(913) 307-1000                    
(Registrant's telephone number, including area 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 January 16, 2004, there were 7,446,979 shares of Common Stock, $0.10 par value, of the registrant outstanding.

See Notes to Unaudited Condensed Consolidated Financial Statements.

See Notes to Unaudited Condensed Consolidated Financial Statements.

The results of operations for the three and six months ended December 31, 2003 are not necessarily indicative of the results to be expected for the entire fiscal year.

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 and six months ended December 31, 2003 and December 31, 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.

On October 11, 2000, Fratelli Auriana, Inc. ("Fratelli"), 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 and the Company. On September 17, 2003, the Company and Fratelli entered into a Third Amendment to the Loan Agreement between the two parties, extending the maturity date to September 30, 2005. As of January 23, 2004, the Company has not borrowed against this loan agreement.

4.     STOCK BASED COMPENSATION PLANS

The Company accounts for stock-based employee and outside directors compensation under Accounting Principles Board 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.

The Company uses the Black-Scholes option pricing model to determine the weighted average fair value of options. The fair value of options at date of grant and the assumptions utilized to determine such values are included in the following table.

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

Eisner LLP
New York, New York
January 21, 2004

Total revenues for the quarter ended December 31, 2003 were $9,109,000, an increase of $1,104,000 or 13.8% from the same period a year ago. The change in revenues reflects quarter over quarter increases of $1,128,000 or 43.4% in the Blood Bank Division and $117,000 or 19.8% in the Operating Room Division; partially offset by decreases of $45,000 or 5.9% in the JAC Division and $96,000 or 2.4% in the Pharmacy Division.

System sales, which include proprietary software, third party software and hardware sales, for the second quarter of fiscal 2004 were $3,102,000, a decrease of $67,000 or 2.1% from $3,169,000 in the second quarter last year. The Operating Room Division reported a 5.3% decrease in system sales to $285,000 in the second quarter of fiscal year 2004 compared to $301,000 in the same period of last year. Management believes, but cannot assure, that these system sales reflect acceptance of the Division's Perioperative Solutions™ system software by both new customers and existing customers electing to migrate from the Company's older scheduling products. The JAC Division experienced a 58.9% decrease in system sales to $146,000 compared to $355,000 in fiscal year 2004 and 2003 second quarters, respectively, reflecting less migration activity during the 2004 period as the Division approaches completion of its installed base migration. The Pharmacy Division reported a 15.6% reduction in sys tem sales to $1,696,000 during the second quarter of fiscal 2004, compared to $2,009,000 in the same period of fiscal 2003. This decrease in system sales reflects less migration activity of the Division's installed base to its WORxä product. The Blood Bank Division reported a 93.5% increase in systems sales to $975,000 during the second quarter of fiscal 2004, from $504,000 in the second quarter of 2003. The increase in system sales is primarily the result of initial installed base migrations from the Division's legacy systems to its new transfusion blood bank software solution, HCLLä , initially released during the fourth quarter of fiscal 2003. Management believes, but cannot give any assurance, that system sales of Perioperative Solutions, MediCOE™, MediMAR™ and HCLL will continue to increase as a result of continued marketing efforts of these products by the Company.

Service revenues, which include recurring software support, implementation, training and validation services, were $6,007,000 during the second quarter of fiscal 2004, an increase of $1,171,000 or 24.2%, compared to $4,836,000 during the same period a year ago. All Divisions reported increased service revenues compared to the second quarter of fiscal year 2003, reflecting a rise in implementation and installation activities primarily related to system sales completed during the previous fiscal year and first quarter of fiscal year 2004 as well as an increase in 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 $659,000 or 31.4% in the Blood Bank Division; $217,000 or 10.1% in the Pharmacy Division; $133,000 or 45.6% in the Operating Room Division; and $162,000 or 39.3% in the JAC Division. Management believes, but cannot give any assurance, that as system sales continue to increase, corresponding service revenues will 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 increased $1,000 or 0.1% to $611,000 during the second quarter of fiscal year 2004, from $610,000 in the same period a year ago. The gross margin on system sales was 80.3% and 80.8% during the quarters ended December 31, 2003 and 2002, respectively. These margins 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 $244,000 or 16.2% to $1,747,000 in the second quarter of fiscal 2004 as compared to $1,503,000 in the same period a year ago. The increase in cost of services is primarily attributed to increases in implementation personnel as the Company increases staff levels in preparation of the rollout of its new MediMAR, MediCOE and HCLL products. 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 70.9% during the second quarter of fiscal 2004 compared to 68.9% 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.

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 and insurance expenses; utilities, rent, communications and other office expenses; and other related direct administrative expenses. SG&A for the quarter ended December 31, 2003 was $3,536,000, an increase of $390,000 or 12.4%, compared to $3,146,000 in the second quarter of fiscal 2003. This increase reflects higher commissions associated with increased revenues, increased legal and marketing expenses and a rise in general business and medical insurance expenses. Management anticipates, but cannot assure, a continued rise in SG&A expenses as it continues to enhance the Company's resources and infrastructure to support anticipated growth trends.

During the quarter ended December 31, 2002 of fiscal 2003, the Company received $614,000 arising out of the class action settlement of In re First DataBank Direct Antitrust Litigation (the "Class Action"). This amount excluded professional, legal fees, and other Company borne expenses associated with this action, all of which were expensed. Class actions had been brought on behalf of persons who purchased electronic drug information databases containing clinical, pricing, or other information on prescription or non-prescription pharmaceutical drugs or services, products or software related thereto (collectively, the "Drug Information Databases") directly from First DataBank, Inc. ("FDB") in the United States. The actions alleged violations of the antitrust laws with respect to the pricing of the Drug Information Databases. As a purchaser of Drug Information Databases from the defendants in the class actions, the Company was entitled to participate in the co urt approved settlement. This settlement represented partial reimbursement of prior period operating costs.

Net income was $973,000 during the second quarter of fiscal year 2004, compared to $1,299,000 in the same period a year ago. Prior year net income includes pretax proceeds of $614,000 from the Class Action settlement previously discussed.

Results of Operations for the Six Months Ended December 31, 2003 as Compared to the Six Months Ended December 31, 2002

Total revenues for the six months ended December 31, 2003 were $18,120,000, an increase of $2,129,000 or 13.3% from the prior year's first six months' total of $15,991,000. The change in the first six months revenues reflects increases at the Blood Bank Division of $2,782,000 or 55.9%, at the Operating Room Division of $429,000 or 50.1%, and at JAC of $18,000 or 1.4%. These increases were partially offset by a reduction in revenues of $1,100,000 or 12.4% at the Pharmacy Division.

System sales for the six months ended December 31, 2003 decreased by $755,000 or 11.4% to $5,840,000 compared to $6,595,000 in the first half of fiscal 2003. The Operating Room Division reported a 59.3% increase in system sales to $478,000 in the first six months of fiscal 2004 compared to $300,000 in the same period of last year. Management believes, but cannot assure, that this change reflects the acceptance of the Division's Perioperative Solutions system software by both new customers and existing customers migrating from earlier software solutions. The JAC Division experienced a 40.0% decrease in system sales to $306,000 compared to $510,000 during the first six months of fiscal 2004 and 2003, respectively, reflecting less migration activity. The Pharmacy Division reported system sales of $2,807,000 during fiscal 2004, down 43.1% from $4,935,000 in the same period of fiscal 2003. Prior year Pharmacy Division system sales reflect two significant Integrated Delivery Network c ontracts signed during the first quarter of fiscal 2003 which represent the primary reason for the sales variance. During the first quarter of fiscal 2004, the Pharmacy Division successfully released and subsequently signed its initial contract for its MediCOE product, a Clinician Order Entry application. MediCOE allows clinicians to enter medication orders and manage drug therapy directly into the Pharmacy Division's WORx product using internet technology. The Blood Bank Division reported systems sales of $2,249,000 during the first six months of fiscal 2004, up 164.6% from $850,000 during the same period in the previous year. The increase in Blood Bank Division system sales is the result of initial customer migrations to the Division's transfusion blood bank software solution, HCLL. Management believes, but cannot give any assurance, that system sales of Perioperative Solutions, HCLL and MediCOE will continue to increase as a result of continued marketing efforts of these products by the Company.

Service revenues increased $2,884,000, or 30.7%, to $12,280,000 during the first half of fiscal 2004 as compared to service revenues of $9,396,000 during the same period a year ago. Consistent with the discussion of quarterly results above, all Divisions had increased service revenues during fiscal 2004 compared to fiscal 2003, reflecting a rise in implementation and installation activities and an increase of annual support fees generated from new customers joining the Company's installed base. In addition, the Blood Bank Division provided services during the first half of fiscal 2004 to assist customers with their FDA required validation processes identified during the last half of fiscal year 2003.

Cost of systems declined $100,000 or 8.3% to $1,102,000 in the first six months of fiscal 2004 compared to $1,202,000 in the same period of fiscal 2003. The gross margin on system sales was 81.1% for the six months ended December 31, 2003 compared to 81.8% in the same period last year. As previously discussed, these margins 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 increased 16.4% or $492,000, to $3,494,000 in the first six months of fiscal 2004 compared to $3,002,000 in the same period a year ago. As described in the quarterly results analysis, the increase in cost of services is primarily attributed to increases in implementation personnel as the Company increases staff levels for the rollout of its new MediMAR, MediCOE and HCLL products. Gross margin on service revenues rose to 71.5% during the six months of fiscal 2004 compared to 68.1% in the first half of fiscal 2003.

Amortization of capitalized software increased $838,000 or 91.1%, to $1,758,000 during the first half of fiscal 2004 compared to $920,000 in the same period of 2003. As previously discussed, this increase is primarily due to increased amortization of capitalized software costs related to the Company's HCLL and MediCOE products.

SG&A expenses increased $465,000 or 7.3% to $6,818,000 for the six months ended December 31, 2003, compared to $6,353,000 for the same period a year ago. As previously discussed, this increase reflects higher commissions associated with increased revenues, increased legal and marketing expenses and a rise in general business and medical insurance expenses.

Net income during the first six months of fiscal 2004 was $2,171,000 compared to $2,221,000 in the same period a year ago. Net income in the prior year includes pretax proceeds of $614,000 from the Class Action settlement previously discussed.

Cash provided by operating activities was $3,528,000 during the first six months of fiscal year 2004 compared to $3,911,000 during the same period a year ago. The decrease in cash provided by operating activities primarily reflects a rise in accounts receivable resulting from increased revenues and a decrease in the deferred tax provision, partially offset by an increase in the amortization of capitalized software development costs and by tax benefits from stock option activity.

Cash used in investing activities was $3,329,000 and $2,770,000 during the six months ended December 31, 2003 and 2002, respectively, reflecting the Company's ongoing investment in software development projects and the acquisition of fixed assets. Of amounts invested, the Company capitalized $2,868,000 and $2,389,000 of product development costs during the six months ended December 31, 2003 and 2002, respectively.

Cash provided by financing activities during the six months ended December 31, 2003 and 2002 was $311,000 and $231,000, respectively, related to proceeds from the exercise of options.

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. ("Fratelli") 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. Currently, there are no plans for additional outside financing.