8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):    October 31, 2006

INFOCUS CORPORATION

(Exact name of registrant as specified in its charter)

Commission File Number: 000-18908

Oregon	93-0932102
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
27500 SW Parkway Avenue, Wilsonville, Oregon	97070
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:  503-685-8888

Former name or former address if changed since last report:  no change

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR      240.13e-4(c))

INFOCUS CORPORATION
FORM 8-K
INDEX

Item	Description	Page
Item 1.01	Entry Into a Material Definitive Agreement	2
Item 2.02	Results of Operations and Financial Condition	2
Item 9.01	Financial Statements and Exhibits	2
Signatures		3

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Item 1.01 Entry Into a Material Definitive Agreement

Amendment to Credit Agreement and Waiver
On October 25, 2006, InFocus Corporation (“InFocus”) entered into a Sixth Amendment to Credit Agreement and Waiver (the “Amendment”) to its credit agreement with Wells Fargo Foothills, Inc. dated October 25, 2004 (the “Agreement”).

InFocus was in default of certain covenant and other provisions of the Agreement as of September 30, 2006. There were no borrowings outstanding as of that date. The Amendment waived the defaults as of September 30, 2006, extended the maturity date of the Agreement to March 31, 2007 and reduced the amount available to borrow from $25 million to $15 million.

A copy of the Amendment is attached hereto as Exhibit 10.1.

Item 2.02 Results of Operations and Financial Condition

On October 31, 2006, InFocus issued a press release announcing a net loss of $19.4 million, or $0.49 per share, on revenues of $81.2 million for its third quarter ended September 30, 2006.  InFocus also announced a net loss of $48.6 million, or $1.23 per share, on revenues of $290.9 million, for the nine months ended September 30, 2006. A copy of the press release is attached as Exhibit 99.1.

We provide in the press release certain non-GAAP financial measures, including pro forma net loss and pro forma net loss per share. As used herein, “GAAP” refers to accounting principles generally accepted in the United States. These non-GAAP financial measures exclude restructuring and other non-recurring charges from the directly comparable GAAP measures. As required by Regulation G, the press release contains a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures. We believe the non-GAAP measures are useful to investors because they provide an alternative method for measuring the operating performance of our business, excluding certain non-recurring and non-cash items that would normally be included in the most directly comparable GAAP financial measure. Our management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating our operating performance. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as reported by us may not be comparable to similarly titled items reported by other companies.

Item 9.01  Financial Statements and Exhibits

(d)Exhibits

The following exhibits are furnished herewith and this list is intended to constitute the exhibit index:

10.1Sixth Amendment to Credit Agreement and Waiver dated October 25, 2006 between InFocus Corporation and Wells Fargo Foothills, Inc.

99.1Press release dated October 31, 2006 regarding InFocus Corporation’s third quarter 2006 financial results.

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SIGNATURES

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

Date:October 31, 2006	INFOCUS CORPORATION
	By:	/s/ C. Kyle Ranson
		C. Kyle Ranson
		President and Chief Executive Officer (Principal Executive Officer)
	By:	/s/ Roger Rowe
		Roger Rowe
		Vice President Finance, Chief Financial Officer and Secretary (Principal Financial Officer)

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EX-10.1

EXHIBIT 10.1

SIXTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER

THIS SIXTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this “Amendment”), dated as of October 25, 2006, is entered into by and among the lenders identified on the signature pages hereof (such lenders, together with their respective successors and permitted assigns, are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”), WELLS FARGO FOOTHILL, INC., a California corporation, as administrative agent for the persons designated in the Credit Agreement referred to below (in such capacity, together with its successors and assigns in such capacity, “Agent”), and INFOCUS CORPORATION, an Oregon corporation (“Borrower”).

RECITALS

A.            Borrower, Agent and the Lenders have previously entered into that certain Credit Agreement dated as of October 25, 2004, as amended by that certain First Amendment to Credit Agreement, Security Agreement and Waiver, dated as of December 3, 2004, that certain Second Amendment to Credit Agreement, dated as of December 13, 2004, that certain Third Amendment to Credit Agreement and Waiver dated May 6, 2005, that certain Fourth Amendment to Credit Agreement, Second Amendment to Security Agreement and Waiver dated November 4, 2005 and that certain Fifth Amendment to Credit Agreement dated as of June 7, 2006 (as so amended or otherwise modified or supplemented from time to time, the “Credit Agreement”), pursuant to which the Lenders have made certain loans and financial accommodations available to Borrower.  Terms used herein without definition shall have the meanings ascribed to them in the Credit Agreement.

B.            Certain Events of Default have occurred and are continuing as a result of Borrower’s failure to (i) achieve EBITDA of $(31,000,000) or more for the 12-month period ending September 30, 2006, as required pursuant to Section 6.16(a)(i) of the Credit Agreement and (ii) notify Agent of the occurrence of an Event of Default due to the Borrowers’ entering into amendments to the WF Credit Agreement and WF Security Agreement which were not approved by Agent, as required under item (n) of Schedule 5.3 to the Credit Agreement (collectively, the “Known Existing Defaults”).

C.            Borrower has requested that Agent and the Lenders waive the Known Existing Defaults and amend the Credit Agreement on the terms and conditions set forth herein.

D.            Borrower is entering into this Amendment with the understanding and agreement that, except as specifically provided herein, none of Agent’s or any member of the Lender Group’s rights or remedies set forth in the Credit Agreement or any other Loan Document is being waived or modified by the terms of this Amendment.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1.             Amendments to Credit Agreement.

(a)           The first sentence of Section 3.3 of the Credit Agreement is hereby amended and restated to read as follows:

“This Agreement shall continue in full force and effect for a term ending on March 31, 2007 (the “Maturity Date”).”

(b)           Schedule 4.19 to the Credit Agreement is hereby replaced with the Schedule 4.19 to this Amendment.

(c)           Section 6.16(a)(i) of the Credit Agreement is hereby amended and restated to read as follows:

“(i)          Minimum EBITDA.  EBITDA, measured on a month-end basis, of at least the required amount set forth in the following table for the applicable period set forth opposite thereto:

Applicable Amount	Applicable Period
$1,200,000	For the 3 month period ending December 31, 2004
$2,100,000	For the 6 month period ending March 31, 2005
$(29,250,000)	For the 9 month period ending June 30, 2005
$(38,500,000)	For the 12 month period ending September 30, 2005
$(92,500,000)	For the 12 month period ending December 31, 2005
$(80,500,000)	For the 12 month period ending March 31, 2006
$(61,500,000)	For the 12 month period ending June 30, 2006
$(31,000,000)	For the 12 month period ending September 30, 2006
$(5,350,000)	For the 3 month period ending December 31, 2006
$(5,050,000)	For the 3 month period ending March 31, 2007”

(d)           The defined term “Availability Block” contained in Schedule 1.1 to the Credit Agreement is hereby amended and restated to read as follows:

“ ‘Availability Block’ means the amount of $25,000,000.”

(e)           The defined term “WF Credit Agreement” contained in Schedule 1.1 to the Credit Agreement is hereby amended and restated to read as follows:

“ ‘WF Credit Agreement’ means that certain Credit Agreement, dated as of March 17, 2003, entered into by and between Borrower and Wells Fargo, as amended by that certain First Amendment to Credit Agreement, dated December 3, 2004, by and between Borrower and Wells Fargo, as the same may be further amended, supplemented, waived or modified from time to time, pursuant to documents in form and substance satisfactory to Agent.”

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(f)            The defined term “WF Credit Documents” contained in Schedule 1.1 to the Credit Agreement is hereby amended and restated to read as follows:

“ ‘WF Credit Documents’ means, collectively, the WF Credit Agreement, the WF Security Agreement, the WF Control Agreement, that certain Standby Letter of Credit Agreement, dated as of October 18, 2002, by and between Wells Fargo and Borrower, as amended by that certain Addendum dated as of October 18, 2002, by and between Wells Fargo and Borrower, and any other document related thereto or amendments thereof in form and substance satisfactory to Agent.”

(g)           The defined term “WF Security Agreement” contained in Schedule 1.1 to the Credit Agreement is hereby amended and restated to read as follows:

“ ‘WF Security Agreement’ means that certain Security Agreement; Securities Account, dated as of December 3, 2004, by and between Borrower and Wells Fargo, as amended by that certain Addendum to Security Agreement: Securities Account, dated as of December 3, 2004, and by that certain Amended and Restated Addendum to Security Agreement: Securities Account, dated as of September 28, 2006, by and between Borrower and Wells Fargo, as the same may be further amended, supplemented, waived or modified from time to time, pursuant to documents in form and substance satisfactory to Agent.”

2.             Waiver of Known Existing Defaults.  Agent, on behalf of the Lenders, hereby waives enforcement of its and the Lender Group’s rights against Borrower arising from the Known Existing Defaults; provided, however, nothing herein shall be deemed a waiver with respect to any other or future failure of Borrower to comply fully with Sections 5.3 or 6.16(a)(i) of the Credit Agreement (as amended or modified by this Amendment).  This waiver shall be effective only for the specific defaults comprising the Known Existing Defaults, and in no event shall this waiver be deemed to be a waiver of enforcement of Agent’s or any other member of the Lender Group’s rights with respect to any other Defaults or Events of Default now existing or hereafter arising.  Nothing contained in this Amendment nor any communications between Borrower and Agent or any other member of the Lender Group shall be a waiver of any rights or remedies such Persons have or may have against Borrower, except as specifically provided herein.  Except as specifically provided herein, Agent hereby reserves and preserves all of its and the Lender Group’s rights and remedies against Borrower under the Credit Agreement and the other Loan Documents

3.             Accommodation Fees.  In consideration of the agreements and the waiver set forth herein, Borrower agrees to pay to Agent, for the benefit of the Lenders the following non-refundable fees: (a) a fee in the amount of $30,000, fully-earned as of and due and payable in full on the date of this Amendment (the “Initial Accommodation Fee”) and (b) a monthly fee of $25,000 (the “Monthly Accommodation Fee”), which fee shall be due and payable, in arrears, on the last day of each month (commencing January 31, 2007) and on the Termination Date (as defined in the Fee Letter); provided, however, that (i) such fee that is due, in arrears, on the Termination Date shall be an amount equal to (A) $25,000 times (B) the result of the total number of days in the month that elapsed to and including the Termination Date divided by the total number of days in the month the Termination Date occurred; provided, further, however, in the event that, for any month for which a Monthly Accommodation Fee is due, the Borrower and its Subsidiaries exclusively utilized the foreign exchange services of Wells Fargo (or a division thereof) for all of their foreign exchange transactions during such month, the Monthly Accommodation Fee for such month shall be $0.

4.             Effectiveness of this Amendment.  Agent must have received the following items, in form and content acceptable to Agent, before this Amendment, and the waivers provided for herein are effective.

(a)           Executed Amendments.  This Amendment and an amendment to the Fee Letter in form and substance satisfactory to Agent, each fully executed in a sufficient number of counterparts for distribution to all parties.

(b)           Payment of Initial Accommodation Fee.  The Initial Accommodation Fee, which fee may be paid as a charge to Borrower’s Loan Account.

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(c)           Representations and Warranties.  The representations and warranties contained herein shall be true and correct as of the date hereof.

(d)           Other Documents and Legal Matters.  All other documents and legal matters in connection with the transactions contemplated by this Amendment shall have been delivered or executed or recorded.

5.             Representations and Warranties.  Borrower represents and warrants as follows:

(a)           Authority.  Borrower has the requisite corporate power and authority to execute and deliver this Amendment and any amendment to any other Loan Document referenced herein, and to perform its obligations hereunder and under the Loan Documents (as amended or modified hereby and by any amendments thereto referenced herein) to which it is a party.  The execution, delivery and performance by Borrower of this Amendment and any amendment to any other Loan Document referenced herein have been duly approved by all necessary corporate action and no other corporate proceedings are necessary to consummate such transactions.

(b)           Enforceability.  This Amendment and any amendment to any other Loan Document referenced herein have been duly executed and delivered by Borrower.  This Amendment and each Loan Document (as amended or modified hereby and by any amendments thereto referenced herein) are the legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with its terms, and is in full force and effect.

(c)           Representations and Warranties.  After giving effect to this Amendment, the representations and warranties contained in each Loan Document (other than any such representations or warranties that, by their terms, are specifically made as of a date other than the date hereof) are correct on and as of the date hereof as though made on and as of the date hereof.

(d)           Due Execution.  The execution, delivery and performance of this Amendment and any amendment to any other Loan Document referenced herein are within the power of Borrower, have been duly authorized by all necessary corporate action, have received all necessary governmental approval, if any, and do not contravene any law or any contractual restrictions binding on Borrower.

(e)           No Default.  After giving effect to the waiver contained in this Amendment, no event has occurred and is continuing that constitutes a Default or an Event of Default.

(f)            No Duress.  This Amendment and any amendment to any other Loan Document referenced herein have been entered into without force or duress, of the free will of Borrower.  Borrower’s decision to enter into this Amendment and any amendment to any other Loan Document referenced herein is a fully informed decision and Borrower is aware of all legal and other ramifications of such decision.

(g)           Counsel.  Borrower has read and understands this Amendment and any amendment to any other Loan Document referenced herein, has consulted with and been represented by legal counsel in connection herewith and therewith, and has been advised by its counsel of its rights and obligations hereunder and thereunder.

6.             Choice of Law.  The validity of this Amendment, its construction, interpretation and enforcement, the rights of the parties hereunder, shall be determined under, governed by, and construed in accordance with the internal laws of the State of New York governing contracts only to be performed in that State.

7.             Counterparts.  This Amendment may be executed in any number of counterparts and by different parties and separate counterparts, each of which when so executed and delivered, shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument.  Delivery of an executed counterpart of a signature page to this Amendment by telefacsimile or other similar method of electronic transmission shall be effective as delivery of a manually executed counterpart of this Amendment.

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8.             Reference to and Effect on the Loan Documents.

(a)           Upon and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified and amended hereby.

(b)           Except as specifically amended above, the Credit Agreement and all other Loan Documents, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed and shall constitute the legal, valid, binding and enforceable obligations of Borrower to the Lender Group.

(c)           The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Agent and Lender Group under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.

(d)           To the extent that any terms and conditions in any of the Loan Documents shall contradict or be in conflict with any terms or conditions of the Credit Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified or amended accordingly to reflect the terms and conditions of the Credit Agreement as modified or amended hereby.

9.             Ratification.  Borrower hereby restates, ratifies and reaffirms each and every term and condition set forth in the Credit Agreement, as amended hereby, and the Loan Documents effective as of the date hereof.

10.           Estoppel.  To induce Agent and Lender Group to enter into this Amendment and to continue to make advances to Borrower under the Credit Agreement, Borrower hereby acknowledges and agrees that, as of the date hereof, there exists no right of offset, defense, counterclaim or objection in favor of Borrower as against any member of the Lender Group with respect to the Obligations.

11.           Integration.  This Amendment, together with the other Loan Documents, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.

12.           Severability.  In case any provision in this Amendment shall be invalid, illegal or unenforceable, such provision shall be severable from the remainder of this Amendment and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

13.           Submission of Amendment.  The submission of this Amendment to the parties or their agents or attorneys for review or signature does not constitute a commitment by Agent or any of the Lenders to waive any of their rights and remedies under the Loan Documents, and this Amendment shall have no binding force or effect until all of the conditions to the effectiveness of this Amendment have been satisfied as set forth herein.

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IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above written.

INFOCUS CORPORATION, an Oregon corporation
By:	/s/ Roger Rowe
Name:	Roger Rowe
Title:	Chief Financial Officer
WELLS FARGO FOOTHILL, INC., a California corporation, as Agent and a Lender
By:	/s/ Thomas Forbath
Name:	Thomas Forbath
Title:	Vice President

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SCHEDULE 4.19

1.  Indebtedness arising under the WF Credit Documents, as the same have been provided to Agent and as the same may be amended on terms satisfactory to Agent.

EX-99.1

[INFOCUS LETTERHEAD]

EXHIBIT 99.1

Investor Relations Contacts:	Public Relations Contacts:
Kyle Ranson	Jennifer Fields
Chief Executive Officer	InFocus Corporation
InFocus Corporation	(503) 685-8923
(503) 685-8576
Roger Rowe	Stacy Doyle
Chief Financial Officer	Edelman
InFocus Corporation	(503) 471-6806
(503) 685-8663

InFocus® Announces Third Quarter 2006
Financial Results

WILSONVILLE, Ore., October 31, 2006 — InFocus® Corporation (NASDAQ: INFS) today announced its third quarter 2006 financial results.  On revenues of $81.2 million, the Company posted a net loss of $19.4 million, or $0.49 per share, compared to a net loss of $12.8 million, or $0.32 per share, for the second quarter of 2006 and a net loss of $38.3 million, or $0.97 per share for the third quarter of 2005.

The third quarter 2006 results include a number of noteworthy transactions combining to increase the reported loss for the quarter by $10.1 million, or $0.25 per share.  The details of these transactions are as follows:

·A $1.6 million inventory charge to cost of goods sold related to the write down to estimated net realizable value of remaining inventory and commitments for the IN72, the company’s entry level home product;

·A restructuring charge of $0.9 million, primarily related to severance for actions taken to reduce the Company’s cost structure;

·A non-cash regulatory assessment charge of $5.1 million consisting of an estimated charge of $6.4 million related to the ongoing Shanghai customs matter and a $1.3 million reversal of the remaining accrued liability related to the investigation into possible infractions of U.S. export law;

·A charge of $1.1 million to other expense related to an estimate of wind down costs for South Mountain Technologies; and

·An impairment charge of $1.4 million related to The University Network, based on the difference between the carrying cost of these assets and the estimated net proceeds from an expected sale of these assets to a third party.

The Company reported total cash and marketable securities as of September 30, 2006 of $79.7 million with no debt outstanding.  In addition, the Company has agreed with Wells Fargo Foothill to amend their existing line of credit by extending the maturity date to March 31, 2007 and reducing the available borrowings under the line from $25 million to $15 million.

Quarterly Revenue, Unit, ASP and Gross Margin Comparisons

Third quarter revenues of $81.2 million were down 17 percent compared with second quarter revenues and down 38 percent from revenues in the third quarter of 2005.  Revenues were down from the second quarter in both the Americas and Europe, primarily a result of lower revenues from meeting room projectors through the PC distribution channel.  The Company’s main stream meeting room product line transitioned during the quarter and its new 2000 lumen IN32 and 2500 lumen IN34 projectors only began shipping in mid September.  As a result of the timing of this transition, total revenues from this product category were down significantly quarter to quarter.

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These new products are expected to be broadly available during the fourth quarter.  Revenues from sales of the Company’s value projectors, the IN24 and IN26, and mobile projectors, were also down during the quarter.

Gross margins declined to 12.7 percent in the third quarter of 2006 from 15 percent in the second quarter. Overall, average selling prices were down 5 percent quarter to quarter.  Projector unit shipments were approximately 74,000 units in the third quarter, down 12 percent from the prior quarter.

Operating Expenses Comparison Excluding Charges

Operating expenses, exclusive of restructuring charges and regulatory assessments, were $21.1 million for the third quarter of 2006, down $2.4 million from the second quarter of 2006, and down $6.1 million from the third quarter of 2005.

Other expense, net for the third quarter was $2.4 million compared to other expense of $2.8 million in the second quarter and other income of $5.5 million in the third quarter of 2005.

          Balance Sheet

Total cash and marketable securities as of September 30, 2006 were $79.7 million, a decrease of $12.7 million from the end of June.  Days sales outstanding for the quarter were 55 days, a decrease of 3 days from the prior quarter.  Inventory levels increased $4.1 million during the quarter to $51.6 million, a result of lower than expected revenues for the quarter.

Outlook for Fourth Quarter 2006

During the fourth quarter of 2006, the following factors are expected to influence revenues and gross margins:

·Industry unit growth due to the traditional fourth quarter seasonal uplift;

·Continued aggressive price competition; and

·Greater revenue contribution from new products.

Relative to operating expenses, the Company expects to achieve a reduction in reported operating expenses as the benefits of further restructuring actions are realized, The University Network sale is completed, and further actions are taken to fine tune the business model to reduce the Company’s break even point.  These savings will be somewhat offset by the costs of a retention plan that will pay a bonus to all employees other than the Chief Executive Officer who remain employed by the Company through April 30, 2007.

While the Company expects revenues and gross margins to increase from third quarter levels and operating expenses to decline as a result of the factors mentioned above, the Company is not giving specific financial guidance for future periods at this time.

“While the Board of Directors conducts its evaluation of strategic alternatives, it is critical that the management and employees of the Company stay focused on improving the operations of the business,” stated Kyle Ranson, President and CEO, InFocus.  “Managing cost is one part of that equation, but it is also critical that we leverage our core strengths to grow revenues and gross margins,” concluded Ranson.

Reconciliation of GAAP and Pro Forma Information

The Company has recorded charges that are excluded from operating expenses and earnings for comparative purposes.  In accordance with SEC FR-59, attached is a Statement of Reconciliation of GAAP Earnings.

Conference Call Information

The Company will hold a conference call today at 11:00 a.m. eastern time. The session will include brief remarks and a question and answer period. The conference can be accessed by calling (866) 904-2211 (U.S. participants) or (706) 634-4707 (outside U.S. participants), or via

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live audio Web cast at www.infocus.com.  Upon completion of the call, the Web cast will be archived and accessible on our website for individuals unable to listen to the live telecast.  The conference call replay will also be available through November 7, 2006 by calling (800) 642-1687 (U.S.) or (706) 645-9291(outside U.S.).  A Pin # is not required.

Forward-Looking Statements

This press release includes forward-looking statements, including statements related to anticipated revenues, gross margins, expenses, earnings, availability of components and projectors manufactured for the Company, inventory, backlog, and new product introductions.  Also included are forward-looking statements regarding the anticipated results and charges associated with further restructuring of the Company’s business and forward-looking statements regarding the evaluation of strategic alternatives for the Company.  Investors are cautioned that all forward-looking statements involve risks and uncertainties and several factors could cause actual results to differ materially from those in the forward-looking statements.  The following factors, among others, could cause actual results to differ from those indicated in the forward-looking statements: 1) in regard to revenues, gross margins, inventory and earnings, uncertainties associated with market acceptance of and demand for the Company’s products, the impact competitive and economic factors have on business buying decisions, dependence on third party suppliers, the impact of regulatory actions by authorities in the markets we serve; 2) in regard to product availability and backlog, uncertainties associated with manufacturing capabilities, uncertainties associated with working with contract manufacturing partners, availability of critical components, and dependence on third party suppliers; 3) in regard to new product introductions, ability of the Company to make timely delivery of new platforms, uncertainties associated with the development of technology, uncertainties with product quality and availability with the reliance on off-shore contract manufacturing, dependence on third party suppliers and intellectual property rights; 4) in regard to the Company’s further restructuring actions, uncertainties associated with the timing and impact of further cost reductions and ability to grow revenues and gross margins; and 5) in regard to the Company’s evaluation of strategic alternatives, uncertainties associated with the ability to identify and execute a transaction, set of transactions or strategy that results in an increase to shareholder value.  Investors are directed to the Company’s filings with the Securities and Exchange Commission, including the Company’s 2005 Form 10-K and 2006 Form 10-Q’s, which are available from the Company without charge, for a more complete description of the risks and uncertainties relating to forward-looking statements made by the Company as well as to other aspects of the Company’s business.  The forward-looking statements contained in this press release speak only as of the date on which they are made and the Company does not undertake any obligation to update any forward looking statements to reflect events or circumstances after the date of this press release.

About InFocus Corporation

InFocus® Corporation (NASDAQ: INFS) is the industry pioneer and worldwide leader in the projection market today. Twenty years of experience and engineering breakthroughs are at work here, constantly improving what you see in the marketplace, and delivering immersive audio visual impact in home entertainment, business and education environments.  Being the inventor and leader is simply a great bonus of making the presentation of ideas, information, and entertainment a vivid, unforgettable experience.

InFocus Corporation’s global headquarters are located in Wilsonville, Oregon, USA, with regional offices in Europe and Asia. For more information, visit the InFocus Corporation web site at www.infocus.com or contact the Company toll-free at 800.294.6400 (U.S. and Canada) or 503.685.8888 worldwide.

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InFocus, IN, Proxima, LiteShow, LP, ASK, ScreenPlay, Play Big, Work Big, Learn Big and The Big Picture are either registered trademarks or trademarks of InFocus Corporation in the U.S. and abroad.  “Digital Light Processing” and “DLP” are trademarks of Texas Instruments.

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InFocus Corporation
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2006			2005			2006			2005
Revenues	$	81,231		$	130,321		$	290,892		$	403,169
Cost of revenues(a)	70,900			130,858			249,137			385,881
Gross margin	$	10,331		$	(537	)	$	41,755		$	17,288
Operating expenses(a):
Marketing and sales	$	12,116		$	15,938		$	39,552		$	49,763
Research and development	3,826			5,261			13,150			16,279
General and administrative	5,198			6,017			16,901			17,788
Restructuring costs	850			5,950			2,775			12,000
Impairment of long-lived assets	—			9,813			—			9,813
Regulatory assessments	5,086			—			5,086			1,600
	$	27,076		$	42,979		$	77,464		$	107,243
Loss from operations	$	(16,745	)	$	(43,516	)	$	(35,709	)	$	(89,955	)
Other income (expense), net	(2,387		)	5,460			(12,161		)	18,725
Loss before income taxes	(19,132		)	(38,056		)	(47,870		)	(71,230		)
Provision for income taxes	274			274			724			649
Net Loss	$	(19,406	)	$	(38,330	)	$	(48,594	)	$	(71,879	)
Basic and fully diluted net loss per share	$	(0.49	)	$	(0.97	)	$	(1.23	)	$	(1.81	)
Basic and fully diluted shares outstanding	39,659			39,595			39,644			39,605
(a) Stock-based compenstation expense included under FAS 123(R) was as follows:
Cost of revenues	$	33		$	—		$	100		$	—
Marketing and sales	95			—			309			—
Research and development	37			—			130			—
General and administrative	110			—			290			—
	$	275		$	—		$	829		$	—

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InFocus Corporation
Consolidated Balance Sheets
(In thousands)
(Unaudited)

	September, 30 2006			December 31, 2005
Assets
Current Assets:
Cash and cash equivalents	$	53,814		$	53,105
Marketable securities	134			1,199
Restricted cash, cash equivalents, and marketable securities	25,770			25,813
Accounts receivable, net of allowances	49,689			70,883
Inventories	51,607			66,454
Land held for sale	—			4,469
Other current assets	17,713			24,094
Total Current Assets	198,727			246,017
Property and equipment, net	4,938			2,747
Other assets, net	767			15,124
Total Assets	$	204,432		$	263,888
Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable	$	63,160		$	74,674
Other current liabilities	26,886			30,985
Total Current Liabilities	90,046			105,659
Other Long-Term Liabilities	2,943			3,038
Shareholders’ Equity:
Common stock and additional paid-in capital	167,340			166,170
Other comprehensive income:
Foreign currency translation	28,611			24,200
Unrealized gain on equity securities	10			745
Accumulated deficit	(84,518		)	(35,924		)
Total Shareholders’ Equity	111,443			155,191
Total Liabilities and Shareholders’ Equity	$	204,432		$	263,888

5

InFocus Corporation
Reconciliation of GAAP Earnings
(In thousands, except per share amounts)
(Unaudited)

	Third Quarter 2006									Second Quarter 2006
	Net Loss			Net Loss Per Share			Operating Expenses			Net Loss			Net Loss Per Share			Operating Expenses
GAAP	$	(19,406	)	$	(0.49	)	$	27,076		$	(12,831	)	$	(0.32	)	$	24,423
Adjustments:
Restructuring charges	$	850		$	0.02		$	(850	)	$	850		$	0.02		$	(850	)
Regulatory assessments	$	5,086		$	0.13		$	(5,086	)	$	—		$	—		$	—
Proforma excluding adjustments	$	(13,470	)	$	(0.34	)	$	21,140		$	(11,981	)	$	(0.30	)	$	23,573

	Third Quarter 2006									Third Quarter 2005
	Net Loss			Net Loss Per Share			Operating Expenses			Net Loss			Net Loss Per Share			Operating Expenses
GAAP	$	(19,406	)	$	(0.49	)	$	27,076		$	(38,330	)	$	(0.97	)	$	42,979
Adjustments:
Restructuring charges	$	850		$	0.02		$	(850	)	$	5,950		$	0.15		$	(5,950	)
Regulatory assessments	$	5,086		$	0.13		$	(5,086	)	$	—		$	—		$	—
Impairment of long-lived assets	$	—		$	—		$	—		$	9,813		$	0.25		$	(9,813	)
Proforma excluding adjustments	$	(13,470	)	$	(0.34	)	$	21,140		$	(22,567	)	$	(0.57	)	$	27,216

	Year-to-Date 2006									Year-to-Date 2005
	Net Loss			Net Loss Per Share			Operating Expenses			Net Loss			Net Loss Per Share			Operating Expenses
GAAP	$	(48,594	)	$	(1.23	)	$	77,464		$	(71,879	)	$	(1.81	)	$	107,243
Adjustments:
Restructuring charges	$	2,775		$	0.07		$	(2,775	)	$	12,000		$	0.30		$	(12,000	)
Regulatory assessments	$	5,086		$	0.13		$	(5,086	)	$	1,600		$	0.04		$	(1,600	)
Impairment of long-lived assets	$	—		$	—		$	—		$	9,813		$	0.25		$	(9,813	)
Proforma excluding adjustments	$	(40,733	)	$	(1.03	)	$	69,603		$	(48,466	)	$	(1.22	)	$	83,830

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