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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549





FORM 10-Q







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

For the quarterly period ended September 26, 2008

OR



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

For the transition period from  to

Commission File Number 333-116673





DA-LITE SCREEN COMPANY, INC.

(Exact Name of Registrant as Specified in its
Charter)







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

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





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

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





Indicate by check mark whether
the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈

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

Large accelerated filer   ̈    Accelerated filer   ̈    Non-accelerated filer  x    Smaller reporting Company   ̈

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

As of October 28, 2008, there were 5,410.62 shares of the registrants common stock outstanding (all of which are privately owned and are not traded on any public market).









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TABLE OF CONTENTS



|                             |  |                                                                                       |  |     
|---------------------------- |  | ------------------------------------------------------------------------------------- |  | ----
|                             |  |                                                                                       |  | Page
|PART I Financial Information |  |                                                                                      
|                             |  |                                                                                      
|Item 1.                      |  | Condensed Consolidated Financial Statements (unaudited)                               |  | 1   
|                             |  |                                                                                      
|Item 2.                      |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 10  
|                             |  |                                                                                      
|Item 3.                      |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 16  
|                             |  |                                                                                      
|Item 4.                      |  | Controls and Procedures                                                               |  | 17  
|                             | 
|PART II Other Information    |  |                                                                                      
|                             |  |                                                                                      
|Item 2.                      |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 18  
|                             |  |                                                                                      
|Item 4.                      |  | Submission of Matters to a Vote of Security Holders                                   |  | 18  
|                             |  |                                                                                      
|Item 6.                      |  | Exhibits                                                                              |  | 18  
|                             |  |                                                                                      
|                             |  | Signatures                                                                            |  | 19  
|                             |  |                                                                                      
|                             |  | Exhibit Index                                                                         |  | 20  



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PART I

FINANCIAL INFORMATION



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

DA-LITE SCREEN COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except par value amount)



|                                                                                                            |  |                                   |         |   |                       |   |         |  
|----------------------------------------------------------------------------------------------------------- |  | --------------------------------- | ------- | - | --------------------- | - | ------- | -
|                                                                                                            |  | (Unaudited)As ofSeptember 26,2008 |         |   | As ofDecember 28,2007 |  
|Assets                                                                                                      |  |                                   |         |   |                       |   |         |  
|Current Assets:                                                                                             |  |                                   |         |   |                       |   |         |  
|Cash and cash equivalents                                                                                   |  | $                                 | 3,288   |   |                       | $ | 5,704   |  
|Short-term investments                                                                                      |  |                                   | 5,000   |   |                       |   | 2,550   |  
|                                                                                                            |  |                                   |         |   |                       |   |         |  
|Total cash and cash equivalents and short-term investments                                                  |  |                                   | 8,288   |   |                       |   | 8,254   |  
|Accounts receivable, less allowance for doubtful accounts                                                   |  |                                   | 18,384  |   |                       |   | 17,492  |  
|Inventories                                                                                                 |  |                                   | 14,982  |   |                       |   | 14,999  |  
|Prepaid expenses and other                                                                                  |  |                                   | 2,053   |   |                       |   | 1,921   |  
|Prepaid income taxes                                                                                        |  |                                   | 295     |   |                       |   | 208     |  
|                                                                                                            |  |                                   |         |   |                       |   |         |  
|Total current assets                                                                                        |  |                                   | 44,002  |   |                       |   | 42,874  |  
|                                                                                                            |  |                                   |         |   |                       |   |         |  
|Property, plant and equipment                                                                               |  |                                   | 60,967  |   |                       |   | 59,933  |  
|Less accumulated depreciation                                                                               |  |                                   | 42,548  |   |                       |   | 40,618  |  
|                                                                                                            |  |                                   |         |   |                       |   |         |  
|Net property, plant, and equipment                                                                          |  |                                   | 18,419  |   |                       |   | 19,315  |  
|                                                                                                            |  |                                   |         |   |                       |   |         |  
|Goodwill                                                                                                    |  |                                   | 27,074  |   |                       |   | 27,129  |  
|Other assets, net                                                                                           |  |                                   | 1,966   |   |                       |   | 2,583   |  
|                                                                                                            |  |                                   |         |   |                       |   |         |  
|                                                                                                            |  | $                                 | 91,461  |   |                       | $ | 91,901  |  
|                                                                                                            |  |                                   |         |   |                       |   |         |  
|Liabilities and Stockholders Deficit                                                                       |  |                                   |         |   |                       |   |         |  
|Current liabilities:                                                                                        |  |                                   |         |   |                       |   |         |  
|Accounts payable                                                                                            |  | $                                 | 4,259   |   |                       | $ | 4,766   |  
|Accrued expenses                                                                                            |  |                                   |         |   |                       |   |         |  
|Interest                                                                                                    |  |                                   | 4,312   |   |                       |   | 1,464   |  
|Other                                                                                                       |  |                                   | 6,059   |   |                       |   | 5,375   |  
|                                                                                                            |  |                                   |         |   |                       |   |         |  
|Total accrued expenses                                                                                      |  |                                   | 10,371  |   |                       |   | 6,839   |  
|                                                                                                            |  |                                   |         |   |                       |   |         |  
|Total current liabilities                                                                                   |  |                                   | 14,630  |   |                       |   | 11,605  |  
|Long-term debt                                                                                              |  |                                   | 124,730 |   |                       |   | 128,980 |  
|                                                                                                            |  |                                   |         |   |                       |   |         |  
|Total liabilities                                                                                           |  |                                   | 139,360 |   |                       |   | 140,585 |  
|                                                                                                            |  |                                   |         |   |                       |   |         |  
|Minority interest                                                                                           |  |                                   | 19      |   |                       |   | 801     |  
|                                                                                                            |  |                                  
|Commitments and contingencies (note 9)                                                                      |  |                                   |         |   |                       |   |         |  
|                                                                                                            |  |                                  
|Stockholders deficit:                                                                                      |  |                                   |         |   |                       |   |         |  
|Common stock, $1 par value. Authorized 1,000,000 shares; issued 10,686 shares                               |  |                                   | 11      |   |                       |   | 11      |  
|Additional paid-in capital                                                                                  |  |                                   | 1,710   |   |                       |   | 1,615   |  
|Accumulated deficit                                                                                         |  |                                   | (29,395 | ) |                       |   | (31,827 | )
|Accumulated other comprehensive income                                                                      |  |                                   | 4,634   |   |                       |   | 4,980   |  
|Less treasury stock, 5,275.38 shares at September 26, 2008 and 5,259.38 shares at December 28, 2007 at cost |  |                                   | (24,878 | ) |                       |   | (24,264 | )
|                                                                                                            |  |                                   |         |   |                       |   |         |  
|Total stockholders deficit                                                                                 |  |                                   | (47,918 | ) |                       |   | (49,485 | )
|                                                                                                            |  |                                   |         |   |                       |   |         |  
|                                                                                                            |  | $                                 | 91,461  |   |                       | $ | 91,901  |  
|                                                                                                            |  |                                   |         |   |                       |   |         |  

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 26,2008 |        | 13 WeeksEndedSeptember 28,2007 |   | 39 WeeksEndedSeptember 26,2008 |  | 39 WeeksEndedSeptember 28,2007
|Net sales                                        |  | $                              | 42,952 |                                | $ | 44,091                         |  | $                              | 129,847 |  | $ | 128,038
|Cost of sales                                    |  |                                | 26,883 |                                |   | 27,098                         |  |                                | 79,820  |  |   | 78,548 
|                                                 |  |                                |        |                                |   |                                |  |                                |         |  |   |        
|Gross profit                                     |  |                                | 16,069 |                                |   | 16,993                         |  |                                | 50,027  |  |   | 49,490 
|Selling, general, and administrative expenses    |  |                                | 4,888  |                                |   | 4,759                          |  |                                | 16,911  |  |   | 15,359 
|                                                 |  |                                |        |                                |   |                                |  |                                |         |  |   |        
|Operating income                                 |  |                                | 11,181 |                                |   | 12,234                         |  |                                | 33,116  |  |   | 34,131 
|                                                 |  |                                |        |                                |   |                                |  |                                |         |  |   |        
|Other expense:                                   |  |                                |        |                                |   |                                |  |                                |         |  |   |        
|Interest                                         |  |                                | 3,044  |                                |   | 3,568                          |  |                                | 9,361   |  |   | 9,812  
|Miscellaneous, net                               |  |                                | 60     |                                |   | 543                            |  |                                | 52      |  |   | 954    
|                                                 |  |                                |        |                                |   |                                |  |                                |         |  |   |        
|Total other expense                              |  |                                | 3,104  |                                |   | 4,111                          |  |                                | 9,413   |  |   | 10,766 
|                                                 |  |                                |        |                                |   |                                |  |                                |         |  |   |        
|Income before income taxes and minority interest |  |                                | 8,077  |                                |   | 8,123                          |  |                                | 23,703  |  |   | 23,365 
|Income taxes                                     |  |                                | 204    |                                |   | 330                            |  |                                | 800     |  |   | 716    
|Minority interest                                |  |                                |       |                                |   | 35                             |  |                                | 33      |  |   | 84     
|                                                 |  |                                |        |                                |   |                                |  |                                |         |  |   |        
|Net income                                       |  | $                              | 7,873  |                                | $ | 7,758                          |  | $                              | 22,870  |  | $ | 22,565 
|                                                 |  |                                |        |                                |   |                                |  |                                |         |  |   |        

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 26,2008 |         |   | 39 weeksEndedSeptember 28,2007 |  
|Cash flows from operating activities:                                             |  |                                |         |   |                                |   |         |  
|Net income                                                                        |  | $                              | 22,870  |   |                                | $ | 22,565  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                                |         |   |                                |   |         |  
|Depreciation                                                                      |  |                                | 2,404   |   |                                |   | 2,605   |  
|Amortization and write-off of debt issuance costs                                 |  |                                | 618     |   |                                |   | 524     |  
|Gain on disposal of assets                                                        |  |                                | (43     | ) |                                |   |        |  
|Minority interest earnings                                                        |  |                                | 33      |   |                                |   | 84      |  
|Change in:                                                                        |  |                                |         |   |                                |   |         |  
|Accounts receivable                                                               |  |                                | (914    | ) |                                |   | (1,551  | )
|Inventories                                                                       |  |                                | (13     | ) |                                |   | (1,621  | )
|Prepaid expenses and other                                                        |  |                                | (132    | ) |                                |   | (944    | )
|Accounts payable                                                                  |  |                                | (488    | ) |                                |   | 1       |  
|Accrued expenses                                                                  |  |                                | 3,435   |   |                                |   | 2,226   |  
|Other                                                                             |  |                                | (1      | ) |                                |   |        |  
|                                                                                  |  |                                |         |   |                                |   |         |  
|Net cash provided by operating activities                                         |  |                                | 27,769  |   |                                |   | 23,889  |  
|                                                                                  |  |                                |         |   |                                |   |         |  
|                                                                                  |  |                               
|Cash flows from investing activities:                                             |  |                                |         |   |                                |   |         |  
|Proceeds from sale of assets                                                      |  |                                | 43      |   |                                |   |        |  
|Payments for purchase of minority shares                                          |  |                                | (956    | ) |                                |   |        |  
|Purchase of property, plant and equipment                                         |  |                                | (1,317  | ) |                                |   | (1,444  | )
|Purchases of short-term investments                                               |  |                                | (5,000  | ) |                                |   | (3,550  | )
|Maturities of short-term investments                                              |  |                                | 2,550   |   |                                |   | 5,584   |  
|                                                                                  |  |                                |         |   |                                |   |         |  
|Net cash (used in) provided by investing activities                               |  |                                | (4,680  | ) |                                |   | 590     |  
|                                                                                  |  |                                |         |   |                                |   |         |  
|                                                                                  |  |                               
|Cash flows from financing activities:                                             |  |                                |         |   |                                |   |         |  
|Payment to retire senior notes                                                    |  |                                | (4,250  | ) |                                |   | (9,275  | )
|Distributions to stockholders                                                     |  |                                | (20,440 | ) |                                |   | (21,868 | )
|Repurchase of common stock                                                        |  |                                | (651    | ) |                                |   | (286    | )
|Exercise of common stock options                                                  |  |                                | 132     |   |                                |   | 1,340   |  
|                                                                                  |  |                                |         |   |                                |   |         |  
|Net cash used in financing activities                                             |  |                                | (25,209 | ) |                                |   | (30,089 | )
|                                                                                  |  |                                |         |   |                                |   |         |  
|Effect of foreign currency exchange rate changes on cash and cash equivalents     |  |                                | (296    | ) |                                |   | (82     | )
|                                                                                  |  |                                |         |   |                                |   |         |  
|Net change in cash and cash equivalents                                           |  |                                | (2,416  | ) |                                |   | (5,692  | )
|Cash and cash equivalents at beginning of period                                  |  |                                | 5,704   |   |                                |   | 12,323  |  
|                                                                                  |  |                                |         |   |                                |   |         |  
|Cash and cash equivalents at end of period                                        |  | $                              | 3,288   |   |                                | $ | 6,631   |  
|                                                                                  |  |                                |         |   |                                |   |         |  

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 28, 2007. 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 99.9% owned by Da-Lite and
Projectas wholly-owned subsidiary Procolor S.A.S. (Procolor), a French corporation. All intercompany accounts and transactions have been eliminated.

The Company uses a 52- or 53-week fiscal year ending on the last Friday of December. The third quarters of 2008 and 2007 were 13-week periods. The Companys 2008 and 2007 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, title has
transferred to customer, the sales price is fixed or determinable and the collectibility of sales price is reasonably assured. All amounts billed to customers in a sales transaction related to shipping and handling are recorded as revenue, and costs
incurred by the Company for shipping and handling are recorded as cost of sales in conformity with Emerging Issues Task Force (EITF) Issue No. 00-10, Accounting for Shipping and Handling Fees and Costs. Provision for customer sales
allowances, returns and warranties are made at the time of shipment.



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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 2007 or during the period ended September 26, 2008. The change in the balance of goodwill from December 28, 2007 to September 26, 2008 is the
result of foreign currency translation.

Recent Accounting Pronouncements

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an
amendment of SFAS No. 133. SFAS 161 applies to all derivative instruments and non-derivative instruments that are designated and qualify as hedging instruments pursuant to paragraphs 37 and 42 of SFAS 133 and related hedged items accounted for
under SFAS 133. SFAS 161 requires entities to provide greater transparency through additional disclosures about how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under SFAS 133
and its related interpretations, and how derivative instruments and related hedged items affect an entitys financial position, results of operations, and cash flows. SFAS 161 is effective as of the beginning of an entitys first fiscal
year that begins after November 15, 2008. The Company does not expect the adoption of SFAS 161 will have a material impact on its financial position, results of operations, or cash flows.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. SFAS 162
provides a framework for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles (GAAP) for nongovernmental entities. SFAS 162 will be effective
60 days following the Securities and Exchange Commissions approval of the Public Company Accounting Oversight Board (PCAOB) amendments to AU Section 411. The Company does not expect the adoption of SFAS 162 will have a material impact on
its financial position, results of operations, or cash flows.

In May 2008, the FASB issued SFAS No. 163,
Accounting for Financial Guarantee Insurance Contracts  an interpretation of FASB Statement No. 60. SFAS 163 requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event)
when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used
to account for premium revenue and claim liabilities. Those clarifications will increase comparability in financial reporting of financial guarantee insurance contracts by insurance enterprises. This Statement requires expanded disclosures about
financial guarantee insurance contracts. The accounting and disclosure requirements of the Statement will improve the quality of information provided to users of financial statements. SFAS 163 will be effective for financial statements issued for
fiscal years beginning after December 15, 2008. The



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Company does not expect the adoption of SFAS 163 will have a material impact on its financial position, results of operations, or cash flows.

In February 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 159, The Fair Value Option for Financial Assets
and Financial Liabilities.This Statement permits entities to choose to measure many financial instruments and certain other items at fair value, with the objective of mitigating volatility in reported earnings caused by measuring related assets
and liabilities differently (without being required to apply complex hedge accounting provisions). We adopted this standard in 2008, and its adoption did not have a material impact on our results of operations, financial position or cash flows.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an
Amendment of ARB No. 51(SFAS 160). SFAS 160 requires that noncontrolling interests be reported as a separate component of equity, that net income attributable to the parent and to the noncontrolling interest be separately identified in the
consolidated statements of income, that changes in a parents ownership interest be accounted for as equity transactions, and that, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary and
the gain or loss on the deconsolidation of the subsidiary be measured at fair value. SFAS 160 will be applied prospectively, except for presentation and disclosure requirements which will be applied retrospectively, as of the beginning of the
Companys fiscal year 2010. The Company does not expect the adoption of SFAS 160 will have a material impact on the Companys financial position, results of operations, or cash flows.

In September 2006, the FASB adopted SFAS Statement No. 157, Fair Value Measurements. SFAS No. 157 defines
fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosures about fair value measurements. While SFAS No. 157 will not impact our valuation methods, it will expand our disclosures of assets and
liabilities which are recorded at fair value. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We adopted this standard in 2008,
and its adoption did not have a material impact on our results of operations, financial position or cash flows.

3. Fair Value Disclosures

Fair Value of Financial Instruments

We used the following assumptions to estimate fair value:

Cash and cash equivalents. The carrying amounts reported in the balance sheet approximate fair value due to the short-term maturity
or variable rates of these instruments.

Short term investments. The fair value of our short term investments, which
consist of 90 day certificates of deposit as of September 26, 2008 and December 28, 2007 was based on quoted market prices in active markets for identical assets, Level 1, as defined in SFAS No. 157.



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The following table reflects the carrying amounts and fair values of our financial instruments as of
September 26, 2008 and December 28, 2007 (in thousands):



|                          |  |                    |       |                   |   |                |  |           |       |  |   |      
|------------------------- |  | ------------------ | ----- | ----------------- | - | -------------- |  | --------- | ----- |  | - | -----
|                          |  | September 26, 2008 |       | December 28, 2007
|                          |  | CarryingAmount     |       | FairValue         |   | CarryingAmount |  | FairValue
|Cash and cash equivalents |  | $                  | 3,288 |                   | $ | 3,288          |  | $         | 5,704 |  | $ | 5,704
|Short term Investments    |  |                    | 5,000 |                   |   | 5,000          |  |           | 2,550 |  |   | 2,550

Fair Value Measurements

In September 2006, the FASB adopted SFAS No. 157, Fair Value Measurements. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. In February 2008, the FASB issued FASB Staff Position (FSP) SFAS 157-2, Effective Date of FASB No. 157
which delays the effective date to fiscal years beginning after November 15, 2008 for all non-financial assets and liabilities, except those recognized or disclosed in financial statements on a recurring basis.

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

Long-term debt at September 26, 2008 and December 28, 2007 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 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.

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 September 26, 2008 and December 28, 2007.

On March 24, 2008, the Company entered into a new two-year agreement for an unsecured revolving credit facility that expires in May 2010 with
maximum possible borrowings of $15.0 million with Lake City Bank (the Bank). The terms of the new two-year unsecured revolving credit facility are substantially similar to a pre-existing credit agreement with the Bank that allowed for
maximum borrowings of $10.0 million and which was due to expire in May 2008. Interest on outstanding borrowings related to the new line of credit is calculated at the prime rate, which was 5.00% on



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September 26, 2008. At September 26, 2008 and December 28, 2007, the Company had no outstanding balances under this line of credit.

The Companys Dutch subsidiary, Projecta, has an overdraft line of credit with maximum possible borrowings equal to 1.5 million
Euros. Interest on outstanding borrowings in Europe related to Projectas overdraft line of credit is calculated at the Fortis Basic Rate plus 1.50%, the sum of which was 7.90% on September 26, 2008. At September 26, 2008, Projecta
had no outstanding balances under this credit facility.

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

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 three
quarters of 2008.

The stock option activity and weighted average exercise prices follow:



|                                  |  |              |   |  |                       |         |   |                                        |   |    
|--------------------------------- |  | ------------ | - |  | --------------------- | ------- | - | -------------------------------------- | - | ---
|                                  |  | Year to Date
|                                  |  | Options      |   |  | AverageExercise Price |         |   | AggregateIntrinsic Value(in
thousands)
|Outstanding at December 28, 2007  |  | 63           |   |  | $                     | 17,013  |   |                                        |   |    
|Exercised                         |  | (8           | ) |  |                       | (16,560 | ) |                                        |   |    
|                                  |  |              |   |  |                       |         |   |                                        |   |    
|Outstanding at September 26, 2008 |  | 55           |   |  | $                     | 17,079  |   |                                        | $ | 567
|                                  |  |              |   |  |                       |         |   |                                        |   |    
|Exercisable at September 26, 2008 |  | 55           |   |  | $                     | 17,079  |   |                                        | $ | 567

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 26,2008 |        | December 28,2007
|Raw materials    |  | $                 | 9,592  |                  | $ | 9,468 
|Work in progress |  |                   | 2,170  |                  |   | 2,342 
|Finished goods   |  |                   | 3,220  |                  |   | 3,189 
|                 |  |                   |        |                  |   |       
|                 |  | $                 | 14,982 |                  | $ | 14,999
|                 |  |                   |        |                  |   |       

7. Other Comprehensive Income

The only component of accumulated other comprehensive income as of September 26, 2008 and December 28, 2007 was for cumulative foreign exchange translation adjustments.



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8. Segment Information

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

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

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



|                       |  |                                |        |                                |   |                                |  |                                |         |  |   |        
|---------------------- |  | ------------------------------ | ------ | ------------------------------ | - | ------------------------------ |  | ------------------------------ | ------- |  | - | -------
|                       |  | 13 WeeksEndedSeptember 26,2008 |        | 13 WeeksEndedSeptember 28,2007 |   | 39 WeeksEndedSeptember 26,2008 |  | 39 WeeksEndedSeptember 28,2007
|Net sales:             |  |                                |        |                                |   |                                |  |                                |         |  |   |        
|United States          |  | $                              | 36,368 |                                | $ | 37,485                         |  | $                              | 107,060 |  | $ | 108,002
|Europe                 |  |                                | 6,584  |                                |   | 6,606                          |  |                                | 22,787  |  |   | 20,036 
|                       |  |                                |        |                                |   |                                |  |                                |         |  |   |        
|Total net sales        |  | $                              | 42,952 |                                | $ | 44,091                         |  | $                              | 129,847 |  | $ | 128,038
|                       |  |                                |        |                                |   |                                |  |                                |         |  |   |        
|                       |  |                                |        |                               
|Operating income:      |  |                                |        |                                |   |                                |  |                                |         |  |   |        
|United States          |  | $                              | 10,369 |                                | $ | 11,046                         |  | $                              | 29,965  |  | $ | 31,330 
|Europe                 |  |                                | 812    |                                |   | 1,188                          |  |                                | 3,151   |  |   | 2,801  
|                       |  |                                |        |                                |   |                                |  |                                |         |  |   |        
|Total operating income |  | $                              | 11,181 |                                | $ | 12,234                         |  | $                              | 33,116  |  | $ | 34,131 
|                       |  |                                |        |                                |   |                                |  |                                |         |  |   |        
|                       |  |                                |        |                               
|As of:                 |  | September 26,2008              |        | December 28,2007               |   |                                |  |                               
|Total assets           |  |                                |        |                                |   |                                |  |                                |         |  |   |        
|United States          |  | $                              | 65,879 |                                | $ | 66,406                         |  |                                |         |  |   |        
|Europe                 |  |                                | 25,582 |                                |   | 25,495                         |  |                                |         |  |   |        
|                       |  |                                |        |                                |   |                                |  |                                |         |  |   |        
|Total assets           |  | $                              | 91,461 |                                | $ | 91,901                         |  |                                |         |  |   |        
|                       |  |                                |        |                                |   |                                |  |                                |         |  |   |        

9. Commitments and Contingencies

The Company is subject to certain 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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|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.

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 28, 2007. As of September 26, 2008, the Companys critical accounting policies had not changed from December 28, 2007.

Recent Accounting Pronouncements

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities, an amendment of SFAS No. 133. SFAS 161 applies to all derivative instruments and non-derivative instruments that are designated and qualify as hedging instruments pursuant to paragraphs 37 and 42 of
SFAS 133 and related hedged items accounted for under SFAS 133. SFAS 161 requires entities to provide greater transparency through additional disclosures about how and why an entity uses derivative instruments, how derivative instruments and related
hedged items are accounted for under SFAS 133 and its related interpretations, and how derivative instruments and related hedged items affect an entitys financial position, results of operations, and cash flows. SFAS 161 is effective as of the
beginning of an entitys first fiscal year that begins after November 15, 2008. The Company does not expect the adoption of SFAS 161 will have a material impact on its financial position, results of operations, or cash flows.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. SFAS 162 provides
framework for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles (GAAP) for nongovernmental entities. SFAS 162 will be effective 60 days
following the Securities and Exchange Commissions approval of the Public Company Accounting Oversight Board (PCAOB)



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amendments to AU Section 411. The Company does not expect the adoption of SFAS 162 will have a material impact on its financial position, results of
operations, or cash flows.

In May 2008, the FASB issued SFAS No. 163, Accounting for Financial Guarantee Insurance Contracts
 an interpretation of FASB Statement No. 60. SFAS 163 requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred
in an insured financial obligation. This Statement also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities. Those
clarifications will increase comparability in financial reporting of financial guarantee insurance contracts by insurance enterprises. This Statement requires expanded disclosures about financial guarantee insurance contracts. The accounting and
disclosure requirements of the Statement will improve the quality of information provided to users of financial statements. SFAS 163 will be effective for financial statements issued for fiscal years beginning after December 15, 2008. The
Company does not expect the adoption of SFAS 163 will have a material impact on its financial position, results of operations, or cash flows.

In February 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities.This Statement permits entities to choose to measure many financial
instruments and certain other items at fair value, with the objective of mitigating volatility in reported earnings caused by measuring related assets and liabilities differently (without being required to apply complex hedge accounting provisions).
We adopted this standard in 2008, and its adoption did not have a material impact on our results of operations, financial position or cash flows.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an Amendment of ARB No. 51(SFAS 160). SFAS 160 requires that noncontrolling interests be reported as a separate
component of equity, that net income attributable to the parent and to the noncontrolling interest be separately identified in the consolidated statements of income, that changes in a parents ownership interest be accounted for as equity
transactions, and that, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary and the gain or loss on the deconsolidation of the subsidiary be measured at fair value. SFAS 160 will be applied
prospectively, except for presentation and disclosure requirements which will be applied retrospectively, as of the beginning of the Companys fiscal year 2010. The Company does not expect the adoption of SFAS 160 to have a material impact on
the Companys financial position, results of operations, or cash flows.

In September 2006, the FASB adopted SFAS Statement
No. 157, Fair Value Measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosures about fair value measurements. While SFAS No. 157
will not impact our valuation methods, it will expand our disclosures of assets and liabilities which are recorded at fair value. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. We adopted this standard in 2008, and its adoption did not have a material impact on our results of operations, financial position or cash flows.

Results of Operations

Overview

Da-Lite is one of the worlds leading manufacturers and distributors of projection screens. Da-Lites projection screens, which are focused on
the premium end of the large screen market, are used in a wide range of settings including conference rooms, educational institutions, live entertainment venues, meeting



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rooms, training facilities, houses of worship and private homes. Da-Lites products provide the viewer with an enhanced visual experience in settings
where a large screen adds to the communication of information or entertainment. The Companys products are versatile and can be customized to fit the needs of unique viewing venues.

The recent decline in the value of the Euro relative to the dollar is likely to adversely affect our European results, and the current worsening of
economic conditions in the United States and globally also may adversely affect our results generally.

Thirteen Weeks Ended September 26, 2008,
Compared with Thirteen Weeks Ended September 28, 2007

Net Sales. Net sales were $43.0 million for the 13 weeks ended
September 26, 2008, as compared to $44.1 million for the 13 weeks ended September 28, 2007, a decrease of $1.1 million or 2.5%. Net sales by the Companys United States (U.S.) operations decreased 3.0%. 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 continued to grow. Wall screen sales decreased $0.3 million
and portable screen sales decreased $0.6 million. Both were likely impacted by a slowdown in the economy and the housing market. Results also reflected increased competition from imports and plasma screens. Sales of other products decreased $1.3
million from 2007 levels, a result of lower sales of screen fabric, audio visual carts and rear projection systems. Net sales from the Companys European subsidiaries for the thirteen weeks ended September 26, 2008 compared to the thirteen
weeks ended September 28, 2007 decreased 0.3%. The stronger Euro produced an increase of $0.5 million that was more than offset by a decrease in revenue from southern European countries due to economic declines.

Cost of Sales. The cost of sales was $26.9 million for the 13 weeks ended September 26, 2008, as compared to $27.1 million for the 13 weeks
ended September 28, 2007, a decrease of $0.2 million, or 0.7%. As a percentage of net sales, the cost of sales represented 62.6% for the 13 weeks ended September 26, 2008 and 61.5% for the 13 weeks ended September 28, 2007. This
constitutes a 1.1 percentage point decrease in margins. Margins at our U.S. facilities decreased 0.7 points while margins at our European operations decreased 1.5 points reflecting the decrease in product volumes.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $4.9 million for the 13 weeks ended
September 26, 2008, as compared to $4.8 million for the 13 weeks ended September 28, 2007. Selling, general and administrative expenses in the U.S. decreased $0.1 million as higher marketing expenses were more than offset by lower legal
expenses resulting from the settlement of the patent litigation. Selling, general and administrative expenses in Europe increased $0.2 million primarily as a result of the stronger Euro.

Interest. Interest expense totaled $3.0 million for the 13 weeks ended September 26, 2008, as compared to $3.6 million for the 13 weeks ended
September 28, 2007, a decrease of $0.6 million. The decrease was a result of a reduction in the outstanding amount of the 9.5% senior notes due 2011 issued in May 2004 and the 2007 period included the write-off of the deferred finance costs
associated with bonds repurchased in the period.

Miscellaneous, net. Miscellaneous, net expense was $0.1 million for the 13 weeks
ended September 26, 2008, as compared to $0.5 million for the 13 weeks ended September 28, 2007, a decrease of $0.4 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



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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 26, 2008 and for the 13 weeks ended September 28, 2007. The Company pays foreign income taxes on the earnings of its European
subsidiaries.

Net Income. As a result of the aforementioned factors, net income increased $0.1 million from $7.8 million for the 13
weeks ended September 28, 2007 to $7.9 million for the 13 weeks ended September 26, 2008.

Results of Operations

Thirty Nine Weeks Ended September 26, 2008, Compared with Thirty Nine Weeks Ended September 28, 2007

Net Sales. Net sales were $129.8 million for the 39 weeks ended September 26, 2008, as compared to $128.0 million for the 39 weeks ended
September 28, 2007, an increase of $1.8 million or 1.4%. Net sales by the Companys United States (U.S.) operations decreased 0.9%. In the U.S., electric screen sales increased $2.2 million primarily because demand for the companys
core business of electrically operated screens with viewing surfaces measuring 100 inches in diagonal and above continued to grow. Wall screen sales decreased $0.7 million while portable screen sales decreased $0.9 million. Both were likely impacted
by a slowdown in the economy and the housing market. Results also reflected increased competition from imports and plasma screens. Sales of other products decreased $1.6 million from 2007 levels, a result of lower sales of screen fabric, audio
visual carts and rear projection systems. Net sales from the Companys European subsidiaries for the thirty nine weeks ended September 26, 2008 compared to the thirty nine weeks ended September 28, 2007 increased $2.8 million or
13.7%. The stronger Euro produced an increase of $2.6 million. The remaining increase was due primarily to the demand for screens for the European cup soccer event partially offset by the decrease in revenue from the southern European countries due
to economic declines.

Cost of Sales. The cost of sales was $79.8 million for the 39 weeks ended September 26, 2008, as
compared to $78.5 million for the 39 weeks ended September 28, 2007, an increase of $1.3 million, or 1.7%. As a percentage of net sales, the cost of sales represented 61.5% for the 39 weeks ended September 26, 2008 and 61.3% for the 39
weeks ended September 28, 2007. This constitutes a 0.2 percentage point decrease in margin. Margins at our U.S. facilities were unchanged while margins at our European operations increased 0.5 points reflecting the increase in product volumes.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $16.9 million for the 39 weeks
ended September 26, 2008, as compared to $15.4 million for the 39 weeks ended September 28, 2007. Selling, general and administrative expenses in the U.S. increased $1.0 million as a result of an increase in marketing costs intended to
support growth in future periods. Selling, general and administrative expenses in Europe increased $0.6 million primarily as a result of the stronger Euro.

Interest. Interest expense totaled $9.4 million for the 39 weeks ended September 26, 2008, as compared to $9.8 million for the 39 weeks ended September 28, 2007, a decrease of $0.4 million. The
decrease was a result of a reduction in the outstanding amount of the 9.5% senior notes due 2011 issued in May 2004.

Miscellaneous,
net. Miscellaneous, net was $0.1 million for the 39 weeks ended September 26, 2008, as compared to $1.0 million for the 39 weeks ended September 28, 2007, a decrease of $0.9 million. The



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2008 amount includes a gain of $0.2 million on bond repurchases while the 2007 amount includes a loss of $0.5 million for bond repurchases.

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 26, 2008 and for the 39 weeks ended September 28, 2007. The Company
pays foreign income taxes on the earnings of its European subsidiaries.

Net Income. As a result of the aforementioned factors, net
income increased $0.3 million from $22.6 million for the 39 weeks ended September 28, 2007 to $22.9 million for the 39 weeks ended September 26, 2008

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 February 2008, the Company repurchased $4.3 million of the outstanding principal amount of its
9 1/2% senior notes from the open market for an aggregate purchase price of $4.1 million. The Company retired these notes
and wrote-off the related deferred financing costs and recorded an immaterial gain during the first quarter of 2008 relating to the repurchase. Depending on the Companys expected cash needs, the prevailing prices of its 9 1/2% 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 26, 2008, the Companys cash position was $8.3 million, the same dollar amount at December 28, 2007. Additionally, the Company had an unsecured
revolving credit facility, with maximum possible borrowings equal to $15.0 million, which expires in May 2010. Interest on any outstanding borrowings related to this line of credit is calculated at the prime rate, which was 5.00% on
September 26, 2008. At September 26, 2008 and December 28, 2007, the Company had no outstanding balances under this line of credit. The Companys Dutch subsidiary, Projecta, has an overdraft line of credit, with maximum possible
borrowings equal to 1.5 million Euros. Interest on outstanding borrowings in Europe related to Projectas overdraft line of credit is calculated at the Fortis Basic Rate plus 1.50%, the sum of which was 7.90% on September 26, 2008. At
September 28, 2008, Projecta had no outstanding balances under this credit facility. Da-Lites working capital position decreased to $29.4 million (including $8.3 million of total cash and short-term investments) at September 26,
2008, from $31.3 million (including $8.3 million of total cash and short-term investments) at December 28, 2007.

Cash Flows

For the 39 weeks ended September 26, 2008, cash provided by operating activities was $27.8 million, as compared to $23.9 million for the 39 weeks
ended September 28, 2007, an increase of $3.9 million or 16.2% primarily attributable to a decrease in working capital changes. Cash used in investing activities was $4.7 million for the 39 weeks ended September 26, 2008, as compared to
cash provided by investing



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activities of $0.6 million for the 39 weeks ended September 28, 2007. Cash used in investing activities in 2008 resulted from purchase of short-term
investments of $5.0 million, capital expenditures of $1.3 million and purchases of minority shares of $1.0 million partially offset by maturities of short-term investments of $2.6 million. In 2007, cash provided by investing activities resulted from
an increase in short-term investments of $5.6 million partially offset by capital expenditures of $1.4 million and purchases of short-term investments of $3.6 million. Cash used in financing activities was $25.2 million during the 39 weeks ended
September 26, 2008, as compared to $30.1 million for the 39 weeks ended September 28, 2007. The decrease in cash used for financing activities in 2008 was related to a $5.0 million decrease in payments to retire senior notes.

Capital Expenditures

Capital expenditures were
$1.3 million for the 39 weeks ended September 26, 2008 compared to $1.4 million for the 39 weeks ended September 28, 2007. The Companys management currently expects to spend approximately $2.5 million on capital expenditures in 2008,
using cash generated from operations.

Contractual Obligations

The following table sets forth, as of September 26, 2008, 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 |  | $                      | 160.3 |                 | 11.9 |           | 148.4 |           |  |                  | 
|Self-insurance letter of credit                 |  |                        | 0.5   |                 | 0.5  |           |      |           |  |                  | 
|                                                |  |                        |       |                 |      |           |       |           |   |                  |  
|Total                                           |  | $                      | 160.8 |                 | 12.4 |           | 148.4 |           |  |                  | 
|                                                |  |                        |       |                 |      |           |       |           |   |                  |  

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 $10.7 million and $12.1 million for the 39 weeks ended September 26, 2008 and
the 39 weeks ended September 28, 2007, respectively.

The Company has paid regular distributions to its stockholders in 2008 and 2007
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.



|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 5.5% of the Companys total outstanding receivables as of September 26, 2008. 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 $15.0 million revolving
credit facility in the U.S. is calculated at the prime rate, which was 5.00% on September 26, 2008. At September 26, 2008, 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 7.90% on September 26, 2008. At September 26, 2008, Projecta had no outstanding balances under this credit
facility.



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At September 26, 2008, the Company had $124.7 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 $121.1 million from the fair value of approximately $117.4 million at
September 26, 2008. 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.



|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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PART II

OTHER INFORMATION



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

During the 13 weeks ended September 26, 2008, an executive officer exercised options to purchase 5.0 shares of our common stock at an aggregate purchase price of $86,225 on September 2,2008 and another
employee exercised options to purchase 2.0 shares of our common stock at an aggregate purchase price of $30,836 on August 22, 2008. 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 stockholders was held on August 21, 2008. Set forth below are the matters that were presented to and voted upon by our stockholders, and the results of such stockholders votes.

Election of directors.



|                   |  |           |  |                |  |              
|------------------ |  | --------- |  | -------------- |  | -------------
|Nominee            |  | Votes For |  | Votes Withheld |  | Votes Against
|James S. Cownie    |  | 5,288.34  |  |               |  |             
|                   |  |           | 
|James M. Hoak      |  | 5,288.34  |  |               |  |             
|                   |  |           | 
|Wayne Kern         |  | 5,288.34  |  |               |  |             
|                   |  |           | 
|Richard E. Lundin  |  | 5,288.34  |  |               |  |             
|                   |  |           | 
|David J. Lundquist |  | 5,288.34  |  |               |  |             
|                   |  |           | 
|David N. Walthall  |  | 5,288.34  |  |               |  |             



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



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



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SIGNATURES

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



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

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


Date: October 28, 2008



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EXHIBIT INDEX



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



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