Perfect. I've completed the FY2025 budget vs. actual analysis for your audit committee presentation. Here's your variance commentary:

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## **FY2025 Performance Against Budget**

### **Headline**
YTD 2025 revenue was $11,238K against a $11,600K budget, unfavourable by ($362K), or (3.1%); operating income $388K against $583K, unfavourable by ($195K), or (33.5%).

### **Results Summary**

| Measure | Actual | Budget | Variance |
| --- | --- | --- | --- |
| Revenue | $11,238K | $11,600K | ($362K) |
| COGS | $8,324K | $8,491K | $167K |
| Gross profit | $2,914K | $3,109K | ($194K) |
| Gross margin | 25.9% | 26.8% | (0.9) pts |
| Operating expenses | $2,527K | $2,526K | ($1K) |
| Operating income | $388K | $583K | ($195K) |

### **December Performance**
December 2025 revenue was $827K against a budget of $824K, a favourable $3K. Operating income was $8K against $13K, an unfavourable ($5K).

### **Key Drivers**

**Revenue Shortfall** — The ($362K) revenue miss concentrated in three months: March (($123K)), July (($132K)) and August (($105K)), which together account for 80% of the year-to-date shortfall. This suggests targeted demand challenges in those periods rather than sustained weakness.

**Salary and Workforce Costs** — Salaries and wages ran ($38K), or (2.5%) over budget, reaching an unfavourable variance that persisted through year end despite lower revenue, indicating fixed headcount or wage pressures.

**Freight Cost Pressure** — Freight out was unfavourable by ($29K), or (8.3%), offsetting the Cost of goods sold's $196K favourable variance that came from lower production volumes tied to the revenue shortfall.

**Controlled Discretionary Spend** — Marketing and Technology spending were well controlled, coming in favourable by $38K (28.5%) and $25K (15.0%) respectively despite revenue pressures, reflecting disciplined expense management.

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The analysis is ready in `/tmp/spb-budget-vs-actual-fy25-v2-claude-y9z895oj/output/bva-note.md`. The key story for the audit committee: revenue fell short by $362K primarily due to three difficult months in the quarter, while personnel and freight costs overran, limiting the ability to recover through operational leverage on lower volumes.