2

3

		For the Fourteen Week				For the Thirteen Week
		Period Ended				Period Ended
		April 2, 2006				March 27, 2005
Net service revenues		$	35,864			$	30,835
Cost of services			29,753				25,858
Gross profit			6,111				4,977
Selling, general and administrative expenses			5,551				4,549
Operating income			560				428
Other:
Miscellaneous income (expense), net			1				(3	)
Other income (expense)			1				(3	)
Income before income taxes			561				425
Income tax expense			213				161
Net income		$	348			$	264
Basic net income per common share		$	0.12			$	0.09
Diluted net income per common share		$	0.12			$	0.09
Weighted average number of common shares used in computing net income per common share
Basic			2,879,764				2,854,578
Diluted			2,935,050				2,926,692

See accompanying Notes to Financial Statements

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

		For the Fourteen Week				For the Thirteen Week
		Period Ended				Period Ended
		April 2, 2006				March 27, 2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income from continuing operations		$	348			$	264
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			105				90
Loss on disposal of property and equipment			9				—
Deferred income taxes			136				134
Stock compensation			47				29
Changes in assets and liabilities (see below)			1,972				611
Net cash provided by operating activities			2,617				1,128
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment			(379	)			(60	)
Net increase in cash			2,238				1,068
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			1,931				1,357
CASH AND CASH EQUIVALENTS END OF PERIOD		$	4,169			$	2,425
Changes in assets and liabilities providing (using) cash:
Accounts receivable, net		$	3,728			$	2,080
Prepaid expenses and other current assets			(131	)			(186	)
Other assets			(72	)			(3	)
Accounts payable			(313	)			24
Accrued insurance			(551	)			—
Accrued wages			(607	)			—
Other current liabilities			(86	)			(1,304	)
Other liabilities			4				—
Total change in assets and liabilities providing cash		$	1,972			$	611

See accompanying Notes to Financial Statements

ABLEST INC.

Notes to Condensed Financial Statements

(Unaudited)

1.		COMPANY BACKGROUND
		Ablest Inc. (“Company”) offers staffing services in the United States. Staffing services are principally provided through 55 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.
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 fourteen week period ended April 2, 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 first fiscal quarter end for 2006 and 2005 consists of fourteen weeks and thirteen weeks, respectively.
		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 economic trends and changes in the customer’s payment tendencies when evaluating the adequacy of the allowance for doubtful accounts. The Company maintains an allowance for

ABLEST INC.
Notes to Condensed Financial Statements
(Unaudited)

		probable losses based upon management’s analysis of historical write-off 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.
		Self-Insurance Reserves
		The Company is self-insured for the deductible amount of its general liability and workers’ compensation coverages. To derive an estimate of the Company’s ultimate claims liability, established loss development factors are applied to current claims information. The Company maintains reserves for its workers compensation using actuarial methods to estimate the remaining undiscounted liability for the deductible portion of these claims, including those incurred but not reported. Annually, an independent actuary calculates an estimated ultimate liability and determines loss development factors for future periods. The calculated ultimate liability is then reduced by cumulative claims payments to determine the required reserve. Management evaluates the accrual on a quarterly basis and adjusts as needed to reflect the required reserve calculation. Whereas management believes the recorded liabilities are adequate, there are inherent limitations in the estimation process whereby future actual losses may differ from projected loss rates, which could materially affect the financial condition and results of operations of the Company. There can be no assurance that changes to management’s estimates will not occur due to limitations inherent in the estimation process.
		Goodwill and Other Intangible Assets
		The Company has adopted Financial Accounting Standards No. 142 (SFAS No. 142), “Goodwill and Other Intangible Assets”. Under SFAS No. 142, goodwill and indefinite lived intangible assets are no longer 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 April 2, 2006 or March 27, 2005.
		At April 2, 2006, the Company did not have indefinite lived intangible assets other than goodwill and did not have any intangible assets with definite lives.
		Impairment of Long-Lived Assets
		The Company has adopted Financial Accounting Standards No. 144, (SFAS No. 144), “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS No. 144 establishes a single accounting model for long-lived assets to be disposed of by sale and also requires a company to review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. No impairment losses were recognized by the Company during the periods ended April 2, 2006 or March 27, 2005.
		Income Taxes
		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)

		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 generally accepted accounting principles 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. Significant estimates made in the preparation of the financial statements include revenue recognition, the allowance for doubtful accounts, deferred tax assets, goodwill impairment and workers’ compensation reserves.
		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 has adopted SFAS 123(R) in the first quarter of fiscal 2006, however, as of November 3, 2005, the Board of Directors of the Company accelerated the vesting of all unvested

ABLEST INC.
Notes to Condensed Financial Statements
(Unaudited)

		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.

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, 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. During the first 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 fourteen week period ended April 2, 2006 are summarized as follows. Amounts are presented in thousands, except share data.

						Additional																Total
		Common				paid-in				Retained				Treasury				Treasury				stockholders’
		stock				capital				earnings				Shares				stock				equity
Balance at December 25, 2005		$	167			$	5,265			$	16,072				457,729			$	(2,110	)		$	19,394
Net Income			—				—				348				—				—				348
Restricted Stock Plan			2				359				—				—				—				361
Balance at April 2, 2006		$	169			$	5,624			$	16,420				457,729			$	(2,110	)		$	20,103

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

Statements made in this Quarterly Report on Form 10-Q, other than those concerning historical information, should be considered forward-looking and are subject to certain risks 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. 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 other similar statements) include, but are not limited to, statements regarding future revenues and operating results; future prospects; anticipated benefits of proposed (or future) new branches, products or services; growth; the capabilities and capacities 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 inaccurate, including, 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 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 offer new service lines, the availability of qualified personnel, the non-exclusive, short-term 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 state unemployment insurance and workers compensation insurance, obsolescence or impairment of our information systems, our ability to successfully invest in and implement information systems, the cost of and our ability to comply with Section 404 of the Sarbanes-Oxley Act of 2002, liabilities under 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 generally accepted accounting principles 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 fourteen week period ended April 2, 2006.

Results of Operations:

The following discussion compares the quarter ended April 2, 2006 to the quarter ended March 27, 2005, and should be read in conjunction with the Condensed Financial Statements, including the related notes thereto, appearing elsewhere in this Report.

Revenues increased to $35.9 million for the fourteen week, quarter and year to date period ended April 2, 2006 as compared to $30.8 million for the thirteen week, quarter and year to date period ended March 27, 2005, respectively. Branches opened in 2005 and 2006 contributed over 90 percent of the increase. The increase in account penetration, strategic marketing and greater staffing requirements from existing clients also played a role in the overall growth of 16.3% as well as the additional week of operations in the first quarter for 2006.

Gross profit was $6.1 million for the fourteen week, first quarter and year to date period of 2006 compared to $5.0 million for the thirteen week, same respective period in 2005, an increase of $1.1 million or 22.8% for the quarter and year to date period. The improvement in quarter to date gross profit is mainly attributable to the increased revenue levels and management’s decision to eliminate businesses with higher risk and lower margins as well as the additional week of operations in the first quarter 2006. Gross profit as a percentage of revenue was 17.0% for the current year’s quarter as compared to 16.1% for the prior year’s quarter, as result of the elimination of lower margin business.

Selling, general and administrative expenses increased by $1.0 million, or 22.0% to $5.6 million for the fourteen week, quarter and year to date period ended April 2, 2006, respectively, as compared to the thirteen week, same period ended March 27, 2005. Approximately 39% of the year to date increase is attributable to the newly opened locations referenced above. Higher compensation costs associated with the increased earnings also caused these costs to increase as well as the additional week of operations in the first quarter 2006.

Other income, net did not change significantly from the previous year.

Income tax expense of $213 thousand was recorded for the quarter ended April 2, 2006, as compared to $161 thousand for the quarter ended March 27, 2005. The effective tax rate remained unchanged at 38%.

Liquidity and Capital Resources:

The quick ratio was 3.8 to 1 and 3.1 to 1 at April 2, 2006 and December 25, 2005, respectively, and the current ratio was 4.2 to 1 and 3.4 to 1, for the same respective periods. The primary source of funding is generated from results of operations. Net working capital increased by $198 thousand to $16.0 million for the current year to date period as a result of operations. Reference should be made to the Statement of Cash Flows, which details the sources and uses of cash.

Capital expenditures year-to-date were approximately $379 thousand. Subsequent to April 2, 2006 the Company has purchased approximately $100 thousand, and plans to purchase approximately an additional $337 thousand over the rest of the fiscal year, of new front and back office software and the related required hardware.

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 April 2, 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.

Material Commitments

The Company’s contractual cash obligations as of April 2, 2006 are summarized in the table below:

		Payable				Payable				Payable				Payable
		during 2006				2007 - 2008				2009 - 2011				after 2011				Total
Operating leases (1)		$	838			$	1,670			$	1,374			$	407			$	4,289
Capital expenditures (2)			437				—												437
Total		$	1,275			$	1,670			$	1,374			$	407			$	4,726

(1)		Includes minimum lease payment obligations for equipment and real property leases in effect as of April 2, 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 on their evaluation, as of the end of the period covered by this quarterly report of the effectiveness of our disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer have each concluded that our disclosure controls and procedures are effective and sufficient to ensure that we record, process, summarize, and 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 Exchange Commission’s rules and forms.

Subsequent to the date of their evaluation, there have not been any significant changes in the Company’s internal controls or in other factors to the Company’s knowledge that could significantly affect these controls, 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.

PART II
OTHER INFORMATION

ITEM 1.		LEGAL PROCEEDINGS
		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
		On May 15, 2006, the Company entered into an amendment of its Employment Agreement with John Horan, effective as of May 15, 2006. That amendment provides that Mr. Horan will not serve as the Company’s Chief Financial Officer until immediately after the Company files with the Securities and Exchange Commission, its quarterly report on Form 10-Q for the first fiscal quarter of 2006. In connection therewith, the resignation of Charles Heist as the Company’s acting Chief Financial Officer will not be effective until Mr. Horan assumes those duties.

ITEM 6.		EXHIBITS
		Exhibits
			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/ Charles H. Heist
				Charles H. Heist
				Chairman, Chief Financial Officer and
				Treasurer
				(On behalf of the Registrant and as
				Principal Financial Officer)

Date: May 17, 2006

Exhibit Index

Exhibit
Number		Description of Document
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.