Sally Beauty Holdings, Inc. Announces Fiscal 2013 Second Quarter Results

  Sally Beauty Holdings, Inc. Announces Fiscal 2013 Second Quarter Results

  *Consolidated net sales of $898.2 million, up 1.0%
  *Same store sales decline of 0.8% vs. growth of 9.1% in 2Q12
  *Gross margin expansion of 40 bps to reach 49.5%
  *2Q13 net earnings of $64.9 million with earnings per share of $0.36
  *Repurchased $191.4 million, or 7.0 million shares of stock in 2Q13

Business Wire

DENTON, Texas -- May 02, 2013

Sally Beauty Holdings, Inc. (NYSE: SBH) (the “Company”) today announced
financial results for the fiscal 2013 second quarter. The Company will hold a
conference call today at 10:00 a.m. (Central) to discuss these results and its
business.

“Our fundamental business drivers are solid and we executed well on our
operating initiatives in the second quarter,” stated Gary Winterhalter,
Chairman, President and Chief Executive Officer. “Our financial performance
reflects the difficult comparisons against record growth in certain product
categories in the prior year and lower traffic driven in part by two fewer
days compared to the prior year quarter. We are optimistic that same store
sales growth in the second half of fiscal year 2013 will be 3% to 4%,
resulting in full year growth of 2.0% to 2.5%. We are pleased with our
capability to drive shareholder value via our stock buy back initiatives. From
May 2012 through March 2013, we have purchased 19.6 million shares spending
over half-a-billion dollars; as of March 31^st, we had $653 million remaining
on our current authorization.”

FISCAL 2013 SECOND QUARTER FINANCIAL HIGHLIGHTS

Net Sales: For the fiscal 2013 second quarter, consolidated net sales were
$898.2 million, an increase of 1.0% from the fiscal 2012 second quarter.
Fiscal 2013 second quarter sales increase is attributed to the addition of new
stores offset by softness in same store sales. The impact from changes in
foreign currency exchange rates in the fiscal 2013 second quarter was not
material. Consolidated same store sales declined in the fiscal 2013 second
quarter by 0.8% compared to record growth of 9.1% in the fiscal 2012 second
quarter. Same store sales growth was negatively impacted by lower traffic
driven in part by two fewer days in the quarter compared to fiscal 2012 second
quarter and difficult comparisons against strong growth in certain product
categories in the Sally Beauty U.S. business.

Gross Profit: Consolidated gross profit for the fiscal 2013 second quarter was
$444.5 million, an increase of 1.8% over gross profit of $436.8 million for
the fiscal 2012 second quarter. Gross profit as a percentage of sales was
49.5%, a 40 basis point improvement from the fiscal 2012 second quarter.

Selling, General and Administrative Expenses: For the fiscal 2013 second
quarter, consolidated selling, general and administrative (SG&A) expenses,
including unallocated corporate expenses and share-based compensation, were
$299.4 million, or 33.3% of sales, an 80 basis point increase from the fiscal
2012 second quarter metric of 32.5% of sales and total SG&A expenses of $289.2
million. Fiscal 2013 second quarter SG&A expenses increased 3.5% or $10.2
million primarily due to expenses associated with the opening of new stores,
higher advertising expenses in Sally Beauty Supply, the U.K. warehouse
initiative, the Sally Beauty Supply point-of-sale system conversion and the
implementation of our European ERP system.

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

Interest Expense: Interest expense for the fiscal 2013 second quarter was
$26.8 million, up $4.4 million from the fiscal 2012 second quarter of $22.4
million.

Provision for Income Taxes: Income taxes were $36.2 million for the fiscal
2013 second quarter versus $41.5 million in the fiscal 2012 second quarter.
The Company’s effective tax rate in the fiscal 2013 second quarter was 35.8%
versus 38.0% in the fiscal 2012 second quarter.

Net Earnings and Diluted Net Earnings per Share (EPS): In the fiscal 2013
second quarter, net earnings were $64.9 million, a decrease of 4.3% over
fiscal 2012 second quarter net earnings of $67.8 million. Diluted earnings per
share in the fiscal 2013 second quarter were $0.36, growth of 2.9% when
compared to diluted earnings per share of $0.35 in the fiscal 2012 second
quarter.

Adjusted (Non-GAAP) EBITDA^(1): Adjusted EBITDA for the fiscal 2013 second
quarter was $148.3 million, a decrease of 1.5% from $150.5 million in the
fiscal 2012 second quarter.

Financial Position, Capital Expenditures and Working Capital: Cash and cash
equivalents as of March 31, 2013, were $62.3 million. The Company ended the
fiscal 2013 second quarter with $22.5 million of loans outstanding on its
asset-based loan (ABL) revolving credit facility. The Company’s debt,
excluding capital leases, totaled $1.63 billion as of March 31, 2013.

For the first six months of fiscal 2013, the Company’s capital expenditures
totaled $43.1 million. Capital expenditures for the fiscal year 2013 are
projected to be in the range of $85 million to $90 million, excluding
acquisitions.

Working capital (current assets less current liabilities) decreased $163.1
million to $523.4 million at March 31, 2013 compared to $686.5 million at
September 30, 2012. The ratio of current assets to current liabilities was
2.13 to 1.00 at March 31, 2013 compared to 2.44 to 1.00 at September 30, 2012.

Inventory as of March 31, 2013 was $752.7 million, an increase of $63.4
million or growth of 9.2% from March 31, 2012 inventory. This increase is
primarily due to additional inventory from recent softness in same store sales
for the Sally Beauty U.S. business, the ramp-up of inventory for the new U.K.
warehouse, and net new store openings.

During the three months ended March 31, 2013, the Company repurchased (and
subsequently retired) a total of 7.0 million shares of its common stock at an
aggregate cost of $191.4 million. As of March 31, 2013, the Company has
approximately $653.0 million remaining under the $700 million authorization
announced on March 5. 2013.

  *From the period of January 1, 2013 through March 4, 2013, the Company
    repurchased 5.4 million shares at an aggregate cost of $144.5 million
    under its $300 million repurchase program announced in August 2012.
  *From the period of March 5, 2013 through March 31, 2013, the Company
    repurchased 1.6 million shares of its common stock under the new $700
    million 2013 Share Repurchase Program at an aggregate cost of $46.9
    million.

Business Segment Results:

Sally Beauty Supply

Fiscal 2013 Second Quarter Results for Sally Beauty Supply

  *Sales of $556.0 million, up 0.4% from $554.0 million in the fiscal 2012
    second quarter. Sales growth is attributed to net new store openings and
    was partially offset by softness in same store sales growth.
  *Same store sales declined by 1.6% when compared to record growth of 9.3%
    in the fiscal 2012 second quarter. Same store sales growth in the fiscal
    2013 second quarter was negatively impacted by lower traffic driven in
    part by two fewer sales days in the quarter compared to fiscal 2012 second
    quarter and difficult comparisons against record growth in certain
    categories in the prior year.
  *Gross margin of 54.5%, a 30 basis point improvement from 54.2% in the
    fiscal 2012 second quarter.
  *Segment earnings of $106.0 million, down 4.8% from $111.3 million in the
    fiscal 2012 second quarter.
  *Segment operating margins were 19.1% of sales, a decline of 100 bps from
    20.1% in the fiscal 2012 second quarter.
  *Net store base increased by 129 over the fiscal 2012 second quarter for
    total store count of 3,357.

Sales growth in the fiscal 2013 second quarter is attributed to net new store
openings and was partially offset by softness in same store sales growth. Same
store sales growth in the fiscal 2013 second quarter was negatively impacted
by lower traffic driven in part by two fewer sales days in the quarter
compared to fiscal 2012 second quarter and difficult comparisons against
record growth in certain product categories in the prior year. Gross profit
margin expansion of 30 basis points resulted from a shift in product and
customer mix and low-cost sourcing initiatives. Segment operating earnings and
margin were negatively impacted by softer sales growth than the prior year
quarter.

Beauty Systems Group

Fiscal 2013 Second Quarter Results for Beauty Systems Group

  *Sales of $342.3 million, up 2.1% from $335.3 million in the fiscal 2012
    second quarter.
  *Same store sales growth of 1.3% versus record growth of 8.7% in the fiscal
    2012 second quarter. Same store sales growth in the fiscal 2013 second
    quarter was negatively impacted by lower traffic driven in part by two
    fewer sales days in the quarter compared to fiscal 2012 second quarter.
  *Gross margin of 41.3%, a 50 basis point improvement from 40.8% in the
    fiscal 2012 second quarter.
  *Segment earnings of $49.8 million, up 9.3% from $45.6 million in the
    fiscal 2012 second quarter.
  *Segment operating margins increased by 100 basis points to 14.6% of sales
    from 13.6% in the fiscal 2012 second quarter.
  *Net store count was 1,201, an increase of 37 stores over the fiscal 2012
    second quarter.
  *Total BSG distributor sales consultants at the end of the fiscal 2013
    second quarter were 994 versus 1,113 at the end of the fiscal 2012 second
    quarter.

Sales growth in the fiscal 2013 second quarter was driven by same store sales
growth and net new stores, but partially offset by the loss of two sales days
versus the fiscal 2012 second quarter. Segment operating earnings and margin
growth is primarily due to improvement in gross margin and SG&A leverage.

^(1)A detailed table reconciling 2013 and 2012 GAAP net earnings to adjusted
net earnings, adjusted EPS and adjusted EBITDA is included in Supplemental
Schedule C.

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 800-288-8976 (International: 612-332-0228). 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) May 2, 2013 through May 16, 2013 by dialing 1-800-475-6701 or
if international dial 320-365-3844 and reference the conference ID number
291272. 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                    Six Months Ended
                 March 31,                             March 31,
               2013         2012         % CHG    2013           2012           % CHG
                                                                                       
Net sales        $ 898,239     $ 889,281     1.0   %   $ 1,803,680     $ 1,754,096     2.8   %
Cost of
products sold
and              453,785    452,495   0.3   %   914,858      895,453     2.2   %
distribution
expenses
Gross profit       444,454       436,786     1.8   %     888,822         858,643       3.5   %
Selling,
general and        299,370       289,189     3.5   %     605,059         582,203       3.9   %
administrative
expenses ^(1)
Depreciation
and              17,247     15,940    8.2   %   34,055       31,493      8.1   %
amortization
Operating          127,837       131,657     -2.9  %     249,708         244,947       1.9   %
earnings
Interest         26,779     22,355    19.8  %   53,503       86,316      -38.0 %
expense ^(2)
Earnings
before             101,058       109,302     -7.5  %     196,205         158,631       23.7  %
provision for
income taxes
Provision for    36,169     41,489    -12.8 %   72,332       60,684      19.2  %
income taxes
Net earnings    $ 64,889    $ 67,813    -4.3  %  $ 123,873     $ 97,947      26.5  %
                                                                                       
Earnings per
share:
Basic            $ 0.37        $ 0.36        2.8   %   $ 0.70          $ 0.53          32.1  %
Diluted          $ 0.36        $ 0.35        2.9   %   $ 0.69          $ 0.51          35.3  %
                                                                                       
Weighted
average
shares:
Basic              173,461       186,335                 175,930         185,514
Diluted          178,389    191,684            180,743      190,662     
                                             Basis                                     Basis
                                             Pt                                        Pt
                                             Chg                                       Chg
Comparison as
a % of Net
sales
Sally Beauty
Supply Segment     54.5    %     54.2    %   30          54.5      %     54.0      %   50
Gross Profit
Margin
BSG Segment
Gross Profit       41.3    %     40.8    %   50          40.9      %     40.6      %   30
Margin
Consolidated
Gross Profit       49.5    %     49.1    %   40          49.3      %     49.0      %   30
Margin
Selling,
general and        33.3    %     32.5    %   80          33.5      %     33.2      %   30
administrative
expenses
Consolidated
Operating          14.2    %     14.8    %   (60   )     13.8      %     14.0      %   (20   )
Profit Margin
Net Earnings       7.2     %     7.6     %   (40   )     6.9       %     5.6       %   130
Margin
                                                                                       
Effective Tax      35.8    %     38.0    %   (220  )     36.9      %     38.3      %   (140  )
Rate
                                                                           
                                                                                       

         Selling, general and administrative expenses include share-based
^(1 ^)  compensation of $3.3 million and $2.9 million for the three months
         ended March 31, 2013 and 2012; and $12.3 million and $11.0 million
         for the six months ended March 31, 2013 and 2012, respectively.
         
         For the six months ended March 31, 2012, interest expense includes a
         loss on extinguishment of debt of $34.6 million in connection with
^(2 ^)   the Company's December 2011 redemption of its senior notes due 2014
         and senior subordinated notes due 2016 with the proceeds of the
         Company's senior notes due 2019 issued in November 2011.

                                                                              
                                                                                      
                                                                      Supplemental Schedule B
                                                                                      
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Segment Information
(In thousands)
(Unaudited)
                                                                                      
                 Three Months Ended                   Six Months Ended
                 March 31,                            March 31,
               2013         2012         % CHG   2013           2012           % CHG
  Net sales:
  Sally Beauty   $ 555,977     $ 553,973     0.4  %   $ 1,114,793     $ 1,090,331     2.2   %
  Supply
  Beauty
  Systems        342,262    335,308   2.1  %   688,887      663,765     3.8   %
  Group
  Total net     $ 898,239   $ 889,281   1.0  %  $ 1,803,680   $ 1,754,096   2.8   %
  sales
                                                                                      
  Operating
  earnings:
  Sally Beauty   $ 105,956     $ 111,334     -4.8 %   $ 212,043       $ 212,400       -0.2  %
  Supply
  Beauty
  Systems        49,821     45,597    9.3  %   98,573       88,924      10.9  %
  Group
  Segment
  operating     $ 155,777   $ 156,931   -0.7 %  $ 310,616     $ 301,324     3.1   %
  earnings
                                                                                      
  Unallocated
  corporate        (24,678 )     (22,329 )   10.5 %     (48,595   )     (45,401   )   7.0   %
  expenses
  ^(1)
  Share-based      (3,262  )     (2,945  )   10.8 %     (12,313   )     (10,976   )   12.2  %
  compensation
  Interest
  expense ^      (26,779 )   (22,355 )  19.8 %   (53,503   )   (86,316   )  -38.0 %
  (2)
  Earnings
  before
  provision     $ 101,058   $ 109,302   -7.5 %  $ 196,205     $ 158,631     23.7  %
  for income
  taxes
                                                                                      
  Segment
  operating                                  Basis                                    Basis
  profit                                     Pt Chg                                   Pt Chg
  margin:
  Sally Beauty     19.1    %     20.1    %   (100 )     19.0      %     19.5      %   (50   )
  Supply
  Beauty
  Systems          14.6    %     13.6    %   100        14.3      %     13.4      %   90
  Group
  Consolidated
  operating      14.2    %   14.8    %  (60  )   13.8      %   14.0      %  (20   )
  profit
  margin
                                                                                      

^(1 ^)  Unallocated expenses consist of corporate and shared costs.
         
         For the six months ended March 31, 2012, interest expense includes a
         loss on extinguishment of debt of $34.6 million in connection with
^(2 ^)   the Company's December 2011 redemption of its senior notes due 2014
         and senior subordinated notes due 2016 with the proceeds of the
         Company's senior notes due 2019 issued in November 2011.

                                                                       
                                                                               
                                                                 Supplemental Schedule
                                                                 C
                                                                               
  SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
  Non-GAAP Financial Measures Reconciliations
 (In thousands, except per share data)
 (Unaudited)
                                                                               
                   Three Months Ended                Six Months Ended
                   March 31,                         March 31,
                 2013       2012       % CHG    2013       2012         % CHG
  Adjusted
  EBITDA:
  Net earnings     $ 64,889    $ 67,813    -4.3  %   $ 123,873   $ 97,947      26.5  %
  (per GAAP)
  Add:
  Depreciation
  and                17,247      15,940    8.2   %     34,055      31,493      8.1   %
  amortization
  Share-based
  compensation       3,262       2,945     10.8  %     12,313      10,976      12.2  %
  ^(1)
  Interest
  expense            26,779      22,355    19.8  %     53,503      86,316      -38.0 %
  ^(2)(3)
  Provision for    36,169    41,489   -12.8 %   72,332    60,684    19.2  %
  income taxes
  Adjusted
  EBITDA          $ 148,346  $ 150,542  -1.5  %  $ 296,076  $ 287,416   3.0   %
  (Non-GAAP)
                                                                               
                                                                               
  Net earnings     $ 64,889    $ 67,813              $ 123,873   $ 97,947
  (per GAAP)
  Add (Less):
  Loss on
  extinguishment     -           -                     -           34,558
  of debt ^(2)
  Interest
  expense on         -           -                     -           5,149
  redeemed debt
  ^(3)
  Amortization
  of deferred        -           -                     -           229
  financing
  costs
  Tax provision
  for the
  adjustments to   -         -                 -         (14,377 )  
  net earnings
  ^(4)
  Adjusted net
  earnings,
  excluding       $ 64,889   $ 67,813   -4.3  %  $ 123,873  $ 123,506   0.3   %
  non-recurring
  items
  (Non-GAAP)
                                                                               
  Adjusted
  earnings per
  share
  (Non-GAAP):
  Basic            $ 0.37      $ 0.36      2.8   %   $ 0.70      $ 0.67        4.5   %
  Diluted          $ 0.36      $ 0.35      2.9   %   $ 0.69      $ 0.65        6.2   %
                                                                               
  Weighted
  average
  shares:
  Basic              173,461     186,335               175,930     185,514
  Diluted            178,389     191,684               180,743     190,662
                                                                               

         Share-based compensation for the six months ended March 31, 2013 and
^(1 ^)  2012 includes $5.9 million and $5.3 million, respectively, of
         accelerated expense related to certain retirement-eligible employees
         who are eligible to continue vesting awards upon retirement.
         
         For the six months ended March 31, 2012, interest expense includes
         $34.6 million in connection with the Company's December 2011
         redemption of its senior notes due 2014 and senior subordinated notes
^(2 ^)   due 2016, with the proceeds of the Company's senior notes due 2019
         issued on November 8, 2011. 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
         redeemed notes.
         
         For the six months ended March 31, 2012, interest expense includes
         interest on the senior notes and senior subordinated notes after
^(3 ^)   November 8, 2011 and until their redemption of $5.1 million, as well
         as interest on the Company's 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.
         
^(4 ^)   The tax provision for the adjustments to net earnings were calculated
         using an estimated effective tax rate of 36.0%.

                                                             
                                                                  
                                                       Supplemental Schedule D
                                                                  
  SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
  Store Count and Same Store Sales
  (Unaudited)
                                                                  
                                                                  
                                             As of March 31,     
                                             2013     2012      CHG
                                                                  
  Number of retail stores (end of period):
                                                                  
  Sally Beauty Supply:
  Company-operated stores                    3,331     3,204      127
  Franchise stores                           26       24        2        
  Total Sally Beauty Supply                  3,357     3,228      129
                                                                           
  Beauty Systems Group:
  Company-operated stores                    1,042     1,006      36
  Franchise stores                           159      158       1        
  Total Beauty System Group                  1,201    1,164     37       
  Total                                      4,558    4,392     166      
                                                                  
  BSG distributor sales consultants (end     994       1,113      (119     )
  of period) ^(1)
                                                           
                                             2013     2012
  Second quarter company-operated same                            Basis Pt Chg
  store sales growth (decline) ^(2)
  Sally Beauty Supply                        -1.6  %   9.3    %   (1,090   )
  Beauty Systems Group                       1.3   %   8.7    %   (740     )
  Consolidated                               -0.8  %   9.1    %   (990     )
                                                                  
  Six months ended March 31
  company-operated same store sales growth                        Basis Pt Chg
  ^(2)
  Sally Beauty Supply                        0.0   %   8.7    %   (870     )
  Beauty Systems Group                       3.4   %   6.9    %   (350     )
  Consolidated                               1.0   %   8.1    %   (710     )
                                                                  

^(1 ^)  Includes 320 and 414 distributor sales consultants as reported by our
         franchisees at March 31, 2013 and 2012, respectively.
         
         Same stores are defined as company-operated stores that have been
         open for 14 months or longer 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 14 months after the
         relocation. The sales of stores acquired are excluded from our same
         store sales calculation until 14 months after the acquisition.

                                 
                                    
                                    Supplemental Schedule E
                                                   
  SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
  Selected Financial Data and Debt
 (In thousands)
 (Unaudited)
                                                     
                                    March 31, 2013   September 30, 2012
  Financial condition information
  (at period end):
  Working capital                   $  523,401       $        686,519
  Cash and cash equivalents            62,256                 240,220
  Property and equipment, net          216,903                202,661
  Total assets                         1,892,069              2,065,800
  Total debt, including capital        1,638,368              1,617,230
  leases
  Total stockholders' (deficit)        ($280,509)             ($115,085)
  equity
                                                 
                                                     
                                    As of
                                    March 31, 2013   Interest Rates
  Debt position excluding capital
  leases (at period end):
                                                     
  Revolving ABL facility            $  22,500        (i) Prime + 1.25-1.75% or
                                                     (ii) LIBOR + 2.25-2.75%
                                                     
  Senior notes due 2019                750,000       6.875%
                                                     
  Senior notes due 2022 ^(1)           858,845       5.750%
                                                     
  Other ^(2)                          1,886         4.93% to 5.79%
  Total debt                        $  1,633,231
                                                 
                                                     
  Debt maturities, excluding
  capital leases
  Twelve months ending March 31,
  2014                              $  23,713
  2015                                 643
  2016                                 30
  2017-2019                            -
  Thereafter ^(1)                     1,608,845
  Total debt                        $  1,633,231
                                                     

         Amount, at March 31, 2013, includes unamortized premium of $8.8
^(1 ^)  million related to notes in an aggregate principal amount of $150.0
         million issued in September 2012. The 5.75% interest rate relates to
         notes in an 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