SPACEHAB Announces Financial Results for Fiscal 1998 First Quarter

For Immediate Release

For more information:
Anne Eisele
Director, Corporate Communications
(703) 821-3000
htttp://www.spacehab.com

SPACEHAB Announces Financial Results
for Fiscal 1998 First Quarter

Vienna, Virginia (November 5, 1998) – SPACEHAB, Inc. (Nasdaq: SPAB) today announced financial results for its fiscal 1999 first quarter, which ended September 30, 1998.

First-quarter revenue increased to $28.3 million from $2.5 million last year. Net income for the first quarter was $413,000, or $0.04 per diluted share, compared with a loss of $5.7 million, or $0.51 per diluted share, a year ago.

The highlight of this quarter was the Company's acquisition of Johnson Engineering ("JE") on July 1, 1998, for $24.5 million in cash, excluding transaction costs. In addition to other projects, JE manages all training operations and facility engineering at NASA’s Neutral Buoyancy Laboratory at Johnson Space Center in Houston, Texas. With over 450 employees, and 1997 calendar revenue of $43 million, JE has become a significant addition to SPACEHAB.

Of SPACEHAB’s total first-quarter revenue, approximately $14.4 million was contributed by JE, $11.4 million came from SPACEHAB’s human space flight activities, and $2.5 million came from the Company's ASTROTECH subsidiary.

"Fiscal 1999 is off to a good start," said Dr. Shelley A. Harrison, SPACEHAB’s Chairman and Chief Executive Officer. "The acquisition of JE has strengthened our market base, substantially increased revenue and lessened our dependency on specific Space Shuttle missions. We're also pleased that a SPACEHAB module is now manifested for a second resupply mission to the International Space Station, ISS 2A.2, scheduled for August 1999."

"Our overall profitability was not as high in the first quarter as we would have liked," Dr. Harrison added, "but this was due to unforeseeable delay in the timing of certain communications satellite launches from the first quarter to later in the fiscal year. Without the delay, these launches would have increased the amount of business for ASTROTECH this quarter."

SPACEHAB, Inc. 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. SPACEHAB’s current flight, STS-95, with John Glenn on board, is scheduled to land November 7. The next SPACEHAB flight, STS-96, is scheduled for May 1999 aboard the Space Shuttle Discovery, and it will be the first resupply mission to the International Space Station, ISS 2A.1.

SPACEHAB, Incorporated and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) In thousands, except share data
	Three months ended September 30,
	1998	1997
Revenue	$28,273	$2,537
Costs of revenue:
Integration and operations	18,690	3,856
Depreciation	1,258	1,224
Insurance and other direct costs	1,792	115
Total costs of revenue	21,740	5,195
Gross profit (loss)	6,533	(2,658)
Operating expenses:
Marketing, general and administrative	4,135	2,735
Research and development	247	292
Total operating expenses	4,382	3,027
Income (loss) from operations	2,151	(5,685)
Interest expense, net of capitalized amounts	1,431	201
Interest and other income	(519)	(232)
Other expense	550	--
Income (loss) before income taxes	689	(5,654)
Income tax expense	276	--
Net income (loss)	$413	$(5,654)

Net income (loss) per common share -basic	$0.04	$(0.51)

Shares used in computing basic per-share income	11,168	11,147

Net income (loss) per common share -diluted	$0.04	$(0.51)

Shares used in computing diluted per-share income	11,353	11,147

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.