Mediware Continues Growth and Expansion with Record Revenue in Second Quarter

A strong financial performance resulted from new contracts, service revenue and favorable retroactive R&D tax credits; conference call scheduled for today at 10:00 a.m. EST, 9:00 a.m. CST

LENEXA, KS Jan. 25, 2011 - Mediware Information Systems, Inc. (Nasdaq: MEDW), a provider of comprehensive healthcare software solutions for blood, medication and performance management, reported total revenue of $13.2 million for the second quarter of the 2011 fiscal year, a $2.4 million or 22 percent increase over the $10.8 million reported in the comparable quarter in fiscal 2010. Net income for the quarter increased to $1.7 million from the $783,000 reported in the comparable quarter of fiscal 2010. Current quarter results include tax benefits of $460,000 or approximately $0.06 per share, of which the largest portion is attributed to a one-time event. Cash increased slightly compared to June 30, 2010, despite a $1.5 million earn-out paid during the quarter as an acquisition exceeded its revenue goals.

Commenting on the quarter, Mediware president and chief executive officer, Thomas Mann, said: “Our results represent a Mediware record in total quarterly revenue that was driven by several important new contracts and strong services associated with new system implementations. In addition, our already strong earnings were enhanced by one-time tax credits and deductions, and a higher capitalization rate on product development spending.

"I am pleased that the contracts signed during the quarter included sales to both new customers and our existing customer base. This mix of net new sales and expansion of current customer relationships is a key part of our growth strategy."

• Total revenue of $13.2 million set a new quarterly revenue record.
• Operating income increased to $2.0 million compared to $727,000 in the same period in FY 2010.
• Earnings per share more than doubled to $0.21 from the $0.10 reported in the same quarter last year.
• Capitalization of product development spending was 65% compared to 46% for the same period of FY 2010.
• Earnings include the favorable impact of a lower tax rate due to the reinstatement of a research and development tax credit applied retroactively to January 1, 2010, and other deductions.

"I'm very pleased with our financial results, but I am equally pleased with the progress we have made to strategically expand in the markets we serve,” continued Mr. Mann. “We added prestigious new customers, such as the Department of Defense which selected our LifeTrak donor management system for use in 28 military health institutions around the world. We also expanded relationships with several of our existing customers. This includes the likes of Carter BloodCare who recently licensed the new KnowledgeTrak product. These new sales contributed immediately to our market momentum and will continue to deliver revenue for us in the coming quarters."

The Company will host a teleconference call at 10:00 am Eastern Time (9:00 am Central Time) today to discuss the results. There will be a question-and-answer session directly following the presentation of the results.

To access the conference call discussing the company’s results, please call (866) 601-3860 (internationally use 706-643-4553). The conference ID for the call is 38603796. A replay of the call will be available after the call’s completion for 5 days at 800-642-1687 (direct dial 706-645-9291). The conference ID required for accessing the playback is 38603796. After 5 days, the replay will be available in the investor relations section of the company’s web site: www.mediware.com .