Robert D. Spear - Senior Vice President and ChiefInformation Officer Gerald J. Rubin - Chairman of the Board, President, ChiefExecutive Officer Thomas J. Benson - Chief Financial Officer, Senior VicePresident

Kathleen M. Reed - Stanford Group Company Gary Giblen - Goldsmith & Harris Douglas M. Lane - Jefferies & Co. Mimi Noel - Sidoti & Company John Harloe - Barrow Hanley Steve Friedman - Wachovia Securities Scott Greeder - Scopia Capital

Good morning and welcome, ladies and gentlemen, to the Helenof Troy third quarter earnings conference call for fiscal 2008. (OperatorInstructions) Our speakers for this morning’s conference call are Gerald Rubin,Chairman, Chief Executive Officer, and President; Thomas Benson, Senior VicePresident and Chief Financial Officer; and Robert Spear, Senior Vice President and Chief InformationOfficer. I will now turn the conference over to Robert Spear. Please go ahead,sir. Robert D. Spear: Good morning, everyone and welcome to Helen of Troy's thirdquarter earnings conference call for fiscal year 2008. The agenda for thismorning’s conference call will be as follows: we’ll have a briefforward-looking statement review followed by Mr. Rubin, who will discuss ourthird quarter earnings release and related results of operation for Helen ofTroy, followed by a financial review of our income statement and balance sheetby Tom Benson, our Chief Financial Officer. Finally, we’ll open it up forquestions and answers for those of you with any further questions. First, the Safe Harbor statement; this conference call maycontain certain forward-looking statements that are based on management’scurrent expectations with respect to future events or financial performance. Anumber of risks or uncertainties could cause actual results to differmaterially from historically or anticipated results. Generally, the wordsanticipates, believes, expects, and other similar words identifyforward-looking statements. The company cautions listeners to not place undue relianceon forward-looking statements. Forward-looking statements are subject to risksthat could cause such statements to differ materially from actual results.Factors that could cause actual results to differ from those anticipated aredescribed in the company’s Form 10-K filed with the Securities and ExchangeCommission for the third quarter fiscal year 2008 ended November 30, 2007. Before I turn the conference call over to our Chairman, Mr.Rubin, I would like to inform all interested parties that a copy of today’searnings release has been posted to our website at www.hotus.com. The releasecan be accessed by selecting the investor relations tab on the homepage andthen the news tab. I will now turn the conference over to Mr. Gerald Rubin,Chairman, CEO, and President of Helen of Troy. Gerald J. Rubin: Good morning, everyone and welcome to our third quarterconference call. Helen of Troy today reported sales and net earnings for thethird quarter which ended November 30, 2007. Third quarter sales were$210,348,000 versus sales of $213,437,000 in the same period of the prior year,a decline of 1.4%. Third quarter net earnings were $22,842,000 or $0.73 perfully diluted share, compared to $22,813,000, or $0.72 per fully diluted sharefor the same period a year earlier. Sales for the nine months ended November 30, 2007 increased3.5% to $508 million versus $491 million for the previous year. Net earningsfor the first nine months of this year were $51,212,000 or $1.60 per fullydiluted share versus $40,366,000, or $1.28 per fully diluted share in the sameperiod last year. Excluding these third quarter items, net earnings for thequarter were $25,480,000 or $0.81 per fully diluted share versus net earningsof $22,375,000, or $0.70 per fully diluted share in the previous year, anincrease in earnings per share of 15.7%. Net earnings for the nine months ending November 30, 2007include an after tax benefit for the second quarter of $7,950,000 or $0.25 perfully diluted share relating to our Hong Kong IRD tax settlement. Net earnings for the nine months ending November 30, 2006include an after tax benefit of $192,000, or $0.01 per fully diluted sharerelated to a previous Hong Kong IRD settlement and an after tax gain on the sale of land of $279,000, or $0.01 perfully diluted share. Excluding all of these items and the third quarter itemsreferred to previously, net earnings for the nine months ending November 30,2007, were $45,900,000, or $1.44 per fully diluted share compared to$39,454,000, or $1.25 per fully diluted share in the prior year, an increase ofearnings per share of $15.2. I would like to point out that everybody shouldlook at the $1.44 without the extraordinary items versus the $1.25, which gaveus a 15% increase. For the third quarter, sales in our houseware segmentincreased 19% to $47 million compared with $39,700,000 for the same period lastyear. Net sales in the houseware segment for the nine-month period endingNovember 30, 2007 increased 19% to $120 million, compared with $101 million forthe same period last year. Net sales in the personal care segment for the third quarterdecreased 6.2% to $163 million compared with $174 million for the same periodlast year. Net sales in the personal care segment for the nine-month perioddecreased 0.4% to $388 million compared with $390 million for the same periodlast year. As you can see, our houseware segment had excellent salesand operating results for the quarter. Our OXO line of products continues to bea very strong leader in its category of products. Our personal care segment isfacing a challenging sales environment, which we anticipate will continue atleast through the first half of the calendar year. As we reported previously, we acquired the Belson businessduring the last quarter. The existing cost of goods structure produced grossmargins that are less than similar products in our existing professionalproduct division. We are in the process of shifting the Belson sourcing to ourcurrent suppliers, which we expect to provide margin improvement opportunitiessome time in fiscal 2009. As of November 30, 2007, Helen of Troy's balance sheetremains strong, with stockholder equity of $563 million, an increase of $47million, or 9.2% from the comparable period last year. Our current book value per outstanding share is $18.33. Ourcash position as of November 30, 2007 was $87 million versus cash of $59million, an increase of $28 million or 48%. Today, our cash position is inexcess of over $100 million. Inventory at November 30, 2007, was $146.4 million versus$146.2 million for the same period in the prior year, while total salesyear-to-date have increased 3.5%. Based on our sales results for the quarter, we are revisingour sales forecast for the fiscal 2008 year ending February 28, 2008 to besales in the range of $645 million to $655 million versus our previous forecastof sales in the range of $660 million to $680 million. We are also revising our net earning guidance to $1.85 to$1.95 per fully diluted share from previous guidance of $1.90 to $2.10 perfully diluted share. Without the extraordinary items, we are projecting $1.70to $1.80 for this fiscal year versus $1.58, which we reported last year. We expect the retail environment to continue to bechallenging. However, we will continue to execute our strategic initiativeswith renewed effort and dedication as we complete this year and formulate ourplans for the coming year. There’s a lot of financials that you all would like to hearabout and I’d now like to turn over the teleconference to Tom Benson, our CFO,to give you the financial highlights. Thomas J. Benson: Thank you, Gerry and good morning, everyone. We faced adifficult domestic retail environment in the third quarter where many of ourretail partners faced slowing same-store sales trends and reduced the amount ofinventory in their pipelines, contributing to lower overall sales for thequarter. Our housewares in international businesses continue to grow.Gross profit margins improved slightly year over year excluding the Belsonacquisition and selling, general, and administrative expense as a percentage ofsales continued to decrease year over year. We sold land resulting in a pretax gain of $3.6 million. Werecorded pretax impairment charges totaling $5 million, representing thecarrying value of our Epil-Stop and Time-Block brands,which I will discuss in further detail shortly. Third quarter net sales decreased 1.4%year over year. This includes $10.5 million of sales from the newly acquiredBelson business. Net sales for the third quarter of fiscal 2008 were $210.3million compared to $213.4 million the prior year quarter. This represents a$3.1 million decrease, or 1.4% decrease. Our third quarter operating incomeincreased by 0.7% in dollar terms year over year. Operating income in the thirdquarter of fiscal 2008 was $29.3 million, which is 13.9% of net sales, comparedto $29.1 million, or 13.6% of net sales in the prior year quarter. This representsan increase of $200,000, or 0.7%. Before the impairment charges and thegain on the sale of land, third quarter operating income increased 5.4% indollar terms year over year. Operating income before impairment and gain was$30.7 million in the third quarter of fiscal 2008, which is 14.6% of sales,compared to $29.1 million, or 13.6% of sales in the prior year quarter. This isan increase of $1.6 million, or 5.4%. Third quarter net earnings increased0.1% in dollar terms year over year. Net earnings for the third quarter offiscal 2008 were $22.8 million, or 10.9% of net sales, compared to $22.8million, or 10.7% of net sales in the prior year quarter. This was a $29,000increase. Excluding the after tax impacts of theimpairment charges and gain on sale of land this quarter, and gain on alitigation settlement in the same quarter last year, net earnings increased by13.9%. Net earnings before impairment and gainin the third quarter of fiscal 2008 were $22.5 million, which is 12.1% ofsales, compared to $22.4 million without the litigation settlement in the prioryear quarter. This is -- in the prior year quarter, it was 10.5% of sales. Thisis an increase of $3.1 million or 13.9%. I’m sorry, the net earnings beforeimpairment and gain in the third quarter fiscal 2008 was $25.5 million, 12.1%.I had said 22.5. The third quarter diluted earnings pershare was $0.73 in the third quarter of fiscal 2008 compared to $0.72 in theprior year quarter. This represents an increase of $0.01 or 1.4%. Excluding theafter tax impacts of the impairment charges and the gain on the sale of land,this quarter and the gain on the litigation settlement in the same quarter lastyear, diluted earnings per share increased 15.7%. Diluted earnings per sharewould have been $0.81 in the third quarter fiscal 2008 compared to $0.70 in theprior year quarter, an increase of $0.11 or 15.7%. Now I will provide a more detailedreview of various components of our financial performance. Our personal care segment includes thefollowing product lines: appliances -- products in this group include hairdryers, curling irons, thermal brushes, hair straighteners, massagers, spaproducts, foot baths, and electric clippers and trimmers. Key brands in thiscategory include Revlon, Vidal Sassoon, Bed Head, Golden Hot, Sunbeam, Dr.Scholl’s, Hot Tools, Wigo, and Health o Meter. Grooming, skin care and hair productsare included in the personal care segment. Products in this line include liquidhair styling products, men’s fragrances, men’s deodorant, foot powder, bodypowder, and skin care products. Key brands include Brut, Sea Breeze, Skin Milk,Ammens, Vitalis, Condition 3-in-1, Final Net and Vitapointe. Brushes and accessories are alsoincluded in the personal care segment. Key brands include Revlon, VidalSassoon, Bed Head, and [Corino]. Personal care net sales were $163million in the third quarter of fiscal 2008 compared to $173.7 million in thethird quarter of the prior year. This represents a decrease of $10.7 million,or 6.2%. Third quarter net sales were down in allthree product categories year over year. The Belson business, which we acquiredeffective May 1, 2007, contributed $10.5 million of net sales for the quarter. The decrease in personal care and netsales compared to the same quarter last year was due to a difficult domesticretail environment, a reduction in the amount of inventory held by certain keyretail partners, a decrease in sales in our grooming and wellness appliancecategories, expanded product line offerings by certain competitors, and a moveby certain professional customers to replace random merchandise with privatelabel. Our houseware segment consists of theOXO business. OXO is a leader in providing innovative consumer product tools ina variety of areas, including kitchen, cleaning, barbeque, bar ware, garden,automotive, storage and organization. Brands that we sell include OXO GoodGrips, OXO Steel, OXO Soft Works, and Candela. The housewares segment’s net sales were$47.4 million in the third quarter of fiscal 2008 compared to $39.7 million inthe third quarter of the prior year. This is an increase of $7.7 million, or19.3%. The sales increase resulted from acontinuing trend of product mix expansion and geographic expansion in the UnitedKingdom and Japan. The company’s gross profit for the thirdquarter was $90.1 million, which is 42.8% of net sales in the third quarter offiscal 2008, compared to $91.5 million, or 42.9% of sales in the prior yearquarter. This represents a dollar decrease of $1.4 million. In percentageterms, it’s 1.5% of the dollars. The gross profit margin declined 0.1percentage point year over year. We continue to experience product sourceand cost pressures due to raw material price increases, changes in exchangerates, and labor cost increases. Despite these pressures, gross profit marginexcluding the Belson acquisition improved 50 basis points compared to the samequarter last year. To compensate for rising costs, we areimplementing selling price increases when possible, introducing new products,sourcing from alternative suppliers, and focusing on our internal cost. For the third quarter, selling, general,and administrative expense was $59.4 million, which is 28.2% of net sales,compared to $62.4 million, or 29.2% of net sales in the prior year quarter.This represents a dollar decrease of $3 million, which is a 4.8% decrease indollar terms and is a one percentage point increase year over year. I’m sorry,one percentage point decrease year over year. The decrease in SG&A expense as apercentage of sales is mostly due to an improved distribution cost structure,freight cost improvements, and lower information technology sourcing costs,partially offset by higher advertising and personnel expenses. In the fourth quarter of fiscal 2007, wecommenced our reintroduction of the newly formulated Epil-Stop product line. Inresponse to unsatisfactory consumer sales and the discontinuance of theEpil-Stop line by certain retailers, we conducted a strategic review of theEpil-Stop trademark in the third quarter of fiscal 2008. We also evaluated thepotential of our TimeBlock brand in light of our recent experience withEpil-Stop. From these reviews, we concluded thatthe future undiscounted cash flows associated with these trademarks wereinsufficient to recover the carrying values. Accordingly, we recorded non-cash,pretax impairment charges totaling $4,983,000, representing the carrying valueof these trademarks. We also sold 16.5 acres of raw landadjacent to our El Paso, Texas office and distribution center. The saleresulted in a pretax gain of $3.6 million. Interest expense for the third quarterwas $3.6 million, which his 1.7% of net sales, compared to $4.5 million, or2.1% of net sales in the prior year quarter. The decrease in interest expenseis due to the lower amounts of debt outstanding in the third quarter of fiscal2008 compared to the third quarter of fiscal 2007. Income tax expense for the third quarterwas $3.6 million compared to $2.7 million in the third quarter of the prioryear. Third quarter income tax expense was 13.6% of pretax earnings compared to10.5% in the same quarter last year. The effective tax rate for the currentquarter was impacted by the impairment charges and the gain on the sale ofland. Excluding these items, the tax expenseis 8.4% of pretax earnings. The year-over-year decrease in tax expense is dueto shifts in the mix of taxable income earned between the various high tax rateand low tax rate jurisdictions in which we conduct our business. I will now discuss our financialposition. Our cash and temporary investment balance was $87.1 million atNovember 30, 2007, and we have had no borrowings in our $50 million revolvingline of credit. Accounts receivable were $162.7 millionat November 30, 2007, compared to $168.4 million at November 2006, on sales inthe third quarter of the current year that were $3.1 million lower than thesame period last year. Accounts receivable turnover improved to 76.2 days atNovember 30, 2007, from 78.5 days at November 30, 2006. Inventories at November 30, 2007 were$146.4 million, an increase of $258,000 from November 30, 2006. Inventoryturnover improved to 2.4 times at November 30, 2007, compared to two times atNovember 30, 2006. Shareholders’ equity increased $47.2million to $562.9 million at November 30, 2007, compared to November 30, 2006. I will now it over to Gerry foradditional comments and questions. Gerald J. Rubin: Thank you, Tom. I would like now to turn over the conferencefor questions, Operator.

(Operator Instructions) Our first question comes fromKathleen Reed with Stanford Financial. Kathleen M. Reed -Stanford Group Company: Good morning. First, can you just clarify your revisedearnings guidance? The $1.70 to $1.80, does that include or exclude the $0.24gain from the Hong Kong tax settlement that you booked in you 2Q? Thomas J. Benson: The $1.70 to $1.80, it excludes the Hong Kong taxsettlement, it excludes the gain on the sale of the land, and it excludes theimpairment. Kathleen M. Reed -Stanford Group Company: So that’s a clean number -- that excludes everything? Thomas J. Benson: Yes. Kathleen M. Reed -Stanford Group Company: Your previous $1.90 to $2.10 guidance though, I did notthink that included -- I thought that included the $0.24 gain. Thomas J. Benson: The $1.90 to $2.10 did include the $0.24 gain. That was thegain on the taxes. Kathleen M. Reed -Stanford Group Company: So the $1.85 to $1.95 number that you put in your pressrelease, that reflects the charges, that reflects all charges -- is thatcorrect? Thomas J. Benson: The $1.85 to $1.95 that’s in our press release includes thetax gain and the impairment and the gain on the sale of the land. If you wantto take those three items out, it’s approximately $0.16. Kathleen M. Reed -Stanford Group Company: Okay, so then we get to the clean $1.70 to $1.80. Thomas J. Benson: Right, so $1.85 to $1.95 minus the $0.16 is approximately$1.70 to $1.80. Kathleen M. Reed -Stanford Group Company: Okay, great, thanks. And then also, can you comment on theretail environment and what you are seeing overall? It’s a challengingenvironment for the personal care space but it doesn’t seem for your OXObusiness, and I just wondered if you could talk about what’s really changed orworsened since your October call and what -- I know you commented in yourprepared remarks and your press release that you think it’s going to be toughfor the first half of the year and is that both businesses or particularlypersonal care? If you can just give us some more information there. Gerald J. Rubin: Well, in the OXO division, they had increases geographicallybecause of us taking over the sales in the U.K. and in Japan. In the personalcare area, we have dropped a lot of SKUs that we thought were not profitable.As Tom told you in his comments, without the Belson division, we actuallyincreased our gross profit which has been decreasing for many, many quarters bya half a percent, and that’s because we are cleaning up and getting rid of alot of SKUs that just are not profitable for us and that was partially had todo with some of the sales decrease. I would say that our business is competitive but it is alsovery steady. We have not lost any market share based on the last report that wegot, so we are looking forward to a better year coming up because of a lot ofthe new products that we have. As you all know, we do show at our major show which is inMarch in Chicago and those of you that can come by, I’d appreciate if you cancome by, you can see all our new products and talk to us and even get a feelfor the business at that time. Kathleen M. Reed -Stanford Group Company: Was it meaningful the last business, or the switch by either-- and if you can clarify if that’s one customer or you are seeing the trend onthe professional side of appliances to private label. Is that just an isolatedincident or is that a trend that is continuing? Thomas J. Benson: That’s basically an isolated incident. On the positive side,our international business, Latin America and Europe, actually has increased.We didn’t break that out for you but those were positives. We had increases inthose areas but to your question about the private label customer, no, that’sone isolated incident, customer. Kathleen M. Reed -Stanford Group Company: And then just finally, can you comment a little bit on yourthoughts on share repurchase? You have over $100 million of cash on your books.Your stock is down already and even though it’s early in ’08, it was down in’07. If you can just talk about your priorities for cash and maybe sharerepurchase versus acquisition and just your thoughts with your stock down atthis level? Gerald J. Rubin: As I mentioned in my comments, we currently have in excessof $100 million in the bank. We have also paid off $10 million of our long-termdebt, so our long-term debt now instead of $225 million is $215 million. We are looking for acquisitions and we believe that weaccumulate this cash, which is important for an acquisition, which we believethere will be some during the year. We believe we are better off to use thatmoney for acquisitions. But if we don’t have any acquisitions, any majoracquisitions during the coming year, when we talk to you three quarters fromnow or four quarters from now, we’ll have the cash flow from this year whichwill almost pay off our debt of the $215 million, because the company isgenerating a lot of cash. So if we don’t have an acquisition, we could almost be debtfree 12 months from now. But the point that I want to point out to you is thatwe are looking for acquisitions and that’s where we feel the best use of ourmoney is. Kathleen M. Reed -Stanford Group Company: Okay. Thank you.

We’ll take our next question from GaryGiblen with Goldsmith & Harris. GaryGiblen - Goldsmith & Harris: Good morning, Gerry and Tom. Since there were a lot offactors that drove the soft results in personal care, can you kind of parse itout and tell us how much of that was company specific versus the environment?In other words, you have competitive activity, which may be just happen toexist against your brands, and then you have the retailer attitude towardreducing inventories, which is probably universal. But I mean, if you sort outthe total thing, the total degree of softness, how much would you attribute toindustry conditions versus ones particular to Helen of Troy’s brand? Thomas J. Benson: Gary, I would say most of it has certainly contributed tothe economic situation, not to our brand. As I mentioned, our market share hasnot changed. The softness at retail of customers coming through our majorretailers and of course, many of them are public and you get the reports onwhat’s going on in the retail. It has nothing to do with our brands or ourmarketing or our products. But I did tell you that we did drop some non-profitable SKUsand that affected the sales, but we believe that that was a benefit to usbecause we did increase the profit, the gross profit without those items. GaryGiblen - Goldsmith & Harris: And is the competitive activity directed against yourbrands, is that continuing for the next six months? Is that part of why youexpect difficult -- Gerald J. Rubin: You know, it’s always competitive out there. I think it’scompetitive -- I was talking more the next six months of the softness in theeconomic retailer situation more than a competitive situation. The competitivesituation has been there for 30 years and it will continue. It’s just thesoftness in retail right now. GaryGiblen - Goldsmith & Harris: Okay, that’s very helpful. And -- I mean, are the retailersfrightened enough where they are actually reducing replenishment orders of evenbasic items or is it just reducing days on -- well, I guess it’s the same thingbut in other words, is it across the board or is it more on the discretionaryproducts within your PC line? Thomas J. Benson: What’s going on now is that the major retailers want to carryless inventory than they did a year ago. How that affects movement will bedecided later but they all want to have less weeks on hand than they’ve had inthe past. But as far as planogram space and the SKUs that we areselling to retailers, it’s all the same. We haven’t lost any. GaryGiblen - Goldsmith & Harris: Okay. I guess what I’m getting at is the desire to reduceinventory, action to reduce inventory on the part of the retailers, is it moretoward the discretionary end of your spectrum of product -- let’s say a footmassager versus an inexpensive hair dryer, which would be less of adiscretionary item? Those aren’t the best examples but you see -- Gerald J. Rubin: Actually, we haven’t seen any. I think the less inventorythat the retailers want to carry, if they can cut it down, I think is due tothe softness that they are seeing and it has nothing to do with the pricepoints because all our price points are popular price points and it has nothingto do with that. I think it all has to do with store traffic. GaryGiblen - Goldsmith & Harris: Okay, and just this last one for me, in the press release itsays you are going to reevaluate personal care segments product line mix. Sodoes that mean possibly divesting entire brands or is that just the SKUreduction within brands? Gerald J. Rubin: No, it has nothing to do with the brands. It has to do withwhat I mentioned, about getting rid of low profit SKUs so that we canconcentrate on the more profitable SKUs and increase our gross profit. GaryGiblen - Goldsmith & Harris: Okay, understood. Thanks very much.

We’ll take our next question from Doug Lane with Jefferies& Company. Douglas M. Lane -Jefferies & Co.: Good morning, everybody. Can you talk a little bit about howsome of the new initiatives, the new product initiatives, the bigger ones havedone? I think fusion tools on the profession side, the Bed Head, which was thenew license that you got last year, and then any new product activity atBelson? What was the response to the new products this year? Gerald J. Rubin: Well, on the fusion tools, it was our first year out and weare getting distribution and we believe that there is more distribution outthere for us, so it was a good introduction for us for the year, although wehaven’t actually shipped a whole year but the customers who are buying it arehappy with it. On the Bed Head products, we do have good distribution. Theprice points are certainly higher because they are competing with professionalproducts at retail and I would say we did satisfactory. The sales are stableand I think we have built a nice brand with the Bed Head that will go alongwith the Vidal Sassoon and with the Revlon and the Sunbeam Health o Meterbrands that we have. So we are happy that we have that brand. I don’t believe it’s ever going to be as big as the Revlonand the Vidal Sassoon brands but it is a good steady brand and it does fill theniche of professional products at retail under the Bed Head brand. Douglas M. Lane -Jefferies & Co.: Any news on Belson? Have you launched new products there yetor is something imminent? Gerald J. Rubin: I forgot to tell you about Belson. Yes, there’s a lot of newproducts coming out because while we just took over I think in May and theydidn’t have very many new products, if any, in the pipeline and so we havedeveloped a whole new line or products and we are looking for a good year atBelson, increased sales because we have a lot of new products coming out --actually, basically all new lines are coming out and we just had our nationalsales meeting this past week here in El Paso with the Belson group and they areall excited. They saw the new products and they think we are going to have agood year this year. Douglas M. Lane -Jefferies & Co.: On that front, both on the retail and professional side,mostly appliances I’m talking about, how does that work with your retailers?When did decisions get made on the ’09 or calendar ’08 planograms? Is thathappening now? Gerald J. Rubin: It’s happening now and some it does happen later. Some areactually May, June decisions and some are made now. There is no consistencyamong all the major retailers. Douglas M. Lane -Jefferies & Co.: And early read on your shelf space going into next yearversus this year? Gerald J. Rubin: It’s good. We’re happy. Douglas M. Lane -Jefferies & Co.: Okay. What was the specific, as specific as you can get,competitive threat from -- in your categories that you were talking about inyour prepared comments. I think you made the comment, Tom, competitiveexpansion into your categories I think was your -- Thomas J. Benson: There are professional products that have always been inprofessional arena that are now being sold in retail stores. That’s where thecompetitive comes in. Douglas M. Lane -Jefferies & Co.: I see. Okay and I know OXO had a terrific quarter. Can yougive us some characterization of how OXO did just in the United States, kind ofexcluding the international expansion? Gerald J. Rubin: I don’t have that information. Maybe Tom -- he can do it nowor maybe in a few minutes, but that’s been a great acquisition for us. As youall know, we’ve had increased sales, double-digit increased sales and profitwith that division year after year after year, so I don’t think the publicappreciates the OXO company that we currently own, of what a good company andwhat a good brand and what good distribution they have. Thomas J. Benson: Doug, it was up double digits in the U.S. for the ninemonths. Douglas M. Lane - Jefferies& Co.: And for the quarter, was it still up? Thomas J. Benson: Yes, it was but let me look and -- yes, for the quarter, itwas up double digits also. Douglas M. Lane -Jefferies & Co.: Wow, so that continues strong. Thomas J. Benson: We did have -- we had an introduction of our pop containers,which is a dry food storage container, so as was mentioned, we continue tobring out new products and geographic expansion. So any time you launch newproducts, you get initial fill-in orders that are very positive and they don’trepeat the next year but as we’ve done each year, we have plans to continue toexpand the product line. Douglas M. Lane -Jefferies & Co.: Okay, and on the cost front, you mentioned excluding Belson,your gross margins were up, which is encouraging after the first half of theyear. What is the outlook for where you are today on fiscal ’09? Can yousustain that? I mean, assuming that you can get the Belson cost situationrighted, if you will, ex that, do we still look for gross margins to be up in’09? How is the cost outlook from where you stand today? Gerald J. Rubin: Well, it’s always a challenge. Although we haven’t receivedany major cost increases, we believe that over the next 12 months, we will begetting price increases and it’s our job and challenge to increase our pricesand innovate to bring in new products where we can absorb the price increaseand that’s what we’ve been telling you for -- certainly for years and years, isthat you can make more money on new products than you can on existing productsbecause you can price it going in on what your costs are versus pricing it andthen getting price increases. But price increases is just something we live and we, to thebest of our ability, try to pass them on to the retailers. Douglas M. Lane -Jefferies & Co.: Okay, so lastly, I know you had a cautious tone about theretail environment in the first half of next year, understandably so. But fromyour planning standpoint, I know you didn’t give guidance in ’09 but with themargin situation improving and the new product activity, are you looking for growthin ’09 over ’08, even with the lousy environment? Gerald J. Rubin: You know, we did not come out with next year’s projection.We just wanted to finish this year because we only have nine months but I cantell you internally we are looking for increased profit and sales for nextyear, yes. We are not looking for any decrease because of all the things thatwe have going. So the number that we have just given you for our estimate forthis year, we don’t have a number exactly to give you for next year but we areoptimistic that when we do give you the number it’s going to be higher thanthis current year. Douglas M. Lane -Jefferies & Co.: Thank you.

Our next question comes from Mimi Noel with Sidoti &Company. Mimi Noel - Sidoti& Company: Most of my questions have been answered but I did want toask about sales at retail. As you see it, do you see retail merchandiser beingpreemptive in their inventory reductions or are they responding to a lower rateof consumption either products, your products in particular or just thecategories? Gerald J. Rubin: Well, you all would know more about that. I mean, you doread the reports from all the retailers. And I think a lot of it is what thepress puts out. I just saw this morning some brokerage firm says that therecession is coming, so I guess that mentally affects the consumers and I guessthe retail stores to be a little bit more cautious. What really will happen will be decided I guess during thenext six months or year, whether the country is in recession or whether peoplebuy less. There’s so many factors -- the price of oil, but the inventory andthe sales are just basically based on take out from the retail stores. If theyhave more traffic, they are going to sell more product. I don’t believe thatour business is changing because of competitive situations. It’s more becauseof what’s happening at retail. If more retail -- the more consumers will go to the stores,we will sell more product and I am sure they will also and I think that’s whatthey are all looking forward to. Mimi Noel - Sidoti& Company: Okay, and just one more question and a follow-up regardingyour commentary on share repurchases versus acquisitions. Can you provide alittle commentary on the acquisition landscape? Gerald J. Rubin: Well, we are looking. We think there are acquisitions outthere and we believe -- that are currently being looked at and we believe thatthere will be more in the coming years, so we think that cash will be king andwe are accumulating our money and as I mentioned, if we don’t have anacquisition the next year, we probably have enough money just to pay up all thedebt and be a debt-free company after that. But we are aggressively looking foracquisitions and if you all know of any, those of you that are listening onthis conference call, we’re more than happy to talk to you about acquisitions. Mimi Noel - Sidoti& Company: Okay. A final question; I don’t know if it was Tom or you,Gerry, that mentioned but a reference to OXO as taking over the U.K. and Japan,or you taking over the OXO business in the U.K. and Japan -- I’m not really --that’s a little confusing to me. What does that mean? Gerald J. Rubin: Well, we had distributors in both of those countries and sowe had mentioned this prior, we did take over the distribution. We run itthrough our own sales organizations now. Mimi Noel - Sidoti& Company: Okay. When does that anniversary? Thomas J. Benson: That will anniversary at the beginning of next year. Mimi Noel - Sidoti& Company: Fiscal ’09 -- okay. All right. Thank you for your help.

We’ll take our next question from JohnHarloe with Barrow Hanley. JohnHarloe - Barrow Hanley: Let me see if I understand this right -- did you buy thisU.K. and Japanese distributor during this quarter? Thomas J. Benson: No, we did not buy them during this quarter. We converted itover early in the beginning of this year. So this has been going on all year,all fiscal year. JohnHarloe - Barrow Hanley: So what would be the pick-up in sales year over year fromthat merge in your U.K. and Japanese distribution into yours? Thomas J. Benson: We actually don’t split it out but as I had mentionedearlier, the U.S. is up double digits and so at least probably 75% of the gainis coming in the U.S. and the rest would be coming from the U.K. and Japan. JohnHarloe - Barrow Hanley: Would you have a rough cut estimate of what the sales losswould be of the SKUs that you discontinued? Thomas J. Benson: Without Belson, we’d be down $20 million. Gerald J. Rubin: Yeah, it was -- JohnHarloe - Barrow Hanley: So you’re saying that you voluntarily killed SKUs thatreduced your sales by $20 million in this quarter? Gerald J. Rubin: Yes, but we didn’t -- the answer is yes but it’s made up bythe other products also, because our sales were only own $3 million. JohnHarloe - Barrow Hanley: Well, if you exclude Belson’s acquisition, you are down morethan that, I think. Gerald J. Rubin: I don’t have those numbers. I think Tom -- do you want tocall and maybe Tom will get you all the breakdown. Thomas J. Benson: No, I think you can figure it out. We’ve given the personalcare sales and we’ve told you what component of that is Belson and also in ourQ, we do core and non-core information. JohnHarloe - Barrow Hanley: Okay. Is the Q out or is that -- Gerald J. Rubin: It will be going out later today. JohnHarloe - Barrow Hanley: Thanks a lot.

We’ll take our next question from SteveFriedman with Wachovia Securities. SteveFriedman - Wachovia Securities: Nice quarter, in view of the environment. I think in yourlast call -- and most of my questions have been answered also but in your lastconference call, the quarter had ended. You had given a little bit of a guideon how the sales were going for the quarter we are in right now, like Decemberand part of January. How did you see those come in, in the environment we’rein? Gerald J. Rubin: We’re certainly just at the first week in January but itlooks like somewhat, we still have another almost two months to go but it willbe somewhat like the fourth quarter of last year. SteveFriedman - Wachovia Securities: Going forward, OXO I presume has performed every bit as wellif not better than you had hoped. Is that, along with Bed Head, complementingyour Revlon and Vidal Sassoon lines? Would you consider that the main thrust ofyour areas of growth going forward, both for margins, bottom line and growth? Gerald J. Rubin: Well, I think it’s all our brands. Certainly OXO is in thehousewares area. In the personal care, the brands that we do have, the BedHead, the Revlon, the Vidal, Health o Meter, Dr. Scholl’s, are doing wellworldwide. As I mentioned, we did have increased sales in South America and inEurope. I think they are all growth drivers for us, actually. SteveFriedman - Wachovia Securities: Has the Bed Head line met your expectations? Gerald J. Rubin: I mentioned that it was satisfactory. It didn’t doexceptional but it did what we thought it would do. It’s satisfactory and it’sactually -- I can’t give you all the numbers but it’s a good base. We have gooddistribution and we are growing on that base. We are adding new products fornext year so we wouldn’t be adding new products in the Bed Head line if itwasn’t satisfactory. There are a lot of new products coming out for next year. SteveFriedman - Wachovia Securities: All right, and then one final question, and you’ve touchedon this partially but maybe I could go back to it; with the book value at$18.33 approximately, which is about 80% of the -- or the market value is about80% of the book right now and your PE trading at, depending on which estimateswe want to use, the trading or Ford estimates, maybe at 10-year lows in theprice earning multiple of seven or eight times earnings. Do you really feelthat going forward, you can find an acquisition more attractive than Helen ofTroy stock? Gerald J. Rubin: As I mentioned in my comments, we’re going to give it a goodshot. We’re going to sure try this year to get what I call the big acquisition.If we don’t, we’ll just have a couple hundred million dollars cash in the bankand then management and the board can decide what direction they want to take. I don’t think people give us the benefit of the way thecompany is run. I’ve seen some of the press releases that came out and they arekind of negative but if you just analyze the business, we made $0.81 for thequarter versus $0.70. We made $1.44 versus $1.25 for the nine months and Ithink people should look at that and then look at our terrific cash flowbecause in order for us to grow the business, we don’t have to build anymorewarehouses or retail stores, so we do have a good cash flow and we have a --you know, in all the things that we do and our interest expense certainly willdrop next year because we’ll have more cash that will be getting us interest ifwe don’t buy anything. So we are very optimistic that next year is going to be a goodyear for us and if we get that acquisition, it will even be better. SteveFriedman - Wachovia Securities: Along with that, you wouldn’t have the same digestionsituation as you had with new warehouses and so forth? Would a sizableacquisition be easily digested, I would presume, with -- Gerald J. Rubin: Well, you know, I don’t have the acquisition to tell youwhat it’s all about but certainly a big acquisition would have its ownmanagement and warehousing and distribution and marketing. Let’s see what comesalong. No, there wouldn’t be any of the -- the things that we’ve done becausewe merged all our warehouses together when we bought the OXO company, but let’ssee what happens, Steve. SteveFriedman - Wachovia Securities: All right. Thank you very much.

Our next question comes from Scott Greeder with ScopiaCapital. Scott Greeder -Scopia Capital: Just had a quick question on the fourth quarter guidance; inyour numbers, how much of an effect are you baking in for the foreign currencycharge you are going to take in the fourth quarter? Thomas J. Benson: We’re baking in a negative effect of closing our hedges outof about $1.5 million. Scott Greeder -Scopia Capital: Okay, so without that, I think that’s what, an additional$0.05, your guidance really is -- you are guiding to $0.30 to $0.40 for thefourth quarter, ex that item? Thomas J. Benson: Our guidance for the fourth quarter including that item is$0.25 to $0.35 now, so $1.5 million would be about another $0.05. Scott Greeder -Scopia Capital: Okay. Thanks, that’s all I had.

We have a follow-up question from Kathleen Reed. Kathleen M. Reed -Stanford Group Company: Thanks. Just quickly, can you tell us if Belson, $10.5million in sales, that seems like a real strong number for me, if you are stillon track for $20 million to $30 million for the 10 months or is Belson do youthink doing a little bit better than you thought? Gerald J. Rubin: I think we surpassed the numbers that we did put out. Youdid see the quarterly sales and you can multiply that by four and that’sprobably what we are looking at for next year, fiscal year. Thomas J. Benson: Since May, we’ve had $20 million of sales in Belson alreadyso we have three months left for the rest of the year and so we are expectingit to be closer to $30 million for this portion of the year we owned it, whichwould have only been 10 months. Robert D. Spear: And our original guidance was $20 million to $30 million. Kathleen M. Reed -Stanford Group Company: Right. Okay, great and then lastly, any guidance you canhelp us with on the tax rate for full year or next year? The 8%, is thatsomething we should use or 10 -- Thomas J. Benson: I think what we’ve said is the 10% to 12% is a good rate touse on an ongoing, longer term basis and when you review the Q, we’ve donereconciliations for the quarter and for the nine months and it will show thatthe nine months are just over 10%, without some of these what I would call theitems we don’t expect to occur every year. Kathleen M. Reed -Stanford Group Company: Okay, and that, what you just said, that excludes theone-time items? Thomas J. Benson: I’m sorry? Kathleen M. Reed -Stanford Group Company: The 10 to 12 excludes the one-time items? Thomas J. Benson: The 10 to 12 excludes the one-time items, yes. Kathleen M. Reed -Stanford Group Company: Okay, and then just lastly, your last quarter call, youmentioned there were some IRS tax outstanding issues and I just wondered if youhad any update on any of those. Thomas J. Benson: We still have some years under audit with the IRS andthere’s been no meaningful changes during the quarter. Kathleen M. Reed -Stanford Group Company: Thank you.

We’ll take a follow-up question from GaryGiblen. GaryGiblen - Goldsmith & Harris: On the acquisition front, do you have any preference forhousewares versus personal care, or is it all of equal interest? Gerald J. Rubin: Actually, it’s of equal interest -- housewares, personalcare, that whole category that we -- what we consider housewares. GaryGiblen - Goldsmith & Harris: Okay, great and then I had just one inventory question; yourinventory looked good in the sense of being in line with sales, but on theother hand you have now anniversaried the duplicate inventory from last yeardue to the distribution center situation, so are you happy with where inventoryis now? Gerald J. Rubin: You know, as we mentioned, our inventory is now 2.4 turns ayear versus 2 turns a year and so yes, we are happy that it’s gone to 2.4 turnsa year. And that includes all the Belson acquisition also in those turns. GaryGiblen - Goldsmith & Harris: Okay. Do the retailer actions to reduce inventory basicallyadd inventory on your end or are you able to adjust for that? Gerald J. Rubin: No, I think 2.4 turns is sufficient for us to take care ofthe retailers. GaryGiblen - Goldsmith & Harris: Okay, good. Thanks, Gerry.

At this time, there are no further questions. I will turnthe conference back to Gerald Rubin to conclude. Gerald J. Rubin: Thank you all for participating in our third quarterconference call and I look forward to talking to you with the year-end results.Thank you again.

Ladies and gentlemen, if you wish to access the replay forthis call, you may do so by dialing 888-203-1112, with replay passcode 1624504.This concludes our conference call for today. Thank you for participating andhave a nice day. All parties may disconnect.