(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 April 23, 2004, there were 7,495,771 shares of Common Stock, $.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 nine months ended March 31, 2004 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 $.10 ("Common Stock"), of the Company outstanding for each period presented. For the three and nine months ended March 31, 2004 and 2003, 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 March 31, 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
April 23, 2004

Total revenues for the three months ended March 31, 2004 were $9,320,000, an increase of $1,133,000 or 13.8% from the same period a year ago. The change in revenues reflects quarter over quarter increases of $444,000 or 15.3% in the Blood Bank Division, $397,000 or 10.0% in the Pharmacy Division, $166,000 or 37.0% in the Operating Room Division, and $126,000 or 14.4% in the JAC Division.

System sales, which include proprietary software, third party software and hardware sales, for the three months ended March 31, 2004 were $3,333,000, an increase of $435,000 or 15.0% from the same period a year ago. The Blood Bank Division reported system sales of $601,000 for the three months ended March 31, 2004, an increase of $91,000 or 17.8% over the same period a year ago. The increase reflects new customers along with the continued initial migration by the Division's installed customer base from legacy systems to its new transfusion blood bank software solution, HCLLä .. During the quarter, the Company modified its marketing approach to the customer migration plan. This was done to accommodate customer capital budget cycles, and while the change had the effect of delaying migration revenue, management believes, but cannot assure, that the change will benefit the long-term market opportunity and provide better customer satisfaction. The Pharmacy Division reported system sales of $2,239,000 for the three months ended March 31, 2004, an increase of $452,000 or 25.3% over the same period a year ago. The increase primarily reflects sales relating to a database upgrade required for all installed base users completed during the quarter. This was partially offset by a decrease of WORxä licenses related to less migration activity of the Division's installed customer base from legacy systems to the WORx software solution compared to the prior year. The Operating Room Division reported system sales of $204,000 for the three months ended March 31, 2004, an increase of $27,000 or 15.3% over the same period a year ago. The increase reflects the continued marketing efforts for the Division's Perioperative Solutionsä product. The JAC Division reported system sales of $289,000 for the three months ended March 31, 2004, a decrease of $135,000 or 31.8% over the same period a year ago. The decrease reflects less migration activity during the 2004 period as the Division approaches completion of its installed customer base migration. Management believes, but cannot give any assurance, that system sales of HCLL, MediCOEä , MediMARä and Perioperative Solutions will increase as the Company further develops its marketing strategies for these products.

Service revenues, which include recurring software support, implementation, training and validation services, were $5,987,000 during the three months ended March 31, 2004, an increase of $698,000 or 13.2% from the same period a year ago. The Blood Bank Division reported service revenues of $2,739,000, an increase of $353,000 or 14.8% over the same period a year ago. The Pharmacy Division reported service revenues of $2,128,000 for the three months ended March 31, 2004, a decrease of $55,000 or 2.5% from the same period a year ago. The Operating Room Division reported service revenues of $411,000 for the three months ended March 31, 2004, an increase of $139,000 or 51.1% over the same period a year ago. The JAC Division reported service revenues of $709,000 for the three months ended March 31, 2004, an increase of $261,000 or 58.3% over the same period a year ago. The increases for the Blood Bank, Operating Room and JAC Divisions reflect additional implementation and installation activ ities relating to sales completed during the first and second quarter of fiscal year 2004 along with increases in annual support renewal rates. 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 was $876,000 for the three months ended March 31, 2004, an increase of $107,000 or 13.9% over the same period a year ago. The gross margin on system sales was 73.7% and 73.5% for the three months ended March 31, 2004 and 2003, 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 and direct expenses of the client service function. Cost of services was $2,034,000 for the three months ended March 31, 2004, an increase of $370,000 or 22.2% over the same period a year ago. The gross margin on service revenue was 66.0% and 68.5% for the three months ended March 31, 2004 and 2003, respectively. The increase in cost of services and the decline in gross margin on service revenues reflect increases in implementation personnel and related training costs as the Company increases staff levels to address the rollout of the HCLL, MediMAR, and MediCOE products. Management believes, but cannot assure, that demand for its contracted services will be strong and that cost of services as a percentage of service revenue will remain consistent.

Software development costs include non-capitalized salaries, consulting, documentation, office and other related expenses incurred in product development activities. Software development costs were $786,000 for the three months ended March 31, 2004, an increase of $108,000 or 15.9% over the same period a year ago. Total expenditures for software development, including both capitalized and non-capitalized portions and excluding amortization of capitalized software, were $2,163,000 for the three months ended March 31, 2004, an increase of $213,000 or 10.9% over the same period a year ago. The increase primarily reflects increases of $276,000 and $70,000 in expenditures in the Pharmacy Division and the JAC Division, respectively, partially offset by reductions of $19,000 and $114,000 in the Blood Bank Division and Operating Room Division, respectively. The increased software development expenditures in the Pharmacy Division reflect continued investment in the MediCOE and MediMAR developme nt projects.

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 three months ended March 31, 2004 was $3,848,000, an increase of $884,000 or 29.8% over the same period a year ago. The increase primarily reflects higher commissions associated with increased revenues; increased legal expense related to customer contracting, general business issues and employee and employment issues; marketing expenses for the Company's new products, and a rise in general business and medical insurance expenses. Management anticipates, but cannot assure, a continued rise in SG&A expenses, exclusive of legal expenses, as it continues to enhance the Company's resources and infrastructur e to support anticipated growth trends.

Net income was $561,000 for the three months ended March 31, 2004, compared to $999,000 in the same period a year ago.

Results of Operations for the Nine Months Ended March 31, 2004 as Compared to the Nine Months Ended March 31, 2003

Total revenues for the nine months ended March 31, 2004 were $27,440,000, an increase of $3,262,000 or 13.5% from the same period a year ago. The change in revenues reflects increases of $3,227,000 or 41.0% in the Blood Bank Division, $594,000 or 45.5% in the Operating Room Division, and $144,000 or 6.6% in the JAC Division; partially offset by a decrease of $703,000 or 5.5% in the Pharmacy Division.

System sales for the nine months ended March 31, 2004 were $9,173,000, a decrease of $320,000 or 3.4% from the same period a year ago. The Blood Bank Division reported system sales of $2,850,000 for the nine months ended March 31, 2004, an increase of $1,490,000 or 109.6% over the same period a year ago. The increase reflects new customers along with the continued initial migration by the Division's installed customer base from legacy systems to its new transfusion blood bank software solution, HCLL. The Pharmacy Division reported system sales of $5,046,000 for the nine months ended March 31, 2004, a decrease of $1,676,000 or 24.9% over the same period a year ago. The decrease in Pharmacy Division system sales reflects two significant Integrated Delivery Network contracts signed during the first quarter of fiscal 2003. During the first quarter of fiscal 2004, the Pharmacy Division successfully released and subsequently signed its initial contract for its MediCOE product. MediCOE all ows clinicians to enter medication orders and manage drug therapy directly into the Pharmacy Division's WORx product using internet technology. The Operating Room Division reported system sales of $681,000 for the nine months ended March 31, 2004, an increase of $204,000 or 42.8% over the same period a year ago. The increase reflects the continued marketing efforts of the Division's Perioperative Solutions product. The JAC Division reported system sales of $596,000 for the nine months ended March 31, 2004, a decrease of $338,000 or 36.2% over the same period a year ago. The decrease reflects less migration activity during the 2004 period as the Division approaches completion of its installed customer base migration. 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 for these products by the Company.

Service revenues for the nine months ended March 31, 2004 were $18,267,000, an increase of $3,582,000 or 24.4% from the same period a year ago. The Blood Bank Division reported service revenues of $8,250,000 for the nine months ended March 31, 2004, an increase in service revenues of $1,737,000 or 26.7% over the same period a year ago. The increase reflects an increase in annual support fees and an increase in implementation and installation activities. The Pharmacy Division reported service revenues of $7,065,000 for the nine months ended March 31, 2004, an increase of $973,000 or 16.0% over the same period a year ago. The increase reflects an increase in implementation and installation activities. The Operating Room Division reported service revenues of $1,218,000 for the nine months ended March 31, 2004, an increase of $390,000 or 47.1% over the same period a year ago. The increase reflects additional implementation and installation activities. The JAC Division reported service revenues of $1,734,000 for the nine months ended March 31, 2004, an increase of $482,000 or 38.5% over the same period a year ago. The increase reflects additional implementation and installation activities.

Cost of systems for the nine months ended March 31, 2004 was $1,978,000, an increase of $7,000 or 0.4% from the same period a year ago. The gross margin on system sales was 78.4% and 79.2% for the nine months ended March 31, 2004 and 2003, 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 for the nine months ended March 31, 2004 were $5,528,000, an increase of $862,000 or 18.5% from the same period a year ago. The gross margin on service revenue was 69.7% and 68.2% during the nine months ended March 31, 2004 and 2003, respectively. The increase in cost of services reflects increases in implementation personnel and related training costs as the Company increases staff levels in preparation of the rollout of its MediMAR, MediCOE and HCLL products.

Software development costs for the nine months ended March 31, 2004 were $2,351,000, an increase of $112,000 or 5.0% from the same period a year ago. Total expenditures for software development, including both capitalized and non-capitalized portions and excluding amortization of capitalized software, were $6,596,000 during the nine months ended March 31, 2004, an increase of $696,000 or 11.8% from the same period a year ago. This increase primarily reflects increases of $1,070,000 and $127,000 in expenditures in the Pharmacy Division and the JAC Division, respectively, partially offset by decreases of $172,000 and $329,000 in the Blood Bank Division and Operating Room Division, respectively. The increased software development expenditures in the Pharmacy Division reflect continued investment in the MediCOE and MediMAR development projects.

SG&A expenses for the nine months ended March 31, 2004 were $10,666,000, an increase of $1,349,000 or 14.5% over the same period a year ago. The increase primarily reflects higher commissions associated with increased revenues; increased legal expense related to customer contracting, general business issues and employee and employment issues; marketing expenses for the Company's new products, 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. The Class Action was 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. 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 Action, the Company was entitled to participate in the court-approved settleme nt. This settlement represented partial reimbursement of prior period operating costs.

Net income for the nine months ended March 31, 2004 was $2,732,000 compared to $3,220,000 in the same period a year ago. Net income in the prior year includes pre-tax proceeds of $614,000 from the Class Action settlement previously discussed.

Cash provided by operating activities was $5,657,000 during the first nine months of fiscal year 2004 compared to $6,599,000 during the same period a year ago. The decrease in cash provided by operating activities primarily reflects a decrease in net income due to the settlement received in the prior fiscal year and discussed more fully above, a rise in accounts receivable resulting from increased revenues in the current fiscal year and a decrease in the deferred tax provision, and partially offset by an increase in the amortization of capitalized software development costs.

Cash used in investing activities was $4,918,000 and $4,191,000 during the nine months ended March 31, 2004 and 2003, respectively, reflecting the Company's ongoing investment in software development projects and the acquisition of fixed assets. Of amounts invested, the Company capitalized $4,245,000 and $3,661,000 of product development costs during the nine months ended March 31, 2004 and 2003, respectively.

Cash pro