FORM 10-Q



SECURITIES AND EXCHANGE COMMISSION

(Mark One)



For the quarterly period ended September 30, 2003
ORoTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to 
Commission file number:     1-10768MEDIWARE INFORMATION SYSTEMS, INC.(Exact name of registrant as specified in its charter)





|New York                                                        | 11-2209324                          
|--------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of 
incorporation or organization) | (I.R.S. Employer
Identification No.)
|                                                                |                                     
|11711 West 79th Street
            Lenexa, Kansas               | 66214                               
|(Address of principal executive offices)                        | (Zip Code)                          





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   [X] Yes  [_]  No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  [  ] Yes   [X] No

As of October 16, 2003, there were 7,379,395 shares of Common Stock, $0.10 par value, of the registrant outstanding.







MEDIWARE INFORMATION SYSTEMS, INC. 
INDEX



|PART I     | Financial Information                                                                                                           |  | Page
|---------- | ------------------------------------------------------------------------------------------------------------------------------- |  | ----
|ITEM 1.    | Financial StatementsCondensed Consolidated Balance Sheets as of September 30, 2003
and June 30, 2003                            |  | 4   
|           | Condensed Consolidated Statements of Operations and Comprehensive Income For the Three Months Ended September 30, 2003 and 2002 |  | 5   
|           | Condensed Consolidated Statements of Cash Flows
For the Three Months Ended September 30, 2003 and 2002                          |  | 6   
|           | Notes to Unaudited Condensed Consolidated Financial Statements                                                                  |  | 7   
|           | Independent Accountants'  Review Report                                                                                         |  | 9   
|ITEM 2.    | Management's Discussion and Analysis of Financial
Condition and Results of Operations                                           |  | 10  
|ITEM 3.    | Quantitative and Qualitative Disclosures About Market Risk                                                                      |  | 14  
|ITEM 4.    | Controls and Procedures                                                                                                         |  | 14  
|Part II    | Other Information                                                                                                               |  |     
|ITEM 6.    | Exhibits and Reports on Form 8-K                                                                                                |  | 15  
|Signatures |                                                                                                                                 |  | 16  





|MEDIWARE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES                      
|-------------------------------------------------------------------------
|CONDENSED CONSOLIDATED BALANCE SHEETS                                    
|(Amounts in thousands except shares)                                     
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|ASSETS                                                                   
|Current Assets                                                           
|Cash and cash equivalents                                                
|Accounts receivable (net of allowance of $520 and 
   $557, respectively)
|Inventories                                                              
|Deferred tax asset - current portion                                     
|Prepaid expenses and other current assets                                
|Total current assets                                                     
|                                                                         
|Fixed assets, net                                                        
|Capitalized software costs, net                                          
|Goodwill, net                                                            
|Purchased technology, net                                                
|Other long term assets                                                   
|Total Assets                                                             
|                                                                         
|                                                                         
|LIABILITIES AND STOCKHOLDERS' EQUITY                                     
|Current Liabilities                                                      
|Accounts payable                                                         
|Advances from customers                                                  
|Accrued expenses and other current liabilities                           
|Total current liabilities                                                
|                                                                         
|Notes payable and accrued interest payable to a related party            
|Deferred tax liability                                                   
|Total liabilities                                                        
|                                                                         
|Stockholders' Equity                                                     
|Preferred stock, $.01 par value; authorized 10,000,000                   
|shares; none issued or outstanding                                       
|Common stock, $.10 par value; authorized 12,000,000                      
|shares;  7,379,000 and 7,358,000 shares issued and                       
|outstanding at September 30, 2003 and June 30, 2003,
     respectively   
|Additional paid-in capital                                               
|Retained earnings (accumulated deficit)                                  
|Accumulated other comprehensive loss                                     
|Total stockholders' equity                                               
|Total Liabilities and Stockholders' Equity                               
|                                                                         

See Notes to Unaudited Condensed Consolidated Financial Statements.









|MEDIWARE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES                     
|------------------------------------------------------------------------
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
|(Amounts in thousands, except earnings per share)                       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Revenues                                                                
|System sales                                                            
|Services                                                                
|Total revenues                                                          
|                                                                        
|Cost and Expenses                                                       
|Cost of systems (exclusive of amortization)                             
|Cost of services (exclusive of amortization)                            
|Amortization of capitalized software                                    
|Software development costs                                              
|Selling, general and administrative                                     
|Total costs and expenses                                                
|                                                                        
|Operating income                                                        
|                                                                        
|Interest and other income                                               
|Interest and other (expense)                                            
|                                                                        
|Income before income taxes                                              
|                                                                        
|Income tax provision                                                    
|                                                                        
|Net Income                                                              
|                                                                        
|Other Comprehensive Income                                              
|Foreign currency translation adjustment                                 
|                                                                        
|Comprehensive Income                                                    
|                                                                        
|Net income per Common Share                                             
|Basic                                                                   
|                                                                        
|Diluted                                                                 
|                                                                        
|Weighted Average Common Shares Outstanding                              
|Basic                                                                   
|                                                                        
|Diluted                                                                 
|                                                                        

See Notes to Unaudited Condensed Consolidated Financial Statements.







|MEDIWARE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES                
|-------------------------------------------------------------------
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                    
|(Amounts, in Thousands)                                            
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Cash Flows From Operating Activities                               
|Net income                                                         
|Adjustments to reconcile net income to                             
|net cash provided by operating activities:                         
|Depreciation and amortization                                      
|Deferred tax provision                                             
|Tax benefit from exercise of stock options                         
|(Provision) benefit for doubtful accounts                          
|Changes in operating assets and liabilities:                       
|Accounts receivable                                                
|Inventories                                                        
|Prepaid expenses and other current assets                          
|Accounts payable, accrued expenses and                             
|advances from customers                                            
|Net cash provided by operating activities                          
|                                                                   
|                                                                   
|Cash Flows From Investing Activities                               
|Acquisition of fixed assets, net of disposals                      
|Capitalized software costs                                         
|Net cash used in investing activities                              
|                                                                   
|                                                                   
|Cash Flows From Financing Activities                               
|Proceeds from exercise of options                                  
|                                                                   
|                                                                   
|Foreign currency translation adjustments                           
|                                                                   
|Net increase in cash and cash equivalents                          
|                                                                   
|Cash and cash equivalents at beginning of period                   
|                                                                   
|Cash and cash equivalents at end of period                         
|                                                                   
|                                                                   
|Supplemental Disclosures of Cash Flow Information:                 
|Cash paid during the period for:                                   
|Interest                                                           
|Income taxes                                                       
|                                                                   
|See Notes to Unaudited Condensed Consolidated Financial Statements.





MEDIWARE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.     FINANCIAL STATEMENTS

In the opinion of management, the accompanying unaudited, consolidated, condensed financial statements contain all adjustments necessary to present fairly the financial position of the Company and its results of operations and cash flows for the interim periods presented. Such financial statements have been condensed in accordance with the applicable regulations of the Securities and Exchange Commission and, therefore, do not include all disclosures required by accounting principles generally accepted in the United States of America. These financial statements should be read in conjunction with the Company's audited financial statements for the year ended June 30, 2003 included in the Company's Annual Report filed on Form 10-K for such year.

The results of operations for the three months ended September 30, 2003 are not necessarily indicative of the results to be expected for the entire fiscal year.

2.     EARNINGS PER SHARE

Basic earnings per share have been computed using the weighted average number of shares of common stock, par value $0.10 ("Common Stock"), of the Company outstanding for each period presented.  For the three months ended September 30, 2003 and September 30, 2002, the dilutive effect of stock options and other common stock equivalents is included in the calculation of diluted earnings per share using the treasury stock method.

3.     RELATED PARTY TRANSACTIONS

On October 11, 2000, Fratelli Auriana, Inc., an entity controlled by Mr. Lawrence Auriana, the Chairman of the Board of the Company and holder of more than 5% of the Company's outstanding Common Stock, committed to loan the Company up to $2,000,000, in addition to amounts previously loaned to the Company, to be drawn in multiples of $250,000, as needed by the Company.  Conditions were finalized and a Loan Agreement was signed December 1, 2000 between Fratelli Auriana, Inc. and the Company.  On September 17, 2003, the Company and Fratelli Auriana, Inc. entered into a Third Amendment to the Loan Agreement between the two parties, extending the maturity date to September 30, 2005.  As of October 17, 2003, the Company has not borrowed against this loan agreement.



5.     STOCK BASED COMPENSATION PLANS



The Company accounts for stock-based employee and outside directors compensation under Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees", and related interpretations.  The Company has adopted the disclosure-only provisions of Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation" and SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure", which was released in December 2002 as an amendment of SFAS No. 123.  The following table illustrates the effect on net income and earnings per share if the fair value based method had been applied to all awards.







|                                                                                                                 | Three Months  Ended   September 30,
|---------------------------------------------------------------------------------------------------------------- | -----------------------------------
|                                                                                                                 | 2003                               
|                                                                                                                 |                                    
|Reported net income                                                                                              | $1,198                             
|Stock-based employee
  compensation expense included
  in reported net income, net of
  related tax effects      | --                                 
|Stock-based employee
  compensation determined under
  the fair value based method, net
  of related tax effects | (140)                              
|                                                                                                                 |                                    
|Pro forma net income                                                                                             | $1,058                             
|                                                                                                                 |                                    
|Income per share:                                                                                                |                                    
|Basic---as reported                                                                                              | $ 0.16                             
|Basic---pro forma                                                                                                | $ 0.14                             
|                                                                                                                 |                                    
|Diluted---as reported                                                                                            | $ 0.15                             
|Diluted---pro forma                                                                                              | $ 0.13                             





The weighted average fair value at date of grant for options granted during the three months ended September 30, 2003 and 2002 were $10.085 and $8.076 per option, respectively. The fair value of options at date of grant was estimated using the Black-Scholes option pricing model utilizing the following assumptions:



|                                | Three Months Ended           
September 30
|------------------------------- | ------------------------------------------
|                                | 2003         
--------------              
|Risk-free interest rates        | 3.31%                                     
|Expected option life in years   | 8                                         
|Expected stock price volatility | 32%                                       
|Expected dividend yield         | -0-                                       





INDEPENDENT ACCOUNTANTS' REVIEW REPORT

To The Board of Directors and Stockholders of 
Mediware Information Systems, Inc.

We have reviewed the accompanying condensed consolidated balance sheet of Mediware Information Systems, Inc. and subsidiaries (the "Company") as of September 30, 2003, and the related condensed consolidated statements of operations and comprehensive income and cash flows for the three-month periods ended September 30, 2003 and 2002.  These condensed consolidated financial statements are the responsibility of the Company's management.

Eisner LLP
New York, New York
October 22, 2003





ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
                   CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

Certain statements made in or incorporated into this Quarterly Report on Form 10-Q may constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, as the same may be amended from time to time (the "Act") and in releases made by the Securities and Exchange Commission from time to time. Such forward-looking statements are not based on historical facts and involve known and unknown risks, uncertainties and other factors, which may cause the actual results of the Company to be materially different from any future results expressed or implied by such forward-looking statements. These risks and uncertainties include: (i) fluctuations in quarterly operating results, (ii) reliance on third-party software, (iii) dependence on third-party marketing relationships, (iv) changes in the healthcare industry, (v) significant competition, (vi) the Company's ability to manage its rapid growth, (vii) the effects of government regulation on the Company, (viii) product related liabilities, (ix) risks associated with system errors and warranties, and (x) risks associated with the development, marketing and sale of new software products. Amplification of such risks may be found in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2003. The Company does not intend to update publicly any forward-looking statements.



Results of Operations for the Three Months Ended September 30, 2003 as Compared to the Three Months Ended September 30, 2002

Total revenues for the quarter ended September 30, 2003 were $9,011,000, an increase of $1,025,000 or 12.8% from the same period a year ago.  The change in revenues reflects quarter over quarter increases of $1,652,000 or 69.6% in the Blood Bank Division; $313,000 or 118.6% in the Operating Room Division; and $64,000 or 11.8% in the JAC Division.  These increases were partially offset by a $1,004,000 or 20.9% decrease in total revenues in the Pharmacy Division.



System sales, which include proprietary software, third party software and hardware sales, for the first quarter of fiscal 2004 were $2,738,000, a decrease of $688,000 or 20.1% from the first quarter last year.  The Operating Room Division reported  system sales of $194,000 in the fiscal year 2004 first quarter compared to none in the same period of last year while the JAC Division experienced an increase in system sales to $160,000 compared to $155,000 in fiscal year 2004 and 2003 first quarters, respectively.  The Pharmacy Division reported system sales of $1,110,000, a $1,815,000 or 62.1% decrease compared to $2,925,000 in fiscal 2003.  Prior year Pharmacy system sales reflect two significant Integrated Delivery Network contracts signed during that period which represent the primary reason for the quarter over quarter sales variance. During the current fiscal year quarter, the Pharmacy Division successfully released and subsequently signed its initial contract for its MediCOEä
 product, a Clinician Order Entry application.   MediCOE allows clinicians to enter medication orders and manage drug therapy directly into the Pharmacy Division's WORxä
 product using internet technology.  Management believes, but cannot assure, that customer acceptance of WORx and related products such as MediCOE will continue to be positive.    The Blood Bank Division experienced an increase in  system sales of $928,000 or 268.2% to $1,274,000 during the first quarter of fiscal year 2004 compared to $346,000 in the same period a year ago.   The increase in Blood Bank system sales is the result of sales of its new transfusion blood bank software solution, HCLLä
, initially released during the fourth quarter of fiscal 2003.  Management believes, but cannot assure, that system sales for the Blood Bank Division will continue to increase as a result of its continued marketing efforts for the new HCLL product.



Service revenues, which include recurring software support, implementation,  training and validation services, were $6,273,000 during the first quarter of fiscal 2004, an increase of $1,713,000 or 37.6%, compared to $4,560,000 during the same period a year ago.  All Divisions had increased service revenues compared to the first quarter of fiscal year 2003, reflecting a rise in implementation and installation activities primarily related to system sales completed during the previous fiscal year as well as an increase of annual support fees generated from new customers joining the Company's installed base.  In addition, the Blood Bank Division continued to provide services to assist customers with their FDA required validation processes identified during the last half of fiscal year 2003.  The rise in service revenues includes increases of $811,000 or 43.1% in the Pharmacy Division; $724,000 or 35.7% in the Blood Bank Division; $119,000 or 45.1% in the Operating Room Division; and $59,000 or 15.2% in the JAC Division.  Management believes, but cannot give any assurance, that as system sales increase, corresponding service revenues should also increase.



Cost of systems includes the cost of computer hardware and sublicensed software purchased from computer and software manufacturers as part of a complete system offering and excludes amortization of capitalized software.   Cost of systems decreased to $491,000 during the quarter ended September 30, 2003, from $592,000 in the same period a year ago primarily due to  the reduction in system sales in the Pharmacy Division.  As a percentage of new systems sales, cost of systems was 17.9% and 17.3% during the quarters ended September 30, 2003 and 2002, respectively.  These costs can fluctuate as the mix of revenue varies between high margin proprietary software and lower margin computer hardware and sublicensed software components.



Cost of services includes the salaries of client service personnel and communications expenses along with the direct expenses of the client service function.  Cost of services increased $248,000 or 16.5% to $1,747,000 in the first quarter of fiscal 2004 as compared to the same period a year ago.  The increase in cost of services is primarily attributed to increases in system implementations associated with the Company's WORx Pharmacy System as well as validation support efforts within the Blood Bank Division.  An increase in implementation of extended service activities, which typically results in higher gross margin, as a proportion of total service revenues, resulted in an increase in service revenue gross margin to 72.2% during the first three months of fiscal 2004 compared to 67.1% in same period of fiscal year 2003.  Management believes, but cannot assure, that demand for its contracted services will continue to be strong and cannot assure that cost of services as a percentage of service revenue will remain consistent with its current utilization rates.



Amortization of capitalized software increased $399,000 or 86.7%, to $859,000 in the first quarter of fiscal 2004 compared to $460,000 in the same period of 2003.  This increase is primarily due to increased amortization of capitalized software costs related to the Blood Bank Division's new transfusion product (HCLL) which reached commercialization in the fourth quarter of fiscal 2003 as well as amortization of capitalized software costs related to the MediCOE product released by the Pharmacy Division during the current quarter.

Software development costs include non-capitalized salaries, consulting, documentation, office and other related expenses incurred in product development activities.  Software development costs decreased $24,000 or 3.2% to $724,000 for the quarter ended September 30, 2003 compared to $748,000 the same quarter a year ago.Total expenditures for software development, including both capitalized and non-capitalized portions and excluding amortization of capitalized software, were $2,108,000 during the first quarter of fiscal year 2004, compared to $1,965,000 in the same period in the prior year, an increase of $143,000 or 7.3%.  This increase primarily reflects a $392,000 rise in expenditures in the Pharmacy  Division, partially offset by reductions of $104,000 and $145,000 in the Blood Bank and Operating Room Divisions, respectively.  The increased software development expenditures in the Pharmacy Division reflects continued investment in MediCOE and MediMARä
, two development projects targeted to doctors and nurses at hospitals currently using the WORx Pharmacy System.   Development of MediCOE and MediMAR began ramping up during the second quarter of fiscal year 2003. Management believes, but cannot assure, that investments in development activities will continue in all of its Divisions.



Selling, general and administrative ("SG&A") expenses include marketing and sales salaries, commissions, travel and advertising expenses.  Also included is bad debt expense; legal, accounting and professional fees; salaries and bonus expenses for corporate, divisional, financial and administrative staffs; utilities, rent, communications and other office expenses; and other related direct administrative expenses.  SG&A for the quarter ended September 30, 2003 was $3,282,000, an increase of $75,000 or 2.3%, compared to $3,207,000 in the first quarter of fiscal 2003.  This increase reflects a rise in general business and medical insurance expenses as well as additional costs associated with Sarbanes-Oxley compliance activities.



Net income was $1,198,000 for the quarter ended September 30, 2003, an increase of $276,000 or 29.9% as compared to net income of $922,000 in the quarter ended September 30, 2002.





Liquidity and Capital Resources

As of September 30, 2003, the Company had cash and cash equivalents of $7,651,000 compared to cash and cash equivalents of $7,525,000 at June 30, 2003.  At September 30, 2003, working capital was $5,834,000 and the current ratio was 1.52:1 compared to $4,241,000 and 1.37:1 at June 30, 2003.  Cash provided by operating activities was $1,602,000 during the first quarter of fiscal year 2004 compared to $2,031,000 during the same period a year ago.  The decreased cash provided by operating activities is primarily due to an increase in accounts receivable reflecting the rise in revenues.

The Company invested $1,554,000 and $1,424,000 during the three months ended September 30, 2003 and 2002, respectively, primarily related to the Company's ongoing investment in software development projects.  Of amounts invested, the Company capitalized $1,384,000 and $1,217,000 of product development costs during the three months ended September 30, 2003 and 2002, respectively.

For the three months ended September 30, 2003, the Company received $77,000 related to proceeds from the exercise of options, compared to $177,000 generated in the same period a year ago.

The Company's liquidity is influenced by its ability to perform on a "best of breed" basis in a competitive industry that is currently impacted by consolidations of healthcare information system providers.  The factors that may affect liquidity are the Company's ability to penetrate the market for its products, maintain or reduce the length of the selling cycle, and collect cash from clients as systems are implemented. Exclusive of activities involving any future acquisitions of products or companies that complement or augment the Company's existing line of products, management believes that current available funds, cash generated from operations and a $2,000,000 line of credit from Fratelli Auriana, Inc. will provide sufficient liquidity to meet operating requirements for the foreseeable future.  The Company continues to review its long-term cash needs and investment options.  As of October 20, 2003, the Company has not borrowed against the line of credit.  Currently, there are no plans for additional outside financing.

The Company owes $1,395,000 to the Chairman of the Board of Directors/Significant Shareholder of the Company which amount accrues interest at 1/4% over prime per annum.  The prime interest rate at July 1, 2003 was 4.0%.  On October 11, 2000, the original note plus accrued interest was changed from a demand note to a long-term note collateralized by the trade accounts receivable of Digimedics.In October 2000, Fratelli Auriana, Inc., an entity controlled by the Chairman of the Board of the Company, committed to loan the Company up to $2,000,000, to be drawn in multiples of $250,000, as needed by the Company.  Interest at the rate of prime plus 1/4% will be charged on any outstanding balance and must be paid quarterly.  On September 17, 2003, the Company and Fratelli Auriana, Inc. entered into a Third Amendment to the Loan Agreement between the two parties, extending the maturity date to September 30, 2005.  As of October 20, 2003, the Company has not borrowed against this loan agreement.



Off-Balance Sheet ArrangementsThe Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to the Company.



New Accounting Pronouncements



ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES
                   ABOUT MARKET RISK

The Company does not currently have any material exposure to foreign currency transaction gains or losses. However, the Company does have some exposure to foreign currency rate fluctuations arising from sales made to customers in the United Kingdom. These transactions are made by the Company's U.K. based, wholly owned subsidiary which transacts business in the local functional currency. To date, the Company has not entered into any derivative financial instrument to manage foreign currency risk and is currently not evaluating the future use of any such financial instruments.



ITEM 4.      CONTROLS AND PROCEDURES

The Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") have reviewed and evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 240.13a-14(c) and 15d-14(c) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of a date within ninety days prior to the filing date of this quarterly report.  Based on that review and evaluation, which included inquiries made to certain other employees of the Company, the CEO and CFO have concluded that the Company's current disclosure controls and procedures, as designed and implemented, are reasonably adequate to ensure that they are provided with material information relating to the Company required to be disclosed in the reports the Company files or submits under the  Exchange Act.  There have not been any significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.  There were no significant deficiencies or material weaknesses identified, and therefore no corrective actions were taken.





PART II     OTHER INFORMATION



ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K

(a).     Exhibits

|Exhibit 10.48 | First Amendment dated August 28, 2003, to Employment Agreement  between Mediware Information Systems, Inc. and Jill H. Suppes        
|------------- | -------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 10.49 | Third Amendment to the Loan Agreement between Mediware Information Systems, Inc. and Fratelli Auriana, Inc., dated September 17, 2003
|Exhibit 11.   | Schedule of Computation of Net Earnings Per Share                                                                                    
|Exhibit 15.   | Letter of awareness from Eisner LLP dated October 22, 2003 concerning unaudited interim financial information                        
|Exhibit 31.1  | Rule 13a-14(a)/15d-14(a) Certification                                                                                               
|Exhibit 31.2  | Rule 13a-14(a)/15d-14(a) Certification                                                                                               
|Exhibit 32.1  | Certification Pursuant to 18 U.S.C. 1350                                                                                             
|              |                                                                                                                                      

(b).     Reports on Form 8-K



On August 28, 2003, a Form 8-K was filed by the Company under "Item 9. Regulation FD Disclosure."





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
                                                   MEDIWARE INFORMATION SYSTEMS, INC.                                                                       (Registrant)



October 27, 2003             /s/   GEORGE J. BARRY          Date                                          GEORGE J. BARRY
                                                            PRESIDENT AND CHIEF EXECUTIVE OFFICER



October 27, 2003             /s/   JILL H. SUPPES          Date                                          JILL H. SUPPES
                                                            CHIEF FINANCIAL OFFICER







EXHIBIT 10.48



FIRST AMENDMENT



This First Amendment, dated as of August 28, 2003 (the "Amendment"), to Employment Agreement entered into as of October 14, 2002 by and between MEDIWARE INFORMATION SYSTEMS, INC., a New York corporation ("Employer"), with offices located at 11711 W. 79th Street, Lenexa, Kansas 66214, and Jill H. Suppes, residing at 1225 Southwest Creekside Drive, Lee's Summit, Missouri 64081 ("Employee").

Recitals

1. As of October 14, 2002, the parties executed an Employment Agreement (the "Agreement") pursuant to which Employer retained Employee as the Chief Financial Officer of Employer.
2. The parties have agreed to make an adjustment to the amount of compensation to be paid to Employee pursuant to the Agreement.
3. The parties now desire to amend the Agreement to reflect the foregoing as hereinafter set forth.

Agreement

In consideration of the agreements contained herein, the parties hereto hereby agree as follows:

Section 1.	Amendment.

1. Section 3(a) of the Agreement is amended by deleting the words "one hundred thirty-five thousand dollars ($135,000.00)" in the second and third lines thereof and inserting the words "one hundred fifty thousand dollars ($150,000.00)" in their stead.

Section 2.	Effect of Amendment.  Except as expressly stated herein, the Agreement is and shall be unchanged and remain in full force and effect.  Except as specifically stated herein, the execution and delivery of this Amendment shall in no way release, harm or diminish, impair, reduce or otherwise affect, the respective obligations and liabilities under the Agreement, all of which shall continue in full force and effect.



Section 3.	Miscellaneous.  This Amendment is a contract made under and shall be construed in accordance with and governed by the laws of the state of New York.  This Amendment shall benefit and bind the parties hereto and their respective assigns, successors and legal representatives.  This Amendment may be executed in two or more counterparts, and it shall not be necessary that the signatures of all parties hereto be contained on any one counterpart hereof; each counterpart shall be deemed an original, but all of which together shall constitute one and the same instrument.  All titles or headings to the sections or other divisions of this Amendment are only for the convenience of the parties and shall not be construed to have any effect or meaning with respect to the other content of such sections, subsections or the divisions, such other content being controlling as to the agreement between the parties hereto.



IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above written.



MEDIWARE INFORMATION SYSTEMS, INC.

By:  /s/ George J. Barry_____________
     George J. Barry
     Chief Executive Officer and President



/s/ Jill H. Suppes_________________
     Jill H. Suppes



EXHIBIT 10.49





MEDIWARE INFORMATION SYSTEMS, INC.
11711 W. 79th Street
Lenexa, Kansas 66214



September 17, 2003





Fratelli Auriana, Inc.
155 Old North Stamford Road
Stamford, Connecticut 06905



Gentlemen:



Reference is made to the Amended and Restated Secured Loan Agreement between Mediware Information Systems, Inc. and Fratelli Auriana, Inc. dated as of September 30, 2000, as amended on December 5, 2001 and as further amended on July 15, 2002 (as so amended, the "Agreement").  We have agreed to further amend the Agreement as follows:



1.   The definition of the term "Maturity Date" set forth in Section 1.01 of the Agreement, is hereby amended and replaced with the following:



"Maturity Date" shall mean September 30, 2005.



2.   Section 2.01 of the Agreement is modified in its entirety to read as follows:



"SECTION 2.01	The Loan.  Subject to the terms and conditions contained in this Agreement, the Lender agrees to make the Loan Facility to the Borrower from and after the Closing Date.  Drawdowns of the Loan Facility in multiples of $250,000 may be made by Borrower, assuming it is in compliance with the conditions for drawdowns, and is not in default hereunder, at any time and from time to time, up to September 30, 2004."



3.   Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Agreement.



4.   The Agreement, to the extent amended herein, remains in full force and effect in accordance with its terms.



Please confirm your agreement with the foregoing by signing and returning a duplicate copy of this letter to the undersigned.





MEDIWARE INFORMATION SYSTEMS, INC.



By:  /s/ George J. Barry     George J. Barry
     President and Chief Executive Officer



AGREED AND ACCEPTED
FRATELLLI AURIANA, INC.





By:  /s/ Lawrence Auriana

Name:Lawrence Auriana

Title:

Date:9/29/03





EXHIBIT 11





|                                |  | Three Months Ended      
September 30, |  | Three Months Ended      
 September 30, |  | 
|------------------------------- |  | -------------------------------------- |  | --------------------------------------- |  | 
|                                |  | 2003                                   |  | 2002                                    |  | 
|                                |  |                                        |  |                                         |  | 
|Basic Earnings Per Share        |  |                                        |  |                                         |  | 
|                                |  |                                        |  |                                         |  | 
|Net earnings                    |  | $1,198,000                             |  | $ 922,000                               |  | 
|                                |  |                                        |  |                                         |  | 
|Weighted-average Common Shares: |  |                                        |  |                                         |  | 
|Outstanding                     |  | 7,363,000                              |  | 7,275,000                               |  | 
|                                |  |                                        |  |                                         |  | 
|                                |  |                                        |  |                                         |  | 
|Basic Earnings Per Share        |  | $        0.16                          |  | $        0.13                           |  | 
|                                |  |                                        |  |                                         |  | 
|                                |  |                                        |  |                                         |  | 
|Diluted Earnings Per Share      |  |                                        |  |                                         |  | 
|                                |  |                                        |  |                                         |  | 
|Net earnings                    |  | $1,198,000                             |  | $   922,000                             |  | 
|                                |  |                                        |  |                                         |  | 
|Weighted-average Common Shares: |  |                                        |  |                                         |  | 
|                                |  |                                        |  |                                         |  | 
|Outstanding                     |  | 7,363,000                              |  | 7,275,000                               |  | 
|                                |  |                                        |  |                                         |  | 
|Options and Warrants            |  | 732,000                                |  | 519,000                                 |  | 
|                                |  |                                        |  |                                         |  | 
|                                |  | 8,095,000                              |  | 7,794,000                               |  | 
|                                |  |                                        |  |                                         |  | 
|Diluted Earnings Per Share      |  | $        0.15                          |  | $        0.12                           |  | 





EXHIBIT 15



To the Board of Directors and Stockholders of 
Mediware Information Systems, Inc.
We have reviewed, in accordance with standards established by the American Institute of Certified Public Accountants, the unaudited interim condensed consolidated financial statements of Mediware Information Systems, Inc. and subsidiaries as of September 30, 2003 and for the three month periods ended September 30, 2003 and 2002, as indicated in our review report dated October 22, 2003; because we did not perform an audit, we expressed no opinion on those financial statements.

We are aware that our review report, which is included in your Quarterly Report on Form 10-Q for the quarter ended September 30, 2003, is incorporated by reference in the Registration Statements on Form S-8 (No. 333-07591 and No. 333-83016).
We are also aware that our review report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Section 7 and 11 of that Act.

Eisner  LLP

New York, New York
October 22, 2003





EXHIBIT 31.1





CERTIFICATIONS

I, George J. Barry, certify that:



I have reviewed this quarterly report on Form 10-Q of Mediware Information Systems, Inc.;



Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:



(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and



The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and



b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls.





Date: October 27, 2003

/s/ George J. Barry
------------------------
     George J. Barry
     Chief Executive Officer





EXHIBIT 31.2



CERTIFICATIONS



I, Jill H. Suppes, certify that:



I have reviewed this quarterly report on Form 10-Q of Mediware Information Systems, Inc.;



Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:



(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and



The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and



b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls.





Date: October 27, 2003

/s/ Jill Suppes
------------------------
     Jill Suppes
     Chief Financial Officer



EXHIBIT 32.1



CERTIFICATION

PURSUANT TO 18 U.S.C. 1350

(AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)



In connection with the Quarterly Report on Form 10-Q (the "Form 10-Q") of Mediware Information Systems, Inc. for the quarter ended September 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned officers of the Company certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his or her respective knowledge:

1. The Report fully complies, in all material respects, with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

|Dated:  October 27, 2003 | /s/ George J. Barry                          
|------------------------ | ---------------------------------------------
|                         | ---------------------------------            
|                         | George J. Barry 
     Chief Executive Officer
|                         |                                              
|Dated:  October 27, 2003 | /s/ Jill H. Suppes                           
|                         | ---------------------------------            
|                         | Jill H. Suppes
     Chief Financial Officer  
|                         |                                              
|                         |                                              







A signed original of this written statement required by Section 906, or other authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Mediware Information Systems, Inc. and will be retained by Mediware Information Systems, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.