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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 April 1, 2005



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 an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes ̈No x



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##### Table of Contents



TABLE OF CONTENTS



|        |  |                                                                                       |  |     
|------- |  | ------------------------------------------------------------------------------------- |  | ----
|        |  |                                                                                       |  | Page
|PART I  |  | Financial Information                                                                 |  |     
|        |  |                                                                                      
|Item 1. |  | Financial Statements (unaudited)                                                      |  | 1   
|        |  |                                                                                      
|Item 2. |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 9   
|        |  |                                                                                      
|Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 13  
|        |  |                                                                                      
|Item 4. |  | Controls and Procedures                                                               |  | 14  
|        |  |                                                                                      
|PART II |  | Other Information                                                                     |  |     
|        |  |                                                                                      
|Item 2. |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 15  
|        |  |                                                                                      
|Item 6. |  | Exhibits                                                                              |  | 15  
|        |  |                                                                                      
|        |  | Signatures                                                                            |  | 16  
|        |  |                                                                                      
|        |  | Exhibit Index                                                                         |  | 17  



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PART I



FINANCIAL INFORMATION



|Item 1. | Financial Statements.
|------- | ---------------------



DA-LITE SCREEN COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE
SHEETS

(Dollars in thousands, unaudited)



|                                                                                                       |  |              |         |   |                  |         |  
|------------------------------------------------------------------------------------------------------ |  | ------------ | ------- | - | ---------------- | ------- | -
|                                                                                                       |  | April 1,2005 |         |   | December 31,2004 |        
|Assets                                                                                                 |  |              |         |   |                  |         |  
|Current Assets:                                                                                        |  |              |         |   |                  |         |  
|Cash and cash equivalents                                                                              |  | $            | 13,268  |   |                  | 9,306   |  
|Accounts receivable, less allowance for doubtful accounts                                              |  |              | 17,827  |   |                  | 17,083  |  
|Inventories                                                                                            |  |              | 11,727  |   |                  | 11,560  |  
|Prepaid expenses                                                                                       |  |              | 704     |   |                  | 301     |  
|                                                                                                       |  |              |         |   |                  |         |  
|Total current assets                                                                                   |  |              | 43,526  |   |                  | 38,250  |  
|                                                                                                       |  |              |         |   |                  |         |  
|Property, plant and equipment                                                                          |  |              | 54,349  |   |                  | 54,486  |  
|Less accumulated depreciation                                                                          |  |              | 31,089  |   |                  | 30,188  |  
|                                                                                                       |  |              |         |   |                  |         |  
|Net property, plant, and equipment                                                                     |  |              | 23,260  |   |                  | 24,298  |  
|                                                                                                       |  |              |         |   |                  |         |  
|Goodwill                                                                                               |  |              | 26,319  |   |                  | 26,604  |  
|Other assets, net                                                                                      |  |              | 4,991   |   |                  | 5,192   |  
|                                                                                                       |  |              |         |   |                  |         |  
|                                                                                                       |  | $            | 98,096  |   |                  | 94,344  |  
|                                                                                                       |  |              |         |   |                  |         |  
|Liabilities and Stockholders Deficit                                                                  |  |              |         |   |                  |         |  
|Current liabilities:                                                                                   |  |              |         |   |                  |         |  
|Accounts payable                                                                                       |  | $            | 4,295   |   |                  | 4,676   |  
|Accrued expenses                                                                                       |  |              |         |   |                  |         |  
|Interest                                                                                               |  |              | 5,391   |   |                  | 1,828   |  
|Other                                                                                                  |  |              | 4,608   |   |                  | 5,344   |  
|                                                                                                       |  |              |         |   |                  |         |  
|Total accrued expenses                                                                                 |  |              | 9,999   |   |                  | 7,172   |  
|                                                                                                       |  |              |         |   |                  |         |  
|Total current liabilities                                                                              |  |              | 14,294  |   |                  | 11,848  |  
|Long-term debt                                                                                         |  |              | 150,200 |   |                  | 150,200 |  
|Minority interest                                                                                      |  |              | 884     |   |                  | 852     |  
|                                                                                                       |  |              |         |   |                  |         |  
|Total liabilities                                                                                      |  |              | 165,378 |   |                  | 162,900 |  
|                                                                                                       |  |              |         |   |                  |         |  
|Stockholders deficit:                                                                                 |  |              |         |   |                  |         |  
|Common stock, $1 par value. Authorized 1,000,000 shares; issued 10,686 shares                          |  |              | 11      |   |                  | 11      |  
|Additional paid-in capital                                                                             |  |              | 294     |   |                  | 230     |  
|Retained deficit                                                                                       |  |              | (46,074 | ) |                  | (48,633 | )
|Accumulated other comprehensive income                                                                 |  |              | 2,178   |   |                  | 3,245   |  
|Less treasury stock, 5,335.38 shares at April 1, 2005 and 5,339.08 shares at December 31, 2004 at cost |  |              | (23,691 | ) |                  | (23,409 | )
|                                                                                                       |  |              |         |   |                  |         |  
|Total stockholders deficit                                                                            |  |              | (67,282 | ) |                  | (68,556 | )
|Commitments and contingencies (notes 3 and 8)                                                          |  |              |         |   |                  |         |  
|                                                                                                       |  |              |         |   |                  |         |  
|                                                                                                       |  | $            | 98,096  |   |                  | 94,344  |  
|                                                                                                       |  |              |         |   |                  |         |  



See accompanying notes
to consolidated financial statements.



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DA-LITE SCREEN COMPANY,
INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS



(Dollars in thousands, except per share amounts, unaudited)



|                                              |  |                             |          |   |                             |         
|--------------------------------------------- |  | --------------------------- | -------- | - | --------------------------- | --------
|                                              |  | 13 WeeksEnded April 1, 2005 |          |   | 14 WeeksEnded April 2, 2004
|Net sales                                     |  | $                           | 39,872   |   |                             | 39,080  
|Cost of sales                                 |  |                             | 22,224   |   |                             | 21,737  
|                                              |  |                             |          |   |                             |         
|Gross profit                                  |  |                             | 17,648   |   |                             | 17,343  
|Selling, general, and administrative expenses |  |                             | 4,719    |   |                             | 4,577   
|Depreciation                                  |  |                             | 1,155    |   |                             | 961     
|                                              |  |                             |          |   |                             |         
|Operating income                              |  |                             | 11,774   |   |                             | 11,805  
|                                              |  |                             |          |   |                             |         
|Other expense (income):                       |  |                             |          |   |                             |         
|Interest                                      |  |                             | 3,694    |   |                             | 218     
|Minority interest                             |  |                             | 32       |   |                             | 64      
|Miscellaneous, net                            |  |                             | (1       | ) |                             | 175     
|                                              |  |                             |          |   |                             |         
|Total other expense                           |  |                             | 3,725    |   |                             | 457     
|                                              |  |                             |          |   |                             |         
|Income before income taxes                    |  |                             | 8,049    |   |                             | 11,348  
|Income Taxes                                  |  |                             | 374      |   |                             | 727     
|                                              |  |                             |          |   |                             |         
|Net income                                    |  | $                           | 7,675    |   |                             | 10,621  
|                                              |  |                             |          |   |                             |         
|Basic earnings per share                      |  | $                           | 1,434.13 |   |                             | 2,029.88
|                                              |  |                             |          |   |                             |         
|Basic weighted-average shares outstanding     |  |                             | 5,351.69 |   |                             | 5,232.34
|                                              |  |                             |          |   |                             |         
|Diluted earnings per share                    |  | $                           | 1,413.57 |   |                             | 2,018.88
|                                              |  |                             |          |   |                             |         
|Diluted weighted-average shares outstanding   |  |                             | 5,429.52 |   |                             | 5,260.83
|                                              |  |                             |          |   |                             |         



See accompanying notes
to consolidated financial statements.



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DA-LITE SCREEN COMPANY,
INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands, unaudited)



|                                                                                  |  |                             |        |   |                             |        |  
|--------------------------------------------------------------------------------- |  | --------------------------- | ------ | - | --------------------------- | ------ | -
|                                                                                  |  | 13 WeeksEnded April 1, 2005 |        |   | 14 WeeksEnded April 2, 2004 |       
|Cash flows from operating activities:                                             |  |                             |        |   |                             |        |  
|Net income                                                                        |  | $                           | 7,675  |   |                             | 10,621 |  
|                                                                                  |  |                             |        |   |                             |        |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                             |        |   |                             |        |  
|Depreciation                                                                      |  |                             | 1,155  |   |                             | 961    |  
|Amortization and write-off of debt issuance costs                                 |  |                             | 201    |   |                             | 38     |  
|Change in:                                                                        |  |                             |        |   |                             |        |  
|Accounts receivable                                                               |  |                             | (913   | ) |                             | (828   | )
|Inventories                                                                       |  |                             | (369   | ) |                             | (4     | )
|Prepaid expenses                                                                  |  |                             | (423   | ) |                             | 234    |  
|Accounts payable                                                                  |  |                             | (274   | ) |                             | 2,155  |  
|Accrued expenses                                                                  |  |                             | 2,857  |   |                             | (610   | )
|Other                                                                             |  |                             | 32     |   |                             | 64     |  
|                                                                                  |  |                             |        |   |                             |        |  
|Total adjustments                                                                 |  |                             | 2,266  |   |                             | 2,010  |  
|                                                                                  |  |                             |        |   |                             |        |  
|Net cash and cash equivalents provided by operating activities                    |  |                             | 9,941  |   |                             | 12,631 |  
|                                                                                  |  |                             |        |   |                             |        |  
|Cash flows from investing activities:                                             |  |                             |        |   |                             |        |  
|Purchase of property, plant and equipment                                         |  |                             | (676   | ) |                             | (1,872 | )
|                                                                                  |  |                             |        |   |                             |        |  
|Net cash and cash equivalents used in investing activities                        |  |                             | (676   | ) |                             | (1,872 | )
|                                                                                  |  |                             |        |   |                             |        |  
|Cash flows from financing activities:                                             |  |                             |        |   |                             |        |  
|Decrease in checks written in excess of bank balance                              |  |                             |       |   |                             | (824   | )
|Payments on revolving credit facility                                             |  |                             |       |   |                             | (600   | )
|Payments on long-term debt                                                        |  |                             |       |   |                             | (2,250 | )
|Distributions to stockholders                                                     |  |                             | (5,116 | ) |                             | (5,431 | )
|Repurchase of common stock                                                        |  |                             | (350   | ) |                             |       |  
|Exercise of common stock options                                                  |  |                             | 132    |   |                             | 736    |  
|                                                                                  |  |                             |        |   |                             |        |  
|Net cash and cash equivalents used in financing activities                        |  |                             | (5,334 | ) |                             | (8,369 | )
|                                                                                  |  |                             |        |   |                             |        |  
|Effect of foreign currency exchange rate changes on cash and cash equivalents     |  |                             | 31     |   |                             | (39    | )
|                                                                                  |  |                             |        |   |                             |        |  
|Net change in cash and cash equivalents                                           |  |                             | 3,962  |   |                             | 2,351  |  
|Cash and cash equivalents at beginning of period                                  |  |                             | 9,306  |   |                             | 1,263  |  
|                                                                                  |  |                             |        |   |                             |        |  
|Cash and cash equivalents at end of period                                        |  | $                           | 13,268 |   |                             | 3,614  |  
|                                                                                  |  |                             |        |   |                             |        |  



See accompanying notes
to consolidated financial statements.



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DA-LITE SCREEN COMPANY,
INC. AND SUBSIDIARIES

NOTES TO INTERIM 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 its subsidiaries, the Company or Da-Lite) for the fiscal year ended December 31, 2004. In the opinion of management, the
accompanying unaudited 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. All intercompany accounts
and transactions have been eliminated. Results for interim periods should not be considered indicative of results for the full year.



The Company uses a 52- or 53-week fiscal year ending on the last Friday of December. The first quarter of 2005 was a 13-week period, and the first quarter
of 2004 was a 14-week period. The Companys 2005 fiscal year will be a 52-week period, and the 2004 fiscal year was a 53-week period.



Certain reclassifications have been made in the prior period information to conform with the current periods presentation.



|2. | Critical 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, product has been shipped FOB shipping point, the sales price is fixed or determinable and the collectibility of sales price is reasonably assured.



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 analysis of past due accounts.



GoodwillGoodwill represents the excess of purchase price over the fair value of identifiable net assets
acquired. Prior to 2002, goodwill was amortized on a straight-line basis over periods of 15 to 40 years. Effective January 1, 2002, the Company adopted the provisions of SFAS No. 142, Accounting for Goodwill and Other Intangible Assets. With
the adoption of SFAS No. 142, goodwill is no longer subjected to amortization. Management tests, at least annually or when events or changes in circumstances occur, goodwill for impairment to determine whether its carrying value exceeds its implied
fair value.



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



Long-term debt at April 1, 2005 and December 31, 2004 consisted of the following (in thousands):



|                                          |  |               |         |                  |        
|----------------------------------------- |  | ------------- | ------- | ---------------- | -------
|                                          |  | April 1, 2005 |         | December 31,2004
|Senior debt                               |  | $             | 150,200 |                  | 150,200
|Less current maturities                   |  |               |        |                  |       
|                                          |  |               |         |                  |        
|Long term debt, net of current maturities |  | $             | 150,200 |                  | 150,200
|                                          |  |               |         |                  |        



The Company issued
$160 million of 91⁄2% senior unsecured notes due in May 2011, 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 to retire approximately $15.0 million of indebtedness outstanding under a then existing credit facility, to pay a special distribution to shareholders of approximately
$134.6 million and for general corporate purposes. The Company may redeem any of the notes beginning on May 15, 2007 with an initial redemption price of 109.500% of their principal amount plus accrued interest. In addition, before May 15, 2007, the
Company may redeem up to 35% of the notes at a redemption price of 109.500% of their principal amount plus accrued interest using the proceeds from sales of certain kinds of its capital stock. The Company has determined the early redemption option
to be an embedded derivative and has determined the value of the embedded derivative to be immaterial. 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 beginning on
November 15, 2004.



In the Indenture related to the 91⁄2%
Senior Notes due 2011, the Company agreed to covenants that limit its and its Restricted Subsidiaries 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 shareholders 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.



At April 1, 2005, the Company had an unsecured revolving credit facility that expires in May 2006 with maximum possible borrowings equal to $5.0 million.
At April 1, 2005 and December 31, 2004, the Company had no outstanding balances under this line of credit. Interest on outstanding borrowings related to this line of credit is calculated at the prime rate, which was 5.75% on April 1, 2005.



At April 1, 2005, Projecta had a line of credit with maximum
possible borrowings equal to the lower of 1.5 million Euros or certain percentages of Projectas eligible accounts receivable and inventory. No borrowings were outstanding under this line of credit at April 1, 2005 and December 31, 2004.



The Company has provided an insurance carrier with a standby
letter of credit for $0.3 million.



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|4. | Earnings Per Share
|-- | ------------------



Basic earnings per share are computed using the weighted average number of actual common shares outstanding during the period. Diluted earnings per share
reflect the potential dilution that would occur from the exercise of common stock options outstanding. The following table presents the calculations of earnings per share for the periods ended (in thousands except share data):



|                                            |  |                              |          |                             |   |         
|------------------------------------------- |  | ---------------------------- | -------- | --------------------------- | - | --------
|                                            |  | 13 Weeks Ended April 1, 2005 |          | 14 WeeksEnded April 2, 2004
|Net income                                  |  | $                            | 7,675    |                             | $ | 10,621  
|                                            |  |                              |          |                             |   |         
|Basic weighted average shares outstanding   |  |                              | 5,351.69 |                             |   | 5,232.34
|Dilutive effect of stock options            |  |                              | 77.83    |                             |   | 28.49   
|                                            |  |                              |          |                             |   |         
|Diluted weighted average shares outstanding |  |                              | 5,429.52 |                             |   | 5,260.83
|                                            |  |                              |          |                             |   |         
|Earnings per share:                         |  |                              |          |                             |   |         
|Basic                                       |  | $                            | 1,434.13 |                             | $ | 2,029.88
|Diluted                                     |  | $                            | 1,413.57 |                             | $ | 2,018.88



The Company applies
the intrinsic value-based method of accounting prescribed by Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. Under this method, compensation expense is recorded on the
date of grant only if the current market price of the underlying stock exceeded the exercise price. Since the exercise price equals the market value of the underlying common stock on the date of grant, no compensation expense is recognized. For the
thirteen weeks ended April 1, 2005 and the fourteen weeks ended April 2, 2004, the Company did not recognize any compensation expense. SFAS No. 123, Accounting for Stock-Based Compensation, established accounting and disclosure requirements
using a fair value method of accounting for stock-based employee compensation plans. As allowed by SFAS No. 123, the Company has elected to continue to apply the intrinsic value-based method of accounting described above, and has adopted the
disclosure requirements of SFAS No. 123.



The Company has a
nonqualified stock option plan under which options are granted to certain employees. The plan authorizes grants of options to purchase 737 shares, all of which have been granted. The Company has not disclosed the effect on net income as if the
Company had applied the fair value recognition provisions of SFAS 123, Accounting for Stock Based Compensation, due to immateriality.



In December 2004, the FASB issued SFAS No. 123 (Revised 2004), Share-Based Payment, that revised FASB Statement No. 123, Accounting for
Stock-Based Compensation and superseded APB Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance. SFAS No. 123R focuses primarily on accounting for transactions in which an entity obtains
employee services through share-based payment transactions. SFAS No. 123R requires a public entity to measure the cost of employee services received in exchange for the award of equity instruments based on the fair value of the award at the date of
grant. The cost will be recognized over the period during which an employee is required to provide services in exchange for the award. SFAS No. 123R is effective January 1, 2006 for the Company. The ultimate amount of increased compensation expense
will be dependent on whether the Company adopts SFAS 123R using the modified prospective or retrospective method, the number of option shares granted during the year, their timing and vesting period, and the method used to calculate the fair value
of the awards, among other factors. The adoption of SFAS 123R is not expected to have a material effect on the results of operations or financial position of the Company.



There were no anti-dilutive securities outstanding at April 1, 2005 or April 2, 2004.



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



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



|                 |  |               |        |                  |       
|---------------- |  | ------------- | ------ | ---------------- | ------
|                 |  | April 1, 2005 |        | December 31,2004
|Raw materials    |  | $             | 6,124  |                  | 6,473 
|Work in progress |  |               | 1,853  |                  | 1,692 
|Finished goods   |  |               | 3,750  |                  | 3,395 
|                 |  |               |        |                  |       
|                 |  | $             | 11,727 |                  | 11,560
|                 |  |               |        |                  |       



|6. | Comprehensive Income
|-- | --------------------



The components of accumulated other comprehensive income are as follows for the periods ended (in thousands):



|                                                    |  |               |       |                  |      
|--------------------------------------------------- |  | ------------- | ----- | ---------------- | -----
|                                                    |  | April 1, 2005 |       | December 31,2004
|Cumulative foreign exchange translation adjustments |  | $             | 2,178 |                  | 3,245
|                                                    |  |               |       |                  |      
|                                                    |  | $             | 2,178 |                  | 3,245
|                                                    |  |               |       |                  |      



|7. | 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. The Europe segment includes the operations of Projecta and Procolor. All significant
intersegment transactions have been eliminated.



Operating cash
flow is the measure reported to the chief decision maker for use in assessing segment performance and allocating resources. Operating cash flow for segment reporting is net sales less operating costs and does not include depreciation and
amortization, interest expense, or minority interest. The Company does not allocate costs between segments.



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



|                       |  |                              |        |                              |       
|---------------------- |  | ---------------------------- | ------ | ---------------------------- | ------
|                       |  | 13 Weeks Ended April 1, 2005 |        | 14 Weeks Ended April 2, 2004
|Net Sales:             |  |                              |        |                              |       
|United States          |  | $                            | 33,148 |                              | 31,089
|Europe                 |  |                              | 6,724  |                              | 7,991 
|                       |  |                              |        |                              |       
|Total net sales        |  | $                            | 39,872 |                              | 39,080
|                       |  |                              |        |                              |       
|Operating income:      |  |                              |        |                              |       
|United States          |  | $                            | 10,588 |                              | 9,716 
|Europe                 |  |                              | 1,186  |                              | 2,089 
|                       |  |                              |        |                              |       
|Total operating income |  | $                            | 11,774 |                              | 11,805
|                       |  |                              |        |                              |       



|8. | Commitments and Contingencies
|-- | -----------------------------



The Company leases production space and equipment under noncancelable operating leases. Some of the Companys leases provide that the Company pay
taxes, insurance, maintenance and other operating expenses. Rent expense under operating leases totaled $7,000 and $10,000 for the thirteen weeks ended April 1, 2005 and the fourteen weeks ended April 2, 2004, respectively.



The Company is involved in certain legal proceedings in the ordinary course
of business. Management believes that all of the Companys pending litigation is routine in nature and that none of this litigation is likely to have a material adverse effect on the results of operations or financial position of the Company.



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|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, 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 and currency exchange rates. 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 the worlds leading manufacturer and distributor of projection screens based on internal estimates of market
share. Projection screens are the Companys main product line and the Company produces three types: (1) electrically operated screens, which have the ability to retract into a concealed ceiling recess or into a wall-mounted case, (2) wall
screens, which are normally mounted on an exposed wall surface and may either be manually retractable or attached to a rigid frame, and (3) portable screens which can easily be set up and removed. Da-Lite also sells custom engineered rear projection
systems and complementary presentation products such as lecterns, easels, audiovisual carts, monitor mounts and conference cabinets.



Results of Operations



Thirteen Weeks Ended April 1, 2005, Compared with Fourteen Weeks Ended April 2, 2004



Net Sales. Net sales were $39.9 million for the first 13 weeks of 2005, as compared to net sales of $39.1 million for the first 14 weeks of 2004,
an increase of $0.8 million or 2.0%. Year-over-year sales growth for the two periods was moderated by an additional week in 2004 compared to 2005. In the U.S., electric screen sales increased $1.3 million, wall screen sales increased $1.2 million,
and portable screen sales increased $0.4 million from 2004 levels. Net sales from the Companys European subsidiaries decreased by $1.3 million or 15.9%, with the stronger Euro offsetting $0.3 million of the overall decrease. The decrease in
Europe was attributable to the difficult economic conditions during the first quarter of 2005, which resulted in a decline in unit sales as compared to the first quarter of 2004.



Cost of Sales. The cost of sales was $22.2 million for the first quarter of 2005, as compared to $21.7 million for
the first quarter of 2004, an increase of $0.5 million, or 2.2%. As a percentage of net sales, the



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cost of sales represented 55.7% and 55.6% for the first quarter of 2005 and the first quarter of 2004, respectively. This constitutes a 0.1% reduction in
margin and was the result of fluctuations in the mix of products sold.



Selling, General and Administrative Expenses. Selling, general and administrative expenses were $4.7 million in the first quarter of 2005, as compared to $4.6 million for the first quarter of 2004. Increased legal and audit fees
related to public filing requirements and Sarbanes-Oxley compliance efforts were partially offset by reductions in bad debt expense and by bad debt recoveries.



Depreciation and Amortization. Depreciation and amortization was $1.2 million for the first quarter of 2005 and $1.0
million for the first quarter of 2004. Depreciation is an expense recorded to reduce the value of long-lived tangible assets used mostly in the manufacturing of product. Depreciation expense is expected to be somewhat higher in 2005 as a result of
the capital expenditures made in 2004.



Interest.
Interest expense totaled $3.7 million for the first quarter of 2005, as compared to $0.2 million for the first quarter of 2004, an increase of $3.5 million. This increase was a direct result of the interest on the 91⁄2% Senior Notes due 2011
issued in May 2004.



Miscellaneous, net. Miscellaneous,
net was $0.0 million for the first quarter of 2005, as compared to $0.2 million for the first quarter of 2004, a decrease of $0.2 million. Miscellaneous, net in 2004 consisted primarily of costs relating to the closing of a subsidiary in 2003.



Net Income. Net income fell from $10.6 million for the
first quarter of 2004 to $7.7 million for the first quarter of 2005, reflecting the higher interest expense associated with the Notes.



EBITDA



EBITDA was $12.9 million for the period ended in 2005 as compared to $12.5 million for the period ended in 2004, an increase of $0.4 million or 3.0%. The Company calculates EBITDA as net income before income taxes,
interest and depreciation, amortization and impairment loss. EBITDA is a non-GAAP measure of operations that the Companys management uses to generally evaluate the financial performance of the business and to assess its cash flow generating
abilities, and is also used by investors and financial analysts. EBITDA should not be considered independently from, and is not presented as an alternative measure of, operating income (loss) or cash provided by operating activities as determined
under generally accepted accounting principles or GAAP. The calculation of EBITDA may vary among companies. The following table reconciles the computation of EBITDA, as compared to net income for the periods indicated:



|                                               |  |                              |      |                              |   |     
|---------------------------------------------- |  | ---------------------------- | ---- | ---------------------------- | - | ----
|                                               |  | 13 Weeks Ended April 1, 2005 |      | 14 weeks Ended April 2, 2004
|                                               |  | (dollars in millions)       
|Net income                                     |  | $                            | 7.7  |                              | $ | 10.6
|Income taxes                                   |  |                              | 0.4  |                              |   | 0.7 
|Interest                                       |  |                              | 3.7  |                              |   | 0.2 
|Depreciation, amortization and impairment loss |  |                              | 1.1  |                              |   | 1.0 
|                                               |  |                              |      |                              |   |     
|EBITDA                                         |  | $                            | 12.9 |                              | $ | 12.5
|                                               |  |                              |      |                              |   |     



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Liquidity and Capital Resources



Management believes the principal indicators of the Companys liquidity are its cash position, remaining availability
under its bank credit facilities and its excess working capital. At April 1, 2005, the Companys cash position was $13.3 million, an increase of $4.0 million from December 31, 2004. Additionally, the Company had an unsecured revolving credit
facility, with maximum possible borrowings equal to $5.0 million available under current terms until May 2006. Interest on outstanding borrowings related to this line of credit is calculated at the prime rate. At April 1, 2005, the Company had no
outstanding balance under this line of credit. Furthermore, Da-Lites working capital position improved to $29.2 million (including $13.3 million of cash and cash equivalents) at April 1, 2005, from $26.4 million (including $9.3 million of cash
and cash equivalents) at December 31, 2004.



At April 1, 2005,
the Companys Dutch subsidiary, Projecta, had a line of credit, with maximum possible borrowings equal to approximately 1.5 million Euros or certain percentages of Projectas eligible accounts receivable and inventory. This facility is
secured by Projectas accounts receivable and inventory. Interest on outstanding borrowings related to this line of credit is calculated at the Fortis Basic Rate plus 1.50% and was 4.25% on April 1, 2005. At April 1, 2005, there was no
outstanding balance under this line of credit.



The Company
expects to be able to fund its working capital requirements, its capital expenditures and its distributions to shareholders with cash generated from operations.



Depending on the Companys expected cash needs, the prevailing prices of the Notes and other factors, the Company may repurchase outstanding Notes
from time to time in the open market or otherwise.



Cash Flows



For the first quarter of 2005, cash provided by operating
activities was $9.9 million, as compared to $12.6 million during the first quarter of 2004, a decrease of $2.7 million or 21.3%, reflecting the reduction of net income attributable to the increased interest expense associated with the Notes. Cash
used in investing activities was $0.7 million during the first quarter of 2005, as compared to $1.9 million during the first quarter of 2004, all of which in both periods represented capital expenditures. Cash used in financing activities was $5.3
million during the first quarter of 2005, as compared to $8.4 million during the first quarter of 2004, reflecting debt paydowns in the first quarter of 2004 as compared to no reduction of debt in the first quarter of 2005.



Interest expense will be substantially higher in the first half of 2005
compared to the first half of 2004 as a result of the interest on the 91⁄2% Senior Notes due 2011 issued in May 2004. Management believes that the cash generated by the Companys operations will be sufficient to cover this interest expense
as well as to fund planned capital expenditures, although there can be no assurances in this regard.



Capital Expenditures



Capital expenditures were $0.7 million during the first quarter of 2005 compared to $1.9 million during the first quarter of 2004. The Companys management currently expects to spend approximately $3.5 million on capital expenditures
in 2005 using cash generated from operations.



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Contractual Obligations



The following table sets forth, as of April 1, 2005, certain of the Companys contractual obligations:



|                                                |  |                        |       |                 |      |           |      |           |      |                  |      
|----------------------------------------------- |  | ---------------------- | ----- | --------------- | ---- | --------- | ---- | --------- | ---- | ---------------- | -----
|                                                |  | Payments due by period
|Contractual Obligations                         |  | Total                  |       | Less than1 year |      | 1-3 years |      | 3-5 years |      | More than5 years
|                                                |  | (in millions)         
|Interest and principal payments for senior debt |  | $                      | 242.9 |                 | 14.3 |           | 28.5 |           | 28.5 |                  | 171.6
|Self-insurance letter of credit                 |  |                        | 0.3   |                 | 0.3  |           |     |           |     |                  |     
|                                                |  |                        |       |                 |      |           |      |           |      |                  |      
|Total                                           |  | $                      | 243.2 |                 | 14.6 |           | 28.5 |           | 28.5 |                  | 171.6
|                                                |  |                        |       |                 |      |           |      |           |      |                  |      



Distributions



As a subchapter S corporation under the Internal Revenue Code of 1986,
distributions are made by Da-Lite to its shareholders to pay estimated taxes relating to taxable income allocated to them by the Company on a quarterly basis. Tax related distributions were $2.3 million in the first quarter of 2005 and $2.3 million
in the first quarter of 2004.



The Company has paid regular
distributions to its shareholders in 2005 at the monthly rate of $175 per share or $0.9 million in the aggregate, subject to the covenants contained in the indenture related to its Notes. Regular monthly distributions were paid to the Companys
shareholders in the first part of 2004, through April 2004, at the monthly rate of $200 per share or $1.0 million in the aggregate. In May 2004, the Company paid a special distribution to its shareholders of approximately $134.6 million ($25,500 per
share). Although the Company continued to make quarterly tax distributions to its shareholders, additional regular monthly distributions during the remainder of 2004 were not issued.



Inflation



The Companys management believes that inflation has not had a material effect on the results of its operations.



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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|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 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 10% of the Companys total outstanding
receivables as of April 1, 2005. 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 hedge raw material purchases from vendors outside of the country of purchase. Gains and losses on
these contracts offset changes in the related foreign currency denominated costs.



Interest Rate Risk



Da-Lite does not have any
variable rate debt outstanding and the Companys management does not foresee the need to pursue additional debt financing at this time. Interest related to outstanding balances in the Companys $5.0 million revolving credit facility is
calculated at the prime rate, which was 5.75% at April 1, 2005. At April 1, 2005, the Company had no outstanding balances under this line of credit.



At April 1, 2005, the Company had $150.2 million in fixed-rate long-term debt outstanding. There are no earnings risks 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 $175 million from the fair value of approximately $166 million at December 31, 2004. Note that 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, including cash and cash equivalents, accounts receivable,
inventory, prepaid expenses, accounts payable and accrued expenses.



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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(b) under the Securities Exchange Act of 1934, the principal executive officer and
principal financial officer of the Da-Lite have concluded that Da-Lite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 Da-Lite in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. The disclosure controls and
procedures are designed to only provide reasonable assurance of achieving the desired control objections.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Changes in internal control over financial reporting. There was no change in Da-Lites internal control over financial reporting that occurred during the last fiscal quarter
that has materially affected, or is reasonably likely to materially affect, Da-Lites internal control over financial reporting.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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PART II



OTHER INFORMATION



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



During the first quarter of 2005, seven employees exercised options to purchase an aggregate of 15.6 shares of our common stock at an aggregate purchase
price of $133,000. These transactions were exempt from registration pursuant to, among other things, Section 4(2) of the Securities Act of 1933, as amended, and Rule 701 thereunder. The Company repurchased 11.9 shares from stockholders during the
same period.



|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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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: May 3, 2005



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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  



17