Press Release

Spacehab Reports First Quarter 2002 Results

By SpaceRef Editor
November 7, 2001
Filed under , ,

Loss Cut 49 Percent, Debt Reduced $5.1 MM, New Module Missions Being Priced

leading provider of commercial space services, today announced financial
results for the first quarter of fiscal 2002, ended September 30, 2001.
SPACEHAB reported a net loss of $2.9 million ($0.24 per basic and diluted
share) for the quarter, a 49 percent reduction from the net loss of $5.6
million ($0.49 per basic and diluted share) reported for the previous quarter.

SPACEHAB recorded revenues of $22.3 million for first quarter 2002 versus
$29.9 million for fourth quarter 2001 and $27.0 million for first quarter
Gross profit was equal to $2.4 million for first quarter 2002 versus
$2.8 million for fourth quarter 2001 and $4.4 million for first quarter 2001.

While revenue declined between fourth quarter 2001 and first quarter 2002,
gross profit improved from 9.5 percent of revenue to 10.9 percent of revenue
in the first quarter due to cost reduction efforts begun in fiscal 2001.
decline in revenue is primarily attributable to changes in the mix of business
within SPACEHAB’s Space Flight Services and Johnson Engineering business
First quarter 2002 operating expenses declined 18 percent from
first quarter 2001, a direct result of company-wide cost reduction efforts.
Operating expenses increased 16 percent, from $4.3 million in fourth quarter
2001 to $5.0 million in first quarter 2002, a result of investment in new
business development.
Noncash charges totaled $3.4 million for first quarter

First quarter 2002 earnings before interest, taxes, depreciation and
amortization (EBITDA) were $1.9 million, compared to $2.4 million for fourth
quarter 2001 and $0.5 million for first quarter 2001.
For first quarter 2002,
SPACEHAB recorded a small provision for income taxes and no tax benefit for
utilization of current period tax losses in future periods.
In first quarter
2001, SPACEHAB recorded a $780,000 tax benefit equal to $0.07 per share.

“Our first quarter 2002 results reflect continued progress toward
improving liquidity and returning to profitability,” said SPACEHAB Senior Vice
President, Finance and Chief Financial Officer Julia Pulzone.
“We have
executed the remaining elements of our financial plan disclosed with our year
end financial results, and we are managing our business to exceed our baseline
financial plan established in June 2001 for fiscal year 2002.
continuing to meet commitments to our customers and vendors, SPACEHAB made
more than $5.1 million of principal repayments on debt in the first quarter,
and we continue to see improvement in working capital over the previous

On October 29, 2001, SPACEHAB finalized terms for restructuring of debt
with Alenia Spazio S.p.A., lowering the interest rate and extending the term
for repayment through 2003.
The terms of the restructuring require payments
of $4.2 million in the current fiscal year.
The remaining balance of $3.7
million will be repaid in future periods.

SPACEHAB reached agreement with Bank of America on October 24, 2001, to
restructure the terms and conditions of SPACEHAB’s credit facility, including
structuring new covenants for the facility.

On August 30, 2001, Astrotech entered into agreements for a $20 million
financing of its Florida facility expansion.
The financing was completed on
September 10.
This facility represents a $30 million investment on the part
of Astrotech.
Construction was completed on the facility, and it was
dedicated on October 25, 2001.

In November 2001, SPACEHAB concluded negotiations with NASA on equitable-
adjustment payments for STS-107 from October 1, 2001, to the June 2002 current
estimated launch date.
SPACEHAB also is negotiating pricing with NASA for two
new International Space Station resupply missions currently scheduled to
launch in 2003; these negotiations are expected to conclude this month.

On September 27, 2001, SPACEHAB’s majority-owned subsidiary Space Media,
Inc., obtained a $750,000 equity investment.
Space Media completed
preparations for a new school year with its STARS Academy global education
program during first quarter 2001.
Subsequent to the first quarter, The Space
Store, Space Media’s online retail operation, established a partnership with
the multimedia company ( ) to create a new
distribution channel that will drive revenue by increasing traffic between
their respective Web sites. ( ) reports that
its Web site receives 20 million page views per month.

Founded in 1984, with more than $100 million in annual revenue, SPACEHAB,
Inc., 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.
It also supports astronaut training and space
station configuration management at NASA’s Johnson Space Center in Houston and
builds space-flight trainers and mockups.
SPACEHAB’s Astrotech subsidiary
provides commercial satellite processing services at facilities in California
and Florida.
SPACEHAB’s newest strategic growth initiative, SPACEHAB
Huntsville, offers customer-focused end-to-end services to the space research
community at NASA’s Marshall Space Flight Center in Huntsville, Alabama.
SPACEHAB subsidiary Space Media, Inc.(TM), brings space into homes and
classrooms worldwide with interactive education programs through STARS Academy
( ), and space merchandise from The Space Store
( ).

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.

          Unaudited Condensed Consolidated Statements of Operations

                                                           Three Months
    (In thousands, except share data)                   Ended September 30,
                                                        2001           2000
    Revenue                                          $22,292        $26,966
    Cost of revenue                                   19,866         22,524
    Gross profit                                       2,426          4,442
    Operating expenses
      Selling, general and administrative              4,936          5,930
      Research and development                            18            114
        Total operating expenses                       4,954          6,044
        Loss from operations                          (2,528)        (1,602)
    Interest expense, net of capitalized amounts      (1,435)          (812)
    Interest and other income net                      1,141            162
        Loss before income taxes                      (2,822)        (2,252)
    Income tax (expense) benefit                         (28)           772
      Net loss                                       $(2,850)       $(1,480)

    Basic loss per share:
    Net loss per share -- basic                       $(0.24)        $(0.13)
    Shares used in computing net
     loss per share -- basic                      11,647,709     11,345,353
    Diluted earnings per share:
    Net loss per share -- diluted                     $(0.24)        $(0.13)
    Shares used in computing net
     loss per share -- diluted                    11,647,709     11,345,353

                      Selected Financial Data by Segment

    (in thousands)
    Three Months Ended September 30, 2001

                                         Pre-Tax        Net      Depreciation
                                          Income       Fixed            And
                           Revenue        (loss)       Assets    Amortization
    Flight Services         $9,602       $(3,537)    $133,577        $2,664
    Johnson Engineering     10,175           402        2,034           391
    Astrotech                2,246         1,637       43,259           224
    SMI                        124          (596)          53            83
    All other                  145          (728)           -             -
                           $22,292       $(2,822)    $178,923        $3,362

    Three Months Ended September 30, 2000
                                                        Net      Depreciation
                                         Pre-Tax        Fixed           And
                           Revenue        Income       Assets    Amortization
    Flight Services        $11,181          $122     $134,424        $1,462
    Johnson Engineering     14,629           (27)       3,469           433
    Astrotech                1,111        (1,029)      29,010           246
    SMI                         45        (1,318)           0             8
                           $26,966       $(2,252)    $166,903        $2,149

SpaceRef staff editor.