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For Immediate Release

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

Media
Penelope Longbottom
VP Corporate Communications

Financial
Margaret E. Grayson
VP Finance and CFO

Vienna, VA, May 6, 1998 — SPACEHAB, Inc., (Nasdaq: SPAB) today announced financial results for its fiscal 1998 third quarter and first nine months, which ended March 31, 1998. The company recorded revenue of $19.0 million for the third quarter and $39.3 million for the first nine months of fiscal 1998. Revenue for the comparable three and nine-month periods that ended March 31, 1997, was $15.0 million and $38.1 million, respectively.

Of fiscal 1998's third-quarter revenues, $13.6 million was recognized for SPACEHAB's sixth mission under the Mir contract, $2.5 million was contributed by its ASTROTECH subsidiary, and $2.9 million was reported under the Research and Logistics Module Services (REALMS) contract with NASA.

On a comparative basis, the three-month and nine-month periods ended March 31, 1998 and 1997, are significantly different. Depreciation expenses were substantially lower in the three-month and nine-month periods this year because SPACEHAB extended the estimated useful lives of its space modules to more accurately reflect their long-term value by conforming with NASA's extension of the Space Shuttle program life through 2012. Costs of revenue, excluding depreciation, increased for both the quarter and year-to-date due primarily to the inclusion of costs of the ASTROTECH subsidiary, which was acquired on February 12, 1997. For the nine months ended March 31, 1997, integration and operations costs reported for the Commercial Middeck Augmentation Module contract were lower than in previous years by approximately $3.2 million due to the close-out of that contract. General and administrative expenses increased for both the quarter and year-to-date as the company added people and processes to strengthen marketing, design and engineering. Research and development costs increased due to the company's investments in the Integrated Cargo Carrier (ICC) and the SPACEHAB Universal Communications System (SHUCS) that will be flown on STS-91 in June. There is no income tax expense recorded for the three-month and nine-month periods ended March 31, 1998, primarily due to depreciation timing differences between book and tax on the company's flight modules.

In December 1997, the company adopted the provisions of Statement of Financial Accounting Standards No. 128 (FAS 128), which established new guidelines for the calculations of earnings per share. Earnings per share for all prior periods presented have been restated to reflect the provisions of FAS 128. Net income in the table that follows this release presents both basic and diluted earnings per share. SPACEHAB's net income for the quarter that ended March 31, 1998, was $4.9 million, or $0.44 per share (basic EPS), as compared with $3.2 million, or $0.29 per share (basic EPS), for the same period last year. For the first nine months of fiscal 1998, net income was $5 million, or $0.45 per share (basic EPS), as compared with $7.2 million, or $0.65 per share, before extraordinary gain and $10.5 million, or $0.94 per share, including extraordinary gain (basic EPS) a year ago.

"Net income so far in fiscal 1998 remains consistent with our business plan, which calls for substantial investment to make available the assets, people, and processes we need to support our growth in conjunction with the advent of the International Space Station and stepped up telecommunications satellite launches," said Dr. Shelley A. Harrison, SPACEHAB Chairman and Chief Executive Officer. "The nearly $88 million in new financing arrangements SPACEHAB has completed within the last 12 months are being used to develop and build assets that are vital to the future of human space flight and the satellite telecommunications industry."

"The SPACEHAB Research Double Module will enable the continued growth of microgravity research aboard the Space Shuttle," Dr. Harrison said. "The Module's first use is scheduled for STS-107 in May 2000."

"Construction of SPACEHAB's Integrated Cargo Carrier system has also begun," Dr. Harrison continued. "This highly flexible system can be used as a stand- alone carrier or combined with SPACEHAB single and double modules to increase the Space Shuttle's capability to carry unpressurized cargo to the International Space Station."

The company's ASTROTECH subsidiary recently completed a $2.3 million expansion of its facility in Titusville, Florida, to add a new Encapsulation High Bay to enable parallel encapsulation activities in support of Atlas II and the new Delta III launch vehicle payloads. The expansion will also support the Air Force's new Evolved Expendable Launch Vehicle (EELV), which is scheduled to begin commercial payload activities in 2001. ASTROTECH's Vandenberg facility is also spending approximately $1.4 million for site improvements and a new technical support building to prepare for the NASA EOS-AM and WIRE missions scheduled for 1998.

"We are pleased with our performance through the first nine months of fiscal 1998 and are enthusiastic about the future of commercial space activities," commented Dr. Harrison.

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