Bacterin Announces Second Quarter 2013 Results Highlights: Revenue increased to $8.3 million from $8.2 million reported during the second quarter of 2012 Revenues for the period, excluding distributor stocking orders, in

Second Quarter 2013 Results

BELGRADE, Montana , August 6, 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 second quarter ended June 30, 2013. The Company reported revenues of approximately

$8.3 million and a net loss for the second quarter of approximately $2.5 million, or ($0.05) per common share, compared to a net

income of approximately $730,000, or $0.02 per common share, reported during the same period in 2012.

The Company also reported revenues of approximately $16.9 million

and a net loss of approximately $4.2 million, or ($0.09) per common share, over the first six months of 2013. This compares to

revenues of approximately $16.0 million and a net loss of approximately $316,000, or ($0.01) per common share, over the same period

Revenue for the second quarter was approximately $8.3 million,

compared to approximately $8.2 million for the same period during 2012. The increase was primarily attributed to higher volume

sales, which were partially offset by lower sales prices resulting from discounting associated with higher volume distributors

and preferred vendors. For the first six months of 2013, revenues were approximately $16.9 million compared to approximately $16.0

million for the same period of 2012.

"Despite the challenges we incurred during the second

quarter of 2013 associated with the resignation of our prior CEO, this was a satisfying quarter," said John Gandolfo, co-interim

CEO and Chief Financial Officer of Bacterin International Holdings. "We were able to keep our senior management team intact,

which has resulted in winning back previous accounts and stabilizing our core hospital business. As a result of our efforts, we

realized a sequential increase in our core hospital business during the period over the first quarter of 2013. We are currently

assessing sales strategies which will enhance the sustained growth of our core business during the second half of the year. There

is a continuing opportunity to leverage new sales channels and we are well positioned to increase our market presence.

For the second quarter of 2013, gross profit was approximately

$4.7 million, a decrease of 20% from $5.9 million in the second quarter of 2012. Gross margin for the period was 57%, which compares

to a gross margin of 72% reported for the same period last year. During the quarter, the Company took a charge of approximately

$500,000 associated with the write off of expired products primarily related to an improvement being made to our hMatrix manufacturing

process which we expect to result in an improved product in the future. Excluding this charge, gross margins in the quarter would

have been 63%.The first six months of 2013 saw gross profit of $10.2 million, compared to $11.8 million for the same period of

2012. Gross margins for the first six months were 60% in 2013 compared to 74% in 2012.

Sales and Marketing Expenses

Sales and marketing expenses for the second quarter increased

to $4.2 million as compared to $3.8 million for the same period during 2012. As a percentage of revenues, selling and marketing

expenses increased to 51%, which compares to 47% reported for the second quarter of 2012. The increase was primarily the result

of higher personnel costs incurred prior to the recent reduction of headcound and increased administrative fees for GPO Contracts

initiated during the third quarter of 2012. In addition, we incurred $103,000 of severance cost associated with headcount reduction

announced during the second quarter of 2013.

The first six months of 2013, sales and marketing expenses remained

flat at $8.0 million compared to the prior year.

General and Administrative Expenses

In the second quarter, general and administrative expenses (G&A)

remained unchanged at $2.3 million for the period as compared to the same period last year. The second quarter 2013 figure included

$164,000 of severance costs associated with the previously announced headcount reduction program as well as $124,000 of non-recurring

expenses associated with a legal settlement. As a percentage of revenues, general and administrative expenses were 27% in 2013

as compared to 28% for the second of quarter 2012.

The first six months experienced a slight increase of general

and administrative expenses to $5.1 million, which compares with $4.9 million reported during the second quarter of 2012. As a

percentage of revenues, G&A was 30% in the first half of 2013 compared to 31% in 2012.

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 second quarter of 2013 was a loss of $1.4 million, compared

to breakeven EBITDA for the second quarter of 2012. Excluding the write off of expired inventory of approximately $500,000

and severance expenses associated with the headcount reduction of $267,000, the second quarter 2013 EBITDA loss was $637,000. See

"GAAP to non-GAAP Reconciliation" below for further information on this non-GAAP measure.

Cash and cash equivalents were $5.1 million and net accounts

receivable, were $6.2 million on June 30, 2013, compared to cash and cash equivalents of $4.9 million and net accounts receivable

of $7.2 million on December 31, 2012.

Kent Swanson, Chairman of Bacterin International Holdings added,

"The sequential growth of our recurring revenues is a clear indication of the success we are having with our base hospital

business. Now with our recent clearance from the FDA to market the OsteoSelect DBM Putty for spinal fusion procedures, we are well

positioned to leverage our products and execute on our sales strategies to further penetrate the marketplace and grow this business."

Conference Call Details

Management will hold a conference call to discuss its financial

results at 10:00 a.m. ET, on Wednesday, August 7, 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