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Subject:  Yurie Systems, Inc. Reports Record First Quarter Date:  4/15/1998  5:50 PM
Author:  scottsewall Number:  44 of 54

Wednesday April 15, 4:10 pm Eastern Time

Company Press Release

SOURCE: Yurie Systems, Inc.

Yurie Systems, Inc. Reports Record First Quarter Financial Results

LANDOVER, Md., April 15 /PRNewswire/ -- Yurie Systems, Inc. (Nasdaq: YURI - news) announced today record financial results for the first quarter ended March 31, 1998.

The Company's revenue for the first quarter was $19.1 million, representing a 127% increase over the $8.4 million reported in the first quarter of 1997 and a 8.4 % sequential increase
over the $17.6 million reported in fourth quarter of 1997.

Net income for the first quarter of 1998 was $3.8 million, or $0.14 per share diluted ($0.15 per share basic), a 456% increase over the $677,000 in net income, or $0.03 per share both
diluted and basic, reported in the first quarter of 1997, and a 59% sequential increase over the $2.4 million in net income, or $0.09 per share both diluted and basic, reported in the fourth
quarter of 1997. For the fourth quarter of 1997, net income included one-time expenses associated with the acquisition of Data Labs. Excluding such expenses from the fourth quarter
would have resulted in a sequential increase in net income of 26%.

All earnings per share amounts reported in this release represent diluted or basic earnings per share as defined within Statement of Financial Accounting Standards No. 128 (FAS 128).

The Company's continued strong revenue growth during the first quarter resulted largely from increased sales of its LDR products to both government and commercial customers.
During the first quarter of 1998, product revenue was $18.4 million, a 146% increase over the first quarter of 1997 and an 11% sequential increase over the fourth quarter of 1997. Sales
to strategic partners accounted for 44% of total product sales and direct sales channels accounted for the balance. Sales to Splitrock Services, Inc. were $571,000 (3% of total sales) of
which product sales were $84,000 (0.5% of product sales).

The Company's net income growth during the first quarter was attributable to revenue growth, increased manufacturing efficiencies, and improved productivity for operating expenses.

During the first quarter, the Company continued to build on the strategic relationships it established in 1997 with its OEM partners, Bay Networks and Lucent Technologies. In addition,
during the first quarter, the company signed an OEM agreement with Ericsson, Inc. thereby furthering its distribution strategy.

``The first quarter was a challenging and rewarding one for Yurie,' according to Harry Carr, Yurie's President and Chief Operating Officer. ``Our revenue, operating income, and
earnings grew to new levels as we heightened our focus on product sales, our core strength. We continued to see positive effects of our relationships with strategic partners and
increased our direct sales in both the commercial and government segments. We added significant new capabilities on our multi-service access products while completing the
integration of personnel from Data Labs. Finally, we continued to enhance the fundamentals of our business to ensure the development and delivery of quality products in a
cost-effective manner. In short, this was a strong quarter that sets a strong foundation for the rest of the year.'

Based in Landover, Maryland, Yurie Systems, Inc. designs, manufactures, markets, and services multi-service ATM WAN access equipment for telecommunications service providers
and corporate and government end users. Dataquest and the Vertical Systems Group have identified Yurie as the market share leader in the ATM WAN access equipment market for
1996 and 1997, respectively. For more information on Yurie Systems, call (301) 352-4600 or visit the Company's Web site at

This release may contain forward-looking statements regarding the Company's business, growth, or customer prospects and other factors that may affect future earnings or financial
results. Such statements involve risks and uncertainties which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements,
and should be understood in light of the risk factors detailed in the Company's recent prospectus, 10-K and 10-Q filings.

(in thousands, except per share data)

Quarter Ended, Year Ended ,
March 31 December 31
1998 1997 1997 1996
Product revenue $18,366 $7,480 $47,064 $18,737
Service revenue 741 923 4,005 2,528

Total revenue 19,107 8,403 51,069 21,265

Cost of revenue:
Cost of product revenue 5,984 2,785 16,670 6,806
Cost of service revenue 631 622 3,026 1,666

Total cost of revenue 6,615 3,407 19,696 8,472

Gross profit 12,492 4,996 31,373 12,793

Operating expenses:
Research and development 3,006 1,759 8,691 4,428
Sales and marketing 2,332 1,288 6,787 1,880
General and administrative 1,548 1,104 7,373 2,980

Total operating expenses 6,886 4,151 22,851 9,288

Income from operations 5,606 845 8,522 3,505
Other income 409 282 1,544 90

Income before income taxes 6,015 1,127 10,066 3,595
Provision for income taxes 2,250 450 3,930 1,5