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SPACEHAB, Inc.
1595 Spring Hill Road
Suite 360
Vienna, Virginia 22182
(703) 821-3000

Vienna, Virginia, November 6, 1997 — SPACEHAB, Inc., (NASDAQ: SPAB) today announced financial results for its fiscal 1998 first quarter, which ended September 30, 1997.

First-quarter revenue increased to $2.5 million from $113,000 last year. The net loss for the fiscal 1998 quarter was $5.7 million, or $0.51 per share. A loss was expected because of the timing differential between recording cost and revenue for astronaut-tended missions as required by the Company's revenue recognition policy. Sustaining engineering costs incurred in support of the Mir mission under contract were higher than anticipated, causing the reported first-quarter loss to be higher than expected. Total costs for the mission have not increased, however, so there will be a favorable effect on expected results in the second quarter. This first-quarter loss compares favorably with last year's first-quarter loss (before an extraordinary gain) of $7.1 million, or $0.64 per share. Last year's first-quarter net loss of $3.8 million, or $0.34 per share, included a $0.30 per share gain from a favorable refinancing of the Company's credit agreement.

The Space Shuttle Atlantis lifted off on its mission to Mir in the first quarter, on September 25, 1997, and landed in the second quarter, on October 5, 1997. Since SPACEHAB's Logistics Double Module, which was vital to the success of the mission, was returned to the Company in early October, all of the revenues for the mission will be recognized in the second quarter. As is consistent with the Company's policies, however, sustaining engineering costs in support of all missions were expensed as incurred during the previous quarters.

"The Company's historical revenue recognition policy, which has caused quarterly results to fluctuate, is changing," said Dr. Shelley A. Harrison, SPACEHAB's Chairman and Chief Executive Officer. "New contracts for astronaut-tended missions entered into in fiscal 1997 and thereafter will recognize both revenue and costs ratably over the period of performance. Revenue reported for the quarter came from our ASTROTECH subsidiary, whose contracts already recognize revenue and costs ratably over the period of performance. By fiscal 1999 all our contracts should be accounted for in this manner."

"Fiscal 1998 is off to a good start," said Dr. Harrison. "Our Logistics Double Module again was vital to the success of a NASA mission to resupply the Russian space station Mir with critical logistics and repair components. Our Astrotech facilities were used to prepare five of Motorola's Iridium satellites for launch from the Pacific coast within 24 hours of the September 25 Shuttle launch on the Atlantic coast, which demonstrates the breadth and versatility of SPACEHAB's commercial services."

SPACEHAB has two additional missions to Mir in backlog for fiscal 1998. Additionally, NASA has selected SPACEHAB as the sole-source supplier for two new missions identified on the NASA manifest for flights scheduled in October 1998 and December 1998. The mission in October 1998 is a new science mission to perform microgravity research for NASA as well as for international customers. The December 1998 mission is the first logistics resupply mission to the new International Space Station (ISS). Negotiations are currently in progress between NASA and SPACEHAB to complete the contract for these missions.

As of September 30, 1997, the balance sheet listed $18.5 million in cash and marketable securities. Also as of September 30, 1997, the balance sheet listed long-term debt of $23.9 million, which is only 22.7 percent of total capitalization.

"The Company's balance sheet was strengthened further by the successful completion of new financing needed to build assets for the next phase of human spaceflight activities and satellite payload processing," Dr. Harrison said. "We secured $25 million in new credit agreements during the first quarter and, shortly after the quarter ended, completed an offering of over $63 million in principal amount of 8% Convertible Subordinated Notes due in 2007. New assets, including SPACEHAB's Integrated Cargo Carrier (ICC) System will complement our Science and Logistics Single and Double Modules for resupply and maintenance of the International Space Station. SPACEHAB awarded contracts in the first quarter to Daimler-Benz Aerospace of Germany and RSC Energia of Russia for the ICC System's preliminary design. Additional assets are being developed to support ISS utilization and for the expansion of the ASTROTECH facilities to accommodate the next generation of EELVs (Evolved Expendable Launch Vehicles)."

"As fiscal 1998 progresses we will continue to build our leadership role in supplying products and services for human spaceflight operations as well as telecommunications satellite payload processing," Dr. Harrison concluded.

SPACEHAB, Inc., with its ASTROTECH subsidiary, is the world's leading provider of commercial payload processing services for both unmanned and astronaut-tended payloads. SPACEHAB is the first company to commercially develop, own and operate habitable modules that provide space-based laboratory facilities and logistics resupply services aboard the U.S. Space Shuttles to support people living and working in space.

This release contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Such risks and uncertainties include, but are not limited to, whether the company will fully realize the economic benefits under its NASA and other customer contracts, the successful development and commercialization of new commercial space assets, technological difficulties, product demand, timing of new contracts and business, market acceptance risks, the effect of economic conditions, uncertainty in government funding, the impact of competition, and other risks detailed in the company's Securities and Exchange Commission filings.