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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549





FORM 10-Q







|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended July 3, 2009

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from              to

Commission File Number 333-116673





DA-LITE SCREEN COMPANY, INC.

(Exact Name of Registrant as Specified in its
Charter)







|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Indiana                                                        |  | 35-1013951                             
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification Number)
|                                                               | 
|3100 North Detroit Street, P.O. Box 137 Warsaw, Indiana        |  | 46581-0137                             
|(Address of Principal Executive Offices)                       |  | (Zip Code)                             

Registrants telephone number, including area code: (574) 267-8101

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None





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.    Yes  x    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definition of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act, or a smaller reporting company (Check one):



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈ |  | Accelerated filer         |  |  ̈
|                        |  |   | 
|Non-accelerated filer   |  | x |  | Smaller reporting company |  |  ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).    Yes   ̈    No  x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   ̈    No   ̈

As of August 5, 2009, there
were 5,389.62 shares of the registrants common stock outstanding (all of which are privately owned and are not traded on any public market).









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TABLE OF CONTENTS



|         |  |                                                                                       |  |     
|-------- |  | ------------------------------------------------------------------------------------- |  | ----
|         |  |                                                                                       |  | Page
|PART I   |  | Financial Information                                                                 |  |     
|         |  |                                                                                      
|Item 1.  |  | Condensed Consolidated Financial Statements (unaudited)                               |  | 1   
|         |  |                                                                                      
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 10  
|         |  |                                                                                      
|Item 3.  |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 18  
|         |  |                                                                                      
|Item 4.  |  | Controls and Procedures                                                               |  | 19  
|         |  |                                                                                      
|PART II  |  | Other Information                                                                     |  |     
|         |  |                                                                                      
|Item 1A. |  | Risk Factors                                                                          |  | 20  
|         |  |                                                                                      
|Item 2.  |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 20  
|         |  |                                                                                      
|Item 6.  |  | Exhibits                                                                              |  | 20  
|         |  |                                                                                      
|         |  | Signatures                                                                            |  | 21  
|         |  |                                                                                      
|         |  | Exhibit Index                                                                         |  | 22  



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PART I

FINANCIAL INFORMATION



|Item 1. | Condensed Consolidated Financial Statements.
|------- | --------------------------------------------

DA-LITE SCREEN COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except par value amount)



|                                                                                   |  |                             |         |   |                       |   |         |  
|---------------------------------------------------------------------------------- |  | --------------------------- | ------- | - | --------------------- | - | ------- | -
|                                                                                   |  | (Unaudited)As ofJuly 3,2009 |         |   | As ofDecember 26,2008 |  
|Assets                                                                             |  |                             |         |   |                       |   |         |  
|Current Assets:                                                                    |  |                             |         |   |                       |   |         |  
|Cash and cash equivalents                                                          |  | $                           | 2,925   |   |                       | $ | 1,633   |  
|Accounts receivable, less allowance for doubtful accounts                          |  |                             | 13,852  |   |                       |   | 16,033  |  
|Inventories                                                                        |  |                             | 9,162   |   |                       |   | 14,442  |  
|Prepaid expenses and other                                                         |  |                             | 2,085   |   |                       |   | 2,614   |  
|Prepaid income taxes                                                               |  |                             |        |   |                       |   | 623     |  
|                                                                                   |  |                             |         |   |                       |   |         |  
|Total current assets                                                               |  |                             | 28,024  |   |                       |   | 35,345  |  
|                                                                                   |  |                             |         |   |                       |   |         |  
|                                                                                   |  |                            
|Property, plant and equipment                                                      |  |                             | 58,357  |   |                       |   | 60,160  |  
|Less accumulated depreciation                                                      |  |                             | 41,635  |   |                       |   | 42,531  |  
|                                                                                   |  |                             |         |   |                       |   |         |  
|Net property, plant, and equipment                                                 |  |                             | 16,722  |   |                       |   | 17,629  |  
|                                                                                   |  |                             |         |   |                       |   |         |  
|Goodwill                                                                           |  |                             | 20,440  |   |                       |   | 26,353  |  
|Other assets, net                                                                  |  |                             | 1,010   |   |                       |   | 1,620   |  
|                                                                                   |  |                             |         |   |                       |   |         |  
|                                                                                   |  | $                           | 66,196  |   |                       | $ | 80,947  |  
|                                                                                   |  |                             |         |   |                       |   |         |  
|                                                                                   |  |                            
|Liabilities and Stockholders Deficit                                              |  |                             |         |   |                       |   |         |  
|Current liabilities:                                                               |  |                             |         |   |                       |   |         |  
|Line of credit                                                                     |  | $                           | 2,000   |   |                       | $ |        |  
|Accounts payable                                                                   |  |                             | 2,470   |   |                       |   | 4,029   |  
|Accrued expenses                                                                   |  |                             |         |   |                       |   |         |  
|Interest                                                                           |  |                             | 1,421   |   |                       |   | 1,295   |  
|Other                                                                              |  |                             | 5,460   |   |                       |   | 4,935   |  
|                                                                                   |  |                             |         |   |                       |   |         |  
|Total accrued expenses                                                             |  |                             | 6,881   |   |                       |   | 6,230   |  
|                                                                                   |  |                             |         |   |                       |   |         |  
|Total current liabilities                                                          |  |                             | 11,351  |   |                       |   | 10,259  |  
|Long-term debt                                                                     |  |                             | 110,430 |   |                       |   | 119,730 |  
|                                                                                   |  |                             |         |   |                       |   |         |  
|Total liabilities                                                                  |  |                             | 121,781 |   |                       |   | 129,989 |  
|                                                                                   |  |                             |         |   |                       |   |         |  
|                                                                                   |  |                            
|Commitments and contingencies (note 9)                                             |  |                             |         |   |                       |   |         |  
|                                                                                   |  |                            
|Stockholders deficit:                                                             |  |                             |         |   |                       |   |         |  
|Common stock, $1 par value. Authorized 1,000,000 shares; issued 10,686 shares      |  |                             | 11      |   |                       |   | 11      |  
|Additional paid-in capital                                                         |  |                             | 1,710   |   |                       |   | 1,710   |  
|Accumulated deficit                                                                |  |                             | (35,601 | ) |                       |   | (29,052 | )
|Accumulated other comprehensive income                                             |  |                             | 3,747   |   |                       |   | 3,741   |  
|Less treasury stock, 5,296.38 shares at July 3, 2009 and December 26, 2008 at cost |  |                             | (25,452 | ) |                       |   | (25,452 | )
|                                                                                   |  |                             |         |   |                       |   |         |  
|Total stockholders deficit                                                        |  |                             | (55,585 | ) |                       |   | (49,042 | )
|                                                                                   |  |                             |         |   |                       |   |         |  
|                                                                                   |  | $                           | 66,196  |   |                       | $ | 80,947  |  
|                                                                                   |  |                             |         |   |                       |   |         |  

See accompanying notes to condensed consolidated financial statements.



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DA-LITE SCREEN COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, unaudited)



|                                              |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|--------------------------------------------- |  | ------------------------ | ------ | - | ------------------------- | - | ------------------------ |  | - | ------------------------- | - |  | - | ------
|                                              |  | 13 WeeksEndedJuly 3,2009 |        |   | 13 WeeksEndedJune 27,2008 |   | 27 WeeksEndedJuly 3,2009 |  |   | 26 WeeksEndedJune 27,2008
|                                              |  |                          |        |  
|Net sales                                     |  | $                        | 31,413 |   |                           | $ | 44,613                   |  | $ | 65,097                    |   |  | $ | 86,895
|Cost of sales                                 |  |                          | 20,803 |   |                           |   | 27,354                   |  |   | 42,844                    |   |  |   | 52,937
|                                              |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|                                              |  |                          |        |  
|Gross profit                                  |  |                          | 10,610 |   |                           |   | 17,259                   |  |   | 22,253                    |   |  |   | 33,958
|Selling, general, and administrative expenses |  |                          | 5,644  |   |                           |   | 6,126                    |  |   | 10,539                    |   |  |   | 12,023
|Goodwill impairment                           |  |                          | 5,926  |   |                           |   |                         |  |   | 5,926                     |   |  |   |      
|                                              |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|                                              |  |                          |        |  
|Operating income (loss)                       |  |                          | (960   | ) |                           |   | 11,133                   |  |   | 5,788                     |   |  |   | 21,935
|                                              |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|                                              |  |                          |        |  
|Other expense (income):                       |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|Interest                                      |  |                          | 2,998  |   |                           |   | 3,062                    |  |   | 6,381                     |   |  |   | 6,317 
|Miscellaneous, net                            |  |                          | (574   | ) |                           |   | 176                      |  |   | (1,289                    | ) |  |   | 25    
|                                              |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|Total other expense                           |  |                          | 2,424  |   |                           |   | 3,238                    |  |   | 5,092                     |   |  |   | 6,342 
|                                              |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|Income (loss) before income taxes             |  |                          | (3,384 | ) |                           |   | 7,895                    |  |   | 696                       |   |  |   | 15,593
|                                              |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|Income tax expense (benefit)                  |  |                          | (228   | ) |                           |   | 340                      |  |   | (272                      | ) |  |   | 596   
|                                              |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|                                              |  |                          |        |  
|Net income (loss)                             |  | $                        | (3,156 | ) |                           | $ | 7,555                    |  | $ | 968                       |   |  | $ | 14,997
|                                              |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       

See accompanying notes to condensed consolidated financial statements.



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DA-LITE SCREEN COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands, unaudited)



|                                                                                  |  |                          |         |   |                           |   |         |  
|--------------------------------------------------------------------------------- |  | ------------------------ | ------- | - | ------------------------- | - | ------- | -
|                                                                                  |  | 27 weeksEndedJuly 3,2009 |         |   | 26 weeksEndedJune 27,2008 |  
|Cash flows from operating activities:                                             |  |                          |         |   |                           |   |         |  
|Net income                                                                        |  | $                        | 968     |   |                           | $ | 14,997  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                          |         |   |                           |   |         |  
|Depreciation                                                                      |  |                          | 1,485   |   |                           |   | 1,631   |  
|Amortization and write-off of debt issuance costs                                 |  |                          | 610     |   |                           |   | 463     |  
|Goodwill impairment                                                               |  |                          | 5,926   |   |                           |   |        |  
|Gain on disposal of assets                                                        |  |                          |        |   |                           |   | (3      | )
|Change in:                                                                        |  |                          |         |   |                           |   |         |  
|Accounts receivable                                                               |  |                          | 2,389   |   |                           |   | (2,596  | )
|Inventories                                                                       |  |                          | 5,228   |   |                           |   | (103    | )
|Prepaid expenses and other                                                        |  |                          | 524     |   |                           |   | (105    | )
|Accounts payable                                                                  |  |                          | (1,725  | ) |                           |   | (858    | )
|Accrued expenses                                                                  |  |                          | 1,203   |   |                           |   | 320     |  
|Other                                                                             |  |                          |        |   |                           |   | (1      | )
|                                                                                  |  |                          |         |   |                           |   |         |  
|Net cash provided by operating activities                                         |  |                          | 16,608  |   |                           |   | 13,745  |  
|                                                                                  |  |                          |         |   |                           |   |         |  
|                                                                                  |  |                         
|Cash flows from investing activities:                                             |  |                          |         |   |                           |   |         |  
|Proceeds from sale of assets                                                      |  |                          |        |   |                           |   | 3       |  
|Payments for purchase of minority shares                                          |  |                          |        |   |                           |   | (956    | )
|Purchase of property, plant and equipment                                         |  |                          | (771    | ) |                           |   | (907    | )
|Maturities of short-term investments                                              |  |                          |        |   |                           |   | 2,550   |  
|                                                                                  |  |                          |         |   |                           |   |         |  
|Net cash (used in) provided by investing activities                               |  |                          | (771    | ) |                           |   | 690     |  
|                                                                                  |  |                          |         |   |                           |   |         |  
|                                                                                  |  |                         
|Cash flows from financing activities:                                             |  |                          |         |   |                           |   |         |  
|Proceeds from revolving credit facility                                           |  |                          | 2,000   |   |                           |   |        |  
|Payment to retire senior notes                                                    |  |                          | (9,300  | ) |                           |   | (4,250  | )
|Distributions to stockholders                                                     |  |                          | (7,516  | ) |                           |   | (14,315 | )
|Repurchase of common stock                                                        |  |                          |        |   |                           |   | (594    | )
|Exercise of common stock options                                                  |  |                          |        |   |                           |   | 15      |  
|                                                                                  |  |                          |         |   |                           |   |         |  
|Net cash used in financing activities                                             |  |                          | (14,816 | ) |                           |   | (19,144 | )
|                                                                                  |  |                          |         |   |                           |   |         |  
|                                                                                  |  |                         
|Effect of foreign currency exchange rate changes on cash and cash equivalents     |  |                          | 271     |   |                           |   | 149     |  
|                                                                                  |  |                          |         |   |                           |   |         |  
|Net change in cash and cash equivalents                                           |  |                          | 1,292   |   |                           |   | (4,560  | )
|Cash and cash equivalents at beginning of period                                  |  |                          | 1,633   |   |                           |   | 5,704   |  
|                                                                                  |  |                          |         |   |                           |   |         |  
|Cash and cash equivalents at end of period                                        |  | $                        | 2,925   |   |                           | $ | 1,144   |  
|                                                                                  |  |                          |         |   |                           |   |         |  

See accompanying notes to condensed consolidated financial statements.



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DA-LITE SCREEN COMPANY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)



|1. | Basis of Presentation
|-- | ---------------------

The financial data presented
herein is unaudited and should be read in conjunction with the consolidated financial statements and accompanying notes included in the annual report on Form 10-K filed by Da-Lite Screen Company, Inc. (together with all of its subsidiaries, the
Company or Da-Lite) for the fiscal year ended December 26, 2008. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all of the adjustments necessary for a fair
presentation of the financial position, results of operations and cash flows for the interim periods presented. In preparing the condensed consolidated financial statements, the Company has evaluated events and transactions occurring subsequent to
the financial statement date through the financial statement issuance date of August 5, 2009 for potential recognition or disclosure. Results for interim periods should not be considered indicative of results for the full year.

The accompanying consolidated financial statements include the accounts of Da-Lite Screen Company, Inc. (Da-Lite), Da-Lite International, Inc., a
domestic international sales corporation, and Projecta B.V. (Projecta), a Netherlands limited liability company, which is 99.9% owned by Da-Lite and Projectas wholly-owned subsidiary Procolor S.A.S. (Procolor), a French corporation. All
intercompany accounts and transactions have been eliminated.

The Company operates on a 52/53-week fiscal year ending on the last Friday of
December. The second quarters of 2009 and 2008 were 13-week periods, respectively. The Companys 2009 and 2008 fiscal years will be 53-week and 52- week years, respectively.



|2. | Summary of Significant Accounting Policies and Estimates
|-- | --------------------------------------------------------

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires that management make a number of assumptions and estimates that affect the reported amounts of
assets, liabilities, revenue and expenses in the consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are
based on managements best knowledge of current events and actions that may impact the Company in the future, actual results may differ from these estimates and assumptions. The Companys critical accounting policies are those that affect
its consolidated financial statements materially and involve a significant level of judgment by management.

Revenue Recognition

The Company recognizes revenue when it has received an order from a customer, title has transferred to customer, the sales
price is fixed or determinable and the collectibility of sales price is reasonably assured. All amounts billed to customers in a sales transaction related to shipping and handling are recorded as revenue, and costs incurred by the Company for
shipping and handling are recorded as cost of sales. Provision for customer sales allowances, returns and warranties are made at the time of shipment. The Company does not have any post-shipment obligations related to its sales such as installation,
training or customer acceptance.



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Allowance for Doubtful Accounts

The financial status of customers is routinely checked and monitored by the Company when granting credit. The Company provides an
allowance for doubtful accounts based upon historical experience and managements estimate of amounts to be collected from past due accounts.

Goodwill

Goodwill represents the excess of purchase price over the fair value of identifiable net assets
acquired. The Company applies the provisions of Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, and management tests goodwill for impairment to
determine whether its carrying value exceeds its implied fair value at least annually or more frequently if events or circumstances indicate that the carrying amount of goodwill may be impaired. The Company has three reporting units (Da-Lite US,
Procolor S.A.S, and Projecta BV) of which only Da-Lite US and Projecta BV had goodwill as of December 26, 2008. The Companys annual impairment testing date is the last day of the fiscal year.

The goodwill impairment test involves a two-step process. The first step is a comparison of each reporting units fair value to its
carrying value. The Company estimates fair value based on a combination of the market value approach and income approach using discounted cash flows. These valuations are based on assumptions and estimates including projected future cash flows,
discount rates, and determination of appropriate market comparables. The fair value of each reporting unit is estimated using both methods and each method is given equal weighting in arriving at the fair value of the reporting unit.

The second step, if needed, requires the Company to allocate the fair value of the reporting unit derived in the first step to the fair
value of the reporting units net assets to calculate the implied value of the goodwill. If the carrying value of the reporting units goodwill is in excess of the implied fair value of goodwill, an impairment charge is taken to reduce the
goodwill to its implied fair value.

Disclosures About Fair Value of Financial Instruments

Financial instruments are described as cash or contractual obligations or rights to pay or receive cash. The fair value of certain
financial instruments approximates the carrying value because of the short-term maturity of these instruments. The estimated fair value of long-term debt is approximately $96 million and $105 million based upon the quoted market value at
July 3, 2009 and December 26, 2008, respectively.

Recent Accounting Pronouncements

In May 2009, the FASB issued SFAS No. 165, Subsequent Events, which establishes general standards of accounting
for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. This standard requires us to disclose the date through which we have evaluated subsequent events and the
basis for that date. This standard was adopted in the second quarter of fiscal year 2009. The adoption did not have a material impact on the Companys financial position, results of operations, or cash flows.

In April 2009, the FASB issued FSP No. 107-1 and Accounting Principles Board Opinion (APB) No. 28-1,
Interim Disclosures about Fair Value of Financial Instruments. This FSP and APB amends SFAS 107, Disclosures about Fair Value



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of Financial Instruments, to require disclosures about the fair value of financial instruments for interim reporting periods in addition to annual
reporting periods. This FSP and APB were effective for the second quarter of fiscal year 2009. The adoption did not have a material impact on the Companys financial position, results of operations, or cash flows.



|3. | Notes Payable, Revolving Credit Agreement and Long-term Debt
|-- | ------------------------------------------------------------

The Company issued $160 million of 91/2% senior unsecured notes due in May 2011 during fiscal year 2004, which were subsequently exchanged for substantially identical notes that were registered with the Securities and Exchange Commission (the 91/2% Senior Notes due 2011 or Notes). The net proceeds from the
issuance of the Notes were used during fiscal year 2004 to retire approximately $15.0 million of indebtedness outstanding under a then-existing credit facility, to pay a special distribution to stockholders of approximately $134.6 million and for
general corporate purposes. The Company currently may redeem any of the Notes at a redemption price of 102.375% of their principal amount plus accrued interest. Any outstanding principal is due in May 2011 and interest is payable semi-annually in
arrears on May 15 and November 15 of each year.

In the Indenture related to the 91/2% Senior Notes due 2011, the Company agreed to covenants that limit
it and its restricted subsidiaries (i.e., Projecta B.V., Procolor S.A.S.) ability, among other things, to: (a) incur additional debt and issue preferred stock, (b) pay dividends, acquire shares of capital stock, make payments on
subordinated debt or make investments, (c) place limitations on distributions from restricted subsidiaries, (d) issue or sell capital stock of restricted subsidiaries, (e) issue guarantees, (f) sell or exchange assets,
(g) enter into transactions with stockholders and affiliates, (h) create liens and (i) effect mergers. In addition, if a change of control occurs, each holder of Notes will have the right to require the Company to repurchase all or
part of the holders Notes at a price equal to 101% of their principal amount, plus any accrued interest to the date of purchase. The Company was in compliance with all covenants at July 3, 2009 and December 26, 2008.

On April 20, 2009, the Company entered into a new two-year arrangement for an unsecured revolving credit facility, with
maximum possible borrowings equal to $19.5 million, with Lake City Bank (the Bank). The terms of the new two-year unsecured revolving credit facility are substantially similar to a pre-existing credit facility with the Bank that allowed
for maximum borrowings of $15.0 million and which was due to expire on May 1, 2010. Interest on any outstanding borrowings related to the new line of credit is calculated at the prime rate, which was 3.25% on July 3, 2009, subject to an
interest rate floor of 4.00%. As of July 3, 2009, $2.0 million of borrowings were outstanding under this facility.

The Companys
Dutch subsidiary, Projecta, has an overdraft line of credit with maximum possible borrowings equal to 1.5 million Euros. Interest on outstanding borrowings in Europe related to Projectas overdraft line of credit is calculated at the
Fortis Basic Rate plus 1.50%, the sum of which was 6.50% on July 3, 2009. At July 3, 2009, and December 26, 2008, Projecta had no outstanding balances under this credit facility

The Company has provided an insurance carrier with a standby letter of credit for $0.5 million for self-insured amounts under its insurance program.



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|4. | Stock Options
|-- | -------------

The Company has a nonqualified stock
option plan under which options are granted to certain employees. Options under the plan generally vest one-fifth each year from the anniversary date. During 2004, the Company also granted options to certain employees that were immediately 100%
vested. The options expire after ten years from the date of grant. Fair value calculations are based on highly subjective assumptions. The Company used the Black-Scholes option pricing model using the minimum value method and determined that the
fair value of grants made during 2004 was not material. The Company did not grant awards during periods presented.

The stock option
activity and weighted average exercise prices follow:



|                                 |  |              |  |                |        |                                        |   |  
|-------------------------------- |  | ------------ |  | -------------- | ------ | -------------------------------------- | - | -
|                                 |  | Year to Date
|                                 |  | Options      |  | Exercise Price |        | AggregateIntrinsic Value(in
thousands)
|Outstanding at December 26, 2008 |  | 55           |  | $              | 17,079 |                                        |   |  
|Exercised                        |  |             |  |                |       |                                        |   |  
|                                 |  |              |  |                |        |                                        |   |  
|Outstanding at July 3, 2009      |  | 55           |  | $              | 17,079 |                                        | $ | 
|                                 |  |              |  |                |        |                                        |   |  
|Exercisable at July 3, 2009      |  | 55           |  | $              | 17,079 |                                        | $ | 



|5. | Inventories
|-- | -----------

The Company accounts for its inventory
at the lower of cost or market using the first-in, first-out (FIFO) method. Inventory is comprised of the following (in thousands):



|                 |  |             |       |                  |   |       
|---------------- |  | ----------- | ----- | ---------------- | - | ------
|                 |  | July 3,2009 |       | December 26,2008
|Raw materials    |  | $           | 6,632 |                  | $ | 9,195 
|Work in progress |  |             | 1,112 |                  |   | 2,092 
|Finished goods   |  |             | 1,418 |                  |   | 3,155 
|                 |  |             |       |                  |   |       
|                 |  | $           | 9,162 |                  | $ | 14,442
|                 |  |             |       |                  |   |       



|6. | Accumulated Other Comprehensive Income
|-- | --------------------------------------

The only
component of accumulated other comprehensive income as of July 3, 2009 and December 26, 2008 was for cumulative foreign exchange translation adjustments.



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##### Table of Contents

|7. | Goodwill
|-- | --------

The change in the carrying amount of
goodwill by reportable segment is summarized as follows:



|                             |  |    |        |        |   |        |              |  |   |        |  
|---------------------------- |  | -- | ------ | ------ | - | ------ | ------------ |  | - | ------ | -
|                             |  | US |        | Europe |   |        | Consolidated | 
|Balance at December 26, 2008 |  | $  | 20,440 |        | $ | 5,913  |              |  | $ | 26,353 |  
|Foreign currency             |  |    |       |        |   | 13     |              |  |   | 13     |  
|Impairment                   |  |    |       |        |   | (5,926 | )            |  |   | (5,926 | )
|                             |  |    |        |        |   |        |              |  |   |        |  
|Balance at July 3, 2009      |  | $  | 20,440 |        | $ |       |              |  | $ | 20,440 |  
|                             |  |    |        |        |   |        |              |  |   |        |  

During the second quarter of 2009, management determined that the sustained decline in revenues
and the continued deterioration of the global economy were indicators of impairment as described in SFAS No. 142 and as such, the Company performed a step one test for the potential impairment of the goodwill related to the Da-Lite US and
Projecta BV reporting units. The Da-Lite US reporting unit passed the step one test and a step two test was not required.

The Projecta BV
reporting unit failed the step one test and as a result the step two analysis was performed to determine the implied fair value of the reporting units goodwill. As a result of the step two calculation, the goodwill of $5,926 at the Projecta BV
reporting unit was deemed to be fully impaired and a resulting impairment charge was recorded in the thirteen week period ended July 3, 2009. The Company believes the determined fair values and the resulting goodwill impairment charge are based
on assumptions and represent the best estimate of these amounts at July 3, 2009. However, the impairment charge taken in the quarter is an estimate and will be finalized in the fiscal third quarter as the Company finalizes the step two
analysis.

The goodwill impairment charge is non-cash and does not effect the Companys liquidity or compliance with debt covenants.



|8. | Segment Information
|-- | -------------------

The Company primarily
manufactures projection screens and other meeting room equipment that are sold throughout the United States and Europe. Based on its operations, the Company has established two reportable segments: United States and Europe. The United States segment
includes the operations of Da-Lite excluding its foreign subsidiaries. The Europe segment includes the operations of Projecta and Procolor. All intersegment transactions have been eliminated. Information regarding the sales of specific product
categories within the Companys geographic business segments is not presented because it is not practical to determine these amounts.

Operating cash flow is the measure reported to the chief operating decision maker for use in assessing segment performance and allocating resources. Operating cash flow for assessing segment performance is net sales less cost of sales and
selling, general, and administrative expenses excluding depreciation and amortization. The Company does not allocate costs between segments.



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##### Table of Contents

The following table presents financial information by segment for the periods stated (in thousands):



|                              |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|----------------------------- |  | ------------------------ | ------ | - | ------------------------- | - | ------------------------ |  | - | ------------------------- | - |  | - | ------
|For the period ended:         |  | 13 WeeksEndedJuly 3,2009 |        |   | 13 WeeksEndedJune 27,2008 |   | 27 WeeksEndedJuly 3,2009 |  |   | 26 WeeksEndedJune 27,2008
|Net sales:                    |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|United States                 |  | $                        | 27,088 |   |                           | $ | 36,358                   |  | $ | 55,552                    |   |  | $ | 70,692
|Europe                        |  |                          | 4,325  |   |                           |   | 8,255                    |  |   | 9,545                     |   |  |   | 16,203
|                              |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|Total net sales               |  | $                        | 31,413 |   |                           | $ | 44,613                   |  | $ | 65,097                    |   |  | $ | 86,895
|                              |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|                              |  |                          |        |  
|Operating income (loss):      |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|United States                 |  | $                        | 5,849  |   |                           | $ | 9,854                    |  | $ | 12,718                    |   |  | $ | 19,596
|Europe                        |  |                          | (6,809 | ) |                           |   | 1,279                    |  |   | (6,930                    | ) |  |   | 2,339 
|                              |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|                              |  |                          |        |  
|Total operating income (loss) |  | $                        | (960   | ) |                           | $ | 11,133                   |  | $ | 5,788                     |   |  | $ | 21,935
|                              |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|                              |  |                          |        |  
|As of:                        |  | July 3,2009              |        |   | December 26,2008          |   |                          |  |   |                          
|Total assets                  |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|United States                 |  | $                        | 48,992 |   |                           | $ | 56,430                   |  |   |                           |   |  |   |       
|Europe                        |  |                          | 17,204 |   |                           |   | 24,517                   |  |   |                           |   |  |   |       
|                              |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       
|Total assets                  |  | $                        | 66,196 |   |                           | $ | 80,947                   |  |   |                           |   |  |   |       
|                              |  |                          |        |   |                           |   |                          |  |   |                           |   |  |   |       



|9. | Commitments and Contingencies
|-- | -----------------------------

The Company is
subject to certain legal proceedings and claims that have arisen in the ordinary course of business. In the opinion of management, the Company does not have a potential liability related to any of these other current legal proceedings and claims
that should individually or in the aggregate have a material adverse effect on its financial condition, liquidity or results of operations.

However, the results of legal proceedings cannot be predicted with certainty. Should the Company fail to prevail in legal matters, it is possible that its results of operations or financial condition could be materially adversely affected.



|10. | Subsequent Events
|--- | -----------------

Subsequent
to July 3, 2009, the Company repurchased $3.3 million of the outstanding $110.4 million principal amount of its 91/2% Senior Notes due 2011 from the open market using cash on hand for an aggregate purchase price of $2.9 million. The Company retired these Notes and expects that the
discount recorded on the transaction will more than offset the write-off of deferred financing costs related to the repurchase.



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##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations.
|------- | --------------------------------------------------------------------------------------

Forward Looking Statements

This quarterly report on Form 10-Q contains certain statements that may
be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical
facts, included in this report are forward-looking statements. When used in this report, the words may, will, should, would, anticipate, estimate, expect,
plan, believe, predict, potential, intend, and similar expressions are intended to identify forward-looking statements. Forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from those projected. These risks and uncertainties include, but are not limited to, changes in sales or industry trends, changes in economic conditions, competition, retention of senior
management and other key personnel, availability of materials or components, ability to make continued product innovations, casualty or work stoppages at the Companys facilities, adverse results of lawsuits against the Company and currency
exchange rates, the availability of financing and other factors described under Item 1A in the Companys Annual Report on Form 10-K for the year ended December 26, 2008 and in Item 1A herein. Forward-looking statements are based
on assumptions and assessments made by the Companys management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Readers
of this report are cautioned not to place undue reliance on these forward-looking statements, as there can be no assurance that these forward-looking statements will prove to be accurate. Management undertakes no obligation to update any
forward-looking statements. This cautionary statement is applicable to all forward-looking statements contained in this report.

Overview

Da-Lite is one of the worlds leading manufacturers and distributors of projection screens. Da-Lites projection screens,
which are focused on the premium end of the large screen market, are used in a wide range of settings including conference rooms, educational institutions, live entertainment venues, meeting rooms, training facilities, houses of worship and private
homes. Da-Lites products provide the viewer with an enhanced visual experience in settings where a large screen adds to the communication of information or entertainment. The Companys products are versatile and can be customized to fit
the needs of unique viewing venues.



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##### Table of Contents

Critical Accounting Policies

Goodwill

The Company applies the provisions of Financial Accounting Standards Board
(FASB) Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, and management tests goodwill for impairment at least annually or more frequently if events or circumstances indicate that the
carrying amount of goodwill may be impaired. The Companys annual impairment testing date is the last day of the fiscal year.

The goodwill impairment test involves a two-step process. The first step is a comparison of each reporting units fair value to its carrying value. The Company estimates fair value based on a combination of the market value approach
and income approach using discounted cash flows. The fair value of each reporting unit is estimated using both methods and each method is given equal weighting in arriving at the fair value of the reporting unit. The income approach uses
managements best estimates of economic and market conditions over the projected period including growth rates in sales, costs, estimates of future expected changes in operating margins and cash expenditures. The market value approach requires
the Company to make assumptions about the appropriate market comparables.

The second step, if needed, requires the Company
to allocate the fair value of the reporting unit derived in the first step to the fair value of the reporting units net assets to calculate the implied value of the goodwill. If the carrying value of the reporting units goodwill is in
excess of the implied fair value of goodwill, an impairment charge is taken to reduce the goodwill to its implied fair value.

In the second quarter of 2009, management determined that impairment indicators had been identified for the Companys reporting units (Da-Lite US and Projecta BV) and the step one goodwill impairment test was performed as of
July 3, 2009. The Da-Lite US reporting unit had a fair value significantly in excess of the carrying value of equity at July 3, 2009 and no step two impairment test was required. A hypothetical decrease of 20% in the fair value would have
no impact on the goodwill impairment analysis at July 3, 2009 for the Da-Lite US reporting unit.

Projecta BV failed
the step one test and the step two impairment test was performed to determine the implied fair value of goodwill. To calculate the amount of the impairment charge, the Company allocated the fair value of the Projecta BV reporting unit to all of its
assets and liabilities, including recognized and unrecognized intangible assets, in order to determine the implied fair value of goodwill. This allocation process required judgment and the use of additional valuation assumptions in deriving the
individual fair values of Projecta BVs assets and liabilities as if the reporting unit had been acquired in a business combination. The Company recorded an impairment charge of $5,926 in the thirteen weeks ended July 3, 2009 to write-off
the entire amount of goodwill assigned to the Projecta BV reporting unit. The Company believes the determined fair values and the resulting goodwill impairment charge are based on assumptions and represent the best estimate of these amounts at
July 3, 2009. However, the impairment charge is an estimate and will be finalized in the fiscal third quarter of 2009 as the Company finalizes the step two analysis.

Changes in the market value, cash flow projections, and assumptions surrounding the fair value of assets and liabilities of the Company
could have a significant impact on whether or not goodwill is impaired and the amount of the impairment. Fair value estimates are made at a specific point in time, based on the relevant information. These estimates are subjective in nature and
involve uncertainties and matters of significant judgments and therefore cannot be determined with precision. Any adverse change in these factors could have a significant impact on the recoverability of these assets and could have a material impact
on our consolidated financial statements.



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##### Table of Contents

There were no other changes in the twenty-seven week period ended July 3, 2009 to the application of
critical accounting policies and estimates as described in our Annual Report on Form 10-K for the year ended December 26, 2009.

Recent Accounting
Pronouncements

In May 2009, the FASB issued SFAS No. 165, Subsequent Events, which establishes
general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. This standard requires us to disclose the date through which we have
evaluated subsequent events and the basis for that date. This standard was adopted in the second quarter of fiscal year 2009. The adoption did not have a material impact on the Companys financial position, results of operations, or cash flows.

In April 2009, the FASB issued FSP No. 107-1 and Accounting Principles Board Opinion (APB) No. 28-1,
Interim Disclosures about Fair Value of Financial Instruments. This FSP and APB amends SFAS 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about the fair value of financial
instruments for interim reporting periods in addition to annual reporting periods. This FSP and APB were effective for the second quarter of fiscal year 2009. The adoption did not have a material impact on the Companys financial position,
results of operations, or cash flows.



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##### Table of Contents

Results of Operations

Thirteen Weeks Ended July 3, 2009, Compared with Thirteen Weeks Ended June 27, 2008

Net Sales. Net
sales were $31.4 million for the 13 weeks ended July 3, 2009, as compared to $44.6 million for the 13 weeks ended June 27, 2008, a decrease of $13.2 million or 29.6%. Net sales by the Companys United States (U.S.) operations
decreased 25.5%. In the U.S., electric screen sales decreased $4.0 million, wall screen sales decreased $1.4 million, and portable screen sales decreased $2.8 million, reflecting primarily decreases in volume. Sales were impacted by a slowdown in
the economy, including the housing, Business/IT and Hospitality markets. Portable screen sales, in particular, were affected by declining demand from the rental and staging markets within the broader Hospitality market. Results also reflected
increased competition from imports and larger plasma screens. Sales of other products decreased $1.0 million from 2008 levels. Net sales from the Companys European subsidiaries decreased $3.9 million or 47.6%. Sales in Europe were also
impacted by a slowdown in the economy. The stronger dollar produced a decrease of $0.6 million.

Cost of Sales. The cost of
sales was $20.8 million for the 13 weeks ended July 3, 2009, as compared to $27.4 million for the 13 weeks ended June 27, 2008, a decrease of $6.6 million, or 23.9%. As a percentage of net sales, the cost of sales represented 66.2% in the
13 weeks ended July 3, 2009 and 61.3% for the 13 weeks ended June 27, 2008. This constitutes a 4.9 percentage point decrease in margins. Margins at our U.S. facilities decreased 3.0 points while margins at our European operations decreased
17.7 points. These decreases resulted primarily from the decrease in product volumes.

Selling, General and Administrative Expenses.
Selling, general and administrative expenses were $5.6 million for the 13 weeks ended July 3, 2009, as compared to $6.1 million for the 13 weeks ended June 27, 2008. Selling, general and administrative expenses in the U.S. decreased $0.5
million as a result of a decrease in legal fees reflecting the settlement of patent litigation in 2008, and a decrease in marketing costs.

Goodwill Impairment. The goodwill impairment charge totaled $5.9 million for the 13 weeks ended July 3, 2009 as a result of the impairment charge recorded at the Projecta BV reporting unit. There were no impairment charges in
the 13 weeks ended June 27, 2008.

Interest. Interest expense totaled $3.0 million for the 13 weeks ended July 3, 2009, as
compared to $3.1 million for the 13 weeks ended June 27, 2008, a decrease of $0.1 million. The decrease was a result of a reduction in the outstanding amount of the 9.5% Senior Notes due 2011.

Miscellaneous, net. Miscellaneous, net was income of $0.6 million for the 13 weeks ended July 3, 2009, as compared to $0.2 million in expense
for the 13 weeks ended June 27, 2008, an increase in income of $0.8 million reflecting the increase in the repurchase of debt at a discount in the 2009 period.

Income Taxes. As a subchapter S corporation for United States tax purposes, the Company is generally not subject to United States federal and state income taxation. Rather, the Companys income, gains,
losses, deductions and credits flow through to its stockholders, and the Company makes distributions to them to meet their tax obligations at an assumed maximum federal and state tax rate (based on the state with the highest tax rate in which any of
the Companys stockholders reside). This assumed rate was 40.4% for the 13 weeks ended July 3, 2009 and for the 13 weeks ended June 27, 2008. The Company pays foreign income taxes on the earnings of its European subsidiaries.

Net Income (Loss). As a result of the aforementioned factors, net income decreased $10.8 million from $7.6 million for the 13 weeks
ended June 27, 2008 to a loss of $3.2 million for the 13 weeks ended July 3, 2009.



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##### Table of Contents

Results of Operations

Twenty Seven Weeks Ended July 3, 2009, Compared with Twenty Six Weeks Ended June 27, 2008

Net Sales. Net sales were
$65.1 million for the 27 weeks ended July 3, 2009, as compared to $86.9 million for the 26 weeks ended June 27, 2008, a decrease of $21.8 million or 25.1%. Net sales by the Companys United States (U.S.) operations decreased 21.4%. In
the U.S., electric screen sales decreased $4.8 million, wall screen sales decreased $2.4 million, and portable screen sales decreased $5.9 million, reflecting primarily decreases in volume. Sales were impacted by a slowdown in the economy, including
the housing, Business/IT and Hospitality markets. Portable screen sales, in particular, were affected by declining demand from the rental and staging markets within the broader Hospitality market. Results also reflected increased competition from
imports and larger plasma screens. Sales of other products decreased $2.0 million from 2008 levels. Net sales from the Companys European subsidiaries decreased $6.7 million or 41.1%. Sales in Europe were also impacted by a slowdown in the
economy. The stronger dollar produced a decrease of $1.4 million.

Cost of Sales. The cost of sales was $42.8 million for
the 27 weeks ended July 3, 2009, as compared to $52.9 million for the 26 weeks ended June 27, 2008, a decrease of $10.1 million, or 19.1%. As a percentage of net sales, the cost of sales represented 65.8% in the 27 weeks ended July 3,
2009 and 60.9% for the 26 weeks ended June 27, 2008. This constitutes a 4.9 percentage point decrease in margins. Margins at our U.S. facilities decreased 3.7 points while margins at our European operations decreased 12.3 points. These
decreases resulted primarily from the decrease in product volumes.

Selling, General and Administrative Expenses. Selling, general
and administrative expenses were $10.5 million for the 27 weeks ended July 3, 2009, as compared to $12.0 million for the 26 weeks ended June 27, 2008. Selling, general and administrative expenses in the U.S. decreased $1.5 million as a
result of a decrease in legal fees reflecting the settlement of patent litigation in 2008, and a decrease in marketing costs.

Goodwill Impairment. The goodwill impairment charge totaled $5.9 million for the 27 weeks ended July 3, 2009 as a result of the impairment charge taken at the Projecta BV reporting unit. There were no impairment charges in the
26 weeks ended June 27, 2008.

Interest. Interest expense totaled $6.4 million for the 27 weeks ended July 3, 2009, as
compared to $6.3 million for the 26 weeks ended June 27, 2008, an increase of $0.1 million, reflecting the increase in the number of days in the current period.

Miscellaneous, net. Miscellaneous, net was an income of $1.3 million for the 27 weeks ended July 3, 2009, as compared to $25,000 of expense in the 26 weeks ended June 27, 2008, an increase of $1.3
million, reflecting the increase in the repurchase of debt at a discount in the 2009 period.

Income Taxes. As a subchapter S
corporation for United States tax purposes, the Company is generally not subject to United States federal and state income taxation. Rather, the Companys income, gains, losses, deductions and credits flow through to its stockholders, and the
Company makes distributions to them to meet their tax obligations at an assumed maximum federal and state tax rate (based on the state with the highest tax rate in which any of the Companys stockholders reside). This assumed rate was 40.4% for
the 27 weeks ended July 3, 2009 and for the 26 weeks ended June 27, 2008. The Company pays foreign income taxes on the earnings of its European subsidiaries.

Net Income (Loss). As a result of the aforementioned factors, net income decreased $14.0 million from $15.0 million for the 26 weeks ended June 27, 2008 to $1.0 million for the 27 weeks ended July 3,
2009.



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##### Table of Contents

Liquidity and Capital Resources

The Company expects to be able to fund its working capital requirements, interest expense, capital expenditures and its distributions to stockholders with cash generated from operations, although there can be no
assurances in this regard. The financial results for the 27 weeks ended July 3, 2009 showed a substantial reduction from the results reported for the 26 weeks ended June 27, 2008, reflecting difficult economic conditions. As a result, the
Company has been seeking to conserve resources. In this regard, the Company discontinued making cash distributions to its stockholders (other than distributions to pay estimated taxes) after having made a distribution of $137.50 per share in April
of 2009.

The Companys bank debt and senior notes become due in May of 2011. Although the Company expects that it will be able to
generate cash from operations to pay or prepay a portion of this indebtedness, it expects that it will need to refinance most of this indebtedness on or before the respective maturity dates. Credit market conditions, as well as other economic
conditions are difficult. There is no assurance that such new financing will be available when needed or as to the cost or other terms of this financing.

In March 2009, the Company repurchased $5.0 million of the outstanding principal amount of its 9 1/2% senior notes from the open market for an aggregate purchase price of $4.3
million. In April 2009, the Company repurchased an additional $2.3 million principal amount of such notes for an aggregate purchase price of $2.0 million. In May 2009, the Company repurchased an additional $2.0 million principal amount of such notes
for an aggregate purchase price of $1.7 million. The Company retired these notes and wrote-off the related deferred financing costs and recorded a gain of $1.3 million during the 27 weeks ended July 3, 2009 relating to the repurchase. In July
2009 the Company repurchased an additional $3.3 million principal amount of such notes for an aggregate purchase price of $2.9 million. Depending on the Companys expected cash needs, the prevailing prices of its 91/2% senior notes and other factors, the Company may repurchase some amount of its
outstanding 91/2% senior notes from time to time in the open
market or otherwise.

Management believes the principal indicators of the Companys liquidity are its cash
position (total cash and cash equivalents), remaining availability under its bank credit facilities and its excess working capital. At July 3, 2009, the Companys cash position was $2.9 million, an increase of $1.3 million from
December 26, 2008. Additionally, the Company had an unsecured revolving credit facility, with maximum possible borrowings equal to $19.5 million, which expires in May 2011. Interest on any outstanding borrowings related to this line of credit
is calculated at the prime rate, which was 3.25% on July 3, 2009, subject to a floor of 4.00%. At July 3, 2009, the Company had a $2.0 million outstanding balance under this line of credit. Da-Lites working capital position decreased
to $16.7 million (including $2.9 million of total cash and cash equivalents) at July 3, 2009, from $25.1 million (including $1.6 million of total cash and cash equivalents) at December 26, 2008.

The Companys Dutch subsidiary, Projecta, has an overdraft line of credit, with maximum possible borrowings equal to 1.5 million Euros.
Interest on outstanding borrowings in Europe related to Projectas overdraft line of credit is calculated at the Fortis Basic Rate plus 1.50%, the sum of which was 6.50% on July 3, 2009. At July 3, 2009, Projecta had no outstanding
balances under this credit facility.



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##### Table of Contents

Cash Flows

For the 27 weeks ended July 3, 2009, cash provided by operating activities was $16.6 million, as compared to $13.7 million for the 26 weeks ended June 27, 2008, an increase of $2.9 million or 20.8%, reflecting reduced net income,
which was more than offset by reductions in inventories and accounts receivable and an increase in accrued expenses. Cash used in investing activities was $0.8 million for the 27 weeks ended July 3, 2009, as compared to cash provided by
investing activities of $0.7 million for the 26 weeks ended June 27, 2008. Cash used in investing activities in 2009 resulted from capital expenditures of $0.8 million. In 2008, cash provided by investing activities resulted from maturities in
short-term investments of $2.6 million partially offset by capital expenditures of $.9 million and purchase of minority shares of $1.0 million. Cash used in financing activities was $14.8 million during the 27 weeks ended July 3, 2009, as
compared to $19.1 million for the 26 weeks ended June 27, 2008. The decrease in cash used in financing activities in 2009 was related to the receipt of proceeds from borrowings under the revolving credit facility of $2.0 million and a reduction
in distributions to stockholders of $6.8 million, partially offset by a $5.0 million increase in retirement of the 9.5% Senior Notes due 2011.

Capital
Expenditures

Capital expenditures were $0.8 million for the twenty seven weeks ended July 3, 2009 compared to $0.9 million for the
twenty six weeks ended June 27, 2008. The Companys management currently expects to spend approximately $1.5 million on capital expenditures in 2009, using cash generated from operations.

Contractual Obligations

The following table sets
forth, as of July 3, 2009, certain of the Companys contractual obligations:



|                                                |  |                        |       |                 |   |          |  |          |       |                  |   |  |  
|----------------------------------------------- |  | ---------------------- | ----- | --------------- | - | -------- |  | -------- | ----- | ---------------- | - |  | -
|                                                |  | Payments due by period
|Contractual Obligations                         |  | Total                  |       | Less than1 year |   | 1-3years |  | 3-5years |       | More than5 years
|                                                |  | (in millions)         
|Interest and principal payments for senior debt |  | $                      | 131.4 |                 | $ | 10.5     |  | $        | 120.9 |                  |  |  | 
|Interest and principal for line of credit       |  |                        | 2.3   |                 |   | .1       |  |          | 2.2   |                  |  |  | 
|Self-insurance letter of credit                 |  |                        | 0.5   |                 |   | 0.5      |  |          |      |                  |  |  | 
|                                                |  |                        |       |                 |   |          |  |          |       |                  |   |  |  
|Total                                           |  | $                      | 134.2 |                 | $ | 11.1     |  | $        | 123.1 |                  |  |  | 
|                                                |  |                        |       |                 |   |          |  |          |       |                  |   |  |  

Distributions

As a subchapter S corporation under the Internal Revenue Code of 1986, Da-Lite is not subject to U.S. federal income taxes. Instead, such taxes are payable by Da-Lites stockholders. Distributions are made by
Da-Lite to its stockholders to pay estimated taxes relating to taxable income allocated to them by the Company on a quarterly basis. Tax related distributions were $4.3 million and $7.8 million for the 27 weeks ended July 3, 2009 and the 26
weeks ended June 27, 2008, respectively.

The Company paid regular distributions to its stockholders in 2009 at a monthly rate of $150
per share or $0.8 million in the aggregate for the months of January through March. The Company reduced the regular distribution to its stockholders to a monthly rate of $137.50 per share or $0.7 million in the aggregate in April of 2009 and
discontinued making regular distributions thereafter. The Company paid regular distributions to its stockholders in 2008 at a monthly rate of $200 per share or $1.1 million in the aggregate, subject to the covenants contained in the indenture. The
Company plans to continue making distributions to its stockholders to pay estimated taxes.



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##### Table of Contents

Inflation

The Company manages its inflation risks by ongoing review of product selling prices and production costs. Management does not believe that inflation risks are material to the Companys business, its consolidated financial position,
results of operations or cash flows. However, there can be no assurance that future inflation will not have an adverse impact on the Companys operating results and financial condition.

Environmental

The Company has incurred, and in the
future will continue to incur, expenditures for matters relating to environmental control, remediation, monitoring and compliance. The Companys management believes that compliance with current environmental laws and regulations is not likely
to have a material adverse effect on the Companys financial condition, the results of its operations or its liquidity; however, environmental laws and regulations have changed rapidly in recent years and the Company may become subject to more
stringent environmental laws and regulations in the future.



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##### Table of Contents

|Item 3. | Quantitative and Qualitative Disclosures About Market Risk.
|------- | -----------------------------------------------------------

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of
credit risk consist primarily of cash and cash equivalents and accounts receivable.

The Company maintains cash and cash equivalents with
well-capitalized financial institutions.

The Companys sales are not materially dependent on a single customer or a small group of
customers. No one individual customer balance represented more than 9% of the Companys total outstanding receivables as of July 3, 2009. Credit risk associated with the Companys receivables is representative of the geographic,
industry and customer diversity associated with the Companys global business.

The Company also maintains credit controls for
evaluating and granting customer credit. As a result, the Company may require that customers provide some type of financial guarantee in certain circumstances.

Foreign Currency Risk

Da-Lite routinely uses forward exchange contracts to economically hedge raw material purchases from
vendors outside of the country of purchase.

Interest Rate Risk

The Company has two credit facilities available for general corporate purposes that are subject to variable interest rates. Interest related to any outstanding balances on the Companys $19.5 million revolving
credit facility in the U.S. is calculated at 4.00% on July 3, 2009. At July 3, 2009, the Company had an outstanding balance of $2.0 million under this revolving credit facility. Interest on outstanding borrowings in Europe, related to
Projectas overdraft line of credit, is calculated at the Fortis Basic Rate plus 1.50%, the sum of which was 6.50% on July 3, 2009. At July 3, 2009, Projecta had no outstanding balances under this credit facility.

At July 3, 2009, the Company had $110.4 million in fixed-rate long-term debt outstanding. There is no interest rate risk associated with the
Companys fixed rate debt. The fair market value of the fixed-rate debt (based on discounted cash flows reflecting borrowing rates currently available for debt with similar terms and maturities) varies with fluctuations in interest rates. A 10%
decrease in interest rates would have changed the fair market value of the fixed-rate debt to approximately $99.2 million from the fair value of approximately $96.1 million at July 3, 2009. Note that financial instruments are described as cash
or contractual obligations or rights to pay or receive cash. The fair value of all other financial instruments approximates the carrying value because of the short-term maturity of these instruments.



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|Item 4. | Controls and Procedures.
|------- | ------------------------



|(a) | Evaluation of Disclosure Controls and Procedures. Based on the evaluation required by Rule 15d-15(e) under the Securities Exchange Act of 1934, the principal executive
officer and principal financial officer of the Da-Lite have concluded that the Companys disclosure controls and procedures (as defined in Rule 15d-15(e)) as of the end of the period covered by this report were effective to ensure that the
information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time period specified in SEC rules and forms. Disclosure
controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the
issuers management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Changes in Internal Control Over Financial Reporting. There were no changes in the Companys internal control over financial reporting that occurred during the last
fiscal quarter that has materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

PART II

OTHER INFORMATION



|Item 1A. | Risk Factors.
|-------- | -------------

The following supplements the risk
factors set forth in Item 1A of the Companys Annual Report of Form 10-K for the year ended December 26, 2008

We have
been adversely affected by the current difficult economic and market conditions, including conditions in the residential and commercial real estate, Business/IT and Hospitality markets, and the continuation or worsening of these conditions could
further negatively impact our results and financial condition.

The Companys success depends to a significant extent on numerous
factors affecting business and consumer spending and residential and commercial construction, including economic conditions relating to the markets we serve. In the current weak economy, our customers have reduced their level of discretionary
spending or investment which has materially adversely affected our business and results of operations. Our results have been adversely affected in recent periods by a decline in residential construction, which reduces the demand for projection
screens for home theaters, the declines in commercial construction and business investment generally, which reduces the demand in the Business/IT market, and the decline in convention activity has adversely affected the demand in the Hospitality
market. The continuation or worsening of difficult economic and market conditions could further negatively impact our business, financial condition, results of operations and cash flows.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds.
|------- | ------------------------------------------------------------

None



|Item 6. | Exhibits
|------- | --------



|            |  |                                                                                                                                
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                    
|31.1        |  | Certification of CEO pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|            | 
|31.2        |  | Certification of CFO pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|            | 
|32.1        |  | Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  
|            | 
|32.2        |  | Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



DA-LITE SCREEN COMPANY, INC. (Registrant)By:

/s/ Jerry C. YoungJerry C. YoungVice President  Finance and Chief Financial Officer (Principal Financial and Accounting Officer)


Date: August 5, 2009



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##### Table of Contents

EXHIBIT INDEX



|            |  |                                                                                                                                
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                    
|31.1        |  | Certification of CEO pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|            | 
|31.2        |  | Certification of CFO pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|            | 
|32.1        |  | Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  
|            | 
|32.2        |  | Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  



22