The Olstein All Cap Value Fund's 2014 First Quarter Letter to Shareholders

Dear Fellow Shareholders:

For the quarter ended March 31, 2014, Class C shares of the Olstein All Cap Value Fund had a return of 1.32% compared to total returns of 1.81% and 1.97% for the S&P 500® Index and the Russell 3000® Index, respectively. The first quarter also marked an important milestone – it was five years ago that equity markets began their strong recovery from the market low of March 9, 2009. For the five years ended March 31, 2014, the Class C share of All Cap Value Fund had an average annual return of 21.97%. Over the same time period, the S&P 500 Index and the Russell 3000 Index had average annual returns of 21.16% and 21.93%, respectively.

Market Outlook

With the strong market run now five years old, many market forecasters continue to speculate on a market correction or pullback in 2014. Yet despite a somewhat rocky and volatile start to the year, the market run has persevered to post another positive quarter and record a new closing high in early March. In light of the resilience of the market and improving economic picture, we believe our portfolio is correctly constructed to take advantage of the positive market economic environment we envision for the remainder of the year.

While there are always some forecasters predicting the next downturn, we believe it is important for investors to weather such market events, if and when they occur, by focusing on the

equities of financially strong companies with stable or growing free cash flow. While many investors are nervous about equity markets or remain sidelined waiting for accelerated economic growth, we believe there is a strong case for investing in the equity securities of companies whose real economic value is unrecognized by the market, obscured by market uncertainty or overshadowed by temporary problems.

Our Strategy

Despite differences of opinion about markets, we will continue to seek and invest in companies that we believe have an ability to deliver long-term value to shareholders that, in many cases, is not currently recognized by the market. In 2014, we remain focused on three primary, company-specific factors: (1) a commitment to maintain a strong financial position as evidenced by a solid balance sheet; (2) an ability to generate sustainable free cash flow that we believe is not properly valued by the stock market; and (3) management that intelligently deploys cash balances and free cash flow from operations to increase returns to shareholders. We further believe that by emphasizing investing in companies possessing the aforementioned factors, our portfolio should consist of companies that are positioned to compete more advantageously as economic growth accelerates.

As always, we will continue to emphasize the quality of a company’s earnings in 2014. We measure and assess the quality of earnings by analyzing the economic realism of the company’s financial statements and the conservatism of its balance sheet. By highlighting the quality of a company’s earnings, we seek to accomplish two objectives: (1) to assess the financial risk inherent in each investment opportunity before considering the potential for capital appreciation; and (2) to determine whether or not the company has laid the groundwork to operate with a strategic competitive advantage in any economic environment resulting in a high probability of generating future normalized free cash flow not properly valued by the market. While many investors are obsessed with short-term market moves, our primary concern is to avoid or mitigate permanent impairment of capital. The centerpiece of our investment process is the belief that there is a high correlation between the number and severity of investment errors and long-term above average performance. Thus, in our quest for long-term appreciation, our first focus is assessing the quality of earnings, which provides a valuable tool for estimating the chances for a permanent impairment of capital.

Portfolio Review

We continue to focus on how individual companies have adapted their expectations, strategic plans and operations to recent bumpy economic conditions, and how they have managed their assets to deliver future earnings to investors. Our current portfolio consists of companies that we believe have a sustainable competitive advantage, discernible balance sheet strength, and a management team that emphasizes decisions based on cost of capital calculations and that deploys free cash flow to create shareholder value. At March 31, 2014, the Olstein All Cap Value Fund portfolio consisted of 105 holdings with an average weighted market capitalization of $52.73 billion. During the quarter, the Fund initiated positions in eleven companies and strategically added to positions in twelve companies. Over the same time period, the Fund eliminated its holdings in twelve companies and strategically decreased its holdings in another ten companies. Positions initiated during the last three months include: ADT Corp. (ADT), CVS Caremark Corp. (CVS), Esterline Technologies (ESL), Fifth Third Bancorp (FITB), Haemonetics Corp. (HAE), Invesco Ltd. (IVZ), Itron Inc. (ITRI), Ralph Lauren Corp. (RL), TE Connectivity Ltd. (TEL), UnitedHealth Group (UNH), and Verizon Communications (VZ). Positions eliminated during the past quarter include: Agilent Technologies (A), Analog Devices Inc. (ADI), Diebold Inc. (DBD), Dover Corp. (DOV), Dr. Pepper Snapple Group (DPS), Fairway Group Holdings (FWM), Pentair Ltd. (PNR), Sonoco Products (SON), Staples Inc. (SPLS), and Teradyne Inc (TER).

Dealing with Uncertainty

In the face of extreme market volatility or signs of trouble, how should equity investors respond? Messages such as “stick to your long-term investment plan” or “stay in the market for the long haul” may sound like worn clichés and fall on deaf ears when markets stagnate or decline. The strong, extended market run of the past five years, coupled with the volatility in markets over the first four months of the year and slowdown in economic activity attributable to the harsh weather this past winter, have many pundits warning of a pull-back or slowdown. From our perspective one of the best ways to deal with the uncertainty of equity markets is to remain focused on company fundamentals and the quality of earnings, especially as market volatility increases and doomsayers predict the next downturn.

In our last letter to shareholders, we discussed why we believe our emphasis on assessing the quality of earnings in 2014 has taken on added importance after the extended market run we have experienced over the past five years. Our strategy in all environments is to value companies based on our assessment of their ability to generate future free cash flow. Our long-term approach focuses on company fundamentals in all market and economic environments. The most important factor we analyze and pay attention to is how each company’s operations generate sustainable free cash flow under both good and bad economic conditions. We also seek to answer a series of questions about the company’s business model, its strategy, its future prospects and management’s approach when faced with uncertain economic conditions.

We emphasize a bottom-up fundamentals and forensic analysis of a company’s financial statements — regulatory filings (10K, 10Q, proxy statements etc.) with a particular emphasis on the company’s balance sheet, income statement, cash flow statement and footnotes. The objective of our fundamental financial statement analysis is to understand the company’s business model and how the company’s operations generate free cash flow under all economic scenarios. We also want to determine the level of ongoing investment that is required to maintain or grow the company’s free cash flow, and ultimately how much of the cash generated by a company’s operations will be returned to us as investors. The objective of our forensic analysis is to determine if a company’s accounting policies and practices reflect economic reality; to identify and make accounting adjustments that eliminate management’s reporting bias, and to identify positive or negative factors that may affect future free cash flow that we believe is not yet valued by the public markets. We believe our ongoing forensic analysis of a company’s public filings and communications provides us with the necessary knowledge to judge the likely success of a company’s strategy, the sustainability of its performance, and the quality of its management team. Although most investors are enthralled by the media and analysts, market and/or economic forecasts, as well as short-term earnings prognostications by company management, our discipline focuses on an intensive analysis of financial statements and related footnote disclosures to value companies, which we believe provides the Fund with a competitive advantage.

Another way to deal with market uncertainty is to focus on the companies whose current stock prices we believe have been unfairly penalized by short-term factors. From our perspective, Wall Street’s obsessive focus or short-term concerns has resulted in an increasing number of deviations between a company’s stock price and our estimate of the company’s intrinsic value. Investors reacting to the daily noise and news continue to create favorable opportunities for the Fund to buy companies with solid balance sheets and business models that we believe are capable of generating normalized future excess cash flow not being properly valued by the stock market. We believe that our investment approach, which attempts to avoid long-term impairment of capital before analyzing each company’s potential to reward shareholders with long-term capital appreciation, can function in all economic environments. Although unfavorable economic or market conditions may cause short-term downward price movements, we believe that focusing on understanding the business behind a stock and the company’s potential to generate sustainable future free cash flow (which ultimately determines a company’s value), provides the Fund with a competitive advantage to purchase companies at discounts to intrinsic value. After identifying companies that meet our well-defined investment criteria, the Fund seeks to take advantage of market volatility and downward price movements to buy such companies at advantageous prices that we believe will increase the probability of a successful investment. A good company bought at the wrong price is usually not a good investment. The three most important factors we evaluate before purchasing a company for our portfolio (after valuing a company on fundamentals) are price, price, and price.

Final Thoughts

As we wait for equity markets to regain a balanced perspective and once again focus on company fundamentals, we remind you that, as always, patience provides generous opportunities for the diligent investor. We intend to stay the course during the current market uncertainty. We are invested in companies that, in our opinion, have the financial strength to ride out unfavorable short-term conditions while offering favorable long-term business prospects. We value your trust and remind you that our money is invested alongside yours as we work hard to accomplish the Fund’s objective of long- term capital appreciation.

Sincerely,

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