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Delay in Shuttle Mission STS-79 Defers $21.3 Million in Revenues to 2nd Quarter Vienna, VA, November 7, 1996 — SPACEHAB, Inc. (NASDAQ: SPAB) announced today results of operations for the fiscal 1997 first quarter, which ended September 30, 1996. The Company reported revenues of $113,200 for the first quarter of 1997 incurring a net loss of $3.8 million, or $0.34 per share on 11,070,910 weighted average shares outstanding. The net loss for the quarter was partially offset by an extraordinary gain, net of federal income tax, of $3.3 million, or $0.30 per share, from a reduction in long-term debt pursuant to a favorable refinancing of SPACEHAB's credit agreement. The quarterly results compare to a net loss of $7.3 million, or $1.08 per share on 6,764,276 weighted average shares outstanding, with no reported revenue for the comparable three-month period a year ago. In June 1996, the Company changed its fiscal year end from September 30 to June 30. SPACEHAB inaugurated its new Logistics Double Module on board the Space Shuttle Atlantis launched on September 16, 1996. This Mir logistics supply mission completed successfully with Atlantis's landing at the Kennedy Space Center on September 26, 1996, and the Double Module's return to SPACEHAB on October 2, 1996, two days after the close of the Company's first quarter." Because we recognize revenue under our current contracts when each Space Shuttle mission is completed and the Module is returned to our facility, a three-day delay in the last SPACEHAB mission pushed the expected recognition of $21.3 million in revenue from our first quarter into our second quarter," said Dr. Shelley A. Harrison, SPACEHAB's Chairman and CEO. The Company noted that revenue will continue to be recognized at the completion of each of the remaining missions under the existing Commercial Middeck Augmentation Module (CMAM) contract and under the Mir basic and options contract. New contract awards for which the Company can demonstrate, at inception, the ability to successfully complete, will recognize revenue under the percentage-of-completion method, reported on the basis of costs incurred over the period of contract performance. During the first quarter of fiscal 1997, SPACEHAB began integration work on two international experiments, one for NASDA, the Japanese Space Agency, and one for ESA, the European Space Agency. The revenue recognized in the first quarter was due to initial efforts performed during this quarter on these commercial experiments, marking the first new business to report revenue under this accounting practice."This will help to smooth our quarterly reporting", Dr. Harrison added. "Since our first Shuttle Mission in 1994, we have continued to deliver solid revenue and earnings results for several years," Dr. Harrison said. "With cash and marketable securities of $45 million, at September 30, 1996, and with long-term debt at only 17 percent of total capital, our balance sheet is quite strong. Excluding the $21.3 million in revenue to be reported in our second quarter of fiscal 1997, we have approximately $70 million in backlog for missions scheduled for completion in fiscal years 1997 and 1998." "SPACEHAB's patented Modules are the only commercial flight-proven assets rated for human space flight. Investment in additional capital assets to augment our existing Module fleet are planned to meet customer requirements in SPACEHAB's three primary markets: Microgravity and Life Sciences Research aboard the Space Shuttles, Space Station Support Services, and Space Infrastructure. NASA budgets alone support a potential value in excess of $1 billion per year in these markets by the year 2002. During the quarter SPACEHAB issued a letter contract to McDonnell Douglas for the initial design phase of a new asset to be added to the Company's fleet, the SPACEHAB Science Double Module. Investment in the Science Double Module is consistent with the Company's strategy of investing in assets that will potentially satisfy known requirements. Customer requirements for this additional capacity to support microgravity research on board the Space Shuttles and completion of the Science Double Module are anticipated in 1998. We are excited about the opportunities we will be pursuing in the years ahead," concluded Dr. Harrison. SPACEHAB is the first company to commercially develop, own and operate habitable modules that provide space-based laboratory research facilities and logistics resupply services aboard the U.S. Space Shuttle system supporting people living and working in space. This document may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are subject to certain risks and uncertainties, including those discussed herein, that could cause actual results to differ materially from those projected in such statements. |