<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 June 30, 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
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
                                                                            ---

         The number of shares of common stock of the Registrant, par value $.001
per share, outstanding as of August 13, 2004 was 7,658,660.



<PAGE>


                                   CD&L, INC.
                  FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2004

                                      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 June 30, 2004 (unaudited)
                           and December 31, 2003                                                 3
                  Condensed Consolidated Statements of Operations for the Three and Six
                           Months Ended June 30, 2004 and 2003 (unaudited)                       4
                  Condensed Consolidated Statements of Cash Flows for the Six
                           Months Ended June 30, 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                                                    11

         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>

                                                                     June 30, 2004       December 31, 2003
                                                                   -----------------    ------------------
                                                                     (Unaudited)             (Note 1)

<S>                                                                        <C>                 <C>
                             ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                                                 $2,298              $1,697
  Accounts receivable, net                                                  19,603              18,786
  Prepaid expenses and other current assets                                  1,993               4,068
                                                                   -----------------    ------------------
    Total current assets                                                    23,894              24,551

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net                                    1,300               1,446
GOODWILL                                                                    11,531              11,531
INTANGIBLE ASSETS AND DEFERRED FINANCING COSTS, net                          1,845                 437
OTHER ASSETS                                                                 1,110               2,387
                                                                   -----------------    ------------------
    Total assets                                                           $39,680             $40,352
                                                                   =================    ==================

              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Short-term borrowings                                                     $5,220              $5,767
  Current maturities of long-term debt                                         471               2,585
  Accounts payable, accrued liabilities and bank overdrafts                 14,092              14,392
                                                                   -----------------    ------------------
    Total current liabilities                                               19,783              22,744

LONG-TERM DEBT, net of current maturities                                   10,070              11,785
OTHER LONG-TERM LIABILITIES                                                    222                 240
                                                                   -----------------    ------------------
    Total liabilities                                                       30,075              34,769
                                                                   -----------------    ------------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
 Preferred stock, $.001 par value; 2,000,000 shares
   authorized; 393,701 shares issued and outstanding                         4,000                   -
 Common stock, $.001 par value; 30,000,000 shares
   authorized; 7,688,027 shares issued at June 30, 2004 and
   December 31, 2003                                                             8                   8
 Additional paid-in capital                                                 12,728              12,883
 Treasury stock, 29,367 shares at cost                                        (162)               (162)
 Accumulated deficit                                                        (6,969)             (7,146)
                                                                   -----------------    ------------------
    Total stockholders' equity                                               9,605               5,583
                                                                   -----------------    ------------------
    Total liabilities and stockholders' equity                             $39,680             $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              For the Six Months Ended
                                                            June 30,                               June 30,
                                                  --------------------------------    --------------------------------
                                                       2004              2003             2004              2003
                                                  ---------------    -------------    -------------    ---------------

<S>                                                  <C>                <C>              <C>              <C>
     Revenue                                         $49,257            $40,887          $95,739          $81,194

     Cost of revenue                                  39,894             33,149           77,779           66,192
                                                  ---------------    -------------    -------------    ---------------

       Gross profit                                    9,363              7,738           17,960           15,002
                                                  ---------------    -------------    -------------    ---------------

     Costs and Expenses:

     Selling, general and
        administrative expenses                        8,000              6,607           15,535           13,135
     Depreciation and amortization                       274                189              494              406
     Other expense (income), net                         623                (65)             612           (1,166)
     Interest expense                                    453                637            1,024            1,247
                                                  ---------------    -------------    -------------    ---------------

     Total Costs and Expenses                          9,350              7,368           17,665           13,622
                                                  ---------------    -------------    -------------    ---------------

     Income before provision for income taxes             13                370              295            1,380

     Provision for income taxes                            5                148              118              552

                                                  ---------------    -------------    -------------    ---------------
       Net income                                         $8               $222             $177             $828
                                                  ===============    =============    =============    ===============

     Net income per share:
       Basic                                            $.00               $.03             $.02             $.11
                                                  ===============    =============    =============    ===============
       Diluted                                          $.00               $.03             $.01             $.10
                                                  ===============    =============    =============    ===============

     Basic weighted average common
        shares outstanding                             7,659              7,659            7,659            7,659
                                                  ===============    =============    =============    ===============
     Diluted weighted average common
        shares outstanding                            12,570              8,165           10,404            8,167
                                                  ===============    =============    =============    ===============

</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 Six Months Ended
                                                                                        June 30,
                                                                              -----------------------------
                                                                                  2004              2003
                                                                              -----------       -----------

<S>                                                                                <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                           $177              $828
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 improvement                            (6)              (62)
    Depreciation, amortization and deferred financing amortization                    621               517
    Deferred financing charge/OID write-off                                           628                 -
    Changes in operating assets and liabilities
      (Increase) decrease in -
        Accounts receivable, net                                                     (817)             (753)
        Prepaid expenses and other current assets                                   2,075              (609)
        Other assets                                                                 (350)             (221)
      (Decrease) increase in -
        Accounts payable, accrued liabilities and bank overdrafts                    (300)              (66)
        Other long-term liabilities                                                   (18)               47
                                                                              --------------    --------------
          Net cash provided by (used in) operating activities                       2,010            (1,353)
                                                                              --------------    --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of equipment and leasehold improvements                            3                68
  Additions to equipment and leasehold improvements                                  (211)             (153)
                                                                              --------------    --------------
          Net cash used in investing activities                                      (208)              (85)
                                                                              --------------    --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  (Repayments of) proceeds from short-term borrowings                                (547)            3,099
  Repayments of long-term debt                                                     (1,205)           (1,111)
  Proceeds from long-term debt                                                      1,000                 -
  Deferred financing costs                                                           (449)                -
                                                                              --------------    --------------
          Net cash (used in) provided by financing activities                      (1,201)            1,988
                                                                              --------------    --------------

          Net increase in cash and cash equivalents                                   601               550

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

CASH AND CASH EQUIVALENTS, end of period                                           $2,298            $2,002
                                                                              ==============    ==============
</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 and six months ended June 30,
         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" 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 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
         six months ended June 30, 2004 and 2003:


<TABLE>
<CAPTION>
                                             For the Three Months Ended          For the Six Months Ended
                                                      June 30,                           June 30,
                                            -----------------------------      -----------------------------
                                               2004              2003             2004             2003
                                            ------------     -------------     ------------     ------------

<S>                                            <C>              <C>               <C>              <C>
         Weighted average fair value           $1.00            $0.36             $0.95            $0.35
         Risk-free interest rate                4.00%            4.30%             4.00%            4.30%
         Volatility factor                       140%              86%              115%              68%
         Expected life                        7 years          7 years           7 years          7 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 Six Months Ended
                                                             June 30,                           June 30,
                                                   -----------------------------      -----------------------------
                                                      2004              2003             2004             2003
                                                   ------------     -------------     ------------     ------------

<S>                                                      <C>               <C>              <C>            <C>
         Net income, as reported                           $8             $222              $177           $828
         Stock-based employee compensation
           expense determined under fair value
           based method for all awards, net of
           related tax effects                           (330)              (1)             (334)             1
                                                   ------------     -------------     ------------     ------------
         Pro forma net (loss) income                    ($322)            $221             ($157)          $829
                                                   ============     =============     ============     ============

         Net income (loss) per share:
            Basic, as reported                            $.00             $.03              $.02          $.11
            Diluted, as reported                          $.00             $.03              $.01          $.10
            Basic, pro forma                             ($.04)            $.03             ($.02)         $.11
            Diluted, pro forma                           ($.04)            $.03             ($.02)         $.10
</TABLE>

(3)      SHORT-TERM BORROWINGS:

         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 June 30,
         2004) and LIBOR based loans at the bank's LIBOR, as defined, plus 225
         basis points (3.62% at June 30, 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 six months ended June 30,
         2004, the maximum borrowings outstanding under the Fleet Facility were
         $6,482,000 and the outstanding borrowings as of June 30, 2004 were
         $5,220,000. As of June 30, 2004, the Company had total cash on hand and
         borrowing availability of $4,574,000 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 amended, as of June 30, 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 ranged 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. There was no
         outstanding debt related to the insurance financing arrangement as of
         June 30, 2004.

                                       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 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 $11.0 million on the Senior Notes.
   On April 14, 2004, an agreement was reached among the Company, Paribas
   and Exeter (collectively "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:

    (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 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 market
         price of the Company's common stock on the date of the transaction.
         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 and will be paid quarterly.
         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.

    (e)  The Investors, Paribas 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 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.



                                       8
<PAGE>

   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, the Company has taken
   a charge of $0.6 million 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.

   Costs incurred relative to the aforementioned transactions amounted to
   approximately $463,000. Of this amount, $308,000 has been accounted for as
   deferred financing costs and is being amortized over the term of the new
   financing agreements. The remaining $155,000 has been accounted for as a
   reduction in 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>
                                                                  JUNE 30,         DECEMBER 31,
                                                                    2004               2003
                                                              ----------------   -----------------

<S>                                                                   <C>                 <C>
Senior Subordinated Notes, net of unamortized
    discount of $0 and $377, respectively.                                 $0             $10,623
Series A Convertible Subordinated Notes                                 4,000                   -
Series B Convertible Subordinated Notes                                 4,000                   -
Capital lease obligations due through October 2007 with
    interest at rates ranging from 6.5% to 11.5% and secured
    by the related property.                                                6                  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%.                               2,535               3,671
                                                              ----------------   -----------------
                                                                       10,541              14,370

Less - Current maturities                                                (471)             (2,585)
                                                              ----------------   -----------------
                                                                      $10,070             $11,785
                                                              ================   =================
</TABLE>

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

     On January 1, 2002, the Company adopted 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.

                                       9
<PAGE>

     The majority of the purchase price of the Indiana acquisition on March 1,
     2004 is related to the value of the customer list and is included as an
     intangible asset in the June 30, 2004 consolidated balance sheet. This
     asset is being amortized over 5 years. (See Note 8)

     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 $500,000 as of June 30, 2004 (net of
     accumulated amortization of $114,000). Amortization of deferred financing
     costs for the six months ended June 30, 2004 was $65,000 compared to
     $112,000 for the same period last year. Amortization of deferred financing
     costs is recorded as interest expense. During the quarter ended June 30,
     2004, $628,000 of deferred financing costs was written off in connection
     with the refinancing of the Senior Notes. (See Note 4)

(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 June 30, 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.

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


<TABLE>
<CAPTION>
                                                                   THREE MONTHS                   SIX MONTHS
                                                                      ENDED                          ENDED
                                                                     JUNE 30,                      JUNE 30,
                                                             -------------------------     --------------------------
                                                                 2004           2003           2004           2003
                                                             ------------    ---------     ------------    ----------
<S>                                                             <C>             <C>           <C>             <C>
     Basic weighted average
      common shares outstanding                                  7,659          7,659          7,659          7,659
     Effect of dilutive securities:
         Stock options and warrants                                974            506            777            508
         Convertible preferred stock                             3,937              -          1,968              -
                                                             ------------    ---------     ------------    ----------

     Diluted weighted average common shares
       Outstanding                                              12,570          8,165         10,404          8,167
                                                             ============    =========     ============    ==========
</TABLE>



                                       10
<PAGE>





     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):

<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED                 SIX MONTHS ENDED
                                                            JUNE 30,                          JUNE 30,
                                                 -------------------------------    -----------------------------
                                                     2004              2003            2004             2003
                                                 --------------     ------------    ------------     ------------
<S>                                                     <C>               <C>            <C>              <C>
     Stock options and warrants                         1,760             1,939          1,762            1,907
     Seller financed convertible notes                    213               431            220              431
     Subordinated convertible debentures                5,905                 -          2,953                -

</TABLE>

(8)  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 included the release of certain
     non-compete agreements. Consideration for the repurchase included
     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 related
     to the value of the customer list and is included as an intangible asset in
     the June 30, 2004 consolidated balance sheet. This asset is being amortized
     over 5 years.

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.

                                       11
<PAGE>

     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 the
     Company's inability to increase prices to its customers at the same rate
     that its costs increase.

     INSURANCE RESERVES

     The Company retains certain insurance risk through various insurance
     policies. The Company's deductible for workers' compensation is $500,000
     per loss. The deductible for employee health medical costs is $150,000 per
     loss. Effective July 1, 2003, automobile liability coverage is maintained
     for covered vehicles through a fully-insured indemnity program with no
     deductible. 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 is
     contrary to that jurisdiction's laws or regulations.


                                       12
<PAGE>


     RESULTS OF OPERATIONS

     INCOME AND EXPENSE AS A PERCENTAGE OF REVENUE

<TABLE>
<CAPTION>
                                               For the Three Months Ended           For the Six Months Ended
                                                        June 30,                            June 30,
                                           ----------------------------------    -------------------------------
                                                2004               2003              2004             2003
                                           ----------------    --------------    -------------    --------------

<S>                                             <C>                 <C>              <C>              <C>
     Revenue                                    100.0%              100.0%           100.0%           100.0%

     Gross profit                                19.0%               18.9%            18.8%            18.5%

     Selling, general and
        administrative expenses                  16.2%               16.2%            16.2%            16.2%

     Depreciation and amortization                0.6%                0.5%             0.5%             0.5%

     Other expense (income), net                  1.3%               (0.2%)            0.6%            (1.4%)

     Interest expense                             0.9%                1.6%             1.1%             1.5%

     Income before provision for income
       taxes                                      0.0%                0.9%             0.3%             1.7%

     Net income                                   0.0%                0.5%             0.2%             1.0%
</TABLE>


     SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
     2003

     Revenue for the six months ended June 30, 2004 increased by $14.5 million,
     or 17.9%, to $95.7 million from $81.2 million for the six months ended June
     30, 2003. The increase was due to new customers as well as a higher volume
     of business from 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 $11.6 million, or 17.5%, to $77.8 million for
     the six months ended June 30, 2004 from $66.2 million for the six months
     ended June 30, 2003. Cost of revenue for the six months ended June 30, 2004
     represented 81.2% of revenues as compared to 81.5% for the same period in
     2003. The decrease in cost of revenue as a percent of revenue was due
     primarily to insurance and claims expense which improved by 100 basis
     points, partially offset by a 70 basis point increase in all other direct
     delivery costs.

     Selling, general and administrative expenses ("SG&A") increased by $2.4
     million, or 18.3%, to $15.5 million for the six months ended June 30, 2004
     from $13.1 million for the same period in 2003. The increase in SG&A was
     primarily due to a $1.0 million increase in compensation expense as a
     result of new hires and higher incentive compensation. All other increases
     including rent, travel and entertainment, bad debt and computer related
     costs totaled $1.4 million, net of $0.3 million savings in insurance. As a
     percentage of revenue, SG&A remained unchanged at 16.2% for the six months
     ended June 30, 2004 and 2003.

     Depreciation and amortization increased by $0.1 million to $0.5 million or
     21.7% of revenue for the six months ended June 30, 2004 from $0.4 million
     for the same period in 2003.



                                       13
<PAGE>

     Other expense, net, increased by $1.8 million to $0.6 million for the six
     months ended June 30, 2004 from other income, net, of $ 1.2 million for the
     same period in 2003. The 2004 year to date expense of $0.6 million 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. The Company recorded a gain included in other income, net, of $1.3
     million during the first quarter of 2003 as a result of the exchange of the
     Sureway note receivable. Refer to the 2003 Form 10-K for further
     discussion.

     Interest expense decreased by $0.2 million to $1.0 million for the six
     months ended June 30, 2004 from $1.2 million for the same period in 2003.
     This was due to the debt restructuring. (See Note - 4)

     As a result of the factors discussed above, income before provision for
     income taxes decreased by $1.1 million to $0.3 million for the six months
     ended June 30, 2004 from $1.4 million for the six months ended June 30,
     2003.

     Provision for income taxes decreased by $0.5 million to $0.1 million for
     the six months ended June 30, 2004 as compared to $0.6 million for the same
     period in 2003. This was due to the drop in income before provision for
     income taxes discussed above. The effective tax rate for both periods was
     40%.

     Net income declined by $0.6 million to $0.2 million for the six months
     ended June 30, 2004 as compared to $0.8 million for the same period in
     2003. This was due to the factors discussed above.

     THREE MONTHS ENDED JUNE 30, 2004 COMPARED TO THE THREE MONTHS ENDED JUNE
     30, 2003

     Revenue for the three months ended June 30, 2004 increased by $8.4 million,
     or 20.5%, to $49.3 million from $40.9 million for the three months ended
     June 30, 2003. The increase was due to an increase in volume from new and
     existing customers. The revenue growth reflected the launch of the
     Company's nationwide business development program and its ability to expand
     into new markets with its existing customer base.

     Cost of revenue increased by $6.8 million, or 20.3%, to $39.9 million for
     the three months ended June 30, 2004 from $33.1 million for the three
     months ended June 30, 2003. Cost of revenue for the three months ended June
     30, 2004 represented 81.0% of revenue as compared to 81.1% for the same
     period in 2003. The decrease in cost of revenue as a percent of revenue was
     due primarily to insurance and claims costs which improved by 90 basis
     points, partially offset by a 100 basis point increase in all other direct
     delivery costs.

     SG&A increased by $1.4 million, or 21.1%, to $8.0 million for the three
     months ended June 30, 2004 from $6.6 million for the same period in 2003.
     The increase in SG&A was primarily due to a $0.6 million increase in
     compensation expense as a result of new hires and higher incentive
     compensation. All other increases including rent, travel and entertainment,
     bad debt and computer related costs totaled $1.0 million, net of $0.2
     million savings in insurance. Stated as a percentage of revenue, SG&A
     remained unchanged at 16.2% for the three months ended June 30, 2004 and
     2003.

     Depreciation and amortization increased by $0.1 million, or 45.0%, to $0.3
     million for the three months ended June 30, 2004 from $0.2 million for the
     same period in 2003.

     Other expense, net, increased by $0.7 million to $0.6 million for the three
     months ended June 30, 2004 from the other income, net, of $.1 million for
     the same period in 2003. The expense of $0.6 million 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. (See
     Note 4)

     Interest expense decreased by $0.1 million to $0.5 million for the three
     months ended June 30, 2004 as compared to $0.6 million for the same period
     last year.



                                       14
<PAGE>

     As a result of the factors discussed above, income before provision for
     income taxes decreased by $0.4 million to $0.0 million, for the three
     months ended June 30, 2004, as compared to the same period in 2003.

     Provision for income taxes decreased by $0.1 million to $0.0 million for
     the three months ended June 30, 2004, as compared to $0.1 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 $0.2 million to net income of $0.0 million for the
     three months ended June 30, 2004 as compared to net income of $0.2 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 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 following table summarizes the Company's long-term debt obligations as
     of June 30, 2004:



<TABLE>
<CAPTION>
                                                      LONG-TERM DEBT PAYMENTS DUE BY PERIOD (IN THOUSANDS)
                                  ---------------------------------------------------------------------------------------
                                      2004            2005          2006        2007     2008-THEREAFTER      TOTAL
                                      ----            ----          ----        ----     ---------------      -----


<S>                                 <C>             <C>          <C>          <C>            <C>              <C>
     Long-term debt                    $231            $486         $520         $526         $8,772          $10,535


     Capital leases                      $2              $2           $2           $-             $-               $6
      Operating leases -
    (Primarily for facilities)       $3,615          $3,031       $2,280       $1,228           $660          $10,814

</TABLE>

     The Company's working capital increased by $2,304,000 from $1,807,000 as of
     December 31, 2003 to $4,111,000 as of June 30, 2004. Cash and cash
     equivalents increased by $601,000 to $2,298,000 as of June 30, 2004. Cash
     of $2,010,000 was provided by operations, while $208,000 was used by net
     investing activities and $1,201,000 was used in net financing activities.
     Capital expenditures amounted to $211,000 and $153,000 for the six months
     ended June 30, 2004 and 2003, respectively.

     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 June 30, 2004) and LIBOR based loans at the
     bank's LIBOR, as defined, plus 225 basis points (3.62% at June 30, 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 six months ended June 30,
     2004, the maximum borrowings outstanding under the Fleet Facility were
     approximately $6,482,000 and the outstanding borrowings as of June 30, 2004
     were approximately $5,220,000. As of June 30, 2004, the Company had total
     cash on hand and borrowing availability of $4,574,000 under the Fleet
     Facility, after adjusting for restrictions related to outstanding standby
     letters of credit of $6,515,000 and minimum availability requirements.

                                       15
<PAGE>

     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
     June 30, 2004.

     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 ($6,969,000) as of June 30, 2004.
     There can be no assurances that the Company's lenders will agree to waive
     any 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
         June 30, 2004, the Company's debt consisted of approximately $8.0
         million of fixed rate debt with a weighted average interest rate of
         9.0% and $7.8 million of variable rate debt with a weighted average
         interest rate of 5.2%. 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 of revolving line of credit debt. If interest rates on
         variable rate debt were to increase by 52 basis points (one-tenth of
         the rate at June 30, 2004), the net impact to the Company's results of
         operations and cash flows for the six month period ended June 30, 2004
         would be a decrease of income before provision for income taxes and
         cash flows from operating activities of approximately $20,000. Maximum
         borrowings of revolving line of credit debt during the six months ended
         June 30, 2004 were $6.5 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
                second quarter of 2004.

                    o  Report on Form 8-K filed on April 15, 2004 concerning the
                       April 15, 2004 press release announcing fiscal year 2003
                       earnings.
                    o  Report on Form 8-K filed on April 16, 2004, concerning
                       the April 16, 2004 press release announcing the debt
                       restructuring.
                    o  Report on Form 8-K filed on May 24, 2004 concerning the
                       May 20, 2004 press release announcing first quarter
                       earnings for the 2004 fiscal year.



                                       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: August 16, 2004                             CD&L, INC.




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



                                       19