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

--4Q09 GAAP earnings per share of $0.15; 4Q09 adjusted earnings per share of $0.14

--FY2009 GAAP earnings per share of $0.54, growth of 29%

--FY2009 adjusted earnings per share of $0.52, growth of 18%

Sally Beauty Holdings, Inc. (NYSE: SBH | Quote | Chart | News | PowerRating) (the "Company") today announced
solid financial results for the fourth quarter and fiscal year ended
September 30, 2009. The Company will hold a conference call today at
10:00 a.m. (Central) to discuss these results and its business.

Consolidated net sales for fiscal year 2009 were $2.6 billion, a
decrease of 0.4% from fiscal year 2008, and include a negative impact
from foreign currency exchange of $86.0 million, or 3.2% of sales.
Fiscal 2009 GAAP net earnings were $99.1 million, growth of 27.8%. GAAP
diluted earnings per share in fiscal 2009 were $0.54, growth of 28.6%
when compared to earnings per share of $0.42 in fiscal year 2008. Fiscal
2009 adjusted net earnings, a non-GAAP measure, were $95.9 million, an
increase of 19.2% over fiscal 2008. Adjusted earnings per share were
$0.52, growth of 18.2% when compared to $0.44 adjusted earnings per
share in fiscal year 2008. Adjusted EBITDA increased 3.2% in fiscal 2009
to $352.5 million, versus $341.7 million in fiscal 2008. Fiscal 2009 net
cash provided by operating activities was $223.3 million and capital
expenditures were $37.3 million. Total store count at the end of fiscal
2009 was 3,914, an increase of 141 stores or growth of 3.7% over prior
year, of which 2.0% is organic store growth and 1.7% is store growth
from acquisitions (1).

"Sally Beauty Holdings delivered very good fourth quarter and full year
results despite a difficult recessionary environment," stated Gary
Winterhalter, President and Chief Executive Officer. "For the fiscal
year consolidated same store sales finished up 1.8% with gross margin
expansion of 60 basis points and GAAP net earnings growth of 28%. We
executed on all of our strategic objectives, including 3.7% growth in
our store base achieved through organic store openings, acquisitions and
the strengthening of our balance sheet through a $73 million reduction
in long-term debt. We believe we are well positioned as we head into
fiscal 2010 and remain confident we will continue to execute against our
strategy and deliver another year of solid performance."

(1) Year-end store count includes: 43 stores from the
acquisition on September 30, 2009 of Schoeneman Beauty Supply, Inc.; 16
stores from the acquisition of InterSalon located in Chile; 3 stores
acquired in Belgium and France; 3 stores acquired in Puerto Rico.

FISCAL 2009 FOURTH QUARTER AND FULL YEAR 2009 FINANCIAL HIGHLIGHTS

Net Sales: For the fiscal 2009 fourth quarter, consolidated net
sales were $676.2 million, an increase of 0.6% from the fiscal 2008
fourth quarter, and include a negative impact from foreign currency
exchange of $13.1 million, or 2.0% of sales. This sales increase is
attributed to consolidated same stores sales growth of 2.4% and the
addition of new stores.

Consolidated net sales for fiscal year 2009 were $2.6 billion, a
decrease of 0.4% from fiscal year 2008, and include a negative impact
from foreign currency exchange of $86.0 million, or 3.2% of sales. Consolidated
same stores sales growth of 1.8% and the addition of new stores
partially offset the negative impact to sales from unfavorable foreign
currency exchange.

Gross Profit: Consolidated gross profit for the fiscal year 2009
fourth quarter was $319.8 million, an increase of 1.5% over prior year's
gross profit of $314.9 million. Gross profit as a percentage of sales
was 47.3%, a 50 basis point improvement from the fiscal 2008 fourth
quarter.

For fiscal 2009, consolidated gross profit was $1.2 billion, an increase
of 0.7% over fiscal 2008 gross profit. Gross profit as a percentage of
sales was 47.2%, a 60 basis point improvement from the 2008 fiscal year.

Selling, General and Administrative Expenses: For the fiscal 2009
fourth quarter, selling, general and administrative (SG&A) expenses were
$231.5 million, or 34.2% of sales, a 10 basis point decrease from the
fiscal 2008 fourth quarter metric of 34.3% of sales when total SG&A was
$230.8 million. Unallocated corporate expenses decreased $1.7 million to
$18.9 million for the fiscal 2009 fourth quarter compared to $20.6
million in the fiscal 2008 fourth quarter. Share-based compensation
expense for the fiscal 2009 fourth quarter was $1.8 million, compared to
$1.5 million in the fiscal 2008 fourth quarter.

For fiscal year 2009, selling, general and administrative (SG&A)
expenses were $899.4 million, or 34.1% of sales compared to SG&A
expenses in fiscal 2008 of $903.1 million, or 34.1% of sales.
Unallocated corporate expenses decreased $3.4 million to $70.0 million
for fiscal year 2009 compared to $73.4 million in the fiscal year 2008.
Share-based compensation expense for fiscal year 2009 was $8.6 million,
compared to $10.2 million in fiscal year 2008.

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 2009 fourth quarter was $29.3 million and included $3.6
million of non-cash interest income related to certain of the Company's
interest rate swap transactions. The Company is accounting for these
transactions on a marked-to-market basis, whereby changes in the fair
value will increase or decrease net interest expense, and therefore
affect reported net earnings and earnings per share. Fiscal 2008 fourth
quarter interest expense was $35.1 million and included $2.0 million of
non-cash interest income for the marked-to-market change in fair value
for these interest rate swap transactions.

For fiscal year 2009, interest expense, net of interest income was
$132.0 million and included $5.3 million of non-cash interest income
related to the Company's interest rate swap transactions. Fiscal year
2008 interest expense was $159.1 million and included $4.6 million of
non-cash charges for the marked-to-market change in fair value for
interest rate swap transactions. The interest rate swap agreements with
a notional amount of $350 million do not qualify for hedge accounting
treatment and will expire in late November, 2009.

Provision for Income Taxes: Income taxes were $19.8 million for
the fiscal 2009 fourth quarter versus $14.4 million in fiscal 2008
fourth quarter.

For fiscal year 2009, income taxes were $65.7 million versus $46.2
million in fiscal 2008. The Company's effective tax rate for fiscal year
2009 was 39.9% compared to 37.3% for fiscal 2008. The increase in tax
rate is primarily due to lower international earnings than in the fiscal
year 2008. In fiscal year 2010, the effective tax rate is expected to be
approximately 39.0%.

Net Earnings and Diluted Net Earnings Per Share (EPS)(2):
For the fiscal 2009 fourth quarter, adjusted net earnings (a
non-GAAP measure) increased by 22.8% to $24.8 million, or $0.14 earnings
per diluted share, after adjusting for $2.2 million in after-tax
non-cash interest income from marked-to-market changes in the fair value
of the Company's interest rate swaps. For the fiscal 2008 fourth
quarter, adjusted net earnings were $20.2 million, or $0.11 per diluted
share, after adjusting for $1.3 million, or approximately $0.01 per
diluted share, in non-cash interest income from marked-to-market changes
in the fair value of the interest rate swaps. On a GAAP basis, net
earnings for the fiscal 2009 fourth quarter grew 25.6% to $27.0 million,
or $0.15 per diluted share, compared to $21.5 million, or $0.12 per
diluted share, for the fiscal 2008 fourth quarter.

For fiscal year 2009, adjusted net earnings grew 19.2% to $95.9 million,
or $0.52 per diluted earnings per share, after adjusting for $3.2
million in after-tax non-cash interest income from marked-to-market
changes in the fair value of the Company's interest rate swaps. For the
2008 fiscal year, adjusted net earnings were $80.5 million, or $0.44 per
share, and exclude a $2.9 million after-tax non-cash interest charge
related to the interest rate swaps. On a GAAP basis, net earnings for
fiscal 2009 grew 27.8% to $99.1 million, or $0.54 per share, compared to
$77.6 million, or $0.42 per share, for fiscal 2008.

Adjusted (Non-GAAP) EBITDA(2): Adjusted
EBITDA for the fiscal 2009 fourth quarter was $90.1 million an increase
of 5.3% from $85.6 million for the fiscal 2008 fourth quarter.

Fiscal year 2009 Adjusted EBITDA was $352.5 million, an increase of 3.2%
from $341.7 million in fiscal 2008. This increase is primarily due to
year-over-year growth in segment operating earnings and reductions in
corporate overhead.

(2)A detailed table reconciling 2009 and 2008 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, 2009, were $54.4 million.
The Company's asset-based loan (ABL) revolving credit facility began and
ended the 2009 fourth quarter with a zero balance. Borrowing capacity on
the ABL facility was approximately $325.6 million at the end of the
fiscal 2009 fourth quarter. The Company paid down $20.0 million of its
senior term loans during the fiscal 2009 fourth quarter. The Company's
debt, excluding capital leases, totaled $1.7 billion as of September 30,
2009.

For the full year ended September 30, 2009, the Company's capital
expenditures totaled $37.3 million. Capital Expenditures for fiscal year
2010 are projected to be in the range of $45 million to $50 million,
excluding acquisitions.

Inventories decreased $38.5 million from September 30, 2008. Inventories
as of September 30, 2009 were $559.7 million, including $13 million of
inventories from the acquisition of Schoeneman Beauty Supply, Inc. on
September 30, 2009.

Business Segment Results:

Sally Beauty Supply

Fiscal 2009 Fourth Quarter Results for Sally Beauty Supply

--
Sales of $438.0 million, up 2.0% from $429.3 million in fiscal 2008
fourth quarter. The negative impact of unfavorable foreign currency
exchange on net sales was $10.8 million, or 2.5% of sales. Significant
components of growth include: same store sales growth of 3.1%; growth
of acquisition-related revenue of 0.1%; and revenue growth from net
new store openings of 1.6%.

--
Gross margin of 51.7%, a 10 basis point improvement from 51.6% in the
fiscal 2008 fourth quarter.

--
Segment earnings of $71.5 million, down 2.0% from $73.0 million in the
fiscal 2008 fourth quarter.

--
Segment operating margins declined to 16.3% of sales from 17.0% in the
fiscal 2008 fourth quarter.

Sales growth in the fiscal 2009 fourth quarter was driven by same store
sales and new store openings; and partially offset by unfavorable
foreign currency exchange and softness in the U.K. Gross profit margin
expansion of 10 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 softness in the U.K.

Fiscal 2009 Results for Sally Beauty Supply

--
Sales of $1.7 billion, up 1.4% from fiscal year 2008. The negative
impact of unfavorable foreign currency exchange on net sales was $64.1
million, or 3.8% of sales. Significant components of growth include:
same store sales growth of 2.1%; growth in acquisition-related revenue
of 1.7%; revenue growth from new store openings of 1.7%.

--
U.S. and Canada represented 83% of segment sales versus 81% in the
prior year.

--
Gross margin of 51.8%, up from 51.3% in fiscal 2008, a 50 basis point
improvement.

--
Segment earnings of $283.9 million, down 0.6% from $285.6 million in
fiscal 2008.

--
Segment operating margin declined to 16.7% of sales from 17.1% in
fiscal 2008.

--
Net store base increased by 79 or 2.8% for total store count of 2,923.
The 2.8% increase in store count included 0.6% from acquired stores
and 2.2% from organic growth.

Sales for the Sally business in fiscal year 2009 were positively
impacted by growth from new store openings and same store sales Gross
profit margin was positively impacted by a shift in product and customer
mix and low-cost sourcing initiatives. Segment operating earnings
declined 0.6% over fiscal year 2008 primarily due to investments in new
stores and softness in the U.K.

During the fiscal 2009 fourth quarter, the Company executed on its
strategy to establish a presence in South America by acquiring
InterSalon, a beauty supply distributor headquartered in Santiago,
Chile. InterSalon has 16 stores that sell professional, private label
and exclusive brands.

Beauty Systems Group

Fiscal 2009 Fourth Quarter Results for Beauty Systems Group

--
Sales of $238.1 million, down 2.0% from $242.9 million in fiscal 2008
fourth quarter. Sales were positively impacted by revenue growth from
new store openings of 0.9% and from acquisitions of 0.3%. Same store
sales rose 0.4%. Unfavorable foreign currency exchange of $2.3 million
or 0.9% of sales, and softness in the franchise business and the BSG
sales consultant business of 2.7%, negatively impacted sales growth.

--
Gross margin of 39.3%, up 80 basis points from 38.5% in the fiscal
2008 fourth quarter.

--
Segment earnings of $25.4 million, up 26.1% from $20.1 million in the
fiscal 2008 fourth quarter.

--
Segment operating margins increased by 240 basis points to 10.7% of
sales from 8.3% in the fiscal 2008 fourth quarter.

Sales for the Beauty Systems Group were negatively impacted by
unfavorable foreign currency exchange and softness in its franchise
business and BSG sales consultant business. Segment earnings improvement
is primarily due to ongoing cost reduction initiatives and savings
realized from the warehouse optimization project. Included in the fiscal
2008 fourth quarter operating expense was $1.0 million in warehouse
optimization expense that did not occur in the fiscal 2009 fourth
quarter.

Fiscal 2009 Results for Beauty Systems Group

--
Sales of $940.9 million, down 3.5% from $975.3 million in fiscal 2008.
Sales were positively impacted by revenue growth from net new store
openings of 0.9% and from acquisitions of 0.4%. Same store sales rose
1.0%. Unfavorable foreign currency exchange of $21.9 million or 2.2%
of sales, and softness in the franchise business and the BSG sales
consultant business of 3.3%, negatively impacted sales growth.

--
Gross margin of 38.7%, up from 38.6% in fiscal 2008, a 10 basis point
improvement.

--
Segment earnings of $91.6 million, up 13.2% from $80.9 million in
fiscal 2008.

--
Segment operating margins increased to 9.7% of sales from 8.3% in
fiscal 2008, a 140 basis point improvement.

--
Net store base increased by 62 or 6.7% for total store count of 991
including 162 franchised locations and 43 stores that were acquired
through the Schoeneman Beauty Supply acquisition on September 30, 2009.

--
Total BSG distributor sales consultants at the end of fiscal 2009 were
1,022 versus 984 at the end of fiscal 2008, and include approximately
100 consultants added through the acquisition of Schoeneman Beauty
Supply.

Sales growth in fiscal year 2009 for the Beauty Systems Group was
negatively impacted by unfavorable foreign currency exchange and
softness in the franchise business and the BSG sales consultant
business. Gross margin expansion was primarily due to improved sales and
product mix, and expansion in new and existing territories. Operating
improvements reflect BSG's initiatives to reduce expenses, improve sales
mix and broadened product mix. Included in fiscal year 2008 operating
expense was $4.7 million in warehouse optimization expense that did not
occur in the fiscal year 2009.

During the fiscal 2009 fourth quarter BSG made two strategic
acquisitions that directly support its strategy of extending
distribution reach in important geographic regions.

BSG acquired Belleza
Concept International Inc., a Puerto Rico-based distributor of
beauty products, on September 18, 2009. Belleza Concept has three stores
and eight sales consultants operating in the Caribbean.

BSG acquired Schoeneman Beauty Supply, based in Pottsville,
Pennsylvania, on September 30, 2009. Schoeneman is a leading distributor
of professional beauty supplies operating a network of 43 stores and
approximately 100 direct sales consultants covering a seven-state region
in the northeast.

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 800-230-1096 (International: 612-288-0329).
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 19, 2009 through December 3, 2009 by dialing 1-800-475-6701 or
if international dial 320-365-3844 and reference the conference ID
number 120873. Also, a website replay will be available on
investor.sallybeautyholdings.com

About Sally Beauty Holdings, Inc.

Sally Beauty Holdings, Inc. (NYSE: SBH | Quote | Chart | News | PowerRating) is an international specialty
retailer and distributor of professional beauty supplies with revenues
of more than $2.6 billion annually. Through the Sally Beauty Supply and
Beauty Systems Group businesses, the Company sells and distributes
through over 3,900 stores, including approximately 200 franchised units,
throughout the United States, the United Kingdom, Belgium, Chile,
France, 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, and TIGI which are targeted exclusively for
professional and salon use and resale to their customers. For more
information about Sally Beauty Holdings, Inc., please visit
sallybeauty.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 or 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 to mass retailers; the operational and
financial performance of our Armstrong McCall, L.P. business; the
success of our new Internet-based business; successfully identifying
acquisition candidates or successfully completing desirable
acquisitions; integrating businesses acquired in the future; the
possibility that we may not recognize the expected tax benefits of our
acquisition of Schoeneman Beauty Supply, Inc.; opening and operating new
stores profitably; the impact of a continued downturn in 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; 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
existing 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; 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 or increasing
our interest expense due to our interest rate swap agreements; the
potential impact on us if the financial institutions we deal with become
impaired; the representativeness of our historical consolidated
financial information with respect to our future financial position,
results of operations or cash flows; our reliance upon Alberto-Culver
for the accuracy of certain historical services and information; the
share distribution of Alberto-Culver common stock in our separation from
Alberto-Culver not constituting a tax-free distribution; actions taken
by certain large shareholders adversely affecting the tax-free nature of
the share distribution of Alberto-Culver common stock; the voting power
of our largest stockholder discouraging third party acquisitions of us
at a premium; and the interests of our largest stockholder differing
from the interests of other holders of our common stock.

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, 2009, 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 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,
                                                           2009           2008 (1)     % CHG            2009             2008 (1)      % CHG
Net sales                                               $  676,175     $  672,228      0.6    %      $  2,636,600     $  2,648,191     -0.4   %
Cost of products sold and distribution expenses            356,359        357,293      -0.3   %         1,393,283        1,413,597     -1.4   %
        Gross profit                                       319,816        314,935      1.5    %         1,243,317        1,234,594     0.7    %
Selling, general and administrative expenses (2) (3)       231,486        230,843      0.3    %         899,415          903,146       -0.4   %
Depreciation and amortization                              12,206         13,154       -7.2   %         47,066           48,533        -3.0   %
        Operating earnings                                 76,124         70,938       7.3    %         296,836          282,915       4.9    %
Interest expense, net (4) (5)                              29,330         35,101       -16.4  %         132,022          159,116       -17.0  %
        Earnings before provision for income taxes         46,794         35,837       30.6   %         164,814          123,799       33.1   %
Provision for income taxes                                 19,821         14,358       38.0   %         65,697           46,222        42.1   %
        Net earnings                                    $  26,973      $  21,479       25.6   %      $  99,117        $  77,577        27.8   %
Net earnings per share:
        Basic                                           $  0.15        $  0.12         25.0   %      $  0.55          $  0.43          27.9   %
        Diluted                                         $  0.15        $  0.12         25.0   %      $  0.54          $  0.42          28.6   %
Weighted average shares:
        Basic                                              181,790        181,359                       181,691          181,189
        Diluted                                            183,833        182,879                       183,306          182,704
                                                                                       Basis Pt Chg                                    Basis Pt Chg
Comparison as a % of Net sales
        Sally Beauty Supply Segment Gross Profit Margin    51.7    %      51.6     %   10               51.8      %      51.3      %   50
        BSG Segment Gross Profit Margin                    39.3    %      38.5     %   80               38.7      %      38.6      %   10
        Consolidated Gross Profit Margin                   47.3    %      46.8     %   50               47.2      %      46.6      %   60
        Selling, general and administrative expenses       34.2    %      34.3     %   (10    )         34.1      %      34.1      %   0
        Operating Margin                                   11.3    %      10.6     %   70               11.3      %      10.7      %   60
        Net Earnings Margin                                4.0     %      3.2      %   80               3.8       %      2.9       %   90
Effective Tax Rate                                         42.4    %      40.1     %   230              39.9      %      37.3      %   260
(1)     Certain amounts for prior periods have been reclassified to conform
        with current year presentation.
(2)     Selling, general and administrative expenses include share-based
        compensation of $1.8 million and $1.5 million for the three months
        ended September 30, 2009 and 2008, respectively.
(3)     Selling, general and administrative expenses include share-based
        compensation of $8.6 million and $10.2 million for the twelve
        months ended September 30, 2009 and 2008, respectively.
(4)     Interest expense, net of interest income of $0.2 million in 2008,
        includes non-cash income of $3.6 million and $2.0 million of
        marked-to-market adjustments for certain interest rate swaps for
        the three months ended September 30, 2009 and 2008, respectively.
(5)     Interest expense, net of interest income of $ 0.3 million and $0.7
        million, includes non-cash income of $5.3 million and non-cash
        expense of $4.6 million of market-to-market adjustments for
        certain interest rate swaps for the twelve months ended September
        30, 2009 and 2008, respectively.

Supplemental Schedule B
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Segment Information
(In thousands)
(Unaudited)
                                                Three Months Ended                           Twelve Months Ended
                                                September 30,                                September 30,
                                                   2009           2008 (1)     % CHG            2009             2008 (1)      % CHG
   Net sales:
                         Sally Beauty Supply    $  438,045     $  429,303      2.0    %      $  1,695,652     $  1,672,897     1.4    %
                         Beauty Systems Group      238,130        242,925      -2.0   %         940,948          975,294       -3.5   %
   Total net sales                              $  676,175     $  672,228      0.6    %      $  2,636,600     $  2,648,191     -0.4   %
   Operating earnings:
                         Sally Beauty Supply    $  71,459      $  72,950       -2.0   %      $  283,872       $  285,615       -0.6   %
                         Beauty Systems Group      25,377         20,129       26.1   %         91,604           80,927        13.2   %
   Segment operating earnings                   $  96,836      $  93,079       4.0    %      $  375,476       $  366,542       2.4    %
   Unallocated corporate expenses (2)              (18,893 )      (20,616  )   -8.4   %         (70,022   )      (73,385   )   -4.6   %
   Share-based compensation                        (1,819  )      (1,525   )   19.3   %         (8,618    )      (10,242   )   -15.9  %
   Interest expense, net of interest income        (29,330 )      (35,101  )   -16.4  %         (132,022  )      (159,116  )   -17.0  %
   Earnings before provision for income taxes   $  46,794      $  35,837       30.6   %      $  164,814       $  123,799       33.1   %
   Segment operating profit margin:                                            Basis Pt Chg                                    Basis Pt Chg
   Sally Beauty Supply                             16.3    %      17.0     %   (70    )         16.7      %      17.1      %   (40    )
   Beauty Systems Group                            10.7    %      8.3      %   240              9.7       %      8.3       %   140
   Consolidated operating profit margin            11.3    %      10.6     %   70               11.3      %      10.7      %   60
(1) Certain amounts for prior periods have been
reclassified to conform with current year presentation.
(2) Unallocated expenses consist of corporate and
shared costs.

Supplemental Schedule C
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Non-GAAP Financial Reconciliations
(In thousands, except per share data)
(Unaudited)
                                                                      Three Months Ended                      Twelve Months Ended
                                                                      September 30,                           September 30,
                                                                         2009           2008        % CHG        2009           2008        % CHG
     Adjusted EBITDA:
     Net earnings (per GAAP)                                          $  26,973      $  21,479      25.6  %   $  99,117      $  77,577      27.8   %
     Add:
     Depreciation and amortization                                       12,206         13,154      -7.2  %      47,066         48,533      -3.0   %
     Share-based compensation (1)                                        1,819          1,525       19.3  %      8,618          10,242      -15.9  %
     Interest expense, net of interest income (2)                        29,330         35,101      -16.4 %      132,022        159,116     -17.0  %
     Provision for income taxes                                          19,821         14,358      38.0  %      65,697         46,222      42.1   %
     Adjusted EBITDA (Non-GAAP)                                       $  90,149      $  85,617      5.3   %   $  352,520     $  341,690     3.2    %
     Net earnings (per GAAP)                                          $  26,973      $  21,479      25.6  %   $  99,117      $  77,577      27.8   %
     Add (Less):
     Marked-to-market adjustment for certain interest rate swaps         (3,585  )      (2,027  )   76.9  %      (5,299  )      4,607       -215.0 %
     Tax provisions for the marked-to-market adjustment (3)              1,434          756         89.7  %      2,120          (1,718  )   -223.3 %
     Adjusted net earnings, excluding interest rate swaps (Non-GAAP)  $  24,822      $  20,208      22.8  %   $  95,938      $  80,466      19.2   %
     Adjusted net earnings per share (Non-GAAP):
                                     Basic                            $  0.14        $  0.11        27.3  %   $  0.53        $  0.44        20.5   %
                                     Diluted                          $  0.14        $  0.11        27.3  %   $  0.52        $  0.44        18.2   %
     Weighted average shares:
                                     Basic                               181,790        181,359                  181,691        181,189
                                     Diluted                             183,833        182,879                  183,306        182,704
(1)  Share-based compensation for the twelve months ended September 30,
     2009 and 2008 includes $2.0 million and $3.1 million, respectively,
     of accelerated expense related to certain retirement-eligible
     employees who are eligible to continue vesting awards upon
     retirement.
(2)  Interest expense, net of interest income of $0.2 million in 2008,
     includes non-cash income of $3.6 million and $2.0 million of
     marked-to-market adjustments for certain interest rate swaps for the
     three months ended September 30, 2009 and 2008, respectively.
     Interest expense, net of interest income of $0.3 million and $0.7
     million, includes non-cash income of $5.3 million and non-cash
     expense of $4.6 million of marked-to-market adjustments for certain
     interest rate swaps for the twelve months ended September 30, 2009
     and 2008, respectively.
(3)  The tax provisions for the marked-to-market adjustments were
     calculated using an effective tax rate of 40.0% for the three and
     twelve months ended September 30, 2009; and 37.3% for the three and
     twelve months ended September 30, 2008, respectively.

Supplemental Schedule D
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Store Count and Same Store Sales
(Unaudited)
                                                                  September 30,
                                                                  2009      2008      CHG
     Number of retail stores (end of period):
     Sally Beauty Supply:
     Company-operated stores                                      2,898     2,820     78
     Franchise stores                                             25        24        1
     Total Sally Beauty Supply stores                             2,923     2,844     79
     Beauty Systems Group:
     Company-operated stores (1)                                  829       760       69
     Franchise stores                                             162       169       (7     )
     Total Beauty System Group stores                             991       929       62
     Total                                                        3,914     3,773     141
     BSG distributor sales consultants (end of period) (2)        1,022     984       38
     Fourth quarter company-operated same store sales growth (3)                      Basis Pt Chg
     Sally Beauty Supply                                          3.1    %  0.9    %  220
     Beauty Systems Group                                         0.4    %  6.1    %  (570   )
     Consolidated                                                 2.4    %  2.2    %  20
     Fiscal year company-operated same store sales growth (3)
     Sally Beauty Supply                                          2.1    %  1.2    %  90
     Beauty Systems Group                                         1.0    %  6.9    %  (590   )
     Consolidated                                                 1.8    %  2.6    %  (80    )
(1)  BSG company-operated stores, at September 30, 2009, includes 43
     stores related to the September 30, 2009 acquisition of Schoeneman
     Beauty Supply, Inc.
(2)  Includes 300 and 328 distributor sales consultants as reported by
     our franchisees as of September 30, 2009 and 2008, respectively, and
     approximately 100 distributor sales consultants employed by
     Schoeneman Beauty Supply, Inc. at September 30, 2009.
(3)  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
     Internet has generated sales for at least 14 months and,
     accordingly, effective as of the fiscal 2009 first quarter,
     Internet sales are included in same store sales.

Supplemental Schedule E
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Selected Financial Data and Debt
(In thousands)
(Unaudited)
                                                                September 30,
                                                                2009                2008
        Financial condition information (at period end):
        Working capital                                         $341,733            $367,198
        Cash and cash equivalents                               54,447              99,788
        Property and equipment, net                             151,252             156,260
        Total assets                                            1,490,732           1,527,023
        Total debt, including capital leases                    1,677,530           1,825,285
        Total stockholders' (deficit) equity                    ($615,451)          ($702,960)
                                                                As of
                                                                September 30, 2009  Interest Rates
        Debt position excluding capital leases (at period end)
        Revolving ABL Facility                                  $0                  Prime + up to 0.5% or Libor + 1-1.5%
        Senior Term A Loan (1)                                  105,000             Prime + 1-1.5% or Libor + 2-2.5%
        Senior Term B Loan (1)                                  863,856             Prime + 1.25-1.5% or Libor + 2.25-2.5%
        Other (2)                                               3,135               4.05% to 7.0%
        Senior Notes                                            430,000             9.25%
        Senior Subordinated Notes                               275,000             10.50%
        Total debt                                              $1,676,991
        Debt maturities excluding capital leases (3)
        FY2010                                                  $24,241
        FY2011                                                  8,188
        FY2012                                                  75,347
        FY2013                                                  8,454
        FY2014                                                  855,761
        Thereafter                                              705,000
        Total debt                                              $1,676,991
(1)     Interest rates on $650 million of these loans are fixed by
        interest rate swaps which expire between November 2009 and May
        2012.
(2)     Represents pre-acquisition debt of Pro-Duo, N.V.
(3)     Annual amounts shown do not reflect payments that might be required
        after fiscal year 2010 as a result of an excess cash-flows test of
        the Term Loans.

SOURCE: Sally Beauty Holdings, Inc.

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

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