Spacehab Announces Third Quarter Results

SPACEHAB, Inc.
, a leading provider of commercial space services,
today announced results for its third quarter ended March 31, 2000.

Revenue for the third quarter ended March 31, 2000 was $25.1
million compared to $26.7 million for the same period in fiscal 1999.
SPACEHAB’s net loss for the quarter was $635,000 or $(0.06) per basic
and diluted share, compared to a net loss of $541,000 or $(0.05) per
basic and diluted share for same period in fiscal 1999.

For the nine months ended March 31, 2000, SPACEHAB reported
revenue of $77.0 million and a net loss of $3.9 million, or $(0.34)
per basic and diluted share. For the same period in fiscal 1999,
SPACEHAB reported revenue of $78.6 million and a net loss of $2.0
million, or $(0.18) per basic and diluted share.

“Third quarter financial results met our expectations,” said
SPACEHAB Chairman and Chief Executive Officer Dr. Shelley A. Harrison.
“With the Space Shuttle fleet back in operation and yet another
mission to the ISS added to our contract with NASA, SPACEHAB should be
profitable in our fourth quarter (ending June 30, 2000).”

As announced on April 4, SPACEHAB received a $21.6 million
addition to its Research and Logistics Mission Support (REALMS)
contract with the National Aeronautics and Space Administration (NASA)
for another ISS resupply mission that is scheduled for launch in
September 2000. Thus SPACEHAB will be supporting two critical ISS
resupply missions (STS-101 and STS-106) this calendar year – the
company’s 14th and 15th Shuttle flights. Throughout the third quarter,
SPACEHAB continued preparations for the STS-101 mission, now scheduled
to launch on May 18.

“We’re excited about our role in three Shuttle missions planned
for launch over the next 12 months. Construction of the ISS is
advancing toward permanent habitation later this year, and SPACEHAB is
playing a key role in space station resupply,” said Dr. Harrison.
“With these new missions added, continuing development of
Enterprise(TM), and the establishment of our new Space Media(TM)
subsidiary, we anticipate that the coming year will turn out to be a
strong year for business opportunities.”

SPACEHAB continues to support NASA missions under the REALMS
contract. The company is under contract for a research mission
(STS-107) scheduled to launch on the Shuttle early next year. SPACEHAB
customers NASA, the European Space Agency, the Canadian Space Agency,
and others will be conducting more than a dozen experiments on this
flight. NASA recently added a new research mission to its Shuttle
manifest for 2001, and SPACEHAB is anticipating that NASA will
exercise an option on the REALMS contract to support this mission. As
space station assembly proceeds, the company expects to support more
resupply missions as well. SPACEHAB’s REALMS contract enables NASA to
manifest new research flights or ISS resupply missions as needed.

Revenues by business segment for the current quarter were $9.0
million for SPACEHAB modules, $2.5 million for Astrotech and $13.6
million for Johnson Engineering. This compares to $9.0 million, $2.2
million and $15.5 million, respectively, for the same period a year
ago.

Revenues by business segment for the nine-month period were $25.4
million for SPACEHAB modules, $6.6 million for Astrotech and $45.0
million for Johnson Engineering. These results compare to $29.8
million, $7.0 million and $41.8 million, respectively, for the same
nine-month period a year ago.

Earnings or loss before tax for the third quarter fiscal 2000 for
these same segments were $0.4 million loss for the SPACEHAB module
business, $0.2 million loss for Astrotech and $0.04 million loss for
Johnson Engineering versus $0.4 million loss, $0.7 million loss and
$0.6 million income, respectively, for the third quarter fiscal 1999.

Earnings or loss before tax for the nine months ended March 31,
2000, for these same segments were $4.3 million loss for the module
business, $1.2 million loss for Astrotech and $0.06 million loss for
Johnson Engineering versus $1.2 million loss, $0.7 million loss and
$0.3 million loss respectively for the same nine-month period a year
ago.

SPACEHAB’s Astrotech subsidiary processed two commercial
satellites for launch during the quarter. Also in the third quarter,
Astrotech received two commercial payloads for launch in the fourth
quarter of fiscal 2000.

SPACEHAB’s Johnson Engineering subsidiary continued to provide
crew training for upcoming ISS assembly flights and also successfully
delivered to NASA a training version of the space station robotic arm.
(To see pictures of the robot arm in operation at NASA’s Neutral
Buoyancy Laboratory, see http://www.spacehab.com/ssrms.)

Founded in 1984 and with more than $100 million in annual revenue,
SPACEHAB is the world’s leading provider of commercial services for
manned and unmanned missions in space. SPACEHAB is the first company
to commercially develop, own and operate habitable modules that
provide laboratory facilities and logistics resupply aboard NASA’s
Space Shuttles. The company also supports NASA astronaut training at
the Johnson Space Center in Houston, Texas and provides commercial
satellite processing services for Boeing’s Delta and
Lockheed Martin’s Atlas launch vehicles in North America.

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.

-0-

                SPACEHAB, INCORPORATED AND SUBSIDIARIES
       Unaudited Condensed Consolidated Statements of Operations

(In thousands, except per share data)

                        Three Months               Nine Months
                       Ended March 31,            Ended March 31,
                  ------------------------  --------------------------
                      2000         1999         2000          1999
                  ------------------------  --------------------------
Revenue           $   25,057   $   26,693   $    77,046   $   78,600
Costs of
 revenue              19,265       21,956        65,870       64,659
                  ------------------------  --------------------------
Gross profit           5,792        4,737        11,176       13,941
                  ------------------------  --------------------------
Operating
  expenses:
 Marketing,
  general and
  administrative       5,178        3,691        12,811       10,781
Research and
 development             503          708         1,580        2,678
                  ------------------------  --------------------------
Total operating
 expenses              5,681        4,399        14,391       13,459
                  ------------------------  --------------------------
Income (loss)
  from operations        111          338        (3,215)         482
Interest expense,
 net of
 capitalized
 interest                907        1,252         2,803        3,910
Interest and
 other income, net      (161)        (422)         (464)      (1,859)
Other expense              -           46             -          596
                  ------------------------  --------------------------
 Net loss before
  income taxes          (635)        (538)       (5,554)      (2,165)
Income tax
 expense (benefit)         -            3        (1,689)        (186)
                  ------------------------  --------------------------
 Net loss         $     (635)   $    (541)    $  (3,865)   $  (1,979)
                  ========================  ==========================
Basic earnings
 per share:
Net income (loss)
 per share -
 basic            $    (0.06)   $   (0.05)    $   (0.34)   $   (0.18)
                  ========================  ==========================
Shares used in
 computing net
 income (loss) per
 share - basic        11,287       11,189        11,259       11,178
                 =========================  ==========================
Diluted earnings
 per share:
Net income (loss)
 per share -
 diluted         $     (0.06)   $   (0.05)     $  (0.34)   $   (0.18)
                 =========================  ==========================
Shares used in
 computing net
 income (loss)
 per share -
 assuming
 dilution             11,287       11,189        11,259       11,178
                 =========================  ==========================

Contact:

SPACEHAB, Inc.

Julia Pulzone, Senior Vice President, Finance
and Chief Financial Officer

202/488-3500 x236

pulzone@hqspacehab.com

or

SPACEHAB, Inc.

Linda Billings, Director of Communications,

202/488-3500 x201

billings@hqspacehab.com

or

William Dunk Partners

William Dunk, 919/929-4100

advisors@beecom.net