Welcome to the Lifetime Brands first quarter earnings conference call. At this time, all participants are in a listen-only mode. Following management’s prepared remarks, we’ll hold a Q&A session. (Operator Instructions) As a reminder, this conference is being recorded today, Thursday, May 8, 2008. I would now like to turn the conference over to Ms. Harriet Freed.

Thank you, Operator. Good morning, everyone, and thank you for joining Lifetime Brands’ First Quarter 2008 conference call. With us today from management are Jeff Siegel, Chairman, President, and Chief Executive Officer; Larry Winoker, Senior Vice President and Chief Financial Officer; and Chris Kasper, Senior Vice President, Corporate Development. Before we begin, I’ll read the Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995. The statements that are about to be made in this conference call that are not historical facts are forward-looking statements and involve risks and uncertainties, including but not limited to, product demand and market acceptance risks, the effects of economic conditions, the impact of competitive products and pricing, product developments, commercialization, technological difficulties, capacity constraints or difficulties, the results of financing efforts, the effect of the company’s accounting policies, and other details contained in its filings with the SEC. The company undertakes no obligation to update these forward-looking statements. With that introduction, I’d like to turn the call over to Mr. Siegel. Please go ahead, Jeff.

Thanks, Harriet. The first quarter of 2008 was one of the most difficult periods for retailers that I can remember. Given the environment, most retailers cut back on purchases with had a negative effect on our wholesale business which was down by about 10% compared to last year. While it may be premature to say that the worst is over, I can tell you that since early April, our order flow has turned around and as of right now it appears that our wholesale sales for the second quarter will exceed last year’s. As the magnitude of the slump in overall retail sales became apparent, many retailers in effect wrote off the spring season ad began aggressively to focus on the fall. While we expect retailers to continue to be cautious, the ongoing collaborative planning process between Lifetime and our retail partners leads us to believe that we should have a strong second half of the year. This will be driven by a combination of new product introductions as well as very strong promotional offerings that can drive retail sales, especially in the last six weeks of the year. As business slowed in the fourth quarter of 2007 and the beginning of the year, we began working with our key suppliers to develop strong promotional offerings in all of our product categories. As a result, we are in a good position to capitalize on retailers’ fall promotions. As I mentioned in this morning’s release, product innovation is especially important during periods when consumer spending is constrained. When business is tough, retailers rely on those vendors who can offer great products at exceptional values. Lifetime offers both the innovation and promotions they need. With those overall comments on our approach and strategy, let me give you an update on some of…

Thanks, Jeff. Net sales for the first quarter of 2008 were $98.2 million, a decrease of 5.4% from the 2007 period. Net loss was $6 million or $0.50 per diluted share for 2008 compared to a loss of $1.3 million or $0.10 per diluted share in the 2007 period. For our wholesale segment, net sales were $80.4 million for the first quarter of 2008, a decrease of $8.8 million from the 2007 period. This decline in sales volume primarily occurred in the tabletop and home décor categories. We believe the most significant factor contributing to the segment’s overall decline was the extremely challenging retail sales environment. In the direct-to-consumer segment, net sales were $17.8 million for the 2008 quarter, an increase of 21.9% from the 2007 period. This increase was driven primarily by our going out of business program for the previously announced closing of 30 underperforming stores. Catalog and internet sales increased due to the successful spring catalog and the late holiday orders in 2007 that were shipped in January 2008. Comparable store sales also showed an improvement. On a consolidated business, cost of sales for the first quarter of 2008 was 60.7% of sales compared to 58.9% in 2007. Our wholesale segment cost of sales was 63.2% of sales in 2008 quarter compared to 62.2% in 2007. This increase was due to our continued effort to reduce inventory levels and higher sales allowances. In the direct-to-consumer sales, cost of sales was 49.3% in 2008 compared to 38.7% in 2007. The increase as a percent of sales primarily resulted from lower margins from the going out of business program and to a lesser extent promotional activity in our ongoing stores. Distribution expenses were $13.4 million or 13.7% of sales in the 2008 quarter compared to $13.3 million or 12.8%…

Thanks, Larry. My remarks this quarter will highlight our progress in four areas: the direct-to-consumer division, our distribution strategy, our inventory reduction initiative, and our recently announced Canadian strategic alliance. Turning first to DTC: as Jeff mentioned, in December of 2007 we announced our plan to close 30 outlet stores for approximately 40% of our total retail doors as part of our restructuring initiative. As of March 31st, all 30 stores were closed. We expect these closures and the associated reduction in divisional overhead to improve profits by approximately $2 million on an annual basis beginning in the second quarter. We’re pleased to report the going out of business sales were a success and we realized a 28% margin on the approximately $5 million in inventory liquidated through the sales. Our efforts at lease mitigation were also successful. We’re now estimating that the $4.2 million in lease obligations will be terminated at a cost of $2.3 million. In the first quarter we spent $2.9 million of restructuring expense and are confident that it will total less than our original $5 million estimate on a full-year basis. We continue to believe that the restructuring initiatives, coupled with the comp store sales growth and organic growth in the web and catalog business that Jeff mentioned will result in a substantial improvement in the division’s profitability. We expect all our remaining retail stores to show a four-wall profit in 2008. However, until the completion of the York warehouse restructuring initiative which I will discuss in a minute, the stores are likely to operate at a loss on a fully burdened basis for 2008. As previously noted, at such time as we were to conclude that our retail stores cannot achieve an acceptable level of profitability, we would pursue other strategic alternatives with respect…

(Operator Instructions) Your first question comes from Alvin Concepcion – Citigroup Global Markets. Alvin Concepcion – Citigroup Global Markets: I just wanted to talk about the guidance for the year a little bit. It was --

Alvin, excuse me. Would you please speak up, we’re having difficulty hearing you. Alvin Concepcion – Citigroup Global Markets: Sure, I just wanted to talk about the guidance a little bit. It was 105 to 125, that’s excluding the DTC restructuring. Does that also exclude the consolidation of the west coast distribution facilities? The $0.07 that you got impacted by?

No, it does not. Alvin Concepcion – Citigroup Global Markets: Just to make sure, there’s about $0.05 left of restructuring in the DTC?

We had estimated the DTC restructuring expense in total for the year 2008 to be $5 million. Year to date that number is substantially less than that but there are remaining expenses that will be incurred associated with the closing of the stores as previously announced so at this point we are still anticipating $5 million in total restructuring charges. Alvin Concepcion – Citigroup Global Markets: Could you comment on your inventory levels at retail, your level of comfort with them?

The inventory levels at retail are low. They’re much lower than they were at the same point last year. Alvin Concepcion – Citigroup Global Markets: And then going into the Vasconia product, how large do you think that opportunity is?

We’ve never given out the number and we still are reluctant to do so. We are getting terrific placement. We have national chains on board. It’s going to be a very important brand for Lifetime but I don’t want to go into any numbers at this point.

Your next question comes from Bill Chappell - Suntrust Robinson Humphrey.

First a basic question. It said I think in the press release you’re expecting 4,000 new products this year. I think if I remember, the button from the houseware show was like 2500, 2600 new products. Have you stepped up that since the houseware show even further or is it just a different number?

The largest number of new products are introduced in the first quarter of the year, that’s when we get placement for the year. I would say the number this year would be more than 4000 but we haven’t put out a new number.

But Bill, to your point, I think it’s important to note that we’ve accelerated the development of new products and the timing of new product introductions earlier in the year to get more bang for the buck so to speak out of sales of products later in the year, so I do think that that’s an important point to note.

And then in terms of the dinnerware business, can you talk to us a little bit more about profitability this year, can we get back to profitability? You shrink the losses from last year and maybe talk a little bit more about what gives you confidence there?

It’s difficult to give a real number. I can tell you there’s going to be a dramatic turnaround, truly dramatic turnaround. Starting in this quarter, top line sales in this quarter look like they’re going to be terrific. We have tremendous placement in customers that we had even no placement or negligible placement last year. We’re making great progress and in addition to that, we’re already starting the process towards 2009 and opening a lot of doors for 2009 as well so I don’t want to put a number on it but there will be a dramatic turnaround in that division. We’re very happy with the way the business is going.

And help me to understand that. Is that just management focus, is it design, is it better retail relationships? Why such a change?

More than anything else, it’s management who really understands the design of products that are necessary to do business today. Dinnerware is driven more by the style of the product than by anything else. Brands are very important but the style of product is everything. A consumer is not going to buy a pattern of dinnerware if she doesn’t like it, no matter what the brand is. The current management that’s in place, Glen Simon and his team, have experience. They were extremely successful in the past with dinnerware and they’re just doing a phenomenal job today.

And then just finally on China manufacturing, is there any way to quantify your cost increases as you’re looking at it with the VAT tax and other things going on there?

There have been many increases, probably starting about 18 months ago, between raw materials, between VAT tax changes, between exchange rate changes, between social issues that drive up costs and different labor laws. There have been continual increases, but remember this is an industry-wide thing that certainly doesn’t affect us more than anyone else. If anything, it affects us less, and the reason it affects us less is that we have more than 100 in-house designers that can redesign product and change product, reconfigure products, change materials... We have capabilities that our competitors don’t have so for us, it’s not a negative as you can see. We’ve pretty much been able to maintain our margins through most of it already, in almost every part of the business that we’re in. We don’t expect things to change. We expect it, of course, to continue to go up, but at a much slower rate. We think we’ve seen peaks in most of the materials. As demand slacks off with some of the materials, even with the increase in price of oil, there’s been a pull back in the price of plastics in the last two months. So we don’t see it as being a serious issue going forward. There are certainly increases out there and retailers are open to accepting the increases. Their main goal is to remain margin-neutral which is the same goal that we have, yet you can’t test price or push prices too high for consumers so we have to reconfigure a lot of things and change things, but somehow we’ve been able to manage it very well at this point.

Gentlemen, there are no further questions at this time.

Thank you. Thanks again for joining us this morning. As I noted, we are very focused on innovation and exciting products and that is a key driver of our profitable growth. We’re working more closely than ever with our retail partners to give them what they want and what they need to ignite the interest of consumers. We’ll give you an update on all the activities in our second quarter call. Thank you.

Ladies and gentlemen, that concludes your conference call for today. We thank you for your participation and ask that you please disconnect your lines at this time.