SPACEHAB OUTLOOK REMAINS POSITIVE WITH BACKLOG AT $173 MILLION

FOR IMMEDIATE RELEASE

SPACEHAB OUTLOOK REMAINS POSITIVE WITH BACKLOG AT $173 MILLION
Company Aggressively Pursuing New Business Opportunities

Houston, Texas, March 11, 2003 – SPACEHAB, Incorporated (NASDAQ/NMS: SPAB), a leading provider of commercial space services, today announced that the Company’s large backlog and new business opportunities support positive results and continued growth.

With over $173 million in business backlog and a strengthened balance sheet, SPACEHAB continues to focus on the utilization of its existing asset base and the delivery of strong financial and operating results going forward. “In the wake of the Columbia tragedy this is a difficult time for the space industry,” said SPACEHAB President and Chief Operating Officer, Michael E. Kearney. “Despite this challenge, we are able to respond to NASA’s near- and long-term requirements for both the Space Shuttle and International Space Station programs, while remaining financially sound and leveraging our strong core competencies.”

SPACEHAB Continues Work for NASA and Boeing

In support of NASA, SPACEHAB continues with day-to-day operations under the Research and Logistics Mission Support (ReALMS) contract for the STS-116 and STS-118 missions, important contributions to the completion of International Space Station (ISS) assembly. SPACEHAB is providing a Logistics Single Module and an Integrated Cargo Carrier to support resupply requirements for the orbiting space station. Once NASA announces new launch dates for these flights, the Company will negotiate adjustments to the contract to compensate for expenses incurred from launch delays.

For the upcoming STS-114 mission SPACEHAB is providing a unique cargo carrier, known as the External Stowage Platform 2, or ESP2, that will be deployed and mounted to the space station. This platform will be attached to the ISS airlock and used by the astronaut crews as a permanent spare parts stowage facility. Under contract to The Boeing Company for these services, SPACEHAB also anticipates receiving compensation for expenses resulting from launch delays.

SPACEHAB remains committed to the ISS Program in support of NASA’s initiatives and is able to provide logistics, research, or a combination of both services within a single mission. By fully utilizing the Company’s pressurized modules and unpressurized carriers, SPACEHAB is equipped to support NASA in its transition from ISS assembly to operations. SPACEHAB is further prepared to add existing functionality to its fleet of assets to enhance the capabilities already vital to the human spaceflight mission.

Astrotech Division Benefiting From Growth Momentum

Building on 18 years of service to the launch industry, SPACEHAB's Astrotech subsidiary is projecting an increase in payload processing activity at all three of its operating locations during the coming fiscal year. Long-term contracts are in place with Lockheed Martin, Boeing, and United States Sea Launch in support of the Atlas, Delta, and Sea Launch programs respectively. Additionally, active negotiations are underway to secure processing contracts in support of government customers thereby expanding Astrotech's existing business base. Two missions are currently in the processing queue, the Astrium-built HellasSat spacecraft and the Boeing-built AsiaSat-4 spacecraft, both projected for liftoff on Atlas launch vehicles later this spring. Astrotech's sales have more than doubled over the past two years and are expected to continue growing going forward.

Growing New Business Opportunities

NASA is in the process of consolidating 26 current contracts into seven in an effort to optimize synergies within the ISS Program, competitive sourcing, and program accountability. Of the seven procurement opportunities outlined by NASA, the Company is poised to effectively compete on at least three of the ISS Program Management contracts classified as ‘A’ through ‘G’. Contracts targeted by SPACEHAB include Program Integration and Control, ISS Mission Integration, and ISS Cargo Missions.

NASA’s Space Launch Initiative includes an investigation of an Alternate Access to Station system. SPACEHAB holds key subcontractor roles on two of the four prime contractor teams. The Company’s responsibility is to apply its core competencies in logistics integration and operations. Through SPACEHAB’s participation in this study, the Company has developed strategic partnerships to support NASA’s Orbital Space Plane concept development activities set to begin in April.

SPACEHAB’s unique capability and existing relationship with RSC Energia in Russia has resulted in a request for the Company’s expertise. With the temporary grounding of the Space Shuttle, SPACEHAB anticipates providing NASA with valuable resupply services in order to ensure the orbiting ISS crew receives the provisions necessary to sustain operations. Food, scientific equipment, and critical supplies will be shipped by SPACEHAB for transport to the ISS on upcoming Soyuz and Progress missions.

With more than $100 million in annual revenue, SPACEHAB, Incorporated is a leading provider of commercial space services. The Company develops, owns, and operates habitat and laboratory modules and cargo carriers aboard NASA’s Space Shuttles. Its Johnson Engineering subsidiary provides orbiter crew compartment integration, ISS stowage and configuration management, supports astronaut training, and builds space-flight mockup trainers at NASA's Johnson Space Center in Houston. SPACEHAB’s Astrotech subsidiary provides commercial satellite processing services at facilities in California and Florida. Additionally, through The Space Store, Space Media provides space merchandise to the public and space enthusiasts worldwide (www.thespacestore.com).

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 timing and mix of Space Shuttle missions, the successful development and commercialization of new space assets, technological difficulties, product demand, timing of new contracts, launches 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.

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