Bacterin Announces First Quarter 2013 Revenue of $8.6 Million First Quarter 2013 Highlights: Revenue increased 11% year over year, to approximately $8.6 million, and increased 6% over reported revenues for the fourth qua

Bacterin Announces First Quarter 2013

Revenue of $8.6 Million

BELGRADE, MT, May 9, 2013 -- Bacterin International

Holdings, Inc. (NYSE MKT: BONE), a leader in the development of revolutionary bone graft material and coatings for medical applications,

today reported its financial results for the first quarter ended March 31, 2013. The Company reported revenues of $8.6

million and a net loss for the first quarter of approximately $1.7 million, or ($0.04) per common share, compared

to a net loss of approximately $1.0 million, or ($0.03) per common share, reported during the same period in 2012.

Revenue for the first quarter was 8.6 million, up 11% compared

to approximately $7.8 million for the same period during 2012. The increase was primarily attributed to a new sales agreement

with a large U.S. distributor that contributed $1.3 million during the first quarter of 2013.

"This was a solid quarter for the business despite the

challenges we faced, " said John Gandolfo, Interim Co-Chief Executive Officer and Chief Financial Officer of Bacterin

International. " After increased competition in the marketplace at the end of 2012, we were able to continue our revenue

growth by implementing certain strategic sales initiatives during the first quarter. This has allowed us to adjust our sales approach

and adapt to this evolving environment. As a result, we have been making progress in overcoming factors that have been impedeing

our sales growth. We will continue to focus on large corporate accounts that understand our product's value propostition

as well as continuing to penetrate our core hospital accounts. "

For the first quarter of 2013, gross profit was $5.5 million,

a decrease of 7% from $5.9 million in the first quarter of 2012. Gross margins for the period were 64%, which compares

to gross margins of 76% reported for the same period last year. Gross margins for the period improved sequentially from 56%, which

was reported for the fourth quarter of 2012. Excluding the $1.3 million sale attributed to the Company's new sales agreement

to a large U.S. distributor, gross margins would have been 67% for the first quarter of 2013.

Sales and Marketing Expenses

Sales and marketing expenses decreased to $3.8 million as

compared to $4.1 million for the same period during 2012. As a percentage of revenues, selling and marketing expenses

decreased to 44%, which compares to 53% reported for the first quarter of 2012. The decrease was primarily the result of more variable

compensation paid to the direct sales force in 2013 compared to fixed salaries earned in the comparable period of 2012, as well

as a lower corporate sales commission structure for direct sales representatives and independent distributors.

General and Administrative Expenses

In the first quarter, general and administrative expenses increased

to $2.9 million for the period as compared to $2.6 million reported for the same period last year. As a percentage

of revenues, general and administrative expenses were 33%, and were unchanged when compared with the first quarter 2012.

EBITDA for the first quarter of 2013 was a loss of $1.1

million, compared to a loss of $0.5 million in the first quarter of 2012. Mr. Gandolfo further commented, "If we are

successful in achieving the our 2013 revenue guidance of $38 to $40 million and the expense reductions we announced on our

2012 year end earnings call, we believe we would generate positive operating income as well as positive EBITDA for the year."

Cash and cash equivalents and net accounts receivable, were $9.3

million on March 31, 2013, compared to $12.1 million on December 31, 2012.

Kent Swanson, Chariman of Bacterin International added, "With

the recent departure of Guy Cook as CEO and Chairman, the board and senior management team remain committed to hiring a proven

and commercially sophisticated CEO who will continue to drive our revenue growth and the Company toward profitability. Morale throughout

the company is high and our products continue to be viewed positively by our customer base, which gives us confidence in achieving

Conference Call Details

The company will hold a conference hosted by Kent

Swanson, Chairman, John Gandolfo, Interim co-CEO and Chief Financial Officer, Darrel Holmes, Interim co-CEO and Chief Operating

Officer and Molly Mason, VP of Marketing to discuss its financial results at 10:00 a.m. ET, on Friday, May 10, 2013.

Please refer to the information below for conference call dial-in information and webcast registration.

Please call the conference telephone number 5-10 minutes prior

to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference

call, please contact the Cockrell Group at 1-877-889-1972.

Following the live call, a replay will be available on the Company's

website, www.bacterin.com, under "Investor Info".

About the Presentation of EBITDA

EBITDA is not a financial measure calculated and presented in

accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered as an alternative to net income,

operating income or any other financial measures so calculated and presented, nor as an alternative to cash flow from operating

activities as a measure of liquidity. The company defines EBITDA as net income/(loss) from operations before depreciation, amortization

and non-cash stock-based compensation. Other companies (including competitors) may define EBITDA differently. The company presents

EBITDA because management believes it to be an important supplemental measure of performance that is commonly used by securities

analysts, investors and other interested parties in the evaluation of companies in our industry. Management also uses this information

internally for forecasting and budgeting. It may not be indicative of the historical operating results of Bacterin nor is it intended

to be predictive of potential future results. Investors should not consider EBITDA in isolation or as a substitute for analysis

of the company's results as reported under GAAP. See "GAAP to non-GAAP Reconciliation" below for further information

on this non-GAAP measure.

About Bacterin International Holdings

Bacterin International Holdings, Inc. (NYSE MKT: BONE)

develops, manufactures and markets biologics products to domestic and international markets. Bacterin's proprietary methods optimize

the growth factors in human allografts to create the ideal stem cell scaffold to promote bone, subchondral repair and dermal growth.

These products are used in a variety of applications including enhancing fusion in spine surgery, relief of back pain, promotion

of bone growth in foot and ankle surgery, promotion of cranial healing following neurosurgery and subchondral repair in knee and

other joint surgeries.

Bacterin's Medical Device division develops and licenses coatings

for various medical device applications. For further information, please visit www.bacterin.com.

Important Cautions Regarding Forward-looking Statements

This news release contains certain disclosures that may be deemed

forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to significant

risks and uncertainties. Forward-looking statements include statements that are predictive in nature, that depend upon or refer

to future events or conditions, or that include words such as "continue," "efforts," "expects," "anticipates,"

"intends," "plans," "believes," "estimates," "projects," "forecasts,"

"strategy," "will," "goal," "target," "prospects," "potential," "optimistic,"

"confident," "likely," "probable" or similar expressions or the negative thereof. Statements of historical

fact also may be deemed to be forward-looking statements. We caution that these statements by their nature involve risks and uncertainties,

and actual results may differ materially depending on a variety of important factors, including, among others: the Company's ability

to meet its existing and anticipated contractual obligations, including financial covenant and other obligations contained in the

Company's secured lending facility; the Company's ability to manage cash flow and achieve profitability; the Company's

ability to develop, market, sell and distribute desirable applications, products and services and to protect its intellectual property;

the ability of the Company's sales force to achieve expected results; the ability of the Company's customers to pay and the timeliness

of such payments; the Company's ability to obtain financing as and when needed; changes in consumer demands and preferences; the

Company's ability to attract and retain management and employees with appropriate skills and expertise; the Company's ability

to attract and retain a well qualified Chief Executive Officer; the Company's ability to successfully conclude government

investigations; the impact of changes in market, legal and regulatory conditions and in the applicable business environment, including

actions of competitors; and other factors. Additional risk factors are listed in the Company's Annual Report on Form 10-K and Quarterly

Report on Form 10-Q under the heading "Risk Factors." The Company undertakes no obligation to release publicly any revisions

to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated

events, except as required by law.