FACE Physicians Formula Holdings, Inc. (MM)

Physicians Formula Holdings, Inc. (Nasdaq:FACE) ("Physicians Formula" or the "Company") today announced that the Company has developed a new skin care line, under its Physicians Formula brand name. Starting at the beginning of August, the line will be carried exclusively in approximately 2,500 Wal-Mart doors, with the potential to expand to other retailers in 2012. It will initially be shelved in Wal-Mart's skin care department next to other cosmeceutical skin care lines. The line will include 14 SKUs, which the Company will begin shipping to Wal-Mart this month.

Physicians Formula cosmeceutical skin care is a major strategic development for the Company, which had been previously focused on color cosmetics. The Company believes that its seventy-four year legacy as a doctor-founded, problem/solution brand makes skin care a natural extension of its efforts. Expanding into this new category will increase awareness of the brand, which is one of the Company's main strategic objectives, as well as increase revenue potential and diversify the Company's sales and risks.

The Physicians Formula cosmeceutical skin care line was developed in-house by the Physicians Formula R&D and product development teams. It is formulated to create visible results for the consumer with innovative technology and ingredients, while also simplifying the process of choosing the correct skin care for one's individual needs. The line includes three regimens focused on the most common skin concerns, including Aging, Moisture Balance and Sensitivity & Redness. Each regimen includes three steps: cleanse, moisturize and treat, and incorporates best-in-class cosmeceutical ingredients at the clinically-tested level.

Ingrid Jackel, Chairwoman and CEO, stated, "We are very proud and excited to have been chosen by Wal-Mart to partner with them in developing these best-in-class products. The launch of the Physicians Formula cosmeceutical skin care line represents another in a long line of first-to-market innovations for our Company, as we continue our mission of bringing new beauty technologies and approaches to the marketplace. It also creates new financial opportunities and risk diversification for us."

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 25,700 stores, including those operated by Wal-Mart, Target, CVS and RiteAid.

Safe Harbor Statement

This press release contains 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. In some cases, forward-looking statements can be identified by words such as "anticipates," "estimates," "expects," "believes," "plans," "predicts," and similar terms. In particular, this press release may include forward-looking statements about management's expectations regarding the Company's refinancing, strategy, liquidity, financial performance and outlook. These forward-looking statements are based on current expectations, estimates and projections about the Company's business and its industry, based on management's beliefs and assumptions. Forward-looking statements are not guarantees of future performance and the Company's actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to: the loss of any significant retailer customers or the degradation of our relationship with our significant retailer customers; the demand for the Company's products, including the new cosmeceutical skin care line; the Company's ability to expand its product offerings; the competitive environment in the Company's business, including the larger competitors the Company will now face in the skin care category; the Company's operations and ability to achieve cost savings; the effect of technological and regulatory changes; the Company's cash needs and financial performance; the Company's ability to comply with the financial covenants in its debt agreements; changes in general economic or market conditions; and other factors discussed in the Company's filings with the Securities and Exchange Commission (the "SEC"), including the Risk Factors contained in the Company's filings with the SEC, and available at www.physiciansformula.com and the SEC's website at www.sec.gov. You are urged to consider these factors carefully in evaluating the forward-looking statements in this release and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. Unless otherwise required by law, the Company expressly disclaims any obligation to update publicly any forward-looking statements, whether as result of new information, future events or otherwise.

(FACE/F)

CONTACT: Anne Rakunas
         ICR, Inc.
         (310) 954-1100