SPACEHAB Inc.
(Nasdaq: SPAB), a leading provider of commercial space services, today
announced financial results for its 2002 fiscal year and fourth quarter, which
ended June 30, 2002. Net loss for fiscal year 2002 was $2.4 million or $0.20
per basic and diluted share as compared to a net loss of $12.8 million or
$1.12 per basic and diluted share for the previous year.

SPACEHAB revenue was $102.8 million in fiscal year 2002 as compared to
$105.3 million in fiscal year 2001. Earnings before interest, taxes,
depreciation and amortization (EBITDA) totaled approximately $15.8 million for
2002, compared to $0.8 million for 2001. Gross margin was 20.4 percent for
fiscal year 2002 as compared to 12.4 percent in fiscal year 2001. Non-cash
charges totaled $16.6 million for fiscal year 2002 as compared to $13.0
million for fiscal year 2001.

SPACEHAB’s fiscal year 2002 operating income was $1.1 million. Excluding
non-recurring charges and non-core operations, SPACEHAB would have generated
an operating income of $5.4 million. Operating income included losses
incurred by Space Media Inc. (SMI), SPACEHAB’s majority-owned subsidiary.
Operating expenses for the year also included $1.9 million in non-recurring
costs relating to competition for a contract with NASA’s Marshall Space Flight
Center in Huntsville, Alabama. In addition, SPACEHAB recorded a non-recurring
non-cash charge of $770,000 primarily for excess facilities that have been
subleased.

Though Space Media acquired an unaffiliated equity investor in the first
quarter of fiscal year 2002, SPACEHAB is required to record all of SMI’s
losses for financial reporting purposes. SMI’s net loss for the year was $1.6
million. SMI’s ongoing business activity is now limited to its spacestore.com
online retail operation and its STARS Academy global education program, which
plans to launch six student-designed experiments on Space Shuttle mission STS-
107.

Throughout fiscal year 2002, SPACEHAB continued to strengthen its balance
sheet, repaying approximately $14.0 million of debt. Cash and cash
equivalents totaled $2.7 million as of June 30, 2002, compared to $34,000 as
of June 30, 2001. Current liabilities decreased to $38.9 million as of June
30, 2002, from $60.2 million as of June 30, 2001, representing a net reduction
of $21.3 million, including a $5.8 million reduction of trade accounts payable
and accrued operating expenses.

For the fourth quarter of fiscal year 2002, net loss was $241,000 or $0.02
per basic and diluted share compared to a net loss of $5.6 million or $0.49
per share for fourth quarter 2001. Fourth quarter 2002 revenue was $28.0
million compared to $29.9 million for the same period a year ago. Fourth
quarter 2002 EBITDA were $3.1 million as compared to $2.4 million for the same
period a year ago. Gross margin was 17.4 percent for fourth quarter fiscal
year 2002 as compared to 9.5 percent in fourth quarter fiscal year 2001. Non-
cash charges totaled $3.9 million for fourth quarter fiscal year 2002.
SPACEHAB recorded a $2.1 million tax benefit in the fourth quarter,
representing a refund of taxes paid in prior years.

SPACEHAB’s fourth quarter fiscal year 2002 operating income was $104,000.
Excluding non-recurring charges and non-core operations, SPACEHAB would have
generated operating income of $1.2 million. Operating income for the quarter
included $194,000 of losses incurred by Space Media. Operating expenses for
the quarter included $345,000 in non-recurring costs relating to competition
for a contract with NASA’s Marshall Space Flight Center. In the fourth
quarter, SPACEHAB recorded $770,000 in non-recurring non-cash charges for
excess facilities subleased.

SPACEHAB Chairman and Chief Executive Officer Dr. Shelley A. Harrison
stated, “The Company began the fiscal year taking on the challenge of
completing its financial recovery plan. SPACEHAB’s management has
successfully executed the plan outlined in January 2001 — a critical step
toward returning the company to a strengthened financial position and
rebuilding shareholder equity. The company has secured further new business,
building its firm backlog to $211.5 million as of the end of fiscal year
2002.”

SPACEHAB Senior Vice President, Finance and Chief Financial Officer Julia
A. Pulzone stated, “SPACEHAB reported profits in the second and third quarters
of 2002, and we’re continuing a vigorous cost-cutting campaign to improve
profitability. Except for one-time charges on rent reserves, the Company
would have shown a profit for the fourth quarter as well. Our challenge for
fiscal year 2003 is to increase our profits, improve liquidity, and continue
to restore investor confidence.”

SPACEHAB signed a $42.5 million contract modification with NASA in third
quarter fiscal year 2002 for two ISS resupply missions using Logistics Single
Modules and Integrated Cargo Carriers. These missions are currently scheduled
to launch in calendar year 2003. SPACEHAB is continuing talks with NASA
regarding additional new missions.

NASA Shuttle research mission STS-107, currently scheduled to launch
January 16, 2003, will mark the first flight of SPACEHAB’s Research Double
Module. The mission originally was scheduled to launch in May 2000 but has
been postponed several times due primarily to the rescheduling of other
missions. In fiscal year 2002, SPACEHAB completed negotiations with NASA for
a $26.7 million equitable adjustment payment to compensate for costs incurred
by STS-107 launch delays through September 2001. Later in the year, NASA
approved an equitable adjustment agreement valued at $20.6 million to cover
payments for delays in the period from October 2001 through July 19, 2002.
Due to further launch schedule delays in the STS-107 mission, NASA has
accepted SPACEHAB’s proposal for an equitable adjustment payment for work
being performed on this mission from July 19 to launch. NASA has agreed to an
equitable adjustment for this period that is comparable to adjustments paid to
SPACEHAB for previous launch delays.

In the fourth quarter of fiscal year 2002, NASA granted SPACEHAB’s Johnson
Engineering subsidiary a five-month, $14.2 million extension of its Flight
Crew Systems Development contract. NASA subsequently exercised its options
for three additional one-month extensions of this contract, worth
approximately $9 million. Including these options, the period of performance
for this contract provides for services through December 2002.

SPACEHAB’s Astrotech Space Operations subsidiary completed financing and
construction of its new Spacecraft Processing Facility expansion project in
Florida in fiscal year 2002 to support commercial launch service providers.
The first satellite processed in the new facility was launched successfully on
August 21, 2002, aboard an Atlas V Evolved Expendable Launch Vehicle, one of
the newest class of expendable launch vehicles.

“SPACEHAB remains focused on increasing profitability on our existing
business backlog while pursuing core areas of new business growth,” said
SPACEHAB President and Chief Operating Officer Michael E. Kearney. “We aim to
continue expanding our customer base, extending our global reach, building new
strategic partnerships and strengthening existing alliances, while maintaining
our reputation for quality and innovation.”

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. Its Johnson Engineering subsidiary provides orbiter crew
compartment integration and space station 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
Florida and California. Additionally, through The Space Store, Space Media
provides space merchandise to the public and space enthusiasts worldwide
(http://www.thespacestore.com ).

This release may contain 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 SPACEHAB 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 SPACEHAB’s
Securities and Exchange Commission filings.

    FOR MORE INFORMATION:

    Linda Billings                       Julia A. Pulzone
    Director of Communications           Chief Financial Officer
    SPACEHAB Inc. -- Washington Office   SPACEHAB Inc. -- Washington Office
    202-488-3500 Ext. 201                202-488-3500 Ext. 236
    Toll-free 888-647-9543               Toll-free 888-647-9543
    billings@hqspacehab.com              pulzone@hqspacehab.com


Note: A Webcast of SPACEHAB’s conference call with investors will be
available after 2 p.m. EDT Thursday August 29, 2002, at:
http://www.firstcallevents.com/service/ajwz364849950gf12.html .

                                Table follows



                   SPACEHAB, INCORPORATED AND SUBSIDIARIES
          Unaudited Condensed Consolidated Statements of Operations

                                        Three Months              Year
    (in thousands, except              Ended June 30,        Ended June 30,
     share data)                     2002        2001        2002       2001

    Revenue                        $28,043     $29,860    $102,773   $105,254
    Costs of revenue                23,164      27,018      81,767     92,243
    Gross profit                     4,879       2,842      21,006     13,011
    Operating expenses:
      Selling, general and
       administrative                3,913       4,236      18,737     21,796
      Loss on subleases (1)            770           -         770          -
      Research and development          92          27         383        393
         Total operating expenses    4,775       4,263      19,890     22,189
         Income (loss) from
          operations                   104      (1,421)      1,116     (9,178)
    Interest expense, net of
     capitalized interest           (2,502)     (1,690)     (6,683)    (4,804)
    Interest and other income, net      24         (75)      1,150        311
         Loss before income taxes   (2,374)     (3,186)     (4,417)   (13,671)
    Income tax expense (2)               -      (3,292)        (83)    (3,292)
    Income tax benefit               2,133         884       2,133      4,178
         Net loss                    $(241)    $(5,594)    $(2,367)  $(12,785)
    Basic loss per share:
    Net loss per share -- basic     $(0.02)     $(0.49)     $(0.20)    $(1.12)

    Shares used in computing
     net loss per share --
     basic                      12,087,269  11,462,897  11,884,309 11,400,482
    Diluted loss per share:
    Net loss per share --
     diluted                        $(0.02)     $(0.49)     $(0.20)    $(1.12)
    Shares used in computing
       net loss                 12,087,269  11,462,897  11,884,309 11,400,482

    (1) The Company recorded a non-cash charge for excess facilities that have
        been subleased at a cost lower than the Company's obligation.

    (2) The Company recorded a non-cash non-recurring charge to establish a
        full valuation allowance on its deferred tax asset as of June 30,
        2001.