Sally Beauty Holdings, Inc. Reports Strong Fourth Quarter and Full Year Results

  Sally Beauty Holdings, Inc. Reports Strong Fourth Quarter and Full Year
  Results

  *Net sales in 4Q12 of $883 million and FY2012 of over $3.5 billion
  *Same store sales growth in 4Q12 and FY2012; 4.3% and 6.4%, respectively
  *4Q12 GAAP and adjusted diluted earnings per share of $0.35 and $0.39^(1),
    respectively
  *FY2012 consolidated gross margin expansion of 70 basis points
  *FY2012 GAAP and adjusted diluted earnings per share of $1.24 and
    $1.42^(1), respectively
  *FY2012 GAAP net earnings of $233.1 and adjusted net earnings of $267.2
    million
  *FY2012 Adjusted EBITDA of $591 million, up 17.6% over FY2011

Business Wire

DENTON, Texas -- November 15, 2012

Sally Beauty Holdings, Inc. (NYSE: SBH) (the “Company”) today announced strong
financial results for the fourth quarter and fiscal year ended September 30,
2012. The Company will hold a conference call today at 10:00 a.m. (Central) to
discuss these results and its business.

“Sally Beauty Holdings had another very strong year, delivering record results
in both our businesses,” stated Gary Winterhalter, Chairman, President and
Chief Executive Officer. “For the fiscal year, consolidated sales grew 8% to
reach over $3.5 billion with same store sales growth of 6.4% and gross margin
expansion of 70 basis points. Adjusted EBITDA grew 18% to reach $591 million
with cash flow from operations of $298 million. During the year, we refinanced
all of our long-term debt and repurchased $200 million of our stock. We are
very pleased with our 2012 performance and are quite optimistic that fiscal
year 2013 is off to a good start.”

Fiscal 2012 Fourth Quarter and Full Year 2012 Financial Highlights

Net Sales: For the fiscal 2012 fourth quarter, consolidated net sales were
$882.6 million, an increase of 5.4% from the fiscal 2011 fourth quarter. The
fiscal 2012 fourth quarter sales increase is attributed to same stores sales
growth, the addition of new stores and acquisitions. The unfavorable impact
from changes in foreign currency exchange rates in the fiscal 2012 fourth
quarter was $8.2 million or 1.0% of sales on a consolidated basis.
Consolidated same store sales growth in the fiscal 2012 fourth quarter was
4.3% compared to 5.6% in the fiscal 2011 fourth quarter.

Consolidated net sales for fiscal year 2012 were $3.5 billion, an increase of
7.8% from fiscal year 2011, and include an unfavorable impact from foreign
currency exchange of $26.3 million, or 0.7% of sales. Fiscal 2012 sales
increased primarily due to same stores sales growth, the addition of new
stores and acquisitions. Consolidated same store sales growth in fiscal year
2012 was 6.4% compared to 6.1% in fiscal year 2011.

^(1) See supplemental schedule C for a detailed reconciliation of adjusting
items.

Gross Profit: Consolidated gross profit for the fiscal 2012 fourth quarter was
$440.2 million, an increase of 6.6% over gross profit of $412.9 million for
the fiscal 2011 fourth quarter. Gross profit as a percentage of sales was
49.9%, a 60 basis point improvement from the fiscal 2011 fourth quarter.

For fiscal year 2012, consolidated gross profit was $1.7 billion, an increase
of 9.3% over fiscal 2011 gross profit. Gross profit as a percentage of sales
was 49.5%, a 70 basis point improvement from fiscal year 2011.

Gross profit margin improved in the fiscal 2012 fourth quarter and full year
due to gross profit margin expansion in both business segments driven by
favorable changes in product and customer mix and low cost sourcing
initiatives.

Selling, General and Administrative Expenses: For the fiscal 2012 fourth
quarter, consolidated selling, general and administrative (SG&A) expenses,
including unallocated corporate expenses and share-based compensation, were
$305.5 million, or 34.6% of sales, an 80 basis point increase from the fiscal
2011 fourth quarter metric of 33.8% of sales and total SG&A expenses of $283.1
million.

Fiscal 2012 fourth quarter SG&A expenses increased $22.4 million in part due
to expenses associated with the opening of new stores and acquisitions such as
rent, occupancy, and payroll expenses. Also included in the fiscal 2012 fourth
quarter SG&A expenses is a $10.2 million charge related to a potential
settlement of litigation.

For fiscal year 2012, SG&A expenses, including $112.9 million of unallocated
corporate expenses and share-based compensation, were $1.2 billion, or 33.5%
of sales, compared to fiscal year 2011 metric of 33.2% of sales and total SG&A
expenses of $1.1 billion. Fiscal year 2011 SG&A expenses reflect a $27.0
million benefit from a litigation settlement and non-recurring charges of $5.7
million.

Fiscal year 2012 SG&A expenses increased $92.8 million due to the continued
investments in the Company’s loyalty programs, international expansion,
professional fees, and a $10.2 million charge related to a potential
settlement of litigation. In addition, expenses associated with the opening of
new stores and acquisitions such as rent, occupancy, and payroll expenses
contributed to the year over year expense increase.

Note: SG&A expenses include unallocated corporate expenses, as detailed in the
Company’s segment information on Schedule B.

Interest Expense: Interest expense, net of interest income, for the fiscal
2012 fourth quarter was $25.2 million, down $2.3 million from the fiscal 2011
fourth quarter of $27.5 million.

For fiscal year 2012, interest expense, net of interest income, was $138.4
million, up $25.9 million from the fiscal year 2011 interest expense of $112.5
million. Interest expense in fiscal year 2012 includes $43.2 million of
charges in connection with the Company’s debt refinancing initiatives.
Detailed explanations of these charges are explained in the Company’s non-GAAP
financial measures reconciliations Schedule C.

Provision for Income Taxes: For the fiscal 2012 fourth quarter, income taxes
were $27.1 million. The effective tax rate for the fiscal 2012 fourth quarter
was 29.2% compared to 37.3% for the fiscal 2011 fourth quarter. In the fiscal
2012 fourth quarter, a limited restructuring occurred for U.S. income tax
purposes. This tax planning opportunity resulted in the recognition of $10.3
million in income tax benefits.

For fiscal year 2012, income taxes were $127.9 million versus $122.2 million
in fiscal 2011. The Company’s effective tax rate for fiscal year 2012 was
35.4% compared to 36.4% for fiscal 2011.

Net Earnings and Diluted Net Earnings Per Share (EPS) ^ (2): For the fiscal
2012 fourth quarter, GAAP net earnings grew 20.7% to $65.6 million or $0.35
per diluted earnings per share over net earnings of $54.4 million, or $0.29
per diluted earnings per share. Adjusted net earnings for the fiscal 2012
fourth quarter grew 32.7% to $72.2 million or $0.39 per diluted earnings per
share over net earnings of $54.4 million or $0.29 per diluted earnings per
share. Adjusted net earnings for the fiscal 2012 fourth quarter excludes a
$10.2 million charge related to a potential settlement of litigation.

For fiscal year 2012, GAAP net earnings grew 9.0% to $233.1 million or $1.24
per diluted earnings per share over GAAP net earnings of $213.7 million, or
$1.14 per diluted earnings per share.

For fiscal year 2012, adjusted net earnings grew 33.4% to $267.2 million, or
$1.42 per diluted earnings per share. Fiscal year 2012 adjusted net earnings
includes adjustments of $34.2 million, net of tax, and are described in detail
on Schedule C. Fiscal year 2011 adjusted net earnings were $200.3 million or
$1.07 per diluted earnings per share after adjusting for a credit of $13.4
million, after-tax, from a litigation settlement, net of non-recurring
expenses.

Adjusted (Non-GAAP) EBITDA^(2): Adjusted EBITDA for the fiscal 2012 fourth
quarter was $148.0 million an increase of 11.6% from $132.6 million for the
fiscal 2011 fourth quarter.

Fiscal year 2012 Adjusted EBITDA was $591.1 million, an increase of 17.6% from
$502.5 million in fiscal 2011.

^(2)A detailed table reconciling 2012 and 2011 GAAP net earnings to adjusted
net earnings, adjusted EPS and adjusted EBITDA is included in Supplemental
Schedule C.

Financial Position, Capital Expenditures and Working Capital: Cash and cash
equivalents as of September 30, 2012, were $240.2 million. The Company’s
asset-based loan (ABL) revolving credit facility ended fiscal year 2012 with a
zero balance. Borrowing capacity on the ABL facility was approximately $377.8
million at the end of fiscalyear 2012. The Company’s debt, excluding capital
leases, totaled $1.6 billion as of September 30, 2012. Net cash provided by
operating activities for fiscal year 2012 was $297.6 million.

The Company’s Board of Directors approved a new stock repurchase program on
August 27, 2012 authorizing the Company to repurchase up to $300 million of
its common stock over an 18-month period beginning October 1, 2012. As of
November 14, 2012, the Company had purchased approximately $40 million under
this program.

On September 5, 2012, the Company closed an underwritten public offering of
$150 million aggregate principal amount of its 5.75% Senior Notes due 2022.
The net proceeds from this offering will be used for general corporate
purposes.

For the full year ended September 30, 2012, the Company’s capital
expenditures, excluding acquisitions, totaled $69.1 million.

Working capital (current assets less current liabilities) increased $267.4
million to $686.5 million at September 30, 2012, compared to $419.1 million at
September 30, 2011. The ratio of current assets to current liabilities was
2.44 to 1.00 at September 30, 2012, compared to 1.91 to 1.00 at September 30,
2011.

Inventory as of September 30, 2012 was $735.4 million, an increase of $70.1
million or growth of 10.5% from September 30, 2011 inventory. This increase is
primarily due to sales growth from existing stores, and additional inventory
from new store openings and acquisitions.

Business Segment Results:

Sally Beauty Supply

Fiscal 2012 Fourth Quarter Results for Sally Beauty Supply

  *Sales of $554.7 million, up 6.0% from $523.4 million in the fiscal 2011
    fourth quarter. The unfavorable impact of foreign currency exchange on net
    sales was $7.6 million, or 1.4% of sales.
  *Same store sales growth of 3.8% versus 6.4% in the fiscal 2011 fourth
    quarter.
  *Gross margin of 54.8%, a 60 basis point improvement from 54.2% in the
    fiscal 2011 fourth quarter.
  *Segment operating earnings of $99.5 million, down 0.7% from $100.2 million
    in the fiscal 2011 fourth quarter. Segment operating margins decreased 120
    basis points to 17.9% of sales from 19.1% in the fiscal 2011 fourth
    quarter. In the fiscal 2012 fourth quarter, segment operating results were
    negatively impacted by a $10.2 million charge related to a potential
    settlement of litigation.

Sales growth in the fiscal 2012 fourth quarter was driven by same store sales,
new store openings and acquisitions. Partially offsetting sales growth was an
unfavorable impact of foreign currency exchange of $7.6 million, or 1.4% of
sales. Gross profit margin expansion of 60 basis points resulted from a
favorable shift in product and customer mix and low-cost sourcing initiatives.

Fiscal 2012 Results for Sally Beauty Supply

  *Sales of $2.2 billion, up 9.2% from fiscal year 2011. The unfavorable
    impact of foreign currency exchange was $22.6 million or 1.0% of sales on
    a full year basis.
  *Same store sales growth of 6.5% versus 6.3% in fiscal year 2011.
  *Sales from international locations (Mexico, Canada, the United Kingdom,
    Ireland, Belgium, the Netherlands,  France, Germany, Spain and Chile)
    represented 22% of segment sales versus 21% in fiscal 2011.
  *Gross margin of 54.6%, up from 54.0% in fiscal 2011, a 60 basis point
    improvement.
  *Segment operating earnings of $429.5 million, up 12.7% from $381.0 million
    in fiscal 2011. Segment operating margins increased 60 basis points to
    19.5% of sales from 18.9% in fiscal 2011. In fiscal year 2012, segments
    operating results were negatively impacted by a $10.2 million charge
    related to a potential settlement of litigation.
  *Net store base increased by 151 or 4.8% for total store count of 3,309.
    This increase is from organic store growth of 4.1% and 0.7% from
    acquisitions. Store growth in the North American business was 4.2% while
    store growth in the International business was 8.9%.

Sales growth in fiscal 2012 was driven by same store sales, new store openings
and acquisitions; unfavorable foreign currency exchange partially offset sales
growth. Gross profit margin improvement resulted from a favorable shift in
product and customer mix and low-cost sourcing initiatives.

Beauty Systems Group

Fiscal 2012 Fourth Quarter Results for Beauty Systems Group

  *Sales of $327.8 million, up 4.5% from $313.8 million in fiscal 2011. The
    impact of unfavorable foreign currency exchange on net sales was $0.7
    million, or 0.2% of sales.
  *Same store sales growth of 5.5% versus 3.5% in the fiscal 2011 fourth
    quarter.
  *Gross margin of 41.6%, up 30 basis points from 41.3% in the fiscal 2011
    fourth quarter.
  *Segment operating earnings of $47.1 million, up 19.9% from $39.3 million
    in the fiscal 2011 fourth quarter.
  *Segment operating margins increased by 190 basis points to 14.4% of sales
    from 12.5% in the fiscal 2011 fourth quarter.

Sales growth for Beauty Systems Group was driven by growth in same store sales
and new store openings. Segment earnings growth is primarily due to
improvement in gross profit and SG&A leverage.

Fiscal 2012 Results for Beauty Systems Group

  *Sales of $1.33 billion, up 5.4% from $1.26 billion in fiscal 2011. The
    impact of unfavorable foreign currency exchange on net sales was $3.7
    million, or 0.3% of sales.
  *Same store sales growth of 6.1% versus 5.5% in fiscal 2011.
  *Gross margin of 41.0%, up from 40.3% in fiscal 2011, a 70 basis point
    improvement.
  *Segment operating earnings of $182.7 million, up 11.0% from $164.7 million
    in fiscal 2011.
  *Segment operating margins increased to 13.8% of sales from 13.1% in fiscal
    2011, a 70 basis point improvement. In fiscal year 2011, segment operating
    margin was positively impacted by a favorable credit of $19.0 million from
    a litigation settlement, net of non-recurring expenses.
  *Net store base increased by 39 or 3.4% for total store count of 1,190,
    including 159 franchised locations. Store growth is from new store
    openings.
  *Total BSG distributor sales consultants at the end of fiscal 2012 were
    1,044 versus 1,116 at the end of fiscal 2011.

Sales growth in fiscal year 2012 for the Beauty Systems Group was primarily
due to same store sales growth and new store openings. Gross margin expansion
was primarily due to improved sales and product mix, and expansion in new and
existing territories. Segment earnings growth is primarily due to sales
growth, gross profit improvement and synergies from acquisitions.

Fiscal Year 2013 Outlook

  *Fiscal year 2013 consolidated same store sales growth is expected to be in
    the range of 4% to 5%. Same store sales growth for the first half of
    fiscal year 2013 is expected to trend towards the low end of this range
    due to the unusually strong same store sales growth in the first half of
    fiscal year 2012.
  *Consolidated gross profit margin expansion is expected to be in the range
    of 50 bps to 60 bps.
  *Fiscal year 2013 unallocated corporate expenses, including approximately
    $19 million in share-based compensation, are expected to be in the range
    of $115 million to $125 million.
  *Consolidated SG&A as a percent of sales is expected to be flat or slightly
    lower than fiscal year 2012 metric of 33.5%.
  *The effective tax rate for fiscal year 2013 is expected to be in the range
    of 36.5% to 37.5%.
  *Capital expenditures for fiscal year 2013 are projected to be in the range
    of $85 million to $90 million, excluding acquisitions and including the
    U.K. warehouse.

Conference Call and Where You Can Find Additional Information

As previously announced, at approximately 10:00 a.m. (Central) today the
Company will hold a conference call and audio webcast to discuss its financial
results and its business. During the conference call, the Company may discuss
and answer one or more questions concerning business and financial matters and
trends affecting the Company. The Company’s responses to these questions, as
well as other matters discussed during the conference call, may contain or
constitute material information that has not been previously disclosed.
Simultaneous to the conference call, an audio webcast of the call will be
available via a link on the Company’s website,
investor.sallybeautyholdings.com. The conference call can be accessed by
dialing 800-288-8960 (International: 612-332-0107). The teleconference will be
held in a “listen-only” mode for all participants other than the Company’s
current sell-side and buy-side investment professionals. If you are unable to
listen in this conference call, the replay will be available at about 12:00
p.m. (Central) November 15, 2012 through November 22, 2012 by dialing
1-800-475-6701 or if international dial 320-365-3844 and reference the
conference ID number 269213. Also, a website replay will be available on
investor.sallybeautyholdings.com.

About Sally Beauty Holdings, Inc.

Sally Beauty Holdings, Inc. (NYSE: SBH) is an international specialty retailer
and distributor of professional beauty supplies with revenues of $3.5 billion
annually. Through the Sally Beauty Supply and Beauty Systems Group businesses,
the Company sells and distributes through 4,500 stores, including
approximately 200 franchised units, throughout the United States, the United
Kingdom, Belgium, Chile, France, the Netherlands, Canada, Puerto Rico, Mexico,
Ireland, Spain and Germany. Sally Beauty Supply stores offer more than 6,000
products for hair, skin, and nails through professional lines such as Clairol,
L’Oreal, Wella and Conair, as well as an extensive selection of proprietary
merchandise. Beauty Systems Group stores, branded as CosmoProf or Armstrong
McCall stores, along with its outside sales consultants, sell up to 9,800
professionally branded products including Paul Mitchell, Wella, Sebastian,
Goldwell, Joico, and Aquage which are targeted exclusively for professional
and salon use and resale to their customers. For more information about Sally
Beauty Holdings, Inc., please visit sallybeautyholdings.com.

            Cautionary Notice Regarding Forward-Looking Statements

Statements in this news release and the schedules hereto which are not purely
historical facts or which depend upon future events may be forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,”
“project,” “target,” “can,” “could,” “may,” “should,” “will,” “would,” or
similar expressions may also identify such forward-looking statements.

Readers are cautioned not to place undue reliance on forward-looking
statements as such statements speak only as of the date they were made. Any
forward-looking statements involve risks and uncertainties that could cause
actual events or results to differ materially from the events or results
described in the forward-looking statements, including, but not limited to,
risks and uncertainties related to: the highly competitive nature of, and the
increasing consolidation of, the beauty products distribution industry;
anticipating changes in consumer preferences and buying trends and managing
our product lines and inventory; potential fluctuation in our same store sales
and quarterly financial performance; our dependence upon manufacturers who may
be unwilling or unable to continue to supply products to us; the possibility
of material interruptions in the supply of beauty supply products by our
manufacturers; products sold by us being found to be defective in labeling or
content; compliance with laws and regulations or becoming subject to
additional or more stringent laws and regulations; product diversion; the
operational and financial performance of our franchise-based business; the
success of our Internet-based business; successfully identifying acquisition
candidates and successfully completing desirable acquisitions; integrating
businesses acquired in the future; opening and operating new stores
profitably; the impact of the health of the economy upon our business; the
success of our cost control plans; protecting our intellectual property
rights, specifically our trademarks; conducting business outside the United
States; disruption in our information technology systems; severe weather,
natural disasters or acts of terrorism; the preparedness of our accounting and
other management systems to meet financial reporting and other requirements
and the upgrade of our financial reporting system; being a holding company,
with no operations of our own, and depending on our subsidiaries for cash; our
substantial indebtedness; the possibility that we may incur substantial
additional debt in the future; restrictions and limitations in the agreements
and instruments governing our debt; generating the significant amount of cash
needed to service all of our debt and refinancing all or a portion of our
indebtedness or obtaining additional financing; changes in interest rates
increasing the cost of servicing our debt; the potential impact on us if the
financial institutions we deal with become impaired; and the
representativeness of our historical consolidated financial information with
respect to our future financial position, results of operations or cash flows.

Additional factors that could cause actual events or results to differ
materially from the events or results described in the forward-looking
statements can be found in our most recent Annual Report on Form 10-K for the
year ended September 30, 2012, as filed with the Securities and Exchange
Commission. Consequently, all forward-looking statements in this release are
qualified by the factors, risks and uncertainties contained therein. We assume
no obligation to publicly update or revise any forward-looking statements.

Note Concerning Non-GAAP Measurement Tools

We have provided detailed explanations of our non-GAAP financial measures in
our Form 8-K filed this morning, which is available on our website.

                                              
Supplemental Schedules
                                                  
Consolidated Statement of Earnings                A
Segment Information                               B
Non-GAAP Financial Measures Reconciliations       C
Store Count and Same Store Sales                  D
Selected Financial Data and Debt                  E

                                                                                       
                                                                                                
                                                                Supplemental Schedule A
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(In thousands, except per share data)
(Unaudited)
                                                                                                
                        Three Months Ended                      Twelve Months Ended
                        September 30,                           September 30,
                  2012         2011        % CHG       2012           2011           % CHG
                                                                                                
Net sales               $ 882,557     $ 837,186     5.4   %     $ 3,523,644     $ 3,269,131     7.8  %
Cost of products sold
and distribution        442,321    424,318   4.2   %    1,780,385    1,674,526   6.3  %
expenses
       Gross profit       440,236       412,868     6.6   %       1,743,259       1,594,605     9.3  %
Selling, general and
administrative            305,469       283,118     7.9   %       1,179,206       1,086,414     8.5  %
expenses ^(1)
Depreciation and        16,906     15,561    8.6   %    64,698       59,722      8.3  %
amortization
       Operating          117,861       114,189     3.2   %       499,355         448,469       11.3 %
       earnings
Interest expense ^(2)   25,172     27,472    -8.4  %    138,412      112,530     23.0 %
       Earnings
       before             92,689        86,717      6.9   %       360,943         335,939       7.4  %
       provision for
       income taxes
Provision for income    27,059     32,362    -16.4 %    127,879      122,214     4.6  %
taxes
     Net earnings    $ 65,630    $ 54,355    20.7  %   $ 233,064     $ 213,725     9.0  %
                                                                                                
Net earnings per
share:
       Basic            $ 0.36        $ 0.30        20.0  %     $ 1.27          $ 1.17          8.5  %
       Diluted          $ 0.35        $ 0.29        20.7  %     $ 1.24          $ 1.14          8.8  %
                                                                                                
Weighted average
shares:
       Basic              179,911       183,619                   183,420         183,020
     Diluted        185,425    189,239             188,610      188,093     
                                                    Basis                                       Basis
                                                    Pt Chg                                      Pt Chg
Comparison as a % of
Net sales
       Sally Beauty
       Supply Segment     54.8    %     54.2    %   60            54.6      %     54.0      %   60
       Gross Profit
       Margin
       BSG Segment
       Gross Profit       41.6    %     41.3    %   30            41.0      %     40.3      %   70
       Margin
       Consolidated
       Gross Profit       49.9    %     49.3    %   60            49.5      %     48.8      %   70
       Margin
       Selling,
       general and        34.6    %     33.8    %   80            33.5      %     33.2      %   30
       administrative
       expenses
       Consolidated
       Operating          13.4    %     13.6    %   (20   )       14.2      %     13.7      %   50
       Profit Margin
       Net Earnings       7.4     %     6.5     %   90            6.6       %     6.5       %   10
       Margin
                                                                                                
Effective Tax Rate        29.2    %     37.3    %   (810  )       35.4      %     36.4      %   (100 )
                                                                               
                                                                                                
                                                                                                
       Selling, general and administrative expenses include share-based compensation of $3.1 million
^(1)   and $2.8 million for the three months ended September 30, 2012 and 2011; and $16.9 million and
       $15.6 million for the twelve months ended September 30, 2012 and 2011, respectively.
                                                                                                
       Interest expense is net of interest income of $0.2 million and $0.3 million for the twelve
       months ended September 30, 2012 and 2011, respectively. For the twelve months ended September
^(2)   30, 2012, interest expense includes losses on extinguishment of debt aggregating $37.8 million
       in connection with the Company's December 2011 redemption of the senior notes due 2014 and
       senior subordinated notes due 2016, and its May 2012 repayment in full of the senior term loan
       B.

                                                                                   
                                                                                             
                                                             Supplemental Schedule B
                                                                                             
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Segment Information
(In thousands)
(Unaudited)
                                                                                             
                      Three Months Ended                     Twelve Months Ended
                      September 30,                          September 30,
                   2012         2011         % CHG    2012           2011           % CHG
       Net sales:
            Sally
            Beauty    $ 554,719     $ 523,367     6.0  %     $ 2,198,468     $ 2,012,407     9.2  %
            Supply
            Beauty
           Systems   327,838    313,819   4.5  %    1,325,176    1,256,724   5.4  %
            Group
       Total net     $ 882,557   $ 837,186   5.4  %   $ 3,523,644   $ 3,269,131   7.8  %
       sales
                                                                                             
       Operating
       earnings:
            Sally
            Beauty    $ 99,497      $ 100,215     -0.7 %     $ 429,520       $ 380,963       12.7 %
            Supply
            ^(1)
            Beauty
           Systems   47,108     39,297    19.9 %    182,699      164,660     11.0 %
            Group
            ^(1)
       Segment
       operating     $ 146,605   $ 139,512   5.1  %   $ 612,219     $ 545,623     12.2 %
       earnings
                                                                                             
       Unallocated
       corporate        (25,694 )     (22,500 )   14.2 %       (96,012   )     (81,594   )   17.7 %
       expenses
       ^(1)(2)
       Share-based      (3,050  )     (2,823  )   8.0  %       (16,852   )     (15,560   )   8.3  %
       compensation
       Interest       (25,172 )   (27,472 )  -8.4 %    (138,412  )   (112,530  )  23.0 %
       expense ^(3)
       Earnings
       before
       provision     $ 92,689    $ 86,717    6.9  %   $ 360,943     $ 335,939     7.4  %
       for income
       taxes
                                                                                             
       Segment
       operating                                  Basis                                      Basis
       profit                                     Pt Chg                                     Pt Chg
       margin:
       Sally Beauty     17.9    %     19.1    %   (120 )       19.5      %     18.9      %   60
       Supply
       Beauty
       Systems          14.4    %     12.5    %   190          13.8      %     13.1      %   70
       Group
       Consolidated
       operating      13.4    %   13.6    %  (20  )    14.2      %   13.7      %  50   
       profit
       margin
                                                                                             
       For the twelve months ended September 30, 2012, the Sally Beauty Supply segment reflects a
       $10.2 million charge resulting from a potential settlement of litigation. For the twelve
       months ended September 30, 2011, consolidated operating earnings reflect a net favorable
^(1)   impact of $21.3 million; including a $27.0 million benefit from a litigation settlement and
       non-recurring charges of $5.7 million. This net benefit of $21.3 million is reflected in the
       BSG segment and in unallocated corporate expenses in the amount of $19.0 million and $2.3
       million, respectively.
                                                                                             
^(2)   Unallocated expenses consist of corporate and shared costs.
                                                                                             
       For the twelve months ended September 30, 2012, interest expense includes losses on
^(3)   extinguishment of debt aggregating $37.8 million in connection with the Company's December
       2011 redemption of the senior notes due 2014 and senior subordinated notes due 2016, and its
       May 2012 repayment in full of the senior term loan B.

                                                                                
                                                                                          
                                                  Supplemental Schedule C
                                                                                          
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Non-GAAP Financial Measures Reconciliations
(In thousands, except per share data)
(Unaudited)
                                                                                          
                        Three Months Ended                    Twelve Months Ended
                        September 30,                         September 30,
                     2012         2011       % CHG     2012         2011         % CHG
       Adjusted
       EBITDA:
       Net earnings     $ 65,630      $ 54,355    20.7  %     $ 233,064     $ 213,725     9.0  %
       (per GAAP)
       Add:
       Depreciation
       and                16,906        15,561    8.6   %       64,698        59,722      8.3  %
       amortization
       Share-based
       compensation       3,050         2,823     8.0   %       16,852        15,560      8.3  %
       ^(1)
       Interest
       expense            25,172        27,472    -8.4  %       138,412       112,530     23.0 %
       ^(2)(3)
       Litigation
       settlements        10,194        -         N/A           10,194        (27,000 )   N/A
       ^(4)
       Non-recurring      -             -         N/A           -             5,749       N/A
       items ^(4)
       Provision for    27,059     32,362   -16.4 %    127,879    122,214   4.6  %
       income taxes
       Adjusted
       EBITDA          $ 148,011   $ 132,573  11.6  %   $ 591,099   $ 502,500   17.6 %
       (Non-GAAP)
                                                                                          
                                                                                          
       Net earnings     $ 65,630      $ 54,355                $ 233,064     $ 213,725
       (per GAAP)
       Add (Less):
       Losses on
       extinguishment     -             -                       37,789        -
       of debt ^(2)
       Interest
       expense on         -             -                       5,149         -
       redeemed debt
       ^(3)
       Amortization
       of deferred        -             -                       229           -
       financing
       costs
       Litigation
       settlements
       and other          10,194        -                       10,194        (21,251 )
       non-recurring
       items, net
       ^(4)
       Tax provision
       for the
       adjustments to   (3,670  )   -                  (19,210 )   7,863     
       net earnings
       ^(5)
       Adjusted net
       earnings,
       excluding       $ 72,154    $ 54,355   32.7  %   $ 267,215   $ 200,337   33.4 %
       non-recurring
       items
       (Non-GAAP)
                                                                                          
       Adjusted net
       earnings per
       share
       (Non-GAAP):
             Basic      $ 0.40        $ 0.30      33.3  %     $ 1.46        $ 1.09        33.9 %
             Diluted    $ 0.39        $ 0.29      34.5  %     $ 1.42        $ 1.07        32.7 %
                                                                                          
       Weighted
       average
       shares:
             Basic        179,911       183,619                 183,420       183,020
             Diluted      185,425       189,239                 188,610       188,093
                                                                                          
       Share-based compensation for the twelve months ended September 30, 2012 and 2011 includes
^(1)   $5.3 million and $5.0 million, respectively, of accelerated expense related to certain
       retirement-eligible employees who are eligible to continue vesting awards upon
       retirement.
                                                                                          
       For the twelve months ended September 30, 2012, interest expense includes losses on
       extinguishment of debt aggregating $37.8 million in connection with the Company's
       December 2011 redemption of the senior notes due 2014 and senior subordinated notes due
^(2)   2016, and its May 2012 repayment in full of the senior term loan B. This amount includes
       a premium paid to redeem the senior notes and the senior subordinated notes, as well as
       unamortized deferred financing costs expensed in connection with the notes redeemed and
       the loan repaid.
                                                                                          
       For the twelve months ended September 30, 2012, interest expense includes interest of
       $5.1 million on the senior notes and senior subordinated notes after November 8, 2011 and
^(3)   until their redemption, as well as interest on the Company's new senior notes due 2019
       issued on that date. This pro-forma adjustment assumes the senior notes and senior
       subordinated notes were redeemed on November 8, 2011.
                                                                                          
       Results for the twelve months ended September 30, 2012, reflect a $10.2 million charge
       resulting from a potential settlement of litigation. Results for the twelve months ended
^(4)   September 30, 2011, reflect a $27.0 million benefit of a litigation settlement and
       non-recurring charges of $5.7 million, resulting in a net favorable impact of $21.3
       million.
                                                                                          
       The tax provisions for the adjustments to net earnings were calculated using an estimated
^(5)   effective tax rate of 36.0% and 37.0% in the twelve months ended September 30, 2012 and
       2011, respectively.

                                                                
                                                                      
                                        Supplemental Schedule D
                                                                      
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Store Count and Same Store Sales
(Unaudited)
                                                                      
                                                                      
                                        As of September 30,          
                                        2012            2011        CHG
                                                                      
       Number of retail stores
       (end of period):
       Sally Beauty Supply:
       Company-operated stores          3,284            3,133        151
       Franchise stores                 25              25          -     
       Total Sally Beauty Supply        3,309            3,158        151
       Beauty Systems Group:
       Company-operated stores          1,031            995          36
       Franchise stores                 159             156         3     
       Total Beauty System Group        1,190           1,151       39    
       Total                            4,499           4,309       190   
                                                                      
       BSG distributor sales
       consultants (end of              1,044            1,116        (72   )
       period) ^(1)
                                                              
                                        2012            2011
       Fourth quarter                                                 Basis Pt
       company-operated same                                          Chg
       store sales growth ^(2)
       Sally Beauty Supply              3.8      %       6.4    %     (260  )
       Beauty Systems Group             5.5      %       3.5    %     200
       Consolidated                     4.3      %       5.6    %     (130  )
                                                                      
       Fiscal year ended September 30                                 Basis Pt
       company-operated same store sales growth ^(2)                  Chg
       Sally Beauty Supply              6.5      %       6.3    %     20
       Beauty Systems Group             6.1      %       5.5    %     60
       Consolidated                     6.4      %       6.1    %     30
                                                                      
                                                                      
^(1)   Includes 356 and 411 distributor sales consultants as reported by our
       franchisees at September 30, 2012 and 2011, respectively.
                                                                      
       Same stores are defined as company-operated stores that have been open
       for at least 14 months as of the last day of a month. Our same store
       sales calculation includes internet-based sales for the periods
^(2)   presented and the impact of store expansions, but does not generally
       include the sales of stores relocated until at least 14 months after
       the relocation. The sales of stores acquired are excluded from our same
       store sales calculation until at least 14 months after the acquisition.

                                                        
                                                              
Supplemental Schedule E
                                                              
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Selected Financial Data and Debt
(In thousands)
(Unaudited)
                                                              
                                          As of September 30,
                                          2012                2011
        Financial
        condition
        information (at
        period end):
        Working capital                   $  686,519          $  419,142
        Cash and cash                        240,220             63,481
        equivalents
        Property and                         202,661             182,489
        equipment, net
        Total assets                         2,065,800           1,728,600
        Total debt,
        including                            1,617,230           1,413,115
        capital leases
        Total
        stockholders'                        ($115,085  )        ($218,982  )
        (deficit)
        equity
                                                        
                                                              
        Debt position excluding
        capital leases (at period         As of September 30,
        end):
                           Interest       2012                2011
                           Rates
                                                              
                           (i) Prime +
        Revolving ABL      1.25-1.75%
        facility           or (ii)        $  -                $  -
                           LIBOR +
                           2.25-2.75%
                           (i) Prime +
        Senior Term        1.25-1.50%
        Loan B             or (ii)           -                   696,856
                           LIBOR +
                           2.25-2.50%
        Senior notes       9.25%             -                   430,000
        due 2014
        Senior
        subordinated       10.50%            -                   275,000
        notes due 2016
        Senior notes       6.875%            750,000             -
        due 2019
        Senior notes       5.75% ^(1)        859,308             -
        due 2022 ^(1)
        Other ^(2)         4.05% to         2,407             4,774      
                           5.79%
        Total debt                        $  1,611,715       $  1,406,630  
                                                        
                                                              
        Debt maturities
        excluding
        capital leases:
        Twelve months
        ending
        September 30,
        2013                              $  1,163
        2014                                 1,147
        2015                                 97
        2016-2019                            -
        Thereafter ^(1)                     1,609,308  
        Total debt                        $  1,611,715  
                                                              
                                                              
                                                              
        Includes unamortized premium of $9.3 million related to notes issued
[(1)]   in September 2012 with an aggregate principal amount of $150.0
        million. The 5.75% interest rate relates to notes in the aggregate
        principal amount of $850.0 million.
                                                              
^(2)    Represents pre-acquisition debt of businesses acquired.

Contact:

Sally Beauty Holdings, Inc.
Karen Fugate, 940-297-3877
Investor Relations