##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 25, 2005
 Commission File Number 1-10893
 Ablest Inc.
 (Exact name of registrant as specified in its charter)
 Delaware(State of Incorporation)
    
    65-0978462(I.R.S. Identification No.)
 1901 Ulmerton Road, Suite 300
Clearwater, Florida 33762
(727) 299-1200  (Address, including zip code, and telephone number, including area code, of principal executive offices)
 Securities registered pursuant to Section 12(b) of the Exchange Act:Title of Each Class
    
    Name of Each Exchange on Which RegisteredCommon Stock, par value $.05 per share
    
    American Stock Exchange
 Securities registered pursuant to Section 12(g) of the Exchange Act: None
 þ o
 þ o
 þ o
 o
  o o þ
 o þ
   Documents Incorporated by Reference




---



TABLE OF CONTENTS  PART IITEM 1. BusinessITEM 1A. Risk FactorsITEM 1B. Unresolved Staff CommentsITEM 2. PropertiesITEM 3. Legal ProceedingsITEM 3. Legal ProceedingsITEM 4. Submission of Matters to a Vote of Security HoldersPART IIITEM 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesITEM 6. Selected Financial DataITEM 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsITEM 7A. Quantitative and Qualitative Disclosure about Market RiskITEM 8. Financial Statements and Supplemental DataITEM 9. Changes In and Disagreements with Accountants on Accounting and Financial DisclosureITEM 9A. Controls and ProceduresITEM 9B. Other InformationPART IIIITEM 10. Directors and Executive Officers of the RegistrantITEM 11. Executive CompensationITEM 12. Security Ownership of Certain Beneficial Owners and ManagementITEM 13. Certain Relationships and Related TransactionsITEM 14. Principal Accountants Fees and ServicesPART IVITEM 15. Exhibits and Financial Statement SchedulesSIGNATURESEx-21 Subsidiaries of RegistrantEx-23.1 Consent of PricewaterhouseCoopers LLP.Ex-31.1 Section 302 CertificationEx-31.2 Section 302 CertificationEx-32.1 Section 906 CertificationEx-32.2 Section 906 Certification    Table of Contents  
 PART I
 
 ITEM 1. Business
 General
  Availability of Reports and Other Information
  The Staffing Industry
    Operations
  2




---



##### Table of Contents



For the fiscal year ended(Amounts in thousands)
    
    December 25, 2005
    
    
    December 26, 2004
    
    
    December 28, 2003Revenues from Unaffiliated Customers:Staffing Services
    
    $
    137,457
    
    
    $
    116,353
    
    
    $
    104,048Discontinued Operations
    
    
    
    
    
    
    
    
    
    
    Operating IncomeStaffing Services
    
    
    3,087
    
    
    
    1,372
    
    
    
    1,061Discontinued Operations
    
    
    
    
    
    
    
    
    
    
    72Identifiable Assets:Staffing Services
    
    
    26,455
    
    
    
    24,743
    
    
    
    22,579Discontinued Operations
    
    
    
    
    
    
    
    
    
    
    
 Working Capital
 Backlog.
 Employees.
 Company-owned Offices
 Company-Owned OfficesMidsouth (1)
    
    9Midwest (2)
    
    10Northeast (3)
    
    21Southeast (4)
    
    16Total
    
    56
 
 (1)
    
    The Midsouth includes the states of Mississippi and Tennessee(2)
    
    The Midwest includes the states of Illinois, Texas and Arizona(3)
    
    The Northeast includes the states of New York, North Carolina and Virginia(4)
    
    The Southeast includes the states of Florida, Georgia and South Carolina  3




---



##### Table of Contents



Seasonality
  Cyclical Nature of the Business
  Clients
  Competition
    Discontinued Operations
 4




---



##### Table of Contents



Code of Ethics
  
 ITEM 1A. Risk Factors
  Any significant economic downturn could result in our clients using fewer temporary employees,
which could materially adversely affect the Company.
  The Company operates in highly competitive markets with low barriers to entry, potentially limiting
its ability to maintain or increase its market share or profit margins.
  The Companys success depends upon its ability to attract and retain qualified temporary personnel.
  5




---



##### Table of Contents



The Companys business may suffer if it loses its key personnel.
  The Company may be exposed to employment-related claims and costs that could materially adversely
affect its business.
  The cost of unemployment insurance premiums and workers compensation costs for temporary
employees may rise and reduce the Companys profit margins.
   The Company is continually subject to the risk of new regulations, which could harm its
business.
  6




---



##### Table of Contents



The Company faces litigation that could have a material adverse effect on its business,
financial condition and results of operations.
  The Companys business may be at risk if there is failure of implementing a new information system.
  
 ITEM 1B. Unresolved Staff Comments
  
 ITEM 2. Properties
  
 
 ITEM 3. Legal Proceedings
  7




---



##### Table of Contents



ITEM 4. Submission of Matters to a Vote of Security Holders
  
 PART II
 
 ITEM 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
 Market for Registrants Common Stock
  Price Range of Common Stock
  2005
    
    
    2004High
    
    
    Low
    
    
    High
    
    
    Low1st Quarter
    
    $
    8.00
    
    
    $
    7.00
    
    
    $
    9.80
    
    
    $
    5.012nd Quarter
    
    
    7.70
    
    
    
    6.63
    
    
    
    8.95
    
    
    
    5.153rd Quarter
    
    
    12.75
    
    
    
    6.51
    
    
    
    7.08
    
    
    
    5.254th Quarter
    
    
    10.85
    
    
    
  7.50
    
    
    
    7.62
    
    
    
    5.95
 Number of Common Stockholders
  Dividends
  Equity Compensation Plan Information
  8




---



##### Table of Contents



Number of securitiesremaining available forfuture issuance underNumber of securities to
    
    
    Weighted-average
    
    
    equity compensationbe issued upon exercise
    
    
    exercise price of
    
    
    plans (excludingof outstanding options,
    
    
    outstanding options,
    
    
    securities reflected inPlan category
    
    warrants and rights
    
    
    warrants and rights
    
    
    column(a))(a)
    
    
    (b)
    
    
    (c)Equity compensation
Plans approved by
Security holders
    
    
    54,000
    
    
    $
    5.38
    
    
    
    373,800Total
    
    
    54,000
    
    
    $
    5.38
    
    
    
    373,800
 
 ITEM 6. Selected Financial Data
  Fiscal Year Ended December
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001(Amounts in thousands, except per share data)Net service revenues
    
    $
    137,457
    
    
    $
    116,353
    
    
    $
    104,048
    
    
    $
    101,193
    
    
    $
    87,042Operating income (loss)
    
    
    3,087
    
    
    
    1,372
    
    
    
    1,061
    
    
    
    566
    
    
    
    (5,674
    )Income tax expense (benefit)
    
    
    2,542
    
    
    
    515
    
    
    
    (1,769
    )
    
    
    218
    
    
    
    (460
    )Net income (loss) from continuing operations
    
    
    536
    
    
    
    883
    
    
    
    2,883
    
    
    
    608
    
    
    
    (5,120
    )Income (loss) per common share from
continuing operations: basic
    
    
    0.19
    
    
    
    0.31
    
    
    
    1.01
    
    
    
    0.21
    
    
    
    (1.75
    )diluted
    
    
    0.18
    
    
    
    0.30
    
    
    
    0.99
    
    
    
    0.21
    
    
    
    (1.75
    )Total assets
    
    
    26,455
    
    
    
    24,743
    
    
    
    22,579
    
    
    
    19,216
    
    
    
    17,212
 9




---



##### Table of Contents



2005 Quarters
    
    1st
    
    2nd
    
    3rd
    
    4th(Amounts in thousands, except per
share data)Net service revenues
    
    $
    30,835
    
    
    $
    32,751
    
    
    $
    34,873
    
    
    $
    38,998Gross profit
    
    
    4,977
    
    
    
    5,742
    
    
    
    5,766
    
    
    
    6,501Operating income
    
    
    428
    
    
    
    927
    
    
    
    589
    
    
    
    1,143Net income (loss) from continuing operations
    
    
    264
    
    
    
    574
    
    
    
    367
    
    
    
    (669
    )Income (loss) per common share, basic
    
    $
    0.09
    
    
    $
    0.20
    
    
    $
    0.13
    
    
    $
    (0.23
    )Income (loss) per common share, diluted
    
    $
    0.09
    
    
    $
    0.20
    
    
    $
    0.13
    
    
    $
    (0.23
    )2004 Quarters
    
    1st
    
    2nd
    
    3rd
    
    4th(Amounts in thousands, except per
share data)Net service revenues
    
    $
    25,770
    
    
    $
    26,827
    
    
    $
    29,912
    
    
    $
    33,844Gross profit
    
    
    3,629
    
    
    
    4,624
    
    
    
    5,074
    
    
    
    5,088Operating
(loss) income
    
    
    (708
    )
    
    
    366
    
    
    
    947
    
    
    
    767Net (loss) income  from continuing operations
    
    
    (441
    )
    
    
    230
    
    
    
    588
    
    
    
    506(Loss) income  per common share, basic
    
    $
    (0.16
    )
    
    $
    0.08
    
    
    $
    0.21
    
    
    $
    0.18(Loss) income  per common share, diluted
    
    $
    (0.16
    )
    
    $
    0.08
    
    
    $
    0.20
    
    
    $
    0.17
 
 ITEM 7. Managements Discussion and Analysis of
Financial Condition and Results of Operations
 Forward-looking Statements
  10




---



##### Table of Contents



,
 .
 History of the Company
    Overview
    11




---



##### Table of Contents



.
     12




---



##### Table of Contents



For
the Fiscal Years Ended2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001(Dollars in thousands)Number of offices
    
    
    56
    
    
    
    49
    
    
    
    45
    
    
    
    47
    
    
    
    48Total hours billed
    
    
    11,121,141
    
    
    
    9,683,921
    
    
    
    8,611,203
    
    
    
    8,333,481
    
    
    
    4,253,579Average hours billed per office
    
    
    198,592
    
    
    
    197,631
    
    
    
    191,360
    
    
    
    177,308
    
    
    
    88,616Total revenue
    
    $
    137,457
    
    
    $
    116,353
    
    
    $
    104,048
    
    
    $
    101,193
    
    
    $
    87,042Average revenue per office
    
    $
    2,455
    
    
    $
    2,375
    
    
    $
    2,312
    
    
    $
    2,153
    
    
    $
    1,813
 For the fiscal year ended December 25, 2005, compared to December 26, 2004
  Results of Operations
      13




---



##### Table of Contents



Discontinued Operations:
  Off-Balance
Sheet Arrangements:
  For the fiscal year ended December 26, 2004, compared to December 28, 2003
  Results of Operations
      Discontinued Operations:
  Off-Balance
Sheet Arrangements:
  14




---



##### Table of Contents



Critical Accounting Policies and Estimates:
         15




---



##### Table of Contents



Liquidity and Capital Resources:
   Cash Flows
  16




---



##### Table of Contents



17




---



##### Table of Contents



Material Commitments:
  Payable
    
    
    Payable
    
    
    Payable
    
    
    Payableduring 2006
    
    
    2007 - 2009
    
    
    2010 - 2012
    
    
    after 2012
    
    
    Total(Amounts in thousands)Operating leases (1)
    
    $
    1,321
    
    
    $
    2,307
    
    
    $
    1,132
    
    
    $
    82
    
    
    $
    4,842Capital Expenditures (2)
    
    
    217
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    217Total
    
    $
    1,538
    
    
    $
    2,307
    
    
    $
    1,132
    
    
    $
    82
    
    
    $
    5,059
 
 (1)
    
    Includes minimum lease payment obligations for equipment and real property leases in
effect as of December 25, 2005.(2)
    
    Purchase obligations for capital expenditure projects in progress. 
 ITEM 7A. Quantitative and Qualitative Disclosure about Market Risk
  18




---



##### Table of Contents



ITEM 8. Financial Statements and Supplemental Data
  Page ReferenceThe financial statements of the registrant required to be included in Item 8 are listed
below:Report of Independent Registered Certified Public Accounting Firm
    
    
    20Balance Sheets as of December 25, 2005 and December 26, 2004
    
    
    21Statements of Income for the years endedDecember 25, 2005, December 26, 2004 and December 28, 2003
    
    
    22Statements of Stockholders Equity for the years endedDecember 25, 2005, December 26, 2004 and December 28, 2003
    
    
    23Statements of Cash Flows for the years endedDecember 25, 2005, December 26, 2004 and December 28, 2003
    
    
    24Notes to Financial Statements
    
    
    26
 19




---



##### Table of Contents



Report of Independent Registered Certified Public Accounting Firm
 
  
 20




---



##### Table of Contents



ABLEST INC.
Balance Sheets
  December 25, 2005
    
    
    December 26, 2004ASSETSCURRENT ASSETSCash
    
    $
    1,931
    
    
    $
    1,357Accounts receivable, net
    
    
    18,760
    
    
    
    16,783Prepaid expenses and other current assets
    
    
    469
    
    
    
    160Current deferred tax asset
    
    
    1,246
    
    
    
    1,369Total current assets
    
    
    22,406
    
    
    
    19,669Property and equipment, net
    
    
    1,732
    
    
    
    543Deferred tax asset
    
    
    863
    
    
    
    3,208Goodwill
    
    
    1,283
    
    
    
    1,283Other assets
    
    
    171
    
    
    
    40Total assets
    
    $
    26,455
    
    
    $
    24,743LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable
    
    $
    841
    
    
    $
    378Accrued insurance
    
    
    2,536
    
    
    
    3,069Accrued wages
    
    
    2,738
    
    
    
    1,989Other current liabilities
    
    
    514
    
    
    
    425Total current liabilities
    
    
    6,629
    
    
    
    5,861Other liabilities
    
    
    432
    
    
    
    117Total liabilities
    
    
    7,061
    
    
    
    5,978COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    STOCKHOLDERS EQUITYPreferred stock of $.05 par value; 500,000 shares authorized,
none issued or outstanding at December 25, 2005 and December 26,
2004
    
    
    
    
    
    
    Common stock of $.05 par value; 7,500,000 shares authorized,
3,346,877 and
3,334,344 shares issued and outstanding including shares held in
treasury at December 25, 2005 and December 26, 2004, respectively
    
    
    167
    
    
    
    167Additional paid-in capital
    
    
    5,265
    
    
    
    5,172Retained earnings
    
    
    16,072
    
    
    
    15,536Treasury stock at cost; 457,729 shares held at both
December 25, 2005 and December 26, 2004
    
    
    (2,110
    )
    
    
    (2,110
    )Total stockholders equity
    
    
    19,394
    
    
    
    18,765Total liabilities and stockholders equity
    
    $
    26,455
    
    
    $
    24,743
  21




---



##### Table of Contents



ABLEST INC.
Statements of Income
  For the Fifty-two WeekPeriods EndedDecember 25, 2005
    
    
    December 26, 2004
    
    
    December 28, 2003Net service revenues
    
    $
    137,457
    
    
    $
    116,353
    
    
    $
    104,048Cost of services
    
    
    114,471
    
    
    
    97,938
    
    
    
    86,335Gross profit
    
    
    22,986
    
    
    
    18,415
    
    
    
    17,713Selling, general and administrative expenses
    
    
    19,899
    
    
    
    17,043
    
    
    
    16,652Operating income
    
    
    3,087
    
    
    
    1,372
    
    
    
    1,061Other:Interest (expense) income, net
    
    
    (7
    )
    
    
    1
    
    
    
    (30
    )Miscellaneous (expense) income, net
    
    
    (2
    )
    
    
    25
    
    
    
    83Other (expense) income
    
    
    (9
    )
    
    
    26
    
    
    
    53Income from continuing operations
before income taxes
    
    
    3,078
    
    
    
    1,398
    
    
    
    1,114Income tax expense (benefit)
    
    
    2,542
    
    
    
    515
    
    
    
    (1,769
    )Net income from continuing operations
    
    
    536
    
    
    
    883
    
    
    
    2,883Discontinued operations:Adjustment to loss on sale of discontinued
operations, net of income taxes
    
    
    
    
    
    
    
    
    
    
    45Net income
    
    $
    536
    
    
    $
    883
    
    
    $
    2,928Basic net income per common share:Continuing operations
    
    $
    0.19
    
    
    $
    0.31
    
    
    $
    1.01Discontinued operations
    
    
    
    
    
    
    
    
    
    
    0.02Basic net income per common share
    
    $
    0.19
    
    
    $
    0.31
    
    
    $
    1.03Diluted net income per common share:Continuing operations
    
    $
    0.18
    
    
    $
    0.30
    
    
    $
    0.99Discontinued operations
    
    
    
    
    
    
    
    
    
    
    0.02Diluted net income per common share
    
    $
    0.18
    
    
    $
    0.30
    
    
    $
    1.01Weighted average number of common shares
used
in computing net income per common shareBasic
    
    
    2,861,097
    
    
    
    2,839,272
    
    
    
    2,848,821Diluted
    
    
    2,922,981
    
    
    
    2,921,853
    
    
    
    2,902,470
  22




---



##### Table of Contents



ABLEST INC.
Statements of Stockholders Equity
  Additional
    
    
    
    
    
    
    
    
    
    TotalCommon
    
    paid-in
    
    Retained
    
    Treasury
    
    stockholdersstock
    
    capital
    
    earnings
    
    stock
    
    equityBalance at December 28, 2003
    
    $
    165
    
    
    $
    5,018
    
    
    $
    14,653
    
    
    $
    (2,110
    )
    
    $
    17,726Net income
    
    
    
    
    
    
    
    
    
    
    883
    
    
    
    
    
    
    
    883Restricted stock plan
    
    
    1
    
    
    
    86
    
    
    
    
    
    
    
    
    
    
    
    87Executive stock awards plan
    
    
    1
    
    
    
    68
    
    
    
    
    
    
    
    
    
    
    
    69Balance at December 26, 2004
    
    $
    167
    
    
    $
    5,172
    
    
    $
    15,536
    
    
    $
    (2,110
    )
    
    $
    18,765Net income
    
    
    
    
    
    
    
    
    
    
    536
    
    
    
    
    
    
    
    536Restricted stock plan
    
    
    
    
    
    
    93
    
    
    
    
    
    
    
    
    
    
    
    93Balance at December 25, 2005
    
    $
    167
    
    
    $
    5,265
    
    
    $
    16,072
    
    
    $
    (2,110
    )
    
    $
    19,394
  23




---



##### Table of Contents



ABLEST INC.
Statements of Cash Flows
 For the Fifty-two WeekPeriods EndedDecember 25, 2005
    
    
    December 26, 2004
    
    
    December 28, 2003CASH FLOWS FROM OPERATING
ACTIVITIES:Net income from
continuing operations
    
    $
    536
    
    
    $
    883
    
    
    $
    2,883Adjustments to reconcile
net income to net cash
provided by (used
in) operating
activities:Depreciation
    
    
    336
    
    
    
    461
    
    
    
    513Stock compensation
    
    
    461
    
    
    
    273
    
    
    
    89Loss on
disposal of
property, plant
and equipment
    
    
    2
    
    
    
    13
    
    
    
    9Deferred income
taxes
    
    
    2,467
    
    
    
    428
    
    
    
    (1,783
    )Changes in assets
and liabilities
(next page)
    
    
    (1,701
    )
    
    
    (1,945
    )
    
    
    (1,548
    )Net cash provided
by
operating
activities
of continuing
operations
    
    
    2,101
    
    
    
    113
    
    
    
    163CASH FLOWS FROM INVESTING
ACTIVITIES:Additions to property
and equipment
    
    
    (1,527
    )
    
    
    (370
    )
    
    
    (297
    )CASH FLOWS FROM FINANCING
ACTIVITIES:Proceeds from short-term
borrowings
    
    
    1,000
    
    
    
    
    
    
    
    2,000Repayment of short-term
borrowings
    
    
    (1,000
    )
    
    
    
    
    
    
    (2,000
    )Purchase of treasury
shares
    
    
    
    
    
    
    
    
    
    
    (155
    )Net cash
used in financing
activities
of continuing
operations
    
    
    
    
    
    
    
    
    
    
    (155
    )Net increase (decrease) in
cash from continuing
operations
    
    
    574
    
    
    
    (257
    )
    
    
    (289
    )Net increase (decrease) in
cash from discontinued
operations
    
    
    
    
    
    
    
    
    
    
    45NET INCREASE (DECREASE) IN
CASH
    
    
    574
    
    
    
    (257
    )
    
    
    (244
    )CASH BEGINNING OF PERIOD
    
    
    1,357
    
    
    
    1,614
    
    
    
    1,858CASH END OF PERIOD
    
    $
    1,931
    
    
    $
    1,357
    
    
    $
    1,614
 24




---



##### Table of Contents



ABLEST INC.
Statements of Cash Flows, continued
 For the Fifty-two WeekPeriods EndedDecember 25, 2005
    
    
    December 26, 2004
    
    
    December 28, 2003Changes in continuing
operations assets and
liabilities
using cash:Accounts receivable, net
    
    $
    (1,977
    )
    
    $
    (3,005
    )
    
    $
    (2,139
    )Prepaid expenses and
other current assets
    
    
    (309
    )
    
    
    53
    
    
    
    83Other assets
    
    
    (131
    )
    
    
    (1
    )
    
    
    7Accounts payable
    
    
    463
    
    
    
    52
    
    
    
    70Accrued insurance
    
    
    (533
    )
    
    
    
    
    
    
    Accrued wages
    
    
    749
    
    
    
    
    
    
    
    Other current liabilities
    
    
    89
    
    
    
    928
    
    
    
    423Other liabilities
    
    
    (52
    )
    
    
    28
    
    
    
    8Total change in
continuing
operations
assets and
liabilities
using
cash
    
    $
    (1,701
    )
    
    $
    (1,945
    )
    
    $
    (1,548
    )Supplemental disclosures of
cash flow information:Cash paid during year for:Interest
    
    $
    1
    
    
    $
    1
    
    
    $
    40Income Taxes
    
    
    28
    
    
    
    28
    
    
    
    22$
    29
    
    
    $
    29
    
    
    $
    62
  25




---



##### Table of Contents



ABLEST INC.
Notes to Financial Statements
 1.
Description of Business
 
 2. Significant Accounting Policies
 Basis of presentation
 Fiscal Years
 Cash Equivalents
 Revenue Recognition
 Property, Plant and Equipment
  26




---



##### Table of Contents



ABLEST INC.
Notes to Financial Statements, continued
 Allowance for Doubtful Accounts
 Self-Insurance Reserves
 Goodwill and Other Intangible Assets
  Impairment of Long-Lived Assets
 Advertising Costs
 27




---



##### Table of Contents



ABLEST INC.
Notes to Financial Statements, continued
  Income Taxes
  Income per Common Share
 Use of Estimates and Assumptions
 Stock Option Plans
 28




---



##### Table of Contents



ABLEST INC.
Notes to Financial Statements, continued
 (Amounts in thousands, except per share
data)
    
    
    
    For the Years EndedDecember 25, 2005
        
    December 26, 2004
        
    December 28, 2003Net income, as reported
        
    
    $
        536        
    $
        883        
    $
    2,928Add: Stock-based employee compensation
expense included in reported net income,
net of related tax effects
        
        227
            
        117
            
    89Deduct: Total stock-based employee compensation
expense determined under fair value based method
for all awards, net of related tax effects
            
        (235
    )        
        (146
    )        
        (106)Pro forma net income
    
    
        $
    528
            $
    854
            $
    2,911Basic net income
per common share
    
    As reported
        $
        0.19
            $
        0.31
            $
        1.03Pro forma
        
        0.18
            
        0.30
            
        1.02Diluted net income
per common share
    
    As reported
        $
            0.18
            $
            0.30
            $
            1.01Pro forma
        
0.18
            
    0.29
            
    1.00
  December 25, 2005
    
    December 26, 2004
    
    December 28, 2003Risk-free interest rate
    
    
    1.63
    %
    
    
    2.64
    %
    
    
    4.17
    %Dividend yield
    
    
    
    
    
    
    
    
    
    
    Expected life
    
    10 Years
    
    10 Years
    
    10 YearsVolatility
    
    
    4.4
    %
    
    
    4.6
    %
    
    
    34.2
    %
 Segment Reporting
  Fair Value of Financial Instruments
  Recent Accounting Pronouncements
  29




---



##### Table of Contents



ABLEST INC.
Notes to Financial Statements, continued
    Inflation
   3. Discontinued Operations
  30




---



##### Table of Contents



ABLEST INC.
Notes to Financial Statements, continued
   For the Years Ended(Amounts in thousands)
    
    December 25, 2005
    
    
    December 26, 2004
    
    
    December 28, 2003Income  from discontinued operations
before income tax expense
    
    $
    
    
    
    $
    
    
    
    $
    72less: Income tax expense
    
    
    
    
    
    
    
    
    
    
    27Income (loss) from discontinued operations
    
    $
    
    
    
    $
    
    
    
    $
    45
 4. Allowance for Doubtful Accounts
  (Amounts in thousands)
    
    December 25, 2005
    
    
    December 26, 2004Balance, beginning of year
    
    $
    285
    
    
    $
    246Additions charged to cost and expense
    
    
    97
    
    
    
    257Accounts receivable written-off
    
    
    (107
    )
    
    
    (218
    )Balance, end of year
    
    $
    275
    
    
    $
    285
 5. Property and Equipment
  (Amounts in thousands)
    
    December 25, 2005
    
    
    December 26, 2004Office furniture and equipment
    
    $
    6,535
    
    
    $
    5,189Leasehold improvements
    
    
    402
    
    
    
    3296,937
    
    
    
    5,518Less: accumulated depreciation
    
    
    5,205
    
    
    
    4,975Property and equipment, net
    
    $
    1,732
    
    
    $
    543
  6. Goodwill
  31




---



##### Table of Contents



ABLEST INC.
Notes to Financial Statements, continued
  7. Accrued Expenses and Other Current Liabilities
  (Amounts in thousands)
    
    December 25, 2005
    
    
    December 26, 2004Payroll and other compensation
    
    $
    2,738
    
    
    $
    1,989Insurance
    
    
    2,536
    
    
    
    3,069Other
    
    
    514
    
    
    
    425Accrued expenses and other current liabilities
    
    $
    5,788
    
    
    $
    5,483
   8. Indebtedness
  32




---



##### Table of Contents



ABLEST INC.
Notes to Financial Statements, continued
 9. Stock Option Plans
   WeightedStock
    
    
    AverageOptions
    
    
    Exercise PriceOutstanding at December 30, 2001
    
    
    30,000
    
    
    $
    4.97Granted
    
    
    6,000
    
    
    
    4.10Outstanding at December 29, 2002
    
    
    36,000
    
    
    $
    4.83Granted
    
    
    6,000
    
    
    
    4.60Outstanding at December 28, 2003
    
    
    42,000
    
    
    $
    4.79Granted
    
    
    6,000
    
    
    
    8.00Outstanding at December 26, 2004
    
    
    48,000
    
    
    $
    5.19Granted
    
    
    6,000
    
    
    
    6.88Outstanding at December 25, 2005
    
    
    54,000
    
    
    $
    5.38Options exercisable at December 25, 2005
    
    
    54,000
    
    
    $
    5.38
   33




---



##### Table of Contents



ABLEST INC.
Notes to Financial Statements, continued
   WeightedStock
    
    
    AverageOptions
    
    
    Exercise PriceOutstanding at December 29, 2002
    
    
    24,000
    
    
    $
    7.48Outstanding at December 28, 2003
    
    
    24,000
    
    
    $
    7.48Canceled or expired
    
    
    (18,000
    )
    
    $
    7.78Outstanding at December 26, 2004
    
    
    6,000
    
    
    $
    6.94Canceled or expired
    
    
    6,000
    
    
    $
    6.94Outstanding at December 25, 2005
    
    
    
    
    
    $
    Options exercisable at December 25, 2005
    
    
    
    
    
    $
    
 10. Incentive Plans
  34




---



##### Table of Contents



ABLEST INC.
Notes to Financial Statements, continued
  
 11. Income Taxes
  (Amounts in thousands)
    
    December 25, 2005
    
    
    December 26, 2004
    
    
    December 28, 2003Income tax expense (benefit):Federal
    
    $
    2,271
    
    
    $
    459
    
    
    $
    (1,825
    )State, current
    
    
    7
    
    
    
    (30
    )
    
    $
    14State, deferred
    
    
    264
    
    
    
    86
    
    
    
    69Total tax
expense (benefit)

    
    $
    2,542
    
    
    $
    515
    
    
    $
    (1,742
    )Continuing operations
    
    $
    2,542
    
    
    $
    515
    
    
    $
    (1,769
    )Discontinued operations
    
    
    
    
    
    
    
    
    
    
    27Total tax
expense (benefit)
    
    $
    2,542
    
    
    $
    515
    
    
    $
    (1,742
    )
  (Amounts in thousands)
    
    December 25, 2005
    
    
    December 26, 2004
    
    
    December 28, 2003Income before income taxes:Continuing operations
    
    $
    3,078
    
    
    $
    1,398
    
    
    $
    1,114Discontinued operations
    
    
    
    
    
    
    
    
    
    
    72Total income
before income taxes
    
    $
    3,078
    
    
    $
    1,398
    
    
    $
    1,186
  35




---



##### Table of Contents



ABLEST INC.
Notes to Financial Statements, continued
 (Amounts in thousands)
    
    December 25, 2005
    
    
    December 26, 2004
    
    
    December 28, 2003Computed expected tax expense
    
    $
    1,047
    
    
    $
    475
    
    
    $
    403Adjustments resulting from:State tax, net of Federal tax benefit
    
    
    122
    
    
    
    55
    
    
    
    83Meals and entertainment
    
    
    45
    
    
    
    32
    
    
    
    28Change in estimate for tax benefit, other
    
    
    146
    
    
    
    (48
    )
    
    
    98Change in estimate for tax benefit (IRS Audit)
    
    
    1,182
    
    
    
    
    
    
    
    Valuation allowance
    
    
    
    
    
    
    
    
    
    
    (2,354
    )Total
expected tax
expense (benefit)
    
    $
    2,542
    
    
    $
    515
    
    
    $
    (1,742
    )Effective tax rate
    
    
    82.6
    %
    
    
    36.8
    %
    
    
    28.4
    %
  (Amounts in thousands)
    
    December 25, 2005
    
    
    December 26, 2004Deferred tax assets and liabilities:Allowance for doubtful accounts
    
    $
    104
    
    
    $
    108Accrued insurance expense
    
    
    919
    
    
    
    1,162Accumulated depreciation of plant and equipment
    
    
    63
    
    
    
    124Accumulated amortization of other assets
    
    
    625
    
    
    
    685Foreign tax and other credit carryforwards
    
    
    
    
    
    
    180AMT Tax Paid
    
    
    142
    
    
    
    60Operating loss carryforwards
    
    
    
    
    
    
    2,159Other
    
    
    257
    
    
    
    99Net deferred
tax assets
    
    $
    2,110
    
    
    $
    4,577
  36




---



##### Table of Contents



ABLEST INC.
 Notes to Financial Statements, continued
  12. Employee Benefit Plans
  13. Lease Commitments
     Year
    
    Real Property
    
    
    Equipment
    
    
    Total2006
    
    $
    1,247
    
    
    $
    74
    
    
    $
    1,3212007
    
    
    969
    
    
    
    59
    
    
    
    1,0282008
    
    
    701
    
    
    
    13
    
    
    
    7142009
    
    
    565
    
    
    
    
    
    
    
    5652010
    
    
    485
    
    
    
    
    
    
    
    4852011
    
    
    323
    
    
    
    
    
    
    
    3232012
    
    
    324
    
    
    
    
    
    
    
    3242013
    
    
    82
    
    
    
    
    
    
    
    82Total
    
    $
    4,696
    
    
    $
    146
    
    
    $
    4,842
 14. Contingencies
  37




---



##### Table of Contents



ABLEST INC.
 Notes to Financial Statements, continued
  
 38




---



##### Table of Contents



ITEM 9.
    
    Changes In and Disagreements with Accountants
on Accounting and Financial Disclosure
  
 ITEM 9A.
    
    Controls and Procedures
   
 ITEM
9B.   Other Information
  
 PART III
 
 ITEM 10.
    
    Directors and Executive Officers of the Registrant
  
 ITEM 11.
    
    Executive Compensation
  
 ITEM 12.
    
    Security Ownership of Certain Beneficial Owners and Management
  39




---



##### Table of Contents



ITEM 13.
    
    Certain Relationships and Related Transactions
  
 ITEM 14.
    
    Principal Accountants Fees and Services
  
 PART IV
 
 ITEM 15.
    
    Exhibits and Financial Statement Schedules
 (a)
    
    The following documents are filed as part of this Report:
 (1)
    
    Financial StatementsSee Index to Financial Statements on page 19.(2)
    
    Supplemental SchedulesSchedule II  Valuation and Qualifying Accounts
  (b)
    
    Exhibits
 ExhibitNumber
    
    Exhibit2.1
    
    Agreement and Plan of Merger between C. H. Heist Corp. and Ablest Inc. dated February 4,
2000. (1)2.2
    
    Agreement and Plan of Merger between Ablest Service Corp., PLP Corp., Milestone
Technologies, Inc. and Ablest Inc., dated January 1, 2001. (2)3.1
    
    Certificate of Incorporation of the Company. (2)3.2
    
    By-laws of the Registrant. (2)10.1
    
    Asset Sale and Purchase Agreement between C. H. Heist Corp. and Onyx Industrial
Services Inc. (1)10.2
    
    Promissory Note dated August 13, 2003 between the Company and Manufacturers and Traders
Trust Company. (3)
 40




---



##### Table of Contents



ExhibitNumber
    
    Exhibit10.3
    
    Modification Agreement dated August 2, 2005 between Manufacturers and Traders Trust
Company and Ablest Inc.10.3
    
    Independent Directors Stock Option Plan adopted May 14, 2000.*(2)10.4
    
    Option to Ownership Plan adopted October 9, 2000.*(2)10.5
    
    Executive Stock Awards Plan.*(4)10.6
    
    2002 Restricted Stock Plan*(8)10.7
    
    Employment agreement with Charles H. Heist III, Chairman, dated January 1,
2004.*(5)10.8
    
    Employment agreement with W. David Foster, Vice Chairman, dated January 1,
2004.*(5)10.9
    
    Employment agreement with Kurt R. Moore, President and Chief Executive
Officer, dated January 1, 2004. (5)10.10
    
    Employment agreement with Vincent J. Lombardo, Vice President and Chief
Financial Officer, dated January 1, 2004.*(5)10.10
    
    Settlement agreement and Complete and Permanent Release, dated September 22, 2005,
between Vincent J. Lombardo and Ablest Inc.*(6)10.10
    
    VCG Services Agreement, dated September 29, 2005, between VCG, Inc. and Ablest Inc.10.10
    
    VCG License and Support Agreement, dated September 29, 2005, between VCG, Inc. and
Ablest Inc.10.10
    
    Professional Services Agreement (including Proposal for Great Plains
Implementation), dated September 30, 2005, between IDEAL Consulting, Inc. and Ablest Inc.10.10
    
    Summary of Compensation Payable to
Non-Employee Directors *(7)14
    
    Code of Ethics for Senior Financial Officers. (5)21
    
    Subsidiaries of the Registrant.23.1
    
    Consent of PricewaterhouseCoopers LLP.31.1
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 41




---



##### Table of Contents



*
    
    Management contracts and compensatory plans and arrangements required to be filed as
exhibits pursuant to item 15(b) of this report.(1)
    
    Filed as Exhibit to the Registrants Form 8-K report dated March 22, 2000 and
incorporated herein by reference.(2)
    
    Filed as an Exhibit to the Registrants Form 10-K Report for the year ended
December 31, 2000 and incorporated herein by reference.(3)
    
    Filed as an Exhibit to the Registrants Form 10-Q Report for the quarter ended
September 28, 2003 and incorporated herein by reference.(4)
    
    Filed as an Exhibit to the Registrants Form S-8 filed January 12, 2004 and
incorporated herein by reference.(5)
    
    Filed as an Exhibit to the Registrants Form 10-K Report for the year ended
December 28, 2003 and incorporated herein by reference.(6)
    
    Filed as an Exhibit to the Registrants Form 8-K report
dated September 26, 2005 and incorporated herein by reference.(7)
    
    Filed as an Exhibit to the Registrants Form 8-K report
dated October 5, 2005 and incorporated herein by reference.(8)
    
    Filed as an Exhibit to the Registrants Form DEF 14A
dated April 28, 2003 and incorporated herein by reference. (c)
    
    Financial Statement SchedulesSchedule II  Valuation and Qualifying Accounts
 42




---



##### Table of Contents



SIGNATURES
  ABLEST INC.By:
    
    /s/ Kurt R. MooreKurt R. MoorePresident and Chief Executive Officer(Principal Executive Officer)By:
    
    /s/ Charles H. HeistCharles H. HeistChairman, Chief Financial Officer,and Treasurer(on behalf of the Registrant and as Principal
Financial and Accounting
Officer)
    By:
    
    /s/ Charles H. Heist
    
    
    
    By:
    
    /s/ Ronald K. LeirvikCharles H. Heist
    
    
    
    
    
    Ronald K. LeirvikChairman of the Board, CFO, Treasurer
And Director
    
    
    
    
    
    DirectorBy:
    
    /s/ W. David Foster
    
    
    
    By:
    
    /s/ Donna R. MooreW. David Foster
    
    
    
    
    
    Donna R. MooreVice Chairman of the Board, Secretary
And Director
    
    
    
    
    
    DirectorBy:
    
    /s/ Kurt R. Moore
    
    
    
    By:
    
    /s/ Richard W. RobersonKurt R. Moore
    
    
    
    
    
    Richard W. RobersonPresident and Chief Executive Officer,
Director
    
    
    
    
    
    DirectorBy:
    
    /s/ Charles E. ScharlauCharles E. ScharlauDirector




---



##### Table of Contents



Report of Independent Registered Certified Public Accounting Firm on Financial Statement Schedule
 
  /s/ PricewaterhouseCoopers LLPTampa, FloridaMarch 10, 2006
 SCHEDULE II




---



##### Table of Contents



Balance at

    
    Additions

    
    Additions

    
    
    
    
    
    Balance atbeginning of

    
    charged to

    
    charged to

    
    
    
    
    
    end of(Amounts in thousands)
    
    the period

    
    costs and expense

    
    other accounts

    
    Deductions

    
    the periodYear Ended December 25, 2005Allowance for doubtful
accounts
    
    $
    285
    
    
    
    97
    
    
    
    
    
    
    
    107
    
    
    
    275Deferred tax asset
valuation allowance
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Year Ended December 26, 2004Allowance for doubtful
accounts
    
    $
    246
    
    
    
    257
    
    
    
    
    
    
    
    218
    
    
    
    285Deferred tax asset
valuation allowance
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Year Ended December 28, 2003Allowance for doubtful
accounts
    
    $
    291
    
    
    
    194
    
    
    
    
    
    
    
    239
    
    
    
    246Deferred tax asset
valuation allowance
    
    $
    2,354
    
    
    
    
    
    
    
    
    
    
    
    2,354
    
    
    
    