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):  July 31, 2007

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	(I.R.S. Employer Identification No.)
or organization)
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:

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

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

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

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

Item 2.02 Results of Operations and Financial Condition

On July 31, 2007, InFocus Corporation (“InFocus”) issued a press release announcing a net loss of $7.8 million, or $0.20 per share, on revenues of $73.6 million for its second quarter ended June 30, 2007. InFocus also announced a net loss of $20.8 million, or $0.52 per share on revenues of $151.3 million for the six-month period ended June 30, 2007. A copy of the press release is attached as Exhibit 99.1 and a copy of the related conference call script is attached as exhibit 99.2.

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 attached hereto and this list is intended to constitute the exhibit index:

99.1Press release dated July 31, 2007 regarding second quarter and year to date 2007 operating results.

99.2Conference call script discussing the three and six-month period ended June 30, 2007.

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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:  August 2, 2007	INFOCUS CORPORATION
	By:	/s/ Mark H. Perry
	Mark H. Perry
	Interim Chief Financial Officer
	(Principal Financial Officer)

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EX-99.1

EXHIBIT 99.1

Investor Relations Contacts:	Public Relations Contacts:
Mark Perry	Martin Flynn
Chief Financial Officer	InFocus Corporation
InFocus Corporation	(503) 685-8112
(503) 685-8960

InFocus® Announces Second Quarter 2007
Financial Results

WILSONVILLE, Ore., July 31, 2007 – InFocus® Corporation (NASDAQ: INFS) today announced its second quarter 2007 financial results.  For the second quarter, InFocus reported revenues of $73.6 million and a net loss of $7.8 million, or $0.20 per share, compared to a net loss of $13.0 million, or $0.33 per share, for the first quarter of 2007 and a net loss of $12.8 million, or $0.32 per share for the second quarter of 2006.

Included in the second quarter 2007 results is a restructuring charge of $2.1 million, which accounted for $0.05 per share, compared to a restructuring charge of $0.9 million, or $.02 per share in the second quarter of 2006.  Restructuring charges for both the second quarter of 2006 and 2007 consist primarily of employee severance costs. Also included in the second quarter 2006 results was a non-cash expense of $3.4 million related to South Mountain Technologies, the Company’s Chinese joint venture, as well as a $0.3 million non-cash charge related to the expensing of stock options.

Overall Q2 operating performance improved over first quarter 2007 results. Revenues decreased from the first quarter, however product mix and continued focus on cost containment resulted in improvements in gross profits and operating expenses, narrowing the operating loss for the quarter.  Total cash, restricted cash, and marketable securities as of June 30, 2007 was $67.3 million with no outstanding borrowings, a decrease of $10.8 million from the end of the first quarter of 2007.

Quarterly Revenue, Unit, ASP and Gross Profit Comparisons

Second quarter revenues of $73.6 million were down 5 percent compared with first quarter revenues and down 25 percent from revenues in the second quarter of 2006.  Projector unit shipments totaled approximately 72,000 units in the second quarter, down approximately 21 percent from the prior quarter and down approximately 14 percent compared to the second quarter of 2006.  The quarter-on-quarter decrease in units was attributable to lower volumes of end of life (EOL) product sales in the second quarter as the Company successfully transitioned customers to better featured entry-level and mainstream meeting room and mobile products. As a result, gross profits improved from 10.9 percent in the first quarter of 2007 to 16.3 percent in the second quarter of 2007.  Overall, average selling prices increased by 20 percent quarter-to-quarter due to the

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positive mix shift away from EOL and entry-level products sold in the first quarter, to a higher percentage of current generation meeting room and mobile products sold during the second quarter.

Regionally, Americas’ revenues increased 4 percent while units shipped decreased 19 percent from the first quarter of 2007, reflecting the positive mix shift described above.  Revenues and units in Europe were down 25 percent and 26 percent, respectively.  Asian revenues decreased 9 percent compared to the first quarter of 2007 while units decreased 21 percent from the first quarter, also reflecting a similar mix variance that was experienced in the Americas.

Operating Expenses Comparison Excluding Charges

Operating expenses, exclusive of charges, were $18.1 million in the second quarter, a reduction of $1.1 million from the first quarter.  The reduction can be attributed primarily to increased focus on reducing the Company’s cost structure, coupled with reduced expenses associated with the evaluation of strategic alternatives.  In the second quarter, expenses associated with this ongoing evaluation decreased by approximately $0.6 million.

Other income for the second quarter was $0.4 million compared to other income of $0.3 million in the prior quarter and other expense of $2.8 million in the second quarter of 2006.  The expense in the second quarter of 2006 consisted of $3.4 million related to South Mountain Technologies, the Company’s Chinese joint venture, offset by other income of $0.6 million.

Balance Sheet

Total cash, restricted cash, and marketable securities as of June 30, 2007 were $67.3 million, a decrease of $10.8 million from the end of March.  Day’s sales outstanding in Accounts Receivable for the second quarter were 57 days, an increase of 2 days from the prior quarter.  Inventory levels decreased $2.7 million during the quarter to $33.3 million, reflecting the Company’s continued emphasis on improved supply chain management.

Strategic Alternatives

As publicly announced in October 2006, the Company has been involved in an active process considering a variety of strategic options with the intention to increase shareholder value.  This process remains ongoing and, as previously stated, the Company does not intend to disclose any specific details regarding the evaluation unless and until the Company has entered into a definitive agreement for a transaction that has been approved by the Board of Directors or the Board has determined to terminate the evaluation process.

Outlook for Second Half 2007

The Company remains focused on growing revenues, improving gross profits, managing the cost structure lower and preserving cash.  During the second half of 2007, the following factors are expected to influence revenues and gross profits:

·Modest industry unit growth;

·Continued aggressive price competition; and

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·Greater contribution to revenues and gross profits from new products.

The Company remains focused on improving its operating performance and believes investing in sales and marketing initiatives with the expectation of growing revenues and margins is a critical element of the plan.  Managing the Company’s cost structure to further reduce the break-even point, in parallel with the evaluation of strategic alternatives for the Company, is important to increasing shareholder value.

In closing, Michael Hallman, Lead Independent Director stated, “We are pleased with the Company’s progress in the second quarter.  While we recognize the challenge in front of us, we are pleased with the improvements to gross profits and continued focus on cost containment.  While we continue to evaluate strategic alternatives for the Company’s long-term future, we believe that Management is appropriately focused on the near-term opportunities for continued improvement, with the continued intention of increasing shareholder value.”

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 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 August 10, 2007 by dialing (800) 642-1687 (U.S.) or (706) 645-9291 (outside U.S.) and Pin 10630780.

Forward-Looking Statements

This press release includes forward-looking statements, including statements related to anticipated revenues, gross profits, expenses, earnings, availability of components and projectors manufactured for the Company, inventory, backlog, and new product introductions.  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 profits, 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

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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; and 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 profits. Investors are directed to the Company’s filings with the Securities and Exchange Commission, including the Company’s 2006 Form 10-K and first quarter 2007 Form 10-Q, 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. Over 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. As the inventor and leader in the category, we focus on making the presentation of ideas, information and entertainment a vivid, unforgettable experience. We believe our innovation and products set the standard for what a big picture experience should be like.

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.

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.

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InFocus Corporation

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

	Three months ended June 30,						Six months ended June 30,
	2007			2006			2007			2006
Revenues	$	73,633		$	97,642		$	151,288		$	209,661
Cost of revenues	61,649			82,961			130,824			178,237
Gross margin	$	11,984		$	14,681		$	20,464		$	31,424
Operating expenses:
Marketing and sales	$	9,442		$	12,871		$	19,086		$	27,436
Research and development	3,905			4,492			7,966			9,324
General and administrative	4,770			6,210			10,308			11,703
Restructuring costs	2,050			850			4,450			1,925
	$	20,167		$	24,423		$	41,810		$	50,388
Loss from operations	$	(8,183	)	$	(9,742	)	$	(21,346	)	$	(18,964	)
Other income (expense), net	359			(2,771		)	658			(9,774		)
Loss before income taxes	(7,824		)	(12,513		)	(20,688		)	(28,738		)
Provision (benefit) for income taxes	(36		)	318			147			450
Net Loss	$	(7,788	)	$	(12,831	)	$	(20,835	)	$	(29,188	)
Basic and fully diluted net loss per share	$	(0.20	)	$	(0.32	)	$	(0.52	)	$	(0.74	)
Basic and fully diluted shares outstanding	39,700			39,636			39,697			39,627

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InFocus Corporation

Consolidated Balance Sheets

(In thousands)

(Unaudited)

	June 30,			December 31,
	2007			2006
Assets
Current Assets:
Cash and cash equivalents	$	44,399		$	53,716
Marketable securities	67			104
Restricted cash, cash equivalents, and marketable securities	22,802			22,413
Accounts receivable, net of allowances	46,366			50,060
Inventories	33,270			40,107
Other current assets	7,513			10,706
Total Current Assets	154,417			177,106
Property and equipment, net	3,698			3,961
Other assets, net	1,495			1,189
Total Assets	$	159,610		$	182,256
Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable	$	52,800		$	52,046
Other current liabilities	20,924			26,800
Total Current Liabilities	73,724			78,846
Other Long-Term Liabilities	4,011			3,147
Shareholders’ Equity:
Common stock and additional paid-in capital	168,065			167,465
Other comprehensive income:
Foreign currency translation	32,546			30,662
Unrealized loss on equity securities	(57		)	(20		)
Accumulated deficit	(118,679		)	(97,844		)
Total Shareholders’ Equity	81,875			100,263
Total Liabilities and Shareholders’ Equity	$	159,610		$	182,256

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InFocus Corporation

Reconciliation of GAAP Earnings

(In thousands, except per share amounts)

(Unaudited)

	Second Quarter 2007									First Quarter 2007
	Net Loss			Net Loss Per Share			Operating Expenses			Net Loss			Net Loss Per Share			Operating Expenses
GAAP	$	(7,788	)	$	(0.20	)	$	20,167		$	(13,047	)	$	(0.33	)	$	21,643
Adjustments:
Restructuring charges	$	2,050		$	0.06		$	(2,050	)	$	2,400		$	0.06		$	(2,400	)
Proforma excluding adjustments	$	(5,738	)	$	(0.14	)	$	18,117		$	(10,647	)	$	(0.27	)	$	19,243

	Second Quarter 2007									Second Quarter 2006
	Net Loss			Net Loss Per Share			Operating Expenses			Net Loss			Net Loss Per Share			Operating Expenses
GAAP	$	(7,788	)	$	(0.20	)	$	20,167		$	(12,831	)	$	(0.32	)	$	24,423
Adjustments:
Restructuring charges	$	2,050		$	0.06		$	(2,050	)	$	850		$	0.02		$	(850	)
Proforma excluding adjustments	$	(5,738	)	$	(0.14	)	$	18,117		$	(11,981	)	$	(0.30	)	$	23,573

	Year-to-Date 2007									Year-to-Date 2006
	Net Loss			Net Loss Per Share			Operating Expenses			Net Loss			Net Loss Per Share			Operating Expenses
GAAP	$	(20,835	)	$	(0.52	)	$	41,810		$	(29,188	)	$	(0.74	)	$	50,388
Adjustments:
Restructuring charges	$	4,450		$	0.11		$	(4,450	)	$	1,925		$	0.05		$	(1,925	)
Proforma excluding adjustments	$	(16,385	)	$	(0.41	)	$	37,360		$	(27,263	)	$	(0.69	)	$	48,463

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EX-99.2

EXHIBIT 99.2

InFocus® Corporation
Second Quarter 2007 – Financial Results Conference Call
July 31, 2007

Mark Perry, InFocus Corporation…

Good morning and welcome to the InFocus second quarter 2007 financial results conference call.  I am serving as the Interim Chief Financial Officer and have been with the Company since June 19, 2007.

As many of you know, the InFocus Board of Directors has engaged an executive search firm to conduct a search for a new Chief Executive Officer.  We have made progress in this area, but the search remains ongoing at this point.  Joe O’Sullivan is our acting Chief Operating Officer, and manages our day-to-day operational activities. I manage the fiduciary elements of the business, including investor relations, external communications and general and administrative functions.

With me today is David Stout, Senior Director of Finance.  David, who has been with the Company for over two years, does not have any prepared remarks, but may provide commentary during the question and answer session.  After completing my prepared remarks, I will open the call to your questions.

Safe Harbor Introduction…

During this call, we will discuss InFocus’ business outlook and provide forward-looking statements.  These forward-looking statements include expectations regarding:

·factors impacting anticipated revenues, gross profits, expenses, earnings, inventory levels and new product introductions;

·the availability of components and projectors manufactured for the Company;

·the anticipated actions and charges associated with reducing our cost structure; and

·the evaluation of strategic alternatives being conducted by our Board of Directors.

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.  A more complete listing of the risk factors that could cause actual results to differ from these forward-looking statements can be found in the Company’s periodic reports on Form 10-Q and 10-K.  The forward-looking statements contained in this conference call 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 conference call.  In addition, if during this call we use any non-GAAP financial measure as defined by the SEC in Reg G, you will find on our website  the required reconciliation to the most directly comparable GAAP financial measure.

I’ll now walk you through the financial results for the second quarter.

Financial Summary....

Revenues for the second quarter were $73.6 million, gross profits were 16.3% of revenue, and pro forma operating expenses were $18.1 million, resulting in a pro forma operating loss of $6.1 million.  In addition, we recorded a restructuring charge of $2.1 million related to estimated employee severance costs.  Total cash and marketable securities were $67.3 million as of June 30, 2007, down $10.8 million from the March quarter.

Operating Expenses incurred, using  Generally Accepted Accounting Principals (GAAP), were $20.2 million and the GAAP operating loss was $8.2 million for the second quarter.  The GAAP net loss for the second quarter was $7.8 million, or $0.20 per share.

Detailed Second Quarter 2007 Financial Results....

Now let’s take a more detailed look at the P&L:

Revenues for the quarter were $73.6 million, down 5% compared to the first quarter and down 25% compared to the second quarter of 2006.  Total projectors sold in the quarter were 72,000 units, down from 91,000 units in the first quarter, a decrease of 21%.  The decrease in units for the quarter was predominantly driven by lower sales of end of life, entry-level meeting room and home products sold in the first quarter which did not reoccur to the same extent in the second quarter.  Average selling prices for the second quarter increased by 20% from the prior quarter across our product portfolio, due primarily to product mix improvements.

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Americas’ revenues increased 4% from the first quarter of 2007 and were down 32% compared to the second quarter of 2006.  Unit sales in the Americas for the second quarter decreased 19% and 25% compared to the first quarter of 2007 and second quarter of 2006, respectively.  Channel inventory levels at the end of the second quarter in the Americas were about 4 weeks of inventory, down from 5 weeks at the end of March 2007.

Internationally, European revenues decreased 25% from the first quarter and were down 18% compared to the second quarter of 2006.  Revenues from Asia were down 9% compared to the first quarter and up 39% compared to the second quarter of 2006.  The quarter-to-quarter reduction in revenue can be attributed to seasonality within certain territories of the region.

Additional breakdowns of revenue and units for the second quarter of 2007 are as follows:

·The breakdown of revenue by projector product line in our commercial markets in the quarter was 67% meeting room, 22% mobile, and 11% integration and installation, compared to a 70% meeting room, 21% mobile, and 9% integration and installation in the first quarter.

·Home projector revenues accounted for 5% of total projector revenues in the second quarter, down from 10% for the first quarter and in line with our expectations as we shift more resource and focus to our meeting room and mobile segments.

Our worldwide projector revenue channel fulfillment splits for the second quarter were 74% from distributors, 18% from value-added resellers and OEMs, and 8% from retail.  This compares to 74% from distributors, 17% from value-added resellers and OEMs, and 9% from retail during the first quarter.

·The breakdown of revenue geographically in the second quarter was 67% Americas, 22% Europe, and 11% Asia Pacific, compared to 61% Americas, 27% Europe, and 12% Asia Pacific in the prior quarter.

·XGA projectors were 63% of unit shipments, while SVGA accounted for 37%, compared to a 64%/36% split in the prior quarter.

·DLP technology comprised 97% of unit shipments, while polysilicon accounted for 3%, compared to a 98%/2% split in the first quarter.

We ended the second quarter with a Backlog of $4.2 million, down from $6.6 million at the end of the first quarter. Typically, backlog is not necessarily indicative of total sales for any future period.

Gross profits were 16.3% in the second quarter, up from 10.9% in the first quarter.  The increase in gross profits was driven by a positive mix shift as well as higher price realization on a new generation of entry-level meeting room projectors.  This improvement was anticipated as we shifted fulfillment of our entry-level meeting room products away from the IN24 and IN26 products to the better performing and higher margin producing IN24+ and IN26+ products.

Operating expenses, excluding charges, were $18.1 million for the second quarter, down $1.1 million from first quarter of 2007 and down $5.4 million from the second quarter of 2006.  The reduction from the first quarter can be attributed continued focus on reducing the cost structure of the Company and lower costs associated with the evaluation of strategic alternatives, Sales and Marketing, Research and Development and General and Administrative expenses.

We recorded Restructuring Charges of $2.1 million during the second quarter primarily for estimated employee severance costs.

Now for a review of the balance sheet:

Cash and marketable securities at the end of the first quarter were $67.3 million.  Working capital performance dipped slightly during the quarter, with the majority of the cash reduction attributable to the net loss of $7.8 million.  Our existing line of credit with Wells Fargo Foothill remained untapped throughout the quarter.

Accounts receivable were $46.4 million at June 30, 2007, a decrease of $0.9 million from the end of the first quarter.  Day’s sales outstanding for the second quarter was 57 days, up 2 days compared to the prior quarter.

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Total inventories decreased $2.7 million in the second quarter to $33.3 million.

Finished goods inventories are primarily made up of new projectors in our logistics centers, new projectors in-transit from our contract manufacturers, and new projectors held by certain retailers on consignment until sold. Finished goods inventories decreased approximately $2.1 million during the second quarter and account for approximately 71% of total inventories.  Service inventories are primarily made up of service parts held for warranty or customer repair activities, remanufactured projectors, replacement lamps, and other accessories such as screens, remotes and ceiling mounts.  Service inventories decreased approximately $0.6 million during the second quarter.

Consignment inventories with various retailers at the end of June, included as part of finished goods inventories, were approximately $3.8 million, up $0.5 million from the end of the first quarter.

Property, plant and equipment was $3.7 million at the end of the second quarter, a decrease of $0.7 million from the end of the first quarter.  Capital expenditures during the quarter were $0.8 million and depreciation and amortization expense was $1.5 million.

Strategic Alternatives....

Briefly I would like to touch on strategic alternatives. As we publicly announced in October 2006, we have been involved in an active process considering a variety of strategic options for the Company with the intention to increase shareholder value.  Our evaluation of various strategic alternatives continues at this time.  As we have stated previously, we do not intend to disclose any specific details regarding this evaluation unless and until the Company has entered into a definitive agreement for a transaction that has been approved by the Board of Directors, or the Board has determined to terminate the evaluation process.

I would now like to turn our attention to the operational initiatives we are undertaking to return the Company to profitability.

We continue to take the necessary steps to improve the operating performance of our core business and increase shareholder value.  Over the past four quarters we have reduced our quarterly operating expenses by approximately 23% and we continue to pursue further operating expense reductions.  These reductions will be made while simultaneously investing in sales, marketing and customer service initiatives.

In our last conference call, we discussed that our near-term focus would be on improving sales performance in the Americas.  We reorganized our sales and marketing organizations to increase efficiencies and customer responsiveness, and the results briefly described earlier in the financial summary demonstrate progress in this area.

Our return to profitability will be based on modest revenue growth and gross profit improvement.  We will continue to refine our cost structure, but are intently focused on changing the trajectory of the business to grow revenues.  To that end, we will concentrate on three connected dimensions: products, channels and regions.

From a product perspective, our growth initiatives will be focused on our core competencies in the meeting room and mobile product segments.  Our current product portfolio provides the most comprehensive product line up that we have offered in a number of years.  In June, we announced the IN10 ultra-mobile projector, a follow on product to our highly acclaimed LP70+ projector.  The IN10 is featured at 1800 lumens and weighs 2.4 pounds, and is about the size of an average paperback book.  We also launched a new wireless adaptor, InFocus Liteshow II, to improve the ease of use of our products.  Liteshow II is our second generation wireless device which allows for seamless streaming of content from a presenter’s computer to any projector with a VGA port.  These two products will be complemented throughout the second half of 2007 with new and innovative products, which will fuel our growth in these segments.  We will introduce several new models in the late Q3 and Q4 time frame targeted at our core segments of the meeting room and mobile categories.

Growth, from a channel dimension, is expected to come from our traditional commercial routes to market.  We continue to maintain a strong market share position with multiple distributors and direct resellers of our products, as well as a strong presence in office products retailers and a global network of dealers representing us in the marketplace.  We will continue to expand our coverage model, focusing on both the number of field sales

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personnel supporting our resellers as well as looking to broaden the network of reseller partners we use to fulfill end customer demand.

Regionally, we will continue a balanced focus on the three geographies we operate in. We believe that each region presents a unique growth opportunity within the varying dynamics of each geography.  While we will continue to serve each of the markets we are in today, the Company will continue to refine its focus and make investments in the areas that we believe will yield the largest and most profitable market opportunities.

Second Half 2007....

For the second half of 2007, we are focused on growing revenues, improving gross profits, reducing our cost structure and preserving cash.   We expect the following factors to influence revenues and gross profits as we continue through the second half of 2007:

1.Modest industry unit growth;

2.Continued aggressive price competition; and

3.Greater contribution to revenues and gross profits from our new products.

Summary....

In summary, we continue to actively drive improvements to our operating performance, with the objective of returning the Company to profitability.  We have a solid product portfolio, industry leading brand recognition, breadth and depth of channel relationships and increasing confidence that we are taking the appropriate actions to improve shareholder value.

Before I open the call to your questions, I would like to remind callers that the company is in a transition period, having had the CEO and CFO recently leave the Company.  I have been serving as interim CFO since June 29th and may not be able to answer all of your questions.  Please understand that I will err on the side of caution when considering my responses to your questions.  If I am uncertain of a specific answer to any question, I will state this in my response.

Thank you. I will now open the call to your questions.

About InFocus Corporation

InFocus® Corporation (NASDAQ:INFS) is the industry pioneer and worldwide leader in the projection market today. Over 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, and we believe our product contributions set the standard for what a big picture experience should be like.

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.  “DLP” is a trademark of Texas Instruments.

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Q2’07

Earnings Release Q&A

#1:

Ian Gilson from Zacks Investment Research

Good morning

(Mr. Gilson)   I have a question regarding the (ah) respective technology groups within the projector market, primarily DLP and LCD.  Could you give us a rundown on the how that is playing out and if there is there any geographical dispersion (that is) particular and distinct with each type of technology?

(Mark Perry)   Well, you probably asked the wrong person that question, I apologize but I really don’t, I don’t think I could do that very well.

David do you know anything?

(David Stout)  Could you clarify the question please?

(Mr. Gilson)  Yea, I’m looking for the relative changes in market share between the DLP based projectors which have been a InFocus strength for many years and the LCD market which is used by a number of your competitors.

(David Stout)  -I think current share estimates are currently being compiled for the most recent quarter.  And so don’t think we have the most up to date information.  As you know, I think, the difference between DLP and LCD have both a regional element from a product mix as well as channel fulfillment and ended user difference.       And so we don’t traditionally segment our share by anything below the corporate level which Mark referenced the current split which have been relatively consistent  with the last 2 quarters

(Mr. Gilson)  Have you been basically gaining share of the Japanese producers or are you still biased away from Japan

(David Stout)  I apologize I’m not sure I understand your question;

(Mr. Gilson)  You mentioned a geographical differentiation which is the question I answered originally, I would like you to expand on that.

(Mark Perry)  I’m sorry I don’t think we are prepared to do that, you have 2 financial people handling this call, I’m just sorry I don’t have the answer to that.

#2  Question

Lionel Tom Eisenberg, with Open Road Partners

(Lionel)  Yes, hello thank you.  Where I come from we like financial people but we like you to answer the questions too.  Um can you give us anymore color on the Strategic process that has been going on for maybe six months now um and do you have interested parties that you are talking too, at reasonable prices either for the whole business or parts of it I mean are you optimistic that something will get done or is it sort of getting to the end and you and you are going to just go on business as usual cost cutting etc.

(Mark Perry)   Um we don’t comment on the Strategic Alternatives.  Processes on going , but we have decided as we have announce previously that we are not going to discuss it until we have a com to a conclusion on it.

(Lionel)   Okay then hypothetically what are some of the conclusions that you can come to or realistically what are some of the conclusions that you’re looking at?

(Mark Perry)   I’d rather not comment on it, we are going through the process we’ve decided it would be best not to comment and so that is what we are going to stay with.

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