<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 September 30, 2005
         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
  incorporation or organization)            (I.R.S. Employer Identification No.)



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_

         Indicate by check mark whether the Registrant is a shell company (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 November 14, 2005 was 10,012,479.


                                       1
<PAGE>

                                   CD&L, INC.
               FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2005

                                      INDEX
<TABLE>
<CAPTION>
                                                                                                              PAGE
                                                                                                              ----
<S>                                                                                                           <C>
PART I - Financial Information

         ITEM 1 - Financial Statements

              CD&L, Inc. and Subsidiaries
                  Condensed Consolidated Balance Sheets as of September 30, 2005 (unaudited)
                           and December 31, 2004                                                                 3
                  Condensed Consolidated Statements of Income for the Three and Nine
                           Months Ended September 30, 2005 and 2004 (unaudited)                                  4
                  Condensed Consolidated Statements of Cash Flows for the Nine
                           Months Ended September 30, 2005 and 2004 (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                                    18

         ITEM 4 - Controls and Procedures                                                                       18

PART II - Other Information

         ITEM 5 - Other Information                                                                             19

         ITEM 6 - Exhibits                                                                                      19

SIGNATURE                                                                                                       20

CERTIFICATIONS                                                                                                  21

</TABLE>


                                       2
<PAGE>

                           CD&L, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    (IN THOUSANDS, EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
                                                                    September 30,           December 31,
                                                                        2005                     2004
                                                                  ------------------    ------------------
                                                                     (Unaudited)              (Note 1)
<S>                                                               <C>                   <C>
                             ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                                                $1,112                 $617
  Accounts receivable, net                                                 26,122               21,548
  Prepaid expenses and other current assets                                 5,340                4,854
                                                                  ------------------    ------------------
    Total current assets                                                   32,574               27,019

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net                                   1,640                1,627
GOODWILL, net                                                              11,531               11,531
INTANGIBLE ASSETS AND DEFERRED FINANCING COSTS, net
                                                                            1,425                1,737
OTHER ASSETS                                                                1,797                  828
                                                                  ------------------    ------------------
    Total assets                                                          $48,967              $42,742
                                                                  ==================    ==================

              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Short-term borrowings                                                    $7,708               $4,809
  Current maturities of long-term debt                                      3,178                  487
  Accounts payable, accrued liabilities and bank
     overdrafts                                                            15,125               13,660
                                                                  ------------------    ------------------
    Total current liabilities                                              26,011               18,956

LONG-TERM DEBT, net of current maturities                                   6,792                9,812
OTHER LONG-TERM LIABILITIES                                                 1,667                1,370
                                                                  ------------------    ------------------
    Total liabilities                                                      34,470               30,138
                                                                  ------------------    ------------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
 Preferred stock, $.001 par value; 2,000,000 shares authorized; 393,701 shares
   issued at September 30, 2005 and December 31, 2004                       4,000                4,000
 Common stock, $.001 par value; 30,000,000 shares
   authorized; 9,385,678 shares issued at September 30, 2005                    9                    9
   and December 31, 2004
 Additional paid-in capital                                                14,320               14,320
 Treasury stock, 29,367 shares at cost                                       (162)                (162)
 Accumulated deficit                                                       (3,670)              (5,563)
                                                                  ------------------    ------------------
    Total stockholders' equity                                             14,497               12,604
                                                                  ------------------    ------------------
    Total liabilities and stockholders' equity                            $48,967              $42,742
                                                                  ==================    ==================
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>

                           CD&L, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                        For the Three Months                 For the Nine Months
                                                               Ended                               Ended
                                                           September 30,                       September 30,
                                                  --------------------------------    --------------------------------
                                                       2005              2004             2005              2004
                                                  ---------------    -------------    -------------    ---------------
<S>                                               <C>                <C>              <C>              <C>
     Revenue                                         $57,135            $49,705         $163,696         $145,444

     Cost of revenue                                  46,077             40,338          131,490          118,116
                                                  ---------------    -------------    -------------    ---------------

       Gross profit                                   11,058              9,367           32,206           27,328
                                                  ---------------    -------------    -------------    ---------------

     Costs and Expenses:

     Selling, general and
        administrative expenses                        9,288              7,863           27,257           23,397
     Depreciation and amortization                       274                272              824              767
     Other (income) expense, net                         (20)               (11)             (30)             601
     Interest expense                                    393                423            1,149            1,447
                                                  ---------------    -------------    -------------    ---------------

     Total Costs and Expenses                          9,935              8,547           29,200           26,212
                                                  ---------------    -------------    -------------    ---------------

     Income before provision for income taxes          1,123                820            3,006            1,116

     Provision for income taxes                          283                328            1,112              446
                                                  ---------------    -------------    -------------    ---------------
       Net income                                       $840               $492           $1,894             $670
                                                  ===============    =============    =============    ===============

     Net income per share (Note 6):
       Basic                                            $.09               $.06             $.20             $.09
                                                  ===============    =============    =============    ===============
       Diluted                                          $.05               $.03             $.11             $.05
                                                  ===============    =============    =============    ===============

     Basic weighted average common
        shares outstanding                             9,356              7,659            9,356            7,659
                                                  ===============    =============    =============    ===============
     Diluted weighted average common
        shares outstanding                            20,288             18,336           20,263           13,048
                                                  ===============    =============    =============    ===============
</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 Nine Months Ended
                                                                                       September 30,
                                                                              --------------------------------
                                                                                  2005              2004
                                                                              --------------    --------------
<S>                                                                           <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                         $1,894              $670
Adjustments to reconcile net income to net cash used in operating
    activities -
    Gain on disposal of equipment and leasehold improvements                          (16)              (16)
    Depreciation and amortization, including amortization of deferred
       financing costs                                                                896               905
    Deferred financing charge/original issue discount (OID) write-off                   -               628
    Changes in operating assets and liabilities
      (Increase) decrease in -
        Accounts receivable, net                                                   (4,574)           (1,824)
        Prepaid expenses and other current assets                                    (486)            1,195
        Other assets                                                                 (969)             (389)
      (Decrease) increase in -
        Accounts payable, accrued liabilities and bank overdrafts                   1,465            (1,514)
        Other long-term liabilities                                                   297               (29)
                                                                              --------------    --------------
          Net cash used in operating activities                                    (1,493)             (374)
                                                                              --------------    --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of equipment and leasehold improvements                           32                21
  Additions to equipment and leasehold improvements                                  (614)             (383)
                                                                              --------------    --------------
          Net cash used in investing activities                                      (582)             (362)
                                                                              --------------    --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from short-term borrowings, net of repayments                            2,899             1,096
  Repayments of long-term debt                                                       (329)           (1,330)
  Proceeds from long-term debt                                                          -             1,000
  Deferred financing costs                                                              -              (510)
                                                                              --------------    --------------
          Net cash provided by financing activities                                 2,570               256
                                                                              --------------    --------------

          Net increase (decrease) in cash and cash equivalents                        495              (480)

CASH AND CASH EQUIVALENTS, beginning of period                                        617             1,697
                                                                              --------------    --------------

CASH AND CASH EQUIVALENTS, end of period                                           $1,112            $1,217
                                                                              ==============    ==============
</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, 2004 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 and nine months ended
         September 30, 2005 are not necessarily indicative of the results that
         may be expected for any other interim period or for the year ending
         December 31, 2005. 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,
         2004.

(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" 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 123, and has been determined as if the Company had accounted for
         its stock options under the fair value method. The Company will be
         adopting SFAS No. 123(R), "Share-Based Payment" ("SFAS 123(R)") during
         the first quarter of 2006. At that time, compensation expense related
         to the Company's stock-based employee compensation plans will be
         recorded over the service period in the financial statements, as
         required by SFAS 123(R).

         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 and nine months ended September 30, 2005 and
         2004:

<TABLE>
<CAPTION>
                                                    For the Three Months Ended         For the Nine Months Ended
                                                          September 30,                      September 30,
                                                   -----------------------------      -----------------------------
                                                      2005              2004             2005             2004
                                                   ------------     -------------     ------------     ------------
<S>                                                <C>              <C>               <C>              <C>
         Risk-free interest rate                        3.90%            4.41%             3.86%            4.14%
         Volatility factor                                46%              82%               46%             101%
         Expected life                              5.5 years        7.0 years         5.2 years        7.0 years
         Dividend yield                                  None             None              None             None

</TABLE>

                                       6
<PAGE>

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

<TABLE>
<CAPTION>
                                                    For the Three Months Ended         For the Nine Months Ended
                                                          September 30,                      September 30,
                                                   -----------------------------      -----------------------------
                                                      2005              2004             2005             2004
                                                   ------------     -------------     ------------     ------------
<S>                                                <C>              <C>               <C>              <C>
         Net income, as reported                         $840             $492            $1,894           $670
         Stock-based employee compensation
           expense determined under fair value
           based method for all awards, net of
           related tax effects                            (72)            (109)             (330)          (443)
                                                   ------------     -------------     ------------     ------------
         Pro forma net income                            $768             $383            $1,564           $227
                                                   ============     =============     ============     ============

         Net income per share:
            Basic, as reported                            $.09             $.06              $.20          $.09
            Diluted, as reported                          $.05             $.03              $.11          $.05
            Basic, pro forma                              $.08             $.05              $.17          $.03
            Diluted, pro forma                            $.04             $.03              $.10          $.02
</TABLE>

(3)      SHORT-TERM BORROWINGS:

         At September 30, 2005, short-term borrowings totaled $7,708,000
         consisting of a line of credit balance of $6,528,000 and $1,180,000 of
         outstanding borrowings related to the insurance financing arrangements
         discussed below. At September 30, 2004, short-term borrowings totaled
         $6,863,000 consisting of a line of credit balance of $5,785,000 and
         $1,078,000 of outstanding borrowings related to the insurance financing
         arrangements entered into in 2004.

         As of June 27, 2002, CD&L and Summit Business Capital Corporation,
         doing business as Fleet Capital - Business Finance Division ("Summit"),
         entered into an agreement establishing a revolving credit facility (the
         "Fleet Facility") of $15,000,000. The Fleet Facility, which was due to
         expire on June 27, 2005 but was extended through December 31, 2005,
         provides CD&L with standby letters of credit, prime rate based loans at
         the bank's prime rate, as defined, plus 25 basis points (7.0% at
         September 30, 2005) and LIBOR based loans at the bank's LIBOR, as
         defined, plus 225 basis points. The Company is in negotiations for an
         extension or replacement of the Fleet Facility on a long-term basis.
         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. Maximum
         borrowings outstanding under the Fleet Facility during the nine months
         ended September 30, 2005 were $7,420,000 and the outstanding borrowings
         as of September 30, 2005 were $6,528,000. As of September 30, 2005, the
         Company had total cash on hand and borrowing availability of $4,817,000
         under the Fleet Facility, after adjusting for restrictions related to
         outstanding standby letters of credit of $4,582,000 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 amended, as of September 30, 2005.

                                       7
<PAGE>

         Insurance Financing Agreements -

         In connection with the renewal of certain of the Company's insurance
         policies, CD&L entered into an agreement to finance annual insurance
         premiums. A total of $1,676,000 was financed through this arrangement
         as of July 30, 2005. Monthly payments, including interest, amount to
         $171,000. The interest rate is 4.75% and the note matures in May 2006.
         The related annual insurance premiums were paid to the various
         insurance companies at the beginning of each policy year. The
         outstanding debt of $1,180,000 as of September 30, 2005 is included in
         short-term borrowings. The corresponding prepaid insurance has been
         recorded in prepaid expenses and other current assets.

 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 were subordinate to all senior
         debt including the Company's Fleet Facility. For a description of the
         Fleet Facility, see "Liquidity and Capital Resources". Under the terms
         of the Senior Notes, as amended, the Company was required to maintain
         certain financial ratios and comply with other financial conditions
         contained in the Senior Notes agreement.

         At March 31, 2004, the Company owed $11,000,000 of principal on the
         Senior Notes. On April 14, 2004, an agreement was reached among the
         Company, BNP Paribas ("Paribas"), Exeter Venture Lenders, L.P. ("Exeter
         Venture"), and Exeter Capital Partners IV, L.P. ("Exeter Capital") and
         together with Exeter Venture and Paribas (the "Original Note holders")
         and certain members of CD&L management and others (the "Investors") as
         to the financial restructuring of the Senior Notes. The Original Note
         holders agreed to convert a portion of the existing debt due from CD&L
         into equity and to modify the terms of the Senior Notes if the
         Investors purchased a portion of the note and accepted similar
         modifications. The nature of the restructuring was as follows:

         (a)      The Original Note holders exchanged Senior Notes in the
                  aggregate principal amount of $4,000,000 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 $4,000,000. The Preferred Stock is
                  convertible into 3,937,008 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 $1.016 per share
                  which was equal to the average closing price for the Company's
                  common stock for the 5 days prior to the closing. Holders of
                  the Preferred Stock have the right to elect two directors.

         (b)      The Original Note holders and the Company amended the terms of
                  the remaining $7,000,000 principal balance of the Senior
                  Notes, and then exchanged the amended notes for the new 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 $3,000,000 and the Series B
                  Convertible Subordinated Notes ("Series B Convertible Notes")
                  in the principal amount of $4,000,000 (collectively, the
                  "Convertible Notes"). The loan agreement that governed the
                  Senior Notes 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. The principal amount of the Convertible Notes 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 and will be paid
                  quarterly. As the interest on the Convertible Notes increases
                  over the term of the notes, the Company records the associated
                  interest expense on a straight-line basis using a blended rate
                  of 10.71%, giving rise to accrued interest over the early term
                  of the Convertible Notes. 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 common stock for the 5 days
                  prior to the closing, and $2.032 for the Series B Convertible
                  Notes).

                                       8
<PAGE>

                  Subsequently, on October 31, 2005, the Company retired the
                  Series B Convertible Notes that were issued to Paribas, Exeter
                  Capital and Exeter Venture. The principal amount of the Series
                  B Convertible Notes totaled $4,000,000 as of that date. See
                  Note 8 - Subsequent Event.

         (c)      The Investors purchased the Series A Convertible Notes from
                  the Original Note holders for a price of $3,000,000.

         (d)      The Company issued an additional $1,000,000 of Series A
                  Convertible Notes to the Investors for an additional payment
                  of $1,000,000, the proceeds of which were used to reduce
                  short-term debt.

         (e)      The Investors, the Original Note holders and the Company
                  entered into 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
                  may be registered for resale with the Securities and Exchange
                  Commission (the "SEC"). Subsequently, on August 2, 2005, the
                  Company filed a registration statement to register 15,527,579
                  shares for resale on Form S-3 with the SEC. The registration
                  statement was declared effective on August 11, 2005.

         The Company cannot be compelled to redeem the Preferred Stock for cash
         at any time.

         As a result of the debt restructuring described above, the Company has
         taken a charge of $628,000 recorded in other expense in the second
         quarter of 2004, representing the unamortized balance of the original
         issue discount and deferred financing costs related to the original
         private placement of the notes.

         Costs incurred relative to the aforementioned transactions amounted to
         approximately $592,000. Of this amount, $420,000 has been accounted for
         as deferred financing costs and is being amortized over the term of the
         new financing agreements. The remaining $172,000 has been accounted for
         as a reduction of additional paid-in capital. These amounts have been
         allocated based on the proportion of debt to equity raised in the
         aforementioned transactions.

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

<TABLE>
<CAPTION>
                                                              SEPTEMBER 30,        DECEMBER 31,
                                                                   2005                2004
                                                            ------------------   -----------------
<S>                                                         <C>                  <C>
Series A Convertible Subordinated Notes                                $4,000              $4,000
Series B Convertible Subordinated Notes                                 4,000               4,000
Capital lease obligations due through July 2007 with
    interest at rates ranging from 8.0% to 11.5% and
    collateralized by the related property.                                 3                   5
Seller-financed debt on acquisitions, payable in monthly
    installments through May 2009.  Interest is payable at
    rates ranging between 7.0% and 9.0%.                                1,967               2,294
                                                            ------------------   -----------------
                                                                        9,970              10,299

Less - Current maturities                                              (3,178)               (487)
                                                            ------------------   -----------------
                                                                       $6,792              $9,812
                                                            ==================   =================
</TABLE>

                                       9
<PAGE>

(5)      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 $730,000 and $774,000 as of September 30, 2005 and December
         31, 2004, respectively.

         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.

(6)      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.

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


<TABLE>
<CAPTION>
                                                                       THREE MONTHS                   NINE MONTHS
                                                                           ENDED                         ENDED
                                                                       SEPTEMBER 30,                 SEPTEMBER 30,
                                                                 --------------------------    ---------------------------
                                                                    2005           2004           2005            2004
                                                                 ------------    ----------    ------------    -----------
<S>                                                              <C>             <C>           <C>             <C>
         Basic weighted average
          common shares outstanding                                  9,356           7,659         9,356           7,659
         Effect of dilutive securities:
             Stock options and warrants                                946             835         1,016             796
             Seller financed convertible notes                         143               -            48               -
             Convertible preferred stock                             3,937           3,937         3,937           2,625
             Subordinated convertible debentures                     5,906           5,905         5,906           1,968
                                                                 ------------    ----------    ------------    -----------

         Diluted weighted average common shares
           outstanding                                              20,288          18,336        20,263          13,048
                                                                 ============    ==========    ============    ===========

</TABLE>


                                       10
<PAGE>

         A reconciliation of net income as reported to net income as adjusted
         for the effect of dilutive securities follows (in thousands)-


<TABLE>
<CAPTION>
                                                                       THREE MONTHS                   NINE MONTHS
                                                                           ENDED                         ENDED
                                                                       SEPTEMBER 30,                 SEPTEMBER 30,
                                                                 --------------------------    ---------------------------
                                                                    2005           2004           2005            2004
                                                                 ------------    ----------    ------------    -----------
<S>                                                              <C>             <C>           <C>             <C>
         Net income, as reported                                      $840            $492        $1,894            $670
         Effect of dilutive securities:
             Interest on seller financed convertible notes              12               -            12               -
             Interest on subordinated convertible debentures           128             128           385              43
                                                                 ------------    ----------    ------------    -----------

         Net income, as adjusted for the effect of
            dilutive securities                                       $980            $620        $2,291            $713
                                                                 ============    ==========    ============    ===========
</TABLE>

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

<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED                 NINE MONTHS ENDED
                                                               SEPTEMBER 30,                     SEPTEMBER 30,
                                                     -------------------------------    -----------------------------
                                                         2005              2004            2005             2004
                                                     --------------     ------------    ------------     ------------
<S>                                                  <C>                <C>             <C>              <C>
         Stock options and warrants                         2,315             1,790            1,529            1,771
         Seller financed convertible notes                     25               205              129              215
         Subordinated convertible debentures                    -                 -                -            1,968

</TABLE>

(7)      PROVISION FOR INCOME TAXES:

         The provision for income taxes for the three and nine month periods
         ended September 30, 2005 has been reduced by federal income tax refunds
         received in the third quarter of 2005 of approximately $301,000 related
         to our 2002 and 2003 federal income tax filings, which had not been
         accrued in those periods.

(8)      SUBSEQUENT EVENT:

         On October 31, 2005, the Company retired the Series B Convertible Notes
         that were issued to Paribas, Exeter Capital and Exeter Venture in
         connection with the Company's financial restructuring on April 14,
         2004. The principal amount of the Series B Convertible Notes was
         $4,000,000 as of the retirement date. The portion of the Series B
         Convertible Notes held by Paribas was satisfied by a cash payment of
         $2,666,667 principal and $40,000 of accrued interest through October
         31, 2005. As such, the $2,666,667 principal amount has been included in
         current maturities of long-term debt in the accompanying condensed
         consolidated balance sheet. Exeter Venture and Exeter Capital
         (collectively "Exeter") held the remaining $1,333,333 of the Series B
         Convertible Notes. Exeter exercised their right of conversion of their
         notes (at the conversion price of $2.032 per share) and as such, the
         Company issued to Exeter a total of 656,168 shares of the Company's
         common stock. In addition, a cash payment of $20,000 was made to Exeter
         relating to accrued interest through October 31, 2005. The $1,333,333
         principal amount related to Exeter remains classified as long-term debt
         in the accompanying condensed consolidated balance sheet.

                                       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 2004 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 Company is one of the leading national full-service providers of
         customized, same-day, time-critical, delivery services to a wide range
         of commercial, industrial and retail customers. Our services are
         provided throughout the United States. The Company currently operates
         in a single-business segment and thus additional disclosures under
         Statement of Financial Accounting Standards No. 131, Disclosures About
         Segments of an Enterprise and Related Information, are not required.

         We offer the following delivery services:

         o        Rush delivery services, typically consisting of delivering
                  time-sensitive packages, such as critical parts, emergency
                  medical devices and legal and financial documents from
                  point-to-point on an as-needed basis;

         o        Distribution services, providing same-day delivery for many
                  pharmaceutical and office supply wholesalers, from
                  manufacturers to retailers and inter-branch distribution of
                  financial documents in a commingled system;

         o        Facilities management, including providing and supervising
                  mailroom personnel, mail and package sorting, internal
                  delivery and outside local messenger services; and

         o        Dedicated contract logistics, providing a comprehensive
                  solution to major corporations that want the control,
                  flexibility and image of an in-house fleet with the economic
                  benefits of outsourcing.

         Our revenue consists primarily of charges to our customers for delivery
         services. Our customers are billed as the services are rendered, mostly
         on a weekly basis. Recurring charges related to facilities management
         or contract logistics services are typically billed on a monthly basis.
         The Company's recent revenue growth has been attributable to expansion
         of our current customer base into new geographical areas. We have
         always had a strong presence in the Northeast and Southeast regions of
         the country. As a result of the Company's nationwide business
         development program, we have doubled our revenue volume on the West
         coast during the nine months ended September 30, 2005 compared to the
         same period for 2004. Our goal for the next year is to focus on
         expanding our footprint even further and gain a strategic presence in
         the central U.S.

         Cost of revenue consists primarily of independent contractor delivery
         costs, other direct pick-up and delivery costs and the costs of
         dispatching rush demand messengers. In addition, the cost of fuel is
         included in cost of revenue. With the recent hurricanes in the
         Southeast region, fuel prices spiked at the end of the third quarter.
         While this did not have a material impact on the Company's third
         quarter results, the increase in fuel prices may have an impact on our
         future results.

                                       12
<PAGE>

         Selling, general and administrative expense ("SG&A") includes the costs
         to support the Company's sales effort and the expense of maintaining
         facilities, information systems, financial, legal and other
         administrative functions. While SG&A costs are not directly correlated
         with revenue volume, we have experienced increased rent charges and
         higher travel costs as a result of opening new facilities to facilitate
         our recent expansion into new geographical locations. In addition, the
         Company has increased its sales force and facilities management
         personnel significantly in the West coast to manage the revenue growth
         from 2005 along with the anticipated growth of the region going
         forward.

         The Company continues to invest in its infrastructure and is currently
         in the development stage of implementing a state-of-the-art,
         web-enabled, business information management system. It will provide
         the scalability, availability and security required to manage the
         future growth of driver, route, tracking and reporting components of
         the Company's ground distribution services.

         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 receivable, intangible assets, insurance reserves, 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. For a discussion of the Company's critical accounting
         policies, see the Company's Annual Report on Form 10-K for 2004.

                                       13
<PAGE>

         RESULTS OF OPERATIONS

         INCOME AND EXPENSE AS A PERCENTAGE OF REVENUE

<TABLE>
<CAPTION>
                                                  For the Three Months Ended            For the Nine Months Ended
                                                         September 30,                        September 30,
                                               ----------------------------------    ---------------------------------
                                                    2005               2004              2005              2004
                                               ----------------    --------------    -------------    ----------------
<S>                                            <C>                 <C>               <C>              <C>
         Revenue                                    100.0%              100.0%           100.0%           100.0%

         Gross profit                                19.4%               18.8%            19.7%            18.8%

         Selling, general and
            administrative expenses                  16.3%               15.8%            16.7%            16.1%

         Depreciation and amortization                0.4%                0.5%             0.5%             0.5%

         Other (income) expense, net                 (0.0%)              (0.0%)           (0.0)%            0.4%

         Interest expense                             0.7%                0.9%             0.7%             1.0%

         Income before provision for income
           taxes                                      2.0%                1.6%             1.8%             0.8%

         Net income                                   1.5%                1.0%             1.2%             0.5%

</TABLE>


         NINE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE NINE MONTHS ENDED
         SEPTEMBER 30, 2004

         Revenue for the nine months ended September 30, 2005 increased by
         $18,252,000, or 12.5%, to $163,696,000 from $145,444,000 for the nine
         months ended September 30, 2004. The majority of this increase relates
         to expansion of our current customer base into new geographic
         locations, primarily in the West and Southeast operating regions.

         Cost of revenue increased by $13,374,000, or 11.3%, to $131,490,000 for
         the nine months ended September 30, 2005 from $118,116,000 for the nine
         months ended September 30, 2004. Cost of revenue for the nine months
         ended September 30, 2005 represented 80.3% of revenues as compared to
         81.2% for the same period in 2004. The improved margin was due
         primarily to increased route optimization, as new revenue provided
         higher density in existing route structures. In addition, there was a
         reduction in insurance expense related to reimbursements from third
         parties totaling $654,000. Of this amount, $300,000 related to an
         agreement with Global Delivery Systems LLC ("GDS") to reimburse
         insurance expenses that the Company paid on behalf of GDS (see Related
         Party Transactions in Item 5 of this quarterly report). The increase in
         margin was offset partially by a $799,000 increase in claims as
         compared to the same period in 2004.

                                       14
<PAGE>

         Selling, general and administrative ("SG&A") increased by $3,860,000,
         or 16.5%, to $27,257,000 for the nine months ended September 30, 2005
         from $23,397,000 for the same period in 2004. Stated as a percentage of
         revenue, SG&A was 16.7% for the nine months ended September 30, 2005
         and 16.1% for the nine months ended September 30, 2004. The increase in
         SG&A was primarily due to the following:

                                                   Increase from 2004
                                                       (9 months)
                                                   ---------------------
               Compensation                        $1,830,000      18.4%
               Rent                                   705,000      19.3%
               Consulting Fees                        414,000     120.4%
               Travel and Entertainment               332,000      30.5%

         All other net increases including payroll taxes, property, liability
         and health insurance, repairs and maintenance, communications, medical
         claims, personnel recruiting costs and computer related costs totaled
         $1,434,000, partially offset by a $855,000 reduction in the provision
         for doubtful accounts based on the historical effectiveness of our
         receivables management.

         Depreciation and amortization increased by $57,000 to $824,000 as
         compared to $767,000 for the same period last year. This increase was
         due to higher capital expenditures in 2005.

         Other income, net, increased by $631,000 to $30,000 of other income,
         net for the nine months ended September 30, 2005 from other expense,
         net, of $601,000 for the same period in 2004. The 2004 year to date
         expense of $601,000 was due to the write-off of deferred financing
         costs and original issue discount related to the original Senior Debt
         which was restructured on April 14, 2004. Refer to the 2004 Form 10-K
         for further discussion.

         Interest expense decreased by $298,000 to $1,149,000 for the nine
         months ended September 30, 2005 from $1,447,000 for the same period in
         2004. This was primarily due to the debt restructuring in April 2004.
         See Note 4 in Notes to Condensed Consolidated Financial Statements.

         As a result of the factors discussed above, income before provision for
         income taxes increased by $1,890,000 to $3,006,000 for the nine months
         ended September 30, 2005 from $1,116,000 for the same period last year.

         Provision for income taxes increased by $666,000 to $1,112,000 for the
         nine months ended September 30, 2005 as compared to $446,000 for the
         same period in 2004. The tax rate for the nine months ended September
         30, 2005 was 37.0% as compared to 40.0% for the same period in 2004.
         This reduction in the tax rate was primarily due to tax refunds
         received in the third quarter totaling $301,000 which related to our
         2002 and 2003 federal tax filings. Before the impact of the tax refunds
         received, the effective tax rate for the nine months ended September
         30, 2005 was 47%.

         Net income increased by $1,224,000 to $1,894,000 for the nine months
         ended September 30, 2005 as compared to $670,000 for the same period in
         2004. This was due to the factors discussed above.

         THREE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE THREE MONTHS
         ENDED SEPTEMBER 30, 2004

         Revenue for the three months ended September 30, 2005 increased by
         $7,430,000, or 14.9%, to $57,135,000 from $49,705,000 for the three
         months ended September 30, 2004. The majority of this increase relates
         to expansion of our current customer base into new geographic
         locations, primarily in the West and Southeast operating regions.

                                       15
<PAGE>

         Cost of revenue increased by $5,739,000, or 14.2%, to $46,077,000 for
         the three months ended September 30, 2005 from $40,338,000 for the
         three months ended September 30, 2004. Cost of revenue for the three
         months ended September 30, 2005 represented 80.6% of revenue as
         compared to 81.2% for the same period in 2004. The decrease in cost of
         revenue as a percent of revenue was primarily due to a reduction in
         insurance expense related to reimbursements from third parties totaling
         $654,000. Of this amount, $300,000 related to an agreement with GDS to
         reimburse insurance expenses that the Company paid on behalf of GDS
         (see Related Party Transactions in Item 5 of this quarterly report).
         This reduction in cost of revenue was partially offset by a $414,000
         increase in claims expense.

         SG&A increased by $1,425,000, or 18.1%, to $9,288,000 for the three
         months ended September 30, 2005 from $7,863,000 for the same period in
         2004. The increase in SG&A was primarily due to the following:

                                                 Increase from 2004
                                                    (3rd quarter)
                                                 -------------------
               Compensation                      $327,000       9.1%
               Rent                               261,000      20.8%
               Consulting Fees                    210,000     180.8%
               Travel and Entertainment           175,000      50.2%

         All other increases totaled $612,000 partially offset by a $160,000
         decrease in allowance for doubtful account based on the historical
         effectiveness of our receivables management. Stated as a percentage of
         revenue, SG&A increased to 16.3% for the three months ended September
         30, 2005 from 15.8% for the same period in 2004.

         Depreciation and amortization increased by $2,000 to $274,000 for the
         three months ended September 30, 2005 from $272,000 for the same period
         last year.

         Other income, net, increased by $9,000 to $20,000 for the three months
         ended September 30, 2005 from other income, net of $11,000 for the same
         period in 2004

         Interest expense decreased by $30,000 to $393,000 for the three months
         ended September 30, 2005 as compared to $423,000 for the same period
         last year.

         As a result of the factors discussed above, income before provision for
         income taxes increased by $303,000 to $1,123,000 for the three months
         ended September 30, 2005, as compared to $820,000 for the same period
         in 2004.

         Provision for income taxes decreased by $45,000 to $283,000 for the
         three months ended September 30, 2005, as compared to $328,000 for the
         same period in 2004. The tax rate for the three months ended September
         30, 2005 was 25.2% as compared to 40.0% for the same period in 2004.
         This decrease in the provision was primarily due to tax refunds
         received in the third quarter totaling $301,000 which related to our
         2002 and 2003 federal income tax filings, which had not been accrued in
         those periods.

         Net income increased by $348,000 to $840,000 for the three months ended
         September 30, 2005 as compared to net income of $492,000 for the same
         period in 2004. This was due to the factors discussed above.


         LIQUIDITY AND CAPITAL RESOURCES

         At March 31, 2004, the Company was indebted to the Original Note
         holders 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 between the Company, the
         Original Note holders and the Investors as to the financial
         restructuring of the Senior Notes. The Original Note holders agreed to
         convert a portion of the existing debt due from CD&L into equity and to
         modify the terms of the Senior Notes if the Investors purchased a
         portion of the Senior Notes and accepted similar modifications. The
         loan agreement that governed the Senior Notes 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. At September 30, 2005, long-term debt included
         $4,000,000 of Series A Convertible Notes and $4,000,000 of Series B
         Convertible Notes. The principal amount of the Convertible Notes 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, and interest is paid quarterly. Subsequently, on
         October 31, 2005, the Company retired the Series B Convertible Notes.
         See Note 8 - Subsequent Event in Notes to Condensed Consolidated
         Financial Statements.

                                       16
<PAGE>

         The Company's working capital decreased by $1,500,000 from $8,063,000
         as of December 31, 2004 to $6,563,000 as of September 30, 2005. Cash
         and cash equivalents increased by $495,000 to $1,112,000 as of
         September 30, 2005. Cash of $1,493,000 was used in operations, while
         $582,000 was used in net investing activities and $2,570,000 was
         provided by net financing activities. Capital expenditures amounted to
         $614,000 and $383,000 for the nine months ended September 30, 2005 and
         2004, respectively.

         As of June 27, 2002, CD&L and Summit entered into an agreement
         establishing the Fleet Facility. The Fleet Facility was due to expire
         on June 27, 2005 but was extended through December 31, 2005. The
         Company is in negotiations for an extension or replacement of the Fleet
         Facility on a long-term basis. The Company believes the terms and
         conditions will be at least as favorable as the current facility. It
         provides CD&L with standby letters of credit, prime rate based loans at
         the bank's prime rate, as defined, plus 25 basis points (7.0% at
         September 30, 2005) and LIBOR based loans at the bank's LIBOR, as
         defined, plus 225 basis points. Credit availability is based on
         eligible amounts of accounts receivable, as defined, up to a maximum
         amount of $15,000,000 and is collateralized 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 nine months ended September
         30, 2005, the maximum borrowings outstanding under the Fleet Facility
         were approximately $7,420,000 and the outstanding borrowings as of
         September 30, 2005 were approximately $6,528,000. As of September 30,
         2005, the Company had total cash on hand and borrowing availability of
         $4,817,000 under the Fleet Facility, after adjusting for restrictions
         related to outstanding standby letters of credit of $4,582,000 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 September 30, 2005.

         The Company's risk of incurring uninsured losses 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 had an accumulated deficit of ($3,670,000) as of September
         30, 2005. On numerous occasions, the Company has had to amend and
         obtain waivers of the terms of its credit facilities and senior debt as
         a result of covenant violations or for other reasons. On April 14,
         2004, the Company restructured its senior debt and related covenants.
         The restructuring included an agreement among the Company, its lenders
         and certain members of CD&L management and others which improved the
         Company's short-term liquidity and reduced interest expense. The
         restructuring eased the financial covenants to which the Company was
         subject. However, if the Company were to fail to meet such covenants in
         the future, there can be no assurances that the Company's lenders would
         agree to waive any future covenant violations, 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 are sufficient to support the Company's operations and general
         business and capital requirements through at least September 30, 2006.
         Such conclusions are predicated upon sufficient cash flows from
         operations and the continued availability of a revolving credit
         facility. The risks associated with cash flows 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.

                                       17
<PAGE>

         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.


ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company is exposed to the effect of changing interest rates. At
         September 30, 2005, the Company's debt consisted of approximately
         $11,151,000 of fixed rate debt with a weighted average interest rate of
         8.20% and $6,528,000 of variable rate debt with a weighted average
         interest rate of 6.18%. The variable rate debt consists of borrowings
         of revolving line of credit debt at the bank's prime rate plus 25 basis
         points (7.0% at September 30, 2005). If interest rates on variable rate
         debt were to increase by 62 basis points (one-tenth of the weighted
         average interest rate at September 30, 2005), the net impact to the
         Company's results of operations and cash flows for the nine months
         ended September 30, 2005 would be a decrease of income before provision
         for income taxes and cash flows from operating activities of
         approximately $30,000. Maximum borrowings of revolving line of credit
         debt during the nine months ended September 30, 2005 were $7,420,000.



ITEM 4 - CONTROLS AND PROCEDURES

         (a)      Disclosure controls and procedures. As of the end of the
                  Company's most recently completed fiscal quarter (September
                  30, 2005) 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. The purpose of this
                  evaluation is to determine whether 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 rules and forms. Based
                  on this evaluation and the matters discussed below, management
                  determined that its disclosure controls and procedures were
                  not effective as of September 30, 2005.


                  During the preparation of this Form 10-Q, the Company's
                  independent registered public accounting firm identified a
                  material weakness with respect to management's knowledge and
                  application of generally accepted accounting principles.
                  Specifically, errors were identified which related to the
                  Company's accounting for certain non-routine transactions,
                  including; gain contingencies, investment banking fees,
                  unsupported reserves and non-capitalization of internal
                  information technology costs. In light of these errors
                  management performed additional analyses and other
                  post-closing procedures to ensure that our consolidated
                  financial statements are prepared in accordance with generally
                  accepted accounting principles in the United States (U.S.
                  GAAP). Accordingly, management believes that the consolidated
                  financial statements included in this report fairly present in
                  all material respects our financial position, results of
                  operations and cash flows for the periods presented.

                  In order to remedy the material weakness noted above, the
                  Company will be enhancing its knowledge of generally accepted
                  accounting principles and their application to properly
                  account for non-routine transactions.

         (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.




                                       18
<PAGE>

                           PART II - OTHER INFORMATION


ITEM 5 - Other Information

RELATED PARTY TRANSACTIONS:

The Company has entered into a consulting agreement with one of its directors,
Thomas E. Durkin III, pursuant to which Mr. Durkin will provide consulting
services to the Company with respect to business and financial matters.
 He will focus on merger and acquisition activities, including, developing
strategies, evaluating, structuring and negotiating potential transactions and
otherwise assisting the chief executive officer with respect to such matters. In
consideration for his services, the Company paid Mr. Durkin a fee of $75,000 on
or about July 1, 2005 and agreed to pay him $125 per hour for his services under
the agreement. In addition, if the chief executive officer requests Mr. Durkin
to work on a particular transaction, Mr. Durkin will become entitled to receive
upon consummation of such a transaction a success fee of at least $300,000 plus
such other amount, if any, as may be authorized by the chief executive officer
and the board or an appropriate committee thereof. The consulting agreement is
terminable on 30 days written notice.

On or about September 30, 2005, the Company entered into a settlement agreement
with Global Delivery Systems LLC, a New York limited liability company ("GDS")
arising from disputes under an Asset Purchase Agreement dated as of March 7,
2001 (the "Agreement") pursuant to which the Company sold its former
next-flight-out air delivery and related ground service business to an affiliate
of GDS. Under the Agreement, GDS had agreed to indemnify the Company from and
against certain costs and to reimburse it for certain insurance losses. The
Company asserted that it was due approximately $807,000 under the insurance
reimbursement provisions of the Agreement and GDS disagreed with the claim.
Pursuant to the Settlement Agreement, the Company and GDS have agreed that the
Company will release GDS in exchange for the sum of $300,000, to be paid to the
Company pursuant to the terms of a promissory note bearing interest at eight
percent (8%) per annum, payments of interest only due quarterly commencing
January 1, 2006 to the date of maturity, and with the balance of principal and
interest due and payable to the Company on September 30th, 2008. The Note is
secured by certain accounts receivable and insurance accounts of GDS. William
Beaury, a principal of GDS, is a 50% owner of an entity which owns approximately
6% of the outstanding common stock of the Company.


ITEM 6 - Exhibits

(a)    Exhibits

         10.1     Consulting Agreement, dated as of July 1, 2005, with Thomas E.
                  Durkin III.

         31.1     Certification of Albert W. Van Ness, Jr. Pursuant to Exchange
                  Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002.

         31.2     Certification of Russell J. Reardon Pursuant to Exchange Act
                  Rules 13a- 14(a) and 15d-14(a), as Adopted Pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

         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


                                       19
<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: November 21, 2005                            CD&L, INC.




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

                                       20