Bacterin Announces Third Quarter 2014 Results Company increases year-over-year sales, improves margins and reduces loss from operations Third Quarter Highlights: Third Quarter 2014 total revenue increased approximately 6

Bacterin Announces Third Quarter 2014

Company increases year-over-year

sales, improves margins and reduces loss from operations

Third Quarter Highlights:

BELGRADE, MT--(BUSINESS WIRE) November

5, 2014 -- Bacterin International Holdings, Inc. (NYSE MKT: BONE), a leader in the development of bone graft material and coatings

for medical applications, today reported financial results for the third quarter ended September 30, 2014.

Third quarter 2014 revenues were $8.454 million,

an increase of 6.6% over third quarter 2013 revenues of $7.930 million. The higher revenues reflect the company's ongoing investment

in its hybrid sales function calling on orthopedic surgeons and neurosurgeons.

"We continue to deliver solid,

organic, year-over-year growth," said Dan Goldberger, CEO of Bacterin International. "Our tenured sales representatives

are becoming more productive and we are more effectively recruiting experienced sales talent as well as increasing the number of

manufacturer representatives carrying Bacterin products."

Gross profit reported for the third quarter

of 2014 increased 17.9% to $5.436 million from $4.612 million reported for the third quarter of 2013. The higher gross profit was

due to sales mix and ongoing productivity improvements.

Gross margins for the period were 64.3%, an

increase over the Company's 2013 third quarter reported gross margin of approximately 58.2%. Although the Company's reported margins

were in excess of 63%, the Company reiterated its guidance on gross margins within the previously announced range of 61.0% to 63.0%.

Sales and Marketing Expenses

Third quarter 2014 sales and marketing expenses

decreased 3.1% to $3.927 million, as compared to $4.054 million during the same period in 2013. Sales and marketing as a percentage

of revenues decreased to 46.5%, which compares favorably to 51.1% reported for the third quarter of 2013.

General and Administrative Expenses

General and administrative expenses for the

quarter decreased 16.3% to $2.282 million, compared to $2.727 million reported during the third quarter of 2013.

Research and Development Expenses

The Company reported third quarter 2014 research

and development expenses of approximately $378,000 related to its ongoing product development initiatives.

Loss from Operations

The reported third quarter 2014 loss from operations

was $1.250 million, a 46.7% decrease from the year-ago period operating loss of $2.347 million. "We continue to demonstrate

strong financial discipline in our organization as evidenced by our increasing gross margin and decreasing operating loss,"

said Dan Goldberger, CEO of Bacterin International.

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 third quarter of 2014 was a loss of approximately $839,000, a significant

improvement over the third quarter of 2013 EBITDA loss of $1.847 million.

As of September 30, 2014 the Company had cash

and cash equivalents of approximately $6.953 million, which compares to $3.046 million as of December 31, 2013.

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 Thursday, November 6, 2014. A slide presentation will also be available on the Company's website prior to the conference

call. 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.

Conference date: November 6 2014, 10:00 AM

Conference dial-in: 877-269-7756

International dial-in: 201-689-7817

Conference Call Name: Bacterin's Third

Quarter 2014 Results Call

Webcast Registration: Click

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.

About Bacterin 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.

Bacterin's Medical Device division develops,

employs, and licenses coatings for various medical device applications. For further information, please visit www.bacterin.com.

Important Cautions Regarding Forward-looking

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 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." 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.

BACTERIN INTERNATIONAL HOLDINGS, INC.

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