AlloVir, Inc.

Q4 revenue was $8.2 million, down from $10.9 million in Q4. Non-GAAP gross margin was 38.2% compared with 46.5% in Q3. GAAP operating expenses were $7.9 million; non-GAAP operating expenses were $7.1 million versus $7.6 million in Q3. GAAP net loss from continuing operations was $0.08 per share, non-GAAP net loss was $0.07 per share, and net loss from discontinued operations was $0.19 per share. Cash, cash equivalents and investments, including restricted cash, totaled $40.4 million as of December 31. Cash generated from operations was $454,000 versus cash used of $6.4 million in Q3. Cash used from continuing operations was $5.3 million. Inventory was $9.3 million and DSOs were 115 days. Forward-looking commentary: Q1 2013 operating expenses are expected to remain similar to Q4 levels and decline slightly in later quarters; gross margin for the unlicensed business is expected to be around Q3 levels; management said the break-even point is around $11.5 million of revenue and $6-7 million of expenses.

Hezi Lapid framed the sale of the DWA/carrier licensed division as the best strategic outcome given market conditions and limited resources, saying the company should focus on the unlicensed segment where it sees the most growth opportunity. He emphasized the turnaround plan: lower burn, more efficient sales channels, new value-added partners, and investment in Wi-Fi products and collaborations. His tone was cautious but constructive, repeatedly noting that the company is still not profitable, but that profitability is achievable.

Avi Stern said the reported financials now largely reflect the vertical and unlicensed carrier solutions business, with the carrier licensed business shown as discontinued operations after the Telrad deal. He highlighted the quarter’s $8.2 million of revenue, 38.2% non-GAAP gross margin, $7.1 million of non-GAAP operating expenses, and $40.4 million of cash and investments at quarter-end. He also said debt was down to $11 million from $13 million at the beginning of the year, cash generated from operations was $454,000, and Q1 2013 operating expenses should stay near Q4 levels before edging down later.

Analysts pressed management on whether the $8.2 million revenue run rate was the bottom and whether Wi-Fi revenue met prior expectations. Hezi Lapid declined to give revenue guidance but said he would be disappointed if this was not the floor, and he said the delay in the new WBSn version did not hurt second-half 2012 results, though the company would not break out product-line revenue. Questions also focused on margins and break-even; management said mid-40s gross margin should return with better volume, but Hezi rejected the idea that the quarter was already structurally break-even and said more disclosure would not fix the NASDAQ listing issue.