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Conolog Reports Results for Fiscal Year Ended July 31, 2009

----Product revenues increase 22%---

15:11 EST Friday, November 13, 2009

SOMERVILLE, N.J. (Business Wire) -- Conolog Corporation (NASDAQ: CNLG) reported today its financial results for the fiscal year ended July 31, 2009.

Product revenue for the fiscal year ended July 31, 2009 totaled $1,485,298 an increase of 21.7% or $264,305 from the product revenue reported for the fiscal year ended July 31, 2008 of $1,220,993. The Company attributes this increase in revenues to an increase in sales.

Product cost (Material and Direct labor) for the fiscal year ended July 31, 2009 amounted to $470,392 or 31.7% of product revenues, compared to $467,081 or 38.2% for the fiscal year ended July 31, 2008. The Company attributes the decrease in the current year's product cost percentage to the standardizing of costs to build our new PDR-2000 system and the outsourcing of assemblies.

For fiscal year ended July 31, 2009 the Company, in compliance with its inventory management policy, the Company recognized $82,138 of cost relating to obsolete inventory parts. This compares to $112,171 of obsolete inventory parts expensed during the fiscal year July 31, 2008.

Total Operating expenses for fiscal July 31, 2009 were $2,672,943 a decrease of $1,700,135 from the $4,373,078 reported for fiscal July 31, 2008. The Company attributes this decrease to the forgiveness of Officers' salary, reduced legal fees and a decrease in the value of stock compensation costs.

Other expenses for the fiscal year ended July 31, 2009 decreased by $2,540,274 to $695,995 from $3,236,269 for fiscal July 31, 2008. Included in this expense is a non-cash expense related to the induced conversion benefit of $552,370; a non-cash interest expense related to conversion of debt for $286,584; and the amortization of fees related to the conversion of debt for $123,274.

As a result of the foregoing, the Company reported a net loss applicable to common shares of $2,354,032 or $0.98 per share for fiscal 2009, compared to a net loss applicable to common shares of $6,967,606 or $23.49 per share (as restated for the stock reversal for fiscal 2009.

*The net loss applicable to common shares for fiscal 2008 has been restated to reflect the one-for-five reverse split of the Company's common stock, approved by the shareholders on February 25, 2009. Total shares outstanding were 1,842,485 and 558,448 (as adjusted to reflect the reverse splits) for the years ended July 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 manufactures 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 manufactures 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. There can be no assurance that the Company's revenue for the year ending July 31, 2010 will be more than its revenue for the year ended July 31, 2009. There can also be no assurance that the Company will find suitable growth opportunities.

Condensed Consolidated Balance Sheet Data
ASSETS
		2009				2008
Current Assets:
Cash and cash equivalents		$	27,358			$	680,647
Certificate of deposit			-				600,182
Accounts receivable, net of allowance			245,980				360,846
Prepaid expenses and consulting fees			70,843				46,367
Current portion of note receivable			14,864				14,864
Inventory			1,395,452				850,507
Other current assets			551,937				568,529
Total Current Assets			2,306,434				3,121,942
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			520,622				209,380
Leasehold improvements			30,265				30,265
Total property and equipment			2,371,802				2,060,560
Less: accumulated depreciation			(1,975,098	)			(1,951,725	)
Net Property and Equipment			396,704				108,835
Other Assets:
Deferred financing fees, net of amortization			8,445				295,030
Note receivable, net of current portion			69,846				80,495
Total Other Assets			78,291				375,525
TOTAL ASSETS		$	2,781,429			$	3,606,302
LIABILITIES AND STOCKHOLDERS' EQUITY
			2009				2008
Current Liabilities:
Accounts payable		$	217,456			$	165,601
Accrued expenses			26,132				61,957
Current Convertible debenture, net of discount			34,318				824,853
Total Current Liabilities			277,906				1,052,411
Non-Current Liabilities:		$	-			$	-
Total Liabilities			277,906				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 July 31, 2009 and 2008, respectively.			77,500				77,500
Preferred stock, par value $.50; Series B; $.90 cumulative;
500,000 shares authorized; 1,197 shares issued and outstanding
at July 31, 2009 and 2008, respectively.			597				597
Common stock, par value $0.01; 30,000,000 shares authorized;
1,842,485 and 558,488* shares issued and outstanding at
July 31, 2009 and 2008 respectively including 2 shares
held in treasury.			18,425				5,574		*
Contributed capital			52,385,432				50,025,998		*
Accumulated deficit			(49,173,964	)			(46,819,934	)
Treasury shares at cost			(131,734	)			(131,734	)
Deferred compensation			(672,733	)			(604,110	)
Total Stockholders' Equity			2,503,523				2,553,891
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	2,781,429			$	3,606,302
*Represents retroactive application of 1:5 reverse stock split.

Consolidated Statements of Operations
		2009				2008
OPERATING REVENUES
Product revenue		$	1,485,298			$	1,220,993
Cost of product revenue
Materials and labor used in production			388,254				467,081
Write down of obsolete inventory parts			82,138				112,171
Total Cost of product revenue			470,392				579,252
Gross Profit (Loss) from Operations			1,014,906				641,741
Selling, general and administrative expenses
General and administrative			1,235,301				2,094,819
Stock compensation			715,242				1,319,400
Stock compliance			203,006				230,396
Research and development			57,089				150,173
Professional fees			291,741				412,119
Marketing and trade shows			170,564				166,171
Total selling, general and administrative expenses			2,672,943				4,373,078
Loss Before Other Income (Expenses)			(1,658,037	)			(3,731,337	)
OTHER INCOME (EXPENSES)
Interest expense			(102,379	)			(77,922	)
Interest income			16,265				92,485
Other income			352,347				112,485
Induced conversion cost			(552,370	)			(1,387,087	)
Write off of discount on converted debt			-				(864,892	)
Amortization of deferred loan discount			(286,584	)			(606,598	)
Amortization of deferred financing fees			(123,274	)			(504,740	)
Total Other Income (Expense)			(695,995	)			(3,236,269	)
Loss before provision for income taxes			(2,354,032	)			(6,967,606	)
Provision for income taxes			-				-
NET LOSS APPLICABLE TO COMMON SHARES		$	(2,354,032	)		$	(6,967,606	)
NET LOSS PER BASIC AND DILUTED COMMON SHARE		$	(0.98	)		$	(23.49	)
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING			2,396,924				296,676
*Represents retroactive application of 1:5 reverse stock split.

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