I contacted PG tech support and they were unable to important the lyrics as well. Here is their response:

"After a bit of testing it looks like the lyrics aren't being properly imported when you open a KAR file. While all the MIDI data is imported correctly, the program is ignoring the lyric data. We've reported this to the development team and it should be addressed in a future program update."

I hope this means the next Mac update. Keeping my fingers crossed.