Houston, Texas, January 22, 2004 SPACEHAB, Incorporated (NASDAQ/NMS: SPAB), a leading provider of commercial space services, today announced a two-step restructuring of its space shuttle and International Space Station (ISS) support operations that expands the Company’s core competencies and streamlines its unique services to NASA.

As previously reported, SPACEHAB is establishing a contract with Cargo Mission Contractor, Lockheed Martin Corporation (NYSE: LMT), to provide International Space Station (ISS) resupply services previously performed directly for NASA. The new contract ensures SPACEHAB will continue its substantial contribution to the ISS program and maintains the Company’s role as an integral member of the ISS cargo mission team.

Additionally, SPACEHAB is bolstering its systems integration and operations capabilities by bringing these functions in-house in support of its logistics and research modules. These activities were previously performed by The Boeing Company (NYSE: BA) under contract to SPACEHAB. The Company is transitioning a portion of this work to Lockheed Martin and the majority of the services will be performed or managed within SPACEHAB.

“Based upon our extensive experience supporting the Space Shuttle and International Space Station programs, we look forward to continuing our high-value services to NASA and commercial users of space,” said Michael E. Kearney, SPACEHAB President and Chief Executive Officer. “The increased internal capabilities and our recognized experience for innovative, cost-effective commercial space solutions strongly position SPACEHAB to contend for new and emerging NASA programs and commercial ventures,” added Kearney.

SPACEHAB will now be performing end-to-end mission integration functions, developing new flight hardware, and conducting the sustaining engineering on its existing modules and carriers. This move will reduce costs for NASA, increase flexibility in responding quickly to changing customer requirements, and build upon existing core SPACEHAB capabilities needed to support future logistics and research missions to the ISS.

SPACEHAB responded to Lockheed Martin’s sole source request for proposal to provide NASA with an Integrated Cargo Carrier (ICC) on space shuttle mission ULF1.1 (STS-121), a Logistics Single Module (LSM) and an ICC on 12A.1 (STS-116), and an LSM and an ICC on 13A.1 (STS-118). SPACEHAB’s proposal reflects the Company’s streamlined approach to module integration and operations, providing exclusive services to NASA in support of these critical ISS missions.

About SPACEHAB, Incorporated

SPACEHAB, Incorporated (www.spacehab.com) is a leading provider of commercial and government space services with three primary business units. The Flight Services business unit develops, owns, and operates habitat and laboratory modules and cargo carriers aboard NASA’s Space Shuttles for Space Station resupply and research purposes. SPACEHAB’s Astrotech subsidiary provides payload processing support services for both commercial and government customers at company-owned facilities in Florida and California. The Company’s Government Services business unit supports NASA’s Johnson Space Center providing configuration management, product engineering, and support services for both the Space Station and Space Shuttle programs. Additionally, through The Space Store, Space Media provides space merchandise to the public and space enthusiasts worldwide (www.thespacestore.com).

The statements in this document may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the statements. In addition to those risks and uncertainties discussed herein, such risks and uncertainties include, but are not limited to, whether the Company will fully realize the economic benefits under its U.S. National Aeronautics and Space Administration (“NASA”) and other customer contracts, whether NASA and other customers will continue to utilize the Company’s habitat modules and related commercial space assets, whether plans to complete the International Space Station (“ISS”) are fulfilled, continued availability and use of the U.S. Space Shuttle system, technological difficulties, product demand and market acceptance risks, the effect of economic conditions, uncertainty in government funding, the impact of competition, delays and uncertainties in future space shuttle and ISS programs, resolution of the Company’s indemnification claim with NASA arising from the loss of the Columbia orbiter and its crew during the STS-107 mission, and other risks described in reports filed by the Company with the Securities and Exchange Commission. The Company assumes no obligation to update these forward-looking statements.

Kimberly Campbell
Director of Marketing and Communications