UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

Commission file number: 1-10893

ABLEST INC.
(Exact name of registrant as specified in its charter)

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $.05 par value
(Title of Class)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 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 [X]     No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements, incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K (X ).

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The aggregate market value of the Registrant’s common shares held by non-affiliates at February 28, 2002 was approximately $4,906,000.

The number of common shares of the Registrant outstanding at February 28, 2002 was 2,899,085.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents are incorporated by reference in the following part of this report: Part III — the Registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission and used in connection with the solicitation of proxies for the Registrant’s annual meeting of shareholders to be held on May 23, 2002.

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PART I

ITEM 1.      Business

General.

Prior to March 13, 2000, Ablest Inc. (the “Company”) operated as C. H. Heist Corp. with two service segments: Staffing Services and Industrial Maintenance.

On March 13, 2000, the Company sold substantially all of the assets of its United States industrial maintenance business and the stock of its Canadian subsidiary, C. H. Heist, Ltd., to Onyx Industrial Services, Inc. (“Onyx”). For the fiscal years reported herein, the Company’s industrial maintenance business is being reported as a discontinued operation. See note 2 to the Financial Statements included under Item 8 to this report on Form 10-K for additional information on the discontinued operations.

Also on that date and following the sale of the Company’s industrial maintenance business to Onyx, the Company reincorporated in Delaware, changed its name to Ablest Inc. and became a pure-play staffing services company.

On January 1, 2001, Ablest Service Corp., Milestone Technologies Inc. and P.L.P. Corp. (part of the discontinued operations) merged into Ablest Inc. to form a single operating company under the Ablest Inc. name. See note 1 to the Financial Statements included under Item 8 to this report on Form 10-K for additional information on the re-incorporation and merger.

Staffing Services

The Company offers staffing services in the United States. Staffing services are principally provided through 49 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 in the Company’s commercial staffing services segment often filled include, but are not limited to, data entry, office administration, telemarketing, light industrial assembly, order picking and shipping. Positions in the Company’s information technology staffing services segment include, but are not limited to, network administration, data base administration, program analyst (both mainframe and client server), 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.

The staffing services business is highly competitive with few barriers to entry. There are numerous local, regional and national firms principally engaged in offering such services. The primary competitive factors in the staffing services field are quality of service, reliability of personnel and price.

Industry Segments and Service Activities.

The table on the following page is a summary of information relating to the Company’s operations in its two industry segments for each of the Company’s last three fiscal years. The discontinued operation noted refers to the Company’s former industrial maintenance operations.

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The following table sets forth the approximate percentages of revenues by service activity within the Company’s Staffing Services operations for each of the Company’s last three fiscal years:

Working Capital. By virtue of the nature of the Company’s business, the attainment and maintenance of high levels of working capital is not required, other than to meet debt requirements as disclosed in Note 7 to the Financial Statements shown under Item 8 to this Form 10-K.

Backlog. In view of the fact that the Company’s services are primarily furnished pursuant to purchase orders or on a call basis, backlog is not material.

Employees. The ongoing staffing business comprises approximately 3,013 persons, 162 of which were full time at December 30, 2001. The Company considers its employee relations to be satisfactory.

Canadian Operations. Up through March 13, 2000, the Company’s former industrial maintenance business included operations in Canada. In connection with the sale of the industrial maintenance business all of the common stock of the Company’s Canadian Subsidiary, C. H. Heist, Ltd., was sold to Onyx Industrial Services, Inc. The operations of the Canadian subsidiary, up through the sale date, are included with the discontinued operations. See note 2 to the Financial Statements included under Item 8 to this report on Form 10-K for additional information on the discontinued operations.

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Executive Officers of Registrant

Identification. The Company’s executive officers are:

(b)  Arrangements and Understandings. There are no arrangements or understandings pursuant to which the above officers were elected.

(c)  Family Relationships. None of the officers has any family relationship with any other officer of the Company.

ITEM 2.      Properties

The Company currently leases 13,724 square feet of office space in Clearwater, Florida that serves as its corporate headquarters. Fifty-five additional facilities are leased under rental agreements and under terms and conditions prevailing in the various service locations. The Company considers all of its offices and facilities suitable and adequate for servicing its customers.

ITEM 3.      Legal Proceedings

The Company is subject, from time to time, to claims encountered in the normal course of business. In the opinion of management, the resolution of all pending matters will not have a material adverse effect on the Company’s financial condition or liquidity.

ITEM 4.      Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders of the Company during the fourth quarter of fiscal 2001.

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PART II

ITEM 5.      Market for Registrant’s Common Equity and Related Stockholder Matters

(a)(i) Market for Registrant’s Common stock:

The Company’s common stock currently trades on the American Stock Exchange under the symbol “AIH”. For the period from March 13, 2000 to November 20, 2000 the Company’s common stock was traded under the symbol “ABI”. Prior to March 13, 2000 the common stock was traded under the symbol “HST”.

(a)(ii) Price Range of Common Stock:

The price ranges applicable to the common shares during each quarter of the years ended December 30, 2001 and December 31, 2000, are as follows:

(b)  Approximate Number of Common Shareholders:

On December 30, 2001, there were 513 registered shareholders.

(c)  Dividends:

The Company currently does not pay a dividend on its common shares.

ITEM 6.      Selected Financial Data

* Restated to reflect discontinued operations, which are more fully discussed in note 2 to the financial statements.

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The following summarizes quarterly operating results:

*     Restated to reflect discontinued operations, which are more fully discussed in note 2 to the financial statements.

ITEM 7.      Management’s Discussion and Analysis of Financial Condition and Results of Operations

Statements made in this discussion, other than those concerning historical information, should be considered forward-looking and 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. Risks and uncertainties include, but are not limited to; hiring and maintaining qualified employees, legislative and judicial reforms which could increase the cost of our services to our customers and make the use of staffing service providers less beneficial, the proper functioning of our management information systems and the continuing economic recession.

On March 13, 2000, C.H. Heist Corp., sold substantially all of the assets of its United States industrial maintenance business and the stock of C. H. Heist Corp.’s wholly owned Canadian subsidiary, C.H. Heist, Ltd., to Onyx Industrial Services, Inc. Taken together, these operations comprised substantially all of the assets of C. H. Heist Corp.’s industrial maintenance operations. Included in the sale was C. H. Heist Corp.’s administrative and warehousing facility in Buffalo, New York. Also on March 13, 2000, C. H. Heist Corp. merged into a newly formed company, Ablest Inc., and reincorporated in the state of Delaware.

On January 1, 2001, the Company’s subsidiaries Ablest Service Corp. (a Delaware corporation), Milestone Technologies, Inc. (an Arizona corporation) and PLP Corp. (an Alabama corporation) were formally merged into Ablest Inc. (a Delaware corporation), to form a single operating company under the Ablest Inc. name. The outstanding shares of the merging corporations were cancelled and no shares of Ablest Inc. were issued in exchange. The outstanding shares of Ablest Inc. remain outstanding and were not affected by the merger.

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For financial reporting purposes, the Company’s former industrial maintenance business is reported as a discontinued operation. The following discussions and analysis of operations and financial condition pertain to the Company’s staffing services business, which constitutes the continuing operations. A separate section labeled “Discontinued Operations” is included at the end of this discussion and pertains to the disposal of the industrial maintenance business.

For the fiscal year ended December 30, 2001, compared to December 31, 2000.

Fiscal Year 2001 was comprised of 52 weeks compared to 53 weeks in fiscal 2000.

Results of Operations:

Service revenues declined by $16.4 million or 15.9% to $87.0 million from $103.4 million for the year ended December 30, 2001 compared to the year ended December 31, 2000.

Service revenues for the Company’s commercial staffing services segment decreased by $11.6 million or 13.2% to $76.6 million from $88.2 million for the current year compared to one year earlier. This decrease is primarily a result of an overall decline in demand for the Company’s commercial staffing services as a result of the economic recession that has occurred in the United States. Historically, the staffing industry is one of the first to feel the impact of a declining economy and conversely, is one of the first to benefit from an improving economy. During fiscal 2001, the Company closed six commercial staffing offices that were not performing up to expectations or were severely impacted by significant declines in their respective local economies. These offices accounted for $3.6 million of the overall decline in commercial staffing services in fiscal 2001 as compared to fiscal 2000.

Service revenue in the Company’s information technology staffing services segment declined by $4.8 million or 31.4% to $10.4 million from $15.2 million for the current year compared to one year earlier. This segment was especially hard hit by the decline in the general economy and the softening of demand for information technology staffing services, post year 2000 conversion. Contributing to this decline was a decrease in placement fees generated by this segment. For the year ended December 30, 2001 placement fees accounted for .7% of information technology staffing services as compared to 4.6% for the year ended December 31, 2000. Additionally, In December of 2001, the Company closed one of its information technology staffing offices that had shown a decline of approximately $900,000 in service revenues from the prior year.

Gross Profit decreased by $5.9 million or 25.8% to $17.0 million for the current fiscal year compared to fiscal 2000. Gross profit for the commercial staffing segment declined $3.5 million or 18.6% over the same period. Gross profit for the Company’s information technology staffing services segment declined by $1.6 million or 40.8% for the current fiscal year compared to fiscal 2000. The decline in gross profit for both segments is related to the decline in the service revenues and a decline in gross margin. Gross margin declined by 2.6 percentage points to 19.5% from 22.1% for fiscal 2001, compared to fiscal 2000. For the commercial staffing services segment, the decline in gross margin is partially attributable to a change in the sales mix where a greater percentage of revenue is being derived from light industrial and payrolling services. For the year ended December 30, 2001, light industrial services as a percentage of commercial staffing services revenue increased to 76.2% from 68.0%, compared to one year earlier. Driving this change in the sales mix is the increase in total staffing services being derived from the Company’s Vendor-On-Premises programs. These services represented 19.8% of revenues for this segment in fiscal 2001 compared to 10.1% of revenues in the prior year. These programs may require the use of out-side staffing service companies (“Tiered Suppliers”), on a direct passthrough basis, to supplement the existing workforce. While they do not negatively impact profitability, they do affect gross margin calculations. Bidding for these services is highly competitive and, due to their large volume, require lower margins to secure the contracts. For the Company’s information technology staffing services segment, gross margin declined by 3.5 percentage points for the comparable year-to-date periods. This decline is partially attributable to the decline in permanent placement fees noted earlier and the use of Tiered Suppliers, which accounted for 5.6% of this segment’s revenues in the current year compared to 0% in the prior year.

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Selling, general and administrative expense, exclusive of amortization expense and intangible asset impairment, declined by approximately $1.9 million or 8.9% for the current year compared to one year earlier. This decline is the result of the cost reduction and staff elimination that were done during the second and fourth quarters when the Company closed seven under performing branch locations. During fiscal 2001, the Company recorded $250,000 in reorganization expense relating to the closing of the seven offices noted above.

In the fourth quarter of 2001, the Company incurred non-cash charges of $2.9 million relating to the impairment of goodwill and other intangible assets associated with various information technology staffing acquisitions made in previous fiscal years. The Company has continuously reviewed the information technology staffing acquisitions to determine whether it can continue to support the carrying value of the intangible assets that were established at the time of the respective acquisitions. Based upon several factors, including a steady decline in revenue and earnings, the loss of a major customer, management changes that occurred in the fourth quarter and the continued weakening of demand in this segment of the staffing industry, an impairment triggering event was deemed to have occurred. Based on the projected discounted future cash flows from this segment, the related goodwill and other intangible assets were written down to their estimated current net realizable values.

Other income (expense), net, increased by $80,000 to $94,000 in the current fiscal year as compared to the prior year. Interest income, net, amounted to approximately $22,000 in the current year as compared to a net interest expense of $135,000 in 2000. Also contributing to the increase in other income, net, was the one time receipt of $73,000 from the demutualization of the Company’s former pension and 401-K plan service provider.

The effective tax rate for the current fiscal year is a benefit of 8.3%. 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 has provided valuation allowances for those deferred tax assets that are not expected to be realized. The Company recorded a valuation allowance of $2.3 million in the current year against a deferred tax benefit of $2.8 million, resulting in a recognized benefit of $460,000. In 2000, the recorded tax provision of $615,000 represented an effective rate of 50.9% due to the impact of changes in estimates of previously recognized tax benefits and the non-deductibility for tax purposes of certain expenses (mainly goodwill amortization) incurred by the Company.

Critical Accounting Policies

The Company has identified the policies below as critical to the Company’s business operations and the understanding of its results of operations. For a detailed discussion on the application of these and other accounting policies, see Note 1 in the Notes to the Financial Statements in Item 8 of this Annual Report on Form 10-K. Note that the preparation of this Annual Report on Form 10-K requires management to make estimates and assumptions that affect the reported amount 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 period. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

(a)  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 accounts receivable balance was $10.2 million, net of allowance for doubtful accounts of $252,000 as of December 30, 2001.

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(b)  Self-insurance reserves

The Company is self-insured for general liability and workers’ compensation coverages. Accruals for losses are made based on the Company’s claims experience and actuarial assumptions followed in the insurance industry. Management believes that the amount accrued is adequate to cover all known and unreported claims at December 30, 2001.

(c)  Intangible asset impairment

The Company assesses the impairment of intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that are considered include significant underperformance relative to expected historical or projected future operating results, significant negative industry trends and significant change in the manner of use of the acquired assets. When management determines that the carrying value of intangible assets may not be recoverable, they measure any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the Company’s current business model. During the year ended December 30, 2001, the Company recorded an impairment loss of $2.9 million related to intangible assets. Net intangible assets, amounted to $1.3 million as of December 30, 2001.

Liquidity and Capital Resources:

The following financial information is provided as of a balance sheet date of December 30, 2001.

The quick ratio was 3.7 to 1 and 2.9 to 1 at December 30, 2001 and December 31, 2000, respectively, and the current ratio was 3.8 to 1 and 3.5 to 1, for the same respective periods. Net working capital decreased by $3.5 million during the current year. Contributing to this decrease was a reduction in accounts receivable of $4.4 million due to the decreased level of revenue being generated during this period. This decrease was partially offset by an increase in cash of $201,000 and a decrease in accrued expenses and accounts payable of $2.0 million and $161,000, respectively. Accrued expenses decreased primarily due to the payment of both the 1999 and 2000 insurance retrospective premium adjustments in the current year. Also contributing to this decrease was a reclassification of $1.3 million of current deferred tax assets to long term deferred tax assets relating to the Company’s net operating loss carryforward from prior periods. Reference should be made to the Statement of Cash Flows, which details the sources and uses of cash.

Capital expenditures for the current fiscal year were approximately $627,000. Approximately $515,000 of the total additions pertains to new front office automation and applicant matching software and related systems that were implemented throughout the Company’s operations. 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 fiscal 2002.

On July 22, 2001, The Company entered into a Standard LIBOR Grid Note Agreement (“LIBOR Agreement”) with The Manufacturers and Traders Trust Company (“M&T”). The LIBOR Agreement allows for the 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, using a formula which adds 250 basis points or 2.5% to the 30, 60 or 90 day London Interbank Offered Rate LIBOR rate. The LIBOR Agreement is a one-year demand note that expires on July 21, 2002, and is renewable annually with the consent of both parties. The LIBOR Agreement does not contain working capital or other financial covenants. The Company believes that this line will be renewed and will be sufficient to cover foreseeable operational funding requirements in 2002. Since, however, the Company must repay any borrowings under the LIBOR Agreement to M&T on demand, there is no guarantee that the Company will be able to maintain or obtain funding from M&T if, for any

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reason, M&T does not wish to continue to extend credit to the Company. At the current time, given the Company’s financial condition, the nature of its business which does not require attainment or maintenance of high levels of working capital, its historical relationship with M&T and the fact that working capital requirements tend to decline if revenues decline, the Company believes that it will be able to borrow required funds from M&T under the LIBOR Agreement. If, however, M&T were to demand repayment of the borrowings (or decline to provide funding) under the LIBOR Agreement for any reason, the Company would be in the position of having to secure from other sources funding to finance its working capital requirements. Such new sources could require commitment fees, financial covenants and other conditions, taking into consideration such factors as the health of the national economy, staffing industry performance and trends, and the Company’s financial condition, performance and prospects. In such event, there is no guarantee that the Company would be able to secure such funding on favorable terms.

At December 31, 2000, the Company had a $25,000,000 unsecured bank line of credit under a revolving credit agreement. Effective for 2001, the Revolving Term Loan Agreement between the Company and M&T dated August 21, 1995 was reduced to $5,000,000 and was set to mature on August 1, 2001. The interest rate on borrowings under the line of credit was elected weekly by the Company and was either (i) the bank’s prime rate or (ii) the Secondary Market Certificate of Deposit (CD) Rate plus 3/4%. The rate in effect at December 31, 2000 was 7.275%. On July 31, 2001, the Company had the option of converting the then outstanding borrowings to a term loan, payable in twenty equal quarterly installments beginning August 1, 2002 and bearing interest at either (i) the bank’s prime rate plus 1/2% or (ii) the Secondary Market CD Rate plus 1-1/2%. If converted, the company continues electing, on a weekly basis, the interest rate to be charged. The revolving credit agreement contained working capital requirements, and limited the amount of liabilities, capital expenditures and payment of cash dividends. Under the most restrictive of these provisions, $1,000,000 of retained earnings was free of dividend restrictions at December 31, 2000. Due to the sale of the industrial maintenance operations, the Company was not in compliance with certain of the covenants relating to the levels of net working capital and net worth of the Company to be maintained and as such obtained a waiver from the bank for all breached covenants. Compensating balances, may be, but were not required, to be maintained. On July 22, 2001 the Company canceled the above noted credit facility and replaced it with the LIBOR Agreement, noted previously.

Discontinued Operations:

At December 30, 2001 the combined balance in the remaining reserve for loss on sale of discontinued operations was $325,000. The Company believes that the balance in the reserve account is sufficient to cover all remaining items from the sale of its industrial maintenance operations to Onyx in 2000. The reserves will be utilized to complete environmental remediation in two of the Company’s former industrial maintenance locations, to cover any damages against the Company’s former Canadian subsidiary resulting from an on-going law suit and to cover any future insurance retrospective premium adjustments in the United States.

In August 2001, the Company sold its former Lima, Ohio property for a gain of approximately $17,000. In December 2001, the Company sold its former Charlotte, North Carolina facility for $1.1 million and recognized a gain in the net assets of discontinued operations of approximately $396,000. Also in December 2001, the Company received a one-time distribution, on behalf of the discontinued operations, of $222,000 from the demutualization of its former pension and 401-K service provider. Prior to year-end the Company made a final payment to Onyx of approximately $62,500 to settle all outstanding items under the Asset Sales and Purchase Agreement dated January 21, 2000.

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For the fiscal year ended December 31, 2000, compared to December 26, 1999.

Fiscal Year 2000 was comprised of 53 weeks compared to 52 weeks in fiscal 1999.

Results of Operations:

Service revenues increased by $5.3 million or 5.4% to $103.4 million from $98.1 million for the year ended December 31, 2000, compared to the year ended December 26, 1999.

Service revenue in the Company’s commercial staffing services segment increased by $11.6 million or 15.3% to $88.2 million from $76.6 million for fiscal 2000 compared to one year earlier. Of this amount $12.0 million was from seven offices opened in fiscal 1999 and six offices opened in fiscal 2000. All of the branches opened in fiscal 1999 were profitable in fiscal 2000 and three of the six offices opened in fiscal 2000 were profitable on a year to date basis at year-end. Additional increases in service revenue for this segment were generated by the Company’s Vendor-on-Premises programs (“Point Source”) that were secured and started in fiscal 2000.

Service revenues in the Company’s information technology staffing segment decreased by $6.3 million or 29.4% to $15.2 million from $21.5 million for fiscal 2000 compared to one year earlier. This decline reflects the continued post Year 2000 industry-wide slowdown in information technology spending. Ablest Technology Services is in the process of shifting from its original focus of primarily servicing low-end solutions work toward applications where trained professionals are scarce but generate higher margins. Additionally, managerial and structural changes have been made to this segment during fiscal 2000 to position it to take advantage of the changing marketplace for information technology services in fiscal 2001 and to stop the decline that has occurred in this segment over the past 18 months.

Gross profit dollars increased by $625,000 or 2.8% to $22.8 million from $22.2 million for fiscal 2000 compared to fiscal 1999. Gross profit margin declined to 22.1% from 22.6% over the same period. The increase in gross profit dollars is primarily the result of the increased service revenue generated by the commercial staffing segment, which was partially offset by the decline in service revenues from the information technology staffing segment. The decline in gross margin is primarily the result of the increase in Point Source programs, noted previously, that generates lower margins on higher volumes. These programs require the use of tiered staffing suppliers on a direct pass-through basis. Billings for these services were approximately $1.5 million in fiscal 2000 compared to $456,000 in fiscal 1999. Without these pass-through services the gross margin would have been 22.4% in fiscal 2000 compared to 22.7% in fiscal 1999. In addition, the demand for full time placements, which produce higher gross margins, was less in fiscal 2000.

Selling, general and administrative expenses, inclusive of amortization expense, increased to $21.6 million from $20.6 million for fiscal 2000 compared to fiscal 1999. As a percentage of service revenues, selling, general and administrative expenses declined to 20.9% from 21.0%. Contributing to the increase in selling, general and administrative expense dollars were transitional expenses associated with the closing and subsequent relocation of the Company’s administrative office in Buffalo, New York to the new leased corporate facilities in Clearwater, Florida, during the first half of fiscal 2000. Selling, general and administrative expenses during the second half of fiscal 2000 declined by $266,000 over the same period one year earlier. This decline is partly attributed to a leveling-off of corporate expenses as the company settled into their new corporate facility. In addition, adjustments were made in the Company’s information technology staffing segment to right size the operation to the level of activity being generated. Also contributing was a decrease in amortization expense of $358,000 in fiscal 2000 compared to fiscal 1999. This decrease is the result of the intangible asset impairment charge taken by the Company in the fourth quarter of fiscal 1999. The remaining intangible assets were reviewed at the end of fiscal 2000 and found to adequately support discounted cash flow projections. As such no adjustment was warranted in fiscal 2000.

Other income (expense), net, improved in fiscal 2000 by $443,000 to $14,000 compared to a net other expense of $429,000 for fiscal 1999. In March, the company used a portion of proceeds from the sale of its industrial maintenance business to pay off their revolving term debt. The result was a decline in interest expense of $404,000 in fiscal 2000 compared to fiscal 1999.

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The effective tax rate was 50.9% for fiscal 2000. The effective tax rate was the result of the multiple taxing jurisdictions in which the company operates and the non-deductibility, for tax purposes, in the current period of certain expenses incurred by the Company.

Discontinued Operations:

During fiscal 2000, a minor adjustment was made to the previously recorded loss on sale of discontinued operations to reconcile amounts previously recorded against continuing operations but which pertained to the discontinued operations. Expenditures associated with the winding down of the discontinued operations were adjusted against the various reserves established at the measurement date of September 26, 1999. At that time, reserves were established for an anticipated loss on the sale of discontinued operations, holding period losses, severance payments and transactional expenses. Management believes that balances remaining in the respective reserves will be sufficient to cover future anticipated expenses associated with the discontinued operations.

ITEM 7A.      Quantitative and Qualitative Disclosure About Market Risk

The Company, in the normal course of business, has exposure to interest rate risk from its long-term debt obligations. The Company does not believe that its exposure to fluctuations in interest rates is material. A 10% change in the interest rate utilized on its long-term debt obligations would have produced less than $1,000 in additional interest expense for the fiscal year ended December 30, 2001.

Due to the immateriality of the above noted market risk, the Company has decided not to utilize any form of financial instrument as a hedge against this risk.

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ITEM 8.      Financial Statements and Supplemental Data

Index to Financial Statements

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Report of Independent Certified Public Accountants

To Ablest Inc.:

We have audited the accompanying balance sheet of Ablest Inc. (a Delaware corporation) as of December 30, 2001, and the related statements of operations, stockholders’ equity and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of Ablest Inc. as of December 31, 2000, were audited by other auditors whose report dated February 16, 2001, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Ablest Inc. as of December 30, 2001, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States.

Tampa, Florida,
     February 1, 2002

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ABLEST INC.

Balance Sheets

See accompanying notes to financial statements.

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ABLEST INC.

Statements of Operations

See accompanying notes to financial statements.

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ABLEST INC.

Statements of Stockholders’ Equity

See accompanying notes to financial statements.

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ABLEST INC.

Statements of Cash Flows