Conolog (CNLG) 8-K Results of Operations and Financial Condition

Exhibit 99.1

CONOLOG REPORTS RESULTS FOR THE
SIX MONTHS ENDED January 31, 2009
-Revenues at a five year high -

Somerville, NJ – March 17, 2009: Conolog Corporation (NASDAQ: CNLGD) announced today the results for the six months ended January 31, 2009.

          Product revenues for the six months ended January 31, 2009 totaled $945,640 representing an increase of 81% from the $522,727 reported for the same six month period last year. The Company attributes this to increased orders.

          Product Cost (Material and Direct Labor) for the six ended January 31, 2009 totaled $234,363 or 25% of Product revenues, a net reduction of 13% from the previous year. The Company attributes this improvement to continued use of improved assembly standards under ISO-9000.

          Gross Profit for the six months ended January 31, 2009 amounted to $711,277 or 75%, a direct result of increased sales this fiscal year.

          Selling, general and administrative expenses for the six months ended January 31, 2009 amounted to $1,133,547, a 50% reduction or $1,055,443 from the same period last year.

          Non-cash non-operating expenses for the six-month period amounted to $543,459 which included induced conversion cost; amortization of deferred debenture discount and debenture costs.

          As a result of the above, the Company reported a net loss from operations of ($665,924) compared to a loss of ($4,177,068) or a per share loss of ($.21) compared to a ($3.36) per share loss for the six months ended January 31, 2009 and 2008, respectively.

About Conolog Corporation

Conolog Corporation is a provider of digital signal processing and digital security solutions to electric utilities worldwide. The Company designs and assembles electromagnetic products to the military and provides engineering and design services to a variety of industries, government organizations and public utilities nationwide. The Company’s INIVEN division is a provider of a line of digital signal processing systems, including transmitters, receivers and multiplexers.

Forward-looking statements in this release are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward looking statements involve risks and uncertainties, including, without limitation, continued acceptance of the Company’s products, increased levels of competition, new products introduced by competitors, and other risks detailed from time to time in the Company’s periodic reports filed with the Securities and Exchange Commission.

CONOLOG CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets

ASSETS	January 31, 2009 (Unaudited)			July 31, 2008 (Audited)
Current Assets:
Cash and cash equivalents	$	728,668		$	680,647
Certificate of deposit		—			600,182
Accounts receivable, net of allowance		298,261			360,846
Prepaid expenses		374,835			26,477
Current portion of note receivable		14,864			14,864
Inventory		1,087,055			850,507
Other current assets		551,937			568,529
Total Current Assets		3,055,620			3,102,052
Property and equipment:
Machinery and equipment		1,357,053			1,357,053
Furniture and fixtures		429,765			429,765
Automobiles		34,097			34,097
Computer software		209,380			209,380
Leasehold improvements		30,265			30,265
Total property and equipment		2,060,560			2,060,560
Less: accumulated depreciation		(1,955,725	)		(1,951,725	)
Net Property and Equipment		104,835			108,835
Other Assets:
Deferred financing fees, net of amortization		59,006			295,030
Note receivable, net of current portion		73,062			80,495
Total Other Assets		132,068			375,525
TOTAL ASSETS	$	3,292,523		$	3,586,412

CONOLOG CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets, Continued

LIABILITIES AND STOCKHOLDERS’ EQUITY	January 31, 2009 (Unaudited)			July 31, 2008 (Audited)
Current Liabilities:
Accounts payable	$	188,304		$	165,601
Accrued expenses		—			61,957
Current convertible debenture, net of discount		575,485			824,853
Total Current Liabilities		763,789			1,052,411
Total Liabilities		763,789			1,052,411
Stockholders’ Equity
Preferred stock, par value $.50; Series A; 4% cumulative; 500,000 shares authorized; 155,000 shares issued and outstanding at January 31, 2009 and July 31, 2008, respectively.		77,500			77,500
Preferred stock, par value $.50; Series B; $.90 cumulative; 2,000,000 shares authorized; 1,197 shares issued and outstanding at January 31, 2009 and July 31, 2008, respectively.		597			597
Common stock, par value $0.01; 30,000,000 shares authorized; 2,882,215 and 2,787,469 shares issued and outstanding at January 31, 2009 and July 31, 2008 respectively including 9 shares held in treasury.		28,823			27,875
Contributed capital		50,039,403			50,003,695
Accumulated deficit		(47,485,855	)		(46,819,932	)
Treasury shares at cost		(131,734	)		(131,734	)
Deferred compensation		—			(604,110	)
Prepaid consulting		—			(19,890	)
Total Stockholders’ Equity		2,528,734			2,534,001
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,292,523		$	3,586,412

CONOLOG CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)

	For the Three Months Ended January 31,						For the Six Months Ended January 31,
	2009			2008			2009			2008
OPERATING REVENUES
Product revenue	$	488,959		$	338,174		$	945,640		$	522,727
Cost of product revenue
Materials and Labor used in production		130,331			93,453			234,363			196,602
Write down of obsolete inventory parts		—			—			—			100,000
Total Cost of product revenue		130,331			93,453			234,363			296,602
Gross Profit (Loss) from Operations		358,628			244,721			711,277			226,125
Selling, general and administrative expenses		614,403			1,316,604			1,133,547			2,188,990
Loss Before Other Income (Expenses)		(255,775	)		(1,071,883	)		(422,270	)		(1,962,865	)
OTHER INCOME (EXPENSES)
Interest expense		(14,140	)		(11,313	)		(69,274	)		(11,351	)
Interest income		2,483			32,293			13,812			48,907
Induced conversion cost		(25,406	)		—			(205,911	)		(944,362	)
Write off of discount on converted debt		—			—			—			(705,088	)
Amortization of deferred loan discount		(50,762	)		(141,016	)		(101,524	)		(349,939	)
Amortization of deferred loan cost		(118,012	)		(126,185	)		(236,024	)		(252,370	)
Total Other Income (Expense)		(205,837	)		(246,221	)		(598,921	)		(2,214,203	)
Loss before provision for income taxes		(461,612	)		(1,318,104	)		(1,021,191	)		(4,177,068	)
Provision for income taxes		(355,267	)		—			(355,267	)		—
NET LOSS APPLICABLE TO COMMON SHARES	$	(106,345	)	$	(1,318,104	)	$	(665,924	)	$	(4,177,068	)
NET LOSS PER BASIC AND DILUTED COMMON SHARE	$	(0.03	)	$	(0.92	)	$	(0.21	)	$	(3.36	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		3,127,079			1,427,076	*		3,123,736			1,241,363	*
* Represents retroactive application of 1:4 reverse stock split.