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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549



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FORM 10-K



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

For the fiscal year ended December 29, 2006

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

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 if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.    Yes ̈No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.    Yes ̈No  x

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ̈

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 March 23, 2007, there were 5,359.12 shares of the registrants common stock outstanding (all of which are privately owned and are not
traded on any public market).



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TABLE OF CONTENTS



|           |  |                                                                                                              |  |     
|---------- |  | ------------------------------------------------------------------------------------------------------------ |  | ----
|           |  |                                                                                                              |  | Page
|PART I     |  |                                                                                                              |  |     
|           |  |                                                                                                             
|Item 1.    |  | Business                                                                                                     |  | 1   
|           |  |                                                                                                             
|Item 1A.   |  | Risk Factors                                                                                                 |  | 8   
|           |  |                                                                                                             
|Item 1B.   |  | Unresolved Staff Comments                                                                                    |  | 11  
|           |  |                                                                                                             
|Item 2.    |  | Properties                                                                                                   |  | 11  
|           |  |                                                                                                             
|Item 3.    |  | Legal Proceedings                                                                                            |  | 12  
|           |  |                                                                                                             
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                                          |  | 12  
|           |  |                                                                                                             
|PART II    |  |                                                                                                              |  |     
|           |  |                                                                                                             
|Item 5.    |  | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  | 13  
|           |  |                                                                                                             
|Item 6.    |  | Selected Financial Data                                                                                      |  | 13  
|           |  |                                                                                                             
|Item 7.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  | 14  
|           |  |                                                                                                             
|Item 7A.   |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  | 22  
|           |  |                                                                                                             
|Item 8.    |  | Financial Statements and Supplementary Data                                                                  |  | 25  
|           |  |                                                                                                             
|Item 9.    |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         |  | 41  
|           |  |                                                                                                             
|Item 9A.   |  | Controls and Procedures                                                                                      |  | 41  
|           |  |                                                                                                             
|Item 9B.   |  | Other Information                                                                                            |  | 41  
|           |  |                                                                                                             
|PART III   |  |                                                                                                              |  |     
|           |  |                                                                                                             
|Item 10.   |  | Directors and Executive Officers of the Registrant                                                           |  | 42  
|           |  |                                                                                                             
|Item 11.   |  | Executive Compensation                                                                                       |  | 45  
|           |  |                                                                                                             
|Item 12.   |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               |  | 52  
|           |  |                                                                                                             
|Item 13.   |  | Certain Relationships and Related Transactions                                                               |  | 53  
|           |  |                                                                                                             
|Item 14.   |  | Principal Accountant Fees and Services                                                                       |  | 54  
|           |  |                                                                                                             
|PART IV    |  |                                                                                                              |  |     
|           |  |                                                                                                             
|Item 15.   |  | Exhibits and Financial Statement Schedules                                                                   |  | 55  
|           | 
|Signatures |  | 58                                                                                                          



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PART I



|Item 1. | Business.
|------- | ---------

Da-Lite Screen Company, Inc. (together
with all its subsidiaries, the Company or Da-Lite) is the worlds leading manufacturer and distributor of projection screens based on internal estimates of market share. Da-Lites comprehensive product line includes
a variety of front and rear projection screens, custom engineered rear projection systems and certain associated products such as lecterns, easels, audio visual carts, monitor mounts and brackets for flat panel displays. By building on its 98 year
history in the projection screen business, its reputation for delivering high-quality products and by providing its customers with exceptional service, the Company believes that it has the largest market share and has developed the most highly
regarded brand name in the industry.

Da-Lite operates manufacturing facilities in both the United States and Europe and its products are
sold through an extensive sales and distribution network in over 100 countries. The Company generated net sales and income before income taxes and minority interest of $169.8 million and $33.3 million, respectively, in 2006. Net sales and income
before income taxes and minority interest were $165.6 million and $32.2 million, respectively, in 2005.

Market Overview

Da-Lite designs, manufactures and distributes certain equipment used in large-scale audio visual presentation systems. The audio visual industry spans a
number of markets, including Business, Consumer/Home Theater, Hospitality, Education, Government, Houses of Worship and other institutions that use large visual displays for a variety of purposes.

The Business market is the most important driver of success for the industry as a whole and is the Companys most significant customer group. Recent
growth in the Business market can be attributed to the increased use of presentation software and other visual presentation tools in the workplace. Additionally, the declining prices of high output projectors has stimulated a growing number of
businesses to equip their facilities with new audio visual systems or to retrofit their existing systems with improved equipment.

The
Consumer/Home Theater market is a small but important part of the Companys revenue. The use of high resolution digital projectors, the increased availability of high quality viewing media and greater affordability of system integration
equipment has contributed to the growth in this sector. The growth has also been dependent upon a trend towards establishing dedicated multimedia spaces in private residences however a recent downturn in housing has caused a slowdown in this area of
business.

The Hospitality market is expected to grow as audio visual presentations become more popular in conference venues and as high
output digital projectors become more portable.

The Education industry has traditionally been an important customer for the audio visual
equipment industry. Growth in this market is expected to continue as audio visual presentation tools become standard equipment in classrooms.

Sales to Government accounts have largely followed trends in government spending.



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The Houses of Worship market is developing into a significant new area of growth as traditionally used
communication materials such as bound paper hymnals and other printed matter are being augmented or replaced by modern audio visual systems.

International markets are important to the Company. Asia, Europe, Latin America and the Middle East are expanding their use of large-scale audio visual presentation systems.

Competitive Strengths

Da-Lite believes that its competitive strengths include the following:



| |  |  | High Quality and Broad Product Line. The Company believes that it leads the industry with the quality and breadth of its product line and that it offers its
customers more choices of projection screen surfaces and screen sizes than its competitors. Da-Lite is recognized for developing new projection screen surfaces that enable customers to take advantage of the latest developments in projector
technology and for introducing product features that add new levels of user convenience. The Company also manufactures and distributes other presentation products such as lecterns, easels, audio visual carts, monitor mounts and brackets for plasma
and other flat panel displays. The Companys extensive product line allows customers to meet a variety of their projection screen and presentation needs from a single source.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Strong Brands. The Company believes that the Da-Lite®brand is the leading name in the projection screen industry and the Company is dedicated to maintaining its position by demonstrating
industry leadership in product development, customer service and education. The Company has a number of other recognized brands, including Projecta®(projection screens and support furniture), Procolor®(projection screens), Fast-Fold®(portable screens), Oravisual®(easels and lecterns), Polacoat®(rear projection screens) and Advance Products®(audio visual carts, monitor mounts and brackets for flat panel displays).
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excellent Customer Service and Support. Da-Lite offers excellent customer support through a dedicated staff of
product specialists to assist dealers and users in meeting their presentation needs. Da-Lites product specialists are required to be certified by the International Communications Industries Association, Inc.®(ICIA®).
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Strong Worldwide Distribution and Marketing Capabilities. The Company uses a dedicated group of sales employees located throughout the United States to reach
its dealers and other customers. In addition, the Company maintains relationships with distributors or dealers in over 100 countries throughout the world.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Efficient and Flexible Manufacturing. The Company believes that its streamlined manufacturing processes and information systems allow it to offer its
customers rapid order turn around times, customizable product features and competitive pricing. Consequently, the Companys dealers are able to conserve capital by keeping their inventory levels low while providing end users with more
product choices and better service.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Experienced and Capable Workforce and Management Team. The Companys highly motivated and flexible workforce continues to be an important source of
ideas to improve productivity and to reduce costs on a continuing basis. The Company also has a very experienced and capable management team. Mr. Richard E. Lundin, the Chairman, President and Chief Executive Officer, and
Ms. Judith D. Loughran, the Executive Vice President, joined the Company in 1989 as part of a leveraged buyout and have led the Companys expansion strategy through internal growth and strategic acquisitions since then.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Company History

Da-Lite is the successor to a business founded in Chicago in 1909 to manufacture projection screens primarily for the motion picture industry. The founder, Adele DeBerri, developed a silver painted canvas projection screen that quickly
became the standard for the industry. Da-Lite expanded rapidly in the 1950s and emerged as the preeminent manufacturer of projection screens in the world by developing the largest network of photographic distributors and dealers in the
industry. The Company pioneered many innovations including the first tripod screen, electrically operated screen, perforated screen, glass beaded screen and rear projection screen. In 1957, a core group of 40 employees relocated from Chicago to
Warsaw, Indiana where the Company continues to maintain its headquarters.

In 1984, Heritage Communications, Inc. (Heritage) acquired
Da-Lite and subsequently consolidated its operations with other Heritage presentation product operations including Welt/Safe-Lock (projection tables) and Oravisual (easels and lecterns).

In 1987, Tele-Communications, Inc. purchased Heritage and sought to divest the non-cable television portion of the business including Da-Lite and its
consolidated companies. Da-Lites current management and major shareholders executed a leveraged buyout of the Company in 1989.

In
1991, the Company acquired Projecta B.V., a European screen and audio visual furniture company. Two years later, it acquired Uni-Screen, a producer of home theater screens. In 1995, the Company purchased the Advance Products Company, Inc., an audio
visual cart, monitor mount and projector table company. The Company acquired Visual Structures, Inc., a video wall and rear screen support structure company, in 1999. Da-Lite subsequently disposed of Visual Structures video wall activities and
consolidated the rear screen support operations into its other operations. In 2001, the Company made its most recent acquisition by purchasing Procolor, a French projection screen manufacturer which further expanded Da-Lites European presence.

Products

Da-Lites core business
is the manufacturing of projection screens that are used in conjunction with projectors manufactured by other companies. The Companys projection screens can be found in a variety of settings including: conference rooms, training facilities,
educational institutions, entertainment venues, meeting rooms, worship centers and private homes. The Company does not typically manufacture projection screens for use in movie theaters. Screen sales, which accounted for approximately 84%, 83% and
83% of the Companys net sales in 2006, 2005 and 2004, respectively, can be divided into three broad categories (i.e. electric, wall and portable), which can be further divided into 18 different screen surfaces tailored to meet a variety of
projection and viewing requirements. Da-Lite has developed several new screen surfaces in recent years that have different characteristics with respect to the reflectivity of light, the resolution of a projected image and the size of the image
viewing angle to suit the changing capabilities of



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projection systems. Da-Lites standard product catalog lists projection screens ranging in size from 40 inches by 40 inches, on the small end, to 60
feet by 90 feet, on the large end. Larger or specially shaped screens are produced on a custom order basis. Da-Lite believes that its flexible and vertically integrated manufacturing processes allow it to deliver products to its customers more
efficiently than its competitors.

Electric Screens. Electrically operated screens are usually found in business meeting rooms,
educational institutions, worship centers and in home theater applications. These products use a motorized roller system to raise or lower the viewing surface from a case and have the ability to be concealed in the ceiling or hung at the top of a
wall. Electric screens accounted for approximately 40%, 37% and 35% of the Companys net sales in 2006, 2005 and 2004, respectively.

Wall Screens. Wall screens are typically found in business meeting rooms, in educational institutions and in home theater applications. Wall screens are normally mounted on an exposed wall surface and may either be retractable or
attached to a fixed frame. Wall screens accounted for approximately 21%, 22% and 22% of the Companys net sales in 2006, 2005 and 2004, respectively.

Portable Screens. The Fast-Fold®line of portable screens are most often used in hotel meeting rooms, entertainment venues and other situations that require easy
setup and quick removal. The Companys other portable screens include Insta-Theater®screens which rise from the floor or can be placed on a table and freestanding tripod screens. Portable screens accounted for approximately 21%, 22% and 22% of the Companys net sales in 2006, 2005 and 2004, respectively.

Screen Materials. Da-Lite manufactures screen materials used to assemble many of the Companys branded products and sells a percentage of its
supply to the marketplace as a non-branded product. The Companys management believes that this in-house capability provides a cost advantage in the projection screen industry. Sales of screen materials accounted for approximately 2%, 3% and 4%
of its net sales in 2006, 2005 and 2004, respectively.

Other. The Company produces custom engineered rear projection systems and
also manufactures a number of complementary products, including audio visual carts, monitor mounts, brackets for flat panel displays, easels, multi-media support furniture and lecterns. These items allow Da-Lite to offer a complete product line that
enables customers to satisfy many of their audio visual peripheral needs from a single source. Sales of other products and freight accounted for approximately 16%, 16% and 17% of the Companys net sales in 2006, 2005 and 2004, respectively.
This category includes amounts billed to customers for shipping in conformity with Emerging Issues Task Force (EITF) Issue No. 00-10, Accounting for Shipping and Handling Fees and Costs.

Note 7 of the notes to the Companys consolidated financial statements included in Item 8 of this report contains information regarding
Da-Lites two reporting segments, the United States and Europe.

Distribution and Customers

Da-Lite currently sells its products to more than 7,500 dealers or distributors in over 100 countries around the world. The Company generally does not
sell its products directly to end users. Furthermore, the Company has a broad customer base with no customer accounting for more than 2% of net sales in 2006 and with the Companys top ten customers accounting for approximately 11% of net sales
in 2006. Da-Lites wide product offering enables customers to consolidate purchasing requirements by using the Company as their main supplier for a variety of items.



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In the United States, the Company sells primarily through nonexclusive dealers, such as traditional audio
visual resellers who sell products to end users. Outside of the United States, the Company sells to distributors who in turn sell to local dealers in their respective countries.

Sales and Marketing

The Company believes that
the Da-Lite®brand is the leading name in the projection screen industry and the Company
is dedicated to maintaining its position by demonstrating leadership in product development, customer service and education. The Company also has a number of other recognized brands, including Projecta®(projection screens and support furniture), Procolor®(projection screens), Fast-Fold®(portable screens), Oravisual®(easels and lecterns), Polacoat®(rear projection screens) and Advance Products®(audio visual carts and monitor mounts). Da-Lite is recognized by the International Communications Industries Association,
Inc.®(ICIA®) as a Certified Audio Visual Solutions Provider, the industry standard certification for companies in the professional audio visual
industry.

Sales. The Companys Sales division is categorized into five groups:

The Commercial Sales group is responsible for sales to the corporate market in the United States, Canada and South and Central America. The group
consists of sales consultants who assist the Companys dealers with sales training, introduce new products and perform after sales service in their defined territories. Sales consultants also present the Companys product offerings to
architects and building contractors who may be in positions to make purchasing decisions. The Companys sales consultants are Da-Lite employees and are compensated through a monthly commission based upon payments received for products shipped
to their respective territories.

The Home Theater Sales group consists of independent representatives located in the United States
and Canada who specialize in the sale of projection screens and other products related to home theaters. These representatives, unlike the sales consultants in the Commercial Sales group, are not the Companys employees and are compensated on a
commission basis.

The International Sales team is responsible for managing the Companys foreign distributors in Europe, Asia,
Mexico, the Middle East and Africa. Da-Lite sells products to distributors operating in these regions who, in turn, market the Companys products to local dealers.

The Bids and Quotes group is responsible for working with dealers on major projects.

The Internal Customer Service group is located in the Companys Warsaw facility.
Da-Lites product specialists receive extensive customer service and product application training and are required to be ICIA®certified to help ensure that they have sufficient knowledge to handle customer inquiries.

Marketing. The Companys marketing effort employs a variety of media to promote the Da-Lite brand, including a detailed color catalog, an interactive website, trade shows and target advertising. The Companys primary
marketing medium for its extensive product line is a broad color catalog that contains detailed product and pricing information.

The
Companys website, www.da-lite.com, has played an increasing role in the Companys marketing plan in recent years. The website is a core marketing resource and contains a complete product list accompanied with photos, detailed
descriptions, specification data and pricing information. In addition, the website offers a live chat area where Da-Lite representatives answer questions regarding the Companys products. The website also provides comprehensive product
information regarding the appropriate size and type of projection screen required for a given application.



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Trade shows are a key tool for audio visual companies to stay abreast of the most recent market
developments. The Company utilizes state-of-the-art display booths at trade shows throughout the year to promote its products to customers and other members of the audio visual industry.

In addition to the complete color catalog and trade show marketing, the Company employs several other marketing techniques including targeted advertising
in consumer publications and trade journals, cooperative marketing efforts with other firms, maintaining an information website and publishing both printed and electronic specification guides.

The Company believes that maintaining the market leader position carries with it a responsibility to educate the consumer base. In this regard, Da-Lite
has published white papers on presentation technology and the Companys trade show participation includes a strong educational component.

Suppliers

The Company has developed strong relationships with a global network of suppliers and relies on these
relationships to ensure that high quality inputs are delivered in a timely manner. The Companys principal purchased components include fabric, fabric substrates, chemicals and coatings used for screen surfaces, motors to operate electric
screens, aluminum, packaging materials and steel. The Company actively evaluates its total supply chain costs and develops sourcing opportunities in various parts of the world to obtain the highest quality inputs for production and to manage the
Companys costs. In some cases, the Company relies on a limited number of suppliers for key components or materials especially with regard to one type of fabric substrate. If one or more of these suppliers were to terminate production or
otherwise stop providing the Company with materials, the Companys financial results could be adversely affected.

Competition

Da-Lite competes in the audio visual presentation equipment industry with a number of other manufacturers in the United States and overseas. On an
international basis, the Company currently competes with two established projection screen manufacturers and a number of newer entrants from China and elsewhere. The Company also competes with a number of smaller companies in many of the local
markets in which it is active. Although there are many manufacturers of projection screens, the Company believes that it has a substantially larger market share in projection screens than the nearest competitor. The Company believes that it is the
leader in both North America and Europe and that no individual competitor has a leading position in Asia. Da-Lite believes that its reputation for quality, the breadth of its product line, its rapid delivery times, its customer support and its broad
distribution network are key factors differentiating the Company from its competitors, some of whom compete primarily on price. The Companys projection screens also compete, to a certain extent, with electronic devices such as large liquid
crystal and plasma displays.



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Environmental Matters

The Company is subject to various evolving federal, state, local and foreign environmental laws and regulations governing, among other things, emissions to air, discharge to waters and the generation, handling,
storage, treatment and disposal of a variety of hazardous and non-hazardous substances and wastes. These laws and regulations provide for substantial fines and criminal sanctions for violations and impose liability for the costs of cleaning up, and
damages resulting from, past spills, disposals or other releases. Although the Company is not aware of any material expenses required to be made by it to comply with environmental laws, there is no assurance material expenditures relating to
environmental matters might not ultimately become necessary.

Employees

Employees are a key part of the Companys success and the Companys management believes that relationships with its employees are excellent. As
of December 29, 2006, the Company had approximately 510 employees in the United States (U.S.) and 130 employees in its European facilities. None of the Companys U.S. employees are represented by unions, and substantially all of the
Companys European employees are represented by unions. Management takes pride in developing a work environment that fosters a loyal culture with a focus on efficiency, quality and developing innovative methods to improve productivity. The
Company has been able to avoid layoffs since 1991 and management believes this philosophy has instilled a collaborative and supportive environment that facilitates employee participation in improving productivity.

Available Information

Da-Lite is subject to the
informational requirements of the Exchange Act. Therefore, we file periodic reports, proxy statements and other information with the Securities and Exchange Commission (SEC). Such reports, proxy statements and other information may be
obtained by visiting the Public Reference Room of the SEC at 100 F Street, NE, Washington, DC 20549 or by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy statements
and other information required that issuers file electronically.

Da-Lite does not make its annual reports on Form 10-K, its quarterly
reports on Form 10-Q, its current reports on Form 8-K and amendments to those reports available on its website.



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

The Companys business, its
future performance and forward looking statements are affected by general industry and growth rates, general U.S. and non-U.S. economic and political conditions (including the global economy), competition, supplier relationships, interest rate and
currency exchange rate fluctuations and other events. The following items are representative of the risks, uncertainties and other conditions that may impact the Companys business, future performance and the forward looking statements that it
makes in this report or that it may make in the future.

The increased demand for projection screens has resulted in large part from
changes in projector technology, the increased use of visual presentation tools and other industry trends. Any changes in these trends could adversely affect the demand for the Companys products.

The demand for projection screens and other presentation products has increased in recent years largely as the result of the improved capabilities and
lower costs of projectors, the increased use of visual presentation tools in business, education and other settings and the strong consumer interest in home theaters. Any changes in these or other industry trends, including the development of
competing technologies, could adversely affect the demand for Da-Lites products and could negatively impact the Companys future growth and its results of operations.

Substantial competition from existing or new competitors or products could reduce the Companys market share and harm its results.

The projection screen business is highly competitive with a number of competitors in the United States and internationally. Although
management believes that the Company has a substantially larger global market share in projection screens than its nearest competitor, the Company currently competes on an international basis with two other substantial competitors and a number of
newer entrants from China and elsewhere. The Company also competes with a number of smaller companies in many of its local markets. There is no assurance that existing or new competitors in the United States, Europe, Asia or elsewhere will not gain
market share. The Company also faces competition to a certain extent from manufacturers of electronic devices such as large liquid crystal and plasma displays. There is no assurance that size, pricing or other improvements in these products or the
development of new products will not result in increased competitive pressure. Any increased competition could adversely affect the Companys financial performance.

The Companys success depends on its ability to retain its senior management and other key personnel.

The Companys success depends to a significant extent on the efforts and abilities of its senior management team. The loss of one or more persons could have an adverse effect on the business. The Company currently does not have key
executive insurance relating to its senior management team.

The Companys success also depends on its ability to hire, train and
retain skilled workers in all areas of the business. From time to time, there may be a shortage of skilled labor that may make it more difficult and expensive for the Company to attract and retain qualified employees. If the Company is unable to
attract and retain qualified individuals or its labor costs increase significantly, the Companys operations would be adversely affected.



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Shortages of materials or components could adversely affect the Companys results.

Shortages of materials or components could adversely affect the Companys results. In addition, there are certain materials and
components, including one type of fabric substrate, as to which the Company has only a few suppliers. Any disruption in deliveries from these suppliers could hinder the Companys ability to fulfill customer orders on a timely basis, which could
adversely affect results.

Changing technology requires the Company to make continued product innovations to remain competitive. Any
failure to make innovations could adversely affect the Companys competitive position.

Changes in technology create the demand for
new screen surfaces and other product innovations. For example, screen surfaces that increase contrast rather than reflectivity have been required to make better use of the higher light output of newer projectors in many applications. If the Company
fails to make needed product innovations, the Companys competitive position and results will be adversely affected.

A casualty or
work stoppage relating to the Companys Warsaw, Indiana facility or other facilities could adversely affect its results.

A large
portion of the Companys manufacturing and other operations are conducted at its headquarters facility in Warsaw, Indiana. Any interruption in manufacturing, head office or computer operations from fire, severe weather, accident or other
calamity or work stoppage at this facility or the Companys other facilities could have a material adverse effect on the Companys reputation and results.

The Company may incur material liabilities under various environmental laws.

The Company is subject
to various evolving federal, state, local and foreign environmental laws and regulations governing, among other things, emissions to air, discharge to waters and the generation, handling, storage, treatment and disposal of a variety of hazardous and
non-hazardous substances and wastes. These laws and regulations provide for substantial fines and criminal sanctions for violations and impose liability for the costs of cleaning up and damages resulting from past spills, disposals or other
releases. Although the Company is not aware of any material expenses required to be made by it to comply with environmental laws, there is no assurance that material expenditures relating to environmental matters might not ultimately become
necessary.

Fluctuations in currency exchange rates could adversely affect the Companys sales and profits.

The Company performs most of its manufacturing in the United States with the remainder of its manufacturing capability located in The Netherlands and
France. Virtually all of the Companys labor and overhead costs and many of its costs for components and supplies are in U.S. Dollars or Euros although the Company also procures some components in Asia. Furthermore, the Companys customers
are located throughout the world. Consequently, fluctuations in currency exchange rates could negatively affect the Companys results.



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The Company cannot make assurances that it will continue to qualify as an S corporation and will
continue to be generally exempt from United States federal or state income taxes. A failure to qualify as an S corporation could subject the Company to federal and state income taxes.

The Company made an election to be treated as an S corporation for United States federal and state income tax purposes, commencing January 1, 1998,
and an election to treat its eligible subsidiaries as qualified subchapter S subsidiaries for United States federal and state income tax purposes. As an S corporation, the Company is generally not subject to United States federal and most state
income taxation on its income from U.S. operations. Rather, the Companys income, gains, losses, deductions and credits generally flow through to its shareholders.

Section 1361 of the Internal Revenue Code of 1986, as amended, provides that a corporation that meets certain requirements may elect to be taxed as an S corporation. These requirements include but are not limited
to: (1) the corporation having only certain types of shareholders, (2) the corporation having 100 shareholders or less and (3) the corporation having only one class of stock. The Companys management believes that it presently
meets the requirements to be treated as an S corporation.

The Company has not obtained a ruling from the Internal Revenue Service or any
state tax agency confirming that it will be treated as an S corporation or that the Companys eligible subsidiaries will be treated as qualified subchapter S subsidiaries for United States federal and state income tax purposes. Nor has the
Company obtained an opinion upon which an investor may rely to this effect. Furthermore, the Company cannot assure investors that the applicable law and regulations will not change in a way that would result in the Companys treatment as a
corporation other than as an S corporation for United States federal and state income tax purposes in the future.

As the Company was a C
corporation (that is, a regular corporation for tax purposes) before converting to an S corporation, it is potentially subject to a corporate level built-in gain tax generally based on the excess of the fair market value of its assets
over their tax basis on its S corporation conversion date (January 1, 1998). As a result, if the Company disposes of its built-in gain assets before 2008, it may be required to pay a federal corporate income tax on the realized built-in
gain at the highest regular corporate rate. The Company is not currently contemplating making any substantial asset sales.

If for any
reason the Company elects to change or lose its S corporation status or its subsidiaries lose their qualified subchapter S subsidiary status, the Company would be required to pay United States federal and state income tax thereby reducing the amount
of cash available to repay its debt or to reinvest in its operations which generally would have a material adverse effect on its operating results and financial condition.

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.

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. These legal matters could have a materially adverse effect on the Companys financial condition, liquidity or results of
operations should the Company fail to prevail in any of these legal proceedings or claims.



10



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##### Table of Contents

|Item 1B. | Unresolved Staff Comments.
|-------- | --------------------------

Not applicable.



|Item 2. | Properties.
|------- | -----------

Da-Lite conducts its business from the
following facilities, all of which are owned by the Company:



|                   |  |                         |  |                                                       
|------------------ |  | ----------------------- |  | ------------------------------------------------------
|Location           |  | Approximate Sq. Footage |  | Primary Function                                      
|Warsaw, Indiana    |  | 311,300                 |  | Main manufacturing facility and corporate headquarters
|Blue Ash, Ohio     |  | 44,000                  |  | Screen fabric production, rear projection screens     
|Wichita, Kansas    |  | 130,000                 |  | Metal fabrication                                     
|Weert, Netherlands |  | 160,000                 |  | Screen manufacturing, metal fabrication               
|Patay, France      |  | 43,560                  |  | Screen manufacturing                                  

Warsaw Facility. The facility based in Warsaw, Indiana has the most extensive production
capabilities and serves as the Companys headquarters.

Blue Ash (Cincinnati Area) Facility. The Blue Ash, Ohio facility is a
much smaller plant that produces all of the flexible material used in the Fast-Fold portable screen product line and certain electric screens. The facility also supplies optical and structural components for the Companys rear projection
systems.

Wichita Facility. The Wichita, Kansas plant is largely a metal fabrication facility that produces carts and stands,
monitor mounts, easels and multi-media support furniture. Wichita also acts as a central distribution center for certain products.

Weert Facility. The Weert, Netherlands facility is a vertically integrated manufacturing
plant that produces front projection screens, carts and stands, and multi-media support furniture under the Projecta®brand name. The Company completed the construction of the 160,000 square foot facility in September 2004 and uses this site to house its Dutch manufacturing and office personnel.

Patay Facility. The Company produces front projection screens at its Patay plant located
south of Paris, France. These products are marketed under the Procolor®brand name.



11



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##### Table of Contents

|Item 3. | Legal Proceedings.
|------- | ------------------

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. The results of legal proceedings cannot be predicted with certainty, and
it is possible that a failure of the Company to prevail in this action could have a material adverse effect on its results of operations or financial condition.



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

No matters were submitted to a vote of security holders during the fourth quarter ended December 29, 2006.



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##### Table of Contents

PART II



|Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|------- | -------------------------------------------------------------------------------------------------------------

As of December 29, 2006, there were 54 holders of record of the Companys single-class of capital stock. No public trading market, or public
exchange, for the Companys common equity has been established.

As a subchapter S corporation under the Internal Revenue Code of
1986, distributions are made by Da-Lite to its shareholders to pay estimated taxes relating to taxable income allocated to them by the Company on a quarterly basis. Tax related distributions were $13.0 million and $10.9 million in 2006 and 2005,
respectively.

The Company paid regular distributions to its shareholders in 2006 at
the monthly rate of $200 per share or $1.1 million per month in the aggregate, subject to the covenants contained in the indenture related to its 91/2% senior unsecured notes due in May 2011. Regular monthly distributions were paid to the Companys shareholders in 2005 at the monthly rate of $175 per share or $0.9 million in the aggregate.



|Item 6. | Selected Financial Data.
|------- | ------------------------

The following tables set
forth Da-Lites selected consolidated financial data. The selected consolidated financial data as of and for each of the years in the five-year period ended December 29, 2006 were derived from the Companys audited consolidated
financial statements.



|                               |  |                        |         |   |                  |   |         |                  |  |   |                  |      |                  |   |         |  |   |        
|------------------------------ |  | ---------------------- | ------- | - | ---------------- | - | ------- | ---------------- |  | - | ---------------- | ---- | ---------------- | - | ------- |  | - | -------
|                               |  | Year Ended (1)        
|                               |  | December 29,2006       |         |   | December 30,2005 |   |         | December 31,2004 |  |   | December 26,2003 |      | December 27,2002
|                               |  | (dollars in thousands)
|Net sales                      |  | $                      | 169,827 |   |                  | $ | 165,634 |                  |  | $ | 162,166          |      |                  | $ | 135,673 |  | $ | 122,734
|Net income                     |  |                        | 31,634  |   |                  |   | 30,815  |                  |  |   | 31,194           |      |                  |   | 28,604  |  |   | 24,409 
|Total assets                   |  |                        | 97,496  |   |                  |   | 93,089  |                  |  |   | 94,344           |      |                  |   | 72,520  |  |   | 69,488 
|Total debt                     |  |                        | 140,200 |   |                  |   | 144,200 |                  |  |   | 150,200          | (2)  |                  |   | 17,850  |  |   | 28,500 
|Shareholders (deficit) equity |  |                        | (55,219 | ) |                  |   | (62,638 | )                |  |   | (68,556          | )(2) |                  |   | 43,544  |  |   | 31,152 

---

|(1) | The Company uses a 52-week or 53-week fiscal year ending on the last Friday of December. The fiscal year ended December 31, 2004 was a 53-week year and all other fiscal years
were 52-week years.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | In the second quarter of 2004, the Company issued $160 million in principal amount of 91/2% senior notes due 2011 (the 91/2% senior notes) and used the proceeds to retire approximately $15.0 million of outstanding indebtedness under a then existing credit facility, to pay a special distribution
to shareholders of approximately $134.6 million and for general corporate purposes.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

|Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations.
|------- | --------------------------------------------------------------------------------------

Forward Looking Statements

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

Overview

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

Outlook

Da-Lite believes that its primary competitive strengths continue to be the quality of its products, the breadth of its product line and its excellent
customer service. The Company is focused on making the investments needed to maintain the high level of performance historically seen from its core business. Sales growth for 2007 is difficult to forecast because the Company does not operate with a
significant order backlog.

Regular profit distributions to shareholders in 2007
have been issued at the monthly rate of $200 per share or $1.1 million per month in the aggregate, subject to the covenants contained in the indenture related to the Companys 91/2% senior notes. The Company currently believes that cash generated from operations will be sufficient to cover its operating requirements, although there
can be no assurances in this regard.



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##### Table of Contents

Results of Operations

Year Ended December 29, 2006 Compared with Year Ended December 30, 2005

Net Sales. Net sales were
$169.8 million for 2006, as compared to net sales of $165.6 million for 2005, an increase of $4.2 million or 2.5%. Net sales by the Companys United States (U.S.) operations increased 0.5%. In the U.S., electric screen sales increased $4.0
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 $1.7 million and were likely
impacted by a slowdown in the housing market that has reduced the demand for the Companys products used in home theaters. Portable screen sales decreased $0.5 million and sales of other products decreased $1.2 million from 2005 levels. The
decrease in sales of other products was a result of lower sales of screen fabric. Net sales from the Companys European subsidiaries increased by $3.6 million or 14.4%, with the stronger Euro accounting for $0.3 million of the overall increase.
The increase in Europe resulted from an improvement in economic outlook for key customers as well as an increase in demand for screens leading up to the World Cup soccer event.

Cost of Sales. Cost of sales were $103.5 million for 2006, as compared to $100.8 million for 2005, an increase of $2.7 million or 2.7%. As a
percentage of net sales, the cost of sales represented 60.9% and 60.8% for 2006 and 2005, respectively. This constitutes a 0.1 percentage point reduction in margin. Margins at our U.S. facilities decreased 0.6 percentage points due to a decrease in
the custom engineered and complementary audiovisual products margins. Margins at our European operation increased 0.9 percentage points, reflecting the increase in product volume.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $18.7 million for 2006, as compared to $17.2
million for 2005. Selling, general and administrative expenses in the U.S. increased $0.8 million. Increases in legal fees related to patent litigation and bad debt expense more than offset a decrease associated with Sarbanes-Oxley preparation
expense. Selling, general and administrative expenses in Europe increased $0.7 million as a result of increased spending in marketing programs and other operating costs.

Interest, net. Interest expense totaled $13.7 million for 2006, as compared to $14.8
million for 2005, a decrease of $1.1 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, net. Miscellaneous, net was $0.6 million for 2006, as compared to $0.7 million for 2005, a decrease of $0.1 million. Miscellaneous, net consisted primarily of the premium paid to retire $4.0 million and $6.0 million of
the Companys 91/2% senior notes in the second quarter of 2006 and in the fourth quarter of 2005,
respectively.

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 shareholders 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 shareholders reside). This assumed rate was 40.4% during 2006 and 2005. 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 $0.8 million from $30.8 million in 2005 to $31.6 million in 2006.



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##### Table of Contents

Year Ended December 30, 2005 Compared with Year Ended December 31, 2004

Net Sales. Net sales were $165.6 million for 2005, as compared to net sales of $162.2 million for 2004, an increase of $3.4 million or 2.1%. Strong
performance in the North American market helped to offset lower than expected sales in Europe resulting from difficult economic conditions and increased competition from new and existing competitors. Growth in North America was partly attributable
to increased sales to the Business and Consumer/Home Theater markets. In addition, the 2005 fiscal year was a 52-week period whereas the 2004 fiscal year was a 53-week period. In the U.S., electric screen sales increased $5.0 million, wall screen
sales increased $3.4 million and portable screen sales increased $1.1 million. Sales from the Companys European subsidiaries decreased $5.7 million or 18.8%.

Cost of Sales. Cost of sales were $100.8 million for 2005, as compared to $97.8 million for 2004, an increase of $3.0 million or 3.1%. As a percentage of net sales, the cost of sales represented 60.8% and 60.3%
for 2005 and 2004, respectively. Margins at our U.S. facilities increased slightly. Margins at our European operations decreased as a result of lower product volumes, which led to unabsorbed overhead.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $17.2 million for 2005, as compared to $18.6
million for 2004. Selling, general and administrative expenses in the Companys European subsidiaries decreased $0.4 million. In the second quarter of 2004, the Company incurred a non-cash compensation expense of $1.7 million related to an
employees exercise of 40 options of common stock at less than the original exercise price as per an employment agreement entered into during the second quarter of 2004.

Interest, net. Interest expense totaled $14.8 million for 2005, as compared to $10.8
million for 2004, an increase of $4.0 million. This increase was a direct result of the interest on the 91/2%
senior debt issued in May 2004.

Miscellaneous, net. Miscellaneous,
net was $0.7 million for 2005, as compared to $1.1 million for 2004, a decrease of $0.4 million. Miscellaneous, net consisted primarily of the premium paid to retire $6.0 million and $9.8 million of the Companys 91/2% senior notes in the fourth quarter of 2005 and in the second half of 2004, respectively.

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 shareholders 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 shareholders reside). This assumed rate was 40.4% during 2005. 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 $0.4 million from $31.2 million in 2004 to $30.8 million in 2005.



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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.

In May 2006, the Company repurchased $4.0 million of the
outstanding principal amount of its 91/2% senior notes from the open market for an aggregate purchase price of
$4.3 million. The Company retired these notes and wrote-off the related deferred financing costs and incurred a charge of $0.4 million during the second quarter of 2006 relating to the repurchase. Depending on the Companys expected cash needs,
the prevailing prices of its 91/2% senior notes and other factors, the Company may repurchase some amount of its
outstanding 91/2% senior notes from time to time in the open market or otherwise.

Management believes the principal indicators of the Companys liquidity are its cash position (total cash and
short-term investments), remaining availability under its bank credit facilities and its excess working capital. At December 29, 2006, the Companys cash position was $16.9 million, an increase of $4.4 million from December 30, 2005.
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 December 29, 2006. At December 29, 2006, the Company had no outstanding balances under this line of credit. Da-Lites working capital position increased to $36.6 million (including $16.9 million of total
cash and short-term investments) at December 29, 2006, from $31.3 million (including $12.5 million of total cash and short-term investments) at December 30, 2005. The Company was in compliance with all covenants at December 29, 2006
and December 30, 2005.

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 5.75% on December 29, 2006. At December 29, 2006 and
December 30, 2005, Projecta had no outstanding balances under this line of credit.

Cash Flows

Cash provided by operating activities in 2006 was $35.7 million, as compared to $34.1 million in 2005, an increase of $1.6 million or 4.5%. Cash provided
by investing activities was $0.1 million in 2006, as compared to an use of $8.1 million in 2005. Cash provided by investing activities in 2006 resulted from $1.3 million of proceeds from the sale of the prior manufacturing facility in the
Netherlands and a reduction in short-term investments of $1.0 million, which were substantially offset by capital expenditures of $2.2 million. In 2005, cash used for investing activities was for the purchase of short-term investments of $5.5
million and capital expenditures of $2.6 million. Cash used in financing activities was $30.5 million in 2006, as compared to $28.1 million in 2005. The increase in cash used for financing activities in 2006 was related to an increase of $2.1
million in distributions to shareholders to pay estimated taxes and an increase of $1.7 million in regular distributions to shareholders, partially offset by a reduction in payments to retire senior notes of $2.0 million.

Capital Expenditures

Capital expenditures were $2.2
million in 2006 and $2.6 million in 2005. Substantially all of the expenditures in 2006 and 2005 were related to machinery and equipment purchases. The Companys management currently expects to spend approximately $2.5 million on capital
expenditures in 2007 using cash generated from operations.



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##### Table of Contents

Contractual Obligations

The following table sets forth, as of December 29, 2006, 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 |  | $                      | 200.1 |                 | $ | 13.3      |  | $         | 26.6 |                  | $ | 160.2 |  | $ | 
|                                                |  |                        |       |                 |  
|Self-insurance letter of credit                 |  |                        | 0.5   |                 |   | 0.5       |  |           |     |                  |   |      |  |   | 
|                                                |  |                        |       |                 |   |           |  |           |      |                  |   |       |  |   |  
|Total                                           |  | $                      | 200.6 |                 | $ | 13.8      |  | $         | 26.6 |                  | $ | 160.2 |  | $ | 
|                                                |  |                        |       |                 |   |           |  |           |      |                  |   |       |  |   |  

Distributions

As a subchapter S corporation under the Internal Revenue Code of 1986, distributions are made by Da-Lite to its shareholders to pay estimated taxes relating to taxable income allocated to them by the Company on a
quarterly basis. Tax related distributions were $13.0 million in 2006 and $10.9 million in 2005.

The Company made regular distributions to its shareholders in 2006 at the monthly rate of $200 per share or $1.1 million per month in the aggregate, subject to the covenants contained in the indenture related to its
91/2% senior notes. Regular distributions to the Companys shareholders in 2005 were issued at the monthly
rate of $175 per share or $0.9 million in the aggregate. The Company has continued to make regular distributions to its shareholders in 2007 at the monthly rate of $200 per share or $1.1 million in the aggregate.

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

Critical Accounting Policies and Estimates

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

Revenue Recognition

The Company recognizes revenue when it has received an order from a customer, product has been shipped FOB shipping point, the sales price is fixed or determinable and the collectibility of sales price is reasonably assured. All amounts
billed to customers in a sales transaction related to shipping and handling are recorded as revenue, and costs incurred by the Company for shipping and handling are recorded as cost of sales in conformity with Emerging Issues Task Force (EITF) Issue
No. 00-10, Accounting for Shipping and Handling Fees and Costs.

Allowance for Doubtful Accounts

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

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 at December 29, 2006 and December 30, 2005. The change in the balance of goodwill from December 30, 2005 to December 29, 2006 is the result of
foreign currency translation.

Recent Accounting Pronouncements

In September 2006, the FASB issued FASB Statement No. 157, Fair Value Measurement (SFAS 157). SFAS 157 addresses standardizing the measurement of fair value for companies who are required to use a fair value
measure of recognition for recognition or disclosure purposes. The FASB defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measure date. The statement is effective for fiscal years beginning after November 15, 2007 and for interim periods within those fiscal years. The Company is required to adopt SFAS 157 beginning fiscal year 2008. The Company is currently
evaluating the impact, if any, of SFAS 157 on its financial position, results of operations and cash flows.



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##### Table of Contents

In September 2006, the FASB issued FASB Statement No. 158, Employers Accounting for Defined
Benefit Pension and Other Postretirement Plans (SFAS 158). SFAS 158 requires companies to recognize the funded status of benefit pension and other postretirement plans as a net asset or liability in its financial statements. In addition,
disclosure requirements related to such plans are affected by SFAS 158. The Company does not have a defined benefit pension plan, or other postretirement plans, and therefore the adoption of SFAS 158 did not have an affect on the results of
operations.

In September 2006, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulleting No. 108
(SAB 108), which provides interpretive guidance on how the effects of the carryover or reversal of prior year misstatements should be considered in quantifying a current year misstatement. The Company adopted SAB 108 at the end of fiscal
year 2006 and the adoption of this statement did not have a material impact on the Companys financial position or results of operations.

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. EITF 06-3 is required to be adopted during the second quarter of fiscal 2007.

In June 2006, the Financial
Accounting Standards Board 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. FIN 48 is effective for fiscal years beginning after December 15, 2006 and the Company will adopt the provisions of FIN 48
in fiscal 2007. The Company does not expect that the adoption of FIN 48 will have a material impact on its consolidated financial position, results of operations or cash flows.

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. This Statement is effective for all financial instruments acquired or issued after the beginning of an entitys first fiscal year that begins after September 15, 2006. The Company
does not anticipate that the adoption of SFAS 155 will have an impact on the Companys overall results of operations or financial position.



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##### Table of Contents

In December 2004, the FASB issued SFAS No. 123 (Revised 2004), Share-Based Payment (SFAS
123R), that revised FASB Statement No. 123, Accounting for Stock-Based Compensation and superseded APB Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance. SFAS 123R focuses
primarily on accounting for transactions in which an entity obtains employee services through share-based payment transactions. SFAS 123R requires a public entity to measure the cost of employee services received in exchange for the award of equity
instruments based on the fair value of the award at the date of grant. The cost is recognized over the period during which an employee is required to provide services in exchange for the award. The Company adopted SFAS 123R on December 31, 2005
using the prospective method. The adoption of SFAS 123R did not have a material effect on the consolidated results of operations or financial position of the Company.

In November 2004, the FASB issued SFAS No. 151, Inventory Costs, an amendment of ARB No. 43, Chapter 4 which amends the guidance in Accounting Research Bulletin (ARB) No. 43, Chapter 4,
"Inventory Pricing," to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated that "under some circumstances, items
such as idle facility expense, excessive spoilage, double freight, and rehandling costs may be so abnormal as to require treatment as current period charges." SFAS 151 requires that those items be recognized as current period charges
regardless of whether they meet the criterion of "so abnormal." In addition, SFAS 151 requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The Company adopted
SFAS 151 in fiscal year 2006 and there was no material effect on the consolidated results of operations or financial position of the Company.

Selected
Quarterly Financial Data (unaudited)



|                                                 |  |                |        |        |   |        |  |        |        |  |   |       
|------------------------------------------------ |  | -------------- | ------ | ------ | - | ------ |  | ------ | ------ |  | - | ------
|                                                 |  | First          |        | Second |   | Third  |  | Fourth
|                                                 |  | (in thousands)
|Year ended December 29, 2006                     |  |                |        |        |   |        |  |        |        |  |   |       
|Net sales                                        |  | $              | 42,976 |        | $ | 43,367 |  | $      | 42,711 |  | $ | 40,773
|Gross profit                                     |  |                | 17,321 |        |   | 17,138 |  |        | 16,173 |  |   | 15,687
|Operating income                                 |  |                | 11,942 |        |   | 12,550 |  |        | 12,107 |  |   | 11,038
|Income before income taxes and minority interest |  |                | 8,457  |        |   | 8,454  |  |        | 8,821  |  |   | 7,616 
|Net income                                       |  |                | 8,084  |        |   | 7,971  |  |        | 8,366  |  |   | 7,213 
|                                                 |  |                |        |       
|Year ended December 30, 2005                     |  |                |        |        |   |        |  |        |        |  |   |       
|Net sales                                        |  | $              | 41,915 |        | $ | 42,039 |  | $      | 41,920 |  | $ | 39,760
|Gross profit                                     |  |                | 16,360 |        |   | 16,401 |  |        | 16,693 |  |   | 15,411
|Operating income                                 |  |                | 11,774 |        |   | 11,774 |  |        | 12,789 |  |   | 11,326
|Income before income taxes and minority interest |  |                | 8,081  |        |   | 8,015  |  |        | 9,135  |  |   | 6,940 
|Net income                                       |  |                | 7,675  |        |   | 7,760  |  |        | 8,826  |  |   | 6,554 



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|Item 7A. | 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, cash equivalents, short-term investments and accounts receivable. The Company maintains cash, cash equivalents, and short-term investments 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 4% of the Companys total outstanding receivables as of December 29, 2006. 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 foreign currency exchange contracts to hedge raw material purchases from vendors outside of the country of purchase. Gains
and losses on these contracts offset changes in the related foreign currency denominated costs. At December 29, 2006, the Company had open forward exchange contracts with a notional amount of $1.2 million. The fair value of these open forward
exchange contracts was not material.

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 December 29, 2006. At December 29, 2006, 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 5.75% on December 29, 2006. At December 29, 2006, Projecta had no outstanding balances under this credit
facility.

At December 29, 2006, 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 $153.5 million from the fair value of approximately $148.0 million at December 29, 2006. 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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Da-Lite Screen Company, Inc.

Warsaw, Indiana

We have audited the accompanying
consolidated balance sheet of Da-Lite Screen Company, Inc. and subsidiaries (the "Company") as of December 29, 2006, and the related consolidated statement of operations, shareholders' (deficit) equity and comprehensive income, and cash flows
for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Da-Lite Screen Company, Inc. and subsidiaries
as of December 29, 2006, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ DELOITTE & TOUCHE LLP

Indianapolis, IN

March 23, 2007



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##### Table of Contents

Report of Independent Registered Public Accounting Firm

The Board of Directors

Da-Lite Screen Company, Inc.:

We have audited the accompanying consolidated balance sheet of Da-Lite Screen Company, Inc. and subsidiaries (the Company) as of December 30, 2005, and the
related consolidated statements of operations, stockholders (deficit) equity and comprehensive income, and cash flows for the years ended December 30, 2005 and December 31, 2004. These consolidated financial statements are the
responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Da-Lite Screen Company, Inc.
and subsidiaries as of December 30, 2005, and the results of their operations and their cash flows for the years ended December 30, 2005 and December 31, 2004, in conformity with U.S. generally accepted accounting principles.

/s/ KPMG LLP

Des Moines,
Iowa

February 20, 2006



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##### Table of Contents

|Item 8. | Financial Statements and Supplementary Data.
|------- | --------------------------------------------

DA-LITE SCREEN COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except par value amount)



|                                                                                                                                                          |  |                        |         |   |                        |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------- | ------- | - | ---------------------- | - | ------- | -
|                                                                                                                                                          |  | As of December 29,2006 |         |   | As of December 30,2005 |  
|Assets                                                                                                                                                    |  |                        |         |   |                        |   |         |  
|Current assets:                                                                                                                                           |  |                        |         |   |                        |   |         |  
|Cash and cash equivalents                                                                                                                                 |  | $                      | 12,323  |   |                        | $ | 7,008   |  
|Short-term investments                                                                                                                                    |  |                        | 4,584   |   |                        |   | 5,539   |  
|                                                                                                                                                          |  |                        |         |   |                        |   |         |  
|Total cash and short-term investments                                                                                                                     |  |                        | 16,907  |   |                        |   | 12,547  |  
|Accounts receivable, less allowance for doubtful accounts of $533 in 2006 and $453 in 2005                                                                |  |                        | 16,620  |   |                        |   | 16,492  |  
|Inventories                                                                                                                                               |  |                        | 13,629  |   |                        |   | 12,195  |  
|Prepaid expenses and other                                                                                                                                |  |                        | 667     |   |                        |   | 439     |  
|Prepaid income taxes                                                                                                                                      |  |                        | 136     |   |                        |   | 179     |  
|                                                                                                                                                          |  |                        |         |   |                        |   |         |  
|Total current assets                                                                                                                                      |  |                        | 47,959  |   |                        |   | 41,852  |  
|                                                                                                                                                          |  |                        |         |   |                        |   |         |  
|Property, plant and equipment:                                                                                                                            |  |                        |         |   |                        |   |         |  
|Land and land improvements                                                                                                                                |  |                        | 2,711   |   |                        |   | 2,531   |  
|Buildings and building improvements                                                                                                                       |  |                        | 17,849  |   |                        |   | 17,135  |  
|Machinery and equipment                                                                                                                                   |  |                        | 27,284  |   |                        |   | 25,538  |  
|Furniture and fixtures                                                                                                                                    |  |                        | 8,632   |   |                        |   | 7,581   |  
|Construction in-process                                                                                                                                   |  |                        | 7       |   |                        |   | 18      |  
|                                                                                                                                                          |  |                        |         |   |                        |   |         |  
|                                                                                                                                                          |  |                        | 56,483  |   |                        |   | 52,803  |  
|Less accumulated depreciation                                                                                                                             |  |                        | 36,761  |   |                        |   | 32,610  |  
|                                                                                                                                                          |  |                        |         |   |                        |   |         |  
|Net property, plant and equipment                                                                                                                         |  |                        | 19,722  |   |                        |   | 20,193  |  
|                                                                                                                                                          |  |                        |         |   |                        |   |         |  
|Goodwill                                                                                                                                                  |  |                        | 26,454  |   |                        |   | 25,851  |  
|Other assets, net                                                                                                                                         |  |                        | 3,361   |   |                        |   | 5,193   |  
|                                                                                                                                                          |  |                        |         |   |                        |   |         |  
|                                                                                                                                                          |  | $                      | 97,496  |   |                        | $ | 93,089  |  
|                                                                                                                                                          |  |                        |         |   |                        |   |         |  
|Liabilities and Shareholders Deficit                                                                                                                     |  |                        |         |   |                        |   |         |  
|Current liabilities:                                                                                                                                      |  |                        |         |   |                        |   |         |  
|Accounts payable                                                                                                                                          |  | $                      | 4,388   |   |                        | $ | 4,318   |  
|                                                                                                                                                          |  |                        |         |   |                        |   |         |  
|Accrued expenses:                                                                                                                                         |  |                        |         |   |                        |   |         |  
|Interest                                                                                                                                                  |  |                        | 1,656   |   |                        |   | 1,754   |  
|Vacation                                                                                                                                                  |  |                        | 1,229   |   |                        |   | 955     |  
|Other                                                                                                                                                     |  |                        | 4,130   |   |                        |   | 3,540   |  
|                                                                                                                                                          |  |                        |         |   |                        |   |         |  
|Total accrued expenses                                                                                                                                    |  |                        | 7,015   |   |                        |   | 6,249   |  
|                                                                                                                                                          |  |                        |         |   |                        |   |         |  
|Total current liabilities                                                                                                                                 |  |                        | 11,403  |   |                        |   | 10,567  |  
|Long-term debt                                                                                                                                            |  |                        | 140,200 |   |                        |   | 144,200 |  
|                                                                                                                                                          |  |                        |         |   |                        |   |         |  
|Total liabilities                                                                                                                                         |  |                        | 151,603 |   |                        |   | 154,767 |  
|                                                                                                                                                          |  |                        |         |   |                        |   |         |  
|Minority interest                                                                                                                                         |  |                        | 1,112   |   |                        |   | 960     |  
|                                                                                                                                                          |  |                       
|Commitments and contingencies (note 9)                                                                                                                    |  |                        |         |   |                        |   |         |  
|                                                                                                                                                          |  |                       
|Shareholders deficit:                                                                                                                                    |  |                        |         |   |                        |   |         |  
|Common stock, $1 par value. Authorized 1,000,000 shares; 10,686 shares issued and 5,364.12 and 5,371.62 shares outstanding in 2006 and 2005,
respectively |  |                        | 11      |   |                        |   | 11      |  
|Additional paid-in capital                                                                                                                                |  |                        | 618     |   |                        |   | 574     |  
|Retained deficit                                                                                                                                          |  |                        | (34,479 | ) |                        |   | (40,036 | )
|Accumulated other comprehensive income                                                                                                                    |  |                        | 2,750   |   |                        |   | 439     |  
|Less treasury stock, 5,321.88 and 5,314.38 shares at cost in 2006 and 2005, respectively                                                                  |  |                        | (24,119 | ) |                        |   | (23,626 | )
|                                                                                                                                                          |  |                        |         |   |                        |   |         |  
|Total shareholders deficit                                                                                                                               |  |                        | (55,219 | ) |                        |   | (62,638 | )
|                                                                                                                                                          |  |                        |         |   |                        |   |         |  
|                                                                                                                                                          |  | $                      | 97,496  |   |                        | $ | 93,089  |  
|                                                                                                                                                          |  |                        |         |   |                        |   |         |  

See accompanying notes to consolidated financial statements.



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##### Table of Contents

DA-LITE SCREEN COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands)



|                                                 |  |                              |         |                              |   |                              |  |   |        
|------------------------------------------------ |  | ---------------------------- | ------- | ---------------------------- | - | ---------------------------- |  | - | -------
|                                                 |  | Year ended December 29, 2006 |         | Year ended December 30, 2005 |   | Year ended December 31, 2004
|Net sales                                        |  | $                            | 169,827 |                              | $ | 165,634                      |  | $ | 162,166
|Cost of sales                                    |  |                              | 103,508 |                              |   | 100,769                      |  |   | 97,774 
|                                                 |  |                              |         |                              |   |                              |  |   |        
|Gross profit                                     |  |                              | 66,319  |                              |   | 64,865                       |  |   | 64,392 
|Selling, general and administrative expenses     |  |                              | 18,682  |                              |   | 17,202                       |  |   | 18,648 
|                                                 |  |                              |         |                              |   |                              |  |   |        
|Operating income                                 |  |                              | 47,637  |                              |   | 47,663                       |  |   | 45,744 
|                                                 |  |                              |         |                              |   |                              |  |   |        
|Other expense:                                   |  |                              |         |                              |   |                              |  |   |        
|Interest, net                                    |  |                              | 13,726  |                              |   | 14,758                       |  |   | 10,785 
|Miscellaneous, net                               |  |                              | 563     |                              |   | 734                          |  |   | 1,140  
|                                                 |  |                              |         |                              |   |                              |  |   |        
|Total other expense                              |  |                              | 14,289  |                              |   | 15,492                       |  |   | 11,925 
|                                                 |  |                              |         |                              |   |                              |  |   |        
|Income before income taxes and minority interest |  |                              | 33,348  |                              |   | 32,171                       |  |   | 33,819 
|Income taxes                                     |  |                              | 1,562   |                              |   | 1,248                        |  |   | 2,441  
|Minority interest                                |  |                              | 152     |                              |   | 108                          |  |   | 184    
|                                                 |  |                              |         |                              |   |                              |  |   |        
|Net income                                       |  | $                            | 31,634  |                              | $ | 30,815                       |  | $ | 31,194 
|                                                 |  |                              |         |                              |   |                              |  |   |        

See accompanying notes to consolidated financial statements.



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DA-LITE SCREEN COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS (DEFICIT) EQUITY AND

COMPREHENSIVE INCOME

(Dollars in thousands, except per share amounts)



|                                                             |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|------------------------------------------------------------ |  | ----------- | -- | ------------------------ | - | ------- | -------------------------- |  | - | ------------------------------------------ | - |  | ------------- | ------ | - | ----- | - | ------- | - |  | - | -------- | -
|                                                             |  | CommonStock |    | Additionalpaid-incapital |   |         | Retained (deficit)earnings |  |   | Accumulatedothercomprehensive(loss) income |   |  | Treasurystock |        |   | Total |  
|Balance at December 26, 2003                                 |  | $           | 11 |                          | $ | 11,172  |                            |  | $ | 55,229                                     |   |  | $             | 1,156  |   |       | $ | (24,024 | ) |  | $ | 43,544   |  
|                                                             |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Comprehensive income:                                        |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Net income                                                   |  |             |   |                          |   |        |                            |  |   | 31,194                                     |   |  |               |       |   |       |   |        |   |  |   | 31,194   |  
|Other comprehensive income:                                  |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Foreign currency translation adjustments                     |  |             |   |                          |   |        |                            |  |   |                                           |   |  |               | 1,845  |   |       |   |        |   |  |   | 1,845    |  
|Reversal of unrealized loss on expired derivative instrument |  |             |   |                          |   |        |                            |  |   |                                           |   |  |               | 244    |   |       |   |        |   |  |   | 244      |  
|                                                             |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Total comprehensive income                                   |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   | 33,283   |  
|                                                             |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Exercise of common stock options (140.4 shares)              |  |             |   |                          |   | 2,361   |                            |  |   |                                           |   |  |               |       |   |       |   | 615     |   |  |   | 2,976    |  
|Distributions to shareholders ($28,098.03 per share)         |  |             |   |                          |   | (13,303 | )                          |  |   | (135,056                                   | ) |  |               |       |   |       |   |        |   |  |   | (148,359 | )
|                                                             |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Balance at December 31, 2004                                 |  |             | 11 |                          |   | 230     |                            |  |   | (48,633                                    | ) |  |               | 3,245  |   |       |   | (23,409 | ) |  |   | (68,556  | )
|                                                             |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Comprehensive income:                                        |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Net income                                                   |  |             |   |                          |   |        |                            |  |   | 30,815                                     |   |  |               |       |   |       |   |        |   |  |   | 30,815   |  
|Other comprehensive income:                                  |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Foreign currency translation adjustments                     |  |             |   |                          |   |        |                            |  |   |                                           |   |  |               | (2,806 | ) |       |   |        |   |  |   | (2,806   | )
|                                                             |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Total comprehensive income                                   |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   | 28,009   |  
|                                                             |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Repurchase of common stock (12.9 shares)                     |  |             |   |                          |   |        |                            |  |   |                                           |   |  |               |       |   |       |   | (381    | ) |  |   | (381     | )
|Exercise of common stock options (37.6 shares)               |  |             |   |                          |   | 344     |                            |  |   |                                           |   |  |               |       |   |       |   | 164     |   |  |   | 508      |  
|Distributions to shareholders ($4,124.49 per share)          |  |             |   |                          |   |        |                            |  |   | (22,218                                    | ) |  |               |       |   |       |   |        |   |  |   | (22,218  | )
|                                                             |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Balance at December 30, 2005                                 |  |             | 11 |                          |   | 574     |                            |  |   | (40,036                                    | ) |  |               | 439    |   |       |   | (23,626 | ) |  |   | (62,638  | )
|                                                             |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Comprehensive income:                                        |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Net income                                                   |  |             |   |                          |   |        |                            |  |   | 31,634                                     |   |  |               |       |   |       |   |        |   |  |   | 31,634   |  
|Other comprehensive income:                                  |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Foreign currency translation adjustments                     |  |             |   |                          |   |        |                            |  |   |                                           |   |  |               | 2,311  |   |       |   |        |   |  |   | 2,311    |  
|                                                             |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Total comprehensive income                                   |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   | 33,945   |  
|                                                             |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Repurchase of common stock (16.5 shares)                     |  |             |   |                          |   |        |                            |  |   |                                           |   |  |               |       |   |       |   | (533    | ) |  |   | (533     | )
|Exercise of common stock options (9.0 shares)                |  |             |   |                          |   | 44      |                            |  |   |                                           |   |  |               |       |   |       |   | 40      |   |  |   | 84       |  
|Distributions to shareholders ($4,817.26 per share)          |  |             |   |                          |   |        |                            |  |   | (26,077                                    | ) |  |               |       |   |       |   |        |   |  |   | (26,077  | )
|                                                             |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  
|Balance at December 29, 2006                                 |  | $           | 11 |                          | $ | 618     |                            |  | $ | (34,479                                    | ) |  | $             | 2,750  |   |       | $ | (24,119 | ) |  | $ | (55,219  | )
|                                                             |  |             |    |                          |   |         |                            |  |   |                                            |   |  |               |        |   |       |   |         |   |  |   |          |  

See accompanying notes to consolidated financial statements.



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DA-LITE SCREEN COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)



|                                                                                  |  |                              |         |   |                            |   |         |                            |  |   |          |  
|--------------------------------------------------------------------------------- |  | ---------------------------- | ------- | - | -------------------------- | - | ------- | -------------------------- |  | - | -------- | -
|                                                                                  |  | Year ended December 29, 2006 |         |   | Year endedDecember 30,2005 |   |         | Year endedDecember 31,2004 | 
|Cash flows from operating activities:                                             |  |                              |         |   |                            |   |         |                            |  |   |          |  
|Net income                                                                        |  | $                            | 31,634  |   |                            | $ | 30,815  |                            |  | $ | 31,194   |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                              |         |   |                            |   |         |                            |  |   |          |  
|Depreciation                                                                      |  |                              | 3,918   |   |                            |   | 4,368   |                            |  |   | 3,553    |  
|Amortization and write-off of debt issuance costs                                 |  |                              | 870     |   |                            |   | 985     |                            |  |   | 1,425    |  
|Stock-based compensation                                                          |  |                              |        |   |                            |   |        |                            |  |   | 1,710    |  
|Gain on disposal of assets                                                        |  |                              | (475    | ) |                            |   | (6      | )                          |  |   | (13      | )
|Minority interest earnings                                                        |  |                              | 152     |   |                            |   | 108     |                            |  |   | 184      |  
|Change in:                                                                        |  |                              |         |   |                            |   |         |                            |  |   |          |  
|Accounts receivable                                                               |  |                              | 463     |   |                            |   | 140     |                            |  |   | (725     | )
|Inventories                                                                       |  |                              | (1,080  | ) |                            |   | (1,138  | )                          |  |   | (1,001   | )
|Prepaid expenses and other                                                        |  |                              | (195    | ) |                            |   | (178    | )                          |  |   | 207      |  
|Accounts payable                                                                  |  |                              | (418    | ) |                            |   | (61     | )                          |  |   | 477      |  
|Accrued expenses                                                                  |  |                              | 791     |   |                            |   | (893    | )                          |  |   | 1,872    |  
|Other                                                                             |  |                              | (1      | ) |                            |   | (5      | )                          |  |   | (217     | )
|                                                                                  |  |                              |         |   |                            |   |         |                            |  |   |          |  
|Net cash provided by operating activities                                         |  |                              | 35,659  |   |                            |   | 34,135  |                            |  |   | 38,666   |  
|                                                                                  |  |                              |         |   |                            |   |         |                            |  |   |          |  
|Cash flows from investing activities:                                             |  |                              |         |   |                            |   |         |                            |  |   |          |  
|Proceeds from sale of assets                                                      |  |                              | 1,339   |   |                            |   | 6       |                            |  |   | 27       |  
|Purchase of property, plant and equipment                                         |  |                              | (2,236  | ) |                            |   | (2,590  | )                          |  |   | (8,955   | )
|Purchases of short-term investments                                               |  |                              | (9,135  | ) |                            |   | (6,039  | )                          |  |   |         |  
|Maturities of short-term investments                                              |  |                              | 10,090  |   |                            |   | 500     |                            |  |   |         |  
|                                                                                  |  |                              |         |   |                            |   |         |                            |  |   |          |  
|Net cash provided by (used in) investing activities                               |  |                              | 58      |   |                            |   | (8,123  | )                          |  |   | (8,928   | )
|                                                                                  |  |                              |         |   |                            |   |         |                            |  |   |          |  
|Cash flows from financing activities:                                             |  |                              |         |   |                            |   |         |                            |  |   |          |  
|Decrease in checks written in excess of bank balance                              |  |                              |        |   |                            |   |        |                            |  |   | (824     | )
|Payments on revolving credit facility                                             |  |                              |        |   |                            |   |        |                            |  |   | (600     | )
|Proceeds from senior notes                                                        |  |                              |        |   |                            |   |        |                            |  |   | 160,000  |  
|Payments to retire senior notes                                                   |  |                              | (4,000  | ) |                            |   | (6,000  | )                          |  |   | (9,800   | )
|Payments on long-term debt                                                        |  |                              |        |   |                            |   |        |                            |  |   | (17,250  | )
|Distributions to shareholders                                                     |  |                              | (26,077 | ) |                            |   | (22,218 | )                          |  |   | (148,359 | )
|Payments of financing costs                                                       |  |                              |         |   |                            |   | (23     | )                          |  |   | (6,025   | )
|Payments for repurchase of common stock                                           |  |                              | (533    | ) |                            |   | (381    | )                          |  |   |         |  
|Proceeds from exercise of common stock options                                    |  |                              | 84      |   |                            |   | 508     |                            |  |   | 1,266    |  
|                                                                                  |  |                              |         |   |                            |   |         |                            |  |   |          |  
|Net cash used in financing activities                                             |  |                              | (30,526 | ) |                            |   | (28,114 | )                          |  |   | (21,592  | )
|                                                                                  |  |                              |         |   |                            |   |         |                            |  |   |          |  
|Effect of foreign currency exchange rate changes                                  |  |                              | 124     |   |                            |   | (196    | )                          |  |   | (103     | )
|                                                                                  |  |                              |         |   |                            |   |         |                            |  |   |          |  
|Net change in cash and cash equivalents                                           |  |                              | 5,315   |   |                            |   | (2,298  | )                          |  |   | 8,043    |  
|Cash and cash equivalents at beginning of year                                    |  |                              | 7,008   |   |                            |   | 9,306   |                            |  |   | 1,263    |  
|                                                                                  |  |                              |         |   |                            |   |         |                            |  |   |          |  
|Cash and cash equivalents at end of year                                          |  | $                            | 12,323  |   |                            | $ | 7,008   |                            |  | $ | 9,306    |  
|                                                                                  |  |                              |         |   |                            |   |         |                            |  |   |          |  
|Supplemental disclosures of cash flow information:                                |  |                              |         |   |                            |   |         |                            |  |   |          |  
|Income taxes paid during the year                                                 |  | $                            | 1,519 $ |   |                            |   | 2,017   |                            |  | $ | 2,123    |  
|                                                                                  |  |                              |         |   |                            |   |         |                            |  |   |          |  
|Interest paid during the year                                                     |  |                              | 13,824  |   |                            |   | 14,832  |                            |  |   | 7,843    |  
|                                                                                  |  |                              |         |   |                            |   |         |                            |  |   |          |  

See accompanying notes to consolidated financial statements.



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DA-LITE SCREEN COMPANY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years ended December 29, 2006, December 30, 2005 and December 31, 2004

(1) Summary of Significant Accounting
Policies

(a) Organization

Da-Lite Screen Company, Inc. and subsidiaries (the Company) primarily manufactures projection screens and other meeting room equipment that are sold throughout the United States and a number of foreign
countries. The Companys principal operations are located in the United States and Europe.

Approximately 84%, 83% and 83% of the
Companys total net sales in 2006, 2005 and 2004, respectively, were from front projection screen sales. The Companys ten largest customers accounted for approximately 11%, 11% and 12% of total net sales in 2006, 2005 and 2004,
respectively. No customer accounted for more than 2% of the Companys total net sales in each of 2006, 2005 and 2004.

(b)
Principles of Consolidation

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 operates on a 52/53-week
year. The Companys fiscal year ends on the last Friday of December. The fiscal year ended December 31, 2004 was a 53-week year and all other fiscal years were 52-week years.

(c) Use of Estimates

The
preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(d) 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 costs of goods sold in conformity with EITF Issue No. 00-10,
Accounting for Shipping and Handling Fees and Costs.



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(e) Cash, Cash Equivalents and Short-term Investments

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. Previously, the 2005 balance sheet and cash flow statement had incorrectly included
approximately $5.5 million of certificates of deposit with original maturities of four months as cash equivalents. The Company has corrected these previously reported balances resulting in a reduction of cash and cash equivalents and an increase in
short-term investments of $5.5 million as of December 30, 2005. This correction also increased net cash used in investing activities by $5.5 million in the consolidated statements of cash flows for the year ended December 30, 2005. These
immaterial corrections were made to properly present cash equivalents pursuant to Statement of Financial Accounting Standard (SFAS) No. 95, Statement of Cash Flows.

(f) Accounts Receivable

The
financial status of customers are routinely checked and monitored by the Company when granting credit. The Company provides an allowance for doubtful accounts based upon historical experience and managements analysis of past due accounts. At
December 29, 2006 and December 30, 2005, no customer accounted for more than 4% of accounts receivable.

(g) 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 at (in thousands):



|                 |  |                   |        |                   |   |       
|---------------- |  | ----------------- | ------ | ----------------- | - | ------
|                 |  | December 29, 2006 |        | December 30, 2005
|Raw materials    |  | $                 | 7,714  |                   | $ | 7,030 
|Work in progress |  |                   | 2,069  |                   |   | 1,651 
|Finished goods   |  |                   | 3,846  |                   |   | 3,514 
|                 |  |                   |        |                   |   |       
|                 |  | $                 | 13,629 |                   | $ | 12,195
|                 |  |                   |        |                   |   |       

(h) Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Depreciation is calculated using the straight-line method over the estimated useful lives which are
ten to fifteen years for land improvements, ten to fifteen years for building and building improvements, three to ten years for machinery and equipment, four to five years for information systems and five to ten years for furniture and fixtures.
Repair and maintenance costs are charged to expense as incurred.



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(i) Impairment of Long-lived Assets

The Company evaluates the carrying value of long-lived assets held and used when events and circumstances warrant such a review, in accordance with
Statements of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. If the carrying value of long-lived assets held and used exceeds the expected future undiscounted cash flows, a
loss is recognized based on the amount by which the carrying value exceeds the fair market value of the assets. During the years ended December 29, 2006, December 30, 2005 and December 31, 2004, no such impairment was recognized.

During 2005, the Company classified its prior manufacturing facility at Projecta as held for sale. The carrying value of $1.0 million is
included in Other assets, net at December 30, 2005. The Company compared the carrying value of the facility to its fair market value, less the related costs to sell, and determined no impairment was necessary. The manufacturing facility was
sold during the third quarter of 2006 for a gain of $0.5 million.

(j) Goodwill

SFAS No. 142, Goodwill and Other Intangible Assets, requires that goodwill be tested at least annually for impairment or when events or
changes in circumstances occur by determining whether the carrying amount of goodwill exceeds its implied fair value based on both a market value and income approach. Goodwill represents the excess of purchase price over fair value of identifiable
net assets acquired. Management has determined that goodwill was not impaired as of fiscal year-end 2006, 2005 and 2004. The change in the balance of goodwill is the result of foreign currency translation.

(k) Other Assets, Net

Other
assets, net includes deferred financing costs of $5.4 million and $5.5 million less accumulated amortization of $2.1 million and $1.3 million at December 29, 2006 and December 30, 2005, respectively. The Company amortizes the deferred
financing costs over the life of the long-term debt. In conjunction with the retirement of long-term debt, the Company writes-off the related deferred financing costs. Amortization and write-offs of the deferred financing costs are recognized as a
component of interest expense.

(l) Foreign Currency Translation

The Company conducts business on a multinational basis. The Companys exposure to market risk for changes in foreign currency exchange rates arises
from foreign currency denominated monetary assets and liabilities and anticipated transactions arising from international business. The Companys primary currency exposure relates to the Euro.

The functional currency for Projecta and Procolor is their local currency (Euro). Foreign currency accounts were translated into United States dollars at
exchange rates in effect at the end of the year for all asset and liability accounts, at the historical exchange rate for common stock and additional paid-in capital and at average exchange rates during the year for income and expense accounts. The
gains or losses from these translations are included in accumulated other comprehensive income.



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(m) Product Warranties

At the time a sale is recognized, the Company estimates future warranty costs based on historical warranty claims. The Company has recorded a warranty
reserve of $175,000 at December 29, 2006 and $150,000 at December 30, 2005 for estimated future warranty costs based upon past trends of actual warranty claims.

(n) Disclosures About Fair Value of Financial Instruments

Financial instruments are described
as cash or contractual obligations or rights to pay or receive cash. The fair value of certain financial instruments approximates the carrying value because of the short-term maturity of these instruments. The estimated fair value of long-term debt
is approximately $148 million and $154 million based upon the quoted market value at December 29, 2006 and December 30, 2005, respectively.

(o) Derivative Instruments

The Company uses derivative financial instruments selectively to
offset exposure to market risks arising from changes in foreign exchange rates and interest rates. Derivative financial instruments used by the Company include forward foreign exchange contracts and interest rate swaps.

The Company reports derivative financial instruments in accordance with the provisions of SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities, as amended, which requires that every derivative instrument be recorded in the balance sheet at fair value. Changes in the fair value of derivatives are to be recorded each period in earnings or other comprehensive income,
depending on whether the derivative is designated as a hedge and on the type of hedge transaction. Gains or losses on derivative instruments reported in other comprehensive income are reclassified as earnings in the period in which earnings are
affected by the underlying hedged item.

The Company had an interest rate swap that expired in January 2004 that was considered a hedge of
the forecasted interest payments on variable rate debt (cash flow hedge). For a cash flow hedge, changes in fair value of the derivative instrument to the extent that it is effective are recorded in shareholders deficit and subsequently
reclassified to net income in the same period that the hedged transaction impacts net income.

The Company periodically uses forward
foreign currency exchange contracts to hedge purchase orders. Gains or losses are recorded through operations and were not material in 2006, 2005 or 2004. There were open forward exchange contracts with notional amounts of $1.2 million, $0.8 million
and $1.6 million at December 29, 2006, December 30, 2005 and December 31, 2004, respectively. The fair value of open forward exchange contracts was not material.



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(p) Stock Option Plan

The Company had previously applied the intrinsic value based method of accounting prescribed by Accounting Principles Board (APB) Opinion No. 25,
Accounting for Stock Issued to Employees, and had adopted the disclosure only provisions of SFAS No. 123, Accounting for Stock-Based Compensation. In December 2004, SFAS No. 123(R), Share-Based Payment, a replacement
of SFAS No. 123, Accounting for Stock- Based Compensation, and a rescission of APB Opinion No. 25, Account for Stock Issued to Employees, was issued. This statement requires compensation costs related to share-based payment
transactions to be recognized in the financial statements. The Company implemented SFAS No. 123(R) on December 31, 2005 using the prospective method of adoption. For stock options granted prior to adoption, the Company continues to apply
APB 25. Beginning on December 31, 2005, the amount of compensation cost is measured based upon the grant date fair value. The fair value of the option grants is estimated on the date using the Black-Scholes option pricing model with assumptions
on dividend yield, risk-free investment, expected volatilities, and expected lives of the options.

The Company has a nonqualified stock
option plan under which options are granted to certain employees. The plan authorizes grants of options to purchase 737 shares, all of which have been granted.

(q) Income Taxes

Da-Lite is taxed under the provisions of the Internal Revenue Code
regulating small business corporations (Subchapter S). Under the provisions of Subchapter S, tax liabilities and benefits flow through to the shareholders of Da-Lite. Therefore, no provision or liability is recorded in the consolidated financial
statements for taxable income of Da-Lite. The Company pays foreign income taxes on the earnings of Projecta and Procolor. Foreign income taxes are recorded in the consolidated financial statements. See note 3 for further information.

(r) Research and Development

Research and development costs are expensed as incurred. Such costs are classified as part of cost of sales and were $100,000, $154,000 and $68,000 for the years ended December 29, 2006, December 30, 2005 and
December 31, 2004, respectively.

(s) Recent Accounting Pronouncements

In September 2006, the FASB issued FASB Statement No. 157, Fair Value Measurement (SFAS 157). SFAS 157 addresses standardizing the measurement of
fair value for companies who are required to use a fair value measure of recognition for recognition or disclosure purposes. The FASB defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measure date. The statement is effective for fiscal years beginning after November 15, 2007 and for interim periods within those fiscal years. The Company is required to adopt SFAS
157 beginning fiscal year 2008. The Company is currently evaluating the impact, if any, of SFAS 157 on its financial position, results of operations and cash flows.

In September 2006, the FASB issued FASB Statement No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans (SFAS 158). SFAS 158 requires companies to recognize the
funded status of benefit pension and other postretirement plans as a net asset or liability in its financial statements. In addition, disclosure requirements related to such plans are affected by SFAS 158. The Company does not have a defined benefit
pension plan, or other postretirement plans, and therefore the adoption of SFAS 158 did not have an affect on the results of operations.



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In September 2006, the Securities and Exchange Commission (SEC) issued Staff Accounting
Bulleting No. 108 (SAB 108), which provides interpretive guidance on how the effects of the carryover or reversal of prior year misstatements should be considered in quantifying a current year misstatement. The Company adopted SAB
108 at the end of fiscal year 2006 and the adoption of this statement did not have a material impact on the Companys financial position or results of operations.

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. EITF 06-3 is required to be adopted during the second quarter of fiscal 2007.

In June 2006, the
Financial Accounting Standards Board 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. FIN 48 is effective for fiscal years beginning after December 15, 2006 and the Company will adopt the provisions of FIN
48 in fiscal 2007. The Company does not expect that the adoption of FIN 48 will have a material impact on its consolidated financial position, results of operations or cash flows.

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. This Statement is effective for all financial instruments acquired or issued after the beginning of an entitys first fiscal year that begins after September 15, 2006. The Company
does not anticipate that the adoption of SFAS 155 will have an impact on the Companys overall results of operations or financial position.

In December 2004, the FASB issued SFAS No. 123 (Revised 2004), Share-Based Payment (SFAS 123R), that revised FASB Statement No. 123, Accounting for Stock-Based Compensation and superseded APB Opinion No. 25,
Accounting for Stock Issued to Employees, and its related implementation guidance. SFAS 123R focuses primarily on accounting for transactions in which an entity obtains employee services through share-based payment transactions. SFAS 123R
requires a public entity to measure the cost of employee services received in exchange for the award of equity instruments based on the fair value of the award at the date of grant. The cost is recognized over the period during which an employee is
required to provide services in exchange for the award. The Company adopted SFAS 123R on December 31, 2005 using the prospective method. The adoption of SFAS 123R did not have a material effect on the consolidated results of operations or
financial position of the Company.



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In November 2004, the FASB issued SFAS No. 151, Inventory Costs, an amendment of ARB No. 43,
Chapter 4 which amends the guidance in Accounting Research Bulletin (ARB) No. 43, Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material
(spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated that "under some circumstances, items such as idle facility expense, excessive spoilage, double freight, and rehandling costs may be so abnormal as to require treatment as current
period charges." SFAS 151 requires that those items be recognized as current period charges regardless of whether they meet the criterion of "so abnormal." In addition, SFAS 151 requires that allocation of fixed production overheads to the
costs of conversion be based on the normal capacity of the production facilities. The Company adopted SFAS 151 in fiscal year 2006 and there was no material effect on the consolidated results of operations or financial position of the Company.

(t) Reclassification

Certain prior-year financial information has been reclassified to conform to the fiscal 2006 financial statement presentation. As discussed in note 1(e), the Company has reclassified certificates of deposit with original maturities greater
than three months and less than six months of $5.5 million as short-term investments.

(2) Notes Payable, Revolving Credit Agreement, and Long-term Debt

Long-term debt at December 29, 2006 and December 30, 2005 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. In addition, before May 15,
2007, the Company may redeem up to 35% of the Notes at a redemption price of 109.5% of their principal amount plus accrued interest using the proceeds from sales of certain kinds of its capital stock. 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 December 29, 2006 and December 30,
2005.



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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 December 29, 2006 and December 30, 2005, 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 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 5.75% on December 29, 2006. At December 29, 2006 and December 30, 2005, 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.

(3) Income Taxes

The Company is taxed
as a S-Corporation in the U.S. and therefore does not provide for U.S. federal and state income taxes. Foreign income taxes for the years ended December 29, 2006, December 30, 2005 and December 31, 2004 consisted of the following
(in thousands):



|                               |  |                   |       |                   |   |                   |  |   |      
|------------------------------ |  | ----------------- | ----- | ----------------- | - | ----------------- |  | - | -----
|                               |  | December 29, 2006 |       | December 30, 2005 |   | December 31, 2004
|Projecta current foreign taxes |  | $                 | 1,528 |                   | $ | 1,209             |  | $ | 2,275
|Procolor current foreign taxes |  |                   | 34    |                   |   | 39                |  |   | 166  
|                               |  |                   |       |                   |   |                   |  |   |      
|Total                          |  | $                 | 1,562 |                   | $ | 1,248             |  | $ | 2,441
|                               |  |                   |       |                   |   |                   |  |   |      

A reconciliation of the U.S. statutory tax rate and effective income tax rate based on the
Companys income before income taxes is as follows:



|                                                                            |  |                  |   |  |                  |   |  |                  |  
|--------------------------------------------------------------------------- |  | ---------------- | - |  | ---------------- | - |  | ---------------- | -
|                                                                            |  | Years Ended      |  
|                                                                            |  | December 29,2006 |   |  | December 30,2005 |   |  | December 31,2004 |  
|U.S. statutory tax rate                                                     |  | 35.0             | % |  | 35.0             | % |  | 35.0             | %
|S corporation income not subject to federal and state income tax            |  | -29.5            | % |  | -30.8            | % |  | -27.8            | %
|Taxes on foreign locations income at rates which differ from the U.S. rate |  | -0.8             | % |  | -0.3             | % |  | 0.1              | %
|                                                                            |  |                  |   |  |                  |   |  |                  |  
|Effective income tax rate                                                   |  | 4.7              | % |  | 3.9              | % |  | 7.3              | %
|                                                                            |  |                  |   |  |                  |   |  |                  |  



36



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##### Table of Contents

4) Profit Sharing and Retirement Plans

Da-Lite has a 401(k) retirement plan covering all full-time Da-Lite employees meeting certain service requirements. Under the terms of the plan, employees
can contribute up to 16% of maximum compensation as prescribed by law to the plan and Da-Lite may match 50% of the first 6% contributed by the employees. Effective October 1, 2006, Da-Lite resumed matching 50% of employee contributions up to 6%
of salary. Da-Lite had previously suspended matching in June 2001. Da-Lite recorded approximately $51,000 and $0 in matching contributions for the years ended December 29, 2006 and December 30, 2005, respectively. Also, under the terms of
the plan, Da-Lite may make discretionary profit sharing contributions. The discretionary contributions are determined by management. Da-Lite accrued approximately $0 and $138,000 in discretionary contributions to the plan for the years ended
December 29, 2006 and December 30, 2005, respectively. Projecta is a participant in a multi-employer benefit plan covering substantially all Projecta employees. For the years ended December 29, 2006, December 30, 2005 and
December 31, 2004, Projecta made contributions of approximately $382,000, $341,000 and $319,000, respectively.

(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 2006 and 2005.

The exercise prices of previously granted options were reduced by $25,500 per share to reflect the reduction in value of the underlying
stock due to a special dividend paid to shareholders in May 2004. The exercise price for all periods presented in the table below have been adjusted for the special dividend paid in 2004.

The stock option activity and weighted average exercise prices follow:



|                                |  |                              |   |  |                                |        |   |                     |     |                                |   |       
|------------------------------- |  | ---------------------------- | - |  | ------------------------------ | ------ | - | ------------------- | --- | ------------------------------ | - | ------
|                                |  | Number of SharesUnder Option |   |  | Weighted AverageExercise Price |        |   | Options Exercisable |     | Weighted AverageExercise Price
|Outstanding, December 30, 2005  |  | 153                          |   |  | $                              | 16,530 |   |                     | 150 |                                | $ | 16,681
|                                |  |                              |   | 
|Granted                         |  |                             |   |  |                                |       |   |                     |     |                                |   |       
|                                |  |                              |   | 
|Exercised                       |  | (9                           | ) |  |                                | (9,362 | ) |                     |     |                                |   |       
|                                |  |                              |   | 
|Forfeited                       |  |                             |   |  |                                |       |   |                     |     |                                |   |       
|                                |  |                              |   |  |                                |        |   |                     |     |                                |   |       
|Outstanding, December 29, 2006  |  | 144                          |   |  | $                              | 16,978 |   |                     | 142 |                                | $ | 17,091
|                                |  |                              |   |  |                                |        |   |                     |     |                                |   |       
|Vested or expected to be vested |  | 142                          |   |  | $                              | 17,091 |   |                     |     |                                |   |       
|                                |  |                              |   |  |                                |        |   |                     |     |                                |   |       



37



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##### Table of Contents

The aggregate intrinsic value of options exercised was $0.2 million in 2006, $0.6 million in 2005 and
$2.9 million in 2004. The aggregate intrinsic value of options outstanding, options exercisable, and options vested or expected to vest as of December 29, 2006 was $2.3 million, $2.2 million and $2.2 million, respectively. The weighed average
contractual term of options outstanding, options exercisable and options vested and expected to vest as of December 29, 2006 was 7.4 years. Cash received from exercise of stock options was $0.1 million in 2006, $0.5 million in 2005 and $1.3
million in 2004. The Company does not have a policy for issuing shares or using treasury shares when stock options are exercised.

(6) Goodwill

The changes in the carrying value of goodwill for the years ended December 29, 2006, December 30, 2005 and
December 31, 2004 are as follows (in thousands):



|                                |  |               |        |        |   |       |       |  |   |        |  
|------------------------------- |  | ------------- | ------ | ------ | - | ----- | ----- |  | - | ------ | -
|                                |  | United States |        | Europe |   |       | Total | 
|Balance as of December 31, 2004 |  | $             | 20,440 |        | $ | 6,164 |       |  | $ | 26,604 |  
|                                |  |               |        |        |   |       |       |  |   |        |  
|Foreign currency translation    |  |               |       |        |   | (753  | )     |  |   | (753   | )
|                                |  |               |        |        |   |       |       |  |   |        |  
|Balance as of December 30, 2005 |  |               | 20,440 |        |   | 5,411 |       |  |   | 25,851 |  
|                                |  |               |        |        |   |       |       |  |   |        |  
|Foreign currency translation    |  |               |       |        |   | 603   |       |  |   | 603    |  
|                                |  |               |        |        |   |       |       |  |   |        |  
|Balance as of December 29, 2006 |  | $             | 20,440 |        | $ | 6,014 |       |  | $ | 26,454 |  
|                                |  |               |        |        |   |       |       |  |   |        |  



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##### Table of Contents

(7) Financial Information about Industry Segments

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 segment reporting is net sales less operating costs and does not include depreciation and amortization, interest expense, or minority interest. The Company does not allocate costs between segments.

The following table presents financial information by segment: (in thousands)



|                                                       |  |                  |         |                  |   |                  |  |   |        
|------------------------------------------------------ |  | ---------------- | ------- | ---------------- | - | ---------------- |  | - | -------
|For the years ended:                                   |  | December 29,2006 |         | December 30,2005 |   | December 31,2004
|Net sales:                                             |  |                  |         |                  |   |                  |  |   |        
|United States                                          |  | $                | 141,628 |                  | $ | 140,992          |  | $ | 131,822
|Europe                                                 |  |                  | 28,199  |                  |   | 24,642           |  |   | 30,344 
|                                                       |  |                  |         |                  |   |                  |  |   |        
|Total net sales                                        |  | $                | 169,827 |                  | $ | 165,634          |  | $ | 162,166
|                                                       |  |                  |         |                  |   |                  |  |   |        
|Operating income:                                      |  |                  |         |                  |   |                  |  |   |        
|United States                                          |  | $                | 42,751  |                  | $ | 43,674           |  | $ | 38,676 
|Europe                                                 |  |                  | 4,886   |                  |   | 3,989            |  |   | 7,068  
|                                                       |  |                  |         |                  |   |                  |  |   |        
|Total operating income                                 |  | $                | 47,637  |                  | $ | 47,663           |  | $ | 45,744 
|                                                       |  |                  |         |                  |   |                  |  |   |        
|Income before income taxes and minority interest:      |  |                  |         |                  |   |                  |  |   |        
|United States                                          |  | $                | 27,965  |                  | $ | 28,216           |  | $ | 26,776 
|Europe                                                 |  |                  | 5,383   |                  |   | 3,955            |  |   | 7,043  
|                                                       |  |                  |         |                  |   |                  |  |   |        
|Total income before income taxes and minority interest |  | $                | 33,348  |                  | $ | 32,171           |  | $ | 33,819 
|                                                       |  |                  |         |                  |   |                  |  |   |        
|Net income:                                            |  |                  |         |                  |   |                  |  |   |        
|United States                                          |  | $                | 27,965  |                  | $ | 28,216           |  | $ | 26,776 
|Europe                                                 |  |                  | 3,669   |                  |   | 2,599            |  |   | 4,418  
|                                                       |  |                  |         |                  |   |                  |  |   |        
|Total net income                                       |  | $                | 31,634  |                  | $ | 30,815           |  | $ | 31,194 
|                                                       |  |                  |         |                  |   |                  |  |   |        
|Purchase of property, plant and equipment              |  |                  |         |                  |   |                  |  |   |        
|United States                                          |  | $                | 2,050   |                  | $ | 1,923            |  | $ | 4,258  
|Europe                                                 |  |                  | 186     |                  |   | 667              |  |   | 4,697  
|                                                       |  |                  |         |                  |   |                  |  |   |        
|Total purchases of property, plant and equipment       |  | $                | 2,236   |                  | $ | 2,590            |  | $ | 8,955  
|                                                       |  |                  |         |                  |   |                  |  |   |        
|Depreciation                                           |  |                  |         |                  |   |                  |  |   |        
|United States                                          |  | $                | 2,918   |                  | $ | 3,338            |  | $ | 2,570  
|Europe                                                 |  |                  | 1,000   |                  |   | 1,030            |  |   | 983    
|                                                       |  |                  |         |                  |   |                  |  |   |        
|Total depreciation                                     |  | $                | 3,918   |                  | $ | 4,368            |  | $ | 3,553  
|                                                       |  |                  |         |                  |   |                  |  |   |        
|                                                       |  |                  |        
|As of:                                                 |  | December 29,2006 |         | December 30,2005 |   |                 
|Total assets:                                          |  |                  |         |                  |   |                  |  |   |        
|United States                                          |  | $                | 73,512  |                  | $ | 69,662           |  |   |        
|Europe                                                 |  |                  | 23,984  |                  |   | 23,427           |  |   |        
|                                                       |  |                  |         |                  |   |                  |  |   |        
|Total assets                                           |  | $                | 97,496  |                  | $ | 93,089           |  |   |        
|                                                       |  |                  |         |                  |   |                  |  |   |        



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##### Table of Contents

(8) Accumulated Other Comprehensive Income (Loss)

The only component of accumulated other comprehensive income as of December 29, 2006 and December 30, 2005 was for cumulative foreign exchange
translation adjustments.

(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) Valuation and Qualifying Accounts



|                                 |  |                              |     |                             |   |            |  |                      |     |  |   |    
|-------------------------------- |  | ---------------------------- | --- | --------------------------- | - | ---------- |  | -------------------- | --- |  | - | ---
|Description                      |  | Balance at beginning of year |     | Charges toCosts andexpenses |   | Deductions |  | Balanceat end ofyear
|                                 |  | (in thousands)              
|Allowance for doubtful accounts: |  |                              |     |                             |   |            |  |                      |     |  |   |    
|                                 |  |                              |     |                            
|Year ended December 31, 2004     |  | $                            | 449 |                             | $ | 692        |  | $                    | 591 |  | $ | 550
|                                 |  |                              |     |                            
|Year ended December 30, 2005     |  |                              | 550 |                             |   | 450        |  |                      | 547 |  |   | 453
|                                 |  |                              |     |                            
|Year ended December 29, 2006     |  |                              | 453 |                             |   | 853        |  |                      | 773 |  |   | 533



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##### Table of Contents

|Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|------- | -------------------------------------------------------------------------------------

None.



|Item 9A. | Controls and Procedures.
|-------- | ------------------------



|(a) | Evaluation of Disclosure Controls and Procedures. Based on the evaluation required by Rule 15d-15(e) under the Securities Exchange Act of 1934, the principal executive
officer and principal financial officer of the Da-Lite have concluded that the Companys disclosure controls and procedures (as defined in Rule 15d-15(e)) as of the end of the period covered by this report were effective to ensure that the
information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time period specified in SEC rules and forms. The disclosure
controls and procedures are designed to only provide reasonable assurance of achieving the desired control objectives.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(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.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 9B. | Other Information.
|-------- | ------------------

None.



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##### Table of Contents

PART III



|Item 10. | Directors and Executive Officers of the Registrant.
|-------- | ---------------------------------------------------

The following table sets forth information regarding Da-Lites executive officers and directors as of December 29, 2006.



|                   |  |     |  |                                                   
|------------------ |  | --- |  | --------------------------------------------------
|Name               |  | Age |  | Position                                          
|Richard E. Lundin  |  | 56  |  | Chairman, President and Chief Executive Officer   
|Judith D. Loughran |  | 59  |  | Executive Vice President                          
|Jerry C. Young     |  | 59  |  | Vice PresidentFinance and Chief Financial Officer
|Peter A. de Kroon  |  | 52  |  | Managing Director, Projecta B.V.                  
|David N. Walthall  |  | 61  |  | Lead Director                                     
|James S. Cownie    |  | 62  |  | Director                                          
|James M. Hoak      |  | 63  |  | Director                                          
|Wayne Kern         |  | 74  |  | Director                                          
|David J. Lundquist |  | 64  |  | Director                                          

Richard E. Lundin. Mr. Lundin has been the Companys President and Chief
Executive Officer since 1989 and has served as Chairman of the Board since 1998. After being named President of Gulf & Westerns Healthcare Division (a manufacturer of patient handling equipment) in 1982 at the age of 30,
Mr. Lundin went on to be President of two other companies before accepting his position with Da-Lite in 1989.

Judith D.
Loughran. Ms. Loughran became the Companys Executive Vice President in 2005. From 1998 to 2004 she was Da-Lites Senior Vice PresidentSales and Marketing and from 1989 to 1998 she was Da-Lites Vice
PresidentSales and Marketing. Ms. Loughran was employed by Thonet Industries (a manufacturer of furniture) in York, Pennsylvania from 1982 to 1986, where she first worked for Mr. Lundin. From 1986 through 1989 she worked for Cole
Office Environment (a furniture manufacturer), also in York.

Jerry C. Young. Mr. Young has been the Companys Vice
PresidentFinance and Chief Financial Officer since 1999. Mr. Youngs background includes working for Price Waterhouse, Clark Equipment, Zimmer Inc. (a manufacturer of orthopedic implants which was a subsidiary of Bristol-Myers Squibb
Company while Mr. Young was employed by them) and most recently as an independent consultant. While with Zimmer from 1979 to 1996, he was the International Controller, a Vice President Controller of the United States Sales Division and a Vice
President of Projects involving the startup of operations in Puerto Rico and China.

Peter A. de Kroon. Peter A. de Kroon has been
the managing director of Projecta B.V. and head of the Companys European operations since 1987. Previously, he worked in various sales, marketing and operating capacities in Europe and the Middle East for Phillips N.V., an electronics
manufacturer.

David N. Walthall. Mr. Walthall has served as a director since 1989 and became the Companys lead director
in 2004. Mr. Walthall invests primarily in real estate on a project-by-project basis through Walthall Asset Management Corporation. Previously, he served as President of Lyric Corporation (a producer of childrens television programming,
including Barney and Friends), Co-founder, President and Chief Executive Officer of Heritage Media Corporation (a company with operations in in-store advertising, broadcasting and direct mail advertising) and President-Communication
Products Group for Heritage Communications, Inc. (a diversified media company with operations in cable television, broadcasting, outdoor advertising and communications products).

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##### Table of Contents

James S. Cownie. Mr. Cownie has served as a director since 1989. For the past five years he
has been self-employed as an investor. Previously, Mr. Cownie was President and Chief Executive Officer of New Heritage Associates (an operator of cable television systems) and President in charge of cable television operations of Heritage
Communications, Inc. Mr. Cownie currently serves as a director of The Macerich Company.

James M. Hoak. Mr. Hoak has
served as Chairman of Hoak Media, LLC (a television broadcaster) since its formation in August 2003. He also has served as Chairman and a Principal of Hoak Capital Corporation (a private equity investment firm) since September 1991. He served as
Chairman of Heritage Media Corporation (a broadcasting and marketing services firm) from its inception in August 1987 to its sale in August 1997. From February 1991 to January 1995, he served as Chairman and Chief Executive Officer of Crown Media,
Inc. (a cable television company). From 1971 to 1987, he served as President and Chief Executive Officer of Heritage Communications, Inc. (a diversified cable television and communications company), and as its Chairman and Chief Executive Officer
from August 1987 to December 1990. He is also a Director of Chaparral Steel Company, Inc. (non-executive Chairman) and Pier 1 Imports, Inc.

Wayne Kern. Mr. Kern has served as a director since 1989 and also serves as the Companys Secretary. For the past five years he has been retired, but also serves as a director and the Secretary of Dynamex Inc. (a delivery
and logistics company). Previously, he served as Vice President, General Counsel and Secretary of Crown Media Corporation, President of Hoak Securities, Inc. (a predecessor of HBW Holdings, Inc.) and Vice President, General Counsel and Secretary of
Heritage Communications, Inc.

David J. Lundquist. Mr. Lundquist has served as a director since 1989 and served as the
Companys Chairman from 1989 until 1998 and the Companys Vice Chairman from 1998 until 2004. For the past five years Mr. Lundquist has been a managing director of Lundquist, Schiltz and Associates (a money management company).
Previously, he served as Executive Vice President and Chief Financial Officer of New Heritage Associates and Vice President and Chief Financial Officer of Heritage Communications, Inc.



43



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##### Table of Contents

Board of Directors and Committees of the Board

The Companys board of directors (the Board) is composed of six directors. Each director serves for an annual term and until a successor
is elected and qualified. All of the directors have been elected and continue to hold their positions pursuant to the terms of the shareholders agreement among all of the Companys shareholders. See Item 12. Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder Matters.

The Board does not have a compensation committee or other
committee performing equivalent functions. During 2006, Mr. Lundin was the only officer or employee who participated in the Boards deliberations concerning executive officer compensation. During 2006, none of the executive officers served
on the compensation committee or board of directors of any other company of which any other member of the Board was an executive officer.

Audit Committee

The Board has established an audit committee to assess, report and make recommendations to the Board
regarding the Companys independent auditors, financial statements, internal audit activities and legal compliance. The Companys audit committee consists of Messrs. Hoak, Kern and Lundquist with Mr. Lundquist serving as the chair.
The Board has determined that each of Messrs. Hoak and Lundquist is an audit committee financial expert as defined by the rules of the SEC.

Finance Code of Professional Conduct

The Company has adopted a Finance Code of Professional Conduct applicable to its Chief
Executive Officer, Chief Financial Officer, Corporate Controller and all other employees of its finance organization which satisfies the SECs requirements for a code of ethics. A copy of the Companys Finance Code of
Professional Conduct has been filed as an exhibit to this report.



44



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##### Table of Contents

|Item 11. | Executive Compensation.
|-------- | -----------------------

Compensation Discussion and Analysis

This section provides information regarding the compensation program in place for Da-Lites executive officers for 2006. It
includes information regarding the overall objectives of the compensation program and each element of compensation provided.

The Board
believes that compensation for the Da-Lites executive officers should reward superior performance that creates long-term investor value and encourage executives who deliver that performance to remain with the Company and to continue that level
of performance. Compensation is reviewed and approved by the Board during regularly scheduled Board meetings with input from Mr. Lundin.

During 2006, all of the compensation received by Da-Lites executive officers was in the form of cash compensation. This reflects the Boards view that additional equity ownership of the Company was not needed to align the
interests of our executive officers with shareholders due to the fact that each of the executive officers already holds substantial equity in the Company. In addition, the Board believes that Da-Lites executive officers should be afforded a
fair amount of certainty as to their level of compensation. Therefore, with the exception of Mr. de Kroon (who was entitled to a bonus under his employment agreement), substantially all of compensation received by the Companys executive
officers in 2006 was comprised of base salary.

The elements of the Companys executive compensation program are:

Salary

Base salary for each of
the Companys officers is specified in their respective employment agreements. On August 28, 2006, the employment agreements of Mr. Lundin, Ms. Loughran and Mr. Young were amended to increase each officers base salary
effective as of October 1, 2006. Mr. Lundins base salary was increased from $350,000 to $450,000 per year; Ms. Loughrans base salary was increased from $250,000 to $287,500 per year; and Mr. Youngs base salary
was increased from $225,000 to $262,500 per year. These amendments to the employment agreements represented the first increase in base salary for these officers since their employment agreements were entered into on April 5, 2004. In
determining to increase the salaries of these officers, the Board considered the strong performance of the Company during that time.

Mr. de Kroon is entitled to a base salary of 128,000 Euro per year pursuant to his employment agreement with Projecta B.V., the Companys Dutch subsidiary.

Bonus

Bonuses for
Mr. Lundin, Ms. Loughran and Mr. Young are awarded at the discretion of the Board. Bonus amounts are based on the Companys overall performance during the year as well as individual performance. Factors considered by the Board in
making its bonus determinations include revenue, operating cash flow and cost efficiencies realized. However, bonus targets are not set in advance, and no particular factor carries greater weight than any other factor. The Board also considers the
recommendations of Mr. Lundin in determining the bonuses to be paid to Ms. Loughran and Mr. Young. None of Mr. Lundin, Ms. Loughran or Mr. Young received a bonus in 2006.

Pursuant to his employment agreement with Projecta, Mr. de Kroon is eligible to receive a bonus in an amount between 40,000 Euro and 75,000 Euro per
year. The amount of the bonus is at the discretion of Projecta based on the companys performance during the year. The agreement also provides that he is entitled to an annual holiday allowance, paid in the month of May, equal to 8% of the
salary received by him in the preceding twelve months.



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##### Table of Contents

Stock Options

The Company occasionally grants nonqualified stock options to certain employees, including the executive officers, pursuant to the Da-Lite Screen Company, Inc. 1999 Stock Option Plan. The purposes of this plan are
(i) to align the interests of the Companys stockholders and the recipients of options under this plan by increasing the proprietary interest of those recipients in Da-Lites growth and success, (ii) to advance Da-Lites
best interests by attracting and retaining key employees and (iii) to motivate recipients of options to act in the long-term best interests of the Company and its stockholders.

Options under the plan generally vest one-fifth each year from the anniversary date of grant and expire on the tenth anniversary of the date of grant. No
options were granted in 2006.

Perquisites

The Board does not believe that perquisites should be a significant part of the compensation of the Companys executive officers. In 2006, the only perquisite the Company provided to its executive officers was a
car allowance to facilitate the schedule and work of its executive officers.

Retirement Benefits

The Da-Lite Screen Company, Inc. 401(k) Retirement Plan (the 401(k) Plan) covers all full-time employees who meet certain service
requirements. Each of the executive officers other than Mr. de Kroon participates in the 401(k) Plan. Under the terms of the 401(k) Plan, employees may contribute up to 16% of salary, subject to compensation and contribution limits prescribed
by law.

Effective October 1, 2006, the Company resumed matching 50% of employee contributions (up to 6% of salary) under the 401(k)
Plan. The Company had previously suspended matching in June 2001 due to economic factors then affecting the Company. At this time, however, the Board felt it important to resume offering this benefit in order to attract and retain employees. All
participants, including the executive officers, are eligible for the match. In 2006, Ms. Loughran was the only executive officer to receive matching contributions because she was the only executive officer who contributed to the 401(k) Plan
after October 1, 2006.

Under the terms of the 401(k) Plan, the Company may make discretionary profit sharing contributions as
determined by management. The Company did not make any such discretionary profit sharing contributions in 2006.



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##### Table of Contents

Report of the Board of Directors on Executive Compensation

The Board of Directors of Da-Lite Screen Company, Inc. oversees the Companys compensation program. In fulfilling its oversight responsibilities, the
Board reviewed and discussed with management the Compensation Discussion and Analysis set forth in this Annual Report on Form 10-K.

In
reliance on the review and discussions referred to above, the Board determined to include the Compensation Discussion and Analysis in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

Richard E. Lundin (Chairman)

David N.
Walthall (Lead Director)

James S. Cownie

James M. Hoak

Wayne Kern

David J. Lundquist

Summary Compensation Table

The following table provides information for the 2006 fiscal year concerning the compensation of the Companys executive officers.



|                                                   |  |      |  |           |  |          |  |                          |     |  |         
|-------------------------------------------------- |  | ---- |  | --------- |  | -------- |  | ------------------------ | --- |  | --------
|Name and Principal Position                        |  | Year |  | Salary($) |  | Bonus($) |  | All OtherCompensation($) |     |  | Total($)
|Richard E. Lundin                                  |  | 2006 |  | 375,000   |  |         |  | 10,800                   | (1) |  | 385,800 
|Chairman, President and Chief Executive Officer    |  |      |  |           |  |          |  |                          |     |  |         
|                                                   |  |      |  |           | 
|Judith D. Loughran                                 |  | 2006 |  | 259,375   |  |         |  | 6,904                    | (2) |  | 266,279 
|Executive Vice President                           |  |      |  |           |  |          |  |                          |     |  |         
|                                                   |  |      |  |           | 
|Jerry C. Young                                     |  | 2006 |  | 234,375   |  |         |  | 4,800                    | (3) |  | 239,175 
|Vice PresidentFinance and Chief Financial Officer |  |      |  |           |  |          |  |                          |     |  |         
|                                                   |  |      |  |           | 
|Peter A. de Kroon (4)                              |  | 2006 |  | 166,738   |  | 62,726   |  | 18,818                   | (3) |  | 248,282 
|Managing Director, Projecta, B.V.                  |  |      |  |           |  |          |  |                          |     |  |         

---

|(1) | Consists of a car allowance of $4,800 and director fees of $6,000.
|--- | ------------------------------------------------------------------

|(2) | Consists of a car allowance of $4,800 and matching contributions under the 401(k) Plan of $2,104.
|--- | -------------------------------------------------------------------------------------------------

|(3) | Consists of a car allowance.
|--- | ----------------------------

|(4) | Mr. de Kroon is paid in Euros and his compensation was translated into U.S. Dollars at the average exchange rate during the year.
|--- | ---------------------------------------------------------------------------------------------------------------------------------

As mentioned above in Compensation Discussion and Analysis, the Company has employment agreements with each of its executive officers. The material terms
of the employment agreements are summarized below. Additional provisions of these agreements relating to compensation and benefits payable upon the termination of the executives employment or upon a change-in-control of the Company are
described below under Potential Payments upon Termination or Change-in-Control.



47



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##### Table of Contents

Employment Agreements with Mr. Lundin, Ms. Loughran and Mr. Young

Each of the employment agreements with Mr. Lundin, Ms. Loughran and Mr. Young was entered into on April 5, 2004 and specified, among
other things, each officers salary and term of employment (initially expiring on April 1, 2008). On August 28, 2006, each of these employment agreements was amended to (i) increase the salary of the respective officers as
described above under Compensation Discussion and Analysis  Salary, (ii) extend the term of employment of each executive officer through December 31, 2010, and (iii) with respect to Mr. Lundin, increase his paid
vacation period from not less than four weeks per year to not less than five weeks per year. The remaining terms of each of the original employment agreements were unchanged.

In addition to salary, the employment agreements provide that each executive officer is entitled to a car allowance of $400 per month, which is subject
to increase if and to the extent that the car allowance for the Companys field sales people is increased. Each executive officer is also entitled to participate in the Companys employee benefit plans, such as medical plans, life
insurance and the profit-sharing plan, generally available to the executives of the Company. Ms. Loughran and Mr. Young are entitled to not less than four weeks of paid vacation time per year; as noted above, pursuant to his employment
agreement amendment, Mr. Lundin is entitled to not less than five weeks of paid vacation per year. Mr. Lundins employment agreement also provides that he may charter planes to visit the Companys manufacturing facilities
provided that the aggregate costs of such charters do not exceed $75,000 annually.

Each of the executive officers is subject to a
noncompetition clause that restricts his or her ability to compete with the business of the Company during the period of employment and for two years following his or her termination of employment in any country or other area where the Company
manufactures, distributes or sells meeting room products during the term of such executives employment. Each executive officer also agreed not to solicit the Companys employees or customers for a period of two years following his or her
termination of employment.

Employment Agreement with Mr. de Kroon

Mr. de Kroons employment agreement with Projecta B.V. was initially entered into as of October 15, 1996. An addendum to this agreement was
entered into as of January 1, 2004 to amend certain terms and to clarify Mr. de Kroons additional responsibilities as managing director of Procolor SAS, Projectas French subsidiary.

Under the agreement, Mr. de Kroon is entitled to a gross salary of 98,000 Euro per year in connection with his services as managing director of
Projecta and an additional gross salary of 30,000 Euro per year in connection with his services as managing director of Procolor. He is also eligible to receive bonuses as described above under Compensation Discussion and
Analysis  Bonus as applicable to him. The agreement further provides him with 25 paid vacation days per year and a car allowance.

Mr. de Kroons employment agreement provides that, if he becomes fully disabled as a result of illness or accident and consequently receives disability benefits under Dutch law, Projecta will, for a period
not exceeding 26 weeks, supplement such disability benefits so that Mr. de Kroon will receive 100% of his current salary under the agreement during the period of disability. In the event of partial disability, Projectas supplemental
payments will be made on a pro rata basis.

Mr. de Kroon is subject to a noncompetition clause that prohibits him, without the prior
written permission of Projecta, from undertaking any activities within the countries in which Projecta is active during the course of his employment agreement which are the same or similar to the activities of Projecta or its affiliates for a period
of one year following the termination of his employment agreement. He may also be subject to monetary penalties for certain breaches of his employment agreement.



48



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##### Table of Contents

2006 Outstanding Equity Awards at Fiscal Year-End

The following table reflects the number of stock options held by our executive officers as of the end of fiscal year 2006.



|                   |  |                                                               |  |                                                                 |  |                        |  |                      
|------------------ |  | ------------------------------------------------------------- |  | --------------------------------------------------------------- |  | ---------------------- |  | ---------------------
|                   |  | Option Awards                                                
|Name               |  | Number ofSecuritiesUnderlyingUnexercisedOptions(#)Exercisable |  | Number ofSecuritiesUnderlyingUnexercisedOptions(#)Unexercisable |  | OptionExercisePrice($) |  | OptionExpiration Date
|Richard E. Lundin  |  | 40                                                            |  |                                                                |  | 17,245                 |  | May 17, 2014         
|                   |  |                                                               |  |                                                                
|Judith D. Loughran |  | 40                                                            |  |                                                                |  | 17,245                 |  | May 17, 2014         
|                   |  |                                                               |  |                                                                
|Jerry C. Young     |  | 50                                                            |  |                                                                |  | 17,245                 |  | May 17, 2014         
|                   |  |                                                               |  |                                                                
|Peter A. de Kroon  |  |                                                              |  |                                                                |  |                       |  |                     

Potential Payments Upon Termination or Change-in-Control

This section describes the compensation and benefits that would have been payable to our executive officers as of the end of fiscal year 2006 pursuant to
their respective employment agreements had a change-in-control occurred or their employment been terminated as a result of the circumstances described below.

Termination for Cause

The Company may, if authorized by the Board at a meeting of which three
days advance notice has been given to the executive, terminate the employment of Mr. Lundin, Ms. Loughran or Mr. Young for cause upon written notice to the executive. Cause is generally defined under
their respective employments agreements to mean (i) any intentional act of fraud, embezzlement or theft or the commission of any felony or of any crime involving fraud, embezzlement, theft or misrepresentation, (ii) any willful misconduct
resulting in a material loss to the Company or damage to the Companys reputation, (iii) any willful refusal to perform his or her duties or to perform specific directives of the Board consistent with the scope and nature of his or her
duties (other than the officers good faith belief that compliance with such directive would constitute a violation of law or breach of fiduciary duty to the Company, or (iv) any intentional breach of the noncompetition, nonsolicitation,
confidentiality and works made for hire provisions of the employment agreement. Except with respect to clause (i) of the foregoing sentence, the executive has 15 days after delivery of notice by the Company to cure the particular
actions or inactions giving rise to the cause notice. If the executive so effects a cure to the reasonable satisfaction of the Board, the cause notice will be deemed rescinded. Upon a termination for cause, the officer would be entitled to accrued
and unpaid salary and benefits through and including the termination date.



49



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##### Table of Contents

Mr. de Kroons employment agreement does not contemplate termination for cause. Projecta is
entitled to terminate his employment on six months notice as described below under Voluntary Resignation.

Termination
by the Company Without Cause or by the Executive with Good Reason

The Company may, if authorized by the Board, terminate the employment
of Mr. Lundin, Ms. Loughran or Mr. Young other than for cause or disability, or such executive may terminate his or her employment with the Company at any time with good reason. Upon such a termination, the executive will
be entitled to the continuation of payment of salary and benefits for the remainder of the term of the employment agreement. Good reason is defined in the employment agreements to mean (i) the assignment to the executive of duties
and responsibilities not consistent with the status and activities (including location) of his or her current position, (ii) any action which results in a significant and continuing diminution of the authority, duties or responsibilities of the
executive, (iii) the failure of the Company to provide compensation, benefits or expense reimbursements as required under the employment agreement, or (iv) the failure of the Company to adhere in any material manner to any of its other
covenants in the employment agreement or in any other agreement between the Company and the executive; provided that any of the foregoing continues for a period of twenty days after the executive gives written notice to the Company requesting a
cure.

Mr. de Kroons employment agreement provides that if his employment is terminated by Projecta for any reason beyond
his control, Projecta must provide six months notice of such termination. In addition, upon such a termination, he will be entitled to receive an amount equal to six months gross salary. Assuming such a termination occurred
effective as of December 29, 2006, six months gross salary for Mr. de Kroon would amount to 64,000 Euros.

Voluntary
Resignation

Each of Mr. Lundin, Ms. Loughran and Mr. Young may resign his or her employment with the Company for any
reason upon 120 days prior written notice to the Company. Upon such a termination, the officer would be entitled to accrued and unpaid salary and benefits through and including the termination date. The Company may, by action of the Board, designate
any day within such 120-day period as the effective date of the executives resignation, although the Company is required to pay the executives salary and benefits through the end of the 120-day notice period.

Mr. de Kroons employment agreement may be terminated by either him or Projecta on six months notice. Upon such a termination, he would be
entitled to accrued and unpaid salary and benefits through and including the termination date.

Termination by Reason of Disability

The Company may, if authorized by the Board, terminate the employment of Mr. Lundin, Ms. Loughran or Mr. Young if he or
she, because of physical or mental incapacity or disability, fails to perform the essential functions of his or her position for a continuous period of 180 days or any 180 days within any 12-month period. Upon such a termination, the officer would
be entitled to accrued and unpaid salary and benefits through and including the termination date.



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##### Table of Contents

Termination by Reason of Death

If the employment of any of the executive officers is terminated as a result of death, their respective heirs, executors or administrators would be
entitled to accrued and unpaid salary and benefits through and including the date of death.

Change-in-Control

In the event of a corporate transaction that occurs while Mr. Lundin, Ms. Loughran or Mr. Young is employed by the Company (or
within three months of his or her termination of employment without cause or with good reason), the salary payable to each such executive will be increased to the annual rate of $750,000, $300,000 and $300,000, respectively. Corporate
transaction is defined in the employment agreements to mean (i) the reorganization, merger or consolidation of the Company with, or the sale or other transfer of all or substantially all of the Companys assets to, another entity or
entities if 50% or less of the common equity of the surviving or resulting entity is owned by persons and entities which were the shareholders of the Company or its affiliates immediately prior to such merger, consolidation, sale or transfer, or
(ii) the sale or other transfer of more than 50% of the outstanding common stock (or beneficial interests in Company voting securities).

Mr. de Kroon is not eligible to receive supplemental compensation upon a change-in-control of Projecta. However, the termination of his employment as a result of a change-in-control of Projecta is considered a termination beyond
his control, entitling him to the benefits described above as applicable to him under Termination by the Company Without Cause or by the Executive with Good Reason.

2006 Director Compensation Table

The table below summarizes the compensation paid by the Company to
non-employee directors for the fiscal year ended December 29, 2006.



|                   |  |                               |     |  |          
|------------------ |  | ----------------------------- | --- |  | ---------
|Name               |  | Fees Earned orPaid in Cash($) |     |  | Total ($)
|James S. Cownie    |  | 6,000                         | (1) |  | 6,000    
|                   |  |                              
|James M. Hoak      |  | 10,000                        | (2) |  | 10,000   
|                   |  |                              
|Wayne Kern         |  | 10,000                        | (2) |  | 10,000   
|                   |  |                              
|David J. Lundquist |  | 10,000                        | (2) |  | 10,000   
|                   |  |                              
|David N. Walthall  |  | 12,000                        | (3) |  | 12,000   

---

|(1) | Represents cash compensation of $1,500 per quarter for board membership.
|--- | ------------------------------------------------------------------------

|(2) | Represents cash compensation of $1,500 per quarter for board membership and $500 per meeting for audit committee membership.
|--- | ----------------------------------------------------------------------------------------------------------------------------

|(3) | Represents cash compensation of $3,000 per quarter as lead director.
|--- | --------------------------------------------------------------------

With the exception of the lead director, who receives cash compensation of $3,000 per quarter in director fees, the Companys directors receive cash compensation of $1,500 each quarter. Directors are also
reimbursed for reasonable out-of-pocket expenses incurred in attending board or committee meetings. Audit committee members receive an additional fee of $500 per audit committee meeting. The Audit Committee met five times in 2006 and also received
three payments related to meetings in 2005.



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##### Table of Contents

|Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|-------- | -----------------------------------------------------------------------------------------------

The following table sets forth certain information regarding the beneficial ownership of the Companys common stock as of March 23, 2007 by:
(1) each of the Companys executive officers and directors individually and (2) all of the Companys executive officers and directors as a group. The address for each of the Companys beneficial owners is c/o Da-Lite Screen
Company, Inc., 3100 North Detroit Street, P.O. Box 137, Warsaw, Indiana 46581-0137.



|                                                           |  |          |     |  |                |  
|---------------------------------------------------------- |  | -------- | --- |  | -------------- | -
|Name                                                       |  | Shares   |     |  | Percentage (1) |  
|James S. Cownie                                            |  | 1,278.51 | (2) |  | 23.86          | %
|James M. Hoak                                              |  | 1,750.69 | (3) |  | 32.67          | %
|Wayne Kern                                                 |  | 245.99   | (4) |  | 4.59           | %
|David J. Lundquist                                         |  | 382.93   | (5) |  | 7.15           | %
|David N. Walthall                                          |  | 307.62   |     |  | 5.74           | %
|Richard E. Lundin                                          |  | 305.00   | (6) |  | 5.65           | %
|Judith D. Loughran                                         |  | 167.00   | (6) |  | 3.09           | %
|Jerry C. Young                                             |  | 75.00    | (7) |  | 1.39           | %
|Peter A. de Kroon                                          |  |         |     |  |               |  
|All directors and executive officers as a group (9 people) |  | 4,512.74 |     |  | 82.21          | %

---

|(1) | Calculated based on 5,359.12 shares outstanding and excluding all options except as to each individual under options as described in notes (6) and (7) below, as the case
may be.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Consists of (a) 1,041.51 shares held in a revocable trust for the benefit of Mr. Cownie for which he serves as trustee and (b) 237.00 shares held in a trust for the
benefit of Mr. Cownie and his children for which he serves as trustee.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Consists of (a) 250.69 shares held in Mr. Hoaks name and (b) 1,500.00 shares held by Mr. Hoaks wife, Nancy J. Hoak.
|--- | ---------------------------------------------------------------------------------------------------------------------

|(4) | Consists of (a) 146.51 shares held in Mr. Kerns name and (b) 99.48 shares held by Mr. Kerns wife, Donna Kern.
|--- | ---------------------------------------------------------------------------------------------------------------

|(5) | Represents 382.93 shares held in a revocable trust for the benefit of Mr. Lundquist for which he serves as trustee.
|--- | -------------------------------------------------------------------------------------------------------------------

|(6) | Includes options to purchase 40.00 shares.
|--- | ------------------------------------------

|(7) | Includes options to purchase 50.00 shares
|--- | -----------------------------------------

Peter A. de
Kroon is the beneficial owner of 3.84% of the outstanding capital stock of Projecta B.V., the Companys Dutch subsidiary. Projecta B.V. owns all of the outstanding capital stock of Procolor S.A.S., the Companys French subsidiary.

Shareholders Agreement

Da-Lites
shareholders are parties to an Amended and Restated Shareholders Agreement dated as of July 15, 2004 which requires each shareholder to elect and vote for the persons currently serving as the Companys directors. The Amended and Restated
Shareholders Agreement also contains certain restrictions on the transfer of shares of the Companys stock and provides for rights of first refusal, co-sale rights and preemptive rights in the event of certain transfers or issuances, as
applicable, of the Companys stock.



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Equity Compensation Plan Information

The following table summarizes the number of shares of the Companys common stock that may be issued under its equity compensation plans as of December 29, 2006.



|                                                           |  |                                                                                          |  |                                                                          |        |                                                                                                                                        |  
|---------------------------------------------------------- |  | ---------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------ | ------ | -------------------------------------------------------------------------------------------------------------------------------------- | -
|Plan Category                                              |  | Number of securities tobe issued upon exerciseof outstanding options,warrants and
rights |  | Weighted averageexercise price ofoutstanding options,warrants and rights |        | Number of securitiesremaining available forfuture issuance underequity
compensationplans (excluding securitiesreflected in column (a))
|Equity compensation plans approved by security holders     |  |                                                                                         |  |                                                                          |       |                                                                                                                                        | 
|                                                           |  |                                                                                          | 
|Equity compensation plans not approved by security holders |  | 144.0                                                                                    |  | $                                                                        | 16,978 |                                                                                                                                        | 
|                                                           |  |                                                                                          |  |                                                                          |        |                                                                                                                                        |  
|Total                                                      |  | 144.0                                                                                    |  | $                                                                        | 16,978 |                                                                                                                                        | 
|                                                           |  |                                                                                          |  |                                                                          |        |                                                                                                                                        |  



|Item 13. | Certain Relationships and Related Transactions.
|-------- | -----------------------------------------------

None.



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##### Table of Contents

|Item 14. | Principal Accountant Fees and Services.
|-------- | ---------------------------------------

The
following table sets forth the aggregate fees for services related to the year ended December 29, 2006 provided by Deloitte & Touche LLP and December 30, 2005 provided by KPMG LLP, the Companys principal accountants for such
years.



|                       |  |                  |         |                  |   |        
|---------------------- |  | ---------------- | ------- | ---------------- | - | -------
|                       |  | December 29,2006 |         | December 30,2005
|Audit fees (a)         |  | $                | 215,000 |                  | $ | 229,370
|                       |  |                 
|Audit related fees (b) |  |                  | 19,000  |                  |   | 25,514 
|                       |  |                 
|Tax fees (c)           |  |                  | 52,000  |                  |   | 113,054

---

|(a) | Audit fees represent fees billed for professional services rendered for the audit of the Companys annual financial statements and review of quarterly financial statements and
audit services provided in connection with other statutory or regulatory filings.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Audit Related fees represent fees billed for assurance services related to the audit of Da-Lites employee benefit plans.
|--- | -------------------------------------------------------------------------------------------------------------------------

|(c) | Tax fees represent fees billed for services principally consisting of tax advisory and preparation services.
|--- | ------------------------------------------------------------------------------------------------------------

During fiscal 2005, the Company reviewed its existing practices regarding the use of Independent Registered Public Accounting Firms to provide non-audit
and consulting services to ensure compliance with recent SEC proposals. Da-Lites audit committee adopted a policy which provides that the Companys Independent Registered Public Accounting Firm may provide certain non-audit services which
do not impair the auditors independence. In that regard, Da-Lites audit committee must pre-approve all audit services provided to the Company as well as non-audit services provided to the Company by its Independent Registered Public
Accounting Firm. This policy is administered by Da-Lites senior corporate financial management which reports throughout the year to the Companys audit committee. Da-Lites audit committee pre-approved all audit and non-audit
services provided by Deloitte & Touche LLP in 2006 and KPMG LLP during 2005 and 2006.



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##### Table of Contents

PART IV



|Item 15. | Exhibits and Financial Statement Schedules
|-------- | ------------------------------------------

The following documents
are filed as a part of this report:



|       |  |                                                                                                                                                                                                                                                                 
|------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a)(1) |  | Financial Statements:                                                                                                                                                                                                                                           
|       | 
|       |  | Reports of Independent Registered Public Accounting Firms                                                                                                                                                                                                       
|       | 
|       |  | Consolidated Balance Sheets as of December 29, 2006 and December 30, 2005                                                                                                                                                                                       
|       | 
|       |  | Consolidated Statements of Operations for the Years Ended December 29, 2006, December 30, 2005 and December 31,
2004                                                                                                                                            
|       | 
|       |  | Consolidated Statements of Shareholders (Deficit) Equity and Comprehensive Income for the Years Ended December 29,
2006, December 30, 2005 and December 31, 2004                                                                                               
|       | 
|       |  | Consolidated Statements of Cash Flows for the Years Ended December 29, 2006, December 30, 2005 and December 31,
2004                                                                                                                                            
|       | 
|       |  | Notes to Consolidated Financial Statements                                                                                                                                                                                                                      
|       | 
|(a)(2) |  | Financial Statement Schedules:                                                                                                                                                                                                                                  
|       | 
|       |  | All schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule or because the information required is
included in the consolidated financial statements or notes thereto.



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##### Table of Contents

|       |  |                                                 
|------ |  | ------------------------------------------------
|(a)(3) |  | Exhibits required by Item 601 of Regulation S-K:



|            |  |                                                                                                                                                                                                                                                          
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                              
|3.1         |  | Amended and Restated Articles of Incorporation of Da-Lite Screen Company, Inc. (incorporated by reference to Exhibit 3.1 to the Registrants Registration Statement on Form S-4, File No.
333-116673).                                                   
|            | 
|3.2         |  | Amended and Restated By-Laws of Da-Lite Screen Company, Inc. (incorporated by reference to Exhibit 3.2 to the Registrants Registration Statement on Form S-4, File No.
333-116673).                                                                     
|            | 
|4.1         |  | Indenture dated as of May 18, 2004 between Da-Lite Screen Company, Inc. and Wilmington Trust Company (incorporated by reference to Exhibit 4.1 to the Registrants Registration Statement on
Form S-4, File No. 333-116673).                             
|            | 
|4.2         |  | Form of Exchange Note (incorporated by reference to Exhibit 4.2 to the Registrants Registration Statement on Form S-4, File No. 333-116673).                                                                                                            
|            | 
|4.3         |  | Registration Rights Agreement dated as of May 18, 2004 between Da-Lite Screen Company, Inc. and Morgan Stanley & Co. Incorporated (incorporated by reference to Exhibit 4.3 to the
Registrants Registration Statement on Form S-4, File No. 333-116673).
|            | 
|10.1*       |  | Amended and Restated Da-Lite Screen Company, Inc. 1999 Stock Option Plan (incorporated by reference to Exhibit 10.1 to the Registrants Registration Statement on Form S-4, File No.
333-116673).                                                        
|            | 
|10.2*       |  | Employment Agreement dated as of April 5, 2004 between Da-Lite Screen Company, Inc. and Richard E. Lundin (incorporated by reference to Exhibit 10.2 to the Registrants Registration
Statement on Form S-4, File No. 333-116673).                       
|            | 
|10.3*       |  | Employment Agreement dated as of April 5, 2004 between Da-Lite Screen Company, Inc. and Judith D. Loughran (incorporated by reference to Exhibit 10.3 to the Registrants Registration
Statement on Form S-4, File No. 333-116673).                      
|            | 
|10.4*       |  | Employment Agreement dated as of April 5, 2004 between Da-Lite Screen Company, Inc. and Jerry C. Young (incorporated by reference to Exhibit 10.4 to the Registrants Registration Statement
on Form S-4, File No. 333-116673).                          
|            | 
|10.5*       |  | Employment Agreement Amendment dated as of August 28, 2006 between Da-Lite Screen Company, Inc. and Richard E. Lundin (incorporated by reference to Exhibit 10.1 to the Registrants Current
Report on Form 8-K dated September 1, 2006).                
|            | 
|10.6*       |  | Employment Agreement Amendment dated as of August 28, 2006 between Da-Lite Screen Company, Inc. and Judith D. Loughran (incorporated by reference to Exhibit 10.2 to the Registrants Current
Report on Form 8-K dated September 1, 2006).               
|            | 
|10.7*       |  | Employment Agreement Amendment dated as of August 28, 2006 between Da-Lite Screen Company, Inc. and Jerry C. Young (incorporated by reference to Exhibit 10.3 to the Registrants Current
Report on Form 8-K dated September 1, 2006).                   
|            | 
|10.8*       |  | Employment Agreement dated as of September 23, 1996 between Projecta B.V. and Peter de Kroon.                                                                                                                                                            
|            | 
|10.9*       |  | Employment Agreement Addendum dated as of January 1, 2004 between Projecta B.V. and Peter de Kroon.                                                                                                                                                      



56



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|      |  |                                                                                                                                                                                                                                                                                    
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.10 |  | Amended and Restated Shareholders Agreement dated as of July 15, 2004 among Da-Lite Screen Company, Inc. and the persons listed on the signature pages thereto (incorporated by reference
to Exhibit 10.1 to the Registrants Current Report on Form 8-K dated September 22, 2004).
|      | 
|14    |  | Code of ethics                                                                                                                                                                                                                                                                     
|      | 
|16    |  | Letter Regarding Change in Certifying Accountant (incorporated by reference to Exhibit 16.1 to the Registrants Current Report on Form 8-K dated July 11, 2006).                                                                                                                   
|      | 
|21    |  | Subsidiaries of Da-Lite Screen Company, Inc.                                                                                                                                                                                                                                       
|      | 
|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                                                                                                                                                      

---

|* | Indicates management contract or compensatory plan or arrangement.
|- | ------------------------------------------------------------------



|    |  |                                                                                                                  
|--- |  | -----------------------------------------------------------------------------------------------------------------
|(b) |  | Exhibits: The Exhibits required by Item 601 of Regulation S-K are reflected above in Section (a)(3) of this Item.

Registrant hereby agrees to furnish to the Securities and Exchange Commission a copy of any
agreement under which any long-term debt is issued or outstanding.



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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


Date: March 23, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



|                       |  |                                                    |  |               
|---------------------- |  | -------------------------------------------------- |  | --------------
|Signature              |  | Title                                              |  | Date          
|                       |  |                                                   
|/s/ Richard E. Lundin  |  | Chairman, President and Chief Executive Officer    |  | March 23, 2007
|Richard E. Lundin      |  |                                                    |  |               
|                       |  |                                                   
|/s/ Jerry C. Young     |  | Vice PresidentFinance and Chief Financial Officer |  | March 23, 2007
|Jerry C. Young         |  |                                                    |  |               
|                       |  |                                                   
|/s/ David N. Walthall  |  | Lead Director                                      |  | March 23, 2007
|David N. Walthall      |  |                                                    |  |               
|                       |  |                                                   
|/s/ James S. Cownie    |  | Director                                           |  | March 23, 2007
|James S. Cownie        |  |                                                    |  |               
|                       |  |                                                   
|/s/ James M. Hoak      |  | Director                                           |  | March 23, 2007
|James M. Hoak          |  |                                                    |  |               
|                       |  |                                                   
|/s/ Wayne Kern         |  | Director                                           |  | March 23, 2007
|Wayne Kern             |  |                                                    |  |               
|                       |  |                                                   
|/s/ David J. Lundquist |  | Director                                           |  | March 23, 2007
|Darvid J. Lundquist    |  |                                                    |  |               



58



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##### Table of Contents

EXHIBIT INDEX

The following documents are filed as a part of this report:



|       |  |                                                                                                                                                                                                                                                                  
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a)(1) |  | Financial Statements:                                                                                                                                                                                                                                            
|       | 
|       |  | Reports of Independent Registered Public Accounting Firms                                                                                                                                                                                                        
|       | 
|       |  | Consolidated Balance Sheets as of December 29, 2006 and December 30, 2005                                                                                                                                                                                        
|       | 
|       |  | Consolidated Statements of Operations for the Years Ended December 29, 2006, December 30, 2005 and December 31,
2004                                                                                                                                             
|       | 
|       |  | Consolidated Statements of Shareholders (Deficit) Equity and Comprehensive Income for the Years Ended December 29,
2006, December 30, 2005 and December 31, 2004                                                                                                
|       | 
|       |  | Consolidated Statements of Cash Flows for the Years Ended December 29, 2006, December 30, 2005 and December 31,
2004                                                                                                                                             
|       | 
|       |  | Notes to Consolidated Financial Statements                                                                                                                                                                                                                       
|       | 
|(a)(2) |  | Financial Statement Schedules:                                                                                                                                                                                                                                   
|       | 
|       |  | All schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is
included in the consolidated financial statements or notes thereto.



|       |  |                                                  |  | 
|------ |  | ------------------------------------------------ |  | 
|(a)(3) |  | Exhibits required by Item 601 of Regulation S-K: |  | 



|            |  |                                                                                                                                                                                                                                                          
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                              
|3.1         |  | Amended and Restated Articles of Incorporation of Da-Lite Screen Company, Inc. (incorporated by reference to Exhibit 3.1 to the Registrants Registration Statement on Form S-4, File No.
333-116673).                                                   
|            | 
|3.2         |  | Amended and Restated By-Laws of Da-Lite Screen Company, Inc. (incorporated by reference to Exhibit 3.2 to the Registrants Registration Statement on Form S-4, File No.
333-116673).                                                                     
|            | 
|4.1         |  | Indenture dated as of May 18, 2004 between Da-Lite Screen Company, Inc. and Wilmington Trust Company (incorporated by reference to Exhibit 4.1 to the Registrants Registration Statement on
Form S-4, File No. 333-116673).                             
|            | 
|4.2         |  | Form of Exchange Note (incorporated by reference to Exhibit 4.2 to the Registrants Registration Statement on Form S-4, File No. 333-116673).                                                                                                            
|            | 
|4.3         |  | Registration Rights Agreement dated as of May 18, 2004 between Da-Lite Screen Company, Inc. and Morgan Stanley & Co. Incorporated (incorporated by reference to Exhibit 4.3 to the
Registrants Registration Statement on Form S-4, File No. 333-116673).
|            | 
|10.1*       |  | Amended and Restated Da-Lite Screen Company, Inc. 1999 Stock Option Plan (incorporated by reference to Exhibit 10.1 to the Registrants Registration Statement on Form S-4, File No.
333-116673).                                                        



59



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##### Table of Contents

|      |  |                                                                                                                                                                                                                                                                                    
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.2* |  | Employment Agreement dated as of April 5, 2004 between Da-Lite Screen Company, Inc. and Richard E. Lundin (incorporated by reference to Exhibit 10.2 to the Registrants Registration
Statement on Form S-4, File No. 333-116673).                                                 
|      | 
|10.3* |  | Employment Agreement dated as of April 5, 2004 between Da-Lite Screen Company, Inc. and Judith D. Loughran (incorporated by reference to Exhibit 10.3 to the Registrants Registration
Statement on Form S-4, File No. 333-116673).                                                
|      | 
|10.4* |  | Employment Agreement dated as of April 5, 2004 between Da-Lite Screen Company, Inc. and Jerry C. Young (incorporated by reference to Exhibit 10.4 to the Registrants Registration Statement
on Form S-4, File No. 333-116673).                                                    
|      | 
|10.5* |  | Employment Agreement Amendment dated as of August 28, 2006 between Da-Lite Screen Company, Inc. and Richard E. Lundin (incorporated by reference to Exhibit 10.1 to the Registrants Current
Report on Form 8-K dated September 1, 2006).                                          
|      | 
|10.6* |  | Employment Agreement Amendment dated as of August 28, 2006 between Da-Lite Screen Company, Inc. and Judith D. Loughran (incorporated by reference to Exhibit 10.2 to the Registrants Current
Report on Form 8-K dated September 1, 2006).                                         
|      | 
|10.7* |  | Employment Agreement Amendment dated as of August 28, 2006 between Da-Lite Screen Company, Inc. and Jerry C. Young (incorporated by reference to Exhibit 10.3 to the Registrants Current
Report on Form 8-K dated September 1, 2006).                                             
|      | 
|10.8* |  | Employment Agreement dated as of September 23, 1996 between Projecta B.V. and Peter de Kroon.                                                                                                                                                                                      
|      | 
|10.9* |  | Employment Agreement Addendum dated as of January 1, 2004 between Projecta B.V. and Peter de Kroon.                                                                                                                                                                                
|      | 
|10.10 |  | Amended and Restated Shareholders Agreement dated as of July 15, 2004 among Da-Lite Screen Company, Inc. and the persons listed on the signature pages thereto (incorporated by reference to
Exhibit 10.1 to the Registrants Current Report on Form 8-K dated September 22, 2004).
|      | 
|14    |  | Code of ethics                                                                                                                                                                                                                                                                     
|      | 
|16    |  | Letter Regarding Change in Certifying Accountant (incorporated by reference to Exhibit 16.1 to the Registrants Current Report on Form 8-K dated July 11, 2006).                                                                                                                   
|      | 
|21    |  | Subsidiaries of Da-Lite Screen Company, Inc.                                                                                                                                                                                                                                       
|      | 
|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                                                                                                                                                      

---

|* | Indicates management contract or compensatory plan or arrangement.
|- | ------------------------------------------------------------------



|    |  |                                                                                                                  
|--- |  | -----------------------------------------------------------------------------------------------------------------
|(b) |  | Exhibits: The Exhibits required by Item 601 of Regulation S-K are reflected above in Section (a)(3) of this Item.



60