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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549



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FORM 10-Q



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

For the quarterly period ended September 28, 2007

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



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DA-LITE SCREEN COMPANY, INC.

(Exact Name of Registrant as Specified in its Charter)



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|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|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



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

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



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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, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ̈Accelerated filer ̈Non-accelerated filer  x

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

As of October 29, 2007, there were 5,434.12 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 |  | 11
|        |  |                                                                                      
|Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 18
|        |  |                                                                                      
|Item 4. |  | Controls and Procedures                                                               |  | 19
|        |  |                                                                                      
|PART II |  | Other Information                                                                     |  |   
|        |  |                                                                                      
|Item 2. |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 20
|        |  |                                                                                      
|Item 4. |  | Submission of Matters to a Vote of Security Holders                                   |  | 20
|        |  |                                                                                      
|Item 6. |  | Exhibits                                                                              |  | 20
|        |  |                                                                                      
|        |  | Signatures                                                                            |  | 21
|        |  |                                                                                      
|        |  | Exhibit Index                                                                         |  | 22



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##### Table of Contents

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 ofSeptember 28,2007 |         |   | As ofDecember 29, 2006 |  
|Assets                                                                                                      |  |                                   |         |   |                        |   |         |  
|Current Assets:                                                                                             |  |                                   |         |   |                        |   |         |  
|Cash and cash equivalents                                                                                   |  | $                                 | 6,631   |   |                        | $ | 12,323  |  
|Short-term investments                                                                                      |  |                                   | 2,550   |   |                        |   | 4,584   |  
|                                                                                                            |  |                                   |         |   |                        |   |         |  
|Total cash and short-term investments                                                                       |  |                                   | 9,181   |   |                        |   | 16,907  |  
|Accounts receivable, less allowance for doubtful accounts                                                   |  |                                   | 18,440  |   |                        |   | 16,620  |  
|Inventories                                                                                                 |  |                                   | 15,506  |   |                        |   | 13,629  |  
|Prepaid expenses and other                                                                                  |  |                                   | 1,624   |   |                        |   | 667     |  
|Prepaid income taxes                                                                                        |  |                                   | 264     |   |                        |   | 136     |  
|                                                                                                            |  |                                   |         |   |                        |   |         |  
|Total current assets                                                                                        |  |                                   | 45,015  |   |                        |   | 47,959  |  
|                                                                                                            |  |                                   |         |   |                        |   |         |  
|Property, plant and equipment                                                                               |  |                                   | 59,114  |   |                        |   | 56,483  |  
|Less accumulated depreciation                                                                               |  |                                   | 39,721  |   |                        |   | 36,761  |  
|                                                                                                            |  |                                   |         |   |                        |   |         |  
|Net property, plant, and equipment                                                                          |  |                                   | 19,393  |   |                        |   | 19,722  |  
|                                                                                                            |  |                                   |         |   |                        |   |         |  
|Goodwill                                                                                                    |  |                                   | 26,908  |   |                        |   | 26,454  |  
|Other assets, net                                                                                           |  |                                   | 2,837   |   |                        |   | 3,361   |  
|                                                                                                            |  |                                   |         |   |                        |   |         |  
|                                                                                                            |  | $                                 | 94,153  |   |                        | $ | 97,496  |  
|                                                                                                            |  |                                   |         |   |                        |   |         |  
|                                                                                                            |  |                                  
|Liabilities and Stockholders Deficit                                                                       |  |                                   |         |   |                        |   |         |  
|Current liabilities:                                                                                        |  |                                   |         |   |                        |   |         |  
|Accounts payable                                                                                            |  | $                                 | 4,550   |   |                        | $ | 4,388   |  
|Accrued expenses                                                                                            |  |                                   |         |   |                        |   |         |  
|Interest                                                                                                    |  |                                   | 4,630   |   |                        |   | 1,656   |  
|Other                                                                                                       |  |                                   | 4,815   |   |                        |   | 5,359   |  
|                                                                                                            |  |                                   |         |   |                        |   |         |  
|Total accrued expenses                                                                                      |  |                                   | 9,445   |   |                        |   | 7,015   |  
|                                                                                                            |  |                                   |         |   |                        |   |         |  
|Total current liabilities                                                                                   |  |                                   | 13,995  |   |                        |   | 11,403  |  
|Long-term debt                                                                                              |  |                                   | 130,925 |   |                        |   | 140,200 |  
|                                                                                                            |  |                                   |         |   |                        |   |         |  
|Total liabilities                                                                                           |  |                                   | 144,920 |   |                        |   | 151,603 |  
|                                                                                                            |  |                                   |         |   |                        |   |         |  
|Minority interest                                                                                           |  |                                   | 1,196   |   |                        |   | 1,112   |  
|                                                                                                            |  |                                  
|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                                                                                  |  |                                   | 1,604   |   |                        |   | 618     |  
|Accumulated deficit                                                                                         |  |                                   | (33,794 | ) |                        |   | (34,479 | )
|Accumulated other comprehensive income                                                                      |  |                                   | 4,267   |   |                        |   | 2,750   |  
|Less treasury stock, 5,252.88 shares at September 28, 2007 and 5,321.88 shares at December 29, 2006 at cost |  |                                   | (24,051 | ) |                        |   | (24,119 | )
|                                                                                                            |  |                                   |         |   |                        |   |         |  
|Total stockholders deficit                                                                                 |  |                                   | (51,963 | ) |                        |   | (55,219 | )
|                                                                                                            |  |                                   |         |   |                        |   |         |  
|                                                                                                            |  | $                                 | 94,153  |   |                        | $ | 97,496  |  
|                                                                                                            |  |                                   |         |   |                        |   |         |  

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 WeeksEndedSeptember 28,2007 |        | 13 WeeksEnded September 29,2006 |   |        | 39 WeeksEndedSeptember 28,2007 |  | 39 WeeksEnded September 29,2006
|Net sales                                        |  | $                              | 44,091 |                                 | $ | 42,711 |                                |  | $                               | 128,038 |  | $ | 129,054
|Cost of sales                                    |  |                                | 27,098 |                                 |   | 26,538 |                                |  |                                 | 78,548  |  |   | 78,422 
|                                                 |  |                                |        |                                 |   |        |                                |  |                                 |         |  |   |        
|Gross profit                                     |  |                                | 16,993 |                                 |   | 16,173 |                                |  |                                 | 49,490  |  |   | 50,632 
|Selling, general, and administrative expenses    |  |                                | 4,759  |                                 |   | 4,066  |                                |  |                                 | 15,359  |  |   | 14,033 
|                                                 |  |                                |        |                                 |   |        |                                |  |                                 |         |  |   |        
|Operating income                                 |  |                                | 12,234 |                                 |   | 12,107 |                                |  |                                 | 34,131  |  |   | 36,599 
|                                                 |  |                                |        |                                 |   |        |                                |  |                                 |         |  |   |        
|Other expense:                                   |  |                                |        |                                 |   |        |                                |  |                                 |         |  |   |        
|Interest                                         |  |                                | 3,568  |                                 |   | 3,384  |                                |  |                                 | 9,812   |  |   | 10,442 
|Miscellaneous                                    |  |                                | 543    |                                 |   | (98    | )                              |  |                                 | 954     |  |   | 425    
|                                                 |  |                                |        |                                 |   |        |                                |  |                                 |         |  |   |        
|Total other expense                              |  |                                | 4,111  |                                 |   | 3,286  |                                |  |                                 | 10,766  |  |   | 10,867 
|                                                 |  |                                |        |                                 |   |        |                                |  |                                 |         |  |   |        
|Income before income taxes and minority interest |  |                                | 8,123  |                                 |   | 8,821  |                                |  |                                 | 23,365  |  |   | 25,732 
|Income taxes                                     |  |                                | 330    |                                 |   | 411    |                                |  |                                 | 716     |  |   | 1,192  
|Minority interest                                |  |                                | 35     |                                 |   | 44     |                                |  |                                 | 84      |  |   | 119    
|                                                 |  |                                |        |                                 |   |        |                                |  |                                 |         |  |   |        
|Net income                                       |  | $                              | 7,758  |                                 | $ | 8,366  |                                |  | $                               | 22,565  |  | $ | 24,421 
|                                                 |  |                                |        |                                 |   |        |                                |  |                                 |         |  |   |        

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)



|                                                                                  |  |                                |         |   |                                |   |         |  
|--------------------------------------------------------------------------------- |  | ------------------------------ | ------- | - | ------------------------------ | - | ------- | -
|                                                                                  |  | 39 WeeksEndedSeptember 28,2007 |         |   | 39 WeeksEndedSeptember 29,2006 |  
|Cash flows from operating activities:                                             |  |                                |         |   |                                |   |         |  
|Net income                                                                        |  | $                              | 22,565  |   |                                | $ | 24,421  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                                |         |   |                                |   |         |  
|Depreciation                                                                      |  |                                | 2,605   |   |                                |   | 2,970   |  
|Amortization and write-off of debt issuance costs                                 |  |                                | 524     |   |                                |   | 681     |  
|Gain on disposal of assets                                                        |  |                                |        |   |                                |   | (475    | )
|Minority interest earnings                                                        |  |                                | 84      |   |                                |   | 119     |  
|Change in:                                                                        |  |                                |         |   |                                |   |         |  
|Accounts receivable                                                               |  |                                | (1,551  | ) |                                |   | (1,500  | )
|Inventories                                                                       |  |                                | (1,621  | ) |                                |   | (817    | )
|Prepaid expenses and other                                                        |  |                                | (944    | ) |                                |   | 5       |  
|Accounts payable                                                                  |  |                                | 1       |   |                                |   | (570    | )
|Accrued expenses                                                                  |  |                                | 2,226   |   |                                |   | 4,091   |  
|Other                                                                             |  |                                |        |   |                                |   | (1      | )
|                                                                                  |  |                                |         |   |                                |   |         |  
|Net cash provided by operating activities                                         |  |                                | 23,889  |   |                                |   | 28,924  |  
|                                                                                  |  |                                |         |   |                                |   |         |  
|Cash flows from investing activities:                                             |  |                                |         |   |                                |   |         |  
|Proceeds from sale of assets                                                      |  |                                |        |   |                                |   | 1,339   |  
|Purchase of property, plant and equipment                                         |  |                                | (1,444  | ) |                                |   | (1,811  | )
|Purchases of short-term investments                                               |  |                                | (3,550  | ) |                                |   | (7,558  | )
|Maturities of short-term investments                                              |  |                                | 5,584   |   |                                |   | 8,589   |  
|                                                                                  |  |                                |         |   |                                |   |         |  
|Net cash provided by investing activities                                         |  |                                | 590     |   |                                |   | 559     |  
|                                                                                  |  |                                |         |   |                                |   |         |  
|Cash flows from financing activities:                                             |  |                                |         |   |                                |   |         |  
|Payments to retire senior notes                                                   |  |                                | (9,275  | ) |                                |   | (4,000  | )
|Distributions to stockholders                                                     |  |                                | (21,868 | ) |                                |   | (22,808 | )
|Repurchase of common stock                                                        |  |                                | (286    | ) |                                |   | (533    | )
|Exercise of common stock options                                                  |  |                                | 1,340   |   |                                |   | 84      |  
|                                                                                  |  |                                |         |   |                                |   |         |  
|Net cash used in financing activities                                             |  |                                | (30,089 | ) |                                |   | (27,257 | )
|                                                                                  |  |                                |         |   |                                |   |         |  
|Effect of foreign currency exchange rate changes on cash and cash equivalents     |  |                                | (82     | ) |                                |   | 89      |  
|                                                                                  |  |                                |         |   |                                |   |         |  
|Net change in cash and cash equivalents                                           |  |                                | (5,692  | ) |                                |   | 2,315   |  
|Cash and cash equivalents at beginning of period                                  |  |                                | 12,323  |   |                                |   | 7,008   |  
|                                                                                  |  |                                |         |   |                                |   |         |  
|Cash and cash equivalents at end of period                                        |  | $                              | 6,631   |   |                                | $ | 9,323   |  
|                                                                                  |  |                                |         |   |                                |   |         |  

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 29, 2006. 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. 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 96% 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 uses a 52- or 53-week fiscal year ending on the last Friday of December. The third quarters of 2007 and 2006 were 13-week periods. The Companys 2007 and 2006 fiscal years will be 52-week years.

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, product
has been shipped FOB shipping point, 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 in conformity with Emerging Issues Task Force (EITF) Issue No. 00-10, Accounting for Shipping and Handling Fees and Costs.

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.



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Goodwill

Goodwill represents the excess of purchase price over the fair value of identifiable net assets acquired. The Company applies the
provisions of the Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 142 and management tests goodwill for impairment to determine whether its carrying value exceeds its implied fair value at
least annually, or when events or changes in circumstances occur. Management calculates the implied fair value based on an income and market approach. These calculations include estimates of discount rates and market value multiples. Management has
determined that its goodwill was not impaired in 2006 or during the period ended September 28, 2007. The change in the balance of goodwill from December 29, 2006 to September 28, 2007 is the result of foreign currency translation.

New Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board (FASB) issued FAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities  Including an amendment of FASB Statement
No. 115, (FAS 159) which permits entities to choose to measure many financial instruments and certain other items at fair value at specified election dates. A business entity is required to report unrealized gains and losses on items for
which the fair value option has been elected in earnings at each subsequent reporting date. FAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.
The Company is currently evaluating the impact of adopting FAS 159.

In June 2006, the FASB ratified Emerging Issues Task
Force Issue No. 06-3 (EITF 06-3), How Taxes Collected from Customers and Remitted to Governmental Authorities Should be Presented in the Income Statement (That Is, Gross versus Net Presentation). EITF 06-3 applies to any tax assessed by
a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer. EITF 06-3 allows companies to present taxes either gross within revenue and expense or net. If taxes subject to this issue are
significant, a company is required to disclose its accounting policy for presenting taxes and the amount of such taxes that are recognized on a gross basis. The Company currently presents such taxes net. The Company adopted EITF 06-03 during the
first quarter of 2007.

In June 2006, the FASB issued FASB Interpretation No. (FIN) 48, Accounting for Uncertainty in
Income Taxes  an interpretation of FASB Statement No. 109. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in
a tax return. FIN 48 also provides guidance on accounting for derecognition, interest, penalties, accounting in interim periods, disclosure and classification of matters related to uncertainty in income taxes, and transitional requirements upon
adoption of FIN 48. The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes  an Interpretation of FASB Statement No. 109 (FIN 48), on December 30, 2006. The Company did
not have any unrecognized tax benefits and there was no effect on our financial condition or results of operations as a result of implementing FIN 48.

We file income tax returns in various state and foreign jurisdictions. State jurisdictions that remain subject to examination range from 2004 to 2006. Netherlands tax returns that remain subject to examination range
from 2001 to 2006. We do not believe there will be any material changes in our unrecognized tax positions over the next 12 months.



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Our policy is that we recognize interest and penalties accrued on any unrecognized tax
benefits as a component of income tax expense. As of the date of adoption of FIN 48, the Company had no accrued interest or penalties, and no such expenses were recognized during the quarter.

In February 2006, the FASB issued FASB Statement No. 155, Accounting for Certain Hybrid Financial Statementsan amendment to
FASB Statements No. 133 and 140(SFAS 155), that allows a preparer to elect fair value measurement at acquisition, at issuance, or when a previously unrecognized financial instrument is subject to a re-measurement (new basis) event, on an
instrument-by-instrument basis, in cases in which a derivative would otherwise have to be bifurcated. It also eliminates the exemption from applying Statement 144 to interests in securitized financial assets so that similar instruments are accounted
for similarly regardless of the form of the instruments. The Company adopted the provisions of SFAS 155 on December 30, 2006. The adoption of SFAS 155 did not have an impact on the Companys overall results of operations or financial
position.

3. Reclassification

Certain
cash flow information for the thirty-nine weeks ended September 29, 2006 has been reclassified to conform to the fiscal 2007 financial statement presentation.

The Company considers interest bearing instruments with original maturities of three months or less at the date of purchase to be the equivalent of cash. The Company considers interest bearing instruments with
original maturities greater than three months and less than twelve months as short-term investments. For the thirty-nine weeks ended September 29, 2006 the cash flow statement had incorrectly included approximately $5.5 million and $4.5 million
of certificates of deposit with original maturities greater than three months as cash equivalents at the beginning of the period and at the end of the period, respectively. This correction decreased net cash used in investing activities by $1.0
million in the consolidated statements of cash flows for the thirty-nine weeks ended September 29, 2006. These immaterial corrections were made to properly present cash equivalents pursuant to Statement of Financial Accounting Standard (SFAS)
No. 95, Statement of Cash Flows.

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

Long-term debt at September 28, 2007 and December 29, 2006 consisted only of Senior Notes due in 2011.

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 may now redeem any of the Notes with an initial redemption price of 109.500% of their principal amount, which price reduces to 104.750%, 102.375% and 100.000% on May 15 of 2008,
2009 and 2010, respectively in each case, 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



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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 September 28, 2007 and
December 29, 2006.

The Company has an unsecured revolving credit facility that expires in May 2008 with maximum possible borrowings
of $10.0 million. At September 28, 2007 and December 29, 2006, the Company had no outstanding balances under these lines of credit. Interest on outstanding borrowings related to the $10.0 million line of credit is calculated at the prime
rate, which was 7.75% on September 28, 2007.

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 related to this line of credit is calculated at the Fortis basic rate plus 1.50%, the sum of which was 6.50% on September 28, 2007. At
September 28, 2007 and December 29, 2006, Projecta had no outstanding balances under this line of credit.

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.

5. 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 the three
quarters of 2007 or during fiscal year 2006.

The stock option activity and weighted average exercise prices follow:



|                                  |  |              |   |  |                      |         |   |                                         |   |    
|--------------------------------- |  | ------------ | - |  | -------------------- | ------- | - | --------------------------------------- | - | ---
|                                  |  | Year to Date
|                                  |  | Options      |   |  | AverageExercisePrice |         |   | AggregateIntrinsic Value (in thousands)
|Outstanding at December 29, 2006  |  | 144          |   |  | $                    | 16,978  |   |                                         |   |    
|Exercised                         |  | (78          | ) |  | $                    | (17,175 | ) |                                         |   |    
|Forfeited                         |  | (2           | ) |  | $                    | (9,000  | ) |                                         |   |    
|                                  |  |              |   |  |                      |         |   |                                         |   |    
|Outstanding at September 28, 2007 |  | 64           |   |  | $                    | 16,988  |   |                                         | $ | 804
|                                  |  |              |   |  |                      |         |   |                                         |   |    
|Exercisable at September 28, 2007 |  | 64           |   |  | $                    | 16,988  |   |                                         | $ | 804
|                                  |  |              |   |  |                      |         |   |                                         |   |    



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6. 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):



|                 |  |                   |        |                  |   |       
|---------------- |  | ----------------- | ------ | ---------------- | - | ------
|                 |  | September 28,2007 |        | December 29,2006
|Raw materials    |  | $                 | 10,256 |                  | $ | 7,714 
|Work in progress |  |                   | 2,401  |                  |   | 2,069 
|Finished goods   |  |                   | 2,849  |                  |   | 3,846 
|                 |  |                   |        |                  |   |       
|                 |  | $                 | 15,506 |                  | $ | 13,629
|                 |  |                   |        |                  |   |       

7. Accumulated Other Comprehensive Income

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



|                                         |  |                                |       |                                  |   |       |                                |  |                                  |        |  |   |       
|---------------------------------------- |  | ------------------------------ | ----- | -------------------------------- | - | ----- | ------------------------------ |  | -------------------------------- | ------ |  | - | ------
|                                         |  | 13 WeeksEndedSeptember 28,2007 |       | 13 WeeksEnded September 29, 2006 |   |       | 39 weeksEndedSeptember 28,2007 |  | 39 weeksEnded September 29, 2006
|Net income                               |  | $                              | 7,758 |                                  | $ | 8,366 |                                |  | $                                | 22,565 |  | $ | 24,421
|Other comprehensive income:              |  |                                |       |                                  |   |       |                                |  |                                  |        |  |   |       
|Foreign exchange translation adjustments |  |                                | 1,051 |                                  |   | (135  | )                              |  |                                  | 1,517  |  |   | 1,479 
|                                         |  |                                |       |                                  |   |       |                                |  |                                  |        |  |   |       
|Total comprehensive income               |  | $                              | 8,809 |                                  | $ | 8,231 |                                |  | $                                | 24,082 |  | $ | 25,900
|                                         |  |                                |       |                                  |   |       |                                |  |                                  |        |  |   |       



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8. Segment Information

The Company primarily manufactures projection screens and other meeting room products 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.

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



|                       |  |                                   |        |                                |   |                                   |  |                                |         |  |   |        
|---------------------- |  | --------------------------------- | ------ | ------------------------------ | - | --------------------------------- |  | ------------------------------ | ------- |  | - | -------
|                       |  | 13 Weeks Ended September 28, 2007 |        | 13 WeeksEndedSeptember 29,2006 |   | 39 Weeks Ended September 28, 2007 |  | 39 WeeksEndedSeptember 29,2006
|Net sales:             |  |                                   |        |                                |   |                                   |  |                                |         |  |   |        
|United States          |  | $                                 | 37,485 |                                | $ | 36,667                            |  | $                              | 108,002 |  | $ | 108,397
|Europe                 |  |                                   | 6,606  |                                |   | 6,044                             |  |                                | 20,036  |  |   | 20,657 
|                       |  |                                   |        |                                |   |                                   |  |                                |         |  |   |        
|Total net sales        |  | $                                 | 44,091 |                                | $ | 42,711                            |  | $                              | 128,038 |  | $ | 129,054
|                       |  |                                   |        |                                |   |                                   |  |                                |         |  |   |        
|Operating income:      |  |                                   |        |                                |   |                                   |  |                                |         |  |   |        
|United States          |  | $                                 | 11,046 |                                | $ | 11,053                            |  | $                              | 31,330  |  | $ | 32,913 
|Europe                 |  |                                   | 1,188  |                                |   | 1,054                             |  |                                | 2,801   |  |   | 3,686  
|                       |  |                                   |        |                                |   |                                   |  |                                |         |  |   |        
|Total operating income |  | $                                 | 12,234 |                                | $ | 12,107                            |  | $                              | 34,131  |  | $ | 36,599 
|                       |  |                                   |        |                                |   |                                   |  |                                |         |  |   |        
|                       |  |                                   |       
|As of:                 |  | September 28, 2007                |        | December 29,2006               |   |                                  
|Total assets           |  |                                   |        |                                |   |                                   | 
|United States          |  | $                                 | 69,068 |                                | $ | 73,512                            | 
|Europe                 |  |                                   | 25,085 |                                |   | 23,984                            | 
|                       |  |                                   |        |                                |   |                                   | 
|Total assets           |  | $                                 | 94,153 |                                | $ | 97,496                            | 
|                       |  |                                   |        |                                |   |                                   | 



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9. Commitments and Contingencies

On May 19, 2006, Draper, Inc. (Draper), a competitor of the Company, filed an action entitled Draper, Inc. v. Da-Lite Screen Company, Inc. and Stewart Filmscreen Corporation in the United
States District Court for the Southern District of Indiana, Indianapolis Division. The complaint, as amended, alleges that certain projection screens manufactured by the Company and Stewart Filmscreen Corporation, another competitor of the Company,
infringe patents issued to Draper, and seeks unspecified damages and injunctive relief. The Company has filed a second amended answer denying the allegations and asserting affirmative defenses. The defenses include: non-infringement, invalidity
based on prior art, and unenforceability because of inequitable conduct in procuring at least some of the patents in suit. The Company believes that it has good defenses to this suit and intends to vigorously defend this action.

In addition, the Company is subject to certain other legal proceedings and claims that have arisen in the ordinary course of business and which have not
been fully adjudicated.

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.



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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, 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. 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 of projection screens primarily focused on the premium end of the market.
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 brackets for plasma and LCD displays.

Critical Accounting Policies

Da-Lites critical accounting policies are summarized in the Companys Annual Report
on Form 10­K for the year ended December 29, 2006. As of September 28, 2007, the Companys critical accounting policies had not changed from December 29, 2006.



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Recent Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board (FASB) issued FAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities  Including an amendment of FASB Statement
No. 115, (FAS 159) which permits entities to choose to measure many financial instruments and certain other items at fair value at specified election dates. A business entity is required to report unrealized gains and losses on items for
which the fair value option has been elected in earnings at each subsequent reporting date. FAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.
The Company is currently evaluating the impact of adopting FAS 159.

In June 2006, the FASB ratified Emerging Issues Task Force Issue
No. 06-3 (EITF 06-3), How Taxes Collected from Customers and Remitted to Governmental Authorities Should be Presented in the Income Statement (That Is, Gross versus Net Presentation). EITF 06-3 applies to any tax assessed by a
governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer. EITF 06-3 allows companies to present taxes either gross within revenue and expense or net. If taxes subject to this issue are
significant, a company is required to disclose its accounting policy for presenting taxes and the amount of such taxes that are recognized on a gross basis. The Company currently presents such taxes net. The Company adopted EITF 06-03 during the
first quarter of 2007.

In June 2006, the FASB issued FASB Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes
 an interpretation of FASB Statement No. 109. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.
FIN 48 also provides guidance on accounting for derecognition, interest, penalties, accounting in interim periods, disclosure and classification of matters related to uncertainty in income taxes, and transitional requirements upon adoption of FIN
48. The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes  an Interpretation of FASB Statement No. 109 (FIN 48), on December 30, 2006. The Company did not have any
unrecognized tax benefits and there was no effect on our financial condition or results of operations as a result of implementing FIN 48.

We file income tax returns in various state and foreign jurisdictions. State jurisdictions that remain subject to examination range from 2004 to 2006. Netherlands tax returns that remain subject to examination range from 2001 to 2006. We do
not believe there will be any material changes in our unrecognized tax positions over the next 12 months.

Our policy is that we recognize
interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of the date of adoption of FIN 48, the Company had no accrued interest or penalties, and no such expenses were recognized during the quarter.

In February 2006, the FASB issued FASB Statement No. 155, Accounting for Certain Hybrid Financial Statements  an amendment
to FASB Statements No. 133 and 140(SFAS 155), that allows a preparer to elect fair value measurement at acquisition, at issuance, or when a previously unrecognized financial instrument is subject to a re-measurement (new basis) event, on
an instrument-by-instrument basis, in cases in which a derivative would otherwise have to be bifurcated. It also eliminates the exemption from applying Statement 144 to interests in securitized financial assets so that similar instruments are
accounted for similarly regardless of the form of the instruments. The Company adopted the provisions of SFAS 155 on December 30, 2006. The adoption of SFAS 155 did not have an impact on the Companys overall results of operations or
financial position.



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Results of Operations

Thirteen Weeks Ended September 28, 2007, Compared with Thirteen Weeks Ended September 29, 2006

Net
Sales. Net sales were $44.1 million for the 13 weeks ended September 28, 2007, as compared to $42.7 million for the 13 weeks ended September 29, 2006, an increase of $1.4 million or 3.3%. Net sales by the Companys United States
(U.S.) operations increased 2.2%. In the U.S., electric screen sales increased $0.1 million primarily because demand for the Companys core business of electrically operated screens with viewing surfaces measuring 100 inches in diagonal and
above continues to grow. Wall screen sales decreased $0.2 million and were likely impacted by a slowdown in the housing market and increased competition from imports and larger plasma screens that has reduced the demand for the Companys
products used in home theaters and certain other applications. Portable screen sales increased $0.7 million due to demand from the rental market. Sales of other products increased $0.2 million from 2006 levels primarily due to sales of screen fabric
during the period. Net sales from the Companys European subsidiaries increased $0.6 million or 9.3%. The stronger Euro produced an increase of $0.4 million. An increase in volume of $0.2 million in Europe is primarily the result of an increase
in demand for electric screens.

Cost of Sales. The cost of sales was $27.1 million for the 13 weeks ended September 28,
2007, as compared to $26.5 million for the 13 weeks ended September 29, 2006, an increase of $0.6 million, or 2.3%. As a percentage of net sales, the cost of sales represented 61.5% and 62.1% for the 13 weeks ended September 28, 2007 and
for the 13 weeks ended September 29, 2006, respectively. This constitutes a 0.6 percentage-point improvement in margin. Margins at our U.S. facilities increased 0.9 percentage points due to a shift in customer and product mix in the period.
Margins at our European operations increased 0.2 percentage points reflecting the increase in product volumes.

Selling, General and
Administrative Expenses. Selling, general and administrative expenses were $4.8 million for the 13 weeks ended September 28, 2007, as compared to $4.1 million for the 13 weeks ended September 29, 2006. Selling, general and
administrative expenses in the U.S. increased $0.6 million as a result of increases in legal fees related to patent defense and marketing costs. Selling, general and administrative expenses in Europe increased $0.1 million as a result of the
stronger Euro.

Interest. Interest expense totaled $3.6 million for the 13 weeks ended September 28, 2007, as compared
to $3.4 million for the 13 weeks ended September 29, 2006, an increase of $0.2 million. The increase is attributed to the write-off of the deferred finance costs associated with the bonds repurchased in September of 2007.

Miscellaneous. Miscellaneous was an expense of $0.5 million for the 13 weeks ended September 28, 2007, as compared to income of $0.1 million
for the 13 weeks ended September 29, 2006, an increase of $0.6 million.

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 September 28, 2007 and for the 13 weeks ended September 29, 2006. The Company pays foreign income taxes on the earnings of its European subsidiaries.



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Net Income. As a result of the aforementioned factors, net income decreased $0.6 million from $8.4
million for the 13 weeks ended September 29, 2006 to $7.8 million for the 13 weeks ended September 28, 2007.

Thirty-Nine Weeks Ended
September 28, 2007, Compared with Thirty-Nine Weeks Ended September 29, 2006

Net Sales. Net sales were $128.0
million for the 39 weeks ended September 28, 2007, as compared to $129.1 million for the 39 weeks ended September 29, 2006, a decrease of $1.1 million or 0.9%. Net sales by the Companys United States (U.S.) operations decreased 0.4%.
In the U.S., electric screen sales increased $1.1 million primarily because demand for the Companys core business of electrically operated screens with viewing surfaces measuring 100 inches in diagonal and above continues to grow. Wall screen
sales decreased $1.5 million and were likely impacted by a slowdown in the housing market and increased competition from imports and larger plasma screens that has reduced the demand for the Companys products used in home theaters. Portable
screen sales increased $1.3 million due to demand from the rental market. Sales of other products decreased $1.3 million from 2006 levels primarily due to lower sales of screen fabric. Net sales from the Companys European subsidiaries
decreased $0.6 million or 3.0%. The stronger Euro produced an increase of $1.5 million. A decrease in volume of $2.1 million is primarily the result of a reduction in demand for screens attributed to the World Cup Soccer event in 2006.

Cost of Sales. The cost of sales was $78.5 million for the 39 weeks ended September 28, 2007, as compared to $78.4 million
for the 39 weeks ended September 29, 2006, an increase of $0.1 million, or 0.1%. As a percentage of net sales, the cost of sales represented 61.3% and 60.8% for the 39 weeks ended September 28, 2007 and for the 39 weeks ended
September 29, 2006, respectively. This constitutes a 0.5 percentage-point reduction in margin. Margins at our U.S. facilities did not change. Margins at our European operations decreased 2.0 percentage points reflecting the decrease in product
volumes.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $15.4 million for the 39
weeks ended September 28, 2007, as compared to $14.0 million for the 39 weeks ended September 29, 2006. Selling, general and administrative expenses in the U.S. increased $1.2 million due to increases in legal fees related to patent
defense and marketing costs. Selling, general and administrative expenses in Europe increased $0.2 million as a result of the stronger Euro.

Interest. Interest expense totaled $9.8 million for the 39 weeks ended September 28,
2007, as compared to $10.4 million for the 39 weeks ended September 29, 2006, a decrease of $0.6 million. The decrease was a result of a reduction in the outstanding amount of the 91/2% Senior Notes due 2011 issued in May 2004.

Miscellaneous. Miscellaneous was an expense of $1.0 million for the 39 weeks ended September 28, 2007, as compared to $0.4 million for the 39 weeks ended September 29, 2006, an increase of $0.6 million.

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 39 weeks ended September 28, 2007 and for the 39 weeks ended September 29, 2006. The Company
pays foreign income taxes on the earnings of its European subsidiaries.



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##### Table of Contents

Net Income. As a result of the aforementioned factors, net income decreased $1.8 million from
$24.4 million for the 39 weeks ended September 29, 2006 to $22.6 million for the 39 weeks ended September 28, 2007.

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.

In July 2007, the Company repurchased $4.0 million of the outstanding principal amount of its
91/2% senior notes from the open market for an aggregate purchase price of $4.3 million. The Company retired
these notes and wrote-off the related deferred financing costs and incurred a charge of $0.4 million during the third quarter of 2007 relating to the repurchase. In September 2007, the Company repurchased $5.3 million of the outstanding principal
amount of its 91/2% senior notes from the open market for an aggregate purchase price of $5.5 million. The
Company retired these notes and wrote-off the related deferred financing costs and incurred a charge of $0.5 million during the third quarter relating to the repurchase. 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 short-term investments), remaining
availability under its bank credit facilities and its excess working capital. At September 28, 2007, the Companys cash position was $9.2 million, a decrease of $7.7 million from December 29, 2006. Additionally, the Company had an
unsecured revolving credit facility, with maximum possible borrowings equal to $10.0 million, which expires in May 2008. Interest on any outstanding borrowings related to this line of credit is calculated at the prime rate, which was 7.75% on
September 28, 2007. At September 28, 2007 and December 29, 2006, the Company had no outstanding balances under this line of credit. Da-Lites working capital position decreased to $31.0 million (including $9.2 million of total
cash and short-term investments) at September 28, 2007, from $36.6 million (including $16.9 million of total cash and short-term investments) at December 29, 2006.

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 related to this line of credit is calculated at the Fortis Basic Rate plus 1.50%, the sum of which was 6.50% on September 28, 2007. At September 28, 2007 and December 29, 2006, Projecta had no
outstanding balances under this line of credit.

Cash Flows

For the 39 weeks ended September 28, 2007, cash provided by operating activities was $23.9 million, as compared to $28.9 million for the 39 weeks ended September 29, 2006, a decrease of $5.0 million or
17.4%. Cash provided by investing activities was $0.6 million for the 39 weeks ended September 28, 2007 and for the 39 weeks ended September 29, 2006. Cash provided by investing activities in 2007 resulted from a reduction in short-term
investments of $2.0 million, partially offset by capital expenditures of $1.4 million. In 2006, cash provided by investing activities resulted from a reduction in short-term investments of $1.0 million and the proceeds from the sale of the prior
manufacturing facility in the Netherlands of $1.3 million partially offset by capital expenditures of $1.8 million. Cash used in financing activities was $30.1 million during the 39 weeks ended September 28, 2007, as compared to



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##### Table of Contents

$27.3 million for the 39 weeks ended September 29, 2006. The increase in cash used for financing activities in 2007 was related to an increase of $5.3
million in the repurchase of the outstanding principal amount of the Companys 91/2% senior notes.

Capital Expenditures

Capital
expenditures were $1.4 million during the 39 weeks ended September 28, 2007 compared to $1.8 million during the 39 weeks ended September 29, 2006. The Companys management currently expects to spend approximately $2.5 million on
capital expenditures in 2007 using cash generated from operations.

Contractual Obligations

The following table sets forth, as of September 28, 2007, 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 |  | $                      | 180.7 |                 | $ | 12.4      |  | $         | 24.9 |                  | $ | 143.4 |  | 
|Self-insurance letter of credit                 |  |                        | 0.5   |                 |   | 0.5       |  |           |     |                  |   |      |  | 
|                                                |  |                        |       |                 |   |           |  |           |      |                  |   |       |  |  
|Total                                           |  | $                      | 181.2 |                 | $ | 12.9      |  | $         | 24.9 |                  | $ | 143.4 |  | 
|                                                |  |                        |       |                 |   |           |  |           |      |                  |   |       |  |  

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 $12.1 million and $13.0 million for the 39 weeks ended September 28, 2007 and
the 39 weeks ended September 29, 2006, respectively.

The Company has paid regular distributions to its stockholders in 2007 and 2006
at the monthly rate of $200 per share or $1.1 million in the aggregate, subject to the covenants contained in the indenture related to its notes.

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.



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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 6% of the Companys total outstanding receivables as of September 28, 2007. 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 $10.0 million revolving
credit facility in the U.S. is calculated at the prime rate, which was 7.75% on September 28, 2007. At September 28, 2007, the Company had no outstanding balances 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 September 28, 2007. At September 28, 2007, Projecta had no outstanding balances under this credit
facility.

At September 28, 2007, the Company had $130.9 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 $141 million from the fair value of approximately $137 million at September 28, 2007. 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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##### Table of Contents

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

During the 13 weeks ended September 28, 2007, two executive officers exercised options to purchase an aggregate of 75.0 shares of our common stock at an aggregate purchase price of $1,293,375. These transactions
were exempt from registration pursuant to, among other things, Section 4(2) of the Securities Act of 1933, as amended. The Company repurchased 2.0 shares from stockholders during the same period.



|Item 4. | Submission of Matters to a Vote of Security Holders.
|------- | ----------------------------------------------------

Our annual meeting of shareholders was held on July 26, 2007. Set forth below are the matters that were presented to and voted upon by our shareholders, and the results of such shareholders votes.

Election of directors.



|                   |  |           |  |                |  |              
|------------------ |  | --------- |  | -------------- |  | -------------
|Nominee            |  | Votes For |  | Votes Withheld |  | Votes Against
|James S. Cownie    |  | 5,358.12  |  |               |  |             
|                   |  |           | 
|James M. Hoak      |  | 5,358.12  |  |               |  |             
|                   |  |           | 
|Wayne Kern         |  | 5,358.12  |  |               |  |             
|                   |  |           | 
|Richard E. Lundin  |  | 5,358.12  |  |               |  |             
|                   |  |           | 
|David J. Lundquist |  | 5,358.12  |  |               |  |             
|                   |  |           | 
|David N. Walthall  |  | 5,358.12  |  |               |  |             



|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: October 29, 2007



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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