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Deals

Physicians Formula Holdings Secures Growth Capital

Los Angeles, CA — FocalPoint Securities, LLC (“FocalPoint”) has completed another successful financing to support the growth capital needs of our client. The transaction demonstrates the firm’s capabilities in securing capital under the most challenging of financing market conditions, and in creatively structuring transactions to attract capital providers.

Physicians Formula Holdings, Inc. (Nasdaq: FACE), (“Physicians Formula” or the “Company”) is an innovative cosmetics company that addresses skin imperfections through a problem-solving approach. In this difficult retail environment, the financing provides Physicians Formula with additional liquidity and flexibility as it manages its working capital needs, new product production cycle, and growth opportunities. FocalPoint served as exclusive financial advisor to Physicians Formula, FocalPoint’s second transaction with the Company after initially advising its parent on the sale to Summit Partners in 2003.

Ingrid Jackel, CEO and Chairwoman of the Board of Physicians Formula Holdings, said, “This new financing will allow us to execute our long-range plan, including the introduction of exciting new product platforms and our efforts to expand sales into new channels and international markets.” Jeff Berry, CFO of Physicians Formula, added, “Without FocalPoint’s great relationships and experience, we would not have achieved a deal as complicated as this one.”

Rajesh Sood, Managing Director at FocalPoint, commented, “We are pleased with the outcome of this transaction and the results that FocalPoint was able to achieve for Physicians Formula. We understood the constraints the Company faced in raising additional capital and were able to structure a financing that provided the Company’s shareholders the greatest value.”

About Physicians Formula Holdings, Inc.
Physicians Formula is an innovative cosmetics company operating in the mass market prestige, or “masstige”, market. Under its Physicians Formula brand name, created in 1937, the Company develops, markets and distributes innovative, premium-priced products for the mass market channel. Physicians Formula differentiates itself by addressing skin imperfections through a problem-solving approach, rather than focusing on changing fashion trends. Currently, Physicians Formula products are sold in approximately 29,500 stores including stores operated by Walmart, Target, CVS and Rite Aid. After the discontinuation by a major customer takes full effect in 2010, the Company’s products will be sold in approximately 23,700 stores. For more information, please visit www.physiciansformula.com.

About FocalPoint Securities, LLC
FocalPoint is an independent investment bank, specializing in mergers and acquisitions, private placements (both debt and equity), financial restructurings, and distressed transactions. The firm’s primary focus is on middle-market companies.

Please contact Rajesh Sood at 310-405-7000 with any questions about this transaction.