Stock Purchase Plan | ||
Options not included in the computation of diluted net (loss) income per share (in thousands) | 327 | |
Convertible Notes | ||
Options not included in the computation of diluted net (loss) income per share (in thousands) | 2,657 | 2,657 |
Stock Options | ||
Options not included in the computation of diluted net (loss) income per share (in thousands) | 3,373 | 263 |
Restricted Stock Units | ||
Options not included in the computation of diluted net (loss) income per share (in thousands) | 38 |
5. CASH, CASH EQUIVALENTS AND INVESTMENTS (Details) - USD ($) $ in Thousands |
Nov. 30, 2018 |
May 31, 2018 |
Nov. 30, 2017 |
May 31, 2017 |
|||
---|---|---|---|---|---|---|---|
Cash, cost | $ 1,961 | $ 3,132 | |||||
Cash equivalents, cost | 12,041 | 13,716 | |||||
Cash equivalents, estimated fair value | 12,041 | 13,716 | |||||
Cash and cash equivalents, cost | 14,002 | 16,848 | [1] | $ 9,959 | $ 17,803 | ||
Cash and cash equivalents, estimated fair value | 14,002 | 16,848 | |||||
Long-term investments, certificate of deposit, cost | 80 | 80 | |||||
Long-term investments, certificate of deposit, estimed fair value | 80 | 80 | |||||
Cash, cash equivalents, and investments, cost | 14,082 | 16,928 | |||||
Cash, cash equivalents, and investments, estimated fair value | 14,082 | 16,928 | |||||
Money Market Funds At Carrying Value | |||||||
Cash equivalents, cost | 6,050 | 7,733 | |||||
Cash equivalents, estimated fair value | 6,050 | 7,733 | |||||
U.S. Treasury securities | |||||||
Cash equivalents, cost | 5,991 | 5,983 | |||||
Cash equivalents, estimated fair value | $ 5,991 | $ 5,983 | |||||
|
6. FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands |
Nov. 30, 2018 |
May 31, 2018 |
---|---|---|
Money market funds | $ 6,050 | $ 7,733 |
U.S. Treasury securities | 5,991 | 5,983 |
Certificate of deposit | 80 | 80 |
Assets | 12,121 | 13,796 |
Level 1 | ||
Money market funds | 6,050 | 7,733 |
U.S. Treasury securities | 5,991 | 5,983 |
Certificate of deposit | 0 | 0 |
Assets | 12,041 | 13,716 |
Level 2 | ||
Money market funds | 0 | 0 |
U.S. Treasury securities | 0 | 0 |
Certificate of deposit | 80 | 80 |
Assets | 80 | 80 |
Level 3 | ||
Money market funds | 0 | 0 |
U.S. Treasury securities | 0 | 0 |
Certificate of deposit | 0 | 0 |
Assets | $ 0 | $ 0 |
6. FAIR VALUE OF FINANCIAL INSTRUMENTS (Details Narrative) - USD ($) $ in Thousands |
Nov. 30, 2018 |
May 31, 2018 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Financial liabilities at fair value | $ 0 | $ 0 |
Transfers between Level 1 and Level 2 fair value measurements | $ 0 | $ 0 |
7. ACCOUNTS RECEIVABLE, NET (Details Narrative) - USD ($) $ in Thousands |
Nov. 30, 2018 |
May 31, 2018 |
---|---|---|
Accounts Receivable, Net, Current [Abstract] | ||
Allowance for doubtful accounts customer trade receivables | $ 0 | $ 4 |
8. INVENTORIES (Details) - USD ($) $ in Thousands |
Nov. 30, 2018 |
May 31, 2018 |
|||
---|---|---|---|---|---|
Inventory, Net [Abstract] | |||||
Raw materials and sub-assemblies | $ 6,613 | $ 5,747 | |||
Work in process | 3,119 | 3,068 | |||
Finished goods | 251 | 234 | |||
Inventory | $ 9,983 | $ 9,049 | [1] | ||
|
9. PRODUCT WARRANTIES (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Nov. 30, 2018 |
Nov. 30, 2017 |
Nov. 30, 2018 |
Nov. 30, 2017 |
|
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Balance at the beginning of the period | $ 160 | $ 119 | $ 135 | $ 113 |
Accruals for warranties issued during the period | 71 | 152 | 146 | 246 |
Consumption of reserves | (68) | (138) | (118) | (226) |
Balance at the end of the period | $ 163 | $ 133 | $ 163 | $ 133 |
9. PRODUCT WARRANTIES (Details Narrative) |
6 Months Ended |
---|---|
Nov. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Standard warranty period | The standard warranty period is one year for systems and ninety days for parts and service. |
10. CUSTOMER DEPOSITS AND DEFERRED REVENUE, SHORT-TERM (Details) - USD ($) $ in Thousands |
Nov. 30, 2018 |
May 31, 2018 |
---|---|---|
Customer Deposits And Deferred Revenue Short-term | ||
Customer deposits | $ 1,625 | $ 1,340 |
Deferred revenue | 443 | 290 |
Total | $ 2,068 | $ 1,630 |
11. INCOME TAXES (Details Narrative) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Nov. 30, 2018 |
May 31, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Federal refundable AMT credit | $ 0 | $ 90 |
Reduction of deferred tax assets | $ 0 | $ (6,400) |
12. LONG-TERM DEBT (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | |
---|---|---|
Nov. 30, 2018 |
Apr. 10, 2015 |
|
Debt Disclosure [Abstract] | ||
Convertible debt, principal amount | $ 6,110 | $ 4,110 |
Convertible note, interest rate | 9.00% | |
Convertible note, maturity | Apr. 10, 2019 | |
Convertible note, interest payment | Interest is payable quarterly on March 1, June 1, September 1 and December 1 of each year. | |
Debt issuance costs | $ 356 | |
Conversion price for the Convertible Notes | $ 2.30 | $ 2.65 |
Convertible Notes, Terms of Conversion Feature | The conversion price for the Convertible Notes is $2.30 per share and is subject to adjustment upon the occurrence of certain specified events. Holders may convert all or any part of the principal amount of their Convertible Notes in integrals of $10,000 at any time prior to the maturity date. Upon conversion, the Company will deliver shares of its common stock to the holder of Convertible Notes electing such conversion. The Company may not redeem the Convertible Notes prior to maturity. | |
Line of credit, maximum borrowing capacity | $ 2,000 | |
Balance available to borrow under the line of credit | $ 0 |
13. STOCKHOLDERS' EQUITY, COMPREHENSIVE INCOME AND STOCK-BASED COMPENSATION (Details) $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Nov. 30, 2018
USD ($)
| ||||
Accumulated other comprehensive income, beginning | $ 2,292 | [1] | ||
Other comprehensive (loss) income before reclassifications | (51) | |||
Amounts reclassified out of AOCI | 0 | |||
Other comprehensive (loss) income, net of tax | (51) | |||
Accumulated other comprehensive income, ending | 2,241 | |||
Cumulative Translation Adjustments [Member] | ||||
Accumulated other comprehensive income, beginning | 2,292 | |||
Other comprehensive (loss) income before reclassifications | (51) | |||
Amounts reclassified out of AOCI | 0 | |||
Other comprehensive (loss) income, net of tax | (51) | |||
Accumulated other comprehensive income, ending | 2,241 | |||
Unrealized loss on Investments, Net | ||||
Accumulated other comprehensive income, beginning | 0 | |||
Other comprehensive (loss) income before reclassifications | 0 | |||
Amounts reclassified out of AOCI | 0 | |||
Other comprehensive (loss) income, net of tax | 0 | |||
Accumulated other comprehensive income, ending | $ 0 | |||
|
13. STOCKHOLDERS' EQUITY, COMPREHENSIVE INCOME AND STOCK-BASED COMPENSATION (Details 1) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Nov. 30, 2018 |
Nov. 30, 2017 |
Nov. 30, 2018 |
Nov. 30, 2017 |
|
Stock-based compensation in the form of employee stock options, RSUs and ESPP purchase rights, included in: | ||||
Total stock-based compensation | $ 224 | $ 364 | $ 480 | $ 580 |
Cost of Sales | ||||
Stock-based compensation in the form of employee stock options, RSUs and ESPP purchase rights, included in: | ||||
Total stock-based compensation | 23 | 57 | 59 | 79 |
Selling, General and Administrative | ||||
Stock-based compensation in the form of employee stock options, RSUs and ESPP purchase rights, included in: | ||||
Total stock-based compensation | 136 | 218 | 284 | 368 |
Research and Development | ||||
Stock-based compensation in the form of employee stock options, RSUs and ESPP purchase rights, included in: | ||||
Total stock-based compensation | $ 65 | $ 89 | $ 137 | $ 133 |
13. STOCKHOLDERS' EQUITY, COMPREHENSIVE INCOME AND STOCK-BASED COMPENSATION (Details 2) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Nov. 30, 2018 |
Nov. 30, 2017 |
Nov. 30, 2018 |
Nov. 30, 2017 |
|
Stock Options | ||||
Expected term (in years) | 5 years | 4 years | 5 years | 4 years |
Volatility | 70.00% | 74.00% | 72.00% | 77.00% |
Risk-free interest rate | 3.01% | 1.92% | 2.84% | 1.77% |
Weighted average grant date fair value | $ 1.21 | $ 1.93 | $ 1.38 | $ 2.22 |
ESPP | ||||
Expected dividend | $ 0 | $ 0 | ||
Estimated forfeiture rate | 0.00% | 0.00% | ||
Weighted average grant date fair value | $ 1.15 | $ 1.15 | ||
ESPP | Minimum | ||||
Expected term (in years) | 6 months | 6 months | ||
Volatility | 48.00% | 48.00% | ||
Risk-free interest rate | 2.40% | 2.40% | ||
ESPP | Maximum | ||||
Expected term (in years) | 2 years | 2 years | ||
Volatility | 64.00% | 64.00% | ||
Risk-free interest rate | 2.82% | 2.82% |
13. STOCKHOLDERS' EQUITY, COMPREHENSIVE INCOME AND STOCK-BASED COMPENSATION (Details 3) - Stock Option and RSU Transactions - shares |
3 Months Ended | |
---|---|---|
Nov. 30, 2018 |
Aug. 31, 2018 |
|
Available Shares, Beginning (in thousands) | 1,373 | 1,812 |
Options granted (in thousands) | (248) | (441) |
RSUs granted (in thousands) | 0 | 0 |
Shares cancelled (in thousands) | 45 | 13 |
Shares expired (in thousands) | (33) | (11) |
Available Shares, Ending (in thousands) | 1,137 | 1,373 |
13. STOCKHOLDERS' EQUITY, COMPREHENSIVE INCOME AND STOCK-BASED COMPENSATION (Details 4) - Outstanding Options Stock Option Transactions - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Nov. 30, 2018 |
Aug. 31, 2018 |
|
Options Outstanding, Beginning (in thousands) | 3,189 | 2,859 |
Options granted (in thousands) | 248 | 441 |
Options cancelled (in thousands) | (45) | (13) |
Options exercised (in thousand) | (19) | (98) |
Options Outstanding, Ending (in thousands) | 3,373 | 3,189 |
Weighted Average Exercise Price Outstanding, Beginning | $ 2.12 | $ 2.04 |
Weighted Average Exercise Price Granted | 2.03 | 2.40 |
Weighted Average Exercise Price Cancelled | 2.70 | 1.64 |
Weighted Average Exercise Price Exercised | 1.09 | 1.12 |
Weighted Average Exercise Price Outstanding, Ending | $ 2.11 | $ 2.12 |
Aggregate Intrinsic Value, beginning balance | $ 1,757 | $ 1,987 |
Aggregate Intrinsic Value, ending balance | $ 679 | $ 1,757 |
Options fully vested and expected to vest, ending (in thousands) | 3,337 | |
Weighted Average Exercise Price for Options fully vested and expected to vest, ending | $ 2.11 | |
Aggregate Intrinsic Value for Options fully vested and expected to vest, ending | $ 678 |
13. STOCKHOLDERS' EQUITY, COMPREHENSIVE INCOME AND STOCK-BASED COMPENSATION (Details 5) $ / shares in Units, $ in Thousands |
6 Months Ended |
---|---|
Nov. 30, 2018
USD ($)
$ / shares
shares
| |
$0.59-$0.97 | |
Options Outstanding, Ending (in thousands) | shares | 249 |
Weighted Average Remaining Contractual Life (Years) Options Outstanding | 3 months 7 days |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ .66 |
Options exercisable shares, ending (in thousands) | shares | 249 |
Weighted Average Remaining Contractual Life (Years) Options Exercisable | 3 months 7 days |
Weighted Average Exercise Price for Options exercisable, ending | $ / shares | $ .66 |
$1.09-$1.28 | |
Options Outstanding, Ending (in thousands) | shares | 498 |
Weighted Average Remaining Contractual Life (Years) Options Outstanding | 1 year 2 months 19 days |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 1.28 |
Options exercisable shares, ending (in thousands) | shares | 498 |
Weighted Average Remaining Contractual Life (Years) Options Exercisable | 1 year 2 months 19 days |
Weighted Average Exercise Price for Options exercisable, ending | $ / shares | $ 1.28 |
$1.68-$2.06 | |
Options Outstanding, Ending (in thousands) | shares | 713 |
Weighted Average Remaining Contractual Life (Years) Options Outstanding | 4 years 10 months 13 days |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 1.84 |
Options exercisable shares, ending (in thousands) | shares | 344 |
Weighted Average Remaining Contractual Life (Years) Options Exercisable | 3 years 6 months 11 days |
Weighted Average Exercise Price for Options exercisable, ending | $ / shares | $ 1.77 |
$2.10-$2.81 | |
Options Outstanding, Ending (in thousands) | shares | 1,651 |
Weighted Average Remaining Contractual Life (Years) Options Outstanding | 4 years 1 month 17 days |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 2.43 |
Options exercisable shares, ending (in thousands) | shares | 1,143 |
Weighted Average Remaining Contractual Life (Years) Options Exercisable | 3 years 1 month 17 days |
Weighted Average Exercise Price for Options exercisable, ending | $ / shares | $ 2.45 |
$3.46-$3.93 | |
Options Outstanding, Ending (in thousands) | shares | 262 |
Weighted Average Remaining Contractual Life (Years) Options Outstanding | 5 years 7 months 28 days |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 3.86 |
Options exercisable shares, ending (in thousands) | shares | 114 |
Weighted Average Remaining Contractual Life (Years) Options Exercisable | 5 years 8 months 19 days |
Weighted Average Exercise Price for Options exercisable, ending | $ / shares | $ 3.76 |
$0.59-$3.93 | |
Options Outstanding, Ending (in thousands) | shares | 3,373 |
Weighted Average Remaining Contractual Life (Years) Options Outstanding | 3 years 8 months 8 days |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 2.11 |
Options exercisable shares, ending (in thousands) | shares | 2,348 |
Weighted Average Remaining Contractual Life (Years) Options Exercisable | 2 years 7 months 10 days |
Weighted Average Exercise Price for Options exercisable, ending | $ / shares | $ 1.98 |
Aggregate Intrinsic Value for Options exercisable, ending | $ | $ 653 |
13. STOCKHOLDERS' EQUITY, COMPREHENSIVE INCOME AND STOCK-BASED COMPENSATION (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Nov. 30, 2018 |
Nov. 30, 2017 |
Nov. 30, 2018 |
Nov. 30, 2017 |
|
Stock-based compensation costs capitalized as part of inventory | $ 0 | $ 0 | ||
Intrinsic value of options exercised | 23 | $ 269 | $ 162 | $ 745 |
Weighted average remaining contractual life of the options exercisable and expected to be exercisable | 3 years 8 months 1 day | |||
Stock Option and RSU Transactions | ||||
Stock-based compensation expense related to stock options and RSUs | $ 166 | $ 207 | $ 339 | $ 408 |
Restricted Stock Units granted (in thousands) | 0 | 0 | 0 | 64 |
Market value on the date of the grant | $ 3.93 | |||
Restricted Stock Units vested (in thousands) | 4 | 4 | 9 | 7 |
Restricted Stock Units unvested (in thousands) | 38 | 89 | 38 | 89 |
Restricted Stock Units unvested intrinsic value | $ 72 | $ 227 | $ 72 | $ 227 |
2016 Equity Incentive Plan | ||||
Unrecognized stock-based compensation | 1,582 | 1,582 | ||
Estimated forfeitures of unvested stock based awards, amount | 4 | $ 4 | ||
Weighted average period for recognition of costs | 3 years 2 months 12 days | |||
Employee Stock Purchase Plan | ||||
Weighted average period for recognition of costs | 1 year 3 months 18 days | |||
Stock-based compensation related to the ESPP | 58 | $ 157 | $ 141 | $ 172 |
Compensation cost related to purchase rights under the ESPP but not yet recognized | $ 217 | $ 217 | ||
ESPP purchase right granted (in thousands) | 327 | 0 | 327 | 0 |
ESPP shares issued (in thousands) | 64 | 116 | 64 | 116 |
ESPP shares available for issuance (in thousands) | 430 | 430 |
14. SEGMENT INFORMATION (Details) - USD ($) $ in Thousands |
Nov. 30, 2018 |
May 31, 2018 |
|||
---|---|---|---|---|---|
Property and equipment, net | $ 1,074 | $ 1,203 | [1] | ||
US | |||||
Property and equipment, net | 1,033 | 1,156 | |||
Asia | |||||
Property and equipment, net | 38 | 40 | |||
Europe | |||||
Property and equipment, net | $ 3 | $ 7 | |||
|
14. SEGMENT INFORMATION (Details Narrative) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Nov. 30, 2018 |
Nov. 30, 2017 |
Nov. 30, 2018 |
Nov. 30, 2017 |
|
Five Largest Customers | ||||
Customers accounted for 10% or more of total revenues | 94.00% | 94.00% | 83.00% | 96.00% |
Customer A | ||||
Customers accounted for 10% or more of total revenues | 55.00% | 43.00% | 33.00% | 43.00% |
Customer B | ||||
Customers accounted for 10% or more of total revenues | 13.00% | 34.00% | 16.00% | 39.00% |
Customer C | ||||
Customers accounted for 10% or more of total revenues | 13.00% | 15.00% | ||
Customer D | ||||
Customers accounted for 10% or more of total revenues | 13.00% |
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