<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, 2001 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
                                              ---    ---

The number of shares of common stock of the Registrant, par value $.001 per
share, outstanding as of August 7, 2001 was 7,658,660.


                                       1
<PAGE>

                                   CD&L, INC.
                  FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2001

                                      INDEX

                                                                            Page
                                                                            ----
Part I - Financial Information (unaudited)

        Item 1 - Financial Statements

           CD&L, Inc. and Subsidiaries
             Condensed Consolidated Balance Sheets as of June 30,
                    2001 and December 31, 2000                                3
             Condensed Consolidated Statements of Operations for the
                    Three and Six Months Ended June 30, 2001 and 2000         4
             Condensed Consolidated Statements of Cash Flows for the
                    Six Months Ended June 30, 2001 and 2000                   5
             Notes to Condensed Consolidated Financial Statements             6

        Item 2 - Management's Discussion and Analysis of Financial
                    Condition and Results of Operations                       9

Part II - Other Information

        Item 4 - Submission of Matters to a Vote of Security Holders

        Item 6 - Exhibits and Reports on Form 8-K                             12

Signature                                                                     13


                                       2
<PAGE>

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

<TABLE>
<CAPTION>
                                                        June 30,       December 31,
                                                          2001             2000
                                                      -------------    ------------
                                                      (Unaudited)        (Note 1)
                       ASSETS
                       ------
<S>                                                   <C>              <C>
CURRENT ASSETS:
Cash and cash equivalents                           $        292     $       319
  Accounts receivable, net                                  14,601          17,596
  Prepaid expenses and other current assets                  3,408           2,917
  Net assets of discontinued operations                          -           4,591
                                                      -------------    ------------
    Total current assets                                    18,301          25,423

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net                    2,499           2,841
INTANGIBLE ASSETS, net                                      16,021          20,666
NOTE RECEIVABLE FROM STOCKHOLDER, net                          409             408
OTHER ASSETS                                                 4,465             402
NET ASSETS OF DISCONTINUED OPERATIONS                            -           8,045
                                                      -------------    ------------
    Total assets                                      $     41,695     $    57,785
                                                      =============    ============

        LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Short-term borrowings                               $          -     $    11,169
  Current maturities of long-term debt                       3,952           5,752
  Accounts payable and accrued liabilities                  10,806          11,932
  Net liabilities of discontinued operations                    52               -
                                                      -------------    ------------
    Total current liabilities                               14,810          28,853

LONG-TERM DEBT                                              17,792          17,765
OTHER LONG-TERM LIABILITIES                                  1,279           1,283
                                                      -------------    ------------
    Total liabilities                                       33,881          47,901
                                                      -------------    ------------

COMMITMENTS AND CONTINGENCIES                                    -               -

STOCKHOLDERS' EQUITY
 Preferred stock, $.001 par value; 2,000,000 shares
   authorized; no shares issued and outstanding                  -               -
 Common stock, $.001 par value; 30,000,000 shares
  authorized; 7,688,027 issued at June 30, 2001 and
  December 31, 2000                                              8               8
 Additional paid-in capital                                 12,883          12,883
 Treasury stock, 29,367 shares at cost                        (162)           (162)
 Accumulated deficit                                        (4,915)         (2,845)
                                                      -------------    ------------
    Total stockholders' equity                               7,814           9,884
                                                      -------------    ------------
    Total liabilities and stockholders' equity        $     41,695     $    57,785
                                                      =============    ============
</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          For the Six Months
                                                 Ended June 30,               Ended June 30,
                                            -------------------------    -------------------------
                                               2001           2000          2001           2000
                                            -----------    ----------    ----------    -----------
<S>                                         <C>            <C>           <C>           <C>
   Revenue                                    $39,797        $41,878       $79,834       $84,781

  Cost of revenue                             31,236         32,711        62,689        66,892
                                            -----------    ----------    ----------    -----------

    Gross profit                               8,561          9,167        17,145        17,889

  Selling, general, and
     administrative expenses                   6,771          7,852        13,974        17,201
  Depreciation and amortization                  671            937         1,388         1,872
                                            -----------    ----------    ----------    -----------

    Operating income (loss)                    1,119            378         1,783        (1,184)

  Other expense (income):
    Interest expense                             741            772         1,470         1,463
    Other expense (income), net                2,285            (72)        2,240           (91)
                                            -----------    ----------    ----------    -----------

  Loss before provision
     (benefit) for income taxes               (1,907)          (322)       (1,927)       (2,556)

  Provision (benefit) for income taxes           151           (110)          143          (990)
                                            -----------    ----------    ----------    -----------

  Loss from continuing operations            $(2,058)         $(212)      $(2,070)      $(1,566)

  Income from discontinued operations              -           $340             -          $584

                                            -----------    ----------    ----------    -----------
  Net (loss) income                          $(2,058)          $128       $(2,070)        $(982)
                                            ===========    ==========    ==========    ===========

  Net (loss) income per share:
    Basic                                      $(0.27)         $0.02       $(0.27)       $(0.13)
                                            ===========    ==========    ==========    ===========
    Diluted                                    $(0.27)         $0.02       $(0.27)       $(0.13)
                                            ===========    ==========    ==========    ===========

  Basic weighted average common
     Shares outstanding                        7,659          7,353         7,659         7,353
                                            ===========    ==========    ==========    ===========
  Diluted weighted average common
     Shares outstanding                        7,659          7,915         7,659         7,353
                                            ===========    ==========    ==========    ===========
</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,
                                                                 -----------------------
                                                                    2001         2000
                                                                 ----------   ----------
<S>                                                                <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                           ($2,070)       ($982)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities of continuing operations -
  Gain on disposal of equipment and leasehold improvements             (33)         (41)
   Income from discontinued operations                                   -         (584)
   Loss on sale of subsidiary                                        2,283            -
   Depreciation and amortization                                     1,388        1,872
   Changes in operating assets and liabilities
      (Increase) decrease in -
        Accounts receivable, net                                     1,788         (992)
        Prepaid expenses and other current assets                     (264)         931
        Other assets                                                     3         (203)
      Increase (decrease) in -
        Accounts payable and accrued liabilities                    (1,007)        (280)
        Other long-term liabilities                                     (4)        (341)
Cash used in discontinued operations                                (1,425)        (620)
                                                                 ----------   ----------
          Net cash provided by (used in) operating activities
            of continuing operations                                   659       (1,240)
                                                                 ----------   ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of equipment and leasehold improvements           187           74
  Proceeds from sale of businesses, net                             12,306            -
  Additions to equipment and leasehold improvements                   (151)        (502)
                                                                 ----------   ----------
          Net cash provided by (used in) investing activities
            of continuing operations                                12,342         (428)
                                                                 ----------   ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Short-term (repayments) borrowings, net                          (11,169)       2,567
  Repayments of long-term debt                                      (1,859)        (780)
                                                                 ----------   ----------
          Net cash (used in) provided by financing activities
        of continuing operations                                   (13,028)       1,787
                                                                 ----------   ----------

          Net (decrease) increase in cash and cash equivalents         (27)         119

CASH AND CASH EQUIVALENTS, beginning of period                         319          326
                                                                 ----------   ----------

CASH AND CASH EQUIVALENTS, end of period                              $292         $445
                                                                 ==========   ==========
</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, 2000 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 six months ended June 30, 2001 are
         not necessarily indicative of the results that may be expected for any
         other interim period or for the year ending December 31, 2001. 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, 2000.

         The Company suffered a loss from operations of ($6,229,000) for the
         year ended December 31, 2000 and at December 31, 2000 had a working
         capital deficit of ($3,430,000). In March and June 2001, the Company
         sold its air delivery business and Mid-West Region operations,
         respectively, and used the proceeds from the sales to pay down a
         portion of the Company's existing debt. Additionally, management has
         taken steps to mitigate the factors that led to the net loss in 2000,
         which arose as a result of increased labor, insurance and vehicle
         operating costs and increased selling, general and administrative
         expenses. As a result of such actions, working capital as of June 30,
         2001 has improved to $3,491,000. Subject to reaching agreement with
         holders of subordinated seller notes and the Company's principal
         lenders as further described under Short-Term Debt below, management
         believes that based upon the results to date and the projected
         results for the remainder of 2001 that cash flow from operations and
         availability under the Company's credit facility with First Union
         will be sufficient to meet its cash requirements in the next twelve
         months.

         Certain prior year amounts have been reclassified in order to conform
         to the current year presentation.

(2)      SHORT-TERM DEBT:

         Effective as of March 30, 2001, CD&L and First Union Commercial
         Corporation ("First Union") modified the Loan and Security Agreement
         (the "First Union Agreement") entered into on July 14, 1997. The
         revolving credit facility was decreased from $22,500,000 to $15,000,000
         as a result of the March 30, 2001 consummation of a transaction
         providing for the sale of certain assets and liabilities of Sureway Air
         Traffic Corporation, Inc. ("Sureway"), the air delivery business (See
         Note 4). In addition, the First Union Agreement was changed to amend
         the covenants and financial ratios that the Company must maintain.
         Under the terms of the First Union Agreement, as amended, the Company
         is in compliance with all such covenants and financial ratios as of and
         for the period ended June 30, 2001, except with respect to the
         stockholders' equity covenant. First Union has waived non-compliance
         with this covenant at June 30, 2001 and projected non-compliance as of
         September 30, 2001.

         A subordinated note in the principal amount of $1.75 million issued to
         Metro- Courier Network, Inc. ("Metro") in connection with the
         Company's purchase of that business in 1998 came due on July 1,
         2001. Metro has demanded payment; however, the Company does not have
         sufficient availability under its credit facilities to pay the note.
         The note is subordinated to the Company's obligations to First Union
         and to the holders of its subordinated Senior Notes.

 (3)     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 bear
         interest at 12% per annum and are subordinate to all senior debt
         including the Company's credit facility with First Union. The Senior
         Notes mature on January 29, 2006 and may


                                       6
<PAGE>

         be prepaid by the Company under certain circumstances. The warrants
         expire January 19, 2009 and are exercisable at any time prior to
         expiration at a price of $.001 per equivalent share of common stock for
         an aggregate of 506,250 shares of the Company's stock, subject to
         additional adjustments. The Company has recorded the fair value of the
         warrants as a credit to additional paid-in-capital and a debt discount
         on the Senior Notes. Under the terms of the Senior Notes, the Company
         is required to maintain certain financial ratios and comply with other
         financial conditions. Effective as of March 30, 2001, CD&L and the note
         holders modified the Senior Subordinated Loan Agreement (the "Senior
         Note Agreement") entered into on January 29, 1999. The Senior Note
         Agreement, as amended, provides for repayment of $1,000,000 of the
         Senior Notes on April 2, 2001 and four repayments of $250,000 each on
         August 15, 2001, November 15, 2001, May 15, 2002 and August 15, 2002
         provided that the Company is in compliance with the terms of the First
         Union Agreement. The Senior Note Holders have agreed to defer fifty per
         cent (50%) of the August 15, 2001 payment to October 31, 2001. In
         addition, the Senior Note Agreement was amended to change the financial
         ratios and conditions that the Company must comply with and the
         interest rate on the Senior Notes was revised to between 12% and 15%
         per annum. The interest rate charged each calendar quarter is dependant
         on the Company's compliance with the financial ratios and conditions in
         the Senior Note Agreement, as amended. As of June 30, 2001, the
         interest rate being charged on the Senior Notes is 12%. Under the terms
         of the Senior Note Agreement, as amended, the Company is in compliance
         with all such financial ratios and conditions as of and for the period
         ended June 30, 2001, except with respect to the stockholders' equity
         covenant. The Senior Note holders have waived non-compliance with the
         equity covenant at June 30, 2001 and projected non-compliance as of
         September 30, 2001.

 (4)     DISCONTINUED OPERATIONS:

         On December 1, 2000, CD&L made a strategic decision to dispose of its
         air delivery business. On March 30, 2001, CD&L consummated a
         transaction providing for the sale of certain assets and liabilities of
         Sureway, the air delivery business. The selling price for the net
         assets was approximately $14,150,000 and is comprised of $11,650,000 in
         cash, a subordinated promissory note (the "Note Receivable") for
         $2,500,000 ($500,000 of which is based upon the ultimate development of
         certain liabilities retained by CD&L) and contingent cash payments
         based upon the ultimate development of certain liabilities retained by
         CD&L. The Note Receivable bears interest at a rate of 10.0% per annum,
         with interest only in monthly installments. The entire balance of
         principal, plus all accrued interest, is due and payable on March 30,
         2006. The $2,500,000 Note Receivable ultimately recorded upon the
         consummation of the sale is included in Other Assets in the
         accompanying financial statements. Accordingly, the financial position
         and operating results have been segregated from continuing operations
         and reclassified as a discontinued operation in the accompanying
         financial statements.

         As a result of the sale of its air delivery business, the Company now
         operates in only one reportable business segment; the time-critical,
         ground delivery business.

(5)      NOTE RECEIVABLE FROM STOCKHOLDER:

         In February 1996, Liberty Mutual Insurance Company ("Liberty Mutual")
         filed an action against Securities Courier Corporation ("Securities"),
         a subsidiary of the Company, Mr. Vincent Brana and certain other
         parties in the United States District Court for the Southern District
         of New York alleging, among other things, that Securities Courier had
         fraudulently obtained automobile liability insurance from Liberty
         Mutual in the late 1980s and early 1990s at below market rates. Under
         the terms of its acquisition of Securities, the Company has certain
         rights to indemnification from Mr. Brana. In connection with the
         indemnification, Mr. Brana has entered into a Settlement Agreement and
         executed a Promissory Note in such amount as may be due for any defense
         costs or award arising out of this suit. Mr. Brana has agreed to repay
         the Company on December 1, 2002, together with interest calculated at a
         rate per annum equal to the rate charged the Company by its senior
         lender. Mr. Brana has delivered 357,301 shares of CD&L common stock


                                       7
<PAGE>

         to the Company as collateral for the note. On September 8, 2000 the
         parties entered into a settlement agreement in which Securities and Mr.
         Brana agreed to pay Liberty Mutual $1,300,000. An initial payment of
         $650,000 was made by Securities on October 16, 2000, $325,000 plus
         interest at a rate of 10.5 % per annum, was paid in monthly
         installments ending July 1, 2001 and $325,000 plus interest was due on
         August 1, 2001. Subsequently, on July 30, 2001, the settlement
         agreement was amended and now provides for the payment of the $325,000
         balance due, plus interest at a rate of 12.0% per annum, in monthly
         installments ending July 1, 2002.

         At June 30, 2001 and December 31, 2000 the Company had a receivable due
         from Mr. Brana totaling $2,909,000 and $2,908,000, respectively. As of
         December 31, 2000, considering the market value of the collateral and
         Mr. Brana's failure to update and provide satisfactory evidence to
         support his ability to pay the promissory note, the Company recorded a
         $2,500,000 reserve against the receivable. Based upon the facts and
         circumstances as of the current time, the reserve remained the same as
         of June 30, 2001.

(6)      LITIGATION:

         The Company is, from time to time, a party to litigation arising in the
         normal course of its business, most of which involves claims for
         personal injury and property damage incurred in connection with its
         same-day ground delivery operations. In connection therewith, the
         Company has recorded reserves of $225,000 and $455,000 as of June 30,
         2001 and December 31, 2000, respectively. Management believes that none
         of these actions, including the action described above, will have a
         material adverse effect on the consolidated financial position or
         results of operations of the Company.

(7)     INCOME (LOSS) PER SHARE:

        Basic income (loss) per share includes no dilution and is computed by
        dividing loss available to common stockholders by the weighted average
        number of common shares outstanding for the period. Diluted (income)
        loss per share reflects the potential dilution if certain securities are
        converted and also includes certain shares that are contingently
        issuable. Because of the Company's net loss for the three and six months
        ended June 30, 2001, equivalent shares represented by 12,429 Stock
        Options and 505,668 Warrants would be anti-dilutive and therefore are
        not included in the loss per share calculation for the three and six
        month periods ended June 30, 2001. Because of the Company's net loss for
        the six months ended June 30, 2000, equivalent shares represented by
        118,463 Stock Options, 506,094 Warrants and 5,744 Employee Stock
        Purchase Plan shares would be anti-dilutive and therefore are not
        included in the loss per share calculation for the six months ended June
        30, 2000. A reconciliation of weighted average common shares outstanding
        to weighted average common shares outstanding assuming dilution follows:

(8)     SALE OF MID-WEST OPERATIONS:

        On June 14, 2001, the company consummated a transaction providing for
        the sale of all the outstanding stock in National Express, Inc. The
        selling price was approximately $2.5 million and is comprised of $.9
        million in cash and a subordinated promissory note (the "Note
        Receivable") for $1.6 million. The Note Receivable bears interest at the
        rate of 7.0% per annum. The note is payable in seventeen equal quarterly
        installments through March 14, 2006 and a final balloon payment of
        approximately $1.1 million on June 14, 2006. As a result of the
        transaction, the company recorded a $2.3 million loss on the sale with
        no related tax benefit pending review and analysis by our tax advisors.

(9)     NEW ACCOUNTING PRONOUNCEMENT:

        In June 2001, the FASB issued Statements of Financial Accounting
        Standards No. 141, "Business Combinations" ("SFAS No. 141"), and No.
        142, "Goodwill and Other Intangible Assets" ("SFAS No. 142"). SFAS
        No. 141 changes the accounting for business combinations, requiring
        that all business combinations be accounted for using the purchase
        method and that intangible assets be recognized as assets apart
        from, goodwill if they arise from contractual or other legal rights,
        or if they are seperate or capable of being separated from the
        acquired entity and sold, transferred, licensed, rented or exchanged.
        SFAS No. 141 is effective for all business combinations initiated
        after June 30, 2001. SFAS No. 142 specifies the financial accounting
        and reporting for acquired goodwill and other intangible assets.
        Goodwill and intangible assets that have indefinite useful lives
        will not be amortized but rather will be tested at least annually
        for impairment. SFAS No. 142 is effective for fiscal years beginning
        after December 15, 2001.

        SFAS No. 142 requires that the useful lives of intangible assets
        acquired on or before June 30, 2001 be reassessed and the remaining
        amortization periods adjusted accordingly. Previously recognized
        intangible assets deemed to have indefinite lives shall be tested
        for impairment. Goodwill recognized on or before June 30, 2001, will
        be tested for impairment as of the beginning of the fiscal year in
        which SFAS No. 142 is initially applied in its entirety.

        The Company is currently assessing the impact of the adoption of
        these statements. Amortization of goodwill and other intangibles was
        $1,094,000 for the year ended December 31, 2000, and $417,000 for
        the six months ended June 30, 2001.



                                       8
<PAGE>

<TABLE>
<CAPTION>
                                     Three Months Ended          Six Months Ended
                                         June 30,                     June 30,
                                 ----------   ----------     ---------      ---------
 ( 000's )                          2001         2000           2001          2000
                                 ----------   ----------     ---------      ---------
<S>                              <C>          <C>            <C>            <C>
  Basic weighted average
  common shares outstanding           7,659        7,353         7,659          7,353
 Effect of dilutive
 securities:
     Stock options                        -           12             -              -
     Warrants                             -          506             -              -
     ESPP                                 -           44             -              -
                                 ----------    ---------      ---------    ----------
 Diluted weighted average
  Common shares outstanding           7,659        7,915         7,659          7,353
                                 ==========    =========      =========    ==========
</TABLE>

 The following common stock equivalents were excluded from the
 computation of diluted earnings per share because the exercise or
 conversion price was greater than the average market price of common
 shares:

<TABLE>
<CAPTION>
                                        June 30,                     June 30,
                                 ----------   -----------    ----------    ----------
 ( 000's )                          2001         2000           2001          2000
                                 ----------   -----------    ----------    ----------
 <S>                             <C>          <C>            <C>           <C>
        Stock options                 1,616        1,628         1,583          1,038
        Subordinated
           Convertible debentures        16          146            16            146
        Seller financed
           Convertible notes            593          593           593            593
</TABLE>

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

         Overview

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

         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 business development,
         cost reduction programs, revenue growth and fuel, insurance and labor
         cost controls, as well as its liquidity and capital needs and its
         future prospects. These forward-looking statements involve certain
         risks and uncertainties that may cause the actual events or results to
         differ materially from those indicated by such forward-looking
         statements. Potential risks and uncertainties include without
         limitation the risk that the Company will be unable to grow revenue
         internally, or that the Company will be unable to price its services so
         as to increase its profit margins, or that the Company's cost reduction
         programs will fail to prevent further erosion of its profit margins, or
         that the Company will be unable to reduce its fuel, insurance and labor
         costs, or that the Company will be unable to achieve the other cost
         savings or additional profits for forward quarters contemplated by the
         Company's business management strategy, or that the Company will be
         unable to continue to meet its financial covenants under existing
         credit lines or otherwise have adequate cash flow


                                       9
<PAGE>

         from operations or credit facilities to support its operations and
         revenue growth, or that the slowing economy will reduce demand for the
         Company's services or other risks specified in the Company's 2000
         Report on Form 10-K and other SEC filings.


                                       10
<PAGE>

RESULTS OF OPERATIONS

        Income and Expense as a Percentage of Revenue
<TABLE>
<CAPTION>

                                           For the Three Months           For the Six Months
                                              Ended June 30,                 Ended June 30,
                                         --------------------------     ------------------------
                                             2001          2000           2001          2000
                                         -------------   ----------     ----------   -----------

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

        Gross profit                          21.5%          21.9%          21.5%         21.1%

        Selling, general, and
           administrative expenses            17.0%          18.8%          17.6%         20.3%
        Depreciation and amortization          1.7%           2.2%           1.7%          2.2%

        Operating income (loss)                2.8%            .9%           2.2%         (1.4)%

        Interest expense                       1.9%           1.8%           1.8%          1.7%

        Other expense (income)                 5.7%            .2%           2.8%          (.1%)

        Loss from continuing
        operations                            (5.2)%          (.5)%         (2.6)%        (1.8%)

</TABLE>

        Six Months Ended June 30, 2001 Compared to the Six Months Ended June 30,
        2000

        Revenue for the first half of 2001 decreased by $4.9 million, or 5.8%,
        to $79.8 million from $84.8 million. The decrease in revenue is
        primarily due to the Company's ongoing efforts to increase its profit
        margins and eliminate less profitable business. As a result of a
        portfolio review, contracts with certain customers that had unacceptable
        profit margins were given notice of rate increases. If the rate
        increases were not accepted, the contracts were terminated. This revenue
        loss was partially offset by the effect of fuel surcharges and price
        increases implemented throughout 2000 that remained in effect for the
        first half of 2001.

        Cost of revenue decreased by $4.2 million, or 6.3%, to $62.7 million for
        the six months ended June 30, 2001 from $66.9 million for the six months
        ended June 30, 2000. Cost of revenue for the six months ended June 30,
        2001 represents 78.5% of revenues as compared to 78.9% for the same
        period in 2000. The decrease in cost of revenue is due primarily to a
        decrease in labor and vehicle operating costs as compared to the same
        period in 2000. Both the elimination of less profitable business and
        better utilization of direct labor have contributed to the increase in
        gross profit margin. Additionally, the slowing economy has helped in
        recruiting and retaining reliable couriers and subcontractors at
        reasonable costs.

        Selling, general and administrative expenses ("SG&A") decreased by $3.2
        million, or 18.8%, to $14.0 million for the six months ended June 30,
        2001 from $17.2 million for the same period in 2000. Stated as a
        percentage of revenue, SG&A decreased to 17.5% for the six months ended
        June 30, 2001 as compared to 20.3% for the same period in 2000. The
        decrease in SG&A is due primarily to both the Company's ongoing efforts
        to reduce and better control such costs and certain non-recurring items
        recorded during the same period in 2000. The non-recurring items
        recorded during the first quarter of 2000 were the bad debt expense
        recorded as a result of a previous customer filing for bankruptcy
        protection and certain consulting expenses.


                                       11
<PAGE>

        Depreciation and amortization decreased by $0.5 million, or 25.9%, to
        $1.4 million for the six months ended June 30, 2001 from $1.9 million
        for the same period in 2000. The decrease in depreciation and
        amortization is due primarily to certain equipment and leasehold
        improvements reaching the end of their depreciable lives during 2000
        that have not yet been replaced as of June 30, 2001.

        As a result of the factors discussed above, operating income increased
        by $3.0 million for the six months ended June 30, 2001 as compared to
        the same period in 2000.

        Other expense increased by $2.3 million, to $2.2 million, primarily as a
        result of recording a loss on the sale of the Company's Mid-West Region
        businesses. On June 14, 2001, the company consummated a transaction
        providing for the sale of all the outstanding stock in National Express,
        Inc. The selling price was approximately $2.5 million and is comprised
        of $.9 million in cash and a subordinated promissory note (the "Note
        Receivable") for $1.6 million. The Note Receivable bears interest at the
        rate of 7.0% per annum. The note is payable in seventeen equal quarterly
        installments through March 14, 2006 and a final balloon payment of
        approximately $1.1 million on June 14, 2006. As a result of the
        transaction, the company recorded a $2.3 million loss on the sale with
        no related tax benefit pending review and analysis by our tax advisors.

        Loss from continuing operations increased by $.5 million for the six
        months ended June 30, 2001 as compared to the same period in 2000. This
        was primarily due to the factors discussed above and similar interest
        expense for the six months ended June 30, 2001 as compared to the same
        period in 2000.

        During the six months ended June 30, 2000 the Company also recorded $0.6
        income from discontinued operations net of tax as a result of the
        activities of the air delivery business.

        Net loss increased by $1.1 million to a loss of ($2.1) million for the
        six months ended June 30, 2001 as compared to a loss of ($1.0) million
        for the same period in 2000 for the reasons discussed above.

        Three Months Ended June 30, 2001 Compared to the Three Months Ended
        June 30, 2000

        Revenue for the three months ended June 30, 2001 decreased by $2.1
        million, or 5.0%, to $39.8 million from $41.9 million for the three
        months ended June 30, 2000. The decrease in revenue is primarily due to
        the Company's ongoing efforts to increase its profit margins and
        eliminate less profitable business. As a result of a portfolio review,
        contracts with certain customers that had unacceptable profit margins
        were given notice of rate increases. If the rate increases were not
        accepted, the contracts were terminated. This revenue loss was partially
        offset by the effect of fuel surcharges and price increases implemented
        throughout 2000 that remained in effect for the second quarter of 2001.

        Cost of revenue decreased by $1.5 million, or 4.5%, to $31.2 million for
        the three months ended June 30, 2001 from $32.7 million for the three
        months ended June 30, 2000. Cost of revenue for the three months ended
        June 30, 2001 represents 78.5% of revenues as compared to 78.1% for the
        same period in 2000. The decrease in cost of revenue is due primarily to
        a decrease in labor and vehicle operating costs as compared to the same
        period in 2000, partially offset by non-recurring expense credits in the
        prior period.

        Selling, general and administrative expenses ("SG&A") decreased by $1.1
        million, or 13.8%, to $6.8 million for the three months ended June 30,
        2001 from $7.9 million for the same period in 2000. Stated as a
        percentage of revenue, SG&A decreased to 17.0% for the three months
        ended June 30, 2001 as compared to 18.7% for the same period in 2000.
        The decrease in SG&A is due primarily to the Company's ongoing efforts
        to reduce and better control such costs.


                                       12
<PAGE>

        Depreciation and amortization decreased by $0.2 million, or 28.4%, to
        $0.7 million for the three months ended June 30, 2001 from $0.9 million
        for the same period in 2000. The decrease in depreciation and
        amortization is due primarily to certain equipment and leasehold
        improvements reaching the end of their depreciable lives during 2001
        that have not yet been replaced as of June 30, 2001.

        As a result of the factors discussed above, operating income increased
        by $0.7 million for the three months ended June 30, 2001 as compared to
        the same period in 2000.

        Other expense increased by $2.4 million, to $2.3 million, primarily as a
        result of recording a loss on the sale of the Company's Mid-West Region
        businesses. On June 14, 2001, the Company consummated a transaction
        providing for the sale of all the outstanding stock in National Express,
        Inc. The selling price was approximately $2.5 million and is comprised
        of $.9 million in cash and a subordinated promissory note (the "Note
        Receivable") for $1.6 million. The Note Receivable bears interest at the
        rate of 7.0% per annum. The note is payable in seventeen equal quarterly
        installments through March 14, 2006 and a final balloon payment of
        approximately $1.1 million on June 14, 2006. As a result of the
        transaction, the Company recorded a $2.3 million loss on the sale with
        no related tax benefit pending review and analysis by our tax advisors.

        Loss from continuing operations increased by $1.8 million for the three
        months ended June 30, 2001 as compared to the same period in 2000. This
        was primarily due to the factors discussed above.

        Net loss increased by $2.2 million to a loss of ($2.1) million for the
        three months ended June 30, 2001 as compared to income of ($.1) million
        for the same period in 2000 for the reasons discussed above.

        New Accounting Pronouncement

        In June 2001, the FASB issued Statements of Financial Accounting
        Standards No. 141, "Business Combinations" ("SFAS No. 141"), and No.
        142, "Goodwill and Other Intangible Assets" ("SFAS No. 142"). SFAS
        No. 141 changes the accounting for business combinations, requiring
        that all business combinations be accounted for using the purchase
        method and that intangible assets be recognized as assets apart
        from, goodwill if they arise from contractual or other legal rights,
        or if they are seperate or capable of being separated from the
        acquired entity and sold, transferred, licensed, rented or exchanged.
        SFAS No. 141 is effective for all business combinations initiated
        after June 30, 2001. SFAS No. 142 specifies the financial accounting
        and reporting for acquired goodwill and other intangible assets.
        Goodwill and intangible assets that have indefinite useful lives
        will not be amortized but rather will be tested at least annually
        for impairment. SFAS No. 142 is effective for fiscal years beginning
        after December 15, 2001.

        SFAS No. 142 requires that the useful lives of intangible assets
        acquired on or before June 30, 2001 be reassessed and the remaining
        amortization periods adjusted accordingly. Previously recognized
        intangible assets deemed to have indefinite lives shall be tested
        for impairment. Goodwill recognized on or before June 30, 2001, will
        be tested for impairment as of the beginning of the fiscal year in
        which SFAS No. 142 is initially applied in its entirety.

        The Company is currently assessing the impact of the adoption of
        these statements. Amortization of goodwill and other intangibles was
        $1,094,000 for the year ended December 31, 2000, and $417,000 for
        the six months ended June 30, 2001.

        Liquidity and Capital Resources

        Working capital increased from a deficit of ($3.4) million as of
        December 31, 2000 to $3.5 million as of June 30, 2001. This increase
        of $6.9 million reflects the cash received from the sales of the
        Company's air delivery business and the Mid-West Region operations,
        as well as better management of accounts receivable and reduced
        capital expenditures.

        Cash and cash equivalents of $0.3 million were approximately the
        same as of December 31, 2000. Cash was provided by operating
        activities (a decrease in accounts receivable offset partially by a
        decrease in accounts payable and accrued liabilities during the six
        months ended June 30, 2001), provided by investing activities
        (proceeds received from the sale of the businesses), used by
        financing activities (a decrease in the Company's borrowings on its
        line of credit and repayments of long-term debt) and used by
        discontinued operations. Capital expenditures amounted to $0.2
        million for the six months ended June 30, 2001.

        As of June 30, 2001 the Company had total cash on hand and borrowing
        ability of $0.7 million under its revolving credit facility; after
        adjusting for the restrictions for outstanding letters of credit and the
        subordinated debentures.

        A subordinated note in the principal amount of $1.75 million issued to
        Metro-Courier Network, Inc. ("Metro") in connection with the Company's
        purchase of that business in 1998 came due on July 1, 2001. Metro has
        demanded payment; however, the Company does not have sufficient
        availability under its credit facilities to pay the note. The note is
        subordinated to the Company's obligations to First Union and to the
        holders of its subordinated Senior Notes.

        The Company is not in compliance with the stockholders' equity covenant
        in its credit facilities with First Union and the Senior Noteholders.
        First Union has agreed to waive such default and the


                                       13
<PAGE>

        cross-default arising from the non-payment of the Metro note subject to
        revision of the payment schedule thereunder consistent with agreements
        previously reached with other subordinated selling noteholders. The
        Senior Noteholders have agreed to waive the covenant default and to
        defer fifty percent (50%) of the $250,000 principal payment due on
        August 15, 2001 to October 31, 2001. In light of Metro's subordinated
        position, the Company is attempting to negotiate a payment schedule with
        Metro that will be acceptable to First Union and the Senior Noteholders.
        There is another subordinated seller note in the principal sum of
        $780,000 that will become due at the end of the year for which the
        Company is attempting to negotiate an extended payment schedule. No
        assurances can be given that the Company will be able to successfully
        negotiate such extended payment schedules with its subordinated seller
        noteholders and its senior creditors.

        Assuming acceptable payment schedules can be negotiated with holders of
        subordinated Seller Notes, management believes that anticipated cash
        flows generated from operations, together with its borrowing capacity,
        are sufficient to support the Company's operations and general business
        and liquidity requirements for the foreseeable future. However, if there
        is no resolution of the payment schedules for the subordinated note
        holders, or if losses continue or cash flows from operations materially
        fall short of our projections, no assurances can be given with respect
        to the adequacy of existing credit lines, the availability of
        alternative borrowing sources or the ability to sell non-strategic
        assets.

        Inflation

        Other than the described effects of recent fuel increases and labor cost
        increases experienced in 2000, inflation has not had a material impact
        on the Company's results of operations for the past three years.

        Quantitative and Qualitative Disclosures About Market Risk

        CD&L's major "market risk" exposure is the effect of changing interest
        rates. CD&L manages its interest expense by using a combination of fixed
        and variable rate debt. At June 30, 2001, the Company's debt consisted
        of approximately $21.7 million of fixed rate debt with a weighted
        average interest rate of 11.0%. The amount of variable rate debt
        fluctuates during the year based on CD&L's cash requirements and was nil
        at June 30, 2001. If interest rates on variable rate debt were to
        increase by 82 basis points (one-tenth of the rate at June 30, 2001),
        the net impact to the Company's results of operations and cash flows for
        the six month period ended June 30, 2001 would be a decrease of
        approximately $30,000.

                           Part II - OTHER INFORMATION

Item 4 - Submission of Matters to a Vote of Security Holders.

        On June 6, 2001, the Company held its annual meeting of stockholders.
        The following sets forth a brief description of each matter which was
        acted upon, as well as the votes cast for, against or withheld for each
        such matter, and, where applicable, the number of abstentions and broker
        non-votes for each matter:

        1.     Election of Directors.

                Name of Director            Votes For          Withheld
                ----------------            ---------          --------

                Class III
                William T. Brannan           4,964,720            661,682
                Marilu Marshall              5,072,720            553,682
                John S. Wehrle               5,084,720            591,682


                                       14
<PAGE>

        2.     Amendment to the Year 2000 Stock Incentive Plan.

                 Votes For:                     4,334,928
                 Votes Against:                 1,283,938
                 Abstentions:                       7,536


        3.      Ratification of the selection by the Board of Directors of
                Arthur Andersen LLP as the Company's independent public
                accountants for 2000.

                 Votes For:                     5,485,159
                 Votes Against:                   136,407
                 Abstentions:                       4,836

Item 6 - Exhibits and Reports on Form 8-K

        (a)     Exhibits

        10.1    Stock Purchase Agreement dated June 14, 2001 by and among
                Executive Express, Inc., Charles Walch, National Express
                Company, Inc., and CD&L, Inc.

        10.2    Promissory Note in the sum of $1,650,000 of Executive Express,
                Inc. due June 14, 2006

        10.3    Amendment dated August 2, 2001 to First Union Credit Agreement
                dated June 14, 1997, as modified.

        10.4    Fourth Amendment and Consent dated May 31, 2001 to the Senior
                Subordinated Loan Agreement dated July 29, 1999.

        10.5    Fifth Amendment and Consent dated July 27, 2001 to the Senior
                Subordinated Loan Agreement dated July 29, 1999.

        10.6    Amendment Number 2 dated June 6, 2001 to the Employment
                Agreement dated June 5, 2000 by and between the Company and
                Albert W. Van Ness, Jr.

        (b)     Reports on Form 8-K

                      A report on Form 8-K was filed on May 1, 2001 to report
        the sale of certain assets and liabilities of Sureway Air Traffic
        Corporation.

                                    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 20, 2001                                  CD&L, INC.

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



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