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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

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

For the quarterly period ended ~~July~~October 21, 2010

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

For the transition period from to

Commission File Number 333-116673

DA-LITE SCREEN COMPANY, INC.

(Exact Name of Registrant as Specified in its Charter)

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

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

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

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

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

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

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

As of ~~August~~November 32, 2010, there were 5,~~407~~412,~~923~~570 shares of the registrant’s common stock outstanding (all of which are privately owned and are not traded on any public market).

TABLE OF CONTENTS

		Page
PART I	Financial Information
Item 1.	Condensed Consolidated Financial Statements (unaudited)	1	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15	17
Item 4.	Controls and Procedures	16	18
PART II	Other Information
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17	19
Item 5.	Other Information	17
Item 4.	Submission of Matters to a Vote of Security Holders		19
Item 6.	Exhibits	17	20
	Signatures	19	21
	Exhibit Index	20	22

PART I

FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements.

DA-LITE SCREEN COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except par value amount)

	(Unaudited)As ofJuly 2,2010			As ofJanuary 1,2010
	(Unaudited)As ofOctober 1,2010			As ofJanuary 1,2010
Assets
Current Assets:
Cash and cash equivalents	$	~~1,194~~489		$	552
Accounts receivable, less allowance for doubtful accounts		16,~~708~~850			13,559
Inventories		8,~~370~~869			8,482
Prepaid expenses and other		2,~~374~~493			2,045
Prepaid income taxes		~~784~~1,071			519
Total current assets		29,~~430~~772			25,157
Property, plant and equipment		5860,~~483~~192			60,104
Less accumulated depreciation		4345,~~685~~028			43,256
Net property, plant, and equipment		1415,~~798~~164			16,848
Goodwill		20,440			20,440
Other assets, net		3,~~999~~486			805
	$	68,~~667~~862		$	63,250
Liabilities and Stockholders’ Deficit
Current liabilities:
Revolving credit facility	$	—9,800		$	1,975
Checks written in excess of bank balance		~~344~~867			890
Accounts payable		2,~~716~~593			3,281
Accrued expenses
Interest		~~3,589~~—			1,167
Vacation		1,~~289~~229			1,239
Other		23,~~856~~048			3,088
Total accrued expenses		74,~~734~~277			5,494
Total current liabilities		1017,~~794~~537			11,640
Long-term debt		~~102~~91,~~276~~918			98,005
Total liabilities		~~113~~109,~~070~~455			109,645
Commitments and contingencies (note 8)
Stockholders’ deficit:
Common stock, $.001 par value. Authorized 10,000,000 shares; issued 5,388,620 shares at July 2, 2010		5			11
Common stock, $.001 par value. Authorized 10,000,000 shares; issued 5,409,331 shares at October 1, 2010		5			11
Additional paid-in capital		12,~~927~~287			1,710
Accumulated deficit		(4846,~~952~~513	)		(26,770	)
Accumulated other comprehensive income		23,~~617~~628			4,120
Less treasury stock, 5,297.38 shares at January 1, 2010 at cost		—			(25,466	)
Total stockholders’ deficit		(4440,~~403~~593	)		(46,395	)
	$	68,~~667~~862		$	63,250

See accompanying notes to condensed consolidated financial statements.

DA-LITE SCREEN COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, unaudited)

	13 WeeksEndedJuly 2,2010			13 WeeksEndedJuly 3,2009			26 WeeksEndedJuly 2,2010			27 WeeksEndedJuly 3,2009
	13 WeeksEndedOctober 1,2010			13 WeeksEndedOctober 2,2009			39 WeeksEndedOctober 1,2010			40 WeeksEndedOctober 2,2009
Net sales	$	3334,~~896~~149		$	3133,~~413~~793		$	6599,~~178~~327		$	6598,~~097~~890
Cost of sales		2021,~~081~~009			20,~~803~~714			3960,~~389~~398			4263,~~844~~558
Gross profit		13,~~815~~140			1013,~~610~~079			2538,~~789~~929			2235,~~253~~332
Selling, general, and administrative expenses		54,~~031~~329			54,~~644~~418			914,~~707~~036			1014,~~539~~957
Goodwill impairment		—			~~5,926~~—			—			5,926
Operating income (loss)		8,784			(960	)		16,082			5,788
Operating income		8,811			8,661			24,893			14,449
Other expense (income):
Interest		4,~~323~~116			2,~~998~~914			711,~~232~~348			69,~~381~~295
Miscellaneous, net		~~(48~~254	)		(~~574~~786	)		~~995~~1,249			(12,~~289~~075	)
Total other expense		4,~~275~~370			2,~~424~~128			812,~~227~~597			57,~~092~~220
Income (loss) before income taxes		4,509			(3,384	)		7,855			696
Income before income taxes		4,441			6,533			12,296			7,229
Income tax expense (benefit)		21			(228	)		(41	)		(272	)
Income tax benefit		(20	)		(4	)		(61	)		(276	)
Net income (loss)	$	4,488		$	(3,156	)	$	7,896		$	968
Net income	$	4,461		$	6,537		$	12,357		$	7,505

See accompanying notes to condensed consolidated financial statements.

DA-LITE SCREEN COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands, unaudited)

	26 weeksEndedJuly 2,2010			27 weeksEndedJuly 3,2009
	39 weeksEndedOctober 1,2010			40 weeksEndedOctober 2,2009
Cash flows from operating activities:
Net income	$	712,~~896~~357		$	~~968~~7,505
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		12,~~398~~072			12,~~485~~177
Amortization and write-off of debt issuance costs		~~505~~1,081			~~610~~1,014
Accretion of original issue discount on senior notes due 2015		~~106~~498			—
Stock compensation expense		217			—
Goodwill impairment		—			5,926
Change in:
Accounts receivable		(43,~~091~~875	)		21,~~389~~803
Inventories		(~~158~~479	)		5,~~228~~497
Prepaid expenses and other		(~~404~~482	)		~~524~~584
Accounts payable		~~317~~28			(1,~~725~~692	)
Accrued expenses		2(1,~~049~~721	)		12,~~203~~277
Net cash provided by operating activities		79,~~835~~696			1625,~~608~~091
Cash flows from investing activities:
Purchase of property, plant and equipment		(~~457~~783	)		(~~771~~1,036	)
Net cash used in investing activities		(~~457~~783	)		(~~771~~1,036	)
Cash flows from financing activities:
Decrease in checks written in excess of bank balance		(~~546~~23	)		—
Proceeds from revolving credit facility		4,700			5,500
Proceeds from revolving credit facility, 2009 agreement		3,050			12,700
Payments on revolving credit facility		(6,675	)		(3,500	)
Payments on revolving credit facility, 2009 agreement		(5,025	)		(10,500	)
Proceeds from revolving credit facility, 2010 agreement		13,200			—
Payments on revolving credit facility, 2010 agreement		(3,400	)		—
Proceeds from sale of senior notes due 2015		102,170			—
Payments to retire senior notes due 2011		(98,005	)		(917,~~300~~775	)
Distributions to stockholders		(4,618	)		(7,516	)
Payments to retire senior notes due 2015		(10,750	)		—
Payment of financing costs		(3,700	)		—
Distributions to stockholders		(6,638	)		(9,040	)
Net cash used in financing activities		(6,674	)		(14,816	)
Payment of financing costs		(3,762	)		—
Effect of foreign currency exchange rate changes on cash and cash equivalents		(62	)		271
Exercise of common stock options		360			—
Net change in cash and cash equivalents		642			1,292
Net cash used in financing activities		(8,823	)		(24,615	)
Effect of foreign currency exchange rate changes on cash and cash equivalents		(153	)		222
Net change in cash and cash equivalents		(63	)		(338	)
Cash and cash equivalents at beginning of period		552			1,633
Cash and cash equivalents at end of period	$	~~1,194~~489		$	21,~~925~~295

See accompanying notes to condensed consolidated financial statements.

DA-LITE SCREEN COMPANY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.	Basis of Presentation

The financial data presented herein is unaudited and should be read in conjunction with the consolidated financial statements and accompanying notes included in the annual report on Form 10-K filed by Da-Lite Screen Company, Inc. (together with all of its subsidiaries, the “Company” or “Da-Lite”) for the fiscal year ended January 1, 2010. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all of the adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. Results for interim periods should not be considered indicative of results for the full year.

The accompanying consolidated financial statements include the accounts of Da-Lite Screen Company, Inc. (Da-Lite), Da-Lite International, Inc., a domestic international sales corporation, and Projecta B.V. (Projecta), a Netherlands limited liability company, and Projecta’s wholly-owned subsidiary Procolor S.A.S. (Procolor), a French corporation. All intercompany accounts and transactions have been eliminated.

The Company operates on a 52/53-week fiscal year ending on the last Friday of December. The ~~second~~third quarters of 2010 and 2009 were 13-week periods, respectively. The Company’s 2010 ~~and 2009~~ fiscal ~~years~~year will be a 52-week year and ~~53-week~~its ~~years,~~2009 ~~respectively~~fiscal year consisted of 53 weeks.

2.	Summary of Significant Accounting Policies and Estimates

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

Revenue Recognition

The Company recognizes revenue when it has received an order from a customer, title has transferred to customer, the sales price is fixed or determinable and the collectability 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. Provision for customer sales allowances, returns and warranties are made at the time of shipment. The Company does not have any post-shipment obligations related to its sales such as installation, training or customer acceptance.

Allowance for Doubtful Accounts

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

If circumstances change, for example, due to the occurrence of higher-than-expected defaults or a significant adverse change in a major customer’s ability to meet its financial obligations to the Company, estimates of recoverability of receivable amounts due could be reduced.

Goodwill

Goodwill represents the excess of purchase price over the fair value of identifiable net assets acquired. The Company applies the provisions of ASC 350 “Intangibles-Goodwill and Other”, and management tests goodwill for impairment to determine whether its carrying value exceeds its implied fair value at least annually or more frequently if events or circumstances indicate that the carrying amount of goodwill may be impaired. The Company has three reporting units (Da-Lite US, Procolor S.A.S, and Projecta BV) of which only Da-Lite US has goodwill as of ~~July~~October 21, 2010 and January 1, 2010. The Company’s annual impairment testing date is the last day of the fiscal year.

The goodwill impairment test involves a two-step process. The first step is a comparison of each reporting unit’s fair value to its carrying value. The Company estimates fair value based on a combination of the market value approach and income approach using discounted cash flows. These valuations are based on assumptions and estimates including projected future cash flows, discount rates, and determination of appropriate market comparables. The fair value of each reporting unit is estimated using both methods and each method is given equal weighting in arriving at the fair value of the reporting unit.

The second step, if needed, requires the Company to allocate the fair value of the reporting unit derived in the first step to the fair value of the reporting unit’s net assets to calculate the implied value of the goodwill. If the carrying value of the reporting unit’s goodwill is in excess of the implied fair value of goodwill, an impairment charge is taken to reduce the goodwill to its implied fair value.

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 the 12 1/2% Senior Notes due 2015 ~~is $105 million at July 2, 2010 and of the 9 1/2% Senior Notes due 2011~~ was $97101 million at ~~January~~October 1, 2010.

Recent Accounting Pronouncements

There were various accounting standards and interpretations issued recently, none of which are expected to have a material impact on the Company’s financial position, operations or cash flows.

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

Long-term debt consists of the following (in thousands):	~~July~~October 21,2010		~~January 1,2010~~	January 1,2010
9 1/2 % Senior Notes due May 2011	$	—	$	98,005
9 1/2% Senior Notes due May 2011	$	—		$	98,005
12 1/2 % Senior Notes due April 2015 (net of unamortized issue discount of $2,724)		102,276		—
12 1/2% Senior Notes due April 2015 (net of unamortized issue discount of $2,332)		91,918			—
Total Long-term debt	$	~~102~~91,~~276~~918	$	~~98,005~~$	98,005

The Company issued $160 million of 9 1/2% senior unsecured notes due in May 2011 during fiscal year 2004, which were subsequently exchanged for substantially identical notes that were registered with the Securities and Exchange Commission (the “9 1/2% Senior Notes”). On March 29, 2010, the Company repurchased $43.5 million of the outstanding $98.0 million principal amount of its 9 1/2 % Senior Notes from the open market for an aggregate purchase price of $44.5 million. The Company retired these Notes and wrote-off the purchase premium and the deferred financing cost related to the repurchase. On May 17, 2010, the Company redeemed the remaining $54.5 million of its 9 1/2 % Senior Notes at the principal amount plus accrued interest due and wrote-off the remaining purchase premium and the deferred financing cost.

The Company issued $105 million of 12¹/2% senior unsecured notes due in April 2015 during the first quarter of 2010 (the “12¹/2% Senior Notes”). The 12¹/2% Senior Notes were issued with an original issue discount at a price of 97.305% and were recorded at the discounted amount of $102.2 million. The discount will be accreted over the life of these notes as interest expense. The Company used the proceeds from the issuance of the 12¹/2% Senior Notes, together with borrowings under our bank credit facility, to purchase approximately $43.5 million principal amount of the 9¹/2% senior unsecured notes in March 2010, to redeem the remaining $54.5 million of 9¹/2% senior unsecured notes in May 2010 and to pay issuance costs for the new 12¹/2% Senior Notes. The Company may redeem any of the 12¹/2% Senior Notes beginning on April 1, 2013. The initial redemption price is 106.250% of their principal amount, plus accrued interest. The redemption price will decline each year after 2013 and will be 100% of their principal amount, plus accrued interest, beginning on April 1, 2014. In addition, before April 1, 2013, the Company may redeem up to 35% of the aggregate principal amount of outstanding notes with the proceeds from sales of certain kinds of our capital stock at a redemption price equal to 112.500% of their principal amount, plus accrued interest to the redemption date. The Company may make such redemption only if, after any such redemption, at least 65% of the aggregate principal amount of notes originally issued under the indenture remains outstanding. Interest is payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2010.

The Company registered with the Securities and Exchange Commission (the “SEC”) $105 million of new 12¹/2% Senior Notes due 2015 (“Exchange Notes”), which have substantially identical terms to the Company’s outstanding 12¹/2% Senior Notes (“Original Notes”), pursuant to a Registration Statement on Form S-4 which was declared effective by the SEC on June 8, 2010. On June 8, 2010, the Company commenced an offer to exchange its outstanding Original Notes for the Exchange Notes which have been registered with the SEC. This exchange offer expired on July 12, 2010. All of the Original Notes were tendered and exchanged for the Exchange Notes.

In the Indenture related to the 12 1/2% Senior Notes, the Company agreed to covenants that limit it and its restricted subsidiaries’ (i.e., Projecta B.V., Procolor S.A.S.) ability, among other things, to: (a) incur additional debt and issue preferred stock, (b) pay dividends, acquire shares of capital stock, make payments on subordinated debt or make investments, (c) place limitations on distributions from restricted subsidiaries, (d) issue or sell capital stock of restricted subsidiaries, (e) issue guarantees, (f) sell or exchange assets, (g) enter into transactions with stockholders and affiliates, (h) create liens and (i) effect mergers. In addition, if a change of control occurs, each holder of Notes will have the right to require the Company to repurchase all or part of the holder’s Notes at a price equal to 101% of their principal amount, plus any accrued interest to the date of purchase. The Company was in compliance with all covenants at October 1, 2010.

On ~~subsidiaries, (d)~~September ~~issue or sell capital stock of restricted subsidiaries~~2, ~~(e) issue guarantees~~2010, ~~(f) sell~~the orCompany ~~exchange~~repurchased ~~assets,~~$10.8 ~~(g) enter~~million ~~into~~of ~~transactions~~the ~~with~~outstanding ~~stockholders~~$105.0 ~~and affiliates,~~million ~~(h) create~~principal ~~liens~~amount ~~and~~of ~~(i)~~its 12 ~~effect~~1/2% ~~mergers.~~Senior InNotes ~~addition,~~from ifthe aopen ~~change~~market offor ~~control~~an ~~occurs,~~aggregate ~~each~~purchase ~~holder~~price of ~~Notes~~$11.0 ~~will~~million. ~~have~~The ~~the right to require the~~ Company toretired ~~repurchase~~these ~~all~~Notes orand ~~part~~wrote-off of the ~~holder’s~~original ~~Notes~~issuance atdiscount aand ~~price~~the ~~equal to 101%~~deferred offinancing ~~their~~cost ~~principal~~related ~~amount, plus any accrued interest~~ to the ~~date~~repurchase, ofand ~~purchase.~~recognized ~~The~~a ~~Company~~loss ~~was~~on inthe ~~compliance~~premium ~~with~~paid ~~all~~to ~~covenants~~repurchase atthe ~~July 2, 2010~~notes.

On March 26, 2010, the Company entered into a two-year arrangement for an unsecured revolving credit facility, with maximum possible borrowings equal to $19.5 million, with Lake City Bank (the “Bank”). Under the agreement, borrowings from the revolving credit facility are not due until May 1, 2012. As part of this agreement, Lake City Bank may demand full payment at any time. When borrowings have taken place, the Company has paid down on the line as funds have become available. As the Company intends to repay the revolving line of credit as funds become available, the line of credit has been classified as short term. Interest on any outstanding borrowings related to the line of credit is calculated at the prime rate, subject to an interest rate floor of 4.00%. As the prime rate is below the floor, the interest rate in effect as of ~~July~~October 21, 2010 was 4.00%. As of ~~July~~October 21, 2010, ~~the~~$9.8 ~~Company~~million ~~had~~of noborrowings were outstanding ~~balances~~ under this ~~agreement~~facility.

The Company’s Dutch subsidiary, Projecta, has an overdraft line of credit with maximum possible borrowings equal to 1.5 million Euros. Projecta’s agreement with ABN AMRO Bank has no fixed expiration date. Interest on outstanding borrowings in Europe related to Projecta’s overdraft line of credit is calculated at the ABN AMRO Bank Basic Rate plus 1.50%, the sum of which was 6.10% on ~~July~~October 21, 2010. At ~~July~~October 21, 2010, Projecta had no outstanding balance with ABN AMRO Bank under this credit facility.

The Company has provided an insurance carrier with a standby letter of credit for $0.4 million for self-insured amounts under its insurance program.

4.	Stock Split and Stock Options

On June 21, 2010 the Board of Directors of the Company approved a 1,000 to 1 stock split and in connection with the stock split, amended and restated the Amended and Restated Articles of Incorporation of the Company. The Second Amended and Restated Articles of Incorporation were approved by the shareholders in a shareholders meeting on July 2, 2010. All share and per share information set forth herein gives retrospective effect to the stock split. The amended and restated articles of incorporation required that all treasury shares be retired prior to the stock split. The Company retired the treasury shares and retained deficit was impacted by the retirement of the treasury shares by $25.5 million.

The Company has a nonqualified stock option plan under which options are granted to certain employees. During 2004, the Company granted options to certain employees that were immediately 100% vested. The options expire after ten years from the date of grant.

During the thirteen weeks ended July 2, 2010, the Company adopted the Da-Lite Screen Company, Inc. 2010 Stock Option Plan (“2010 Stock Option Plan”) pursuant to which eligible employees may be granted options to purchase up to 200,000 new shares of the Company. The Company granted 159,000 nonqualified options to certain employees that were immediately 100% vested. The options expire after five years from the date of grant.

The stock option activity and weighted average exercise prices follow:

	OptionShares		~~WeightedAverageExercisePrice~~		WeightedAverageExercise Price	~~OptionExercisable~~	~~WeightedAverageExercisePrice~~	OptionExercisable			WeightedAverageExercise Price
Outstanding, January 1, 2010 (1)	~~54,000~~	54,000	$	~~17.11~~	$	~~54,000~~17.11	$	~~17.11~~	54,000		$	17.11
Granted	~~159,000~~	159,000		~~17.62~~		~~159,000~~17.62		~~17.62~~	159,000			17.62
Exercised	0	(20,711	)	0		017.35		0	(20,711	)		17.35
Canceled	0	(3,000	)	0		017.62		0	(3,000	)		17.62
Outstanding July 2, 2010	213,000		$	17.49		213,000	$	17.49
Outstanding October 1, 2010		189,289			$	17.50			189,289		$	17.50

(1)	Amounts restated to report the 1,000 to 1 stock split.

The aggregate intrinsic value of exercisable shares at ~~July~~October 21, 2010 was less than $0.1 million with a weighted average contractual term of 4.7 6 years.

Under the 2010 Stock Option Plan the fair value of the employees’ purchase right under this Plan was estimated on the date of grant. The employees’ purchase right was determined using the Black-Scholes option-pricing model with the following assumptions and results:


	2010 Stock Option Plan

Expected life in years		2.8
Interest rate		1.11	%
Volatility		16.7	%
Dividend yield		3.4	%
Fair value of options	$	1.36

The Company recognized share based compensation expense of $0.2 million ~~for~~during the ~~period~~13 weeks ended July, 2, 2010.

5.	Inventories

The Company accounts for its inventory at the lower of cost or market using the first-in, first-out (FIFO) method. Inventory is comprised of the following (in thousands):

	July 2,2010		January 1,2010
	October 1,2010			January 1,2010
Raw materials	$	6,~~189~~288	$	~~5,715~~$	5,715
Work in progress		~~890~~958		~~915~~	915
Finished goods		1,~~291~~623		~~1,852~~	1,852
	$	8,~~370~~869	$	~~8,482~~$	8,482

6.	Accumulated Other Comprehensive Income

The only component of accumulated other comprehensive income as of ~~July~~October 21, 2010 and January 1, 2010 was for cumulative foreign exchange translation adjustments.

7.	Segment Information

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

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

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

For the period ended:	13 ~~WeeksEndedJuly~~WeeksEndedOctober 21,2010			~~13 WeeksEndedJuly 3,2009~~	13 WeeksEndedOctober 2,2009		~~26 WeeksEndedJuly 2,2010~~	39 WeeksEndedOctober 1,2010		~~27 WeeksEndedJuly 3,2009~~		40 WeeksEndedOctober 2,2009
Net sales:
United States	$	29,~~122~~733		$	~~27,088~~$	28,747	$	~~55,021~~$	84,754	$	~~55,552~~	$	84,299
Europe		4,~~774~~416			~~4,325~~	5,046		~~10,157~~	14,573		~~9,545~~		14,591
Total net sales	$	3334,~~896~~149		$	~~31,413~~$	33,793	$	~~65,178~~$	99,327	$	~~65,097~~	$	98,890
Operating income (loss):
United States	$	8,~~610~~832		$	~~5,849~~$	8,267	$	~~16,079~~$	24,911	$	~~12,718~~	$	20,985
Europe		~~174~~(21	)		~~(6,809~~	)394		3	(18	)	~~(6,930~~	)	(6,536	)
Total operating income (loss)	$	8,784		$	(960	)	$	16,082		$	5,788
Total operating income	$	8,811			$	8,661		$	24,893			$	14,449
As of:	July 2,2010			January 1,2010
Total assets
United States	$	54,961		$	47,751
Europe		13,706			15,499
Total assets	$	68,667		$	63,250


As of:	October 1, 2010		January 1, 2010
Total assets
United States	$	53,714	$	47,751
Europe		15,148		15,499

Total assets	$	68,862	$	63,250

8.	Commitments and Contingencies

The Company is subject to certain legal proceedings and claims that have arisen in the ordinary course of business. In the opinion of management, the Company does not have a potential liability related to any of these other current legal proceedings and claims that should individually or in the aggregate have a material adverse effect on its financial condition, liquidity or results of operations.

However, the results of legal proceedings cannot be predicted with certainty. Should the Company fail to prevail in legal matters, it is possible that its results of operations or financial condition could be materially adversely affected.

910

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward Looking Statements

This quarterly report on Form 10-Q contains certain statements that may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this report are forward-looking statements. When used in this report, the words “may,” “will,” “should,” “would,” “anticipate,” “estimate,” “expect,” “plan,” “believe,” “predict,” “potential,” “intend,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include, but are not limited to, changes in sales or industry trends, changes in economic conditions, competition, retention of senior management and other key personnel, availability of materials or components, ability to make continued product innovations, casualty or work stoppages at the Company’s facilities, adverse results of lawsuits against the Company and currency exchange rates, the availability of financing and other factors described under Item 1A in the Company’s Annual Report on Form 10-K for the year ended January 1, 2010. 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. The Company’s actual results could differ materially from those currently anticipated and discussed in the forward-looking statements as a result of risks and uncertainties described under Item 1A in the Company’s Annual Report on Form 10-K for the year ended January 1, 2010. Management undertakes no obligation to update any forward-looking statements. This cautionary statement is applicable to all forward-looking statements contained in this report.

Overview

Da-Lite is one of the world’s leading manufacturers and distributors of projection screens. Da-Lite’s projection screens, which are focused on the premium end of the large screen market, are used in a wide range of settings including conference rooms, educational institutions, live entertainment venues, meeting rooms, training facilities, houses of worship and private homes. Da-Lite’s products provide the viewer with an enhanced visual experience in settings where a large screen adds to the communication of information or entertainment. The Company’s products are versatile and can be customized to fit the needs of unique viewing venues.

Critical Accounting Policies

There were no changes in the ~~thirteen~~thirty nine week period ended ~~July~~October 21, 2010 to the application of critical accounting policies and estimates as described in our Annual Report on Form 10-K for the year ended January 1, 2010.

Recent Accounting Pronouncements

There were various accounting standards and interpretations issued recently, none of which are expected to have a material impact on the company’s financial position, operations or cash flows.

Results of Operations

Thirteen Weeks Ended July 2, 2010, Compared with Thirteen Weeks Ended July 3, 2009

Net Sales. Net sales were $33.9 million for the 13 weeks ended July 2, 2010, as compared to $31.4 million for the 13 weeks ended July 3, 2009, an increase of $2.5 million or 7.9%. Net sales by the Company’s United States (U.S.) operations increased 7.5%. In the U.S., electric screen sales increased $1.1 million, wall screen sales increased $0.1 million, portable screen sales increased $0.2 million, and the sales of other products increased $0.6 million from 2009 levels, reflecting primarily increases in volume. Sales benefited from an improvement in economic activity during the second quarter, including the Hospitality, Business/IT and housing markets. Net sales from the Company’s European subsidiaries increased $0.4 million or 10.4%. Sales in Europe also benefited from an improvement in the economy. The stronger dollar produced a decrease of $0.4 million.

Cost of Sales. Cost of sales was $20.1 million for the 13 weeks ended July 2, 2010, as compared to $20.8 million for the 13 weeks ended July 3, 2009, a decrease of $0.7 million, or 3.5%. As a percentage of net sales, the cost of sales represented 59.2% in the 13 weeks ended July 2, 2010 and 66.2% for the 13 weeks ended July 3, 2009. This constitutes a 7.0 percentage point increase in margins. Margins at our U.S. facilities increased 5.8 points while margins at our European operations increased 10.0 points. These increases resulted primarily from a decrease in material cost and, to a lesser extent, an increase in product volumes.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $5.0 million for the 13 weeks ended July 2, 2010, as compared to $5.6 million for the 13 weeks ended July 3, 2009. Selling, general and administrative expenses in the U.S. decreased $0.3 million primarily as a result of a decrease in bad debt expense.

Goodwill Impairment. There were no impairment charges in the 13 weeks ended July 2, 2010. The goodwill impairment charge totaled $5.9 million for the 13 weeks ended July 3, 2009 as a result of the impairment charge recorded at the Projecta BV reporting unit.

Interest. Interest expense totaled $4.3 million for the 13 weeks ended July 2, 2010, as compared to $3.0 million for the 13 weeks ended July 3, 2009, an increase of $1.3 million. The increase was primarily due to the changes in rates as a result of refinancing the 9 1/2% Senior Notes with 12 1/2% Senior Notes.

Miscellaneous, net. Miscellaneous, net was income of less than $0.1 million for the 13 weeks ended July 2, 2010, as compared to $0.6 million for the 13 weeks ended July 3, 2009, that included a gain from the repurchase of debt at a discount.

Income Taxes. As a subchapter S corporation for United States tax purposes, the Company is generally not subject to United States federal and state income taxation. Rather, the Company’s income, gains, losses, deductions and credits flow through to its stockholders, and the Company makes distributions to them to meet their tax obligations at an assumed maximum federal and state tax rate (based on the state with the highest tax rate in which any of the Company’s stockholders reside). This assumed rate was 40.4% for the 13 weeks ended July 2, 2010 and for the 13 weeks ended July 3, 2009. The Company pays foreign income taxes on the earnings of its European subsidiaries.

Net Income (Loss). As a result of the aforementioned factors, net income increased $7.6 million to income of $4.5 million for the 13 weeks ended July 2, 2010 compared to a loss of $3.2 million for the 13 weeks ended July 3, 2009.

Results of Operations

~~Twenty~~Thirteen ~~Six~~ Weeks Ended ~~July~~October 21, 2010, Compared with ~~Twenty~~Thirteen ~~Seven~~ Weeks Ended ~~July~~October 32, 2009

Net Sales. Net sales were $6534.21 million for the 2613 weeks ended ~~July~~October 21, 2010, as compared to $6533.18 million for the 2713 weeks ended ~~July~~October 032, 2009, an increase of $0.13 million or 0.19%. Net sales by the Company’s United States (U.S.) operations ~~decreased~~increased 13.04%. In the U.S., electric screen sales ~~decreased~~increased $1.0.3 million, ~~and~~ wall screen sales decreased $0.1 million., ~~Portable~~portable screen sales increased $0.24 million, and the sales of other ~~product~~products increased $0.43 million from 2009 levels., ~~Sales~~reflecting ~~were~~primarily ~~marginally impacted by~~ a ~~leveling~~marginal inincrease ~~the economy,~~ in ~~the Hospitality, Business/IT and housing markets~~volume. ~~Portable~~Sales ~~screen~~benefited ~~sales were~~from ~~positively impacted by~~ a ~~slight~~marginal ~~increase~~improvement in ~~demand~~economic ~~from~~activity ~~the~~during ~~rental and staging markets within~~ the third ~~broader Hospitality market~~quarter. Net sales from the Company’s European subsidiaries ~~increased~~decreased $012.~~6 million or 6.4~~5%. Sales in Europe ~~benefited~~were ~~from an~~lower ~~improvement~~due into the ~~economy. The~~ stronger dollar that produced a decrease of $0.15 million.

Cost of Sales. Cost of sales was $3921.40 million for the 2613 weeks ended ~~July~~October 21, 2010, as compared to $4220.87 million for the 13 27 weeks ended ~~July~~October 32, 2009, aan ~~decrease~~increase of $30.43 million, or 8.1.4%. As a percentage of net sales, the cost of sales represented 6061.45% in the 2613 weeks ended ~~July~~October 21, 2010 and 6561.83% for the 2713 weeks ended ~~July~~October 32, 2009. This constitutes a 50.42 percentage point ~~increase~~decrease in margins. ~~Margins~~Percentage margins at our U.S. facilities ~~increased~~were ~~5.0~~unchanged ~~points~~ while margins at our European operations ~~increased~~decreased 38.9 7 points. ~~These~~The ~~increases~~decrease resulted primarily from ~~the~~a ~~decrease~~change in ~~material~~the ~~cost~~product ~~and,~~mix ~~to a lesser extent, an increase~~ in ~~product~~the European ~~volumes~~operations.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $94.73 million for the 2613 weeks ended ~~July~~October 21, 2010, as compared to $104.54 million for the 2713 weeks ended ~~July~~October 32, 2009. Selling, general and administrative expenses in ~~the~~Europe ~~U.S.~~ decreased $0.62 million primarily as a result of achanges ~~decrease~~ in exchange ~~bad debt and marketing expense~~rates.

~~Goodwill~~Interest. ~~Impairment~~Interest ~~There~~expense ~~were~~totaled no$4.1 ~~impairment~~million ~~charges~~for in the 2613 weeks ended ~~July~~ October 21, 2010., ~~The~~as ~~goodwill~~compared ~~impairment~~to ~~charge totaled~~ $52.9 million for the 2713 weeks ended ~~July~~October 32, 2009, an increase of $1.2 million. The increase was primarily due to the changes in rates as a result of refinancing the ~~impairment~~9 1/2% ~~charge~~Senior ~~taken~~Notes atwith ~~the~~12 1/2% ~~Project~~Senior ~~BV reporting unit~~Notes.

~~Interest~~Miscellaneous, net. ~~Interest~~Miscellaneous, ~~expense~~net ~~totaled~~was $70.23 million in expense for the 2613 weeks ended ~~July~~October 21, 2010, as compared to $60.4 8 million in income for the 2713 weeks ended ~~July~~October 32, 2009,. anThe $1.1 million increase in expense was primarily due to a gain from the repurchase of debt at a discount in the third quarter of 2009 of $0.89 million, ~~reflecting~~and ~~the~~a ~~increase~~loss infrom ~~interest~~the repurchase asof adebt ~~result~~at ofa ~~refinancing~~premium in the ~~9 1/2%~~ ~~Senior~~third ~~Notes~~quarter ~~with 12 1/2%~~of ~~Senior~~2010 ~~Notes~~of $0.3 million.

~~Miscellaneous,~~Income ~~net~~Taxes. ~~Miscellaneous,~~As ~~net~~a ~~was~~subchapter anS corporation ~~expense~~for ofUnited ~~$1.0~~States ~~million~~tax ~~for~~purposes, the 26Company ~~weeks~~is ~~ended~~generally ~~July 2~~not subject to United States federal and state income taxation. Rather, ~~2010~~the Company’s income, asgains, ~~compared~~losses, deductions and credits flow through to its stockholders, and the ~~income~~Company ofmakes ~~$1.3~~distributions ~~million~~to ~~for~~them ~~the~~to 27meet ~~weeks~~their ~~ended~~tax ~~July 3,~~obligations ~~2009,~~at an ~~increase~~assumed ofmaximum ~~$2.3~~federal ~~million.~~and ~~The~~state ~~change~~tax ~~resulted~~rate ~~from~~(based on the ~~repurchase~~state ofwith ~~debt~~the athighest atax ~~premium~~rate in which any of the ~~2010~~Company’s ~~period~~stockholders ~~compared~~reside). toThis assumed rate was 40.4% for the ~~repurchase~~13 ofweeks ~~debt~~ended atOctober 1, a2010 ~~discount~~and infor the 13 weeks ended October 2, 2009. The Company pays foreign income taxes on the earnings of its European subsidiaries.

~~Income~~Net ~~Taxes~~Income. As a ~~subchapter~~result Sof ~~corporation for United States tax purposes,~~ the ~~Company~~aforementioned ~~is generally not subject to United States federal and state income taxation. Rather~~factors, ~~the~~net ~~Company’s~~ income, ~~gains,~~decreased ~~losses,~~$2.0 ~~deductions~~million ~~and credits flow through~~ to its stockholders, and the Company makes distributions to them to meet their tax obligations at an assumed maximum federal and state tax rate (based on the state with the highest tax rate in which any of the Company’s stockholders reside)$4.5 ~~This~~million ~~assumed rate was 40.4%~~ for the 2613 weeks ended ~~July~~October 21, 2010, ~~and~~compared to $6.5 million for the 2713 weeks ended ~~July~~ October 32, 2009. ~~The Company pays foreign income taxes on the earnings of its European subsidiaries.~~

Net Income (Loss). As a result of the aforementioned factors, net income increased $6.9 million to income of $7.9 million for the 26 weeks ended July 2, 2010 compared to $1.0 million for the 27 weeks ended July 3, 2009.

Results of Operations

Thirty Nine Weeks Ended October 1, 2010, Compared with Forty Weeks Ended October 2, 2009

Net Sales. Net sales were $99.3 million for the 39 weeks ended October 1, 2010, as compared to $98.9 million for the 40 weeks ended October 1, 2009, an increase of $0.4 million or 0.4%. Net sales by the Company’s United States (U.S.) operations increased 0.5%. In the U.S., electric screen sales decreased $0.7 million and wall screen sales decreased $0.2 million. Portable screen sales increased $0.7 million and sales of other product increased $0.7 million from 2009 levels. Sales were marginally assisted by a perceived leveling in the economy, in the hospitality, business/IT and housing markets. Portable screen sales were positively impacted by a slight increase in demand from the rental and staging markets within the broader Hospitality market. Net sales from the Company’s European subsidiaries decreased 0.1%. Such decrease was due to the stronger dollar against the Euro.

Cost of Sales. Cost of sales was $60.4 million for the 39 weeks ended October 1, 2010, as compared to $63.6 million for the 40 weeks ended October 2, 2009, a decrease of $3.2 million, or 5.0%. As a percentage of net sales, the cost of sales represented 60.8% in the 39 weeks ended October 2, 2010 and 64.3% for the 40 weeks ended October 2, 2009. This constitutes a 3.5 percentage point increase in margins. Margins at our U.S. facilities increased 3.3 points while margins at our European operations decreased 0.4 points. This overall increase resulted primarily from the decrease in material cost in the U.S. facilities as compared to the same period for 2009.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $14.0 million for the 39 weeks ended October 1, 2010, as compared to $15.0 million for the 40 weeks ended October 2, 2009. Selling, general and administrative expenses in the U.S. decreased $0.5 million as a result of a decrease in marketing expense.

Goodwill Impairment There was no impairment charge in the 39 weeks ended October 1, 2010. The goodwill impairment charge totaled $5.9 million for the 40 weeks ended October 2, 2009 as a result of the impairment charge taken at the Project BV reporting unit.

Interest. Interest expense totaled $11.3 million for the 39 weeks ended October 1, 2010, as compared to $9.3 million for the 40 weeks ended October 2, 2009, an increase of $2.0 million, reflecting the increase in interest as a result of refinancing the 9¹/2% Senior Notes with 12¹/2% Senior Notes.

Miscellaneous, net. Miscellaneous net was an expense of $1.2 million for the 39 weeks ended October 1, 2010, as compared to income of $2.1 million for the 40 weeks ended October 2, 2009. The $3.3 million increase in expense was due primarily to a gain from the repurchase of debt at a discount of $2.2 million in 2009 and a loss of 1.4 million from the repurchase of debt at a premium in 2010.

Income Taxes. As a subchapter S corporation for United States tax purposes, the Company is generally not subject to United States federal and state income taxation. Rather, the Company’s income, gains, losses, deductions and credits flow through to its stockholders, and the Company makes distributions to them to meet their tax obligations at an assumed maximum federal and state tax rate (based on the state with the highest tax rate in which any of the Company’s stockholders reside). This assumed rate was 40.4% for the 39 weeks ended October 1, 2010 and for the 40 weeks ended October 2, 2009. 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 $4.9 million to $12.4 million for the 39 weeks ended October 1, 2010 compared to $7.5 million for the 40 weeks ended October 2, 2009.

Liquidity and Capital Resources

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

The Company issued $105 million 12¹/2% Senior Notes during the first quarter of 2010. These notes were issued with an original issue discount at a price of 97.305% and this debt was recorded at the discounted amount of $102.2 million. The discount will be accreted over the life of these notes as interest expense.

In March 2010, the Company repurchased $43.5 million of the outstanding principal amount of its 9 1/2% Senior Notes from the open market for an aggregate purchase price of $44.5 million. On May 17, 2010, the Company redeemed the remaining $54.5 million of the 9 1 /2% Senior Notes balance at the principal amount. The funds to repurchase these notes were from the cash received from the $102.2 million of the 12 1/2% Senior Notes along with the borrowings under our bank credit facility.

~~Management~~On believes the principal indicators of the Company’s liquidity are its cash position (total cash and cash equivalents), remaining availability under its bank credit facilities and its excess working capital. At JulySeptember 2, 2010, the Company’s ~~cash~~repurchased ~~position was~~ $110.28 million, ~~an increase~~ of the outstanding $0105.60 million ~~from~~ ~~January 1,~~principal ~~2010.~~amount ~~Additionally,~~of ~~the~~its ~~Company~~12 1/2% ~~has~~Senior anNotes ~~unsecured~~from ~~revolving~~the ~~credit~~open ~~facility,~~market ~~with~~for ~~maximum~~an ~~possible~~aggregate ~~borrowings~~purchase ~~equal~~price toof $1911.50 million~~, which expires in April 2012~~. ~~Interest~~The onCompany ~~any~~retired ~~outstanding~~these ~~borrowings~~Notes ~~related~~and towrote-off ~~this line of credit is calculated at~~ the ~~prime~~purchase ~~rate,~~premium ~~subject~~and ~~to a floor of 4.00%. As~~ the ~~prime~~deferred ~~rate~~financing iscost ~~below~~related ~~the~~to ~~floor,~~ the ~~interest rate in effect as of July 2, 2010 was 4~~ repurchase.~~00%.~~ AtThe ~~July 2, 2010, the~~ Company ~~had~~increased noits ~~outstanding~~borrowing ~~balance~~ under ~~this~~the ~~line~~unsecured of revolving credit. ~~Da-Lite’s~~facility ~~working~~in ~~capital~~connection ~~position~~with ~~increased~~the ~~to $18~~repurchase.6 ~~million (including $1.2 million of total cash and cash equivalents) at July 2, 2010, from $13.5 million (including $0.6 million of total cash and cash equivalents) at January 1, 2010.~~

~~The~~Management believes the principal indicators of the Company’s ~~Dutch~~liquidity ~~subsidiary~~are its cash position (total cash and cash equivalents), ~~Projecta~~remaining availability under its bank credit facilities and its excess working capital. At October 1, ~~has~~2010, anthe ~~overdraft~~Company’s ~~line~~cash position was $0.5 million, a decrease of $0.1 million from January 1, 2010. Additionally, the Company has an unsecured revolving credit facility, with maximum possible ~~borrowings~~ borrowings equal to 1$19.5 million, ~~Euros~~which expires in April 2012. As part of this agreement, Lake City Bank may demand full payment at any time. When borrowings have taken place, the Company has paid down on the line as funds have become available. As the Company intends to repay the revolving line of credit as funds become available, the line of credit has been classified as short term. Interest on any outstanding borrowings ~~in Europe~~ related to ~~Projecta’s~~this ~~overdraft~~ line of credit is calculated at the ~~ABN~~prime ~~AMRO~~rate, ~~Bank~~subject ~~Basic~~to a ~~Rate~~floor ~~plus~~of 14.5000%. As the prime rate is below the floor, the ~~sum~~interest ofrate ~~which~~in ~~was~~effect ~~6.10%~~as onof ~~July~~October 21, 2010 was 4. 00%. At ~~July~~October 21, 2010, ~~Projecta~~the Company had no$9.8 million outstanding ~~balances~~balance under this line of credit. ~~facility~~Da-Lite’s working capital position decreased to $12.2 million (including $0.5 million of total cash and cash equivalents) at October 1, 2010, from $13.5 million (including $0.6 million of total cash and cash equivalents) at January 1, 2010.

The Company’s Dutch subsidiary, Projecta, has an overdraft line of credit, with maximum possible borrowings equal to 1.5 million Euros. Projecta’s agreement with ABN AMRO Bank has no fixed expiration date. Interest on outstanding borrowings in Europe related to Projecta’s overdraft line of credit is calculated at the ABN AMRO Bank Basic Rate plus 1.50%, the sum of which was 6.10% on October 1, 2010. At October 1, 2010, Projecta had no outstanding balances under this credit facility.

Cash Flows

For the 2639 weeks ended ~~July~~October 21, 2010, cash provided by operating activities was $79.87 million, as compared to $1625.61 million for the 27 40 weeks ended ~~July~~October 32, 2009, a decrease of $815.84 million or 5361.54%, that resulted primarily from anchanges ~~increase~~ in ~~working~~the ~~capital~~levels of accounts receivables, inventories, and accrued expenses for the 2639 weeks ended ~~July~~October 21, 2010 compared to the decrease in working capital for the 2740 weeks ended ~~July~~October 32, 2009. Cash used in investing activities was $0.58 million for the 2639 weeks ended ~~July~~October 2, 2010, as compared to $01.80 million for the 2740 weeks ended ~~July~~October 32, 2009 due to a reduction in capital expenditures. Cash used in financing activities was $68.7 8 million during the 2639 weeks ended ~~July~~October 21, 2010, as compared to $1424.86 million for the 40 27 weeks ended ~~July~~October 32, 2009. The decrease in cash used in financing activities in 2010 was primarily due to the refinancing.

~~Capital~~14 ~~Expenditures~~

Capital expenditures were $0.5 million for the twenty six weeks ended July 2, 2010 compared to $0.8 million for the twenty seven weeks ended July 3, 2009. The Company’s management currently expects to spend approximately $1.5 million on capital expenditures in 2010, using cash generated from operations.

Capital Expenditures

Capital expenditures were $0.8 million for the thirty nine weeks ended October 1, 2010 compared to $1.0 million for the forty weeks ended October 2, 2009. The Company’s management currently expects to spend approximately $1.0 million on capital expenditures in 2010, using cash generated from operations.

Contractual Obligations

The following table sets forth, as of ~~July~~October 21, 2010, certain of the Company’s contractual obligations:

	Payments due by period
Contractual Obligations	Total		~~Less than1 year~~	Less than1 year		~~1-3 years~~		1-3 years	~~3-5 years~~	~~More than5 years~~	3-5 years		More than5 years
	(in millions)
Interest and principal payments for senior debt	$	~~170~~147.93	$	~~13.4~~$	5.9	$	~~26.3~~	$	~~131~~23.26	—		117.8		—
Interest and principal for line of credit		—10.4		—	—		—		—10.4	—		—		—
Self-insurance letter of credit		0.4		~~0.4~~	0.4		—		—	—		—		—
Total	$	~~171~~158.31	$	~~13.8~~$	6.3	$	~~26.3~~	$	~~131~~34.20	—		117.8		—

Distributions

As a subchapter S corporation under the Internal Revenue Code of 1986, Da-Lite is not subject to U.S. federal income taxes. Instead, such taxes are payable by Da-Lite’s stockholders. Distributions are made by Da-Lite to its stockholders to pay estimated taxes relating to taxable income allocated to them by the Company on a quarterly basis. Tax related distributions were $46.6 million and $45.39 million for the 2639 weeks ended ~~July~~October 21, 2010 and the 2740 weeks ended ~~July~~October 32, 2009, respectively.

The Company paid regular distributions to its stockholders in the amount of $3.2 million during the 2739 weeks ending ~~July~~October 32, 2009. The Company has not paid any regular distribution to its stockholders induring the ~~first~~nine ~~half~~month ofperiod ended October 1, 2010, and there are no current plans to commence making any regular distributions to its stockholders in 2010.

Inflation

The Company manages its inflation risks by ongoing review of product selling prices and production costs. Management does not believe that inflation risks are material to the Company’s business, its consolidated financial position, results of operations or cash flows. However, there can be no assurance that future inflation will not have an adverse impact on the Company’s operating results and financial condition.

Environmental

The Company has incurred, and in the future will continue to incur, expenditures for matters relating to environmental control, remediation, monitoring and compliance. The Company’s management believes that compliance with current environmental laws and regulations is not likely to have a material adverse effect on the Company’s financial condition, the results of its operations or its liquidity; however, environmental laws and regulations have changed rapidly in recent years and the Company may become subject to more stringent environmental laws and regulations in the future.

1416

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.

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

The Company’s sales are not materially dependent on a single customer or a small group of customers. No one individual customer balance represented more than 7.45% of the Company’s total outstanding receivables as of ~~July~~October 21, 2010. Credit risk associated with the Company’s receivables is representative of the geographic, industry and customer diversity associated with the Company’s global business.

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

Foreign Currency Risk

Da-Lite routinely uses forward exchange contracts to economically hedge raw material purchases from vendors outside of the country of purchase.

Interest Rate Risk

The Company has two credit facilities available for general corporate purposes that are subject to variable interest rates. Interest related to any outstanding balances on the Company’s $19.5 million revolving credit facility in the U.S. is calculated at 4.00% on ~~July~~October 21, 2010. At ~~July~~October 21, 2010, the Company had noa $9.8 million outstanding balance. Interest on outstanding borrowings in Europe, related to Projecta’s overdraft line of credit, is calculated at the ABN AMRO Basic Rate plus 1.50%, the sum of which was 6.10% on ~~July~~October 21, 2010. At ~~July~~October 21, 2010, Projecta had no outstanding balance with ABN AMRO Bank.

At ~~July~~October 21, 2010, the Company had $~~105~~94.03 million in fixed-rate long-term debt outstanding from the 12 1/2% Senior Notes. There is no interest rate ~~risk~~ risk associated with the Company’s fixed rate debt. The fair market value of the fixed-rate debt (based on discounted cash flows reflecting borrowing rates currently available for debt with similar terms and maturities) varies with fluctuations in in interest rates. A 10% decrease in interest rates on the value of the 12 1/2% Senior Notes due in 2015 would have changed the fair market value of the fixed-rate debt to approximately $~~111~~106.42 million from the fair value of approximately $~~105~~100.07 million at ~~July~~October 21, 2010. Note that financial instruments are described as cash or contractual obligations or rights to pay or receive cash. The fair value of all other financial instruments approximates the carrying value because of the short-term maturity of these instruments.

1517

Item 4.

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.

The Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchanges Act of 1934 as of the end of the period covered by this report. Based on the evaluation, performed under the supervision and with the participation of the Company’s management, including the Chairman, Chief Executive Officer and President (the “CEO”) and the Chief Financial Officer (the “CFO”), the Company’s management, including the CEO and CFO, concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by the report.

Changes in Internal Control

There were no significant changes with respect to the Company’s internal control over financial reporting or in other factors that materially affected, or are reasonably likely to materially affect, internal control over financial reporting during the quarter ended ~~July~~October 21, 2010.

1618

PART II

OTHER INFORMATION

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

~~None~~During the 13 weeks ended October 1, 2010, an executive officer exercised options to purchase 15,000 shares of common stock at an aggregate purchase price of $258,675. Additionally, non-executive officers of the Company in total, exercised options to purchase 5,711 shares of common stock at an aggregate purchase price of $100,628. These transactions were exempt from registration pursuant to, among other things, Section 4(2) of the Securities Act of 1933, as amended, and Regulation D promulgated under this Act.

Item 54. ~~Other~~Submission ~~Information~~of Matters to a Vote of Security Holders.

~~On July 2,~~The ~~2010, the shareholders of the~~ Company’s ~~convened~~annual ~~a special~~ meeting ~~to adopt the Second Amended and Restated Articles~~ of ~~Incorporation~~stockholders ofwas ~~the~~held ~~Company,~~on ~~which effected a 1~~August 17,~~000-for-1~~ ~~stock~~2010. ~~split~~Set offorth ~~the~~below ~~Company’s~~are ~~common stock (~~the ~~“Stock~~ ~~Split”).~~matters ~~The~~that ~~Company~~were ~~filed~~presented ~~the~~to ~~Second Amended~~ and ~~Restated~~voted ~~Articles~~upon ofby ~~Incorporation~~our ~~with~~stockholders, ~~the~~and ~~Secretary of State of~~ the ~~State~~results of ~~Indiana~~such stockholders’ ~~on that date to be effective as of July 2, 2010 (the “Effective Date”)~~votes.

AsElection of ~~the Effective Date, the Company’s shareholders were entitled to receive 1,000 shares of the Company’s common stock, par value $0~~directors.~~001~~ per share, in exchange for one share of the Company’s common stock, par value $1.00 per share (“Old Shares”). The total number of authorized shares of the Company was increased to 10,000,000 on the Effective Date. The Second Amended and Restated Articles of Incorporation of the Company was included as Exhibit 3.1 to the Periodic Report on Form 8-K filed on July 8, 2010.

During the quarter ended July 2, 2010, the Company adopted the Da-Lite Screen Company, Inc. 2010 Stock Option Plan (“2010 Stock Option Plan”) pursuant to which eligible employees may be granted options to purchase up to 200,000 new shares of the Company. A copy of the 2010 Stock Option Plan and Form Award Agreement are included as Exhibits 10.1 and 10.2 hereto.


Nominee	Votes For	Votes Withheld	Votes Against
James S. Cownie	5,284,143	—	—
James M. Hoak	5,284,143	—	—
Wayne Kern	5,284,143	—	—
Richard E. Lundin	5,284,143	—	—
David J. Lundquist	5,284,143	—	—
David N. Walthall	5,284,143	—	—

As19 of August 1, 2010, the Company entered into amendments to employment agreements with Richard Lundin, Judith Loughran and Jerry Young. Copies of these amendments are included as Exhibits 10.3, 10.4 and 10.5 hereto.

Item 6.

Exhibits

ExhibitNo.		Description
Exhibit No.		Description
10.1		Da-Lite Screen Company, Inc 2010 Stock Option Plan.
10.2		Form of Options Award Agreement.
10.3		Amendment to Employment Agreement between the Da-Lite Screen Company, Inc. and Richard Lundin.
10.4		Amendment to Employment Agreement between the Da-Lite Screen Company, Inc and Judith Loughran.
10.5		Amendment to Employment Agreement between the Da-Lite Screen Company, Inc and Jerry Young.
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

1720

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

SIGNATURES

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


DA-LITE SCREEN COMPANY, INC. (Registrant)

By:		/s/ Jerry C. Young
		Jerry C. Young
		Vice President – Finance and Chief Financial Officer (Principal Financial and Accounting Officer)

Date: ~~August~~November 32, 2010

1921

EXHIBIT INDEX

ExhibitNo.		Description
Exhibit No.		Description
10.1		Da-Lite Screen Company, Inc 2010 Stock Option Plan.
10.2		Form of Options Award Agreement.
10.3		Amendment to Employment Agreement between the Da-Lite Screen Company, Inc. and Richard Lundin.
10.4		Amendment to Employment Agreement between the Da-Lite Screen Company, Inc and Judith Loughran.
10.5		Amendment to Employment Agreement between the Da-Lite Screen Company, Inc and Jerry Young.
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

2022

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Smaller reporting Company

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