Sterling Investment Services

Company Description:

SPACEHAB Inc. is the first Company to commercially develop, own and operate pressurized habitat modules. SPACEHAB habitat modules and unpressurized cargo carriers provide space-based research facilities and cargo services for use aboard the U.S. Space Shuttle system. A SPACEHAB Single Module, when installed in the payload bay of a Space Shuttle, more than doubles the space available to astronauts for research, habitation and storage. SPACEHAB offers its modules in single and double versions, outfitted for research, logistics, or a combination research and logistics depending on customer needs. SPACEHAB’s newest space flight asset is the Research Double Module (“RDM”). The Company also offers an unpressurized cargo carrier system, the Integrated Cargo Carrier (“ICC”).

Recent Events:

The recent accident resulting in the loss of the space shuttle Columbia obviously hurt the share price of all the companies that were involved in the space shuttle program. Companies that were dependent upon NASA for the majority of their operations obviously saw the price of their stock hit the hardest. We believe this is the case with the shares of Spacehab.

The recent decision by NASA to set a target of this fall for resuming shuttle flights and subsequent press release by the company appears to be positive.

SPACEHAB Steps Up Preparations for Upcoming Space Shuttle Missions Wednesday March 19, 11:00 am

NASA Approval Will Generate Contract Extension # HOUSTON, March 19 /PRNewswire-FirstCall/ — SPACEHAB, Incorporated (Nasdaq: SPAB – News), a leading provider of commercial space services, today announced that it is equipped and engaged to support NASA in its aim for a safe return to flight as early as the fall of 2003. SPACEHAB is under contract to provide high-value flight assets and logistics services on three of the next five Space Shuttle missions.(Photo: http://www.newscom.com/cgi-bin/prnh/20000905/SPACELOGO ) The complete press release can be viewed at: Press Realease

Our Analysis:

The company announced late on March 20th, that its cash position was equivalent to $1.42/fully diluted share. A full copy of this press release may be found at: Press Release This company has a strong balance sheet, and annual sales in excess of $100 million. The management of the company appears to be very solid. Their statement that the company is considering new business opportunities for its excess cash, leads us to be optimistic that they will be increase the company’s sales and earnings.

Sterling Investment Services currently is of the opinion that Spacehab (SPAB) is undervalued and that its current cash position should provide some downside protection from the current price levels.