<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549
                                    FORM 10-Q


(Mark One)

/X/      Quarterly report pursuant to Section 13 or 15 (d) of the Securities
         Exchange Act of 1934 for the quarterly period ended March 31, 2004 or

/ /      Transition report pursuant to Section 13 or 15 (d) of the
         Securities Exchange Act of 1934 for the transition period
         from_______________to____________


Commission File Number:    0-26954


                                   CD&L, INC.
             (Exact name of Registrant as specified in its charter)


               Delaware                              22-3350958
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)



80 Wesley Street                                       07606
South Hackensack, New Jersey                         (Zip Code)
(Address of principal executive offices)

                                 (201) 487-7740
              (Registrant's telephone number, including area code)

         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 whether the Registrant is an accelerated filer
(as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes   No /X/
                                                                      ---  ---

         The number of shares of common stock of the Registrant, par value $.001
per share, outstanding as of May 7, 2004 was 7,658,660.


                                       1
<PAGE>




                                   CD&L, INC.
                 FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2004

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                        Page
<S>     <C>                                                                                          <C>
Part I - Financial Information

         Item 1 - Financial Statements

              CD&L, Inc. and Subsidiaries
                  Condensed Consolidated Balance Sheets as of March 31, 2004 (unaudited)
                           and December 31, 2003                                                          3
                  Condensed Consolidated Statements of Operations for the Three
                           Months Ended March 31, 2004 and 2003 (unaudited)                               4
                  Condensed Consolidated Statements of Cash Flows for the Three
                           Months Ended March 31, 2004 and 2003 (unaudited)                               5
                  Notes to Condensed Consolidated Financial Statements                                    6

         Item 2 - Management's Discussion and Analysis of Financial Condition and Results
                               of Operations                                                             12

         Item 3 - Quantitative and Qualitative Disclosures about Market Risk                             17

         Item 4 - Controls and Procedures                                                                17

Part II - Other Information

         Item 6 - Exhibits and Reports on Form 8-K                                                       18

Signature                                                                                                19

Certifications                                                                                           20
</TABLE>



                                       2
<PAGE>


                           CD&L, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    (In thousands, except share information)

<TABLE>
<CAPTION>
                                                                  March 31,     December 31,
                                                                    2004           2003
                                                                  --------       --------
                                                                (Unaudited)     (Note 1)

<S>                                                             <C>            <C>
                             ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                                       $    697       $  1,697
  Accounts receivable, net                                          18,738         18,786
  Prepaid expenses and other current assets                          2,940          4,068
                                                                  --------       --------
    Total current assets                                            22,375         24,551

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net                            1,279          1,446
GOODWILL, net                                                       11,531         11,531
INTANGIBLE ASSETS AND DEFERRED FINANCING COSTS, net
                                                                     1,956            437
OTHER ASSETS                                                         1,062          2,387
                                                                  --------       --------
    Total assets                                                  $ 38,203       $ 40,352
                                                                  ========       ========

              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Short-term borrowings                                           $  3,799       $  5,767
  Current maturities of long-term debt                               2,043          2,585
  Accounts payable, accrued liabilities and bank overdrafts
                                                                    14,981         14,392
                                                                  --------       --------
    Total current liabilities                                       20,823         22,744

LONG-TERM DEBT, net of current maturities                           11,395         11,785
OTHER LONG-TERM LIABILITIES                                            233            240
                                                                  --------       --------
    Total liabilities                                               32,451         34,769
                                                                  --------       --------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
 Preferred stock, $.001 par value; 2,000,000 shares
   authorized; no shares issued and outstanding                         --             --
 Common stock, $.001 par value; 30,000,000 shares
   authorized; 7,688,027 shares issued at March 31, 2004 and
   December 31, 2003                                                     8              8
 Additional paid-in capital                                         12,883         12,883
 Treasury stock, 29,367 shares at cost                                (162)          (162)
 Accumulated deficit                                                (6,977)        (7,146)
                                                                  --------       --------
    Total stockholders' equity                                       5,752          5,583
                                                                  --------       --------
    Total liabilities and stockholders' equity                    $ 38,203       $ 40,352
                                                                  ========       ========

</TABLE>

     See accompanying notes to condensed consolidated financial statements.



                                       3
<PAGE>

                           CD&L, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                          For the Three Months
                                                             Ended March 31,
                                                        -----------------------
                                                          2004           2003
                                                        --------       --------

<S>                                                     <C>            <C>
Revenue                                                 $ 46,482       $ 40,307

Cost of revenue                                           37,884         33,043
                                                        --------       --------

  Gross profit                                             8,598          7,264
                                                        --------       --------

Costs and Expenses:

Selling, general, and administrative expenses              7,535          6,528
Depreciation and amortization                                221            217
Other (income), net                                          (11)        (1,101)
Interest expense                                             571            610
                                                        --------       --------

  Total Costs and Expenses                                 8,316          6,254
                                                        --------       --------

Income before provision for income taxes                     282          1,010

Provision for income taxes                                   113            404
                                                        --------       --------
  Net income                                            $    169       $    606
                                                        ========       ========

Net income per share:
  Basic                                                 $    .02       $    .08
                                                        ========       ========
  Diluted                                               $    .02       $    .07
                                                        ========       ========

Basic weighted average common shares outstanding           7,659          7,659
                                                        ========       ========

Diluted weighted average common shares outstanding         8,238          8,170
                                                        ========       ========

</TABLE>

     See accompanying notes to condensed consolidated financial statements.




                                       4
<PAGE>


                           CD&L, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                           For the Three Months
                                                                             Ended March 31,
                                                                           ----------------------
                                                                             2004          2003
                                                                           -------       -------
<S>                                                                        <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                 $   169       $   606
Adjustments to reconcile net income to net cash provided by (used in)
    operating activities -
    Non-cash extinguishment of debt                                             --        (1,034)
    Gain on disposal of equipment and leasehold improvements                    (2)          (34)
    Depreciation, amortization and deferred financing amortization             274           272
    Changes in operating assets and liabilities
      (Increase) decrease in -
        Accounts receivable, net                                                48        (1,092)
        Prepaid expenses and other current assets                            1,128          (143)
        Other assets                                                          (277)         (122)
      Increase (decrease) in -
        Accounts payable, accrued liabilities and bank overdrafts              589           829
        Other long-term liabilities                                             (7)           (8)
                                                                           -------       -------
          Net cash provided by (used in) operating activities                1,922          (726)
                                                                           -------       -------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of equipment and leasehold improvements                     3            36
  Additions to equipment and leasehold improvements                            (25)          (54)
                                                                           -------       -------
          Net cash used in investing activities                                (22)          (18)
                                                                           -------       -------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Short-term borrowings                                                     (1,968)        1,575
  Repayments of long-term debt                                                (932)         (542)
                                                                           -------       -------
          Net cash (used in) provided by financing activities               (2,900)        1,033
                                                                           -------       -------

          Net (decrease) increase in cash and cash equivalents              (1,000)          289

CASH AND CASH EQUIVALENTS, beginning of period                               1,697         1,452
                                                                           -------       -------

CASH AND CASH EQUIVALENTS, end of period                                   $   697       $ 1,741
                                                                           =======       =======
</TABLE>

     See accompanying notes to condensed consolidated financial statements.




                                       5
<PAGE>

                           CD&L, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1)      BASIS OF PRESENTATION:

         The accompanying unaudited condensed consolidated financial statements
         have been prepared in accordance with generally accepted accounting
         principles for interim financial information and with the instructions
         to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
         include all of the information and footnotes required by generally
         accepted accounting principles for complete financial statements. The
         condensed consolidated balance sheet at December 31, 2003 has been
         derived from the audited financial statements at that date. In the
         opinion of management, all adjustments (consisting of normal recurring
         adjustments) considered necessary for a fair presentation have been
         included. Operating results for the three months ended March 31, 2004
         are not necessarily indicative of the results that may be expected for
         any other interim period or for the year ending December 31, 2004. For
         further information, refer to the consolidated financial statements and
         footnotes thereto included in the CD&L, Inc. (the "Company" or "CD&L")
         Form 10-K for the year ended December 31, 2003.


(2)      STOCK BASED COMPENSATION

         In December 2002, Statement of Financial Accounting Standards ("SFAS")
         No. 148, "Accounting for Stock-Based Compensation-Transition and
         Disclosure" ("SFAS 148") was issued and became effective in 2002. This
         Statement amends SFAS No. 123 "Accounting for Stock-Based
         Compensation," ("SFAS 123") to provide alternative methods of
         transition for an entity that voluntarily changes to the fair value
         method of accounting for stock-based compensation. The Company has
         elected to continue to recognize stock-based compensation using the
         intrinsic value method and has incorporated the additional disclosure
         requirements of SFAS 148.

         The Company applies Accounting Principles Board Opinion No. 25,
         "Accounting for Stock Issued to Employees" ("APB 25"), and related
         interpretations in accounting for its stock option plans. The Company's
         stock options have all been issued with their exercise price at market
         value at the date of grant. Accordingly, no compensation expense has
         been recognized for its stock-based compensation plans. Pro forma
         information regarding net income and net income per share is required
         under the provisions of SFAS No. 123, and has been determined as if the
         Company had accounted for its stock options under the fair value
         method. The fair value for these options was estimated at the date of
         grant using the Black-Scholes option-pricing model with the following
         assumptions for the three months ended March 31, 2004 and 2003.

                                                For the Three Months Ended
                                                        March 31,
                                               -----------------------------
                                                  2004              2003
                                               ------------     -------------

         Weighted average fair value             $0.62            $0.52
         Risk-free interest rate                  4.00%            4.30%
         Volatility factor                          82%             101%
         Expected life                          7 years          7 years
         Dividend yield                            None             None



                                       6
<PAGE>


         The pro forma information regarding net income and net income per share
         is as follows (in thousands, except per share data)-

                                                       For the Three Months
                                                         Ended March 31,
                                                   -------------------------
                                                     2004           2003
                                                   ----------    -----------

         Net income, as reported                      $169           $606
         Stock-based employee compensation
           expense determined under fair value
           based method for all awards, net of
           related tax effects                         (4)            (2)
                                                   ----------    -----------
         Pro forma net income                         $165           $604
                                                   ==========    ===========

         Net income per share:
            Basic, as reported                         $.02          $.08
            Diluted, as reported                       $.02          $.07
            Basic, pro forma                           $.02          $.08
            Diluted, pro forma                         $.02          $.07


(3)      SHORT-TERM BORROWINGS:

         At March 31, 2004, short-term borrowings totaled $3,799,000 consisting
         of a line of credit balance of $3,543,000 and $256,000 of outstanding
         borrowings related to the insurance financing arrangements discussed
         below.

         As of June 27, 2002 CD&L and Summit Business Capital Corporation, doing
         business as Fleet Capital - Business Finance Division, entered into an
         agreement establishing a revolving credit facility (the "Fleet
         Facility") of $15,000,000. The Fleet Facility replaced a revolving
         credit facility with First Union Commercial Corporation established in
         July 1997. The Fleet Facility expires on June 27, 2005 and provides
         CD&L with standby letters of credit, prime rate based loans at the
         bank's prime rate, as defined, plus 25 basis points (4.25% at March 31,
         2004) and LIBOR based loans at the bank's LIBOR, as defined, plus 225
         basis points (3.34% at March 31, 2004). Credit availability is based on
         eligible amounts of accounts receivable, as defined, up to a maximum
         amount of $15,000,000 and is secured by substantially all of the
         assets, including certain cash balances, accounts receivable,
         equipment, leasehold improvements and general intangibles of the
         Company and its subsidiaries. During the three months ended March 31,
         2004, the maximum borrowings outstanding under the Fleet Facility were
         $6,008,000 and the outstanding borrowings as of March 31, 2004 were
         $3,543,000. As of March 31, 2004, the Company had total cash on hand
         and borrowing availability of $3,246,000 under the Fleet Facility,
         after adjusting for restrictions related to outstanding standby letters
         of credit of $6,515,000 and minimum availability requirements.

         Under the terms of the Fleet Facility, the Company is required to
         maintain certain financial ratios and comply with other financial
         conditions. The Fleet Facility also prohibits the Company from
         incurring certain additional indebtedness, limits certain investments,
         advances or loans and restricts substantial asset sales, capital
         expenditures and cash dividends. The Company was in compliance with its
         debt covenants as of March 31, 2004.

         Insurance Financing Agreements -
         In connection with the renewal of certain of the Company's insurance
         policies, CD&L entered into four agreements to arrange for the
         financing of annual insurance premiums. A total of $3,236,000 was
         financed through these arrangements. The interest rates range from
         3.50% to 4.75% and the notes matured in March and April 2004. The
         related annual insurance premiums were paid to the various insurance
         companies at the beginning of each policy year. The outstanding debt of
         $256,000 at March 31, 2004 is included in short-term borrowings. The
         corresponding prepaid insurance has been recorded in prepaid expenses
         and other current assets.


                                       7
<PAGE>

 (4)     LONG-TERM DEBT:

         On January 29, 1999, the Company completed a $15,000,000 private
         placement of senior subordinated notes and warrants (the "Senior
         Notes") with three financial institutions. The Senior Notes originally
         bore interest at 12.0% per annum and are subordinate to all senior debt
         including the Company's Fleet Facility. Under the terms of the Senior
         Notes, as amended, the Company is required to maintain certain
         financial ratios and comply with other financial conditions contained
         in the Senior Notes agreement. Although we were in compliance with our
         Senior Notes debt covenants at December 31, 2003, we were anticipating
         non-compliance with certain covenants in 2004 and beyond. Additionally,
         based on our cash flow projections, we would likely have been unable to
         pay the $9,000,000 balloon payment on the Senior Notes due to be paid
         in January 2006. Subsequently, on April 14, 2004, we restructured our
         senior debt and related covenants. The restructuring includes an
         agreement among us, our lenders and certain members of CD&L management
         and others which improves the Company's short-term liquidity and
         reduces interest expense. See Note 10 - Subsequent Events.


Long-term debt consists of the following (in thousands)   -

<TABLE>
<CAPTION>
                                                                                       March 31,         December 31,
                                                                                        2004                2003
                                                                                 -------------------  ------------------

<S>                                                                                         <C>                 <C>
Senior Subordinated Notes, net of unamortized discount of $331 and $377,
    respectively.                                                                           $10,669             $10,623
Capital lease obligations due through October 2007 with interest at rates
    ranging from 6.5% to 11.5% and secured by the related property.                              75                  76
Seller-financed debt on acquisitions, payable in monthly installments through
    June 2007. Interest is payable at rates ranging between 7.0% and 11.0%.(a)                2,694               3,671
                                                                                 -------------------  ------------------

                                                                                             13,438              14,370
Less - Current maturities                                                                     (2,043)             (2,585)
                                                                                 -------------------  ------------------

                                                                                            $11,395             $11,785
                                                                                 ===================  ==================
</TABLE>

(a)      In April 2002, the Company renegotiated the repayment terms of certain
         seller-financed debt. Effective with the July 2002 payments, the
         individual notes convert into five-year term loans with principal and
         interest payments due monthly. The interest rate on seller-financed
         debt, as amended in 2002, is generally a floating interest rate with a
         floor of 7% and a ceiling of 9%. The one note not renegotiated in 2002
         matured in March 2004 and was paid.


 (5)     GOODWILL, OTHER INTANGIBLE ASSETS AND DEFERRED FINANCING COSTS:

         On January 1, 2002, the Company adopted Statement of Financial
         Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible
         Assets" ("SFAS 142"). This Statement required that goodwill no longer
         be amortized over its estimated useful life but tested for impairment
         on an annual basis. As required by SFAS 142, annual impairment tests
         were completed at the end of fiscal 2003 and 2002 and the Company
         determined that there was no impairment.

         The value of the Company's goodwill is significant relative to total
         assets and stockholders' equity. The Company reviews goodwill for
         impairment on at least an annual basis using several fair-value based
         tests, which include, among others, a discounted cash flow and terminal
         value computation as well as comparing the Company's market
         capitalization to the book value of the Company. The discounted cash
         flow and terminal value computation is based on management's estimates
         of future operations. Changes in business conditions or interest rates
         could materially impact management's estimates of future operations and
         consequently the Company's evaluation of fair value, and this could
         result in an impairment of goodwill. Such impairment, if any, could
         have a significant impact on the Company's reported results from future
         operations and financial condition.


                                       8
<PAGE>

         The majority of the purchase price of the Indiana acquisition on March
         1, 2004, is included as an intangible asset in the March 31,2004
         consolidated balance sheet. The purchase price allocation is
         preliminary, and will be finalized in the second quarter of 2004. (See
         Note 9).

         The costs incurred to obtain financing, including all related fees, are
         included in intangible assets and deferred financing costs in the
         accompanying consolidated balance sheets and are amortized as interest
         expense over the life of the related financing, from 3 - 7 years. Such
         costs are amortized over the term of the related debt agreements using
         the straight line method, which approximates that of the effective
         interest method.

         Deferred financing costs totaled $381,000 as of March 31, 2004 (net of
         accumulated amortization of $957,000). Amortization of deferred
         financing costs for the three months ended March 31, 2004 was $56,000
         compared to the same amount for the same period last year. Amortization
         of deferred financing costs has been recorded as interest expense.


(6)      LITIGATION:

         The Company is, from time to time, a party to litigation arising in the
         normal course of its business, including claims for uninsured personal
         injury and property damage incurred in connection with its same-day
         delivery operations. In connection therewith, the Company has recorded
         reserves of $885,000 as of March 31, 2004 and December 31, 2003.

         Also from time to time, federal and state authorities have sought to
         assert that independent contractors in the transportation industry,
         including those utilized by CD&L, are employees rather than independent
         contractors. The Company believes that the independent contractors that
         it utilizes are not employees under existing interpretations of federal
         and state laws. However, federal and state authorities have and may
         continue to challenge this position. Further, laws and regulations,
         including tax laws, and the interpretations of those laws and
         regulations, may change.

         Management believes that none of these actions, including the actions
         described above, will have a material adverse effect on the
         consolidated financial position or results of operations of the
         Company.


(7)      NET INCOME PER SHARE:

         Basic net income per share represents net income divided by the
         weighted average shares outstanding. Diluted net income per share
         represents net income divided by the weighted average shares
         outstanding adjusted for the incremental dilution of potentially
         dilutive common shares.


                                       9
<PAGE>

         A reconciliation of weighted average common shares outstanding to
         weighted average common shares outstanding assuming dilution follows
         (in thousands)-

                                                Three Months Ended
                                                     March 31,
                                                 -----------------
                                                 2004       2003
                                                 -----      -----
            Basic weighted average common
              shares outstanding                 7,659      7,659
            Effect of dilutive securities:
                Stock options and warrants         579        511
                                                 -----      -----
            Diluted weighted average common
              Shares outstanding                 8,238      8,170
                                                 =====      =====

         The following potentially dilutive common shares were excluded from the
         computation of diluted net income per share because the exercise or
         conversion price was greater than the average market price of common
         shares (in thousands):

                                                   Three Months Ended
                                                        March 31,
                                                   ----------------
                                                    2004       2003
                                                   -----      -----
            Stock options and warrants             1,763      1,884
            Seller-financed convertible notes        227        431


(8)      RELATED PARTY TRANSACTIONS:

         Effective as of February 1, 2003, the Company has leased its former
         vehicle repair facility to a company whose principal is a shareholder
         and former executive of the Company. During the first three months
         ended March 31, 2004 and 2003, the Company has made payments for
         vehicle maintenance and repairs of $39,000 and $61,000, respectively.
         Additionally, the Company has recorded rental income from this company
         of $9,000 during the three months ended March 31, 2004 and $6,000 for
         the same period last year. Refer to the 2003 Form 10-K for additional
         discussion of related party transactions.


(9)      2004 ACQUISITION:

         On March 1, 2004, the Company consummated a transaction providing for
         the repurchase of certain Indiana-based assets and liabilities sold to
         First Choice in June 2001. The acquisition includes the release of
         certain non-compete agreements. Consideration for the repurchase
         includes cancellation of a certain note receivable owed by First Choice
         of approximately $1.6 million plus a three-year contingent earn-out
         based on future net revenue generated by the accounts repurchased. The
         majority of the purchase price of the Indiana acquisition on March 1,
         2004, is included as an intangible asset in the March 31,2004
         consolidated balance sheet. The purchase price allocation is
         preliminary, and will be finalized in the second quarter of 2004.

(10)     SUBSEQUENT EVENTS:

         At March 31, 2004, the Company was indebted to Paribas and Exeter
         (collectively "Paribas") in the sum of $11,000,000 pursuant to a
         subordinated note bearing interest at 12% per annum (see Senior Notes
         in Note 4). On April 14, 2004, an agreement was reached among the
         Company, Paribas and certain members of CD&L management and others
         ("Investors") as to the financial restructuring of the Senior Notes.
         Paribas agreed to convert a portion of its existing debt due from CD&L
         into equity and to modify the terms of its subordinated note if the
         Investors purchased a portion of the note and accepted similar
         modifications. The nature of the restructuring is as follows:


                                       10
<PAGE>

         (a)      Paribas exchanged notes in the aggregate principal amount of
                  $4.0 million for shares of the Series A Convertible Redeemable
                  Preferred Stock of the Company, par value $.001 per share
                  ("Preferred Stock") with a liquidation preference of $4.0
                  million. The Preferred Stock is convertible into an aggregate
                  of approximately 4,000,000 shares of Common Stock, does not
                  pay dividends (unless dividends are declared and paid on the
                  Common Stock), and is redeemable by the Company for the
                  liquidation value. The conversion price is equal to the market
                  price of the Company's common stock on the date of the
                  transaction (computed as the average closing price of the
                  Company's shares for the five days prior to the closing).
                  Holders of the Preferred Stock have the right to elect two
                  directors.

         (b)      Paribas and the Company amended the terms of the $7.0 million
                  balance of the Notes, and then exchanged the original notes
                  for the amended and restated notes, which consist of two
                  series of convertible notes, the Series A Convertible
                  Subordinated Notes (the "Series A Convertible Notes") in the
                  principal amount of $3.0 million and the Series B Convertible
                  Subordinated Notes ("Series B Convertible Notes") in the
                  principal amount of $4.0 million (collectively, the
                  "Convertible Notes"). The Loan Agreement was amended and
                  restated to reflect the terms of the substituted Series A
                  Convertible Notes and the Series B Convertible Notes,
                  including the elimination of most financial covenants.
                  Principal is due in a balloon payment at the maturity date of
                  April 14, 2011. The Convertible Notes bear interest at a rate
                  of 9% for the first two years of the term, 10.5% for the next
                  two years, and 12% for the final three years of the term. The
                  terms of the two series of Convertible Notes are identical
                  except for the conversion price ($1.016 for the Series A
                  Convertible Notes, the average closing price for the Company's
                  shares for the 5 days prior to the closing, and $2.032 for the
                  Series B Convertible Notes).

         (c)      The Investors purchased the Series A Convertible Notes from
                  Paribas for a purchase price of $3.0 million.

         (d)      The Company issued an additional $1.0 million of Series A
                  Convertible Notes to the Investors for an additional payment
                  of $1.0 million, the proceeds of which were used to reduce
                  short-term debt, so that there is now $8.0 million of
                  convertible notes outstanding.

         (e)      The Investors, Paribas and the Company entered into a
                  Stockholders Agreement and a Registration Rights Agreement
                  pursuant to which the shares of the Company's common stock
                  issuable upon conversion of the Preferred Stock and the
                  Convertible Notes will be registered for resale with the
                  Securities and Exchange Commission ("SEC").

         In addition, the Company has agreed to commence a rights offering to
         its common stockholders as soon as practical, and in any event prior to
         January 14, 2005, whereby the common shareholders of the Company shall
         have the right to acquire at least $2 million of additional shares of
         common stock of the Company in the aggregate at a price equal to the
         conversion price of the Series A Convertible Notes.

         The Company cannot be compelled to redeem the Preferred Stock for cash
         at any time. As the interest on the Investor Notes and the new Paribas
         note increase over the term of the notes, the Company will record the
         associated interest expense on a straight-line basis, which will give
         rise to accrued interest over the early term of the notes.

         As a result of the debt restructuring described above, in the second
         quarter, the Company may take a charge for all, or a portion, of the
         $0.6 million balance of its original issue discount and deferred
         financing costs related to the original 1999 financing.


                                       11
<PAGE>

Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations

         Disclosure Regarding Forward-Looking Statements

         The Company is provided a "safe harbor" for forward-looking statements
         contained in this report by the Private Securities Litigation Reform
         Act of 1995. The Company may discuss forward-looking information in
         this report such as its expectations for future performance, growth and
         acquisition strategies, liquidity and capital needs and its future
         prospects. Actual results may not necessarily develop as the Company
         anticipates due to many factors including, but not limited to the
         timing of certain transactions, unexpected expenses encountered, the
         effect of economic and market conditions, the impact of competition and
         the factors listed in the Company's 2003 Report on Form 10-K and other
         SEC filings. Because of these and other reasons, the Company's actual
         results may vary materially from management's current expectations.

         Overview

         The condensed consolidated financial statements of the Company
         including all related notes, which appear elsewhere in this report,
         should be read in conjunction with this discussion of the Company's
         results of operations and its liquidity and capital resources.

         Critical Accounting Policies and Estimates

         The Company's discussion and analysis of financial condition and
         results of operations are based upon the Company's consolidated
         financial statements, which have been prepared in accordance with
         accounting principles generally accepted in the United States of
         America. The preparation of these financial statements requires the
         Company to make estimates and judgments that affect the reported
         amounts of assets, liabilities, revenues and expenses, and related
         disclosure of contingent assets and liabilities. On an ongoing basis,
         the Company evaluates its estimates, including those related to
         accounts and notes receivable, intangible assets, income taxes and
         contingencies. The Company 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.

         The Company believes the following critical accounting policies reflect
         more significant judgments and estimates used in the preparation of its
         consolidated financial statements.

         Allowance for Doubtful Accounts

         The Company maintains allowances for doubtful accounts and notes
         receivable for estimated losses resulting from the inability of its
         customers and debtors to make payments when due or within a reasonable
         period of time thereafter. The Company estimates allowances for
         doubtful accounts and notes receivable by evaluating past due aging
         trends, analyzing customer payment histories and assessing market
         conditions relating to its customers' operations and financial
         condition. Such allowances are developed principally for specific
         customers. If the financial condition of the Company's customers and
         debtors were to deteriorate, resulting in an impairment of their
         ability to make required payments, additional allowances may be
         required.

         Goodwill

         The value of the Company's goodwill is significant relative to total
         assets and stockholders' equity. The Company reviews goodwill for
         impairment on at least an annual basis using several fair-value based
         tests, which include, among others, a discounted cash flow and terminal
         value computation. The discounted cash flow and terminal value
         computation is based on management's estimates of future operations.
         Changes in business conditions could materially impact management's
         estimates of future operations and this could result in an impairment
         of goodwill. Such impairment, if any, could have a significant impact
         on the Company's consolidated operations and financial condition.
         Examples of changes in business conditions include, but are not limited
         to, bankruptcy or loss of a significant customer, a significant adverse
         change in regulatory factors, a loss of key personnel, increased levels
         of competition from companies with greater financial resources than the
         Company and margin erosion caused by our inability to increase prices
         to our customers at the same rate that our costs increase.

                                       12
<PAGE>

         Insurance Reserves

         The Company retains certain insurance risk through various insurance
         policies. The Company's deductible for workers' compensation is
         $500,000 per loss ($350,000 prior to May 1, 2003). The deductible for
         employee health medical costs is $150,000 per loss ($125,000 prior to
         March 1, 2002). Effective July 1, 2003, automobile liability coverage
         is maintained for covered vehicles through a fully insured indemnity
         program with no deductible ($350,000 deductible prior to July 1, 2003).
         The Company reserves the estimated amounts of uninsured claims and
         deductibles related to such insurance retentions for claims that have
         occurred in the normal course of business. These reserves are
         established by management based upon the recommendations of third-party
         administrators who perform a specific review of open claims, which
         include fully developed estimates of both reported claims and incurred
         but not reported claims, as of the balance sheet date. Actual claim
         settlements may differ materially from these estimated reserve amounts.

         Income Taxes

         The Company files income tax returns in every jurisdiction in which it
         has reason to believe it is subject to tax. Historically, the Company
         has been subject to examination by various taxing jurisdictions. To
         date, none of these examinations have resulted in any material
         additional tax. Nonetheless, any tax jurisdiction may contend that a
         filing position claimed by the Company regarding one or more of its
         transactions are contrary to that jurisdiction's laws or regulations.

         Results of Operations

         Income and Expense as a Percentage of Revenue

                                                         For the Three Months
                                                           Ended March 31,
                                                        -------------------
                                                         2004         2003
                                                        ------       ------

          Revenue                                       100.0%       100.0%

          Gross profit                                   18.5%        18.0%

          Selling, general and
             administrative expenses                     16.2%        16.2%

          Depreciation and amortization                   0.5%         0.5%

          Other (income), net                              --          (2.7%)

          Interest expense                                1.2%         1.5%

          Income before provision for income taxes        0.6%         2.5%

          Net income                                      0.4%         1.5%



                                       13
<PAGE>


         Three Months Ended March 31, 2004 Compared to the Three Months Ended
         March 31, 2003

         Revenue for the three months ended March 31, 2004 increased by $6.2
         million, or 15.3%, to $46.5 million from $40.3 million for the three
         months ended March 31, 2003. The increase is due to an increase in
         volume from new and existing customers. The revenue growth reflects the
         launch of our nationwide business development program and our ability
         to expand into new markets with our existing customer base.

         Cost of revenue increased by $4.9 million, or 14.7%, to $37.9 million
         for the three months ended March 31, 2004 from $33.0 million for the
         three months ended March 31, 2003. Cost of revenue for the three months
         ended March 31, 2004 represents 81.5% of revenues as compared to 82.0%
         for the same period in 2003. The decrease in cost of revenue as a
         percent of revenue is due primarily to insurance and all other net
         costs which improved by 170 basis points, partially offset by a 120
         basis point increase in direct delivery costs.

         Selling, general and administrative expenses ("SG&A") increased by $1.0
         million, or 15.0%, to $7.5 million for the three months ended March 31,
         2004 from $6.5 million for the same period in 2003. The increase in
         SG&A is due primarily to a $0.5 million increase in wages, $0.3 million
         increase in facility costs, and all other net increases of $0.2
         million. Stated as a percentage of revenue, SG&A was 16.2% as of March
         31, 2004 and 2003.

         Depreciation and amortization of $0.2 million, or 0.5% of revenue, was
         the same as the same period in 2003.

         Other income, net, decreased by $1.1 million to $0.0 million for the
         three months ended March 31, 2004 from $1.1 million for the same period
         in 2003 for the reasons discussed below.

         On March 30, 2001, pursuant to an Asset Purchase Agreement dated as of
         March 7, 2001, Sureway Worldwide, LLC ("Sureway Worldwide"), a wholly
         owned subsidiary of Global Delivery Systems, LLC ("Global"), purchased
         certain assets from a subsidiary of CD&L. As part of the payment price
         for such assets, Sureway Worldwide issued to CD&L a promissory note in
         the original principal amount of $2,500,000 guaranteed by Global (the
         "Note Receivable"). Such note and the guaranty were subordinated to
         Sureway Worldwide's and Global's obligations to its secured lender. No
         payments had been made to CD&L on the Note Receivable since issuance.
         CD&L wrote off the entire amount of the Note Receivable on December 31,
         2001 based on management's determination that the note would not be
         collected.

         On February 16, 1999, the Company and its subsidiary, Sureway Air
         Traffic Corporation, Inc. ("Sureway"), entered into and consummated an
         asset and stock purchase agreement with Victory Messenger Service,
         Inc., Richard Gold ("Gold"), Darobin Freight Forwarding Co., Inc.
         ("Darobin"), and The Trust Created Under Paragraph Third of the Last
         Will and Testament of Charles Gold (the "Trust"), (collectively "Gold
         Wings"), whereby Sureway purchased all of the outstanding shares of the
         capital stock of Darobin and certain of the assets and liabilities of
         the other sellers. In conjunction therewith, the Company became
         obligated for seller-financed acquisition debt of $1,650,000. As of
         February 28, 2003, the note had a remaining principal balance of
         $1,034,000 (the "CDL/Gold Note").

         On February 28, 2003, the Company completed a series of related
         transactions with GMV Express, Inc. ("GMV"), Gold (a principal of GMV)
         and his affiliates, and Global and its subsidiary, Sureway Worldwide.
         The net effect of the transactions with Global, Sureway Worldwide, GMV
         and Gold is that the Company assigned the Note Receivable to GMV in
         exchange for a release on the CDL/Gold Note payable, so that the
         Company is now relieved of its $1,034,000 liability for the CDL/Gold
         Note and the Company has no further rights to the Note Receivable. In
         addition, the Company received payments from Sureway Worldwide and
         Global of approximately $117,000 ($72,000 in settlement of disputed
         claims and $45,000 for other amounts due) and provided Gold with a
         release covering claims of breach of certain non-competition
         agreements. As a result of this transaction, the Company recorded a
         gain of $1,034,000 during the three month period ended March 31, 2003,
         included within other income, net.


                                       14
<PAGE>

         As a result of the factors discussed above, income before provision for
         income taxes decreased by $0.7 million to $0.3 million, for the three
         months ended March 31, 2004, as compared to the same period in 2003.

         Interest expense of $0.6 million was approximately the same as the
         expense for the same period last year.

         Provision for income taxes decreased by $0.3 million to $0.1 million
         for the three months ended March 31, 2004, as compared to $0.4 million
         for the same period in 2003. This was due to the decrease in income
         before provision for income taxes discussed above. The effective rate
         for both periods was 40.0%.

         Net income decreased by $0.4 million to net income of $0.2 million for
         the three months ended March 31, 2004 as compared to net income of $0.6
         million for the same period in 2003. This was due to the factors
         discussed above.


         Liquidity and Capital Resources

         2004 Restructuring of Senior Notes Debt

         At March 31, 2004, the Company was indebted to Paribas and Exeter
         (collectively "Paribas") in the sum of $11,000,000 pursuant to a
         subordinated note bearing interest at 12% per annum (see Senior Notes
         in Note 4). On April 14, 2004, an agreement was reached among the
         Company, Paribas and certain members of CD&L management and others
         ("Investors") as to the financial restructuring of the Senior Notes. We
         believe the restructuring materially improves the Company's liquidity
         position. Paribas agreed to convert a portion of its existing debt due
         from CD&L into equity and to modify the terms of its subordinated note
         if the Investors purchased a portion of the note and accepted similar
         modifications. See Notes to Consolidated Financial Statements Note 10 -
         Subsequent Events for further discussion of the restructuring
         arrangement.

         The following table summarizes our proforma contractual and commercial
         obligations as of December 31, 2003, after adjusting for the April 14,
         2004 restructuring:


<TABLE>
<CAPTION>

Contractual Obligations                                         Payments Due By Period
(in thousands)                        ---------------------------------------------------------------------------------
                                      2004         2005          2006           2007        2008-Thereafter       Total
                                      ----         ----          ----           ----        ---------------       -----

<S>                                  <C>          <C>          <C>             <C>             <C>             <C>
Long-term debt                       $ 1,514      $   760      $   813         $   580         $  8,000        $11,667

Capital leases                       $    72      $     2      $     2         $     1         $     --        $    77

Operating leases (Primarily for      $ 3,615      $ 3,031      $ 2,280         $ 1,228         $    660        $10,814
facilities)

</TABLE>


         The Company's working capital decreased by $255,000 from $1,807,000 as
         of December 31, 2003 to $1,552,000 as of March 31, 2004. The decrease
         is primarily a result of cash used in operating activities. Cash and
         cash equivalents decreased by $1,000,000 to $697,000 as of March 31,
         2004. Cash of $1,922,000 was provided by operations, while $22,000 was
         used in net investing activities and $2,900,000 was used in net
         financing activities.

                                       15
<PAGE>

         As of June 27, 2002 CD&L and Summit Business Capital Corporation, doing
         business as Fleet Capital - Business Finance Division, entered into an
         agreement establishing a revolving credit facility (the "Fleet
         Facility") of $15,000,000. The Fleet Facility replaced a revolving
         credit facility with First Union Commercial Corporation established in
         July 1997. The Fleet Facility expires on June 27, 2005 and provides
         CD&L with standby letters of credit, prime rate based loans at the
         bank's prime rate, as defined, plus 25 basis points (4.25% at March 31,
         2004) and LIBOR based loans at the bank's LIBOR, as defined, plus 225
         basis points (3.34% at March 31, 2004). Credit availability is based on
         eligible amounts of accounts receivable, as defined, up to a maximum
         amount of $15,000,000 and is secured by substantially all of the
         assets, including certain cash balances, accounts receivable,
         equipment, leasehold improvements and general intangibles of the
         Company and its subsidiaries. During the three months ended March 31,
         2004, the maximum borrowings outstanding under the Fleet Facility were
         approximately $6,008,000 and the outstanding borrowings as of March 31,
         2004 were approximately $3,543,000. As of March 31, 2004, the Company
         had total cash on hand and borrowing availability of $3,246,000 under
         the Fleet Facility, after adjusting for restrictions related to
         outstanding standby letters of credit of $6,515,000 and minimum
         availability requirements.

         Under the terms of the Fleet Facility, the Company is required to
         maintain certain financial ratios and comply with other financial
         conditions. The Fleet Facility also prohibits the Company from
         incurring certain additional indebtedness, limits certain investments,
         advances or loans and restricts substantial asset sales, capital
         expenditures and cash dividends. The Company was in compliance with its
         debt covenants as of March 31, 2004.

         Self-Insurance -

         The Company's risk of incurring uninsured losses has increased in 2004
         as a result of increased deductibles retained by the Company in order
         to reduce premiums in conjunction with the renewal of certain insurance
         policies in 2004. There can be no assurances that the Company's risk
         management policies and procedures will minimize future uninsured
         losses or that a material increase in frequency or severity of
         uninsured losses will not occur and adversely impact the Company's
         future consolidated financial results.

         The Company has an accumulated deficit of ($6,977,000) as of March 31,
         2004. There can be no assurances that the Company's lenders will agree
         to waive future covenant violations, if any, continue to renegotiate
         and modify the terms of their loans, or further extend the maturity
         date, should it become necessary to do so. Further, there can be no
         assurances that the Company will be able to meet its revenue, cost or
         income projections, upon which the debt covenants are based.

         Management believes that cash flows from operations and its borrowing
         capacity, after the debt modifications referred to above, are
         sufficient to support the Company's operations and general business and
         capital requirements for at least the next twelve months. Such
         conclusions are predicated upon sufficient cash flow from operations
         and the continued availability of a revolving credit facility. The
         risks associated with cash flow from operations are mitigated by the
         Company's low gross profit margin. Unless extraordinary, decreases in
         revenue should be accompanied by corresponding decreases in costs,
         resulting in minimal impact to liquidity. The risks associated with the
         revolving credit facility are as discussed above.


         Inflation

         While inflation has not had a material impact on the Company's results
         of operations for the periods presented herein, recent fluctuations in
         fuel prices can and do affect the Company's operating costs.


                                       16
<PAGE>

Item 3 - Quantitative and Qualitative Disclosures about Market Risk

         The Company is exposed to the effect of changing interest rates. At
         March 31, 2004, the Company's debt consisted of approximately $11.3
         million (excluding unamortized discount of $.3 million) of fixed rate
         debt with a weighted average interest rate of 11.7 % and $6.2 million
         variable rate debt with a weighted average interest rate of 5.4%. The
         variable rate debt consists of seller-financed notes with an interest
         rate of prime plus 200 basis points with a minimum rate of 7.0% and
         maximum rate of 9.0% and borrowings from the revolving line of credit
         debt. If interest rates on variable rate debt were to increase by 54
         basis points (one-tenth of the rate at March 31, 2004), the net impact
         to the Company's results of operations and cash flows for the three
         month period ended March 31, 2004 would be a decrease of income before
         provision for income taxes and cash flows from operating activities of
         approximately $8,000. Maximum borrowings of revolving line of credit
         debt during the three months ended March 31, 2004 were $6.0 million.

Item 4 - Controls and Procedures

         (a)      Disclosure controls and procedures. As of the end of the
                  Company's most recently completed fiscal quarter (the
                  Company's fourth fiscal quarter in the case of an annual
                  report) covered by this report, the Company carried out an
                  evaluation, with the participation of the Company's
                  management, including the Company's Chief Executive Officer
                  and Chief Financial Officer, of the effectiveness of the
                  Company's disclosure controls and procedures pursuant to
                  Securities Exchange Act Rule 13a-15. Based upon that
                  evaluation, the Company's Chief Executive Officer and Chief
                  Financial Officer concluded that the Company's disclosure
                  controls and procedures are effective in ensuring that
                  information required to be disclosed by the Company in the
                  reports that it files or submits under the Securities Exchange
                  Act is recorded, processed, summarized and reported, within
                  the time periods specified in the SEC's rules and forms.

         (b)      Changes in internal controls over financial reporting. There
                  have been no changes in the Company's internal control over
                  financial reporting that occurred during the Company's last
                  fiscal quarter to which this report relates that have
                  materially affected, or are reasonably likely to materially
                  affect, the Company's internal control over financial
                  reporting.



                                       17
<PAGE>

                           Part II - OTHER INFORMATION


Item 6 - Exhibits and Reports on Form 8-K

(a)      Exhibits

         31.1     Section 302 Certification of Albert W. Van Ness, Jr.

         31.2     Section 302 Certification of Russell J. Reardon

         32.1     Certification of Albert W. Van Ness, Jr. Pursuant to 18 U.S.C.
                  Section 1350, as Adopted Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

         32.2     Certification of Russell J. Reardon Pursuant to 18 U.S.C.
                  Section 1350, as Adopted Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

         The following current reports on Form 8-K were filed during the first
quarter of 2004.

         o        Report on Form 8-K filed on April 19, 2004 concerning the
                  press release announcing 2003 fiscal year earnings.

         o        Report on Form 8-K filed on April 19, 2004 announcing the debt
                  restructuring.

         o        Report on Form 8-K filed on March 16, 2004 concerning the
                  Acquisition of the Indianapolis business.



                                       18
<PAGE>

                                    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.



         Dated: May 19, 2004                                 CD&L, INC.




                                                  By:  \s\ Russell J. Reardon
                                                       ----------------------
                                                         Russell J. Reardon
                                                         Vice President and
                                                         Chief Financial Officer



                                       19