SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 28, 2003
		or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED OCTOBER 1, 2006


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSISTION PERIOD FROM TO

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~~1511 ~~Ulmerton~~N. ~~Road~~Westshore Boulevard, Suite ~~300~~900 ~~Clearwater~~Tampa, Florida ~~33762~~33607 (~~727~~813) ~~299~~830-~~1200~~7700 ~~(Address, including zip code, and telephone number, including area code, of principal executive offices)~~

~~Indicate by check mark whether the Registrant~~ (~~1) has~~Address, ~~filed~~including ~~all~~zip ~~reports required~~code, toand betelephone ~~filed~~number, byincluding ~~Section 13~~area orcode, ~~15(d)~~ of ~~the Securities Exchange Act of~~principal ~~1934~~executive ~~during the preceding 12 months (or for such shorter period that the registrant was required to file such reports~~offices)~~, and (2) has been subject to such~~ ~~filing requirements for the past 90 days. Yes x No o~~

Indicate by check mark whether the Registrant is(1) has anfiled ~~accelerated~~all ~~filer~~reports ~~(as defined~~required into ~~Rule~~be filed by Section ~~12b-2~~13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes oþ No xo

~~The~~Indicate ~~number~~by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of ~~outstanding~~“accelerated ~~shares~~filer and large accelerated filer” in Rule 12b-2 of the ~~registrant’s~~Exchange ~~Common~~Act. ~~Stock~~(Check atone): the Registrant is an accelerated filer (as defined in ~~September~~Rule ~~28,~~12b-2 ~~2003~~of ~~was~~the ~~2,856,500~~Exchange Act).

~~TABLE~~Large OFaccelerated ~~CONTENTS~~filer o Accelerated filer o Non-accelerated filer þ

PART I FINANCIAL INFORMATION
	ITEM 1. FINANCIAL STATEMENTS
		Condensed Balance Sheets
		Condensed Statements of Operations
		Condensed Statements of Cash Flows
		Notes to Condensed Financial Statements
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
	ITEM 4. CONTROLS AND PROCEDURES
PART II OTHER INFORMATION
	ITEM 1. LEGAL PROCEEDINGS
	ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
	ITEM 3. DEFAULTS UPON SENIOR SECURITIES
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	ITEM 5. OTHER INFORMATION
	ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURE
Exhibit Index
Ex-10 August 13, 2003 Promissory Note
Ex-31.1 Section 302 CEO Certification
Ex-31.2 Section 302 CFO Certification
Ex-32.1 Section 906 CEO Certification
Ex-32.2 Section 906 CFO Certification

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

~~Table~~The number of ~~Contents~~outstanding shares of the Registrant’s Common Stock at November 10, 2006 was 2,930,639.

ABLEST INC.

Table of Contents

Item No.	Page			~~Page~~
PART I FINANCIAL INFORMATION
1. Financial Statements:	~~1. Financial Statements:~~
			Condensed Balance Sheets as of September 28, 2003 (Unaudited) and December 29, 2002	3
Condensed Balance Sheets as of October 1, 2006 and December 25, 2005 (Unaudited)		3
			Condensed Statements of Operations (Unaudited) for the Thirteen and Thirty-nine week periods ended September 28, 2003 and September 29, 2002	4
Condensed Statements of Income for the thirteen and forty week period ended October 1, 2006 and for the thirteen and thirty nine week period ended September 25, 2005 (Unaudited)		4
			Condensed Statements of Cash Flows (Unaudited) for the Thirty-nine week periods ended September 28, 2003 and September 29, 2002	5
Condensed Statements of Cash Flows for the forty and thirty nine week periods ended October 1, 2006 and September 25, 2005 (Unaudited)		5
			Notes to Condensed Financial Statements	6
Notes to Condensed Financial Statements (Unaudited)		6
2. Management’s Discussion and Analysis of Results of Operations and Financial Condition	~~2. Management’s Discussion and Analysis of Results of Operations and Financial Condition~~	11		9
3. Quantitative and Qualitative Disclosure about Market Risk	~~3. Quantitative and Qualitative Disclosure about Market Risk~~	14		11
4. Controls and Procedures	~~4. Controls and Procedures~~	15		11
PART II OTHER INFORMATION
1. Legal Proceedings	~~1. Legal Proceedings~~	16		12
	2. Change in Securities and Uses of Proceeds			12
2. Unregistered Sales of Equity Securities and Use of Proceeds		16
3. Defaults Upon Senior Securities	~~3. Defaults Upon Senior Securities~~	16		12
4. Submission of Matters to a Vote of Security Holders	~~4. Submission of Matters to a Vote of Security Holders~~	16		12
5. Other Information	~~5. Other Information~~	16		12
	6. Exhibits and Reports on Form 8-K			12
6. Exhibits		16
SIGNATURES		17		13
Exhibit Index
EX-10.1 EMPLOYMENT AGREEMENT WITH JOHN HORAN
EX-10.2 2006 NON-EMPLOYEE DIRECTORS' EQUITY RIGHTS PLAN
EX-31.1 SECTION 302 CERTIFICATION OF THE CEO
EX-31.2 SECTION 302 CERTIFICATION OF THE CFO
EX-32.1 SECTION 906 CERTIFICATION OF THE CEO
EX-32.2 SECTION 906 CERTIFICATION OF THE CFO

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ABLEST INC. ~~Condensed Balance Sheets (amounts in thousands except share and per share data)~~

					September 28, 2003			December 29, 2002
					(Unaudited)
				ASSETS
CURRENT ASSETS
	Cash and cash equivalents				$	1,372		$	1,858
	Accounts receivable, net					13,440			11,639
	Prepaid expenses and other current assets					407			296
	Current deferred tax asset					988			988
		Total current assets				16,207			14,781
	Property, plant and equipment, net					733			872
	Deferred tax asset, net					2,234			2,234
	Goodwill, net					1,283			1,283
	Other assets					40			46
		Total assets			$	20,497		$	19,216
			LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
	Accounts payable				$	718		$	256
	Accrued expenses and other current liabilities					4,739			4,008
	Short-term borrowings					—			—
		Total current liabilities				5,457			4,264
Other liabilities						86			81
		Total liabilities				5,543			4,345
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
	Preferred stock of $.05 par value; 500,000 shares authorized , none issued or outstanding at September 28, 2003 and December 29, 2002					—			—
	Common stock of $.05 par value; 7,500,000 shares authorized, 3,308,929 shares issued and outstanding including shares held in treasury at September 28, 2003 and December 29, 2002, respectively					165			165
	Additional paid-in capital					4,936			4,936
	Retained earnings					11,934			11,725
	Treasury stock at cost; 452,429 and 428,341 shares held at September 28, 2003 and December 29, 2002, respectively					(2,081	)		(1,955	)
		Total stockholders’ equity				14,954			14,871
		Total liabilities and stockholders’ equity			$	20,497		$	19,216

Condensed Balance Sheets

~~See~~(amounts ~~accompanying~~in ~~Notes~~thousands toexcept ~~Condensed~~share ~~Financial Statements~~ data)

(Unaudited)


	October 1, 2006			December 25, 2005
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	4,251		$	1,931
Accounts receivable, net		16,301			18,760
Prepaid expenses and other current assets		704			469
Current deferred tax asset		1,017			1,246

Total current assets		22,273			22,406

Property and equipment, net		2,661			1,732
Deferred tax asset		867			863
Goodwill		1,283			1,283
Other assets		63			171


Total assets	$	27,147		$	26,455


LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	203		$	841
Accrued insurance		2,417			2,536
Accrued wages		2,948			2,738
Other current liabilities		518			514

Total current liabilities		6,086			6,629

Other liabilities		265			432


Total liabilities		6,351			7,061


COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY
Preferred stock of $.05 par value; 500,000 shares authorized, none issued or outstanding at October 1, 2006 and December 25, 2005		—			—
Common stock of $.05 par value; 7,500,000 shares authorized, 3,387,118 and 3,334,344 shares issued and outstanding including shares held in treasury at October 1, 2006 and December 25, 2005, respectively		169			167
Additional paid-in capital		5,636			5,265
Retained earnings		17,101			16,072
Treasury stock at cost; 457,729 shares held at October 1, 2006 and December 25, 2005		(2,110	)		(2,110	)


Total stockholders’ equity		20,796			19,394


Total liabilities and stockholders’ equity	$	27,147		$	26,455

See accompanying Notes to Financial Statements

ABLEST INC. ~~Condensed Statements of Operations (amounts in thousands except share and per share data) (Unaudited)~~

			For the Thirteen Week						For the Thirty-nine Week
			Periods Ended						Periods Ended
			September 28, 2003			September 29, 2002			September 28, 2003			September 29, 2002
Net service revenues			$	26,668		$	29,287		$	74,171		$	74,748
Cost of services				22,111			24,006			61,777			61,034
		Gross profit		4,557			5,281			12,394			13,714
Selling, general and administrative expenses				3,999			4,479			12,074			13,075
		Operating income (loss)		558			802			320			639
Other:
	Interest income (expense), net			(9	)		(20	)		(31	)		24
	Miscellaneous, net			14			24			47			20
		Other income (loss)		5			4			16			44
		Income (loss) before income taxes		563			806			336			683
Income tax expense (benefit)				213			280			127			79
		Net income (loss)	$	350		$	526		$	209		$	604
		Basic net income (loss) per common share	$	0.12		$	0.18		$	0.07		$	0.21
		Diluted net income (loss) per common share	$	0.12		$	0.18		$	0.07		$	0.21
		Weighted average number of common shares in computing net income (loss) per common share
		Basic		2,858,197			2,864,422			2,862,629			2,872,847
		Diluted		2,876,197			2,884,422			2,880,629			2,892,847

Condensed Statements of Income

~~See~~(amounts ~~accompanying~~in ~~Notes~~thousands toexcept ~~Condensed~~share ~~Financial~~and ~~Statements~~ per share data)

(Unaudited)


	For the Thirteen Week				For the Forty Week		For the Thirty Nine Week
	Periods Ended				Period Ended		Period Ended
	October 1, 2006		September 25, 2005		October 1, 2006		September 25, 2005
Net service revenues	$	34,672	$	34,873	$	104,876	$	98,459
Cost of services		28,491		29,107		86,642		81,974


Gross profit		6,181		5,766		18,234		16,485

Selling, general and administrative expenses		5,528		5,177		16,545		14,541


Operating income		653		589		1,689		1,944


Other:
Interest income, net		13		—		22		—
Miscellaneous income (expense), net		—		1		21		(2	)

Other income (expense)		13		1		43		(2	)


Income before income taxes		666		590		1,732		1,942

Income tax expense		270		223		703		737


Net income	$	396	$	367	$	1,029	$	1,205


Basic net income per common share	$	0.14	$	0.13	$	0.36	$	0.42


Diluted net income per common share	$	0.13	$	0.13	$	0.35	$	0.41


Weighted average number of common shares in computing net income per common
Basic		2,879,566		2,863,168		2,879,073		2,860,418

Diluted		2,972,953		2,930,644		2,961,314		2,922,079

See accompanying Notes to Financial Statements

ABLEST INC. ~~Condensed Statements of Cash Flows (amounts in thousands) (Unaudited)~~

			For the Thirty-nine Week
			Periods Ended
			September 28, 2003			September 29, 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net income (loss) from continuing operations		$	209		$	604
	Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
		Depreciation		388			495
		Loss (gain) on disposal of property, plant and equipment		6			42
		Deferred income taxes		—			(1	)
		Stock compensation		37			71
		Changes in assets and liabilities (see below)		(745	)		(569	)
		Net cash provided by (used in) operating activities		(105	)		642
CASH FLOWS FROM INVESTING ACTIVITIES:
	Additions to property, plant and equipment			(255	)		(53	)
		Net cash provided by (used in) investing activities		(255	)		(53	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Proceeds from short-term borrowings			2,000			5,950
	Repayment of short-term borrowings			(2,000	)		(5,950	)
	Purchase of treasury shares			(126	)		(124	)
		Net cash provided by (used in) financing activities		(126	)		(124	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS				(486	)		465
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD				1,858			607
CASH AND CASH EQUIVALENTS, END OF PERIOD			$	1,372		$	1,072
Changes in assets and liabilities providing (using) cash:
	Accounts receivable, net		$	(1,801	)	$	(2,816	)
	Prepaid expenses and other current assets			(111	)		(113	)
	Other assets			6			13
	Accounts payable			462			330
	Accrued expenses and other current liabilities			694			2,017
	Other liabilities			5			—
		Total change in assets and liabilities providing (using) cash	$	(745	)	$	(569	)

Condensed Statements of Cash Flows

~~See~~(amounts ~~accompanying~~in ~~Notes to Condensed Financial Statements~~ thousands)

(Unaudited)


	For the Forty Week			For the Thirty Nine Week
	Period Ended			Period Ended
	October 1, 2006			September 25, 2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,029		$	1,205
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		384			243
Loss on disposal of property and equipment		10			—
Deferred income taxes		225			702
Stock compensation		199			326
Changes in assets and liabilities (see below)		1,796			(245	)


Net cash provided by operating activities		3,643			2,231


CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment		(1,323	)		(283	)


Net increase in cash and cash equivalents		2,320			1,948


CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		1,931			1,357

CASH AND CASH EQUIVALENTS END OF PERIOD	$	4,251		$	3,305


Changes in assets and liabilities providing (using) cash:
Accounts receivable, net	$	2,459		$	(210	)
Prepaid expenses		(235	)		(288	)
Other assets		108			(5	)
Accounts payable		(638	)		261
Accrued insurance		(119	)		(1,145	)
Accrued wages		210			1,067
Other current liabilities		4			192
Other liabilities		7			(117	)


Total changes in assets and liabilities providing cash	$	1,796		$	(245	)

See accompanying Notes to Financial Statements

ABLEST INC. ~~Notes to Condensed Financial Statements (Unaudited)~~

1.Notes ~~COMPANY~~to ~~BACKGROUND~~ Condensed Financial Statements

~~Ablest Inc.~~ (~~“Company”~~Unaudited) offers staffing services in the United States. Staffing services are principally provided through 44 service locations in the Eastern United States and selected Southwestern markets with the capability to supply staffing services for the clerical, industrial and information technology needs of their customers. Positions often filled include, but are not limited to, data entry, office administration, telemarketing, light industrial assembly, order picking, shipping, network administration, database administration, program analyst, web development, project management and technical writing. Ablest does not service any specific industry or field; instead, its services are provided to a broad-based customer list.

21. ~~BASIS~~COMPANY OFBACKGROUND ~~PRESENTATION~~ Ablest Inc. (“Company”) offers staffing services in the United States. Staffing services are principally provided through 60 service locations in the Eastern United States and selected Southwestern markets with the capability to supply staffing services for the clerical, light industrial, information technology, finance and accounting needs of their customers. Positions often filled include, but are not limited to, data entry, office administration, telemarketing, light industrial assembly, order picking and shipping, network administration, database administration, program analyst (both mainframe and client server), web development, project management, technical writing, accounting, financial analysis and internal auditing. The Company does not service any specific industry or field; instead, its services are provided to a broad-based customer list.

These interim financial statements have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States for interim financial information, the instructions to Quarterly Report on Form 10-Q, and Rule 10-01 of Regulation S-X and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 29, 2002. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

2.		SIGNIFICANT ACCOUNTING POLICIES

		*Basis of Presentation*

		These interim financial statements have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States for interim financial information, the instructions to Quarterly Report on Form 10-Q, and Rule 10-01 of Regulation S-X and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 25, 2005. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

		All adjustments, consisting of only normal recurring adjustments, considered necessary for fair presentation have been reflected in these condensed financial statements. The operating results for the thirteen and forty week period ended October 1, 2006 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2006.

		*Fiscal Periods*

		The Company’s fiscal year to date for 2006 and 2005 consists of forty and thirty nine weeks, respectively.

		*Cash Equivalents*

		All highly liquid investments with original maturities of three months or less are considered cash equivalents. As of October 1, 2006, there was $1.5 million in cash equivalents. There were no equivalents as of December 25, 2005.

		*Revenue Recognition*

		The Company’s revenues are derived from providing staffing services to its customers. Substantially all revenue is billed on a direct cost plus markup basis. Revenue is recognized at the time the service is performed. In addition, the Company bills revenues under piecework contracts and permanent placement services. Piecework contracts are billed to the customer on a cost per unit basis versus an hourly basis. Revenue from piecework contracts is recognized at the time service is performed. Permanent placement services are fee-based services to recruit and fill regular staff positions for customers. Revenue from permanent placement services is recognized when a candidate begins full-time employment.

		*Allowance for Doubtful Accounts*

		The Company must make estimates of the collectibility of accounts receivables. Management analyzes historical bad debts, customer concentrations, customer credit-worthiness, current

All adjustments, consisting of only normal recurring adjustments, considered necessary for fair presentation have been reflected in these condensed financial statements. The operating results for the thirty-nine week period ended September 28, 2003 are not necessarily indicative of the results that may be expected for the fiscal year ending December 28, 2003.

In order to maintain consistency and comparability between periods presented, certain amounts have been reclassified from the previously reported consolidated financial statements to conform with the financial statement presentation of the current period.

3. NEW ACCOUNTING PRONOUNCEMENTS

In December 2002, the Financial Accounting Standards Board issued Financial Accounting Standards No. 148, (“SFAS No. 148”), “Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of FASB Statement No. 123.” SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-Based Compensation”, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. SFAS No. 148 is effective for fiscal years ending after December 15, 2002 and did not have a material financial impact upon the Company.

ABLEST INC.
Notes to Condensed Financial Statements
(Unaudited)

4economic trends and changes in the customer’s payment tendencies when evaluating the adequacy of the allowance for doubtful accounts. ~~SHORT~~The Company maintains an allowance for probable losses based upon management’s analysis of historical write-~~TERM~~off ~~BORROWINGS~~levels, current economic trends, routine assessments of its clients’ financial strength and any other known factors impacting collectibility. Recoveries are recognized in the period in which they are received. The ultimate amount of accounts receivable that become uncollectible could differ from those estimated; however, such losses have been generally within management’s expectations.

OnSelf-Insurance ~~August 13, 2003, the Company signed a two year $7,500,000 Committed~~Reserves Revolving Credit Facility (“Facility”) with Manufacturers and Traders Trust Company (“M&T”). The Company elects the interest rate on borrowings under the Facility at the time of borrowing at either the bank’s prime rate or the thirty, sixty or ninety day LIBOR plus 200 basis points. The Facility expires on August 12, 2005 and is renewable for one year with the consent of both parties. The Facility requires the Company to maintain certain financial covenants including a tangible net worth ratio among other restrictions.

The ~~Facility~~Company ~~replaced~~is self-insured for the deductible amount of its general liability and workers’ compensation coverages. To derive an estimate of the Company’s ~~Standard~~ultimate ~~LIBOR~~claims ~~Grid~~liability, established ~~Note~~loss ~~Agreement (“LIBOR~~development ~~Agreement”)~~factors ~~that~~are ~~allowed~~applied ~~borrowing~~to current claims information. The Company maintains reserves for ~~general~~its ~~corporate~~workers ~~needs~~compensation ofusing up actuarial methods to ~~$5.0 million~~estimate ~~with~~the remaining ~~interest~~undiscounted ~~calculated~~liability atfor the ~~bank’s~~deductible ~~then~~portion ~~prime~~of ~~lending rate~~these orclaims, atincluding ~~the~~those incurred ~~Company’s~~but ~~option~~not reported. Annually, aan ~~rate~~independent actuary calculates an estimated ultimate liability and determines loss development factors for future periods. The calculated ultimate liability is then reduced by ~~using~~cumulative aclaims ~~formula~~payments ~~which~~to determine the ~~added~~required ~~250~~reserve. Management evaluates the accrual on a quarterly basis ~~points~~and oradjusts ~~2.5%~~as needed to reflect the ~~thirty,~~required ~~sixty~~reserve orcalculation. ~~ninety~~Whereas ~~day~~management ~~LIBOR.~~believes the ~~The~~recorded ~~LIBOR~~liabilities ~~Agreement~~are ~~was~~adequate, athere ~~one-year~~are ~~demand~~inherent ~~note~~limitations ~~due~~in tothe ~~expire~~estimation onprocess whereby ~~July 22~~future actual losses may differ from projected loss rates, ~~2003,~~ ~~but~~which ~~was~~could ~~renewed~~materially affect ~~for~~the anfinancial ~~additional~~condition ~~thirty~~and ~~days~~results ~~while~~of operations of the Company. ~~and~~There can be no ~~M&T~~assurance ~~negotiated~~that changes to management’s estimates will not occur due to limitations inherent in the ~~new~~estimation ~~Facility~~process.

5.Goodwill ~~STOCKHOLDERS’~~and ~~EQUITY~~Other Intangible Assets

The ~~changes~~Company inhas ~~stockholders’~~adopted ~~equity~~Financial ~~for~~Accounting ~~the~~Standards ~~thirty-nine~~No. 142 ~~week~~(SFAS ~~period~~No. 142), “Goodwill and ~~ended~~Other ~~September~~Intangible Assets”. Under SFAS No. 28142, ~~2003~~goodwill and indefinite lived intangible assets are ~~summarized~~no aslonger ~~follows:~~amortized but are reviewed at least annually for impairment. SFAS No. 142 prescribes a two-phase process for impairment testing of goodwill. The first phase screens for impairment; while the second phase (if necessary), measures the impairment. No impairment losses were recognized by the Company during the periods ended October 1, 2006 or September 25, 2005.

(amounts in thousands,			Additional										Total
except share data)	Common		Paid-in		Retained		Treasury		Stock			Stockholders'
	Stock		Capital		Earnings		Shares		Amount				Equity
Balance at December 29, 2002	$	165	$	4,936	$	11,725		428,341	$	(1,955	)		$	14,871
Net income (loss)		—		—		209		—		—				209
Stock repurchase program		—		—		—		24,088		(126	)			(126	)
Balance at September 28, 2003	$	165	$	4,936	$	11,934		452,429	$	(2,081	)		$	14,954

At October 1, 2006, the Company did not have indefinite lived intangible assets other than goodwill and did not have any intangible assets with definite lives.

6.Impairment ~~STOCK~~of ~~OPTIONS~~Long-Lived Assets

The Company ~~grants~~has ~~stock~~adopted ~~options~~Financial ~~for~~Accounting aStandards ~~fixed~~No. 144 ~~number~~(SFAS ~~of shares to executive officers, certain other key employees, and independent directors~~No. ~~On May~~ 20144), ~~2003,~~“Accounting for the ~~date~~Impairment ofor ~~the~~Disposal ~~Company’s Annual Meeting~~ of ~~Shareholders, upon re~~Long-~~election~~Lived toAssets.” ~~the~~SFAS ~~Board~~No. 144 ofestablishes ~~Directors~~a ~~(“Board”),~~single accounting ~~the~~model ~~independent directors~~for oflong-lived ~~the~~assets ~~Board~~to ~~were~~be ~~granted~~disposed ~~options~~of toby ~~purchase~~sale ~~6,000~~and ~~shares~~also asrequires ~~per~~a company ~~the~~to ~~terms~~review oflong-lived ~~the~~assets ~~Company’s~~for ~~Independent~~impairment ~~Directors’~~whenever ~~Stock~~events ~~Option~~or ~~Plan.~~changes ~~The~~in circumstances ~~options~~indicate ~~become~~that ~~fully~~the ~~vested~~carrying ~~one~~amount ~~year~~of ~~from~~an ~~the~~asset ~~date~~may ofnot ~~grant~~be recoverable. ~~The~~No ~~options~~impairment losses ~~are~~were ~~exercisable~~recognized atby the ~~closing~~Company ~~market~~during ~~price~~the onperiods ~~the~~ended ~~date~~October 1, of2006 ~~grant~~or September 25, 2005.

~~The~~Income ~~Company has elected to continue to use the intrinsic value method~~Taxes of accounting for stock options under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”. The following table represents the effect on net income and earnings per share if the Company had applied the fair value based method and recognition provisions of Financial Accounting Standards No. 123, (“SFAS No. 123”), “Accounting for Stock-Based Compensation”.

Income taxes are accounted for by the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to operating loss and credit carryforwards and differences between the financial

ABLEST INC.
Notes to Condensed Financial Statements
(Unaudited)

		For the Thirty-nine Week
(amounts in thousands except share and per share data)		Periods Ended
		September 28, 2003		September 29, 2002
Net income (loss), as reported		$	209	$	604
	Deduct: Total stock-based employee compensation expense determined under fair value methods for all awards, net of related tax effects		15		—
Net income (loss), pro forma		$	194	$	604
Net income (loss) per share:
	Basic, as reported	$	0.07	$	0.21
	Diluted, as reported	$	0.07	$	0.21
	Basic, pro forma	$	0.07	$	0.21
	Diluted, pro forma	$	0.07	$	0.21
Weighted average number of common shares in computing net income (loss) per common share
	Basic		2,862,629		2,872,847
	Diluted		2,880,629		2,892,847

statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date.

In assessing the realizability of deferred tax assets, management considers, within each taxing jurisdiction, whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the years in which the deferred tax assets are deductible, management provided valuation allowances as needed for those deferred tax assets that were not expected to be realized.

Income Per Common Share

Basic income per common share is computed by using the weighted average number of common shares outstanding. Diluted income per share is computed by using the weighted average number of common shares outstanding plus the dilutive effect, if any, of stock options.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

Stock Option Plans

The Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 123 (revised 2004) “Share-Based Payment” (SFAS 123 (R)). SFAS 123 (R) replaces FASB Statement No. 123 “Accounting for Stock-Based Compensation”, and supersedes APB Opinion No 25 “Accounting for Stock Issued to Employees”. The statement establishes standards for accounting for share-based payment transactions. Share-based payment transactions are those in which an entity exchanges its equity instruments for goods or services, or in which an entity incurs liabilities in exchange for goods or services, which are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. SFAS 123(R) covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. SFAS 123(R) requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the fair value of the award on the grant date (with limited exceptions). That cost will be recognized in the entity’s financial statements over the period during which the employee is required to provide services in exchange for the award.

The Company adopted SFAS 123(R) in the first quarter of fiscal 2006, however, as of

ABLEST INC.
Notes to Condensed Financial Statements
(Unaudited)

November 3, 2005, the Board of Directors of the Company accelerated the vesting of all unvested stock options. By accelerating the vesting of these options, the Company has no obligations outstanding which would require compensation expense under SFAS 123(R) to be recorded.

Prior to the adoption of SFAS 123(R), the Company applied the intrinsic value-based method of accounting prescribed by Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations, in accounting for its fixed plan stock options. As such, compensation expense would be recorded on the date of the grant if the current market price of the underlying stock exceeded the exercise price. Statement of Financial Accounting Standards No. 123 (“SFAS No. 123”) “Accounting for Stock – Based Compensation,” established accounting and disclosure requirements using a fair value-based method of accounting for stock-based employee compensation plans. As allowed by SFAS No. 123, the Company has elected to continue to apply the intrinsic value-based method of accounting described above, and has adopted the disclosure requirements of SFAS No. 123.

Resent Accounting Pronouncements

In July 2006, the Financial Accounting Standards Board (“FASB”) issued interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” (“FIN 48”), which clarifies the accounting for and disclosure of uncertainty in tax positions. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition associated with tax positions. The provisions on FIN 48 are effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating the effects of adoption on its financial statements and the impact, if any, is not known at this time.

In September 2006, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin (“SAB”) No. 108, “considering the Effects of Prior Year Misstatements when Qualifying Misstatements in current Year Financial Statements,” which provides interpretive guidance on how the effects of the carryover or reversal of prior year misstatements should be considered in quantifying a current year misstatement. SAB 108 is effective for the fiscal years ending after November 15, 2006. The company is currently evaluating the effects of adoption on its financial statements and the impact is not expected to be material.

3.		SHORT-TERM BORROWINGS

		On August 2, 2005, the Company entered into a Modification Agreement with Manufacturers and Traders Trust Company (“M&T”) that extends for three years the $7,500,000 Committed Revolving Credit Facility (“Facility”) originally signed on August 13, 2003. The Company elects the interest rate on borrowings under the Facility at the time of borrowing at either the bank’s prime rate or the thirty, sixty or ninety day LIBOR (as defined in the agreement) plus 125 basis points. The Facility expires on August 12, 2008 and is renewable with the consent of both parties. The Company believes that the Facility will be sufficient to cover foreseeable operational funding requirements until expiration of the Facility. The Facility requires the Company to maintain certain financial covenants including a tangible net worth ratio among other restrictions. The most restrictive covenant is the limitation of total indebtedness which caps total funded indebtedness to 3.5 times the four most recent quarter’s EBITDA, as defined in the agreement. During the third quarter of 2006, the Company had no borrowings against the Facility and was in compliance with all covenants. It is anticipated that existing funds, cash flows from operations and available borrowings will be sufficient to cover working capital requirements, organic growth and capital expenditure requirements.

4.		STOCKHOLDERS’ EQUITY

		The changes in stockholders’ equity for the forty week period ended October 1, 2006 are summarized as follows. Amounts are presented in thousands, except share data.


			Additional							Total
	Common		paid-in		Retained		Treasury			stockholders’
	stock		capital		earnings		stock			equity

Balance at December 25, 2005	$	167	$	5,265	$	16,072	$	(2,110	)	$	19,394
Net Income		—		—		1,029		—			1,029
Restricted Stock Plan		2		359		—		—			361
Directors Restricted Stock Plan		—		12		—		—			12

Balance at October 1, 2006	$	169	$	5,636	$	17,101	$	(2,110	)	$	20,796

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Statements made in this ~~discussion~~Quarterly Report on Form 10-Q, other than those concerning historical information, should be considered forward-looking and are subject to certain risks ~~and~~ and uncertainties that could cause actual results to differ materially from those anticipated. This notice is intended to take advantage of the safe harbor provided by the Private Securities Litigation Reform Act of 1995 with respect to such forward-looking statements. ~~Risks~~These forward-looking statements (such as when we describe what “will”, “may” or “should” occur, what we “plan”, “intend”, “estimate”, “believe”, “expect” or “anticipate” will occur, and ~~uncertainties~~other similar statements) include, but are not limited to, ~~hiring~~statements regarding future revenues and ~~maintaining~~operating results; ~~qualified~~future ~~employees~~prospects; anticipated benefits of proposed (or future) new branches, ~~legislative~~products or services; growth; the capabilities and ~~judicial~~capacities ~~reforms~~of our business operations and information systems; financing needs or plans; any financial or other guidance and all statements that are not based on historical fact, but rather reflect our current expectations concerning future results and events. We make certain assumptions when making forward-looking statements, any of which could prove ~~increase~~inaccurate, ~~the~~including, ~~cost~~but not limited to, statements about our business plans. The ultimate correctness of these forward-looking statements is dependent upon a number of known and unknown risks and events, and is subject to various uncertainties and other factors that may cause our actual ~~services~~results, performance or achievements to be different from any future results, performance or achievements expressed or implied by these statements. The following important factors, among others, could affect future results and events, causing those results and events to differ materially from those expressed or implied in our forward-looking statements: business conditions and competitive factors in our customers’ industries, our ability to successfully expand into new markets and ~~make~~offer new service lines, the ~~use~~availability of ~~staffing~~qualified ~~service~~personnel, ~~providers~~the ~~less~~non-exclusive, short-term ~~beneficial~~nature of our customers’ commitments, economic and political conditions and unemployment levels in the United States and other countries, increases in payroll related costs, including ~~proper~~state ~~functioning~~unemployment insurance and workers compensation insurance, obsolescence or impairment of our information ~~management~~systems, our ability to successfully invest in and implement information systems, the cost of and our ability to comply with Section 404 of the ~~continuing~~Sarbanes-Oxley Act of 2002, liabilities ~~economic~~under ~~recession~~our self-insurance program, and other factors that we may not have currently identified or quantified.

All forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date of this Quarterly Report on Form 10-Q, and we do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or which we hereafter become aware of. You should read this document and the documents that we incorporate by reference into this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We may not update these forward-looking statements, even if our situation changes in the future. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

Critical Accounting Policies

The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions affecting the amounts and disclosures reported within those financial statements. These estimates are evaluated on an ongoing basis by management and generally affect revenue recognition, collectibility of accounts receivable, workers’ compensation costs, income taxes and goodwill. Management’s estimates and assumptions are based on historical experience and other factors believed to be reasonable under the circumstances. However, actual results under circumstances and conditions different than those assumed could result in differences from the estimated amounts in the financial statements.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The Company’s critical accounting policies are described in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in the notes to the consolidated financial statements in the Company’s previously filed Annual Report on Form 10-K for the fiscal year ended December 25, 2005. There were no changes to these policies during the forty week period ended October 1, 2006.

Results of Operations:

The following discussion compares the quarter ended ~~September~~October 281, ~~2003~~2006 to the quarter ended September 29 25, ~~2002~~2005, and ~~September 28, 2003 year to date to September 29, 2002 year to date and~~ should be read in conjunction with the Condensed Financial Statements, including the related notes thereto, appearing elsewhere in this Report.

~~Revenues~~Three ~~totaled~~Months ~~$26.7 million~~Quarter ~~and~~Ended ~~$74.2~~October ~~million for the quarter and year to date periods ended September 28~~1, ~~2003~~2006 asCompared ~~compared~~with ~~to $29.3 million and $74.7 million for the quarter and year to date periods ended~~ September 2925, ~~2002.~~2005 Revenue decreased $2.6 million for the quarter primarily due to a reduction in the needs of one large account and a decrease in information technology services billing. Information technology services continue to be especially hard hit by reduced corporate spending for these services in particular. Year to date commercial services revenue increased $2.9 million due to the addition of several large industrial customers and increased account penetration in others.

~~Gross~~Revenues ~~profit~~decreased ~~was~~to $434.67 million ~~and $12.4 million~~ for the ~~quarter~~thirteen ~~and~~week ~~year to~~quarter ~~date~~period ~~periods~~ ended ~~September~~October 281, ~~2003~~2006 as compared to $534.39 million ~~and $13.7 million~~ for the ~~quarter~~thirteen ~~and~~week ~~year~~quarter toperiod ~~date periods~~ ended September 2925, ~~2002~~2005. The ~~Commercial~~decrease ~~services~~was ~~gross~~caused ~~profit decreased~~ by ~~$542,000~~lower ~~for~~billable ~~the~~hours ~~quarter primarily~~notwithstanding ~~due~~an ~~to a $211,000~~ increase in ~~workers’~~average ~~compensation~~billing ~~self-insurance~~rate. ~~Year~~We toare ~~date~~experiencing ~~gross~~reduced ~~profit~~demand for ~~the~~labor ~~Company’s~~in ~~commercial~~certain ~~services~~industries ~~decreased $512,000~~including ~~for~~home ~~2003~~building, furniture asmanufacturing ~~compared~~and toconsumer ~~2002~~products. ~~The~~We ~~year~~also todiscontinued ~~date~~service ~~decrease~~to incertain ~~gross~~customers ~~profit~~that ~~includes~~were annot ~~increase~~meeting inour ~~workers’~~margin ~~compensation~~and ~~self-insurance~~volume ~~of $817,000.~~targets ~~Gross profit for the Company’s information technology services decreased by $182,000~~ and ~~$808,000~~at ~~for~~ the ~~quarter~~same ~~and~~time ~~year~~have toincreased ~~date~~our ~~periods~~focus ~~ended~~on ~~September 28,~~improved ~~2003~~pricing asboth ~~compared~~with toexisting ~~the quarter~~ and ~~year~~new ~~to date periods ended September 29, 2002~~customers.

~~Selling,~~Gross ~~general~~profit ~~and~~was ~~administrative~~$6.2 million ~~expenses~~for ~~decreased~~the bythirteen ~~$480,000,~~week ~~or 10.7%,~~third ~~and~~quarter ~~$1.0 million,~~period orof ~~7.7%,~~2006 compared to $45.0 8 million ~~and $12.1 million~~ for the ~~quarter~~ ~~and~~thirteen ~~year~~week tothird ~~date~~quarter ~~periods~~period ~~ended~~in ~~September 28~~2005, ~~2003~~an asincrease ~~compared~~of to$0.4 million ~~the same~~or ~~periods~~7.2% ~~ended~~for the ~~September 29, 2002~~quarter. ~~The~~Gross ~~decrease~~profit ~~reflects~~as ~~containment~~a ~~of costs~~percentage ~~and management~~ of ~~staff~~revenue ~~levels~~was 17.8% ~~Reductions~~for ~~include~~the aquarter ~~decrease~~period ofas compared ~~$111,000~~to ~~and~~16.5% ~~$489,000~~prior ~~for~~year’s ~~the~~ quarter ~~and~~period, ~~year~~respectively. toThe ~~date~~improvement ~~periods~~in ~~ended~~quarterly ~~September 28,~~gross ~~2003~~profit asis attributable ~~compared~~ to ~~the~~increased ~~quarter~~hourly billing rates and ~~year~~lower tostate ~~date~~unemployment ~~periods~~insurance ~~ended~~rates. ~~September~~In 29addition, ~~2002~~gross ~~related~~profit toalso ~~information~~increased ~~technology~~as ~~services~~a asresult ~~the~~of ~~Company~~additional ~~continues~~permanent toplacement fees. These ~~align~~increases ~~those~~offset ~~services~~a ~~with~~decrease ~~its~~in ~~business~~total ~~volume~~billable hours for the quarter.

~~There~~Selling, ~~was~~general and administrative expenses increased by $5351,000 ~~other~~or ~~income~~6.8% for the quarter period ended ~~September~~October 281, ~~2003~~2006, as compared to ~~$4,000 for~~ the quarter period ended September 2925, ~~2002~~2005. ~~For~~The ~~the year to~~quarter ~~date~~ period ~~ended~~increase ~~September 28,~~is ~~2003,~~primarily ~~other~~attributable ~~income decreased $28,000 as compared~~ to the ~~year~~cost toof ~~date~~establishing ~~period~~and ~~ended~~staffing ~~September 29,~~new ~~2002~~office locations. ~~The~~Over ~~decrease~~the ~~was primarily~~last ~~the~~twelve ~~result~~months, ofsix ~~receiving~~new ~~interest~~offices ~~income~~were ofopened. ~~$32~~In addition,~~000~~ in the ~~quarter~~hiring of ~~ended~~additional ~~March 31,~~sales ~~2002~~and ~~that~~business ~~related~~development tostaff ~~the~~at ~~Company’s~~our ~~amended~~headquarters ~~1998~~office ~~federal~~contributed ~~income tax~~to ~~return~~the increase.

~~Income~~Other ~~tax expense of $213~~income,~~000~~ ~~was~~net ~~recorded~~increased ~~for~~due ~~the quarter ended September 28, 2003 as compared~~ to ~~$280,000~~cash ~~for~~equivalent ~~the~~earnings ~~quarter~~and ~~ended~~other ~~September 29, 2002.~~miscellaneous ~~Income tax expense of $127,000 was recorded for the year to date period ended September 28, 2003, an increase of $48,000 as compared to the year to date period ended September 29, 2002~~income.

9Income tax expense of $270 thousand was recorded for the quarter ended October 1, 2006, as compared to $223 thousand for the quarter ended September 25, 2005. The effective tax rates were 40.5% and 37.8%, respectively. The increase in the tax rate is due to deferred timing differences.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Nine Months Ended October 1, 2006 Compared with September 25, 2005

Revenues increased 6.5% to $104.9 million for the forty week year to date period ended October 1, 2006 as compared to $98.5 million for the thirty nine week year to date period ended September 25, 2005, respectively. The improvement in year to date revenue is primarily attributable to the additional week of operations included in the 2006 results. Adjusting for the additional week, billed hours for the thirty nine week year to date period ended October 1, 2006 are below the equivalent thirty nine week year to date period ended September 25, 2005. The reduction in billed hours has been offset by an increase in average billing rate. As noted above in the quarter comparison above, we are experiencing reduced demand for labor in certain industries including home building, furniture manufacturing and consumer products. We also discontinued service to certain customers that were not meeting our margin and volume targets and at the same time have increased our focus on improving pricing both with existing and new customers.

Gross profit was $18.2 million for the forty week year to date period of 2006 compared to $16.5 million for the thirty nine week year to date period in 2005, an increase of $1.7 million or 10.6% for the year to date period. The improvement in year to date gross profit is partly attributable to the additional week of operations in the first quarter 2006 and an increase in gross profit per labor hour. This increase reflects increased hourly billing rates and lower state unemployment insurance rates. In addition, gross profit increased as a result of additional permanent placement fees. These gains were partially offset by an increase to our workers’ compensation reserve in the second quarter of 2006. This increase is primarily due to an increase in the severity, frequency and probable ultimate value of claims incurred in 2006. Gross profit as a percentage of revenue was 17.4% for the year to date period as compared to 16.7% for the prior year’s year to date period.

Selling, general and administrative expenses increased by $2.0 million or 13.8% for the year to date period ended October 1, 2006, as compared to the same period ended September 25, 2005. The year to date increase is primarily attributable to the cost of establishing and staffing new office locations and the additional week of operations in the first quarter 2006. Over the last twelve months six new offices were opened. In addition, the hiring of additional sales and business development staff at our headquarters office contributed to the increase as well as the write-off of certain uncollectible accounts.

Other income, net increased due to cash equivalent earnings and other miscellaneous income.

Income tax expense of $703 thousand was recorded for the year ended October 1, 2006, as compared to $737 thousand for the year ended September 25, 2005. The effective tax rates were 40.5% and 38.0%, respectively. The increase in the tax rate is due to deferred timing differences.

Liquidity and Capital Resources:

The quick ratio was 23.84 to 1 and 3.21 to 1 at ~~September~~October 281, ~~2003~~2006 and December 2925, ~~2002~~2005, respectively, and the current ratio was 3.07 to 1 and 3.54 to 1, for the same respective periods. The primary source of funding is generated from results of operations. Net working capital increased by $~~233,000~~0.4 million to $1016.82 million for the current year to date period. ~~The~~as ~~increase~~a ~~was primarily~~result ~~due to an increase~~ of $1operations.~~8 million~~ ~~in accounts receivable, net and an increase in accrued expenses and other current liabilities of $731,000.~~ Reference should be made to the ~~Statement~~Condensed Statements of Cash Flows, which details the sources and uses of cash. ~~Capital expenditures were $255,000 during the~~ ~~current year to date period.~~

OnCapital ~~August 13,~~expenditures ~~2003,~~year-to-date ~~the~~were ~~Company~~approximately ~~signed a two year~~ $~~7,500,000~~1.3 million. ~~Committed Revolving~~In ~~Credit~~the ~~Facility~~fourth ~~(“Facility”)~~quarter ~~with~~2006, ~~Manufacturers and Traders Trust~~the Company ~~(“M&T”).~~plans ~~The~~to ~~Company~~purchase ~~elects~~approximately ~~the~~an ~~interest~~additional ~~rate~~$110 onthousand ~~borrowings~~over ~~under~~ the ~~Facility~~ atrest ~~the time~~ of ~~borrowing at either~~ the ~~bank’s prime rate or the~~fiscal ~~thirty~~year, ~~sixty or ninety day LIBOR plus 200 basis points. The Facility expires on August 12, 2005 and is renewable for one year with the consent~~ of ~~both parties.~~new ~~The~~front ~~Facility~~office ~~requires the Company to maintain certain financial covenants including a tangible net worth ratio among other restrictions~~software.

~~The Facility replaced the Company’s Standard LIBOR Grid Note Agreement~~13 (“LIBOR Agreement”) that allowed borrowing for general corporate needs of up to $5.0 million with interest calculated at the bank’s then prime lending rate or, at the Company’s option, a rate calculated by using a formula which added 250 basis points or 2.5% to the thirty, sixty or ninety day LIBOR. The LIBOR Agreement was a one-year demand note due to expire on July 22, 2003, but was renewed for an additional thirty days while the Company and M&T negotiated the new Facility.

It is anticipated that existing funds, cash flows from operations and available borrowings will be sufficient to cover working capital requirements and capital expenditures for the remainder of fiscal 2003.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On August 2, 2005, the Company entered into a Modification Agreement with Manufacturers and Traders Trust Company (“M&T”) that extends for three years the $7,500,000 Committed Revolving Credit Facility (“Facility”) originally signed on August 13, 2003. The Company elects the interest rate on borrowings under the Facility at the time of borrowing at either the bank’s prime rate or the thirty, sixty or ninety day LIBOR plus 125 basis points, a reduction of 75 basis points from the expiring agreement. The Facility expires on August 12, 2008 and is renewable with the consent of both parties. The Company believes that the Facility will be sufficient to cover foreseeable operational funding requirements until expiration of the Facility. The Facility requires the Company to maintain certain financial covenants including a tangible net worth ratio among other restrictions. The most restrictive covenant is the limitation of total indebtedness which caps total funded indebtedness to 3.5 times the four most recent quarter’s EBITDA, as defined in the agreement. The Company had no borrowings during the period ended October 1, 2006. It is anticipated that existing funds, cash flows from operations and available borrowings will be sufficient to cover working capital requirements, organic growth and capital expenditure requirements.

Outlook

We will continue to focus on improving our gross margin and growing revenue through implementing more favorable pricing and discontinuing certain customer relationships not meeting our profitability targets. We also intend to continue our focus on expanding further into new and existing commercial and professional staffing markets during the remainder of 2006 and 2007.

Material Commitments

The Company’s contractual cash obligations as of October 1, 2006 are summarized in the table below:


	Payable		Payable		Payable		Payable
	during 2006		2007 - 2008		2009 - 2011		after 2011		Total
Operating leases (1)	$	596	$	1,793	$	1,391	$	406	$	4,186
Capital expenditures (2)		165		—						165


Total	$	761	$	1,793	$	1,391	$	406	$	4,351

(1)		Includes minimum lease payment obligations for equipment and real property leases in effect as of October 1, 2006.

(2)		Purchase obligations for capital expenditure projects in progress.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company does not believe that its exposure to fluctuations in interest rates is material.

ITEM 4. CONTROLS AND PROCEDURES

~~Based~~We oncarried ~~their~~out an evaluation, asunder ofthe supervision and with the ~~end~~participation of our management, including the ~~period~~Chief ~~covered~~Executive byOfficer ~~this quarterly~~and ~~report~~Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this quarterly report. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer ~~have each~~ concluded that our disclosure controls and procedures ~~are~~were effective ~~and sufficient~~for tothe ~~ensure~~period ~~that~~covered weby ~~record,~~this ~~process, summarize, and~~ quarterly report ~~information required to be disclosed by us in our periodic reports~~ filed under the Securities Exchange Act within the time periods specified by the Securities ~~and~~ and Exchange Commission’s rules and forms.

~~Subsequent~~During to the ~~date~~last offiscal ~~their evaluation~~quarter, there have not been any ~~significant~~ changes in the Company’s internal controls over financial reporting or in other factors to the Company’s knowledge that could ~~significantly~~materially affect, or is reasonably likely to materially affect ~~these~~the ~~controls~~internal control over financial reporting, including any corrective action with regard to significant deficiencies and material weaknesses. The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events.

11Effective May 15, 2006, the Company implemented Great Plains® software for use in connection with the Company’s back-office systems, including its corporate accounting, finance, human resources and customer service processes. Management has reviewed then changed in internal controls associated with the new system and plans to complete its testing of the internal control changes prior to December 31, 2006.

Effective October 2, 2006, the Company implemented new front-office staffing software, StaffSuite^®, to be utilized in connection with the Company’s commercial and professional staffing operations to house sales and process employee payroll information. Management has reviewed then changed in internal controls associated with the new payroll system and plans to complete its testing of the internal control changes prior to December 31, 2006.

PART II
OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS
	Not applicable
ITEM 2.	CHANGES IN SECURITIES AND USE OF PROCEEDS
	Not applicable
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES
	Not applicable
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	Not applicable
ITEM 5.	OTHER INFORMATION
	Not applicable
ITEM 6.	EXHIBITS AND REPORTS ON FORM 8-K
(a)	Exhibits
	10	Promissory Note dated August 13, 2003 between the Company and Manufacturers and Traders Trust Company.
	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.
(b)	Reports on Form 8-K

ITEM 1. LEGAL PROCEEDINGS

~~The~~ Not ~~Company filed a report on Form 8-K dated August 1, 2003, under Item 12~~applicable. ~~The report included a press release reporting the Company’s~~ ~~results of operations and financial condition for the thirteen and twenty-six weeks ended June 29, 2003.~~

12ITEM 1A RISK FACTORS

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable

ITEM 5. OTHER INFORMATION

Not applicable

ITEM 6. EXHIBITS

Exhibits


10.1		Employment agreement with John Horan, Vice President and chief Financial Officer, dated April 17, 2006.

10.2		2006 Non-Employee Directors’ Equity Rights Plan.

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.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ABLEST INC
	By:	/s/ Vincent J. Lombardo
		Vincent J. Lombardo Vice President, Chief Financial Officer, Treasurer, and Secretary
Date: October 24, 2003


		ABLEST INC.

		By:		/s/ John Horan John Horan
				Vice President and Chief Financial Officer
				(On behalf of the Registrant and as
				Principal Financial Officer)

13Date: November 10, 2006

Exhibit Index

Exhibit
Number		Description of Document
10		Promissory Note dated August 13, 2003 between the Company and Manufacturers and Traders Trust Company.
10.1		Employment agreement with John Horan, Vice President and Chief Financial Officer, dated April 17, 2006.
10.2		2006 Non-Employee Directors’ Equity Rights Plan.
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.

1418

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