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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 June 29, 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 July 31, 2007, there were 5,360.12 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

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                            |  | 17  
|        |  |                                                                                      
|Item 4. |  | Controls and Procedures                                                               |  | 18  
|        |  |                                                                                      
|PART II |  | Other Information                                                                     |  |     
|        |  |                                                                                      
|Item 2. |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 19  
|        |  |                                                                                      
|Item 6. |  | Exhibits                                                                              |  | 19  
|        |  |                                                                                      
|        |  | Signatures                                                                            |  | 20  
|        |  |                                                                                      
|        |  | Exhibit Index                                                                         |  | 21  



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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 ofJune 29, 2007 |         |   | As ofDecember 29, 2006 |  
|Assets                                                                                                 |  |                               |         |   |                        |   |         |  
|Current Assets:                                                                                        |  |                               |         |   |                        |   |         |  
|Cash and cash equivalents                                                                              |  | $                             | 8,747   |   |                        | $ | 12,323  |  
|Short-term investments                                                                                 |  |                               | 2,550   |   |                        |   | 4,584   |  
|                                                                                                       |  |                               |         |   |                        |   |         |  
|Total cash and short-term investments                                                                  |  |                               | 11,297  |   |                        |   | 16,907  |  
|Accounts receivable, less allowance for doubtful accounts                                              |  |                               | 17,868  |   |                        |   | 16,620  |  
|Inventories                                                                                            |  |                               | 15,653  |   |                        |   | 13,629  |  
|Prepaid expenses and other                                                                             |  |                               | 1,538   |   |                        |   | 667     |  
|Prepaid income taxes                                                                                   |  |                               | 350     |   |                        |   | 136     |  
|                                                                                                       |  |                               |         |   |                        |   |         |  
|Total current assets                                                                                   |  |                               | 46,706  |   |                        |   | 47,959  |  
|                                                                                                       |  |                               |         |   |                        |   |         |  
|Property, plant and equipment                                                                          |  |                               | 57,778  |   |                        |   | 56,483  |  
|Less accumulated depreciation                                                                          |  |                               | 38,687  |   |                        |   | 36,761  |  
|                                                                                                       |  |                               |         |   |                        |   |         |  
|Net property, plant, and equipment                                                                     |  |                               | 19,091  |   |                        |   | 19,722  |  
|                                                                                                       |  |                               |         |   |                        |   |         |  
|Goodwill                                                                                               |  |                               | 26,597  |   |                        |   | 26,454  |  
|Other assets, net                                                                                      |  |                               | 3,358   |   |                        |   | 3,361   |  
|                                                                                                       |  |                               |         |   |                        |   |         |  
|                                                                                                       |  | $                             | 95,752  |   |                        | $ | 97,496  |  
|                                                                                                       |  |                               |         |   |                        |   |         |  
|                                                                                                       |  |                              
|Liabilities and Stockholders Deficit                                                                  |  |                               |         |   |                        |   |         |  
|Current liabilities:                                                                                   |  |                               |         |   |                        |   |         |  
|Accounts payable                                                                                       |  | $                             | 3,808   |   |                        | $ | 4,388   |  
|Accrued expenses                                                                                       |  |                               |         |   |                        |   |         |  
|Interest                                                                                               |  |                               | 1,665   |   |                        |   | 1,656   |  
|Other                                                                                                  |  |                               | 5,307   |   |                        |   | 5,359   |  
|                                                                                                       |  |                               |         |   |                        |   |         |  
|Total accrued expenses                                                                                 |  |                               | 6,972   |   |                        |   | 7,015   |  
|                                                                                                       |  |                               |         |   |                        |   |         |  
|Total current liabilities                                                                              |  |                               | 10,780  |   |                        |   | 11,403  |  
|Long-term debt                                                                                         |  |                               | 140,200 |   |                        |   | 140,200 |  
|                                                                                                       |  |                               |         |   |                        |   |         |  
|Total liabilities                                                                                      |  |                               | 150,980 |   |                        |   | 151,603 |  
|                                                                                                       |  |                               |         |   |                        |   |         |  
|Minority interest                                                                                      |  |                               | 1,161   |   |                        |   | 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                                                                             |  |                               | 650     |   |                        |   | 618     |  
|Accumulated deficit                                                                                    |  |                               | (35,933 | ) |                        |   | (34,479 | )
|Accumulated other comprehensive income                                                                 |  |                               | 3,216   |   |                        |   | 2,750   |  
|Less treasury stock, 5,325.88 shares at June 29, 2007 and 5,321.88 shares at December 29, 2006 at cost |  |                               | (24,333 | ) |                        |   | (24,119 | )
|                                                                                                       |  |                               |         |   |                        |   |         |  
|Total stockholders deficit                                                                            |  |                               | (56,389 | ) |                        |   | (55,219 | )
|                                                                                                       |  |                               |         |   |                        |   |         |  
|                                                                                                       |  | $                             | 95,752  |   |                        | $ | 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 WeeksEnded June 29,2007 |        | 13 WeeksEnded June 30,2006 |   | 26 WeeksEnded June 29,2007 |  | 26 WeeksEnded June 30,2006
|Net sales                                        |  | $                          | 42,440 |                            | $ | 43,367                     |  | $                          | 83,947 |  | $ | 86,343
|Cost of sales                                    |  |                            | 26,325 |                            |   | 26,229                     |  |                            | 51,450 |  |   | 51,884
|                                                 |  |                            |        |                            |   |                            |  |                            |        |  |   |       
|Gross profit                                     |  |                            | 16,115 |                            |   | 17,138                     |  |                            | 32,497 |  |   | 34,459
|Selling, general, and administrative expenses    |  |                            | 5,401  |                            |   | 4,588                      |  |                            | 10,600 |  |   | 9,967 
|                                                 |  |                            |        |                            |   |                            |  |                            |        |  |   |       
|Operating income                                 |  |                            | 10,714 |                            |   | 12,550                     |  |                            | 21,897 |  |   | 24,492
|                                                 |  |                            |        |                            |   |                            |  |                            |        |  |   |       
|Other expense:                                   |  |                            |        |                            |   |                            |  |                            |        |  |   |       
|Interest                                         |  |                            | 3,291  |                            |   | 3,572                      |  |                            | 6,244  |  |   | 7,058 
|Miscellaneous                                    |  |                            | 222    |                            |   | 524                        |  |                            | 411    |  |   | 523   
|                                                 |  |                            |        |                            |   |                            |  |                            |        |  |   |       
|Total other expense                              |  |                            | 3,513  |                            |   | 4,096                      |  |                            | 6,655  |  |   | 7,581 
|                                                 |  |                            |        |                            |   |                            |  |                            |        |  |   |       
|Income before income taxes and minority interest |  |                            | 7,201  |                            |   | 8,454                      |  |                            | 15,242 |  |   | 16,911
|Income taxes                                     |  |                            | 132    |                            |   | 441                        |  |                            | 386    |  |   | 781   
|Minority interest                                |  |                            | 19     |                            |   | 42                         |  |                            | 49     |  |   | 75    
|                                                 |  |                            |        |                            |   |                            |  |                            |        |  |   |       
|Net income                                       |  | $                          | 7,050  |                            | $ | 7,971                      |  | $                          | 14,807 |  | $ | 16,055
|                                                 |  |                            |        |                            |   |                            |  |                            |        |  |   |       

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)



|                                                                                  |  |                            |         |   |                            |   |         |  
|--------------------------------------------------------------------------------- |  | -------------------------- | ------- | - | -------------------------- | - | ------- | -
|                                                                                  |  | 26 WeeksEnded June 29,2007 |         |   | 26 WeeksEnded June 30,2006 |  
|Cash flows from operating activities:                                             |  |                            |         |   |                            |   |         |  
|Net income                                                                        |  | $                          | 14,807  |   |                            | $ | 16,055  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                            |         |   |                            |   |         |  
|Depreciation                                                                      |  |                            | 1,805   |   |                            |   | 2,053   |  
|Amortization and write-off of debt issuance costs                                 |  |                            | 3       |   |                            |   | 493     |  
|Minority interest earnings                                                        |  |                            | 49      |   |                            |   | 75      |  
|Change in:                                                                        |  |                            |         |   |                            |   |         |  
|Accounts receivable                                                               |  |                            | (1,170  | ) |                            |   | (1,896  | )
|Inventories                                                                       |  |                            | (1,942  | ) |                            |   | (195    | )
|Prepaid expenses and other                                                        |  |                            | (866    | ) |                            |   | (1,045  | )
|Accounts payable                                                                  |  |                            | (631    | ) |                            |   | (643    | )
|Accrued expenses                                                                  |  |                            | (283    | ) |                            |   | 342     |  
|Other                                                                             |  |                            |        |   |                            |   | 963     |  
|                                                                                  |  |                            |         |   |                            |   |         |  
|Net cash provided by operating activities                                         |  |                            | 11,772  |   |                            |   | 16,202  |  
|                                                                                  |  |                            |         |   |                            |   |         |  
|Cash flows from investing activities:                                             |  |                            |         |   |                            |   |         |  
|Purchase of property, plant and equipment                                         |  |                            | (920    | ) |                            |   | (1,495  | )
|Purchases of short-term investments                                               |  |                            | (2,550  | ) |                            |   | (4,533  | )
|Maturities of short-term investments                                              |  |                            | 4,584   |   |                            |   | 5,539   |  
|                                                                                  |  |                            |         |   |                            |   |         |  
|Net cash provided by (used in) investing activities                               |  |                            | 1,114   |   |                            |   | (489    | )
|                                                                                  |  |                            |         |   |                            |   |         |  
|Cash flows from financing activities:                                             |  |                            |         |   |                            |   |         |  
|Payments to retire senior notes                                                   |  |                            |        |   |                            |   | (4,000  | )
|Distributions to stockholders                                                     |  |                            | (16,261 | ) |                            |   | (16,530 | )
|Repurchase of common stock                                                        |  |                            | (227    | ) |                            |   | (338    | )
|Exercise of common stock options                                                  |  |                            | 45      |   |                            |   | 84      |  
|                                                                                  |  |                            |         |   |                            |   |         |  
|Net cash used in financing activities                                             |  |                            | (16,443 | ) |                            |   | (20,784 | )
|                                                                                  |  |                            |         |   |                            |   |         |  
|Effect of foreign currency exchange rate changes on cash and cash equivalents     |  |                            | (19     | ) |                            |   | 114     |  
|                                                                                  |  |                            |         |   |                            |   |         |  
|Net change in cash and cash equivalents                                           |  |                            | (3,576  | ) |                            |   | (4,957  | )
|Cash and cash equivalents at beginning of period                                  |  |                            | 12,323  |   |                            |   | 7,008   |  
|                                                                                  |  |                            |         |   |                            |   |         |  
|Cash and cash equivalents at end of period                                        |  | $                          | 8,747   |   |                            | $ | 2,051   |  
|                                                                                  |  |                            |         |   |                            |   |         |  

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 second 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.



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Allowance for Doubtful Accounts

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

Goodwill

Goodwill represents the excess of purchase price over the fair value of identifiable net assets
acquired. The Company applies the provisions of 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 June 29, 2007. The change in the balance of goodwill from December 29, 2006 to June 29, 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. This statement is expected to expand the use of fair value measurement. 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.



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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.

3. Reclassification

Certain cash flow information for the twenty six weeks ended June 30, 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 twenty six weeks ended June 30, 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 twenty six weeks ended June 30, 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 June 29, 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 redeem any of the Notes beginning on May 15, 2007 with an initial redemption price of 109.5% of their principal amount plus accrued interest. Any outstanding principal is due in May
2011 and interest is payable semi-annually in arrears on May 15 and November 15 of each year.



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In the Indenture related to the 91/2% Senior Notes due 2011, the Company agreed to covenants that limit it and its restricted subsidiaries (i.e.,
Projecta B.V., Procolor S.A.S.) ability, among other things, to: (a) incur additional debt and issue preferred stock, (b) pay dividends, acquire shares of capital stock, make payments on subordinated debt or make investments,
(c) place limitations on distributions from restricted subsidiaries, (d) issue or sell capital stock of restricted subsidiaries, (e) issue guarantees, (f) sell or exchange assets, (g) enter into transactions with
stockholders and affiliates, (h) create liens and (i) effect mergers. In addition, if a change of control occurs, each holder of Notes will have the right to require the Company to repurchase all or part of the holders Notes at a
price equal to 101% of their principal amount, plus any accrued interest to the date of purchase. The Company was in compliance with all covenants at June 29, 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 which replaced the $5.0
million revolving credit facility that expired in May 2006. At June 29, 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 8.25% on June 29, 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 6.25% on
June 29, 2007. At June 29, 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 first half 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                        |  | (3           | ) |  | $                    | (15,418 | ) |                                         |   |      
|Forfeited                        |  | (2           | ) |  | $                    | (9,000  | ) |                                         |   |      
|                                 |  |              |   |  |                      |         |   |                                         |   |      
|Outstanding at June 29, 2007     |  | 139          |   |  | $                    | 17,127  |   |                                         | $ | 1,596
|                                 |  |              |   |  |                      |         |   |                                         |   |      
|Exercisable at June 29, 2007     |  | 139          |   |  | $                    | 17,127  |   |                                         | $ | 1,596



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##### Table of Contents

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):



|                 |  |               |        |                  |   |       
|---------------- |  | ------------- | ------ | ---------------- | - | ------
|                 |  | June 29, 2007 |        | December 29,2006
|Raw materials    |  | $             | 9,731  |                  | $ | 7,714 
|Work in progress |  |               | 2,393  |                  |   | 2,069 
|Finished goods   |  |               | 3,529  |                  |   | 3,846 
|                 |  |               |        |                  |   |       
|                 |  | $             | 15,653 |                  | $ | 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 Weeks Ended June 29, 2007 |       | 13 WeeksEnded June 30, 2006 |   | 26 weeks Ended June 29, 2007 |  | 26 weeksEnded June 30, 2006
|Net income                               |  | $                            | 7,050 |                             | $ | 7,971                        |  | $                           | 14,807 |  | $ | 16,055
|Other comprehensive income:              |  |                              |       |                             |   |                              |  |                             |        |  |   |       
|Foreign exchange translation adjustments |  |                              | 184   |                             |   | 1,109                        |  |                             | 466    |  |   | 1,614 
|                                         |  |                              |       |                             |   |                              |  |                             |        |  |   |       
|Total comprehensive income               |  | $                            | 7,234 |                             | $ | 9,080                        |  | $                           | 15,273 |  | $ | 17,669
|                                         |  |                              |       |                             |   |                              |  |                             |        |  |   |       



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##### Table of Contents

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):



|                              |  |                              |        |                             |   |                              |  |                             |        |  |   |       
|----------------------------- |  | ---------------------------- | ------ | --------------------------- | - | ---------------------------- |  | --------------------------- | ------ |  | - | ------
|For the thirteen weeks ended: |  | 13 Weeks Ended June 29, 2007 |        | 13 WeeksEnded June 30, 2006 |   | 26 Weeks Ended June 29, 2007 |  | 26 WeeksEnded June 30, 2006
|Net sales:                    |  |                              |        |                             |   |                              |  |                             |        |  |   |       
|United States                 |  | $                            | 36,080 |                             | $ | 35,851                       |  | $                           | 70,517 |  | $ | 71,730
|Europe                        |  |                              | 6,360  |                             |   | 7,516                        |  |                             | 13,430 |  |   | 14,613
|                              |  |                              |        |                             |   |                              |  |                             |        |  |   |       
|Total net sales               |  | $                            | 42,440 |                             | $ | 43,367                       |  | $                           | 83,947 |  | $ | 86,343
|                              |  |                              |        |                             |   |                              |  |                             |        |  |   |       
|Operating income:             |  |                              |        |                             |   |                              |  |                             |        |  |   |       
|United States                 |  | $                            | 10,098 |                             | $ | 11,070                       |  | $                           | 20,284 |  | $ | 21,860
|Europe                        |  |                              | 616    |                             |   | 1,480                        |  |                             | 1,613  |  |   | 2,632 
|                              |  |                              |        |                             |   |                              |  |                             |        |  |   |       
|Total operating income        |  | $                            | 10,714 |                             | $ | 12,550                       |  | $                           | 21,897 |  | $ | 24,492
|                              |  |                              |        |                             |   |                              |  |                             |        |  |   |       



|              |  |               |        |                   |   |       
|------------- |  | ------------- | ------ | ----------------- | - | ------
|As of:        |  | June 29, 2007 |        | December 29, 2006
|Total assets  |  |               |        |                   |   |       
|United States |  | $             | 72,284 |                   | $ | 73,512
|Europe        |  |               | 23,468 |                   |   | 23,984
|              |  |               |        |                   |   |       
|Total assets  |  | $             | 95,752 |                   | $ | 97,496
|              |  |               |        |                   |   |       



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##### Table of Contents

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.

10. Subsequent Event

Subsequent to
June 29, 2007, the Company repurchased $4.0 million of the outstanding $140.2 million principal amount of its 91/2% Senior Notes due 2011 from the open market using cash on hand for an aggregate purchase price of $4.3 million. The Company retired these Notes and expects to incur an expense of $0.4 million during the third quarter related to the
premium paid in the transaction and the write-off of deferred financing costs.



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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 June 29, 2007, the Companys critical accounting policies had not changed from December 29, 2006.



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##### Table of Contents

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. This statement is expected to expand the use of fair value measurement. 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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##### Table of Contents

Results of Operations

Thirteen Weeks Ended June 29, 2007, Compared with Thirteen Weeks Ended June 30, 2006

Net Sales. Net
sales were $42.4 million for the 13 weeks ended June 29, 2007, as compared to $43.4 million for the 13 weeks ended June 30, 2006, a decrease of $1.0 million or 2.3%. Net sales by the Companys United States (U.S.) operations increased
0.6 %. In the U.S., electric screen sales increased $0.4 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 $0.6 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 $0.7 million due to demand from the rental market. Sales of other products decreased $0.3 million from 2006 levels primarily due to lower sales of screen fabric. Net sales from the Companys European subsidiaries
decreased $1.2 million or 15.4%. The stronger Euro produced an increase of $0.4 million. A decrease in volume of $1.6 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 $26.3 million for the 13 weeks ended June 29, 2007, as compared to $26.2 million for
the 13 weeks ended June 30, 2006, an increase of $0.1 million, or 0.4%. As a percentage of net sales, the cost of sales represented 62.0% and 60.5% for the 13 weeks ended June 29, 2007 and for the 13 weeks ended June 30, 2006,
respectively. This constitutes a 1.5 percentage-point reduction in margin. Margins at our U.S. facilities decreased 0.9 points due to a shift in customer and product mix in the period. Margins at our European operations decreased 4.0 points
reflecting the decrease in product volumes.

Selling, General and Administrative Expenses. Selling, general and administrative
expenses were $5.4 million for the 13 weeks ended June 29, 2007, as compared to $4.6 million for the 13 weeks ended June 30, 2006. Selling, general and administrative expenses in the U.S. increased $0.7 million as a result of increases in
legal fees related to patent defense, marketing costs and bad debts. Selling, general and administrative expenses in Europe increased $0.1 million as a result of increases in marketing costs.

Interest. Interest expense totaled $3.3 million for the 13 weeks ended June 29, 2007,
as compared to $3.6 million for the 13 weeks ended June 30, 2006, a decrease of $0.3 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 $0.2 million for the 13 weeks ended June 29, 2007, as compared to $0.5 million for the 13 weeks ended June 30, 2006, a decrease of $0.3 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 June 29, 2007 and for the 13 weeks ended June 30, 2006. The Company pays foreign
income taxes on the earnings of its European subsidiaries.

Net Income. As a result of the aforementioned factors, net income
decreased $0.9 million from $8.0 million for the 13 weeks ended June 30, 2006 to $7.1 million for the 13 weeks ended June 29, 2007.



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##### Table of Contents

Twenty-Six Weeks Ended June 29, 2007, Compared with Twenty-Six Weeks Ended June 30, 2006

Net Sales. Net sales were $83.9 million for the 26 weeks ended June 29, 2007, as compared to $86.3 million for the 26
weeks ended June 30, 2006, a decrease of $2.4 million or 2.8%. Net sales by the Companys United States (U.S.) operations decreased 1.7%. In the U.S., electric screen sales increased $1.0 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 $1.4 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 $0.6 million due to demand from the rental market. Sales of other
products decreased $1.4 million from 2006 levels primarily due to lower sales of screen fabric. Net sales from the Companys European subsidiaries decreased $1.2 million or 8.1%. The stronger Euro produced an increase of $1.0 million. A
decrease in volume of $2.2 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 $51.5 million for the 26 weeks ended June 29, 2007, as compared to $51.9 million for the 26 weeks ended June 30, 2006, a decrease of $0.4 million, or 0.8%. As a
percentage of net sales, the cost of sales represented 61.3% and 60.1% for the 26 weeks ended June 29, 2007 and for the 26 weeks ended June 30, 2006, respectively. This constitutes a 1.2 percentage-point reduction in margin. Margins at our
U.S. facilities decreased 0.6 points due to a shift in customer and product mix in the period. Margins at our European operations decreased 2.9 points reflecting the decrease in product volumes.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $10.6 million for the 26 weeks ended June 29,
2007, as compared to $10.0 million for the 26 weeks ended June 30, 2006. Selling, general and administrative expenses in the U.S. increased $0.5 million as increases in legal fees related to patent defense were partially offset by decreases in
compensation costs of $0.1 million and travel costs of $0.1 million. Selling, general and administrative expenses in Europe increased $0.1 million as a result of increases in marketing costs.

Interest. Interest expense totaled $6.2 million for the 26 weeks ended June 29, 2007,
as compared to $7.1 million for the 26 weeks ended June 30, 2006, a decrease of $0.9 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 $0.4 million for the 26 weeks ended June 29, 2007, as compared to $0.5 million for the 26 weeks ended June 30, 2006, a decrease of $0.1 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 26 weeks ended June 29, 2007 and for the 26 weeks ended June 30, 2006. The Company pays foreign
income taxes on the earnings of its European subsidiaries.

Net Income. As a result of the aforementioned factors, net income
decreased $1.3 million from $16.1 million for the 26 weeks ended June 30, 2006 to $14.8 million for the 26 weeks ended June 29, 2007.



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##### Table of Contents

Liquidity and Capital Resources

The Company expects to be able to fund its working capital requirements, interest expense, capital expenditures and its distributions to stockholders with cash generated from operations, although there can be no
assurances in this regard.

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 June 29, 2007, the Companys cash position was $11.3 million, a decrease of $5.6 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 8.25% on
June 29, 2007. At June 29, 2007 and December 29, 2006, the Company had no outstanding balances under this line of credit. Da-Lites working capital position decreased to $35.9 million (including $11.3 million of total cash and
short-term investments) at June 29, 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 6.25% on June 29, 2007. At June 29, 2007 and December 29, 2006, Projecta had no outstanding balances under this line of credit.

Cash Flows

For the 26 weeks ended June 29, 2007, cash provided by operating activities was $11.8 million, as compared to $16.2 million for the 26 weeks ended June 30, 2006, a decrease of $4.4 million or 27.3%. Cash
provided by investing activities was $1.1 million for the 26 weeks ended June 29, 2007, as compared to a use of $0.5 million for the 26 weeks ended June 30, 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 $0.9 million. In 2006, cash used in investing activities resulted from a reduction in short-term investments of $1.0 million offset by capital expenditures of $1.5
million. Cash used in financing activities was $16.4 million during the 26 weeks ended June 29, 2007, as compared to $20.8 million for the 26 weeks ended June 30, 2006. The decrease in cash used for financing activities in 2007 was related
to the 2006 repurchase of $4.0 million of the outstanding principal amount of the Companys 91/2% senior
notes.



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##### Table of Contents

Capital Expenditures

Capital expenditures were $0.9 million during the 26 weeks ended June 29, 2007 compared to $1.5 million during the 26 weeks ended June 30, 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 June 29, 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 |  | $                      | 193.5 |                 | $ | 13.3      |  | $         | 26.6 |                  | $ | 153.6 |  | 
|Self-insurance letter of credit                 |  |                        | 0.5   |                 |   | 0.5       |  |           |     |                  |   |      |  | 
|                                                |  |                        |       |                 |   |           |  |           |      |                  |   |       |  |  
|Total                                           |  | $                      | 194.0 |                 | $ | 13.8      |  | $         | 26.6 |                  | $ | 153.6 |  | 
|                                                |  |                        |       |                 |   |           |  |           |      |                  |   |       |  |  

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 $9.7 million and $10.0 million for the 26 weeks ended June 29, 2007 and the 26
weeks ended June 30, 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.

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 5% of the Companys total outstanding receivables as of June 29, 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 8.25% on June 29, 2007. At June 29, 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 6.25% on June 29, 2007. At June 29, 2007, Projecta had no outstanding balances under this credit facility.

At June 29, 2007, the Company had $140.2 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 $151 million from the fair value of approximately $147 million at June 29, 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 June 29, 2007, two employees exercised options to purchase an aggregate of 3.0 shares of our common stock at an aggregate purchase price of $46,254. 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 a stockholder 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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##### 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: July 31, 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  



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