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SPACEHAB ANNOUNCES FINANCIAL RESULTS FOR FISCAL YEAR 2000

For the fourth quarter of fiscal 2000, revenue decreased 1.6 percent to $28.7 million from $29.1 million the year before. Net income for the fourth quarter was $22,000 compared to a loss of $610,000 for the fourth quarter of fiscal 1999. On a per-share basis, basic and diluted earnings per share for the fiscal 2000 fourth quarter were $0.00 compared to a loss of $0.05 per share for the same quarter in fiscal 1999.

For fiscal 2000, SPACEHAB revenue decreased 1.9 percent to $105.7 million from $107.7 million in the previous year. SPACEHAB's net loss for fiscal 2000 was $3.8 million or $0.34 per basic and diluted share compared to a net loss of $2.6 million or $0.23 per diluted share for the previous year.

Several factors affected the Company's financial performance for fiscal 2000. The Space Shuttle fleet had a launch hiatus of several months for upgrades and repairs, and the International Space Station (ISS) assembly sequence was delayed, due to the late delivery of the Russian service module Zvezda. In addition, failures of the Delta III and Sea Launch rockets and the financial reorganizations of the Iridium and ICO satellite constellation programs delayed and curtailed satellite processing activities for the company's Astrotech subsidiary.

The Space Shuttle fleet is now fully operational and scheduled to launch eight missions next year, Zvezda was launched successfully and attached to the ISS on July 17, and the Delta III and Sea Launch vehicles are back in operation.

SPACEHAB incurred additional costs of $2.4 million in fiscal 2000 due to the initiation of its Enterprise™ commercial space station habitat project and its new Space Media, Inc.™ subsidiary. Space Media is creating proprietary space-themed content for television and Internet broadcasting and holds exclusive multimedia rights to program content that will be produced aboard Enterprise.

Space Media also is managing the S*T*A*R*S™ (Space Technology And Research Students) global space education program, initiated by SPACEHAB in 1999. The S*T*A*R*S program currently is planning to launch student-designed experiments on upcoming Space Shuttle missions for schools in Australia, Canada, China, Israel, Japan, Singapore, Thailand, and the United States. (To learn more about S*T*A*R*S or sign up to participate, see http://www.starsprogram.com.)

Space Media recently acquired The Space Store, an online retail operation, anticipating that e-commerce will be an integral part of its business. Currently offering about 400 space-related products, The Space Store (http://www.thespacestore.com) will expand its product line in fiscal 2001 and beyond with the addition of SMI-licensed merchandise as well as other space-themed products from worldwide sources.

"As our fiscal 2000 activities demonstrate, SPACEHAB continues to lead the way in the commercial development of space," said SPACEHAB Chairman and Chief Executive Officer Dr. Shelley A. Harrison. "Our Enterprise module will house the world's first commercial broadcasting studio in orbit, and Space Media is breaking new ground in the growing multimedia business. In all of our efforts," said Dr. Harrison, "we are focused on expanding our customer base, developing new markets, extending our global reach, building new strategic partnerships and strengthening existing alliances, while continuing to deliver top-quality, innovative products and services."

"SPACEHAB's third ISS resupply mission, STS-106, is scheduled to launch on September 8, this week, and the first ISS crew is scheduled to inhabit the ISS in November," said SPACEHAB President and Chief Operating Officer David A. Rossi. "We are a leader in the business of space station resupply, and we anticipate that this market will grow now that ISS assembly is well under way."

For the fiscal year ended June 30, 2000, revenue included $39.6 million recognized from Flight Services contracts in support of Space Shuttle missions, including the Company's Research and Logistics Mission Support (REALMS) contract with the National Aeronautics and Space Administration (NASA) and contracts with commercial customers to fly experiments and other payloads; $58.2 million from SPACEHAB's Engineering Services unit (formerly called Johnson Engineering), primarily under contracts with NASA's Johnson Space Center; $7.6 million contributed by the Company's Astrotech subsidiary for satellite processing; and $0.3 million in miscellaneous revenues. In comparison, for the fiscal year ended June 30, 1999, revenue of $39.1 million was recognized from Space Shuttle missions, $58.4 million from Engineering Services, $9.8 million from Astrotech, and $0.4 million from miscellaneous sources.

In fiscal 2000, SPACEHAB's Engineering Services unit continued to support astronaut training at NASA's Neutral Buoyancy Laboratory and Space Vehicle Mockup Facility in Houston. Engineering Services built and delivered a Space Station Remote Manipulator System trainer for NASA this spring. Building on its core competences in providing training and building full-scale mockups, Engineering Services contributed to diversifying SPACEHAB's commercial customer base by receiving a $6 million contract to design and fabricate a major museum exhibit in China in fiscal 2001. This project is due to be completed in April 2001.

During fiscal 2000, SPACEHAB's Astrotech subsidiary handled satellite processing for 13 missions launched from California and Florida, compared to 15 missions in 1999. In fiscal 2000, Astrotech secured long-term contracts to process payloads for Atlas and Delta launches. Astrotech also has an excusive contract to process Sea Launch payloads. In addition, Astrotech completed the research-and-development phase of its Oriole suborbital launch vehicle program in fiscal 2000, executing a successful demonstration launch of the Oriole sounding rocket from NASA's Wallops Flight Facility in Virginia on July 7, 2000.

Founded in 1984, with more than $100 million in annual revenue, SPACEHAB, Inc., is a leading provider of commercial space services. The Company is the first to develop, own, and operate habitat modules and cargo carriers providing laboratory facilities and resupply capabilities aboard NASA's Space Shuttles. It also supports astronaut training at NASA's Johnson Space Center in Houston and builds full-scale space-flight trainers and mockups. SPACEHAB's Astrotech subsidiary provides commercial satellite processing services at facilities in Florida and California in support of a range of expendable launch vehicles, including Lockheed Martin's Atlas and Boeing's Delta and Sea Launch rockets. SPACEHAB's newest strategic growth initiative, Space Media, Inc. (SMI™, a subsidiary), will bring space into homes and classrooms worldwide with television and Internet broadcasting from the International Space Station.

Linda Billings
Director of Communications
SPACEHAB, Inc.
202/488-3500; toll-free 888/647-9543
billings@hqspacehab.com

Note: To access a Webcast of SPACEHAB's conference call with investors, scheduled for 11 a.m. EDT on Thursday September 7, see: http://www.videonewswire.com/SPACEHAB/090700/

Note: Certain items in costs of revenue and operating expenses for the three and year ended June 30, 1999, have been reclassified to conform with the 2000 consolidated financial statement presentation.