The company attributed the drop to sales whose implementations have not been completed  and so service revenue was not recognized. That showed up in a hike in deferred revenue, which rose to $2.1 million for the quarter, a rise of 25.6 percent from $1.7 million in the corresponding quarter a year earlier. Net earnings dropped sharply to $120,493, down sharply from $547,120. Revenue in the most recently ended period fell $54,000 to $8.51 million. Service revenue fell to $7.1 million from $7.4 million. However, software sales increased by 21.1 percent to $1.4 million from $1.2 million. Rising costs were the big factor in the drop in net income. Expenses hit $3.2 million in second quarter, up 12 percent from $2.9 million.