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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 30, 2005



OR



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



For the transition period from  to



Commission File Number 333-116673



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DA-LITE SCREEN COMPANY, INC.

(Exact Name of Registrant as Specified in its Charter)



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|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Indiana                                                        |  | 35-1013951                             
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification Number)



|                                                        |  |           
|------------------------------------------------------- |  | ----------
|3100 North Detroit Street, P.O. Box 137 Warsaw, Indiana |  | 46581-0137
|(Address of Principal Executive Offices)                |  | (Zip Code)



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



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



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



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Indicate by check mark 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 February 20, 2006,
there were 5,375.62 shares of the registrants common stock outstanding (all of which are privately owned and are not traded on any public market).



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TABLE OF CONTENTS



|           |  |                                                                                                              |  |     
|---------- |  | ------------------------------------------------------------------------------------------------------------ |  | ----
|           |  |                                                                                                              |  | Page
|PART I     |  |                                                                                                             
|           |  |                                                                                                             
|Item 1.    |  | Business                                                                                                     |  | 1   
|           |  |                                                                                                             
|Item 1A.   |  | Risk Factors                                                                                                 |  | 8   
|           |  |                                                                                                             
|Item 1B.   |  | Unresolved Staff Comments                                                                                    |  | 10  
|           |  |                                                                                                             
|Item 2.    |  | Properties                                                                                                   |  | 11  
|           |  |                                                                                                             
|Item 3.    |  | Legal Proceedings                                                                                            |  | 11  
|           |  |                                                                                                             
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                                          |  | 11  
|           | 
|PART II    |  |                                                                                                             
|           |  |                                                                                                             
|Item 5.    |  | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  | 12  
|           |  |                                                                                                             
|Item 6.    |  | Selected Financial Data                                                                                      |  | 12  
|           |  |                                                                                                             
|Item 7.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  | 13  
|           |  |                                                                                                             
|Item 7A.   |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  | 19  
|           |  |                                                                                                             
|Item 8.    |  | Financial Statements and Supplementary Data                                                                  |  | 21  
|           |  |                                                                                                             
|Item 9.    |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         |  | 38  
|           |  |                                                                                                             
|Item 9A.   |  | Controls and Procedures                                                                                      |  | 38  
|           |  |                                                                                                             
|Item 9B.   |  | Other Information                                                                                            |  | 38  
|           | 
|PART III   |  |                                                                                                             
|           |  |                                                                                                             
|Item 10.   |  | Directors and Executive Officers of the Registrant                                                           |  | 39  
|           |  |                                                                                                             
|Item 11.   |  | Executive Compensation                                                                                       |  | 41  
|           |  |                                                                                                             
|Item 12.   |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               |  | 43  
|           |  |                                                                                                             
|Item 13.   |  | Certain Relationships and Related Transactions                                                               |  | 44  
|           |  |                                                                                                             
|Item 14.   |  | Principal Accountant Fees and Services                                                                       |  | 45  
|           | 
|PART IV    |  |                                                                                                             
|           |  |                                                                                                             
|Item 15.   |  | Exhibits, Financial Statement Schedules                                                                      |  | 46  
|           | 
|Signatures |  | 48                                                                                                          



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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 and monitor mounts. By building on its 97 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 earned the largest market share position 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 net income before taxes of $165.6 million
and $32.1 million, respectively, in 2005. Net sales and net income before taxes were $162.2 million and $33.6 million, respectively, in 2004.



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 segment 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 group is one of the Companys fastest growing
market segments and its growth can be attributed to the emergence of high resolution digital projectors, the increased availability of high quality viewing media and the greater affordability of system integration equipment. A recent trend towards
establishing dedicated multimedia spaces in private residences has also fueled the expansion of this segment.



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 segment 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.



The Houses of Worship segment 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.



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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 Screen Company,
Inc. 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 and monitor mounts. 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 and monitor mounts).
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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®) and the International Communications Industries Foundation (ICIF) before they are allowed to handle customer inquiries.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Company History



Da-Lite Screen Company, Inc. 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 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 motion picture theaters. Screen sales,
which accounted for approximately 83%, 83% and 81% of the Companys net sales in 2005, 2004 and 2003, 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 projection systems. Da-Lites standard product catalog generally lists projection screens that range in size from 40 inches by 40 inches, on the small
end, to 30 feet by 30 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 screens use a motorized



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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 37%, 35% and 35% of the Companys net sales in 2005, 2004 and 2003, 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 22%, 22% and 20% of the Companys net sales in 2005, 2004 and 2003, 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 can be placed on the floor or on a table and freestanding tripod screens. Portable screens accounted for
approximately 22% of the Companys net sales in each of 2005, 2004 and 2003.



Screen Materials. Da-Lite manufactures screen materials used to assemble many of the Companys branded products and sells a percentage of its supply as non-branded screen materials to a number of its
competitors. 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 3%, 4% and 3% of its net sales in 2005, 2004 and
2003, respectively.



Other. The Company produces custom
engineered rear projection systems and also manufactures a number of complementary products, including audio visual carts, monitor mounts, easels, multi-media support furniture, lecterns and conference cabinets. 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 17%, 17% and 19% of the Companys net sales in 2005, 2004
and 2003, respectively. This category includes amounts billed to customers for shipping in conformity with Emerging Issues Task Force (EITF) 00-10, Accounting for Shipping and Handling Fees and Costs (EITF 00-10).



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 2005 and with the Companys top ten customers accounting for approximately 11% of 2005 net
sales. Da-Lites product offering enables customers to consolidate purchasing requirements by using the Company as their main supplier for a variety of items.



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.



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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 Screen Company, Inc. is recognized by
the International Communications Industries Association, Inc.® (ICIA®) and the
International Communications Industries Foundation (ICIF) 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 call on accounts in their defined territories to assist dealers with sales training, present new products,
perform after sales service and detail Da-Lites product offering to projection screen purchasing decision makers, including architects and contractors. 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 focus on the sale of screens in
connection with 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 that, in turn, market the Companys products to dealers within their respective
countries.



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 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 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 reliable and 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 which compete primarily on price. The Companys projection screens also compete, to a certain extent, with electronic display products such as large
liquid crystal displays, plasma screens and television monitors.



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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 employees are excellent. As of
December 30, 2005, the Company had approximately 495 employees in the United States and 117 employees in its European facilities. None of the Companys U.S. employees 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.



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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 products including manufacturers of large plasma screens, liquid crystal displays and televisions. 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 also could hinder
the Companys ability to fulfill customer orders on a timely basis, which could adversely affect the Companys 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.



Item 1B. Unresolved Staff Comments.



Not applicable.



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##### Table of Contents

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               
|Weert, Netherlands |  | 104,000                 |  | Prior manufacturing facility held for sale            
|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. After suffering extensive tornado damage in 2001, the facility began to implement lean manufacturing
techniques to further improve productivity.



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 end items.



Weert Facilities. 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. All operations have been transferred to this new site and the Company expects to sell its original 104,000 square foot plant.



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.



Item 3. Legal Proceedings.



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



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 30, 2005.



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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 30, 2005, there were 56 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 $10.9 million and $9.5 million in 2005 and 2004, respectively. In 2004, regular monthly distributions were paid to the Companys shareholders through April 2004, at the monthly rate of $200 per share or $1.0 million
in the aggregate. In May 2004, the Company paid a special distribution to its shareholders of approximately $134.6 million ($25,500 per share). Although the Company continued to make quarterly tax distributions to its shareholders, additional
regular monthly distributions were not issued after May 2004 for the remainder of 2004. The Company resumed regular distributions to its shareholders in 2005 at the monthly rate of $175 per share or $0.9 million in the aggregate, subject to the
covenants contained in the indenture relating to its 91/2% Senior Notes.



During the fourth quarter of 2005, the Company repurchased one share of the
Companys common stock from a shareholder for $30,894.



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 30, 2005 were derived from the
Companys audited consolidated financial statements.



|                               |  |                                               |          |   |                  |           |   |                  |          |                  |          |                  |         
|------------------------------ |  | --------------------------------------------- | -------- | - | ---------------- | --------- | - | ---------------- | -------- | ---------------- | -------- | ---------------- | --------
|                               |  | Year Ended (1)                               
|                               |  | December 30,2005                              |          |   | December 31,2004 |           |   | December 26,2003 |          | December 27,2002 |          | December 28,2001
|                               |  | (dollars in thousands, except per share data)
|Net sales (2)                  |  | $                                             | 165,634  |   |                  | 162,166   |   |                  | 135,673  |                  | 122,734  |                  | 117,967 
|Net income                     |  |                                               | 30,815   |   |                  | 31,194    |   |                  | 28,604   |                  | 24,409   |                  | 18,886  
|Basic earnings per share       |  |                                               | 5,744.53 |   |                  | 5,881.92  |   |                  | 5,493.95 |                  | 4,685.49 |                  | 3,608.61
|Diluted earnings per share     |  |                                               | 5,671.36 |   |                  | 5,788.80  |   |                  | 5,468.23 |                  | 4,676.89 |                  | 3,595.75
|Distributions per share        |  |                                               | 4,124.49 |   |                  | 28,098.03 |   |                  | 3,619.93 |                  | 3,309.89 |                  | 3,527.73
|Total assets                   |  |                                               | 93,089   |   |                  | 94,344    |   |                  | 72,520   |                  | 69,488   |                  | 66,414  
|Total debt                     |  |                                               | 144,200  |   |                  | 150,200   |   |                  | 17,850   |                  | 28,500   |                  | 34,500  
|Stockholders (deficit) equity |  |                                               | (62,638  | ) |                  | (68,556   | ) |                  | 43,544   |                  | 31,152   |                  | 22,468  

---

|(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) | The above amounts of Net Sales for the years ended December 31, 2004, December 26, 2003, December 27, 2002 and December 28, 2001 have been increased
from the amounts previously reported by $7,940, $6,559, $6,006 and $5,637, respectively, to be in conformity with EITF 00-10 which prescribes that shipping billings be recorded in revenues and corresponding costs be recorded in cost of sales.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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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 2006 is difficult to forecast because the Company does not operate with a
significant order backlog.



Regular profit distributions to
shareholders in 2006 have been issued at the monthly rate of $200 per share or $1.1 million in the aggregate, subject to the covenants contained in the indenture related to 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.



As discussed in
note 1(s) to the consolidated financial statements, there are no new accounting standards that the Company believes will have a material effect on the results of operations or financial position of the Company.



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##### Table of Contents

Results of Operations



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 US 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.



Year Ended December 31, 2004 Compared with Year Ended December 26, 2003



Net Sales. Net sales were $162.2 million for
2004, as compared to net sales of $135.7 million for 2003, an increase of $26.5 million or 19.5%. Improved economic conditions in North America during 2004 as compared to 2003 contributed to this growth as the Company realized sales increases in all
of its product lines. In addition, the 2004 fiscal year was a 53-week period whereas the 2003 fiscal year was a



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##### Table of Contents

52-week period. In the U.S., electric screen sales increased $7.1 million, wall screen sales increased $6.4 million and portable screen sales increased $5.3
million. Sales from the Companys European subsidiaries increased $5.4 million or 21.6% with the stronger Euro accounting for $2.9 million of that increase.



Cost of Sales. Cost of sales were $97.8 million for 2004, as compared to $87.4 million for 2003, an increase of $10.4
million or 11.9%. As a percentage of net sales, the cost of sales represented 60.3% and 64.4% for 2004 and 2003, respectively. This constitutes a 4.1 percentage point improvement in margins and results from a combination of the increased sales of
higher margin products and greater productivity at the Warsaw, Indiana plant.



Selling, General and Administrative Expenses. Selling, general and administrative expenses were $18.6 million for 2004, as compared to $15.0 million for 2003. 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. Salaries and
commission expense increased $1.0 million as a result of increased sales and performance based compensation. Marketing expense increased $0.2 million as the Company expanded its market coverage in the home theater and on-line resale markets.
Selling, general and administrative expenses in the Companys European subsidiaries increased $1.1 million of which $0.5 million was the result of the strengthening Euro.



Interest, net. Interest expense totaled $10.8 million for 2004, as compared to $2.0 million for 2003, an increase of
$8.8 million. This increase was a direct result of the interest on $160 million of 91/2% senior debt issued in
May 2004.



Miscellaneous, net. Miscellaneous, net
was $1.1 million for 2004, as compared to $0.6 million for 2003, an increase of $0.5 million. Miscellaneous, net consisted primarily of the premium paid to retire $9.8 million of the Companys 91/2% senior notes in 2004 and costs relating to the closing of a subsidiary in 2003.



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 2004. 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 $2.6 million from $28.6 million in 2003 to $31.2 million in 2004.



Liquidity and Capital Resources



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



In October 2005, the Company
repurchased $6.0 million of the $160 million principal amount of its 91/2% senior notes from the open market
using cash on hand for an aggregate purchase price of $6.4 million. The Company retired these notes, wrote-off the related deferred financing costs and incurred a charge of $0.6 million during the fourth quarter of 2005 relating to the repurchase.
Depending on the Companys expected cash needs, the prevailing prices of the senior notes and other factors, the Company may repurchase additional outstanding senior notes from time to time in the open market or otherwise.



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##### Table of Contents

Cash Flows



Cash provided by operating activities was $34.1 million in 2005, as compared to $38.7 million in 2004, a decrease of $4.6
million or 11.7%. Cash used in investing activities was $2.6 million in 2005, as compared to $8.9 million in 2004, all of which in both periods represented capital expenditures. Cash used in financing activities was $28.1 million in 2005, as
compared to $21.6 million in 2004. A cash inflow of $160 million, related to the issue of senior debt, was substantially offset by a special dividend to shareholders of $134.6 million and payment of financing costs of $6.0 million during the 2004
fiscal year.



Management believes that the cash generated by
the Companys operations will be sufficient to cover its expenses as well as to fund planned capital expenditures, although there can be no assurances in this regard.



Liquidity



Management believes the principal indicators of the Companys liquidity are its cash position, remaining availability under its bank credit
facilities and its excess working capital. At December 30, 2005, the Companys cash position was $12.5 million, an increase of $3.2 million from December 31, 2004. Additionally, the Company had an unsecured revolving credit facility,
which expires in May 2006, with maximum possible borrowings equal to $5.0 million. At December 30, 2005, the Company had no outstanding balances under this line of credit. Interest on outstanding borrowings related to this line of credit is
calculated at the prime rate, which was 7.25% at December 30, 2005. Furthermore, Da-Lites working capital position improved to $31.3 million (including $12.5 million of cash and cash equivalents) at December 30, 2005 from $26.4
million (including $9.3 million of cash and cash equivalents) at December 31, 2004.



The Company repurchased $6.0 million in principal amount of its 91/2% senior
notes during the fourth quarter of 2005 using cash on hand for an aggregate purchase price of $6.4 million. The Company retired these notes, wrote-off the related deferred financing costs and incurred a charge of $0.6 million during the fourth
quarter of 2005 relating to the repurchase. Depending on the Companys expected cash needs, the prevailing prices of the 91/2% senior notes and other factors, the Company may repurchase additional outstanding 91/2% senior notes from time to time in the open market or otherwise.



Regular profit distributions to shareholders in 2005 were issued at the monthly rate of $175 per share or $0.9 million in aggregate, subject to the
covenants contained in the indenture relating to the notes. As a subchapter S corporation under the Internal Revenue Code of 1986, the Company also made quarterly tax distributions to its shareholders to pay estimated taxes relating to taxable
income allocated to them by the Company.



At December 30,
2005, the Companys Dutch subsidiary, Projecta, had a line of credit, with maximum possible borrowings equal to approximately 1.5 million Euros or certain percentages of Projectas eligible accounts receivable and inventory. This
facility is secured by Projectas accounts receivable and inventory. At December 30, 2005, no amount was outstanding under this line of credit.



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##### Table of Contents

Capital Expenditures



Capital expenditures were $2.6 million in 2005 and $8.9 million in 2004. Substantially all of the expenditures in 2005 were related to machinery and
equipment purchases. Approximately $4.0 million of expenditures in 2004 were related to the construction of the Companys new 160,000 square foot facility in the Netherlands, which was completed in September 2004. The Companys management
currently expects to spend approximately $4.0 million on capital expenditures in 2006 using cash generated from operations.



Contractual Obligations



The following table sets forth, as of December 30, 2005, certain of the Companys contractual obligations:



|                                                |  |                        |       |                 |      |           |      |           |      |                  |      
|----------------------------------------------- |  | ---------------------- | ----- | --------------- | ---- | --------- | ---- | --------- | ---- | ---------------- | -----
|                                                |  | Payments due by period
|Contractual Obligations                         |  | Total                  |       | Less than1 year |      | 1-3 years |      | 3-5 years |      | More than5 years
|                                                |  | (in millions)         
|Interest and principal payments for senior debt |  | $                      | 219.5 |                 | 13.7 |           | 27.4 |           | 27.4 |                  | 151.0
|Self-insurance letter of credit                 |  |                        | 0.5   |                 | 0.5  |           |     |           |     |                  |     
|                                                |  |                        |       |                 |      |           |      |           |      |                  |      
|Total                                           |  | $                      | 220.0 |                 | 14.2 |           | 27.4 |           | 27.4 |                  | 151.0
|                                                |  |                        |       |                 |      |           |      |           |      |                  |      



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 $10.9 million in 2005 and $9.5 million in 2004. The Company
made additional regular distributions to its shareholders in 2005 at the monthly rate of $175 per share or $0.9 million in the aggregate, subject to the covenants contained in the indenture related to its 91/2% senior notes. Regular monthly distributions were paid to the Companys shareholders in the first part of
2004, through April 2004, at the monthly rate of $200 per share or $1.0 million in the aggregate. In May 2004, the Company paid a special distribution to its shareholders of approximately $134.6 million ($25,500 per share). Although the Company
continued to make quarterly tax distributions to its shareholders, additional regular monthly distributions during the remainder of 2004 were not issued. The Company has increased regular distributions to its shareholders in 2006 to the monthly rate
of $200 per share or $1.1 million in the aggregate.



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 EITF 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 analysis of past due accounts.



GoodwillGoodwill represents the excess of purchase price over
the fair value of identifiable net assets acquired. With the adoption of SFAS No. 142, 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 has determined there were no indicators of impairment in 2005 and 2004. The change in the balance of goodwill from December 31, 2004 to December 30, 2005 is the result of foreign currency translation.



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##### Table of Contents

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 and accounts receivable. The Company maintains cash and cash equivalents with well
capitalized financial institutions.



The Companys sales
are not materially dependent on a single customer or a small group of customers. No one individual customer balance represented more than 2% of the Companys total outstanding receivables as of December 30, 2005. Credit risk associated
with the Companys receivables is representative of the geographic, industry and customer diversity associated with the Companys global business.



The Company also maintains credit controls for evaluating and granting customer credit. As a result, the Company may require that customers provide some
type of financial guarantee in certain circumstances.



Foreign Currency Risk



Da-Lite routinely uses forward exchange contracts to
hedge raw material purchases from vendors outside of the country of purchase. Gains and losses on these contracts offset changes in the related foreign currency denominated costs. At December 30, 2005, the Company had open forward exchange
contracts with a notional value of $0.8 million. The fair value of these open forward exchange contracts was not material.



Interest Rate Risk



Da-Lite does not have any variable rate debt outstanding and the Companys management does not foresee the need to pursue additional debt financing
at this time. Interest related to outstanding balances in the Companys $5.0 million revolving credit facility is calculated at the prime rate, which was 7.25% at December 30, 2005. The Company had no outstanding borrowings related to this
credit facility on December 30, 2005.



At
December 30, 2005, the Company had $144.2 million in fixed-rate long-term debt outstanding. There are no earnings risks associated with the Companys fixed-rate debt. The fair market value of the fixed-rate debt (based on discounted cash
flows reflecting borrowing rates currently available for debt with similar terms and maturities) varies with fluctuations in interest rates. A 10% decrease in interest rates would have changed the fair market value of the fixed-rate debt to
approximately $160 million from the fair value of approximately $154 million at December 30, 2005. See note 1(n) to the consolidated financial statements for further discussion.



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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 sheets of Da-Lite Screen Company, Inc. and subsidiaries (the Company) as of December 30, 2005 and December 31, 2004, and the related consolidated statements of operations,
stockholders (deficit) equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 30, 2005. In connection with our audits of the consolidated financial statements, we have also audited the
financial statement schedule II. These consolidated financial statements and financial statement schedule are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements
and financial statement schedule 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 December 31, 2004, and the results of their operations and their cash flows for each of the years in the
three-year period ended December 30, 2005, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements
taken as a whole, presents fairly, in all material respects, the information set forth therein.



/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)



|                                                                                                                                                          |  |                  |         |   |                  |         |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ------- | - | ---------------- | ------- | -
|                                                                                                                                                          |  | December 30,2005 |         |   | December 31,2004 |        
|Assets                                                                                                                                                    |  |                  |         |   |                  |         |  
|Current assets:                                                                                                                                           |  |                  |         |   |                  |         |  
|Cash and cash equivalents                                                                                                                                 |  | $                | 12,547  |   |                  | 9,306   |  
|Accounts receivable, less allowance for doubtful accounts of $453 in 2005 and $550 in 2004                                                                |  |                  | 16,492  |   |                  | 17,083  |  
|Inventories                                                                                                                                               |  |                  | 12,195  |   |                  | 11,560  |  
|Prepaid expenses and other                                                                                                                                |  |                  | 439     |   |                  | 301     |  
|Prepaid income taxes                                                                                                                                      |  |                  | 179     |   |                  |        |  
|                                                                                                                                                          |  |                  |         |   |                  |         |  
|Total current assets                                                                                                                                      |  |                  | 41,852  |   |                  | 38,250  |  
|                                                                                                                                                          |  |                  |         |   |                  |         |  
|Property, plant and equipment:                                                                                                                            |  |                  |         |   |                  |         |  
|Land and land improvements                                                                                                                                |  |                  | 2,531   |   |                  | 3,055   |  
|Buildings and building improvements                                                                                                                       |  |                  | 17,135  |   |                  | 19,918  |  
|Machinery and equipment                                                                                                                                   |  |                  | 25,538  |   |                  | 23,833  |  
|Furniture and fixtures                                                                                                                                    |  |                  | 7,581   |   |                  | 7,603   |  
|Construction in-process                                                                                                                                   |  |                  | 18      |   |                  | 77      |  
|                                                                                                                                                          |  |                  |         |   |                  |         |  
|                                                                                                                                                          |  |                  | 52,803  |   |                  | 54,486  |  
|Less accumulated depreciation                                                                                                                             |  |                  | 32,610  |   |                  | 30,188  |  
|                                                                                                                                                          |  |                  |         |   |                  |         |  
|Net property, plant and equipment                                                                                                                         |  |                  | 20,193  |   |                  | 24,298  |  
|                                                                                                                                                          |  |                  |         |   |                  |         |  
|Goodwill                                                                                                                                                  |  |                  | 25,851  |   |                  | 26,604  |  
|Other assets, net                                                                                                                                         |  |                  | 5,193   |   |                  | 5,192   |  
|                                                                                                                                                          |  |                  |         |   |                  |         |  
|                                                                                                                                                          |  | $                | 93,089  |   |                  | 94,344  |  
|                                                                                                                                                          |  |                  |         |   |                  |         |  
|Liabilities and Stockholders Deficit                                                                                                                     |  |                  |         |   |                  |         |  
|Current liabilities:                                                                                                                                      |  |                  |         |   |                  |         |  
|Accounts payable                                                                                                                                          |  | $                | 4,318   |   |                  | 4,676   |  
|Accrued expenses:                                                                                                                                         |  |                  |         |   |                  |         |  
|Income taxes                                                                                                                                              |  |                  |        |   |                  | 590     |  
|Interest                                                                                                                                                  |  |                  | 1,754   |   |                  | 1,828   |  
|Vacation                                                                                                                                                  |  |                  | 955     |   |                  | 994     |  
|Other                                                                                                                                                     |  |                  | 3,540   |   |                  | 3,760   |  
|                                                                                                                                                          |  |                  |         |   |                  |         |  
|Total accrued expenses                                                                                                                                    |  |                  | 6,249   |   |                  | 7,172   |  
|                                                                                                                                                          |  |                  |         |   |                  |         |  
|Total current liabilities                                                                                                                                 |  |                  | 10,567  |   |                  | 11,848  |  
|Long-term debt                                                                                                                                            |  |                  | 144,200 |   |                  | 150,200 |  
|Minority interest                                                                                                                                         |  |                  | 960     |   |                  | 852     |  
|                                                                                                                                                          |  |                  |         |   |                  |         |  
|Total liabilities                                                                                                                                         |  |                  | 155,727 |   |                  | 162,900 |  
|                                                                                                                                                          |  |                  |         |   |                  |         |  
|Stockholders deficit:                                                                                                                                    |  |                  |         |   |                  |         |  
|Common stock, $1 par value. Authorized 1,000,000 shares; 10,686 shares issued and 5,371.62 and 5,346.92 shares outstanding in 2005 and 2004,
respectively |  |                  | 11      |   |                  | 11      |  
|Additional paid-in capital                                                                                                                                |  |                  | 574     |   |                  | 230     |  
|Accumulated deficit                                                                                                                                       |  |                  | (40,036 | ) |                  | (48,633 | )
|Accumulated other comprehensive income                                                                                                                    |  |                  | 439     |   |                  | 3,245   |  
|Less treasury stock, 5,314.38 and 5,339.08 shares at cost in 2005 and 2004, respectively                                                                  |  |                  | (23,626 | ) |                  | (23,409 | )
|                                                                                                                                                          |  |                  |         |   |                  |         |  
|Total stockholders deficit                                                                                                                               |  |                  | (62,638 | ) |                  | (68,556 | )
|Commitments and contingencies (note 9)                                                                                                                    |  |                  |         |   |                  |         |  
|                                                                                                                                                          |  |                  |         |   |                  |         |  
|                                                                                                                                                          |  | $                | 93,089  |   |                  | 94,344  |  
|                                                                                                                                                          |  |                  |         |   |                  |         |  



See accompanying notes
to consolidated financial statements.



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DA-LITE SCREEN COMPANY, INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF OPERATIONS



(Dollars in thousands, except per share amounts)



|                                             |  |                            |          |                            |          |                            |         
|-------------------------------------------- |  | -------------------------- | -------- | -------------------------- | -------- | -------------------------- | --------
|                                             |  | Year endedDecember 30,2005 |          | Year endedDecember 31,2004 |          | Year endedDecember 26,2003
|Net sales                                    |  | $                          | 165,634  |                            | 162,166  |                            | 135,673 
|Cost of sales                                |  |                            | 100,769  |                            | 97,774   |                            | 87,414  
|                                             |  |                            |          |                            |          |                            |         
|Gross profit                                 |  |                            | 64,865   |                            | 64,392   |                            | 48,259  
|Selling, general and administrative expenses |  |                            | 17,202   |                            | 18,648   |                            | 15,093  
|                                             |  |                            |          |                            |          |                            |         
|Operating income                             |  |                            | 47,663   |                            | 45,744   |                            | 33,166  
|                                             |  |                            |          |                            |          |                            |         
|Other expense:                               |  |                            |          |                            |          |                            |         
|Interest, net                                |  |                            | 14,758   |                            | 10,785   |                            | 1,994   
|Minority interest                            |  |                            | 108      |                            | 184      |                            | 164     
|Miscellaneous, net                           |  |                            | 734      |                            | 1,140    |                            | 590     
|                                             |  |                            |          |                            |          |                            |         
|Total other expense                          |  |                            | 15,600   |                            | 12,109   |                            | 2,748   
|                                             |  |                            |          |                            |          |                            |         
|Income before income taxes                   |  |                            | 32,063   |                            | 33,635   |                            | 30,418  
|Income taxes                                 |  |                            | 1,248    |                            | 2,441    |                            | 1,814   
|                                             |  |                            |          |                            |          |                            |         
|Net income                                   |  | $                          | 30,815   |                            | 31,194   |                            | 28,604  
|                                             |  |                            |          |                            |          |                            |         
|Basic earnings per share                     |  | $                          | 5,744.53 |                            | 5,881.92 |                            | 5,493.95
|                                             |  |                            |          |                            |          |                            |         
|Basic weighted-average shares outstanding    |  |                            | 5,364.23 |                            | 5,303.37 |                            | 5,206.45
|                                             |  |                            |          |                            |          |                            |         
|Diluted earnings per share                   |  | $                          | 5,671.36 |                            | 5,788.80 |                            | 5,468.23
|                                             |  |                            |          |                            |          |                            |         
|Diluted weighted-average shares outstanding  |  |                            | 5,433.44 |                            | 5,388.68 |                            | 5,230.94
|                                             |  |                            |          |                            |          |                            |         



See accompanying notes
to consolidated financial statements.



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DA-LITE SCREEN COMPANY, INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF STOCKHOLDERS (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 27, 2002                                 |  | $           | 11 |                          | 11,200  |   |                           | 45,507   |   |                                            | (1,514 | ) |               | (24,052 | ) |       | 31,152   |  
|                                                             |  |             |    |                          |         |   |                           |          |   |                                            |        |   |               |         |   |       |          |  
|Comprehensive income:                                        |  |             |    |                          |         |   |                           |          |   |                                            |        |   |               |         |   |       |          |  
|Net income                                                   |  |             |   |                          |        |   |                           | 28,604   |   |                                            |       |   |               |        |   |       | 28,604   |  
|Other comprehensive income:                                  |  |             |    |                          |         |   |                           |          |   |                                            |        |   |               |         |   |       |          |  
|Foreign currency translation adjustments                     |  |             |   |                          |        |   |                           |         |   |                                            | 2,702  |   |               |        |   |       | 2,702    |  
|Unrealized loss on derivative instrument                     |  |             |   |                          |        |   |                           |         |   |                                            | (32    | ) |               |        |   |       | (32      | )
|                                                             |  |             |    |                          |         |   |                           |          |   |                                            |        |   |               |         |   |       |          |  
|Total comprehensive income                                   |  |             |   |                          |        |   |                           | 28,604   |   |                                            | 2,670  |   |               |        |   |       | 31,274   |  
|                                                             |  |             |    |                          |         |   |                           |          |   |                                            |        |   |               |         |   |       |          |  
|Cashless stock option exercise (6.3 shares)                  |  |             |   |                          | (28     | ) |                           |         |   |                                            |       |   |               | 28      |   |       |         |  
|Distributions to stockholders ($3,619.93 per share)          |  |             |   |                          |        |   |                           | (18,882  | ) |                                            |       |   |               |        |   |       | (18,882  | )
|                                                             |  |             |    |                          |         |   |                           |          |   |                                            |        |   |               |         |   |       |          |  
|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                                   |  |             |   |                          |        |   |                           | 31,194   |   |                                            | 2,089  |   |               |        |   |       | 33,283   |  
|                                                             |  |             |    |                          |         |   |                           |          |   |                                            |        |   |               |         |   |       |          |  
|Exercise of common stock options (140.4 shares)              |  |             |   |                          | 2,361   |   |                           |         |   |                                            |       |   |               | 615     |   |       | 2,976    |  
|Distributions to stockholders ($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                                   |  |             |   |                          |        |   |                           | 30,815   |   |                                            | (2,806 | ) |               |        |   |       | 28,009   |  
|                                                             |  |             |    |                          |         |   |                           |          |   |                                            |        |   |               |         |   |       |          |  
|Repurchase of common stock (12.9 shares)                     |  |             |   |                          |        |   |                           |         |   |                                            |       |   |               | (381    | ) |       | (381     | )
|Exercise of common stock options (37.6 shares)               |  |             |   |                          | 344     |   |                           |         |   |                                            |       |   |               | 164     |   |       | 508      |  
|Distributions to stockholders ($4,124.49 per share)          |  |             |   |                          |        |   |                           | (22,218  | ) |                                            |       |   |               |        |   |       | (22,218  | )
|                                                             |  |             |    |                          |         |   |                           |          |   |                                            |        |   |               |         |   |       |          |  
|Balance at December 30, 2005                                 |  | $           | 11 |                          | 574     |   |                           | (40,036  | ) |                                            | 439    |   |               | (23,626 | ) |       | (62,638  | )
|                                                             |  |             |    |                          |         |   |                           |          |   |                                            |        |   |               |         |   |       |          |  



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 endedDecember 30,2005 |         |   | Year endedDecember 31,2004 |          |   | Year endedDecember 26,2003 |        
|Cash flows from operating activities:                                             |  |                            |         |   |                            |          |   |                            |         |  
|Net income                                                                        |  | $                          | 30,815  |   |                            | 31,194   |   |                            | 28,604  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                            |         |   |                            |          |   |                            |         |  
|Depreciation                                                                      |  |                            | 4,368   |   |                            | 3,553    |   |                            | 3,990   |  
|Amortization and write-off of debt issuance costs                                 |  |                            | 985     |   |                            | 1,425    |   |                            | 134     |  
|Stock-based compensation                                                          |  |                            |        |   |                            | 1,710    |   |                            |        |  
|Gain on disposal of assets                                                        |  |                            | (6      | ) |                            | (13      | ) |                            | (28     | )
|Minority interest earnings                                                        |  |                            | 108     |   |                            | 184      |   |                            | 164     |  
|Change in:                                                                        |  |                            |         |   |                            |          |   |                            |         |  
|Accounts receivable                                                               |  |                            | 140     |   |                            | (725     | ) |                            | (2,429  | )
|Inventories                                                                       |  |                            | (1,138  | ) |                            | (1,001   | ) |                            | 1,718   |  
|Prepaid expenses and other                                                        |  |                            | (178    | ) |                            | 207      |   |                            | (249    | )
|Accounts payable                                                                  |  |                            | (61     | ) |                            | 477      |   |                            | (176    | )
|Accrued expenses                                                                  |  |                            | (893    | ) |                            | 1,872    |   |                            | 649     |  
|Other                                                                             |  |                            | (5      | ) |                            | (217     | ) |                            | (4      | )
|                                                                                  |  |                            |         |   |                            |          |   |                            |         |  
|Net cash and cash equivalents provided by operating activities                    |  |                            | 34,135  |   |                            | 38,666   |   |                            | 32,373  |  
|                                                                                  |  |                            |         |   |                            |          |   |                            |         |  
|Cash flows from investing activities:                                             |  |                            |         |   |                            |          |   |                            |         |  
|Proceeds from sale of assets                                                      |  |                            | 6       |   |                            | 27       |   |                            | 150     |  
|Purchase of property, plant and equipment                                         |  |                            | (2,590  | ) |                            | (8,955   | ) |                            | (3,129  | )
|                                                                                  |  |                            |         |   |                            |          |   |                            |         |  
|Net cash and cash equivalents used in investing activities                        |  |                            | (2,584  | ) |                            | (8,928   | ) |                            | (2,979  | )
|                                                                                  |  |                            |         |   |                            |          |   |                            |         |  
|Cash flows from financing activities:                                             |  |                            |         |   |                            |          |   |                            |         |  
|(Decrease) increase in checks written in excess of bank balance                   |  |                            |        |   |                            | (824     | ) |                            | 177     |  
|(Payments on) proceeds from revolving credit facility                             |  |                            |        |   |                            | (600     | ) |                            | 600     |  
|Proceeds from senior notes                                                        |  |                            |        |   |                            | 160,000  |   |                            |        |  
|Payments to retire senior notes                                                   |  |                            | (6,000  | ) |                            | (9,800   | ) |                            |        |  
|Payments on long-term debt                                                        |  |                            |        |   |                            | (17,250  | ) |                            | (11,250 | )
|Distributions to stockholders                                                     |  |                            | (22,218 | ) |                            | (148,359 | ) |                            | (18,882 | )
|Payments of financing costs                                                       |  |                            | (23     | ) |                            | (6,025   | ) |                            | (78     | )
|Repurchase of common stock                                                        |  |                            | (381    | ) |                            |         |   |                            |        |  
|Exercise of common stock options                                                  |  |                            | 508     |   |                            | 1,266    |   |                            |        |  
|                                                                                  |  |                            |         |   |                            |          |   |                            |         |  
|Net cash and cash equivalents used in financing activities                        |  |                            | (28,114 | ) |                            | (21,592  | ) |                            | (29,433 | )
|                                                                                  |  |                            |         |   |                            |          |   |                            |         |  
|Effect of foreign currency exchange rate changes on cash and cash equivalents     |  |                            | (196    | ) |                            | (103     | ) |                            | 604     |  
|                                                                                  |  |                            |         |   |                            |          |   |                            |         |  
|Net change in cash and cash equivalents                                           |  |                            | 3,241   |   |                            | 8,043    |   |                            | 565     |  
|Cash and cash equivalents at beginning of year                                    |  |                            | 9,306   |   |                            | 1,263    |   |                            | 698     |  
|                                                                                  |  |                            |         |   |                            |          |   |                            |         |  
|Cash and cash equivalents at end of year                                          |  | $                          | 12,547  |   |                            | 9,306    |   |                            | 1,263   |  
|                                                                                  |  |                            |         |   |                            |          |   |                            |         |  
|Supplemental disclosures of cash flow information:                                |  |                            |         |   |                            |          |   |                            |         |  
|Income taxes paid during the year                                                 |  | $                          | 2,017   |   |                            | 2,123    |   |                            | 2,123   |  
|Interest paid during the year                                                     |  |                            | 14,832  |   |                            | 7,843    |   |                            | 1,767   |  
|                                                                                  |  |                            |         |   |                            |          |   |                            |         |  



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 30, 2005, December 31, 2004 and
December 26, 2003.



(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 83%, 83% and 81% of the Companys total net sales in
2005, 2004 and 2003, respectively, were from front projection screen sales. The Companys ten largest customers accounted for approximately 11%, 12% and 11% of total net sales in 2005, 2004 and 2003, respectively. No customer accounted for more
than 2% of the Companys total net sales in each of 2005, 2004 and 2003.



(b) Principles of Consolidation



The accompanying consolidated financial statements include the accounts of Da-Lite Screen Company, Inc. (Da-Lite) and its wholly owned subsidiary, Visual Structures, Inc. (VSI), a California 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. VSI was inactive at December 26, 2003 and Da-Lite has
dissolved this corporation. The liquidating entries were made effective December 26, 2003. The liquidation was not reported as discontinued operations as the effect on consolidated results of operations was not material. All material
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



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##### Table of Contents

recorded as costs of goods sold in conformity with Emerging Issues Task Force (EITF) 00-10, Accounting for Shipping and Handling Fees and Costs (EITF
00-10). Net Sales for the years ended December 31, 2004 and December 26, 2003 were increased from the amounts previously reported by $7.9 million and $6.6 million, respectively, to be in conformity with EITF 00-10 which prescribes that
shipping billings be recorded in revenues and corresponding costs be recorded in cost of sales. Cost of sales for the years ended December 31, 2004 and December 26, 2003 were also increased from the amounts previously reported by $8.7
million and $7.1 million, respectively, and Selling, general and administrative expenses were reduced by $0.8 million and $0.5 million for the years ended December 31, 2004 and December 26, 2003, respectively, to conform to
EITF 00-10.



(e) Cash and Cash Equivalents



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 had money market accounts, which are considered cash equivalents, of $5.7 million and $10.0 million at December 30, 2005 and
December 31, 2004, respectively.



(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 30, 2005 and
December 31, 2004, no customer accounted for more than 2% 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 30,2005 |        | December 31,2004
|Raw materials    |  | $                | 7,030  |                  | $ | 6,473 
|Work in progress |  |                  | 1,651  |                  |   | 1,692 
|Finished goods   |  |                  | 3,514  |                  |   | 3,395 
|                 |  |                  |        |                  |   |       
|                 |  | $                | 12,195 |                  | $ | 11,560
|                 |  |                  |        |                  |   |       



(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.



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##### Table of Contents

(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 30,
2005, December 31, 2004 and December 26, 2003 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.



(j) Goodwill



SFAS No. 142, Goodwill and Other Intangible Assets (SFAS 142),
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. Goodwill represents the excess of purchase
price over fair value of identifiable net assets acquired. Goodwill is shown separately on the face of the balance sheet. Management has determined that goodwill was not impaired in 2005, 2004 and 2003. The change in the balance of goodwill is the
result of foreign currency translation. Additional information regarding goodwill is included in note 6.



(k) Other Assets, Net



Other assets, net includes deferred financing costs of $5.5 million and $5.7 million less accumulated amortization of $1.3 million and $0.5 million at
December 30, 2005 and December 31, 2004, 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. For additional discussion, see note 8.



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The Company periodically uses forward exchange contracts to hedge purchase orders. Gains or losses on
settlement are recorded through operations and were not material in 2005, 2004 or 2003. There were open forward exchange contracts with a notional value of $0.8 million and $1.6 million at December 30, 2005 and December 31, 2004,
respectively. The fair value of open forward exchange contracts was not material. There were no open forward exchange contracts at December 26, 2003.



(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 $150,000 at December 30, 2005 and December 31, 2004 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 $154 million based upon the quoted market value at December 30,
2005.



(o) Derivative Instruments



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 stockholders deficit
and subsequently reclassified to net income in the same period that the hedged transaction impacts net income.



The Company formally documented the relationship between the hedging instrument and the hedged item, as well as the risk management objective and strategy
for undertaking various hedge transactions. The Company also formally assessed, both at the inception of the hedge and on an ongoing basis, whether derivative instruments used are highly effective in offsetting changes in cash flows of hedged items.
If it had been determined that the derivative instrument had not been highly effective as a hedge, hedge accounting would have been discontinued and changes in fair value of the interest rate swap would have been recognized through earnings.



At December 30, 2005, there were no derivative
instruments outstanding, except for the foreign currency exchange contracts discussed in note 1(l).



(p) Stock Option Plan



The Company applies the intrinsic value based method of accounting prescribed by Accounting Principles Board (APB) Opinion No. 25, Accounting for
Stock Issued to Employees, and related interpretations. Under this method, compensation expense is recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price. Since the exercise price
equals the market value of the underlying common stock on the date of grant, no compensation expense is recognized. For the year ended December 31, 2004, the Company recognized compensation expense of $1.7 million related to the modification of
the exercise price of a certain member of managements 40



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options of common stock to an amount less than the original exercise price. SFAS No. 123, Accounting for Stock-Based Compensation(SFAS 123),
established accounting and disclosure requirements using a fair value-based method of accounting for stock-based employee based compensation plans. As allowed by SFAS 123, the Company continued to apply the intrinsic value based method of accounting
described above and has adopted the disclosure requirements of SFAS 123. For further discussion, see note 5.



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 and VSI are 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 stockholders of Da-Lite. Therefore, no provision or liability is recorded in
the consolidated financial statements for taxable income of Da-Lite or VSI. 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 $154,000, $68,000 and $91,000 for the years ended December 30, 2005, December 31, 2004 and December 26, 2003, respectively.



(s) Recent Accounting Pronouncements



In May 2005, the Financial Accounting Standards Board (FASB) issued SFAS
No. 154, Accounting Changes and Error Correctionsa replacement of APB Opinion No. 20 and FASB Statement No. 3, that changed the requirements for the accounting for and reporting of a change in accounting principle. This
Statement applies to all voluntary changes in accounting principle. It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. APB Opinion
No. 20 previously required that most voluntary changes in accounting principle be recognized by including in net income of the period of the change the cumulative effect of changing to the new accounting principle. This Statement requires
retrospective application to prior periods financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. This Statement also
redefines restatement as the revising of previously issued financial statements to reflect the correction of an error. This Statement requires that retrospective application of a change in accounting principle be limited to the direct effects of the
change. Indirect effects of a change in accounting principle, such as a change in nondiscretionary profit-sharing payments resulting from an accounting change, should be recognized in the period of the accounting change. This Statement also requires
that a change in depreciation, amortization, or depletion method for long-lived, nonfinancial assets be accounted for as a change in accounting estimate effected by a change in accounting principle.



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



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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 will be recognized over the period during which an employee is required to provide services in exchange for the award. SFAS 123R is effective beginning
January 1, 2006. The ultimate amount of increased compensation expense will be dependent on the number of option shares granted during the year, their timing and vesting period, and the method used to calculate the fair value of the awards,
among other factors. The adoption of SFAS 123R is not expected to have a material effect on the 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. This Statement amends the guidance in 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. This Statement requires that those items be recognized as current period charges regardless of whether they meet the criterion of so abnormal. In addition, this Statement requires that allocation of fixed production
overheads to the costs of conversion be based on the normal capacity of the production facilities. The provisions of this Statement are effective for inventory costs incurred beginning after January 1, 2006. The adoption of this Statement is
not expected to have a material effect on the consolidated results of operations or financial position of the Company.



(t) Earnings Per Share



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



|                                            |  |                  |          |                  |   |                  |  |   |         
|------------------------------------------- |  | ---------------- | -------- | ---------------- | - | ---------------- |  | - | --------
|                                            |  | December 30,2005 |          | December 31,2004 |   | December 26,2003
|Net income                                  |  | $                | 30,815   |                  | $ | 31,194           |  | $ | 28,604  
|                                            |  |                  |          |                  |   |                  |  |   |         
|Basic weighted average shares outstanding   |  |                  | 5,364.23 |                  |   | 5,303.37         |  |   | 5,206.45
|Dilutive effect of stock options            |  |                  | 69.21    |                  |   | 85.31            |  |   | 24.49   
|                                            |  |                  |          |                  |   |                  |  |   |         
|Diluted weighted average shares outstanding |  |                  | 5,433.44 |                  |   | 5,388.68         |  |   | 5,230.94
|                                            |  |                  |          |                  |   |                  |  |   |         
|Earnings per share:                         |  |                  |          |                  |   |                  |  |   |         
|Basic                                       |  | $                | 5,744.53 |                  | $ | 5,881.92         |  | $ | 5,493.95
|Diluted                                     |  | $                | 5,671.36 |                  | $ | 5,788.80         |  | $ | 5,468.23



(u) Other



Certain prior-year financial information has been
reclassified to conform to the fiscal 2005 financial statement presentation.



As discussed in note 1(d), the Company has reclassified amounts billed for shipping and handling costs in accordance with EITF 00-10.



For the years ended December 31, 2004 and December 26, 2003, depreciation expense was classified separately on the
consolidated statements of operations included in operating income below gross profit. During fiscal year 2005, depreciation expense was included in Cost of sales and Selling, general and administrative expenses. Cost of sales for the year ended
December 31, 2004 and December 26, 2003 were increased from amounts previously reported by $3.3 million and $3.7 million, respectively, and Selling, general and administrative expenses were increased $0.2 million and $0.3 million for the years ended
December 31, 2004 and December 26, 2003, respectively, to conform with the fiscal 2005 presentation.



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



Long-term debt at December 30, 2005 and December 31, 2004
consisted of the following (in thousands):



|                      |  |                  |         |                  |        
|--------------------- |  | ---------------- | ------- | ---------------- | -------
|                      |  | December 30,2005 |         | December 31,2004
|Senior notes due 2011 |  | $                | 144,200 |                  | 150,200



The Company issued
$160 million of 91/2% senior unsecured notes due in May 2011 in a private offering during the second quarter of
2004 to retire approximately $15.0 million of indebtedness outstanding under a then existing credit facility, to pay a special distribution to shareholders of approximately $134.6 million and for general corporate purposes. The Company may redeem
any of the notes beginning on May 15, 2007 with an initial redemption price of 109.5% 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 beginning on November 15, 2004.



The Company registered with the Securities and Exchange Commission (the SEC) $160 million of new 91/2% senior notes due 2011 which have substantially identical terms to the Companys outstanding 91/2% senior notes due 2011 pursuant to a Registration Statement on Amendment 1 to Form S-4 which was declared effective by the SEC on August 2, 2004. On August 10, 2004, the Company commenced an
offer to exchange its outstanding 91/2% senior notes due 2011 for the new 91/2% senior notes due 2011 which were registered with the SEC. The Company completed this exchange offer on
September 9, 2004 and exchanged all of the new registered notes for the previously outstanding notes.



In the Indenture related to the 91/2% senior notes due 2011, the Company agreed to covenants that limit its and its restricted subsidiaries ability, among other things, to: (a) incur additional debt and issue preferred stock, (b) pay dividends,
acquire shares of capital stock, make payments on subordinated debt or make investments, (c) place limitations on distributions from restricted subsidiaries, (d) issue or sell capital stock of restricted subsidiaries, (e) issue
guarantees, (f) sell or exchange assets, (g) enter into transactions with shareholders and affiliates, (h) create liens and (i) effect mergers. In addition, if a change of control occurs, each holder of notes will have the right
to require the Company to repurchase all or part of the holders notes at a price equal to 101% of their principal amount, plus any accrued interest to the date of purchase.



At December 30, 2005, the Company had an unsecured revolving credit facility that expires in May 2006 with maximum
possible borrowings equal to $5.0 million. At December 30, 2005, the Company had no outstanding balances under this line of credit. Interest on outstanding borrowings related to this line of credit is calculated at the prime rate, which was
7.25% on December 30, 2005.



At December 30, 2005,
Projecta had a line of credit with maximum possible borrowings equal to the lower of 1.5 million Euros or certain percentages of Projectas eligible accounts receivable and inventory. No borrowings were outstanding under this line of
credit at December 30, 2005 and December 31, 2004. 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 4.50% on December 30, 2005.



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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.



Da-Lite had
a credit agreement with Bank of America. The credit agreement provided for a revolver loan with a maximum aggregate of $10.0 million (including $1.0 million letter of credit sub limit) and a term loan of $30.0 million. This credit agreement was
retired upon issuance of the notes in the second quarter of 2004.



The Company had an interest rate swap agreement, that expired in January 2004, to reduce the impact of changes in interest rates on a portion of its variable rate debt on the credit agreement. At December 26, 2003, the total notional
value of the agreement was $17.5 million.



The fair value of
the interest rate swap was a liability of approximately $244,000 at December 26, 2003, which was recorded in other accrued expenses, with an offsetting charge to equity. There was no ineffectiveness recognized on this interest rate swap during
the year ended December 26, 2003.



(3) Income Taxes



Income taxes for the years ended December 30,
2005, December 31, 2004 and December 26, 2003 consisted of the following (in thousands):



|                               |  |                  |       |                  |       |                  |      
|------------------------------ |  | ---------------- | ----- | ---------------- | ----- | ---------------- | -----
|                               |  | December 30,2005 |       | December 31,2004 |       | December 26,2003
|Projecta current foreign taxes |  | $                | 1,209 |                  | 2,275 |                  | 1,784
|Procolor current foreign taxes |  |                  | 39    |                  | 166   |                  | 30   
|                               |  |                  |       |                  |       |                  |      
|Total                          |  | $                | 1,248 |                  | 2,441 |                  | 1,814
|                               |  |                  |       |                  |       |                  |      



The Company has not
recognized a deferred tax liability of approximately $1.6 million for the undistributed earnings of Projecta that arose in 2005 and prior years since the earnings were deemed permanently invested. As of December 30, 2005 the undistributed
earnings of this subsidiary was approximately $10.8 million.



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 30,2005 |   |  | December 31,2004 |   |  | December 26,2003 |  
|U.S. statutory tax rate                                                     |  | 35.0             | % |  | 35.0             | % |  | 35.0             | %
|S corporation income not subject to federal and state income tax            |  | -30.8            | % |  | -27.8            | % |  | -29.1            | %
|Taxes on foreign locations income at rates which differ from the U.S. rate |  | -0.3             | % |  | 0.1              | % |  | 0.1              | %
|                                                                            |  |                  |   |  |                  |   |  |                  |  
|Effective income tax rate                                                   |  | 3.9              | % |  | 7.3              | % |  | 6.0              | %
|                                                                            |  |                  |   |  |                  |   |  |                  |  



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(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. 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 $138,000 and $0 in discretionary contributions to the plan for the years ended December 30, 2005 and
December 31, 2004, respectively. Projecta is a participant in a multi-employer benefit plan covering substantially all Projecta employees. For the years ended December 30, 2005, December 31, 2004 and December 26, 2003,
Projecta made contributions of approximately $341,000, $319,000 and $269,000, 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 of grant and additional awards are generally made each year.
During 2004 and 2002, 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 about the
future. The Company used the Black-Scholes option pricing model and the minimum value method and determined that the fair value of grants made was not material. Accordingly, there is no pro forma compensation expense for SFAS 123 disclosure
purposes.



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:



|                               |  |                   |   |                   |               |        |                   |      |   |               |   |        |         |  |     |               |  |   |      
|------------------------------ |  | ----------------- | - | ----------------- | ------------- | ------ | ----------------- | ---- | - | ------------- | - | ------ | ------- |  | --- | ------------- |  | - | -----
|                               |  | December 30, 2005 |   | December 31, 2004 |               |        | December 26, 2003
|                               |  | Options           |   |                   | Exerciseprice |        | Options           |      |   | Exerciseprice |   |        | Options |  |     | Exerciseprice
|Outstanding, beginning of year |  | 198               |   |                   | $             | 15,921 |                   | 138  |   |               | $ | 3,142  |         |  | 147 |               |  | $ | 2,782
|Granted at market price        |  |                  |   |                   |               |       |                   | 150  |   |               |   | 17,245 |         |  | 5   |               |  |   | 9,000
|Granted at market price        |  |                  |   |                   |               |       |                   | 50   |   |               |   | 15,418 |         |  |    |               |  |   |     
|Exercised                      |  | (38               | ) |                   |               | 13,533 |                   | (140 | ) |               |   | (8,985 | )       |  |    |               |  |   |     
|Forfeited                      |  | (7                | ) |                   |               | 15,418 |                   |     |   |               |   |       |         |  | (4  | )             |  |   | 200  
|Forfeited                      |  |                  |   |                   |               |       |                   |     |   |               |   |       |         |  | (10 | )             |  |   | 1,947
|                               |  |                   |   |                   |               |        |                   |      |   |               |   |        |         |  |     |               |  |   |      
|Outstanding, end of year       |  | 153               |   |                   | $             | 16,530 |                   | 198  |   |               | $ | 15,921 |         |  | 138 |               |  | $ | 3,142
|                               |  |                   |   |                   |               |        |                   |      |   |               |   |        |         |  |     |               |  |   |      
|Exercisable, end of year       |  | 150               |   |                   | $             | 16,681 |                   | 192  |   |               | $ | 16,194 |         |  | 127 |               |  | $ | 3,147



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A summary of stock options outstanding and exercisable as of December 30, 2005 follows:



|               |  |                     |  |                                       |  |                                |  |                   |  |                               
|-------------- |  | ------------------- |  | ------------------------------------- |  | ------------------------------ |  | ----------------- |  | ------------------------------
|               |  | Options outstanding |  | Options exercisable                  
|Exercise price |  | Numberoutstanding   |  | Weighted averageremaining life(years) |  | Weighted averageexercise price |  | Numberexercisable |  | Weighted averageexercise price
|5,000          |  | 4.0                 |  | 6.7                                   |  | 5,000                          |  | 4.0               |  | 5,000                         
|9,000          |  | 4.0                 |  | 7.4                                   |  | 9,000                          |  | 1.0               |  | 9,000                         
|15,418         |  | 15.0                |  | 8.4                                   |  | 15,418                         |  | 15.0              |  | 15,418                        
|17,245         |  | 130.0               |  | 8.4                                   |  | 17,245                         |  | 130.0             |  | 17,245                        
|               |  |                     |  |                                       |  |                                |  |                   |  |                               
|               |  | 153.0               |  | 8.3                                   |  | 16,530                         |  | 150.0             |  | 16,681                        
|               |  |                     |  |                                       |  |                                |  |                   |  |                               



(6) Goodwill



The changes in the carrying value of goodwill for the years ended
December 30, 2005, December 31, 2004 and December 26, 2003 are as follows (in thousands):



|                                |  |              |        |        |       |   |       |        |  
|------------------------------- |  | ------------ | ------ | ------ | ----- | - | ----- | ------ | -
|                                |  | UnitedStates |        | Europe |       |   | Total |       
|Balance as of December 26, 2003 |  | $            | 20,440 |        | 5,537 |   |       | 25,977 |  
|Foreign currency translation    |  |              |       |        | 627   |   |       | 627    |  
|                                |  |              |        |        |       |   |       |        |  
|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 |  
|                                |  |              |        |        |       |   |       |        |  



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(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 and VSI. The Europe segment includes the operations of Projecta
and Procolor. All significant 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 for the years ended (in thousands):



|                                                 |  |                  |         |                  |         |                  |        
|------------------------------------------------ |  | ---------------- | ------- | ---------------- | ------- | ---------------- | -------
|                                                 |  | December 30,2005 |         | December 31,2004 |         | December 26,2003
|Net sales: (1)                                   |  |                  |         |                  |         |                  |        
|United States                                    |  | $                | 140,992 |                  | 131,822 |                  | 110,724
|Europe                                           |  |                  | 24,642  |                  | 30,344  |                  | 24,949 
|                                                 |  |                  |         |                  |         |                  |        
|Total net sales                                  |  | $                | 165,634 |                  | 162,166 |                  | 135,673
|                                                 |  |                  |         |                  |         |                  |        
|Operating income:                                |  |                  |         |                  |         |                  |        
|United States                                    |  | $                | 43,674  |                  | 38,676  |                  | 27,927 
|Europe                                           |  |                  | 3,989   |                  | 7,068   |                  | 5,239  
|                                                 |  |                  |         |                  |         |                  |        
|Total operating income                           |  | $                | 47,663  |                  | 45,744  |                  | 33,166 
|                                                 |  |                  |         |                  |         |                  |        
|Income before income tax:                        |  |                  |         |                  |         |                  |        
|United States                                    |  | $                | 28,216  |                  | 26,776  |                  | 25,338 
|Europe                                           |  |                  | 3,847   |                  | 6,859   |                  | 5,080  
|                                                 |  |                  |         |                  |         |                  |        
|Total income before income tax                   |  | $                | 32,063  |                  | 33,635  |                  | 30,418 
|                                                 |  |                  |         |                  |         |                  |        
|Net income:                                      |  |                  |         |                  |         |                  |        
|United States                                    |  | $                | 28,216  |                  | 26,776  |                  | 25,338 
|Europe                                           |  |                  | 2,599   |                  | 4,418   |                  | 3,266  
|                                                 |  |                  |         |                  |         |                  |        
|Total net income                                 |  | $                | 30,815  |                  | 31,194  |                  | 28,604 
|                                                 |  |                  |         |                  |         |                  |        
|Purchase of property, plant and equipment        |  |                  |         |                  |         |                  |        
|United States                                    |  | $                | 1,923   |                  | 4,258   |                  | 1,418  
|Europe                                           |  |                  | 667     |                  | 4,697   |                  | 1,711  
|                                                 |  |                  |         |                  |         |                  |        
|Total purchases of property, plant and equipment |  | $                | 2,590   |                  | 8,955   |                  | 3,129  
|                                                 |  |                  |         |                  |         |                  |        
|Depreciation                                     |  |                  |         |                  |         |                  |        
|United States                                    |  | $                | 3,338   |                  | 2,570   |                  | 3,216  
|Europe                                           |  |                  | 1,030   |                  | 983     |                  | 774    
|                                                 |  |                  |         |                  |         |                  |        
|Total depreciation                               |  | $                | 4,368   |                  | 3,553   |                  | 3,990  
|                                                 |  |                  |         |                  |         |                  |        
|Total assets:                                    |  |                  |         |                  |         |                  |        
|United States                                    |  | $                | 69,662  |                  | 67,189  |                  |        
|Europe                                           |  |                  | 23,427  |                  | 27,155  |                  |        
|                                                 |  |                  |         |                  |         |                  |        
|Total assets                                     |  | $                | 93,089  |                  | 94,344  |                  |        
|                                                 |  |                  |         |                  |         |                  |        
|Total liabilities:                               |  |                  |         |                  |         |                  |        
|United States                                    |  | $                | 151,203 |                  | 157,332 |                  |        
|Europe                                           |  |                  | 4,524   |                  | 5,568   |                  |        
|                                                 |  |                  |         |                  |         |                  |        
|Total liabilities                                |  | $                | 155,727 |                  | 162,900 |                  |        
|                                                 |  |                  |         |                  |         |                  |        

---

|(1) | Net sales for the years ended December 31, 2004 and December 26, 2003 were increased from the amounts previously reported by $7.9 million and $6.6 million, respectively,
to be in conformity with EITF 00-10 which prescribes that shipping billings be recorded in revenues and corresponding costs be recorded in cost of sales.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



35



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##### Table of Contents

(8) Accumulated Other Comprehensive Income (Loss)



The components of accumulated other comprehensive income were as follows at December 30, 2005 and December 31, 2004 (in
thousands):



|                                                    |  |                  |     |                  |      
|--------------------------------------------------- |  | ---------------- | --- | ---------------- | -----
|                                                    |  | December 30,2005 |     | December 31,2004
|Cumulative foreign exchange translation adjustments |  | $                | 439 |                  | 3,245
|Fair value of effective cash flow hedges            |  |                  |    |                  |     
|                                                    |  |                  |     |                  |      
|                                                    |  | $                | 439 |                  | 3,245
|                                                    |  |                  |     |                  |      



(9) Commitments and Contingencies



The Company leases production space and equipment under
noncancelable operating leases. Some of the Companys leases provide that the Company pays tax, insurance, maintenance and other operating expenses. Rent expense under operating leases totaled $32,000, $35,000 and $219,000 in 2005, 2004 and
2003, respectively. At December 30, 2005, minimum future lease payments consisted of $30,000 and $27,000 in 2006 and 2007, respectively.



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



(10) Selected Quarterly Financial Data (unaudited)



|                             |  |                                       |          |        |   |          |  |        |          |  |   |         
|---------------------------- |  | ------------------------------------- | -------- | ------ | - | -------- |  | ------ | -------- |  | - | --------
|                             |  | First                                 |          | Second |   | Third    |  | Fourth
|                             |  | (in thousands, except per share data)
|Year ended December 30, 2005 |  |                                       |          |        |   |          |  |        |          |  |   |         
|Net sales (1)                |  | $                                     | 41,915   |        | $ | 42,039   |  | $      | 41,920   |  | $ | 39,760  
|Gross profit (1)(2)          |  |                                       | 16,360   |        |   | 16,401   |  |        | 16,693   |  |   | 15,411  
|Operating income             |  |                                       | 11,774   |        |   | 11,774   |  |        | 12,789   |  |   | 11,326  
|Income before income taxes   |  |                                       | 8,049    |        |   | 7,994    |  |        | 9,111    |  |   | 6,909   
|Net income                   |  |                                       | 7,675    |        |   | 7,760    |  |        | 8,826    |  |   | 6,554   
|Basic earnings per share     |  |                                       | 1,434.13 |        |   | 1,447.55 |  |        | 1,643.01 |  |   | 1,220.07
|Diluted earnings per share   |  |                                       | 1,413.57 |        |   | 1,429.13 |  |        | 1,621.56 |  |   | 1,203.81
|                             |  |                                       |          |       
|Year ended December 31, 2004 |  |                                       |          |        |   |          |  |        |          |  |   |         
|Net sales (1)                |  | $                                     | 40,968   |        | $ | 40,488   |  | $      | 40,050   |  | $ | 40,660  
|Gross profit (1)(2)          |  |                                       | 16,239   |        |   | 16,296   |  |        | 15,909   |  |   | 15,948  
|Operating income             |  |                                       | 11,805   |        |   | 10,532   |  |        | 12,149   |  |   | 11,258  
|Income before income taxes   |  |                                       | 11,348   |        |   | 7,956    |  |        | 8,215    |  |   | 6,116   
|Net income                   |  |                                       | 10,621   |        |   | 7,272    |  |        | 7,806    |  |   | 5,495   
|Basic earnings per share     |  |                                       | 2,029.88 |        |   | 1,372.35 |  |        | 1,461.57 |  |   | 1,027.71
|Diluted earnings per share   |  |                                       | 2,018.88 |        |   | 1,367.17 |  |        | 1,442.63 |  |   | 1,011.13

---

|(1) | Net sales and gross profit for all quarters prior to the fourth quarter of 2005 were adjusted from the amounts previously reported to be in conformity with EITF 00-10 which
prescribes that shipping billings be recorded in revenues and corresponding costs be recorded in cost of sales. Net sales for the first, second and third quarters of 2005 increased by $2.0 million and $2.2 million and $2.3 million, respectively,
while gross profit decreased for the same periods by $0.2 million, $0.2 million and $0.1 million, respectively. Net sales for the first, second, third and fourth quarters of 2004 increased by $1.9 million, $2.1 million, $2.1 million and $1.8
million, respectively, while gross profit decreased by $0.2 million in each of the periods.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Gross profit for all quarters prior to the fourth quarter of 2005 was adjusted from the amounts previously reported to reclassify depreciation expense as explained in note (1)(u).
Gross profit for the first, second and third quarter of 2005 decreased by $1.1 million, $1.1 million and $1.0 million, respectively. Gross profit for the first, second, third and fourth quarters of 2004 decreased by $0.9 million, $1.0 million, $0.8
million and $0.7 million, respectively.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



36



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##### Table of Contents

Schedule IIValuation and Qualifying Accounts



|                                 |  |                            |     |                   |     |               |   |            |     |                      |    
|-------------------------------- |  | -------------------------- | --- | ----------------- | --- | ------------- | - | ---------- | --- | -------------------- | ---
|                                 |  |                            |     | Charges to        |     |               |   |           
|Description                      |  | Balance atbeginningof year |     | Costs andexpenses |     | Otheraccounts |   | Deductions |     | Balanceat end ofyear
|                                 |  | (in thousands)            
|Allowance for doubtful accounts: |  |                            |     |                   |     |               |   |            |     |                      |    
|Year ended December 26, 2003     |  | $                          | 399 |                   | 883 |               |  |            | 833 |                      | 449
|Year ended December 31, 2004     |  |                            | 449 |                   | 692 |               |  |            | 591 |                      | 550
|Year ended December 30, 2005     |  |                            | 550 |                   | 450 |               |  |            | 547 |                      | 453



37



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



Item 9B. Other Information.



None.



38



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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 30, 2005.



|                   |  |     |  |                                                   
|------------------ |  | --- |  | --------------------------------------------------
|Name               |  | Age |  | Position                                          
|Richard E. Lundin  |  | 55  |  | Chairman, President and Chief Executive Officer   
|Judith D. Loughran |  | 58  |  | Executive Vice President                          
|Jerry C. Young     |  | 58  |  | Vice PresidentFinance and Chief Financial Officer
|Peter A. de Kroon  |  | 51  |  | Managing Director, Projecta B.V.                  
|David N. Walthall  |  | 60  |  | Lead Director                                     
|James S. Cownie    |  | 61  |  | Director                                          
|James M. Hoak      |  | 62  |  | Director                                          
|Wayne Kern         |  | 73  |  | Director                                          
|David J. Lundquist |  | 63  |  | 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).



39



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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, Jr. 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), PanAmSat Corporation 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.



Board of Directors and Committees of the Board



The Companys board of directors 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. All of the Companys directors receive cash compensation of $1,500 each quarter and are reimbursed for
reasonable out-of-pocket expenses incurred in attending board or committee meetings. Audit committee members receive a fee of $500 per meeting.



Audit Committee



Da-Lites board of directors has established an audit committee to assess, report and make recommendations to the board of directors 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
Companys board of directors has determined that each of Messrs. Hoak and Lundquist is an audit committee financial expert as defined by the rules of the SEC.



40



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##### Table of Contents

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.



Item 11. Executive Compensation.



Summary Compensation Table



The
following table provides information for the last three years concerning the compensation of the Companys Chief Executive Officer and its other executive officers.



|                                                   |  |      |  |                     |  |                             |  |                                 |  |                          |    
|-------------------------------------------------- |  | ---- |  | ------------------- |  | --------------------------- |  | ------------------------------- |  | ------------------------ | ---
|                                                   |  |      |  | Annual Compensation |  | Long-TermCompensationAwards |  |                                 | 
|Name and Principal Position                        |  | Year |  | Salary($)           |  | Bonus($)                    |  | SecuritiesUnderlyingOptions (#) |  | All OtherCompensation($) |    
|Richard E. Lundin                                  |  | 2005 |  | 350,000             |  | 62,000                      |  |                                |  | 10,800                   | (1)
|Chairman, President and Chief Executive Officer    |  | 2004 |  | 350,000             |  | 175,000                     |  | 50                              |  | 10,800                   | (1)
|                                                   |  | 2003 |  | 350,000             |  | 200,000                     |  |                                |  | 10,800                   | (1)
|                                                   |  |      |  |                     | 
|Judith D. Loughran                                 |  | 2005 |  | 250,000             |  | 37,000                      |  |                                |  | 4,800                    | (2)
|Executive Vice President                           |  | 2004 |  | 226,250             |  | 125,000                     |  | 50                              |  | 4,800                    | (2)
|                                                   |  | 2003 |  | 155,000             |  | 78,000                      |  |                                |  | 4,800                    | (2)
|                                                   |  |      |  |                     | 
|Jerry C. Young                                     |  | 2005 |  | 225,000             |  | 37,000                      |  |                                |  | 4,800                    | (2)
|Vice PresidentFinance and Chief Financial Officer |  | 2004 |  | 201,250             |  | 125,000                     |  | 50                              |  | 4,800                    | (2)
|                                                   |  | 2003 |  | 130,000             |  | 65,000                      |  |                                |  | 4,800                    | (2)
|                                                   |  |      |  |                     | 
|Peter A. de Kroon                                  |  | 2005 |  | 163,820             |  | 12,427                      |  |                                |  | 14,912                   | (3)
|Managing Director Projecta, B.V.                   |  | 2004 |  | 157,860             |  | 124,229                     |  |                                |  | 14,907                   | (3)
|                                                   |  | 2003 |  | 144,761             |  | 62,008                      |  |                                |  | 14,093                   | (3)

---

|(1) | Consists of car allowance of $4,800 and director fees of $6,000 in 2004 and 2003.
|--- | ---------------------------------------------------------------------------------

|(2) | Consists of car allowance of $4,800 for each year.
|--- | --------------------------------------------------

|(3) | Represents car allowance for each year.
|--- | ---------------------------------------



Stock Option Plan



Da-Lite grants nonqualified stock options to certain employees pursuant to the Da-Lite Screen Company, Inc. 1999 Stock Option Plan. The options expire ten
years from the date of grant. See note 5 of the notes to consolidated financial statements.



Option Grants in Last Fiscal Year



None.



41



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##### Table of Contents

401(k) Plan



The Da-Lite Screen Company, Inc. 401(k) Retirement Plan covers all full-time employees who meet certain service
requirements. Under the terms of the plan, employees may contribute to the plan up to 16% of maximum compensation as prescribed by law and the Company may match 50% of the first 6% contributed by the employees. Effective June 1, 2001 the
Company stopped matching employee contributions. Under the terms of the plan, Da-Lite may make discretionary profit sharing contributions which are determined by management.



Aggregated Option Exercises in Fiscal Year 2005 and Fiscal Year End Option Values



The following table provides information regarding the pretax value realized
from the exercise of stock options during 2005 and the value of in-the-money options held as of the end of 2005 by the persons named in the Summary Compensation Table.



|                   |  |                              |  |                   |  |                                                                                                          |  |                                                                     |  |             |  |              
|------------------ |  | ---------------------------- |  | ----------------- |  | -------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------- |  | ----------- |  | -------------
|                   |  |                              |  |                   |  | Number of Securities UnderlyingUnexercised Options at FiscalYear-End
2005 (Both In-and-At-the-Money) (#) |  | Value of Unexercised In-the-MoneyOptions at Fiscal Year-End ($) (1)
|Name               |  | SharesAcquiredon Exercise(#) |  | Value Realized($) |  | Exercisable                                                                                              |  | Unexercisable                                                       |  | Exercisable |  | Unexercisable
|Richard E. Lundin  |  | 10                           |  | 123,968           |  | 40                                                                                                       |  |                                                                    |  | 599,246     |  |             
|Judith D. Loughran |  | 10                           |  | 123,968           |  | 40                                                                                                       |  |                                                                    |  | 599,246     |  |             
|Jerry C. Young     |  |                             |  |                  |  | 50                                                                                                       |  |                                                                    |  | 749,057     |  |             

---

|(1) | Value of options has been calculated at a fair market value of $32,226.14 at December 30, 2005.
|--- | -----------------------------------------------------------------------------------------------



Employment Agreements



The Company entered into employment agreements in April 2004 with each of Richard E. Lundin, Judith D. Loughran and Jerry C.
Young each with a term of four years. The agreements provide for annual cash compensation for Mr. Lundin, Ms. Loughran and Mr. Young in amounts of $350,000, $250,000 and $225,000, respectively. In the event of a change in control of
Da-Lite or certain other corporate transactions (as defined therein), the agreements provide that these executives will be entitled to increased annual cash compensation of $750,000, $300,000 and $300,000, respectively. Under these employment
agreements each of these executives is provided employee benefits generally made available to Da-Lite executives, including a car allowance of at least $400 per month. In connection with the execution of Mr. Lundins employment agreement,
the Company agreed to the exercise of his option for 40 shares of our common stock without payment of $1,219,960 of the original exercise price.



42



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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 February 17, 2005 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) |  | 23.78          | %
|James M. Hoak                                              |  | 1,750.69 | (3) |  | 32.57          | %
|Wayne Kern                                                 |  | 245.99   | (4) |  | 4.58           | %
|David J. Lundquist                                         |  | 382.93   | (5) |  | 7.12           | %
|David N. Walthall                                          |  | 307.62   |     |  | 5.72           | %
|Richard E. Lundin                                          |  | 305.00   | (6) |  | 5.63           | %
|Judith D. Loughran                                         |  | 167.00   | (6) |  | 3.08           | %
|Jerry C. Young                                             |  | 75.00    | (7) |  | 1.38           | %
|Peter A. de Kroon                                          |  |         |     |  |               |  
|All directors and executive officers as a group (9 people) |  | 4,512.74 |     |  | 81.97          | %

---

|(1) | Calculated based on 5,375.62 shares outstanding and excluding all options except as to each individual under options as described in notes (5) and (6) 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 his wife 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.



43



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##### Table of Contents

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 30, 2005.



|                                                           |  |                                                                                          |  |                                                                          |        |                                                                                                                                        |  
|---------------------------------------------------------- |  | ---------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------ | ------ | -------------------------------------------------------------------------------------------------------------------------------------- | -
|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 |  | 153.0                                                                                    |  | $                                                                        | 16,530 |                                                                                                                                        | 
|                                                           |  |                                                                                          |  |                                                                          |        |                                                                                                                                        |  
|Total                                                      |  | 153.0                                                                                    |  | $                                                                        | 16,530 |                                                                                                                                        | 
|                                                           |  |                                                                                          |  |                                                                          |        |                                                                                                                                        |  



Item 13. Certain Relationships and Related Transactions.



None.



44



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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 December 30, 2005 and December 31, 2004 provided by KPMG LLP, the Companys principal accountants for such years.



|                       |  |                  |         |                  |   |        
|---------------------- |  | ---------------- | ------- | ---------------- | - | -------
|                       |  | December 30,2005 |         | December 31,2004
|Audit fees (a)         |  | $                | 229,370 |                  | $ | 435,470
|Audit related fees (b) |  |                  | 25,514  |                  |   | 25,670 
|Tax fees (c)           |  |                  | 113,054 |                  |   | 88,545 

---

|(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, including services related to the Companys 91/2% Senior notes issued in May 2004.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(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 KPMG LLP during 2005 and 2004.



45



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##### Table of Contents

PART IV



Item 15. Exhibits, Financial Statement Schedules



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



|       |  |                                                                                                                                                                                                                                                                       
|------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a)(1) |  | Financial Statements:                                                                                                                                                                                                                                                 
|       | 
|       |  | Report of Independent Registered Public Accounting Firm                                                                                                                                                                                                               
|       | 
|       |  | Consolidated Balance Sheets as of December 30, 2005 and December 31, 2004                                                                                                                                                                                             
|       | 
|       |  | Consolidated Statements of Operations for the Years Ended December 30, 2005, December 31, 2004 and December 26, 2003                                                                                                                                                  
|       | 
|       |  | Consolidated Statements of Stockholders (Deficit) Equity and Comprehensive Income for the Years Ended December 30, 2005, December 31,
2004 and December 26, 2003                                                                                                     
|       | 
|       |  | Consolidated Statements of Cash Flows for the Years Ended December 30, 2005, December 31, 2004 and December 26, 2003                                                                                                                                                  
|       | 
|       |  | Notes to Consolidated Financial Statements                                                                                                                                                                                                                            
|       | 
|(a)(2) |  | Financial Statement Schedules:                                                                                                                                                                                                                                        
|       | 
|       |  | Schedule II  Valuation and Qualifying Accounts                                                                                                                                                                                                                       
|       | 
|       |  | All other 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).



46



---

##### Table of Contents

|      |  |                                                                                                                                                                                                                                                                                    
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|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  |  | 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                                                                                                                                                                                                                                                                     
|      | 
|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.



47



---

##### Table of Contents

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: February 21, 2006



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. LundinRichard E. Lundin   |  | Chairman, President and Chief Executive Officer    |  | February 21, 2006
|                                         |  |                                                   
|/s/ Jerry C. YoungJerry C. Young         |  | Vice PresidentFinance and Chief Financial Officer |  | February 21, 2006
|                                         |  |                                                   
|/s/ David N. WalthallDavid N. Walthall   |  | Lead Director                                      |  | February 21, 2006
|                                         |  |                                                   
|/s/ James S. CownieJames S. Cownie       |  | Director                                           |  | February 21, 2006
|                                         |  |                                                   
|/s/ James M. HoakJames M. Hoak           |  | Director                                           |  | February 21, 2006
|                                         |  |                                                   
|/s/ Wayne KernWayne Kern                 |  | Director                                           |  | February 21, 2006
|                                         |  |                                                   
|/s/ David J. LundquistDavid J. Lundquist |  | Director                                           |  | February 21, 2006



48



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##### Table of Contents

EXHIBIT INDEX



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



|       |  |                                                                                                                                                                                                                                                                        
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a)(1) |  | Financial Statements:                                                                                                                                                                                                                                                  
|       | 
|       |  | Report of Independent Registered Public Accounting Firm                                                                                                                                                                                                                
|       | 
|       |  | Consolidated Balance Sheets as of December 30, 2005 and December 31, 2004                                                                                                                                                                                              
|       | 
|       |  | Consolidated Statements of Operations for the Years Ended December 30, 2005, December 31, 2004 and December 26, 2003                                                                                                                                                   
|       | 
|       |  | Consolidated Statements of Stockholders (Deficit) Equity and Comprehensive Income for the Years Ended December 30, 2005, December 31,
2004 and December 26, 2003                                                                                                      
|       | 
|       |  | Consolidated Statements of Cash Flows for the Years Ended December 30, 2005, December 31, 2004 and December 26, 2003                                                                                                                                                   
|       | 
|       |  | Notes to Consolidated Financial Statements                                                                                                                                                                                                                             
|       | 
|(a)(2) |  | Financial Statement Schedules:                                                                                                                                                                                                                                         
|       | 
|       |  | Schedule II  Valuation and Qualifying Accounts                                                                                                                                                                                                                        
|       | 
|       |  | All other 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).



49



---

##### Table of Contents

|      |  |                                                                                                                                                                                                                                                                                    
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|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  |  | 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                                                                                                                                                                                                                                                                     
|      | 
|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.
|--- | -----------------------------------------------------------------------------------------------------------------



50