Gladstone Investment Corporation Reports Financial Results for the Quarter Ended September 30, 2012

  Gladstone Investment Corporation Reports Financial Results for the Quarter
                           Ended September 30, 2012

- Net Investment Income for the three and six months ended September 30, 2012,
was $3.5 million and $6.7 million, or $0.16 and $0.31 per share, respectively.

- Net Decrease in Net Assets Resulting From Operations for the three and six
months ended September 30, 2012, was $0.4 million and $3.4 million, or $0.02
and $0.15 per share, respectively.

PR Newswire

MCLEAN, Va., Oct. 29, 2012

MCLEAN, Va., Oct. 29, 2012 /PRNewswire/ --Gladstone Investment Corporation
(NASDAQ: GAIN) (the "Company") today announced earnings for the quarter ended
September 30, 2012. All per share references are per basic and diluted
weighted average common share outstanding, unless noted otherwise.

(Logo: http://photos.prnewswire.com/prnh/20101005/GLADSTONEINVESTMENT )

Net Investment Income for the Three Months: Net Investment Income for the
quarters ended September 30, 2012 and 2011 was $3.5 million, or $0.16 per
share, and $3.3 million, or $0.15 per share, respectively, an increase in Net
Investment Income of 4.3%. The increase in Net Investment Income was
primarily due to holding a larger portfolio with higher-yielding debt
investments during the quarter ended September 30, 2012, as compared to the
prior year period. This increase was partially offset by an increase in
dividend expense on the Company's 7.125% Series A Cumulative Term Preferred
Stock ("Term Preferred Stock"), on which the Company made its first
distribution in March 2012, as well as an increase in the incentive fee paid
to Gladstone Management Corporation, the Company's investment adviser (the
"Adviser").

Net (Decrease) Increase in Net Assets Resulting from Operations for the
Quarter: Net (Decrease) Increase in Net Assets Resulting from Operations for
the quarters ended September 30, 2012 and 2011 was ($0.4) million, or ($0.02)
per share, and $12.7 million, or $0.57 per share, respectively. The Company
recorded net unrealized depreciation on investments of $3.9 million for the
quarter ended September 30, 2012, primarily due to a decrease in certain
comparable multiples used to estimate the fair value of the Company's
investments. For the quarter ended September 30, 2011, the Company recorded
net unrealized appreciation of $10.3 million on its portfolio, resulting from
increased portfolio company performance of certain of its portfolio companies
and, to a lesser extent, an increase in certain comparable multiples used to
estimate the fair value of the Company's investments.

Investment Portfolio at Fair Value: As of September 30, 2012, the Company's
portfolio was fair valued at 84.1% of cost, as compared to 84.7% as of March
31, 2012.

Net Asset Value: Net asset value was $8.93 per share outstanding at September
30, 2012, as compared to $9.38 at March 31, 2012, a decrease of 4.8%.

Asset Characteristics: Total assets were $373.5 million at September 30,
2012, as compared to $325.3 million at March 31, 2012. At September 30, 2012,
the Company had investments in 20 portfolio companies with an aggregate cost
basis of $317.0 million and an aggregate fair value of $266.7 million. As of
September 30, 2012, the Company's investment portfolio at fair value was
comprised of 71.6% in debt securities and 28.4% in equity securities.
Additionally, the Company held $92.9 million in cash and cash equivalents at
September 30, 2012, including $71.5 million from a short-term loan that was
repaid subsequent to quarter end.

Investment Yield: The weighted average yield on the Company's
interest-bearing portfolio, excluding cash and cash equivalents, was 12.5% for
the quarter ended September 30, 2012, as compared to 12.2% for the quarter
ended September 30, 2011. The increase in the weighted average yield for the
quarter ended September 30, 2012, resulted primarily from the exits of lower
interest-bearing debt investments and the addition of higher-yielding debt
investments.

Highlights for the Quarter: During the quarter ended September 30, 2012, the
following significant events occurred:

  oNew Investment: In July 2012, the Company invested $22.5 million in a new
    control investment, Ginsey Holdings, Inc. ("Ginsey"), through a
    combination of debt and equity. Ginsey, headquartered in Bellmawr, New
    Jersey, designs and markets a broad line of branded juvenile and adult
    bath products. In August 2012, $5.0 million of the debt was participated
    to a third-party.
  oNew Investment: In July 2012, the Company invested $21.3 million in a new
    control investment, Drew Foam Companies, Inc. ("Drew Foam"), through a
    combination of debt and equity. Drew Foam, headquartered in Monticello,
    Arkansas, is an expanded polystyrene foam molder and fabricator for a
    variety of applications in construction and packaging. In September 2012,
    $4.3 million of the debt and the line of credit was refinanced with a
    third-party.
  oRecurring Distributions: The Company paid monthly cash distributions to
    preferred and common stockholders of $0.1484375 per preferred share and
    $0.05 per common share, respectively, for each of July, August and
    September 2012.
  oCo-Investment Order: In July 2012, the Securities and Exchange Commission
    granted the Company relief sought in an exemptive application that expands
    its ability to co-invest in portfolio companies with certain affiliated
    investment funds, subject to compliance with certain conditions. The
    Company believes this expanded ability to co-invest will enhance its
    ability to further its investment strategy and objectives.
  oApproval of Revision to Investment Objectives and Strategies: On
    September 21, 2012, the Company's Board of Directors approved revisions to
    its investment objectives and strategies, effective January 1, 2013. The
    Company believes that the revised investment objectives and strategies
    will allow it greater flexibility in growing its portfolio and maintaining
    its commitment of value to stockholders

Comments from the Company's President, Dave Dullum: "Our origination efforts
continue to put quality new investments on the books quarter over quarter,
including Ginsey and Drew Foam, both in this quarter. In order to fund our
increasing pipeline of new deals, we were successful in raising common equity
and extending our line of credit an additional year to meet these capital
demands. We are excited about the continued increases in our interest income
and yield and hope to deliver strong results during the fiscal year."

Subsequent Events: Subsequent to September 30, 2012, the following events
occurred:

  oCommon Stock Offering: In October 2012, the Company completed a public
    offering of its common stock, resulting in net proceeds to the Company of
    $28.3 million, which was used to repay borrowings under its line of
    credit.
  oLine of Credit Extension: In October 2012, the Company entered into an
    agreement to extend the maturity date on its line of credit (the
    "Facility") by one year. As a result of the new agreement, the Facility
    is now scheduled to mature on October 25, 2015, and, if not renewed or
    extended by that date, all principal and interest will be due and payable
    on or before October 25, 2016. All other terms of the Company's Facility
    remained the same.
  oDistributions Declared: In October 2012, the Company's Board of Directors
    declared the following monthly cash distributions:



Record Date     Payment Date    Distribution per       Distribution per Term
                                Common Share           Preferred Share
October 22,     October 31,     $         0.05         $    0.1484375
2012            2012
November 19,    November 30,    0.05                   0.1484375
2012            2012
December 19,    December 31,    0.05                   0.1484375
2012            2012
Total for the Quarter:          $         0.15         $        0.4453125

Summary Information: The following chart is a summary of some of the
information reported above (dollars in thousands, except per share data)
(unaudited):

                                        September 30, 2012  September30,2011
For the Three Months Ended:
Net investment income                   $   3,451           $    3,309
Net (decrease) increase in net assets   (353)               12,695
resulting from operations
Weighted average yield on               12.5            %   12.2           %
interest-bearing investments
Total dollars invested                  $   50,498          $    44,919
Total dollars repaid                    9,160               2,493
For the Six Months Ended:
Net investment income                   6,689               6,810
Net (decrease) increase in net assets   (3,369)             16,883
resulting from operations
Weighted average yield on               12.5            %   12.1           %
interest-bearing investments
Total dollars invested                  $      63,263       $    67,378
Total dollars repaid                    15,090              5,560
                                        September 30, 2012  March 31, 2012
As of:
Fair value as a percent of cost         84.1            %   84.7           %
Net asset value per share               $   8.93            $    9.38
Number of portfolio companies           20                  17
Total assets at fair value              $   373,532         $    325,297

Conference Call for Stockholders: The Company will hold its earnings release
conference call Tuesday, October 30, 2012, at 8:30 a.m. EDT. Please call
(800) 860-2442 to enter the conference. An operator will monitor the call and
set a queue for any questions. A replay of the conference call will be
available through November 30, 2012. To hear the replay, please dial (877)
344-7529 and use conference number 10018005. The replay will be available
beginning approximately one hour after the call concludes.

The live audio broadcast of the Company's quarterly conference call will also
be available online at www.GladstoneInvestment.com. The event will be archived
and available for replay on the Company's website through December 31, 2012.

Warning: The financial statements below are without footnotes, so readers
should obtain and carefully review the Company's Form 10-Q for the quarter
ended September 30, 2012, including the notes to the financial statements
contained therein. The Company has filed the Form 10-Q today with the
Securities and Exchange Commission (the "SEC"), which you can find on the
SEC's website at www.sec.gov or from the Company's website at
www.GladstoneInvestment.com. To obtain a paper copy, please contact the
Company at 1521 Westbranch Drive, Suite 200, McLean, VA 22102.

About us: Gladstone Investment Corporation is a publicly traded business
development company that seeks to make debt and equity investments in small
and mid-sized businesses in the United States in connection with acquisitions,
changes in control and recapitalizations. The Company has paid 87 consecutive
monthly cash distributions on its common stock, in addition to a bonus
dividend paid on its common stock in March 2012. Information on the business
activities of all the Gladstone funds can be found at
www.gladstonecompanies.com.

For Investor Relations inquiries related to any of the monthly dividend paying
Gladstone funds, please visit www.gladstone.com.

The statements in this press release regarding the longer-term prospects of
the Company and its management team may be deemed "forward-looking
statements." These forward-looking statements inherently involve certain risks
and uncertainties, although they are based on the Company's current plans that
are believed to be reasonable as of the date of this press release. Factors
that may cause the Company's actual results to differ from these
forward-looking statements include, among others, the duration and effects of
the current economic instability, the Company's ability to access debt and
equity capital and those other factors listed under the caption "Risk Factors"
in the Company's registration statement on FormN-2 (No. 333-181879, as
amended (the "Prospectus") and the supplement to the Prospectus as filed with
the SEC on October 2, 2012. The risk factors set forth in the Form N-2 under
the caption "Risk Factors" are specifically incorporated by reference into
this press release. The Company undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.



GLADSTONE INVESTMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
                                                     September 30,  March 31,
                                                     2012           2012
ASSETS
Investments at fair value
 Control investments (Cost of $245,475 and       $   208,922    $ 157,544
$186,743, respectively)
 Affiliate investments (Cost of $61,473 and      48,715         58,831
$70,015, respectively)
 Non-Control/Non-Affiliate investments (Cost of  9,049          9,277
$10,083 and $9,637, respectively)
 Total investments at fair value (Cost of   266,686        225,652
$317,031 and $266,395, respectively)
Cash and cash equivalents                            92,940         91,546
Restricted cash                                      1,041          1,928
Interest receivable                                  1,295          1,250
Due from custodian                                   8,152          1,527
Deferred financing costs                             2,411          2,792
Other assets                                         1,007          602
TOTAL ASSETS                                         $   373,532    $ 325,297
LIABILITIES
Borrowings:
Short-term loan at fair value (Cost of $71,525 and   $   71,525     $ 76,005
$76,005, respectively)
Line of credit at fair value (Cost of $56,000 and    57,209         -
$0, respectively)
Secured borrowing (Cost of $5,000 and $0,            5,000          -
respectively)
Total borrowings (Cost of $132,525 and $76,005,      133,734        76,005
respectively)
Mandatorily redeemable preferred stock, $0.001 par
value per share, $25 liquidation

 preference per share;  1,610,000 shares         40,000         40,000
authorized, 1,600,000 shares issued

 and outstanding at September 30 and March 31,
2012
Accounts payable and accrued expenses                1,311          506
Fees due to Adviser                                  595            496
Fee due to Administrator                             189            218
Other liabilities                                    480            856
TOTAL LIABILITIES                                    176,309        118,081
Commitments and contingencies
NET ASSETS                                           $   197,223    $ 207,216
ANALYSIS OF NET ASSETS
Common stock, $0.001 par value per share,
100,000,000 shares authorized and
                                                     $       22     $ 22
 22,080,133 shares issued and outstanding at
September 30 and March 31, 2012
Capital in excess of par value                       257,131        257,131
Cumulative net unrealized depreciation of            (50,345)       (40,743)
investments
Cumulative net unrealized depreciation of other      (1,236)        (68)
Net investment income in excess of distributions     321            321
Accumulated net realized loss                        (8,670)        (9,447)
TOTAL NET ASSETS                                     $   197,223    $ 207,216
NET ASSET VALUE PER COMMON SHARE AT END OF PERIOD    $   8.93       $ 9.38



GLADSTONE INVESTMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
                               Three Months Ended      Six Months Ended

                               September 30,           September 30,
                               2012        2011        2012        2011
INVESTMENT INCOME
Interest income
 Control investments    $    4,548  $    2,926  $    7,977  $  5,560
Affiliate investments          1,573       1,363       3,344       2,732
Non-Control/Non-Affiliate      339         401         647         806
investments
Cash and cash equivalents      1           2           3           6
Total interest income          6,461       4,692       11,971      9,104
Other income
Control investments            112         341         506         1,176
Affiliate investments          401         -           401         -
Non-Control/Non-Affiliate      -           1           -           17
investments
Total other income             513         342         907         1,193
Total investment income        6,974       5,034       12,878      10,297
EXPENSES
Base management fee            1,308       1,063       2,499       2,071
Incentive fee                  541         -           541         19
Administration fee             189         135         372         286
Interest expense on            484         233         576         365
borrowings
Dividends on mandatorily       713         -           1,425       -
redeemable preferred stock
Amortization of deferred       203         108         403         215
financing fees
Professional fees              177         105         371         315
Other general and              423         592         702         942
administrative expenses
Expenses before credits from   4,038       2,236       6,889       4,213
Adviser
Credits to fees                (515)       (511)       (700)       (726)
Total expenses net of credits  3,523       1,725       6,189       3,487
to fees
NET INVESTMENT INCOME          3,451       3,309       6,689       6,810
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss):
 Control investments     798         (543)       753         5,192

Non-Control/Non-Affiliate      -           (1)         -           4
investments
 Other                   -           -           (41)        (39)
 Total net       798         (544)       712         5,157
realized gain (loss)
Net unrealized (depreciation)
appreciation:
 Control investments    (9,708)     8,886       (7,354)     935
Affiliate investments         6,139       1,662       (1,573)     3,740

Non-Control/Non-Affiliate      (315)       (211)       (674)       609
investments
 Other                  (718)       (407)       (1,169)     (368)
 Total net unrealized    (4,602)     9,930       (10,770)    4,916
(depreciation) appreciation
 Net realized and      (3,804)     9,386       (10,058)    10,073
unrealized (loss) gain
NET (DECREASE) INCREASE IN
NET ASSETS RESULTING FROM      $  (353)    $  12,695   $  (3,369)  $   16,883
OPERATIONS
NET (DECREASE) INCREASE IN
NET ASSETS RESULTING

 FROM OPERATIONS PER COMMON
SHARE
Basic and diluted              $  (0.02)   $  0.57     $  (0.15)   $   0.76
WEIGHTED AVERAGE SHARES OF
COMMON STOCK

 OUTSTANDING:
Basic and diluted              22,080,133  22,080,133  22,080,133  22,080,133



GLADSTONE INVESTMENT CORPORATION
CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AND PER UNIT DATA)
(UNAUDITED)
                           Three Months Ended        Six Months Ended

                           September 30,             September 30,
                           2012         2011         2012         2011
Per Common Share Data
Net asset value at         $  9.10      $  9.06      $  9.38      $  9.00
beginning of period^(A)
Net investment income^(B)  0.16         0.15         0.31         0.31
Realized gain (loss) on
sale of investments and    0.03         (0.03)       0.03         0.23
other^(B)
Net unrealized
(depreciation)             (0.21)       0.45         (0.49)       0.22
appreciation of
investments and other^(B)
Total from investment      (0.02)       0.57         (0.15)       0.76
operations^(B)
Cash distributions from
net investment             (0.15)       (0.15)       (0.30)       (0.28)
income^(B)(C)
Net asset value at end of  $  8.93      $  9.48      $  8.93      $  9.48
period^(A)
Per share market value at  $  7.40      $  7.18      $  7.57      $  7.79
beginning of period
Per share market value at  7.82         6.80         7.82         6.80
end of period
Total return^(D)           7.79       % (3.21)     % 7.53       % (9.16)     %
Shares outstanding at end  22,080,133   22,080,133   22,080,133   22,080,133
of period
Statement of Assets and
Liabilities Data:
Net assets at end of       $  197,223   $  209,419   $  197,223   $  209,419
period
Average net assets^(E)     200,182      202,101      202,520      200,213
Senior Securities
Data^(F):
Total borrowings, at cost  $  132,525   $  83,501    $  132,525   $  83,501
Mandatorily redeemable     40,000       -            40,000       -
preferred stock
Asset coverage ratio^(^G^) 210        % 332        % 210        % 332        %
Average coverage per       $  2,101     $  3,325     $  2,101     $  3,325
unit^(^H^)
Ratios/Supplemental Data:
Ratio of expenses to
average net                8.07       % 4.43       % 6.80       % 4.21       %
assets^(^I^)(^J^)
Ratio of net expenses to
average net                7.04         3.41         6.11         3.48
assets^(^I^)(^K^)
Ratio of net investment
income to average net      6.90         6.55         6.61         6.80
assets^(I)

(A)  Based on actual common shares outstanding at the end of the corresponding
     period.
(B)  Based on weighted average per basic common share data.
     Distributions are determined based on taxable income calculated in
(C)  accordance with income tax regulations, which may differ from amounts
     determined under GAAP.
     Total return equals the change in the market value of our common stock
     from the beginning of the period, taking into account dividends
(D)  reinvested in accordance with the terms of the Company's dividend
     reinvestment plan. Total return does not take into account distributions
     that may be characterized as a return of capital.
(E)  Calculated using the average balance of net assets at the end of each
     month of the reporting period.
     The 1940 Act currently permits the Company to issue senior securities
(F)  representing indebtedness and senior securities that are stock, to which
     the Company refers to as "senior securities."
     As a business development company, the Company is generally required to
     maintain an asset coverage ratio of at least 200% of total consolidated
(G)  assets, less all liabilities and indebtedness not represented by senior
     securities, to the aggregate amount of senior securities. The Company's
     mandatorily redeemable preferred stock is characterized as a senior
     security for purposes of the asset coverage ratio.
(H)  Asset coverage per unit is the asset coverage ratio expressed in terms of
     dollar amounts per one thousand dollars of indebtedness.
(I)  Amounts are annualized.
(J)  Ratio of expenses to average net assets is computed using expenses before
     credits from the Adviser.
(K)  Ratio of net expenses to average net assets is computed using total
     expenses net of credits from the Adviser.



SOURCE Gladstone Investment Corporation

Website: http://gladstoneinvestment.investorroom.com
Contact: Gladstone Investment Corporation, +1-703-287-5893