SPACEHAB CASH POSITION INCREASES TO OVER $19 MILLION OR $1.42 PER DILUTED-SHARES

FOR IMMEDIATE RELEASE

SPACEHAB CASH POSITION INCREASES TO OVER $19 MILLION OR $1.42 PER DILUTED SHARES
Company’s Position Enables Management to Pursue New Business Opportunities While Continuing to Deliver on Current $173 Million Contract Backlog

Houston, Texas, March 20, 2003 – SPACEHAB, Incorporated (NASDAQ/NMS: SPAB), a leading provider of commercial space services, today announced that its balance sheet is continuing to improve, allowing for flexibility to pursue new business opportunities and decrease long-term debt obligations.

SPACEHAB Receives Cash Payments
The most significant recent change in the Company's liquidity position was the increase in cash and cash equivalents from $1.81 million, or $0.13 per diluted share as of December 31, 2002, to $19.3 million, or $1.42 per diluted share as of February 28, 2003. This was primarily a result of a $17.7 million payment from SPACEHAB’s insurance company to contribute toward the loss of the Company’s Research Double Module, which was aboard the STS-107 mission that ended tragically on February 1, 2003. The Company also indicated that it is in negotiations with NASA to determine the amount of reimbursement payments from the Agency for the loss of this module. In the meantime, SPACEHAB maintains a full fleet of modules and carriers, currently under contract on three of the next five Space Shuttle missions, that meet NASA’s space research and ISS resupply requirements.

Subsequent to February 28, 2003, SPACEHAB subsidiary, Astrotech, was awarded a $750,000 grant from the State of Florida. The funds were received as reimbursement of expenditures related to the Company’s recent upgrade of the transportation corridor connecting the Astrotech Florida facilities with the Kennedy Space Center/Cape Canaveral Air Force Station. The Florida Department of Transportation provided $600,000 of the funds through its Transportation Outreach Program with the balance given as matching funds by the Florida Spaceport Authority.

SPACEHAB Pursues New Business Opportunities
As indicated in a recent press release, SPACEHAB is pursuing a number of new business opportunities to build on the Company’s $173 million contract backlog. These opportunities include continued work with NASA, subcontract services to other major aerospace companies, as well as new contracts outstanding on a number of projects with NASA and RSC Energia in Russia.

“During the past few years, we have focused on delivering a steady revenue stream in excess of $100 million, improving our operating cash flow, and reducing expenses and debt in an effort to position SPACEHAB for a new era of growth,” said Michael E. Kearney, President and Chief Operating Officer. “Despite the temporary grounding of the Space Shuttle fleet, SPACEHAB is able to begin this period of growth while responding to NASA’s requirements for both the Space Shuttle and International Space Station programs, delivering on our business backlog, and determining the optimal use for the cash received from the insurance payment,” concluded Mr. Kearney.

About SPACEHAB
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 impact of the recent Columbia tragedy on the Company's existing and future business operations, the amount of any indemnification payments the Company may receive for its RDM, which was lost as part of the Columbia tragedy, 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, the impact of war, uncertainty in government funding, the impact of competition, and other risks detailed in the Company’s Securities and Exchange Commission filings. The Company assumes no obligation to update these forward-looking statements.

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