AEHR TEST SYSTEMS
For the period ended Feb 29, 2024. Filed Apr 10, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Feb 29, 2024 · Filed Apr 10, 2024
AEHR$53.57+9.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-11-30; filed 2024-01-12.
0001654954-24-000525
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-02-29; filed 2024-04-10.
0001654954-24-004455
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 39 previous paragraphs and 39 current paragraphs.
22 unchanged; 15 reworded; 2 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
Revenue decreased to $7.6 million for the three months ended February 29, 2024 from $17.2 million for the three months ended February 28, 2023, driven by a decrease in shipments for our products and services due to the recent overall softness in the demand for electric vehicles. Our systems revenue decreased by $7.8 million, our contactors revenue decreased by $1.5 million, and our services revenue decreased by $0.3 million.
Current report
Net cash provided by financing activities decreased by $7.4 million for the nine months ended February 29, 2024, compared to the nine months ended February 28, 2023. During the nine months ended February 28, 2023, net proceeds from the sale of our common stock under our “At the market” offering program were $6.9 million compared to no such sales during the same period in the current year.
Removed paragraphs (2)
Previous report
Revenue increased to $42.1 million for the six months ended November 30, 2023 from $25.5 million for the six months ended November 30, 2022, also driven by growth in all our revenue streams. Our contactors revenue increased by $13.3 million, our systems revenue increased by $2.3 million, and our services revenue increased by $1.0 million.
Previous report
Net cash used in financing activities increased by $0.3 million for the six months ended November 30, 2023, compared to the six months ended November 30, 2022. For the six months ended November 30, 2023, net cash used in financing activities primarily consisted of cash used to repurchase shares of our common stock on vesting of RSUs, partially offset by the proceeds from issuance of common stock under our employee plans.
Reworded paragraphs (15)
Previous wording
There have been no material changes to our critical accounting policies and estimates during the three and six months ended November 30, 2023 compared to those discussed in our Annual Report on Form 10-K for the fiscal year ended May 31, 2023.
Current wording
There have been no material changes to our critical accounting policies and estimates during the three and nine months ended February 29, 2024 compared to those discussed in our Annual Report on Form 10-K for the fiscal year ended May 31, 2023.
Previous wording
Discussion of Results of Operations for the Three and Six Months Ended November 30, 2023 compared to the Three and Six Months Ended November 30, 2022
Current wording
Discussion of Results of Operations for the Three and Nine Months Ended February 29, 2024 compared to the Three and Nine Months Ended February 28, 2023
Previous wording
Revenue increased to $21.4 million for the three months ended November 30, 2023 from $14.8 million for the three months ended November 30, 2022, driven by growth in all our revenue streams. Our systems revenue increased by $3.3 million, our contactors revenue increased by $2.5 million, and our services revenue increased by $0.8 million.
Current wording
Revenue increased to $49.6 million for the nine months ended February 29, 2024 from $42.7 million for the nine months ended February 28, 2023, primarily driven by strong sales in contactors. Our contactors revenue increased by $11.8 million, and our services revenue increased by $0.7 million. The increase was partially offset by a decrease in systems revenue of $5.6 million.
Previous wording
On a geographic basis, revenues represent products that were shipped to or services that were performed at our customer locations. For the three and six months ended November 30, 2023, international revenues significantly increased, compared to the same periods in the prior year, primarily as a result of the shipments to our customers in Asia and Europe, partially offset by the decline in net revenue from a customer in the United States.
Current wording
On a geographic basis, revenues represent products that were shipped to or services that were performed at our customer locations. For the three months ended February 29, 2024 compared to the three months ended February 28, 2023, revenue in Asia and United States decreased, driven by fewer shipments to our customers in Asia and United States due to the recent overall softness in the demand for electric vehicles, partially offset by the increase in revenue from customers in Europe. For the nine months ended February 29, 2024, international revenues increased, compared to the same period in the prior year, primarily as a result of the more shipments to our customers in Asia and Europe, partially offset by the decline in revenue from a customer in the United States.
Previous wording
Gross profit increased to $11.0 million for the three months ended November 30, 2023 from $7.9 million for the three months ended November 30, 2022. Gross margin decreased to 51.1% for the three months ended November 30, 2023 from 53.4% for the three months ended November 30, 2022. The decrease in gross margin of 2.3 percentage points was primarily due to an increase in inventory reserve, and higher warranty expenses and logistics costs.
Current wording
Gross profit decreased to $3.2 million for the three months ended February 29, 2024 from $8.9 million for the three months ended February 28, 2023. Gross margin decreased to 41.7% for the three months ended February 29, 2024 from 51.6% for the three months ended February 28, 2023. The decrease in gross margin of 9.9 percentage points was primarily due to lower shipments resulting in lower manufacturing efficiencies, an increase in costs from design changes, and higher warranty expenses.
Previous wording
Gross profit increased to $20.9 million for the six months ended November 30, 2023 from $12.4 million for the six months ended November 30, 2022. Gross margin increased to 49.8% for the six months ended November 30, 2023 from 48.6% for the six months ended November 30, 2022. The increase in gross margin of 1.2 percentage points was primarily due to the increased sales of higher margin contactor products, as well as manufacturing efficiencies due to higher production rates.
Current wording
Gross profit increased to $24.1 million for the nine months ended February 29, 2024 from $21.3 million for the nine months ended February 28, 2023. Gross margin decreased to 48.6% for the nine months ended February 29, 2024 from 49.8% for the nine months ended February 28, 2023. The decrease in gross margin of 1.2 percentage points was primarily driven by a slight decrease in products gross margin due to higher costs from design changes and logistics, partially offset by improved services gross margin.
Previous wording
Research and development expenses consist primarily of compensation and benefits for product development personnel, outside development service costs, travel expenses, facilities cost allocations, and stock-based compensation charges. Research and development expenses increased to $2.0 million for the three months ended November 30, 2023, compared to $1.6 million for the three months ended November 30, 2022. The increase of $0.4 million was primarily driven by higher employment costs due to an increase in headcount. We anticipate our expenses in research and development will fluctuate in absolute dollars from period to period as a result of the timing of product development projects and revenue generating activity requirements.
Current wording
Research and development expenses consist primarily of compensation and benefits for product development personnel, outside development service costs, travel expenses, facilities cost allocations, and stock-based compensation charges. Research and development expenses increased to $2.1 million for the three months ended February 29, 2024, compared to $1.8 million for the three months ended February 28, 2023. The increase of $0.3 million was primarily driven by higher non-recurring engineering services charges, an increase in allocated facility cost and higher employment costs due to an increase in headcount. We anticipate our expenses in research and development will fluctuate in absolute dollars from period to period as a result of the timing of product development projects and revenue generating activity requirements.
Previous wording
Research and development expenses increased to $4.4 million for the six months ended November 30, 2023, compared to $3.0 million for the six months ended November 30, 2022. The increase of $1.4 million was primarily due to non-recurring engineering services charges of $0.6 million and higher employment related costs of $0.5 million.
Current wording
Research and development expenses increased to $6.6 million for the nine months ended February 29, 2024, compared to $4.9 million for the nine months ended February 28, 2023. The increase of $1.7 million was primarily due to higher non-recurring engineering services charges of $0.7 million, higher employment-related costs of $0.6 million and an increase in allocated facility cost of $0.2 million.
Previous wording
Selling, general and administrative expenses consist primarily of compensation and benefits for sales, marketing and general and administrative personnel, legal and accounting service costs, marketing communications costs, travel expenses, facilities cost allocations, and stock-based compensation charges. Selling, general and administrative expenses increased to $3.5 million for the three months ended November 30, 2023, compared to $2.9 million for the three months ended November 30, 2022. The increase of $0.6 million was primarily driven by higher employment cost due to an increase in headcount.
Current wording
Selling, general and administrative expenses consist primarily of compensation and benefits for sales, marketing and general and administrative personnel, legal and accounting service costs, marketing communications costs, travel expenses, facilities cost allocations, and stock-based compensation charges. Selling, general and administrative expenses decreased to $3.1 million for the three months ended February 29, 2024, compared to $3.3 million for the three months ended February 28, 2023. The decrease was primarily due to the reversal of a prior period accrual for bonuses based on revenue and profitability levels that are now not anticipated to be met.
Previous wording
Selling, general and administrative expenses increased to $6.9 million for the six months ended November 30, 2023, compared to $5.4 million for the six months ended November 30, 2022. The increase of $1.5 million was primarily due to an increase in employment cost of $1.3 million and an increase in audit and legal service fees of $0.3 million.
Current wording
Selling, general and administrative expenses increased to $10.0 million for the nine months ended February 29, 2024, compared to $8.7 million for the nine months ended February 28, 2023. The increase of $1.3 million was primarily due to an increase in employment-related cost of $1.1 million and an increase in audit and legal service fees of $0.3 million.
Previous wording
Interest and other income (expense), net, primarily consists of interest income and foreign currency transaction exchange gains and losses. Interest and other income (expense), net, increased for the three and six months ended November 30, 2023, compared to the same periods in the prior year, primarily driven by higher interest income earned due to higher yields from our investments in money market funds.
Current wording
Interest and other income (expense), net, primarily consists of interest income and foreign currency transaction exchange gains and losses. Interest and other income (expense), net, increased for the three and nine months ended February 29, 2024, compared to the same periods in the prior year, primarily driven by higher interest income earned due to higher average cash and investment balances and higher yields from our investments in money market funds.
Previous wording
Cash, cash equivalents, and restricted cash were $50.7 million as of November 30, 2023, compared to $19.0 million as of November 30, 2022. We believe that our existing cash resources and anticipated funds from operations will satisfy our cash requirements to fund our operating activities, capital expenditures and other obligations for the next twelve months.
Current wording
Cash, cash equivalents, and restricted cash were $47.7 million as of February 29, 2024, compared to $17.3 million as of February 28, 2023. Short term investments were $0 as of February 29, 2024, compared to $25.6 million of February 28, 2023. We believe that our existing cash resources and anticipated funds from operations will satisfy our cash requirements to fund our operating activities, capital expenditures and other obligations for the next twelve months.
Previous wording
Cash flow from operating activities during the six months ended November 30, 2023 mostly consisted of net income, adjusted for certain non-cash items which primarily consisted of depreciation and amortization, share-based compensation expense and amortization of operating lease right-of-use assets. The $1.9 million decrease in cash flows from operating activities for the six months ended November 30, 2023, compared to the six months ended November 30, 2022, was driven primarily by an increase in cash used in inventory production and vendor payments due to anticipated customer demand, and a decrease in cash provided by deferred revenue due to timing of customer deposits and revenue recognition, partially offset by an increase in cash provided by collection of accounts receivable and a higher net income.
Current wording
Cash flow from operating activities during the nine months ended February 29, 2024 mostly consisted of net income, adjusted for certain non-cash items which primarily consisted of depreciation and amortization, share-based compensation expense and amortization of operating lease right-of-use assets. The $3.6 million decrease in cash flows from operating activities for the nine months ended February 29, 2024, compared to the nine months ended February 28, 2023, was driven primarily by an increase in cash used in inventory production and vendor payments due to anticipated customer demand, and a decrease in cash provided by deferred revenue due to timing of customer deposits and revenue recognition, partially offset by an increase in cash provided by collection of accounts receivable and a higher net income.
Previous wording
Net cash provided by investing activities increased by $35.3 million for the six months ended November 30, 2023 compared to the six months ended November 30, 2022. The increase was primarily due to the maturity of our short-term investments, which were purchased in the six months ended November 30, 2022.
Current wording
Net cash provided by investing activities increased by $42.8 million for the nine months ended February 29, 2024 compared to the nine months ended February 28, 2023. The increase was primarily due to the maturity of our short-term investments of $18.0 million during the nine months ended February 29, 2024, while the net purchase of short-term investments was $25.3 million during the nine months ended February 28, 2023.
Previous wording
Net Cash Flows Used in Financing Activities
Current wording
Net Cash Flows Provided by (Used in) Financing Activities