Reports Record Second Quarter Revenue, up 95% Sequentially

Rodman & Renshaw Capital Group, Inc. (NASDAQ: RODM - News) today announced its results for the second quarter ended June 30, 2008.

Total revenue for the quarter was $29.5 million, representing an increase of 95% from $15.2 million in the first quarter of 2008. The Company reported net income of $6.0 million, or $0.18 per share, for the quarter, compared to net income of $1.1 million, or $0.03 per share, for the first quarter of 2008. The Company reported net income on a non-U.S. GAAP basis of $6.6 million, or $0.20 per share, compared to net income of $1.7 million, or $0.05 per share, for the first quarter of 2008.¹

“We are pleased with our performance during the second quarter,” commented Michael Lacovara, Chief Executive Officer of Rodman & Renshaw. “Despite the challenging environment, we achieved record revenue driven by particular strength within our core healthcare sector. We also were once again ranked the number one firm in PIPE transactions by volume for the second quarter and the first half of 2008². We achieved these results well below our target compensation ratio and showed record improvement in operating margin, which stood at 34% for the quarter. We believe that these results begin to validate our strategy of building a solidly profitable and increasingly diverse franchise in a structure that emphasizes relatively low fixed costs and compensation expense that varies highly with revenue. The businesses we have acquired since the beginning of the year, and the new professionals we have brought on board, are performing well and helping to propel our business forward. We are mindful that conditions are still unfavorable for all investment banks, but we believe that we are well-positioned to continue to successfully execute on our strategy.”

OPERATING RESULTS

Investment Banking

Investment banking revenue was $22.3 million for the quarter, which included $8.0 million in warrants received as compensation for activities as underwriter or placement agent valued using the Black-Scholes Option Pricing Model, as compared to $8.9 million in investment banking revenue in the first quarter of 2008, comprised of $7.4 million of cash fees and $1.5 million attributed to warrants received, valued using the Black-Scholes Option Pricing Model.

• Private placement and underwriting revenue for the quarter was $20.8 million, compared to $8.2 million in the first quarter of 2008. During the quarter, the Company completed 14 financing transactions with an average transaction size of $22.6 million, compared to 13 financing transactions with an average transaction size of $10.8 million in the first quarter of 2008.
• Strategic advisory fees for the quarter were $1.5 million, compared to $0.7 million in the first quarter of 2008.

Sales & Trading

• Commissions for the quarter were $1.7 million, compared to $1.6 million in the first quarter of 2008.
• Principal transactions revenue for the quarter was $4.4 million, compared to $4.3 million in the first quarter of 2008, which included $9.2 million in additional principal transaction revenue as a result of a change in valuation method related to our warrant portfolio.

Conference Fees

Conference fees revenue was $0.8 million for the quarter, compared to $0 in the first quarter of 2008.

Operating Expenses

Total operating expenses were $19.4 million for the quarter, compared to $13.1 million in the first quarter of 2008. The expenses for the second quarter of 2008 include employee compensation and benefits, conference fees associated with our European Conference held in May, and professional and consulting fees. For the quarter, expenses, net of pre-offering stock compensation expense and goodwill impairment, were $18.3 million, compared to $11.0 million in the first quarter of 2008.

• Compensation Expense

Employee compensation and benefits expense for the quarter, including pre-offering stock compensation expense, was $12.5 million, compared to $8.3 million in the first quarter of 2008.

Excluding pre-offering stock compensation expense of $1.0 million, employee compensation and benefits expense for the quarter was $11.5 million, compared to $7.2 million in the first quarter of 2008.

Employee compensation and benefits expense for the second quarter, excluding pre-offering stock compensation expense, represented 38.9% of revenue, compared to 47.6% in the first quarter of 2008.

• Non-Compensation Expense

Non-compensation expense for the quarter was $6.9 million, compared to $4.8 million in the first quarter of 2008, with most of the difference attributable to conference expenses.

Capital

At June 30, 2008 stockholders’ equity was $71.2 million. Cash and cash equivalents and cash held by us but segregated and on deposit for regulatory purposes, or deposited with clearing and depository organizations was $30.3 million. Book value per common share was $1.80. Book value per common share is based on common shares outstanding including unvested and vested restricted stock and restricted stock units.

Termination of Stock Repurchase Program

The Company further announced that it has terminated the Stock Repurchase Program that it announced on February 20, 2008. 529,000 shares were purchased by the Company under the Program at an average price per share of $1.85.

Conference Call details

A conference call with management to discuss the financial results for the second quarter of 2008 will be held today at 10:00 AM Eastern time. Investors can participate in the conference call by dialing (888)-713-4214 (domestic) or (617)-213-4866 (international). The passcode for the call is 45608124. The call is being webcast by Thomson/CCBN and can be accessed through the Rodman & Renshaw Capital Group, Inc. website at www.rodmanandrenshaw.com as well as the Thomson/CCBN link: http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails& c=122722&eventID=1905305 (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)

About Rodman & Renshaw Capital Group, Inc.

Rodman & Renshaw Capital Group, Inc. is a holding company with a number of direct and indirect subsidiaries, including Rodman & Renshaw, LLC, Rodman Principal Investments, LLC, and Miller Mathis & Co., LLC.

Rodman & Renshaw, LLC is a full service investment bank dedicated to providing investment banking services to companies that have significant recurring capital needs due to their growth and development strategies, along with research and sales and trading services to investor clients that focus on such companies. Rodman is a leading investment banking firm with particular emphasis on “essential” industries with significant capital needs, including health care (especially life science), energy (especially upstream oil and gas), ferrous and non-ferrous metals, shipping, and natural resources, as well as a leader in the PIPE (private investment in public equity) and RD (registered direct placements) transaction markets.

MEMBER FINRA, SIPC

Cautionary Note Regarding Forward Looking Statements

This press release contains forward-looking statements regarding future events and financial performance. In some cases, you can identify these statements by words such as “may,” “might,” “will,” “should,” “except,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” the negative of these terms and other comparable terminology. These statements involve a number of risks and uncertainties and are based on numerous assumptions involving judgments with respect to future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the Company’s control. There are or may be important factors that could cause our actual results to materially differ from our historical results or from any future results expressed or implied by such forward looking statements.

These factors include, but are not limited to, those discussed under the section entitled “Risk Factors” in our Annual Report on Form 10-K, filed March 14, 2008, which is available at the Securities and Exchange Commission website at www.sec.gov. The forward-looking statements in this press release are based upon management's reasonable belief as of the date hereof. The Company undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

¹ Reconciliation between GAAP and non-GAAP results can be found in the accompanying tables.

² Source: Sagient Research Systems, a leading publisher of independent research for the financial services and institutional investment communities.