aehr_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended November 29, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from _______________ to ______________

Commission File Number 000-22893

AEHR TEST SYSTEMS

(Exact name of Registrant as Specified in its Charter)

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)

(510) 623-9400

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock par value of $0.01 per share	AEHR	The NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 29,711,804 shares of the Registrant’s Common Stock outstanding as of January 2, 2025.

TABLE OF CONTENTS

	Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3. Quantitative and Qualitative Disclosures About Market Risk	26
Item 4. Controls and Procedures	26
PART II OTHER INFORMATION
Item 1. Legal Proceedings	27
Item 1A. Risk Factors	27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3. Defaults Upon Senior Securities	27
Item 4. Mine Safety Disclosures	27
Item 5. Other Information	27
Item 6. Exhibits	28
SIGNATURES	29

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

AEHR TEST SYSTEMS

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	November 29,			May 31,
(In thousands, except par value)	2024			2024
ASSETS
Current assets:
Cash and cash equivalents	$	32,217		$	49,159
Accounts receivable		7,333			9,796
Inventories		43,776			37,470
Prepaid expenses and other current assets		5,195			1,423
Total current assets		88,521			97,848
Property and equipment, net		4,306			3,253
Goodwill		10,742			-
Intangible assets, net		11,512			-
Deferred tax assets, net		18,585			20,773
Operating lease right-of-use assets, net		6,038			5,734
Other non-current assets		2,576			304
Total assets	$	142,280		$	127,912
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities:
Accounts payable	$	4,854		$	5,332
Accrued expenses		5,392			3,366
Operating lease liabilities, short-term		858			465
Deferred revenue, short-term		613			1,345
Total current liabilities		11,717			10,508
Operating lease liabilities, long-term		5,574			5,732
Deferred revenue, long-term		52			41
Other long-term liabilities		1,756			38
Total liabilities		19,099			16,319
Commitments and contingencies (Note 7)
Shareholders equity:
Preferred stock, $0.01 par value: Authorized: 10,000 shares;
Issued and outstanding: none		-			-
Common stock, $0.01 par value: Authorized: 75,000 shares;
Issued and outstanding: 29,709 shares and 28,995 shares at November 29, 2024 and May 31, 2024, respectively		297			289
Additional paid-in-capital		142,593			130,612
Accumulated other comprehensive loss		(191	)		(158	)
Accumulated deficit		(19,518	)		(19,150	)
Total shareholders' equity		123,181			111,593
Total liabilities and shareholders equity	$	142,280		$	127,912

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)

Table of Contents

AEHR TEST SYSTEMS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended					Six Months Ended
	November 29,			November 30,		November 29,			November 30,
(In thousands, except per share data)	2024			2023		2024			2023
Revenue:
Product	$	11,985		$	19,837	$	24,139		$	39,194
Services		1,468			1,594		2,433			2,861
Total revenue		13,453			21,431		26,572			42,055
Cost of revenue:
Product		7,426			9,707		12,844			19,626
Services		627			766		1,250			1,490
Total cost of revenue		8,053			10,473		14,094			21,116
Gross profit		5,400			10,958		12,478			20,939
Operating expenses:
Research and development		2,276			1,972		4,637			4,429
Selling, general and administrative		4,637			3,518		9,195			6,927
Total operating expenses		6,913			5,490		13,832			11,356
Income (loss) from operations		(1,513	)		5,468		(1,354	)		9,583
Interest income, net		228			631		909			1,212
Other income, net		40			10		14			4
Income (loss) before income tax expense (benefit)		(1,245	)		6,109		(431	)		10,799
Income tax expense (benefit)		(217	)		20		(63	)		36
Net income (loss)	$	(1,028	)	$	6,089	$	(368	)	$	10,763

Net income (loss) per share:
Basic	$	(0.03	)	$	0.21	$	(0.01	)	$	0.37
Diluted	$	(0.03	)	$	0.20	$	(0.01	)	$	0.36
Shares used in per share calculations:
Basic		29,659			28,801		29,383			28,725
Diluted		29,659			29,769		29,383			29,700

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)

Table of Contents

AEHR TEST SYSTEMS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	Three Months Ended					Six Months Ended
	November 29,			November 30,		November 29,			November 30,
(In thousands)	2024			2023		2024			2023
Net income (loss)	$	(1,028	)	$	6,089	$	(368	)	$	10,763
Other comprehensive income (loss), net of tax:
Net change in cumulative translation adjustment		(57	)		7		(33	)		4
Net change in unrealized gain on investments		-			-		-			17
Comprehensive income (loss)	$	(1,085	)	$	6,096	$	(401	)	$	10,784

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)

Table of Contents

AEHR TEST SYSTEMS

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)

									Accumulated
						Additional			Other						Total
	Common Stock					Paid-in			Comprehensive			Accumulated			Shareholders'
(In thousands)	Shares			Amount		Capital			Income (loss)			Deficit			Equity
Three Months Ended November 29, 2024
Balances, August 30, 2024		29,584		$	295	$	140,812		$	(134	)	$	(18,490	)	$	122,483
Issuance of common stock under employee plans		137			2		773			-			-			775
Shares repurchased for tax withholdings on vesting of restricted stock units		(12	)		-		(181	)		-			-			(181	)
Stock-based compensation		-			-		1,189			-			-			1,189
Net loss		-			-		-			-			(1,028	)		(1,028	)
Foreign currency translation adjustment		-			-		-			(57	)		-			(57	)
Balances, November 29, 2024		29,709		$	297	$	142,593		$	(191	)	$	(19,518	)	$	123,181

									Accumulated
						Additional			Other						Total
	Common Stock					Paid-in			Comprehensive			Accumulated			Shareholders'
(In thousands)	Shares			Amount		Capital			Income (loss)			Deficit			Equity
Six Months Ended November 29, 2024
Balances, May 31, 2024		28,995		$	289	$	130,612		$	(158	)	$	(19,150	)	$	111,593
Issuance of common stock for business acquisition		552			6		9,375			-			-			9,381
Issuance of common stock under employee plans		184			2		829			-			-			831
Shares repurchased for tax withholdings on vesting of restricted stock units		(22	)		-		(343	)		-			-			(343	)
Stock-based compensation		-			-		2,120			-			-			2,120
Net loss		-			-		-			-			(368	)		(368	)
Foreign currency translation adjustment		-			-		-			(33	)		-			(33	)
Balances, November 29, 2024		29,709		$	297	$	142,593		$	(191	)	$	(19,518	)	$	123,181

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)

Table of Contents

AEHR TEST SYSTEMS

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)

						Additional			Other						Total
	Common Stock					Paid-in			Comprehensive			Accumulated			Shareholders'
(In thousands)	Shares			Amount		Capital			Income (loss)			Deficit			Equity
Three Months Ended November 30, 2023
Balances, August 31, 2023		28,763		$	288	$	127,630		$	(141	)	$	(47,632	)	$	80,145
Issuance of common stock under employee plans		74			-		774			-			-			774
Issuance cost of common stock offering		-			-		(72	)		-			-			(72	)
Shares repurchased for tax withholdings on vesting of restricted stock units		(11	)		-		(448	)		-			-			(448	)
Stock-based compensation		-			-		659			-			-			659
Net income		-			-		-			-			6,089			6,089
Foreign currency translation adjustment		-			-		-			7			-			7
Balances, November 30, 2023		28,826		$	288	$	128,543		$	(134	)	$	(41,543	)	$	87,154

						Additional			Other						Total
	Common Stock					Paid-in			Comprehensive			Accumulated			Shareholders'
(In thousands)	Shares			Amount		Capital			Income (loss)			Deficit			Equity
Six Months Ended November 30, 2023
Balances, May 31, 2023		28,539		$	285	$	127,776		$	(155	)	$	(52,306	)	$	75,600
Issuance of common stock under employee plans		321			3		1,089			-			-			1,092
Issuance cost of common stock offering		-			-		(72	)		-			-			(72	)
Shares repurchased for tax withholdings on vesting of restricted stock units		(34	)		-		(1,460	)		-			-			(1,460	)
Stock-based compensation		-			-		1,210			-			-			1,210
Net income		-			-		-			-			10,763			10,763
Foreign currency translation adjustment		-			-		-			4			-			4
Net unrealized gains on investments		-			-		-			17			-			17
Balances, November 30, 2023		28,826		$	288	$	128,543		$	(134	)	$	(41,543	)	$

SEC Form 10-Q filed by Aehr Test Systems