Bacterin Announces First Quarter 2014 Results Company reports record core recurring biologics revenues of $8.7 million BELGRADE, Mont .--(BUSINESS WIRE)

First Quarter 2014 Results

Company reports record core recurring

biologics revenues of $8.7 million

BELGRADE, Mont.--(BUSINESS WIRE)- May 06, 2014

-- Bacterin International Holdings, Inc. (NYSE MKT: BONE), a leader in the development of revolutionary bone graft material and

coatings for medical applications, today reported financial results for the first quarter ended March 31, 2014. The Company reported

quarterly revenues just over $8.9 million, and a net loss for the quarter of approximately $4.1 million, or ($0.08) per common

First quarter 2014 revenue was approximately $8.9 million, an

increase of 3.4% compared to approximately $8.6 million for the same period during 2013. First quarter 2014 core recurring biologics

revenues, which excludes large stocking order transactions the Company is no longer pursuing, were approximately $8.7 million,

an increase of approximately 21% compared to the first quarter of 2013. During the first quarter of 2013, the Company had a one

time $1.3 million stocking order sale that was included in the 2013 revenue figure.

"Our hybrid sales organization has delivered substantial

productivity improvements leading to sustained growth in our core business over the last two quarters," said Dan Goldberger,

President and CEO of Bacterin International. "Since I joined Bacterin, we have worked tirelessly to make our sales team focused

and efficient in order to expand our market share.

Gross profit for the first quarter 2014 was $5.5 million or

61.7% of revenues, compared to $5.5 million or 63.8% of revenues for the first quarter 2013. This figure is within the Company's

previously stated range of an expected gross margin of 61 to 63% for 2014.

Sales and Marketing Expenses

First quarter 2014 sales and marketing expenses increased 6.8%

to $4.1 million, as compared to $3.8 million during the same period in 2013. For the quarter, sales and marketing as a percentage

of revenues increased to 45.5%, compared to 44.1% in 2013 as there were no sales commissions paid on the $1.3 million stocking

order sale in the first quarter of 2013. On a sequential basis, sales and marketing expense as a percentage of revenues decreased

from 48.0% in the fourth quarter of 2013 to 45.5% in the first quarter of 2014.

Mr. Goldberger continued, "In the first quarter of 2014,

we continued to see the year-over-year growth that we demonstrated at the end of 2013. The sales management changes we announced

late last week and additional headcount in the sales function are necessary steps in positioning Bacterin for sustained revenue

General and Administrative Expenses

In the first quarter, general and administrative expenses decreased

approximately 11% to $2.3 million as compared to $2.6 million reported for the same period last year. Reductions in general and

administrative expenses made at the beginning of the second quarter last year contributed to the lower general and administrative

figure in the first quarter of 2014.

Research and Development Expenses

The Company reported first quarter 2014 research and development

expenses of approximately $255,000, a slight decrease from $285,000 reported in the first quarter of 2013.

Mr. Goldberger continued, "We continue to invest in clinical

and scientific support for our demineralized bone products as demonstrated by Dr. Brigido's study published in March reporting

positive results for OsteoSponge in foot and ankle procedures. We released OsteoSTX, designed for multi-level spine fusions in

February and we have additional demineralized bone configurations in the development pipeline. We believe these products will strengthen

our revenue base and be attractive to our existing and new customers."

Loss from Operations

The first quarter 2014 loss from operations was approximately

$1.2 million a slight improvement over the first quarter 2013 operating loss.

The Company defines earnings before interest, taxes, depreciation

and amortization ("EBITDA") as net income/loss from operations before depreciation, amortization and non-cash stock-based

compensation. EBITDA for the first quarter of 2014 was a loss of approximately $715,000, a slight improvement over the first quarter

of 2013. On a sequential basis, this compares to a fourth quarter 2013 EBITDA loss of approximately $1.2 million, after adjusting

for the one time inventory reserve adjustment recorded in the fourth quarter of 2013.

Cash, cash equivalents and net accounts receivable were $10.3

million as of March 31, 2014 compared to $7.8 million at December 31, 2013. In March of 2014, the Company borrowed an additional

$4 million from an affiliate of Orbimed Advisors.

Conference Call Details

The Company will hold a conference call hosted by Dan Goldberger,

Chief Executive Officer, and John Gandolfo, Chief Financial Officer, to discuss financial results at 10:00 a.m. ET, on Tuesday,

May 07, 2014. 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.

International Holdings

Bacterin International

Holdings, Inc. (NYSE MKT: BONE) develops, manufactures and markets biologics products to domestic and international markets.

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.

Medical Device division develops, employs, and licenses coatings for various medical device applications. For further information,

please visit www.bacterin.com.

Regarding Forward-looking Statements

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 remain listed on the NYSE

MKT; 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 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 Reports on Form 10-Q under the heading "Risk Factors."