Welcome to the Lifetime Brands First Quarter 2010 Conference Call. At this time, all participants are in a listen only mode. (Operator Instructions) I would now like to turn the conference over to Ms. Harriet Fried, please go ahead ma'am

Good morning everyone and thank you for joining Lifetime Brands’ first quarter 2010 conference call. With us today from management are Jeff Siegel, Chairman, President and Chief Executive Officer and Larry Winoker, Senior Vice President and Chief Financial Officer. 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 that are not historical factors are forward-looking statements and involve risks and uncertainties including but the company's ability to comply with requirement of its credit agreement. The availability of funding under that credit agreement. The Company's ability to maintain adequate liquidity and financing sources and an appropriate level of debt. Changes in general economic conditions which could affect customer payment practices or consumer spending, changes in demand for company's product, shortages and price volatility for certain commodities, effective competition on the company's market and other risk details Lifetime Brands' filing with the SEC. The Company undertakes no obligation to update these forward-looking statements. The company's earning release contained non-GAAP financial measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included in this morning's release is reconciliation of these non-GAAP financial measures to the comparable financial measures calculated in accordance with GAAP. With that introduction, I would like to turn the call over to Mr. Siegel. Go ahead, please Jeff.

Thank you, Harriet. Good morning and thank you for joining us, we’ll review our first quarter 2010 results. On today’s call, I’ll be joined by Laurence Winoker, our Chief Financial Officer. What a difference that you can make? As compared to 2009’s first quarter in which the company loss approximately $6 million, today, we report a net income of $729,000 equal to $0.06 per diluted share. Gross margin increased sharply from last year and we continue to see leverage from reductions and distribution expense and in SG&A. Most important, we returned to growing our top line excluding $3.4 million of non-recurring net sales to one of our customers going out of business of sales. Also net revenue for the quarter were up by 2.4%. We also strengthened our balance sheet while further reducing inventory and (inaudible) asset. Lower inventories means that we will have few goods to close out and therefore margins like will be greater than the prior years. While the borrowings will result in volume interest expense. We intend to maintain a prudent attitude towards inventory. We feel that there is quite a room for improvement in inventory terms though the reduction in inventory will not be as dramatic as it has been in the past year. Overall, our performance reflects improvements we’ve made to types of our business. In our wholesale business, our food product and Tabletop businesses (erupted) as compared to last year. Our internal plan, which is updated monthly anticipates increases in these businesses every quarter this year with a most significant increases occurring in the third and fourth quarters. We attribute our improved performance to the results of our focus on innovation, brands and value. For many years Lifetime Brand has led the housewares industry in new product developments. In 2009, the year in…

Thanks Jeff. As we reported earlier this morning, net income for the current quarter was $729,000, $0.6 per share as compared to net loss of 6 million, $0.50 per share in 2009. Income from operations was $2.5 million in 2010 compared to a loss excluding restructuring expenses of $2.5 million in the 2009 period. Adjusted EBITDA which is a non-GAAP measure and the fine narrow release was $37.2 million for the trailing 12 months period ended March 31, 2010 versus 12.7 million comparable period in 2009. For the 2010 quarter adjusted EBITDA was 5.7 million versus 600,000 through 2009. Looking at our wholesale segment net sales in the first quarter were 82.1 million, a decline of 1.5 million or 1.8%. As Jeff noted 2009 period included 3.4 million of sales in to the going-out-of-business sale of a customer that was liquidated. Excluding these sales wholesale volume increased by 2.4% over 2009. Wholesale segment gross margin increased 400 basis points in the first quarter to 37% due to favorable product mix the current period absence of a going-out-of-business sales where royalty expenses as we allowed certain and profitable licenses to expire and lower ocean freight cost. Wholesale distribution expenses at the percentage of net sales was approximately the same at both periods at 10% and 10.1% respectively. Wholesale SG&A expenses in the first quarter was $17.1 million, a decrease of 7.1% from $18.4 million last year. As a percentage of net sales SG&A was 20.8% in 2010 versus 22% last year. This decrease is attributable to benefit of construction activities mainly a reduction in employee costs from management realignment, lower depreciation and amortization and lower occupancy expenses primarily from consolidated [sterling]. Now turning to our direct-to-consumer segment, net sales for the segment was $6.6 million for both periods. An increase in…

(Operators Instructions). Our first question is from Greg Badishkanian with Citigroup. Please proceed with your question.

Hi, this is actually Alvin Concepcion in for Greg. I just wanted to get a sense, do you know what the POS at resale was in the quarter and also how trends have been in April?

I’m sorry but what I don’t understand what you said? It didn’t come in clearly. Can you repeat that?

Yeah, it POS sales had been trending high, what, last year, we went through a period where we resale with the destocking. They’re no longer destocking. So they’re responding to automate towards sales trends and also anticipating a little further out as we can see by our work flow. But the POS sales seems to be rather strong.

Would you say it’s growing faster than the 2% at wholesale excluding that sales, there’s non-recurring sales from last year?

Overall, yes. But the retails being very conservative. They’re maintaining low inventories. I talked to one retailer a few days ago that was very, very encouraged by POS sales, and they're one of our biggest customer. So I would say overall the answer is yes. POS sales are increasing. Alvin Concepcion – Citigroup: Okay, great. And then you mentioned some market share gains. Are there any particular segments driving that?

We don’t want to go into that but its pretty much across the board trust. We have gained market share, it’s been a truly intense focus of the company. It’s a two hour meeting every week. It really is something that’s paid off. And frankly, it took a lot longer to pay off than I thought it would, but its really starting to produce results for us, it’s the analyzing things that in ways we have never did before quite a focus for us. Alvin Concepcion – Citigroup: Okay. And can you give an update on your view on commodities and also, based on that, do you feel your pricing and product mix will allow you to grow margins this year?

Well, as far as commodity prices, they went up very quickly starting next year from mid last year. It has not had a major as you can see does not have major impact on our margins. We don’t expect it to. A large part of the products that we market are the more labor intensive than material intensive. So, raw materials do have some place in it, its not a very large place and we have also been using our design staff to redesign products that change materials and resource things when it was comfortable, the areas where we were very concerned with raw material prices, we firmed our prices very early and that enables the manufacturers and what’s the material suppliers provide the materials very early on.

Okay. And on that note, what are you seeing on the labor front?

Labor has gone up in China but not so much that it will have a great impact on us. We are doing things to help factories do more coordination to compensate for some of the labor increases but as we anticipated the labor going up and we were right?

It's sort of trending in line with what you were expecting?

Yes it is. It’s very much in line with what we expect and we also anticipated the considerable increase in ocean freight which is built into our prices in 2010.

Our next question is from Peir Uslin with Jefferies & Company Peir Uslin - Jefferies & Company: A question on the interest expense really quickly, the number, by my math, if I adjust out the APB 14 interest expense, if I'm right about this, the interest expense in the quarter would've been closer to $1.7 million. I guess two parts, is that the right way to look at the math, and then, secondly, is that a reasonable run rate to kind of expect, given the sharp reduction in borrowings?

The 14.1 which is the debt discount that in any pre-amortization with respect to the bond, its about 800,000 so you are right on your calculation there. In terms of run rate, obviously the bond or fixed rate that doesn’t change during the year. The other part process I think and that’s certainly a function of what our borrowing will be, on average there were $22 million in this first quarter and some of it don’t change and you can do, make some assumptions as to our working capital needs in our model to say what I might be on a full year basis Peir Uslin - Jefferies & Company: Shifting gears to the, you mentioned the increasing shift in the wholesale side to direct import. First of all, maybe what's behind that, and then, secondly, do you see that as kind of a little bit more of a permanent condition?

This is not going to be a very dramatic shift. We are heading in this direction for sometime where it’s appropriate and we will continue to do so as we have great capabilities overseas and our people are able to handle shipping to customers. So we would rather do that whenever possible that is probably to our D.C.s and it also helps us to keep our course down and one time our intention is not to add any D.C. capacity in the US but as we grow to do more and more direct shipping to make sure that we make more money. Peir Uslin - Jefferies & Company: The last question, I wanted to talk about the product innovation and the dynamics of having maybe the increased pipeline of ideas from the outside with the 1,000 inventions having come in because I think Proctor does something similar. I guess the inventors that you have in your network. I guess I'm just trying to figure how the relationship works. Are they more or less betrothed to you, or are they kind of shopping their ideas kind of to anybody that'll listen? Sort of just illuminate us on how the process works maybe a little bit.

These are independent inventors. You could call them garage inventors in some cases but in some cases they are retired engineers and designers who just want to keep working and instead of working for one company they now just work from home and invent products. We’ve somewhat formalized this network. We have someone who works almost full time with us, going around the country meeting with these investors, meeting with groups, speaking he’s head of the Inventor Council but there is some National Group of Inventors he is the head of that group, he goes around speaking and represents us, exclusively represents us in the world that we’re in. so, though the investors are not exclusive to us, we have a much broader network than everyone that I know off and within our world. Peir Uslin - Jefferies & Company: Great. One last one. On the, I know this will be in the queue but just preemptively, were the shares related to the convertibles? I assume that they would have been anti-deluded and so they’re not included is that correct?

That’s correct. Peir Uslin - Jefferies & Company: Okay. Thank you. Congratulations.

Thanks

Our next question is from Derrick Lagao with Barringtom Research.

Morning guys, this is actually Mike Ruggirello for Derrick

Morning, how you doing?

We were also excited about what we felt the house were shows here in Chicago like you guys were and that were specifically interested in hearing about the water bottle category?

Okay. Its very rapidly growing with us. Percentage wise, it’s the fastest growing business that we have but it’s a small business. There’s going to be a large business this year. We won't give that number on it but we have terrific commitments from retailers for the flow on water bottle much more than we would have expected and some very, very unique products. its also, its not only water bottle its also what you call cocky months which are traveling mugs. Both are growing very rapidly for us. We have some very unique products. we were not in this business a couple of years ago, two years ago. We’re now considered a real player, we’re dealing with most of the majors. And so, a great growth business for us. We had a previous liability as you probably know. For us and its something that is very much on consumers' mind today because of the environment and the issues with plastic water bottle so it's something that is -- for us we anticipated the growth business for quite some time.

So what's the growth opportunity that you guys are looking for there? I mean, it seems like it's a huge -- already a pretty huge market?

It is huge market, we don't want to put a number on, we do have one internally but I can tell you it's -- for us its significant growth opportunity.

I mean, I know it's a new category for you guys, but just in general how are the margins compared to your corporate margin, corporate average?

They are excellent, that's because we have some very unique product that we are (inaudible) hands on.

All right, perfect. Good quarter, guys

Thank you.

Our next question come from Gary Giblin with Quint Miller

Good morning, and great results for the quarter.

Thanks Gary

On the free shipping promotion, was there a promotionality increase beyond that or was that the extent of the increased promotionality of the direct DTC segment?

No, let me answer that. In the world of internet marketing free shipping is becoming much more of standard that was before and in with our products since we of direct source able to cover it. So we are following the trend.

Okay. So is there any other increased promotional activity beyond that or is that what --?

No, there is no more promotional activity but nothing increased and the free shipping is becoming a big thing offered by many (inaudible)

Yes, okay. And I mean, more broadly on DTC, are you satisfied with that year-over-year sales for the quarter, and is the segment where you expected it to be, excluding the (inaudible) order retail stores? But I mean, is your the current composition of your DTC, is that where you want it to be when you made some management changes and so forth, 12, 18 months ago?

The idea of making management changes was to make that a profitable business which we expect it will be. In fact, our focus will continue to be primarily our wholesale business. The DTC business for us has other functions but not only in selling to consumers. And yeah, I’ll give you a few of them because they’re very important. One is, we found that we have Mikasa website and most consumers who go through the website use us to understand the patterns, see how to use them properly, how to set tables and they don’t want to buy the same Mikasa patterns from our customers from whether it would be Macy’s or any store like that, which is very important to us because it helps to drive sales. In addition, the infrastructure that we have for our DTC business helps us to serve our retailers, we’re performing shipping through their consumers for their web business. So if a major retailer or subs some price to our consumer very often we actually do the shipping from our warehouse to the dialed product. And it’s a very important and very fast growing part of our business.

Okay, thanks for that important explanation. And, just would you say destocking is completely over or just 80% over if you had…?

As far as I am concerned it’s completely over. We don’t see it happen anywhere anymore. And not in any of the major customers we deal with.

Okay. And then my final question is, in the previous conference call, you were kind enough to at least give a little enough color to say that you thought probably first quarter would be EPS-positive. So care to venture yes or no on EPS-positive for the second quarter?

We have (inaudible) last quarter because the timing we were too much into the quarter and that was only one month for the quarter. It certainly, the dramatic improvement you saw in this first quarter versus ’09 won’t happen in the second quarter. The second quarter last year was pretty good, we had good margins. So I think you will see something in second quarter of ’10 closer to what we saw in this quarter.

Our next question is from Neil Goldman with Goldman Capital.

First question, you had a great quarter of Vasconia, and one thing, you were off -- you had, like, $600,000, but your investment went up by 1.8. Did you explain that difference?

Its because of the peso strengthening.

Okay, which is probably now reversed. But that's just an item on the quarterly end? It doesn't affect earnings, right?

We go through (inaudible) comprehensive income. Then we go directly holders equity.

Number two, based on the history, you always started growing inventory entering the second quarter for the third quarter shipments, especially since we're importing. And this quarter it continued to shrink again. So A, what do you think is your low point of borrowing based on your new sales forecast for the year, and what would be your peak borrowings on your bank line right now?

The low point is probably around now and what (inaudible) as of this week?

It’s below 20 million right now and that is the low point and the high point, we are focused on returns of that, I don’t expect it, it’s not going to have a dramatic increase. The inventory will certainly go up in the third quarter and not the second quarter we will probably hold inventory at very similar levels to this. We will go up slightly in the third quarter and as it goes up, we will have more borrowing but (inaudible) have a different number or what are you trying.

Of course well to the borrowing because inventory to that factor but also courses the (inaudible) business that we have. Strong business we are going to more see (inaudible) going to have obviously more of borrowing under the facility. So you know it gets to what we think our results would be in Q3 and into Q4 than others have to say. I mean I seriously want to say it certainly could be substantially less than we had outstanding time and last year for the comparable period from ’09 but its not something I want to venture out because then it gets into where we think business level are going.

Your borrowing capability under this line is how much today?

Well its at 45 million.

Okay. So you have $120 million total availability between right now. And when you look out at refinancing the debt, are you looking for the same kind of capacity overall, forget the mix of long and short?

Yes we do need this thing kind of capacity. We expect to be cash positive so we certainly have no reason to increase it but you know of course the mix maybe different but it will be about the same

And based on your current talks with the lenders, if you're right now round numbers have 1.7 based on that question, quarterly which is 6.8 in interest, would it approximate that even though our current rates on the long term are very low?

I didn’t hear what words you just said.

Well my question would be, on a going-forward, once you refinance, given the current use of cash, would the total interest costs run around the same right now?

If I could tell you what’s the cost will be (inaudible) I could tell you that. We don’t think the rate will be materially different than where we are and the when the date’s of today. Until we are complete and successful with our refinancing I really can’t comment on that.

Also in the first quarter last year, did you include the sales of the Canadian business? It was direct?

No.

It's the same this year and last year?

Its comparable, this year we are going to have a true comp.

(Operator Instructions) There are no further questions at this time. Please proceed with your presentation or any closing remarks.

Thanks again for joining us. We look forward to speaking to you again on our next call, thank you.

Ladies and gentlemen that concludes your conference call for today. We thank you for your participation and ask you to please disconnect your line.