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Aehr Test Systems Reports Financial Results For Fourth Quarter Fiscal 2010

At May 31, 2010, cash and cash equivalents were $7.8 million. Aehr Test closed the fourth quarter of fiscal 2010 with no outstanding debt and shareholders' equity of $11.3 million, or $1.30 per share outstanding at May 31, 2010. As of May 31, 2010, the Company's backlog was $2.5 million, compared with $1.7 million at May 31, 2009.

Management Conference Call

Management of Aehr Test will host a conference call and webcast today, July 21, 2010 at 5:00 p.m. Eastern (2:00 p.m. Pacific) to discuss the Company's fourth quarter fiscal 2010 operating results. The conference call will be accessible live via the internet at www.aehr.com . Please go to the website at least 15 minutes before start time to register, download and install any necessary audio software. A replay of the webcast will be available at www.aehr.com for 90 days.

About Aehr Test Systems

Headquartered in Fremont, California, Aehr Test Systems is a worldwide provider of systems for burning-in and testing DRAMs, flash and other memory and logic integrated circuits and has an installed base of more than 2,500 systems worldwide. Aehr Test has developed and introduced several innovative products, including the ABTS, FOX, MTX and MAX systems and the DiePak ® carrier. The ABTS system is Aehr Test's newest system for packaged part test during burn-in for both low-power and high-power logic as well as all common types of memory devices. The FOX system is a full wafer contact test and burn-in system. The MTX system is a massively parallel test system designed to reduce the cost of memory testing by performing both test and burn-in on thousands of devices simultaneously. The MAX system can effectively burn-in and functionally test complex devices, such as digital signal processors, microprocessors, microcontrollers and systems-on-a-chip. The DiePak carrier is a reusable, temporary package that enables IC manufacturers to perform cost-effective final test and burn-in of bare die. For more information, please visit the Company's website at www.aehr.com .

Safe Harbor Statement

This release contains forward-looking statements that involve risks and uncertainties relating to projections regarding revenues, net sales and customer demand and acceptance of Aehr Test's products. Actual results may vary from projected results. These risks and uncertainties include without limitation, world economic conditions, the state of the semiconductor equipment market, the Company's ability to maintain sufficient cash to support operations, acceptance by customers of Aehr Test's technologies, acceptance by customers of the systems shipped upon receipt of a purchase order and the ability of new products to meet customer needs or perform as described, and the Company's development and manufacture of a commercially successful wafer-level test and burn-in system. See Aehr Test's recent 10-K and 10-Q reports and other reports from time to time filed with the U.S. Securities and Exchange Commission for a more detailed description of the risks facing our business. The Company disclaims any obligation to update information contained in any forward-looking statement to reflect events or circumstances occurring after the date of this press release.

AEHR TEST SYSTEMS AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
         
  Three Months Ended May 31, Year Ended  May 31,
  2010 2009 2010 2009
         
Net Sales:        
Product sales $3,567 $1,240 $8,934  $ 21,407
Cancellation charges  --   --  2,740  -- 
Total net sales 3,567 1,240 11,674 21,407
Cost of sales  1,771 2,752 5,571 20,223
Gross profit (loss) 1,796 (1,512) 6,103 1,184
         
Operating expenses:        
Selling, general and administrative 1,494 1,380 6,094 20,623
Research and development 1,288 1,111 4,758 5,762
Impairment of goodwill  --   --   --  274
Gain on sale of bankruptcy claim  (120)  --  (3,993)  -- 
Total operating expenses 2,662 2,491 6,859 26,659
         
Loss from operations (866) (4,003) (756) (25,475)
         
Interest income   1 6 5 142
Other income (expense), net 64 (107) 131 277
         
Loss before income tax expense (benefit) (801) (4,104) (620) (25,056)
         
Income tax expense (benefit) 18 (76) (139) 4,915
         
Net loss  $ (819) $ (4,028) $ (481) $ (29,971)
         
         
Net loss per share        
Basic $ (0.09) $ (0.48) $ (0.06) $ (3.55)
Diluted $ (0.09) $ (0.48) $ (0.06) $ (3.55)
         
Shares used in per share calculations:        
Basic 8,631 8,473 8,563 8,436
Diluted 8,631 8,473 8,563 8,436
         
AEHR TEST SYSTEMS AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Results 
(in thousands, except per share data)
(unaudited)
         
  Three Months Ended May 31, Year Ended May 31,
  2010 2009 2010 2009
         
GAAP net loss $ (819) $ (4,028)  $ (481) $ (29,971)
Provision for bad debts 1  --   --   --  13,708
Restructuring and asset impairments 2  --  1,467  --  8,137
Reinstatement of deferred tax asset valuation allowance  --   --   --  4,943
Gain on sale of bankruptcy claim 3 (120)  --  (3,993)  -- 
Cancellation charges 3  --   --  (2,740)  -- 
Stock compensation expense 4 325 338 1,733 1,285
Non-GAAP net loss $ (614) $ (2,223) $ (5,481) $ (1,898)
         
GAAP net loss per diluted share $ (0.09) $ (0.48) $ (0.06) $ (3.55)
Non-GAAP net loss per diluted share $ (0.07) $ (0.26) $ (0.64) $ (0.22)
Shares used in diluted shares calculation 8,631 8,473 8,563 8,436
 
         
1 Related to accounts receivable of Spansion Inc., which filed for bankruptcy in Japan in February 2009 and in the U.S. in March 2009. 
2 The three months ended May 31, 2009 includes a provision for excess/obsolete inventory of $1.5 million, $0.2 million severance costs, and a credit of $0.3 million for settlement of cancellation charges accrued in the prior fiscal quarter. The year ended May 31, 2009 includes a provision for excess/obsolete inventory of $7.2 million, cancellation charges of $0.3 million, $0.3 million impairment of goodwill, and $0.4 million severance.
3 The Company filed a claim in the Spansion U.S. bankruptcy action. In the first quarter of fiscal 2010, the Company sold a portion of its Spansion U.S. bankruptcy claim to a third party for net proceeds of approximately $3.3 million and recorded the amount as a reduction of operating expenses. In the third quarter of fiscal 2010, the Company sold the remaining balance of its Spansion U.S. bankruptcy claim for net proceeds of approximately $4.6 million and recorded $2.7 million as revenue related to cancellation charges, $1.3 million as deferred revenue and $0.6 million as a reduction of operating expenses. In the fourth quarter of fiscal 2010, the Company received the remaining payment of $0.1 million due from its Q1 bankruptcy claim sale and recognized the amount as a reduction of operating expenses. The $1.3 million deferred at the end of the third quarter of fiscal 2010 was recognized as product revenue during the fourth quarter of fiscal 2010. 
4 In the second quarter of fiscal 2010, officers of the Company elected to forfeit certain stock options granted. The forfeiture of these options resulted in the immediate recognition of the unamortized portion of stock compensation expense of $0.5 million.
Non-GAAP net loss is a non-GAAP measure and should not be considered a replacement for GAAP results. Non-GAAP net loss is a financial measure the Company uses to evaluate the underlying results and operating performance of the business. The limitation of this measure is that it excludes items that impact the Company's current period net loss. This limitation is best addressed by using this measure in combination with net loss (the most comparable GAAP measure).
 
AEHR TEST SYSTEMS AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
(unaudited)
     
  May 31, 2010 May 31, 2009
     
ASSETS    
     
Current assets:    
Cash and cash equivalents  $ 7,766   $ 4,360 
Accounts receivable, net 596 931
Inventories 3,635 4,472
Prepaid expenses and other 445 879
Total current assets 12,442 10,642
     
Property and equipment, net 1,504 2,741
Other assets  528  528
Total assets $14,474 $13,911
     
LIABILITIES AND SHAREHOLDERS' EQUITY                   
     
Current liabilities:    
Accounts payable  $ 703   $ 995 
Accrued expenses 1,626 2,107
Deferred revenue 286 241
Total current liabilities 2,615 3,343
     
Income tax payable 298 299
Deferred lease commitment 280 306
Total liabilities 3,193 3,948
Shareholders' equity 11,281 9,963
Total liabilities and shareholders' equity $14,474 $13,911
CONTACT:  Aehr Test Systems
          Gary Larson, Chief Financial Officer
          (510) 623-9400 x321

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