Kalaris Therapeutics Inc

In Q4, revenue was $8.2 million, down from $10.9 million in Q4 of the prior year. Non-GAAP gross margin was 38.2% versus 46.5% in Q3, and the decline was attributed mainly to lower revenue. 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 discontinued operations added a $0.19 per share net loss. Cash, cash equivalents and investments totaled $40.4 million at Dec. 31, and debt stood at $11 million versus $13 million at the beginning of the year. For Q1 2013, operating expenses were expected to remain similar to Q4 and then decline slightly in subsequent quarters; gross margin for the unlicensed business was expected to be around Q3 levels.

Hezi Lapid framed the quarter as a transition point, saying the sale of the carrier licensed division (DWA) to Telrad is the best outcome for shareholders and customers given market conditions and limited resources. He said the company will concentrate on unlicensed broadband where it sees the most growth potential, especially vertical markets and carrier Wi-Fi. His tone was cautious but constructive: he repeatedly acknowledged the company is not yet profitable, but said the turnaround plan is working and profitability is achievable.

Avi Stern focused on the financial cleanup and the narrower continuing business. He said Q4 continuing-business revenue was $8.2 million, non-GAAP operating expenses were $7.1 million, and non-GAAP gross margin was 38.2%; he also said gross margin should return to around Q3 levels. On liquidity and leverage, he said cash, cash equivalents and investments were $40.4 million at Dec. 31, the company made an additional $1 million principal repayment to Silicon Valley Bank in Q4, and debt was down to $11 million from $13 million at the start of the year. He also noted inventory at $9.3 million and DSOs at 115 days, up from 111 days.

Analysts pressed for more detail on the carrier Wi-Fi business, including whether 2012 came near an earlier $25 million target, but management declined to break out product-line revenue. Questions also focused on whether the $8 million revenue run rate was a floor and how the company could realistically return to break-even. Hezi Lapid said he would not give guidance, but if $8 million is not the low point he would be disappointed; he also said break-even is around $11.5 million in revenue with $6 million to $7 million in expenses, and that more disclosure would not likely fix the NASDAQ listing issue.