Tulsa, Oklahoma Distribution Center

1. FACILITY Status meeting November 11, 2009 Serge Pepin, SVP Technical Direction/MSL – PPD Roger Carroll, VP Corporate Engineering Mike Schewene, VP Supply Chain NA PPD Tulsa, Oklahoma Distribution Center

2. Welcome to the Tulsa Oklahoma SalonCentric Distribution Center, we are glad to have you as guests today and hope we can make your visit informative! Please let us know if we can assist you in any way possible during your visit!! SalonCentric Mgmt!

3. Safety Orientation • Requirements while visiting the Oklahoma SC Distribution Center • You must sign in and out at reception desk • You must be accompanied by site personnel at all times • Safety shoes are required while out in warehouse • High visibility vests are required while out in warehouse • Be aware of site evacuation and egress maps located throughout facility • Evacuation area located at Southwest corner of facility parking lot • Smoking in designated areas only. • Dial 911 in case of emergency • First responders are in high visibility YELLOW vests

4. Agenda 9:00 - 9:15 Meet and Greet Jim McCrary 9:15 - 9:30 Facility Summary and Structure Jim McCrary 9:30 - 10:00 Market Overview/Customer Service Gregg Wilkinson 10:00 - 10:45 Order Process/Profile/Inventory/Headcount Gregg Wilkinson 10:45 - 12:00 Site Tour Jim McCrary 12:00 - 12:30 Lunch (Open Discussion) 12:30 – 1:15 SH&E Overview Heather Peters 1:15 - 2:00 Cost Review/ Capitol Investments Gregg Wilkinson 2:00- 3:00 Site Challenges and Opportunities Jim McCrary, Russ 3:00 - 4:00Questions and Wrap Up!

5. Facility Summary 165,000 Total SQF 12,000 SQF Office 153,000 SQF Warehouse

6. ManCom and Distribution Organization Structure Jim McCrary Operations Director James Carter Facility Coordinator Heather Peters SH&E Coordinator Ray Trimble Production Coordinator Denise Jones Picking Renee Stopple Picking Charles Ingraham Shipping Steve Jones Replenishment Angie Fuller Receiving 2 Full Time 1 Temp Maint/Janitorial 11 Full Time 6 Temp 11 Full Time 6 Temp 6 Full Time 5 Temp 6 Full Time 2 Temp 16 Full Time 3 Temp 3 Full Time Inventory Control

7. Sales, Human Resource and Administrative Management Structure • Rex Blair • (VP of Sales- Sub Distribution) • Kristen Eckert • (Accounting Controller) • Erin Vierthaler • (HR Manager) • Lora Hakel • (Customer Service Manager) • Cynthia Bartos • (Education Manager) • Susan Massie • (Sales Manager)

8. Market Overview Customers Serviced • RDA and State Sub-Distributors • 114 Independent Owners – Typically husband and wife team or other family group • 249 store locations • 526 sales consultants • Small geographic territories • Contractual relationship based upon sub-distribution agreement (non-exclusive), not franchisee agreement • Order and shipped weekly on defined schedule • Selling price is salon less 1/3rd or 30% off salon for store only lines with a 4% 30 prompt pay discount • SalonCentric Stores • Currently 16 store locations replenished weekly

9. Market Overview

10. Market Overview

11. Market Overview

12. Organization

13. Customer Service Territories

14. Order Process • 217 order locations • Orders are processed weekly based upon an assigned order/shipping day • Customers transmit an electronic order on their assigned order day • The orders are processed through an import routine and any exceptions are resolved • CS reps follow up on any orders that are missing • Backorders are maintained for anything that can not be shipped. Current orders and backorders are batched to produce one picking pass for the order. • Orders have an assigned shipping method – orders are not rate shopped on a weekly basis. We influence the customer, but since they pay freight, they determine the carrier

15. Order Profile • Average Weekly order dimensions • 214 orders • 618,000 units • 95,000 lines • 24,000 cases and 7,200 totes • 800 Pallets • 522,000 lbs

16. Picking Profile * Case inner packs that get picked to a tote/box. Example: 6 pack of Shades EQ color vs a 36 unit case of Shades EQ

17. Product Overview Total Sku’s 11,294

18. Inventory Performance

19. Headcount

20. Site Tour Safety shoes and high visibility vests must be worn while on the tour. Slip-on safety shoes and vests are provided if needed at the warehouse entrance! Welcome! You matter to me!

21. Incident Summary

22. Frequency Rate Summary

23. Environmental Summary • YTD • Total Energy Consumption- (121,360 kWh) • Atmospheric Discharge CO2- (912 Kg) • Transportable Waste- (39.6 Cubic Tons) • Landfill- (4.7 Cubic Tons) • Water Consumption- ( ) • Recycling- (36.3 Cubic Tons) • Plastic, Pallets, Paper and Cardboard All solid waste has been going to Covanta Waste to energy facility since August 2009. Waste to energy since August of 2009 is 3.3 cubic tons, waste is turned into steam which provides electricity. 2009 is a benchmark year for Tulsa facility; the goal for 2010 will be to reduce Energy, Discharge, Waste and Landfill by 5% while increasing Recycling by 5% Waste minimization/reduction plans are initiated for the site with the goal of decreasing waste and energy by 5% and increasing recycling by 5%

24. Safety Overview - 2009 • 476 days without a lost time incident ! • SH&E Goals will be met by the end of 09; • Sites emergency response plan developed • ORS 001 A: 85% compliance achieved • Main focus 2009: • PIT separation • Pallet and racking safety auditing program • High visibility clothing program • Improved PIT driver training program • Initiated PIT driver medical clearance program • General SHAP conducted (50% of employee involved) • 37 SOP created and training conducted • Salon Centric safety web site: www.saloncentricsafety.com • Ergonomics program implemented • SH&E training hours in 2009 have doubled from Jan to Sept, (avg- 196.5 hrs per month) • Main focus 2009: • Weekly trainings conducted by management and supervisors • New hire employee safety orientation program • Visual Communication Campaign launched • SH&E fundamentals training followed by 3 managers

25. Safety Overview - Goals 2010 • Zero lost time accidents while reducing incidents! • Actions to achieve goal: • Detailed SHAP • SH&E Basic Roadmap for Distribution • ORS 002 :Safety suggestion/hazard reporting award program • MESUR behavioral based safety in conjunction implementation • Reduce waste and energy by 5% • Increase recycling by 5% • SH&E Fundamentals training (for supervisors) • Compliance audit 2010

26. Cost Review Note Reference Handout – 9/30/09 Logistics Cost by Facility prepared by J. Witherite

27. 2009 Capital Improvements • Trailer Restraint Systems (ERM) • Replacement of LPG Trucks (ORS-001A) • Alarm System Upgrades (ERM/NFPA 72) • Pedestrian Barrier Project (ORS-001A) Estimated Installation- Mid Dec 09

28. Site Challenges and Improvement Opportunities • Reducing the Frequency Rates! • No flammable or level 2 and 3 aerosol containment per RIO 17C (ERM/Zurich) • Inadequate sprinkler system; system needs to be upgraded to ESFR per NFPA 72 (Zurich) • Racking systems need to be inspected by an engineer for structural integrity and floor ratings. 29 CFR 1910.22 (d)(1) (ERM) • Pallet supports and netting need to be added to selective pallet racking to meet RIO-16 and LOG-96, RIS-32 (ERM) • Mechanical equipment and racking is aging • Exposed loading and unloading dock • Improving order/reception efficiency from Streetsboro • 2015 Reduction Environmental Goal

29. Thank you for visiting the Tulsa, OK Salon Centric Beauty Alliance Distribution Facility!!