DataWave Reports Earnings of $161,125 in the Second Quarter for Fiscal 2004.

Business Editors/High-Tech Writers

VANCOUVER, British Columbia--(BUSINESS WIRE)--Nov. 13, 2003

DataWave (OTCBB:DWVSF)(TSX-V: DTV) announces earnings for the second quarter in fiscal 2004 of US$161,125 compared with $127,875 for the same period last year.

Mr. Emanuel, Chairman and CEO, reports, "The fact that this quarter's earnings are 26% higher than for the same period last year is encouraging," commented Mr. Josh Emanuel, Chairman and CEO. "We've been showing positive earnings for over two years now. This clearly indicates that our decision to broaden the company's focus from prepaid long distance phone cards to encompass all prepaid stored value telecom and financial products was the correct one. Our POSA technology has been embraced by an even wider market and our customer base continues to grow."

A complete analysis of our quarterly results ending September 30, 2003 is provided on our Form-10QSB quarterly report filed on Edgar and will be available on the U.S. Securities and Exchange Commission's web site (www.sec.gov) under DataWave's Central Index Number (CIK) 0001000157.

Fiscal 2004 First Quarter Consolidated Financial Statements:

These financial statements have been prepared by Management in accordance with generally accepted accounting principles in the United States and are reported in U.S. dollars.

DATAWAVE SYSTEMS INC
CONSOLIDATED BALANCE SHEETS
(Expressed in United States dollars and presented in accordance with
 US GAAP)
(Unaudited)
                                    September 30           March 31
                                            2003               2003
                                    ------------       ------------
Assets                                                      Audited
Current
 Cash and cash equivalents          $  1,999,280       $  2,139,063
 Accounts receivable and
  other                                3,929,208          2,031,895
 Inventories                           1,678,077          1,225,391
 Prepaid expenses and deposits           671,733            482,549
 Deferred income taxes                    79,000             79,000
                                    ------------       ------------
Total current assets                   8,357,298          5,957,898
Restricted cash                           54,000             54,000
Machinery and equipment, net           1,772,400          1,488,682
Goodwill                               1,827,701          1,750,639
Other intangible assets                  399,139            442,510
                                    ------------       ------------
Total assets                        $ 12,410,538       $  9,693,729
                                    ------------       ------------
                                    ------------       ------------

Liabilities
Current
 Accounts payable and accrued
  liabilities                       $  8,427,701       $  6,092,828
 Deferred revenue                         51,282            146,420
                                    ------------       ------------
Total liabilities                      8,478,983          6,239,248
                                    ------------       ------------

Shareholders' equity
Common shares
 Authorized
 100,000,000 common shares,
  no par value
 Issued
 43,889,334 shares issued and
  outstanding at September 30,
  2003 and March 31, 2003             15,006,743         15,006,743
Additional paid-in capital             2,725,492          2,725,492
Accumulated other
 comprehensive income                    244,940             45,845
Accumulated deficit                  (14,045,620)       (14,323,599)
                                    ------------       ------------
Total shareholders' equity             3,931,555          3,454,481
                                    ------------       ------------
Total liabilities and
 shareholders' equity               $ 12,410,538       $  9,693,729
                                    ------------       ------------
                                    ------------       ------------

APPROVED BY

Josh Emanuel, Director              Alan Trope, Director


DATAWAVE SYSTEMS INC
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in United States dollars and presented in accordance with
 US GAAP)
(Unaudited)

                        Three months ended        Six months ended
                              September 30,           September 30,
                          2003        2002        2003        2002
                   ----------- ----------- ----------- -----------

Revenue
 Sales             $ 2,551,816 $ 2,863,028 $ 4,918,804 $ 5,555,988
 Net agency sales    2,141,580   2,056,031   3,898,450   3,800,221
                   ----------- ----------- ----------- -----------
Total revenue        4,693,396   4,919,059   8,817,254   9,356,209
                   ----------- ----------- ----------- -----------

Operating costs
 and expenses
 Cost of revenues    2,853,554   3,448,252   5,303,506   6,365,461
 General and
  administrative       769,735     606,788   1,408,064   1,338,509
 Selling and
  marketing            412,872     365,298     824,137     730,825
 Product
  development          370,878     299,078     746,036     558,132
 Depreciation and
  amortization         198,899      61,754     362,444     118,783
                   ----------- ----------- ----------- -----------
Total operating
 costs and
 expenses            4,605,938   4,781,170   8,644,187   9,111,710
                   ----------- ----------- ----------- -----------
Operating income        87,458     137,889     173,067     244,499
Other income            76,028       5,171      85,436       8,846
Gain (loss) on
 foreign exchange       (2,361)    (15,185)     19,476     (23,221)
                   ----------- ----------- ----------- -----------
Income before
 income taxes          161,125     127,875     277,979     230,124
Income taxes                 -           -           -           -
                   ----------- ----------- ----------- -----------
Net income for
 the period        $   161,125 $   127,875 $   277,979 $   230,124
                   ----------- ----------- ----------- -----------
                   ----------- ----------- ----------- -----------

Net income per
 share
 Basic and diluted $       000 $       000 $       001 $       001
                   ----------- ----------- ----------- -----------
                   ----------- ----------- ----------- -----------

Weighted-average
 number of common
 shares - basic
 and diluted        43,889,334  43,889,334  43,889,334  43,889,334
                   ----------- ----------- ----------- -----------
                   ----------- ----------- ----------- -----------


DATAWAVE SYSTEMS INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in United States dollars and presented in accordance with
 US GAAP)
(Unaudited)

                        Three months ended        Six months ended
                              September 30,           September 30,
                          2003        2002        2003        2002
                   ----------- ----------- ----------- -----------

Operating
 activities
 Net income for
  the period       $   161,125 $   127,875 $   277,979 $   230,124
 Adjustments to
  reconcile net
  income to net
  cash provided by
  (used in) operating
  activities:
  Depreciation and
   amortization        198,899      61,754     362,444     118,783
 Net change in
  non-cash
  operating assets
  and liabilities
  Accounts
   receivable and
   other               (94,755)     (4,773) (1,897,313)   (226,236)
  Inventories          (76,599)    (68,067)   (452,686)   (147,065)
  Prepaid expenses
   and deposits       (105,941)    (50,968)   (189,184)      9,291
  Accounts payable
   and other accrued
   liabilities         790,700    (365,081)  2,334,873      86,916
  Deferred revenue     (44,818)   (258,959)    (95,138)   (426,757)
                   ----------- ----------- ----------- -----------
Net cash provided
 by operating
 activities            828,611    (558,219)    340,975    (354,944)
                   ----------- ----------- ----------- -----------

Investing
 activities
 Restricted cash             -           -           -     (30,000)
 Purchase of
  machinery and
  equipment            (94,889)    (36,360)   (572,201)   (153,250)
                   ----------- ----------- ----------- -----------
Net cash (used
 in) investing
 activities            (94,889)    (36,360)   (572,201)   (183,250)
                   ----------- ----------- ----------- -----------

Effect of
 exchange rate
 changes
 on cash and cash
 equivalents            91,443           -      91,443           -
                   ----------- ----------- ----------- -----------

Increase
 (decrease) in
 cash                  825,165    (594,579)   (139,783)   (538,194)
Cash and cash
 equivalents,
 beginning of
 period              1,174,115   1,968,273   2,139,063   1,911,888
                   ----------- ----------- ----------- -----------
Cash and cash
 equivalents, end
 of period         $ 1,999,280 $ 1,373,694 $ 1,999,280 $ 1,373,694
                   ----------- ----------- ----------- -----------
                   ----------- ----------- ----------- -----------

Supplemental
 disclosure of
 cash flow
 information:
 Cash paid for
  (refunded from)
  income tax       $         - $         - $         - $         -
                   ----------- ----------- ----------- -----------
                   ----------- ----------- ----------- -----------

About DataWave (http://www.datawave.ca)

DataWave has been an innovator and developer of prepaid and stored-value programs since it was founded in 1994. DataWave pioneered a system that allows for point-of-sale authorization and reload of high value, high shrinkage products, such as cash cards and phone cards. The System works equally well over the internet, through intelligent free-standing vending machines or with various POS devices, including cash registers.

DataWave Systems Inc.

John Gunn, General Manager, CFO 

Legal Notice Regarding Forward-Looking Statements:

Statements in this news release which are not purely historical are forward-looking statements, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward-looking statements in this release include, but are not limited, references to: the potential for our Point of Sale (POS) systems capabilities to significantly increase our volume and market share; our belief that initiatives could bear fruit in fiscal 2004 and positively impact our bottom line; and our belief that we are on the fast track to become an international leader in point of sale stored value products.

It is important to note that the company's actual results and outcomes may differ materially from those contained in the forward-looking statements contained in this release. Factors that could cause actual results to differ materially include, but are not limited to, risks and uncertainties such as: continued market acceptance of our existing products and whether we will achieve broad acceptance of our new products - particularly our Point of Sale (POS) systems - in the new markets that we have identified; and the overall success of our company in general.

Although we believe that the beliefs, plans, expectations and intentions contained in this letter are reasonable, there can be no assurance that such beliefs, plans, expectations or intentions will prove to be accurate. Readers should refer to the risk disclosures outlined in our annual report on Form 10-KSB for the year ended March 31, 2003, filed with the United States Securities and Exchange Commission.

"DataWave" is a registered trademark of the Company. All other trademarks and trade names referred to are the property of their respective owners.

"The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release."