SPACEHAB, Incorporated , a leading provider
of commercial space services, today announced financial results for
its fourth quarter and fiscal year 2006 ended June 30, 2006.

Fourth Quarter Results

SPACEHAB posted a fourth quarter fiscal 2006 net income of
$48,000, or $0.00 per share, on revenue of $14.6 million compared with
a fourth quarter fiscal 2005 net income of $0.1 million, or $0.01 per
share, on revenue of $19.0 million.

“We were pleased to see the flawless liftoff of Space Shuttle
Discovery just days following the end of fiscal 2006 with the
Company’s Integrated Cargo Carrier nestled within the cargo bay,”
stated Michael E. Kearney, SPACEHAB President and Chief Executive
Officer. “During the quarter we continued to support NASA with the
upcoming STS-116 and STS-118 missions, both scheduled for launch in
our 2007 fiscal year, however, delays in the shuttle manifest and
unmanned vehicle launch schedules continued to impact revenue for the
fourth quarter as it did throughout the year.”

Year End Results

SPACEHAB’s net loss for fiscal 2006 was $12.4 million, or $0.97
per share, on revenue of $50.7 million compared to a net income of
$5.2 million, or $0.37 per share, on revenue of $59.4 million. Year
end results include a non-cash charge of $6.3 million as the Company
wrote down the book value of one of its two pressurized space shuttle
modules and changed the depreciable life of its remaining space
shuttle assets to align with NASA’s current launch manifest that
anticipates retiring the space shuttle fleet at the end of 2010.
Included in the prior year results was a recovery of $8.2 million from
NASA in partial indemnification for losses the Company sustained in
the Space Shuttle Columbia tragedy in February 2003.


SPACEHAB’s cash and short-term investments were approximately $6.3
million as of June 30, 2006. Current liabilities decreased to $17.9
million at June 30, 2006 compared to $20.4 million at June 30, 2005
due to reductions in accounts payable and accrued expense. As of year
end SPACEHAB carried a contract backlog of $57.0 million which
represents the expected value of contractually-committed work,
portions of which are subject to the space shuttle’s launch schedule
or future government funding decisions.

Update of Ongoing Operations

During the recently completed fiscal year 2006, SPACEHAB continued
to support manned and unmanned missions to space through its three
major business units, assisting both commercial and government
initiatives. SPACEHAB Flight Services provided a commercial deployable
cargo carrier on NASA’s second return-to-flight mission, STS-114, that
is now permanently attached to the International Space Station serving
as a spare parts platform. Work continued on the STS-121 and 116
missions with new work commencing on the STS-118 flight. Subsequent to
year end, the STS-121 mission, which utilized a returnable version of
the Company’s cargo carrier, launched and concluded successful space
station resupply activities.

The STS-116 and 118 missions are using the Company’s cargo pallets
– one set for permanent deployment and attachment to the space station
– but also utilize SPACEHAB’s patented module system which will
transport thousands of pounds of equipment and provisions, much of it
transferred to the space station for use by the astronaut crews that
live for extended periods in space.

Astrotech Space Operations provides support necessary for its
customers to successfully process their spaceflight hardware for
launch, including advanced planning; use of unique facilities; and
spacecraft checkout, fueling, encapsulation, transport, and remote
control through launch. Astrotech supported the processing of eight
spacecraft during fiscal 2007 with four of those launching in the
fourth quarter. The Astrotech team located in Florida was instrumental
in the successful liftoff of NASA’s GOES-N, an earth monitoring
satellite, while the California teams at Sea Launch and Vandenberg Air
Force Base assisted payload processing and launch activities of the
Galaxy 16 as well as NASA’s CloudSat and CALIPSO spacecraft,
respectively. This business unit also captured over $7.0 million in
new business during the fiscal year with an additional contract
subsequent to year end.

SPACEHAB Government Services continues its exceptional support to
NASA’s International Space Station program, primarily in the areas of
configuration and data management supporting the final acceptance of
space station hardware and software for NASA and the sixteen
international partners. The Company is actively pursuing an additional
NASA contract in a subcontractor role to support configuration
management initiatives.

Conference Call

SPACEHAB will host a conference call at 10:00 a.m. Central time
following the earnings release. During the call management will
discuss the Company’s year end and fourth quarter financial results as
well as other recent and potential future developments relating to
SPACEHAB. To participate on the call please dial 877-502-9274
(domestic calls) or 913-981-5584 (international calls). A taped replay
will be available following the conference call until 11:59 p.m.
Eastern time on September 6, 2006 at 888-203-1112 (domestic calls) or
719-457-0820 (international calls) via access code 5271147. To hear a
replay of the call via the Internet, visit the Investor Information
section of the SPACEHAB website at This audio
archived webcast of the conference call is available on the Company
website for approximately one year.

About SPACEHAB, Incorporated

SPACEHAB, Incorporated ( 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 (

The statements in this document may contain forward-looking
statements that are made pursuant to the Safe Harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to risks, trends, and uncertainties that could
cause actual results to be materially different from the
forward-looking statement. These factors include, but are not limited
to, continued government support and funding for key space programs,
product performance and market acceptance of products and services, as
well as other risk factors and business considerations described in
the company’s Securities & Exchange Commission filings including the
annual report on Form 10-K. Any forward-looking statements in this
document should be evaluated in light of these important risk factors.
The Company assumes no obligation to update these forward-looking

Tables follow

       Unaudited Condensed Consolidated Statements of Operations
                   (In thousands, except share data)

                            Three Months            Twelve Months
                           Ended June 30,          Ended June 30,
                       ----------------------- -----------------------
                          2006        2005        2006        2005
                       ----------- ----------- ----------- -----------
Revenue                   $14,568     $18,958     $50,746     $59,401
Costs of revenue           10,592      14,566      46,855      47,158
                       ----------- ----------- ----------- -----------
Gross profit                3,976       4,392       3,891      12,243
                       ----------- ----------- ----------- -----------
Operating expenses
  Selling, general and
   administrative           2,814       2,827      10,672       9,383
  Research and
   development                108          40         410          77
  Nonrecurring charge,
   loss of Research
   Double Module                -         500           -      (7,744)
                       ----------- ----------- ----------- -----------
    Total operating
     expenses               2,922       3,367      11,082       1,716
                       ----------- ----------- ----------- -----------
    Income (loss) from
     operations             1,054       1,025      (7,191)     10,527
Interest expense           (1,083)     (1,417)     (5,511)     (5,716)
Interest and other
 income (expense), net         77         171         337         292
                       ----------- ----------- ----------- -----------
Income (loss) before
 income taxes                  48        (221)    (12,365)      5,103
Income tax (expense)
 benefit                        -         301         (32)        146
                       ----------- ----------- ----------- -----------
  Net income (loss)           $48         $80    $(12,397)     $5,249
                       =========== =========== =========== ===========
Income (loss) per share
Net income (loss) per
 share - basic              $0.00       $0.01      $(0.97)      $0.42
                       =========== =========== =========== ===========
Shares used in
 computing net income
 (loss) per share -
 basic                 12,819,906  12,644,358  12,743,533  12,613,491
                       =========== =========== =========== ===========

Net income (loss) per
 share - diluted            $0.00       $0.01      $(0.97)      $0.37
                       =========== =========== =========== ===========
Shares used in
 computing net income
 (loss) per share -
 diluted               14,213,185  14,163,713  12,743,533  14,190,281
                       =========== =========== =========== ===========

            Unaudited Condensed Consolidated Balance Sheets
                            (In thousands)

                                                June 30,    June 30,
                                                  2006        2005
                                               ----------- -----------
Cash, restricted cash and investments              $6,317      $8,297
Accounts receivable, net                           11,379      16,906
Property, plant, and equipment, net                61,637      73,647
Other assets, net                                   6,117       3,101
                                               ----------- -----------
  Total assets                                    $85,450    $101,951
                                               =========== ===========
Current liabilities                                17,922      20,461
Long-term liabilities                              64,719      66,693
Stockholders' equity                                2,809      14,797
                                               ----------- -----------
 Total liabilities and stockholders' equity       $85,450    $101,951
                                               =========== ===========


SPACEHAB, Inc., Houston

Kimberly Campbell, 713-558-5049