<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, 2005 or

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


Commission File Number:    0-26954


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


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



80 WESLEY STREET                                             07606
SOUTH HACKENSACK, NEW JERSEY                               (Zip Code)
(Address of principal executive offices)

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

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes  X  No
                                              ---    ---

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

         The number of shares of common stock of the Registrant, par value $.001
per share, outstanding as of August 12, 2005 was 9,356,311.



                                       1
<PAGE>


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

                                      INDEX

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

         ITEM 1 - Financial Statements

                  CD&L, Inc. and Subsidiaries
                  Condensed Consolidated Balance Sheets as of June 30, 2005 (unaudited)
                           and December 31, 2004                                                          3
                  Condensed Consolidated Statements of Operations for the Three and Six
                           Months Ended June 30, 2005 and 2004 (unaudited)                                4
                  Condensed Consolidated Statements of Cash Flows for the Six
                           Months Ended June 30, 2005 and 2004 (unaudited)                                5
                  Notes to Condensed Consolidated Financial Statements                                    6

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

         ITEM 3 - Quantitative and Qualitative Disclosures about Market Risk                             17

         ITEM 4 - Controls and Procedures                                                                17

PART II - Other Information

         ITEM 4 - Submission of Matters to a Vote of Security Holders                                    18

         ITEM 6 - Exhibits                                                                               18

SIGNATURE                                                                                                19

CERTIFICATIONS                                                                                           20

</TABLE>


                                       2
<PAGE>



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


<TABLE>
<CAPTION>
                                                                 June 30,       December 31,
                                                                  2005            2004
                                                                 --------       --------
                                                               (Unaudited)      (Note 1)

<S>                                                              <C>            <C>
                             ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                                      $  1,826       $    617
  Accounts receivable, net                                         22,375         21,548
  Prepaid expenses and other current assets                         3,497          4,854
                                                                 --------       --------
    Total current assets                                           27,698         27,019

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net                           1,663          1,627
GOODWILL, net                                                      11,531         11,531
INTANGIBLE ASSETS AND DEFERRED FINANCING COSTS, net
                                                                    1,521          1,737
OTHER ASSETS                                                        1,262            828
                                                                 --------       --------
    Total assets                                                 $ 43,675       $ 42,742
                                                                 ========       ========

              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Short-term borrowings                                          $  3,494       $  4,809
  Current maturities of long-term debt                                505            487
  Accounts payable, accrued liabilities and bank overdrafts
                                                                   14,977         13,660
                                                                 --------       --------
    Total current liabilities                                      18,976         18,956

LONG-TERM DEBT, net of current maturities                           9,556          9,812
OTHER LONG-TERM LIABILITIES                                         1,485          1,370
                                                                 --------       --------
    Total liabilities                                              30,017         30,138
                                                                 --------       --------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
 Preferred stock, $.001 par value; 2,000,000
   shares authorized; 393,701 shares
   issued at June 30, 2005
   and December 31, 2004                                            4,000          4,000
 Common stock, $.001 par value; 30,000,000 shares
   authorized; 9,385,678 shares issued at June 30, 2005 and
   December 31, 2004                                                    9              9
 Additional paid-in capital                                        14,320         14,320
 Treasury stock, 29,367 shares at cost                               (162)          (162)
 Accumulated deficit                                               (4,509)        (5,563)
                                                                 --------       --------
    Total stockholders' equity                                     13,658         12,604
                                                                 --------       --------
    Total liabilities and stockholders' equity                   $ 43,675       $ 42,742
                                                                 ========       ========
</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               For the Six Months
                                                          Months Ended                     Ended
                                                           June 30,                       June 30,
                                                    -------------------------      -------------------------

                                                       2005            2004           2005            2004
                                                    ---------       ---------      ---------       ---------

<S>                                                 <C>             <C>            <C>             <C>
Revenue                                             $  54,207       $  49,257      $ 106,562       $  95,739

Cost of revenue                                        43,367          39,894         85,414          77,779
                                                    ---------       ---------      ---------       ---------

  Gross profit                                         10,840           9,363         21,148          17,960
                                                    ---------       ---------      ---------       ---------

Costs and Expenses:

Selling, general and
   administrative expenses                              9,088           8,000         17,968          15,535
Depreciation and amortization                             277             274            550             494
Other (income) expense, net                                (9)            623             (9)            612
Interest expense                                          366             453            756           1,024
                                                    ---------       ---------      ---------       ---------

Total Costs and Expenses                                9,722           9,350         19,265          17,665
                                                    ---------       ---------      ---------       ---------

Income before provision for income taxes                1,118              13          1,883             295

Provision for income taxes                                492               5            829             118
                                                    ---------       ---------      ---------       ---------
  Net income                                        $     626       $       8      $   1,054       $     177
                                                    =========       =========      =========       =========

Net income per share:
  Basic                                             $     .07       $     .00      $     .11       $     .02
                                                    =========       =========      =========       =========
  Diluted                                           $     .04       $     .00      $     .06       $     .02
                                                    =========       =========      =========       =========

Basic weighted average common
   shares outstanding                                   9,356           7,659          9,356           7,659
                                                    =========       =========      =========       =========
Diluted weighted average common
   shares outstanding                                  20,248          12,570         20,251          10,404
                                                    =========       =========      =========       =========
</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,
                                                                        ------------------------------
                                                                            2005            2004
                                                                        ------------    --------------
<S>                                                                        <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                 $ 1,054       $   177
Adjustments to reconcile net income to net cash provided by operating
    activities -
    Gain on disposal of equipment and leasehold improvements                    (5)           (6)
    Depreciation and amortization, including amortization of deferred
      financing costs                                                          606           621
    Deferred financing charge/original issue discount (OID) write-off           --           628
    Changes in operating assets and liabilities
      (Increase) decrease in -
        Accounts receivable, net                                              (827)         (817)
        Prepaid expenses and other current assets                            1,357         2,075
        Other assets                                                          (434)         (350)
      (Decrease) increase in -
        Accounts payable, accrued liabilities and bank overdrafts            1,317          (300)
        Other long-term liabilities                                            115           (18)
                                                                           -------       -------
          Net cash provided by operating activities                          3,183         2,010
                                                                           -------       -------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of equipment and leasehold improvements                    22             3
  Additions to equipment and leasehold improvements                           (443)         (211)
                                                                           -------       -------
          Net cash used in investing activities                               (421)         (208)
                                                                           -------       -------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayments of short-term borrowings, net of proceeds                      (1,315)         (547)
  Repayments of long-term debt                                                (238)       (1,205)
  Proceeds from long-term debt                                                  --         1,000
  Deferred financing costs                                                      --          (449)
                                                                           -------       -------
          Net cash used in financing activities                             (1,553)       (1,201)
                                                                           -------       -------

          Net increase in cash and cash equivalents                          1,209           601

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

CASH AND CASH EQUIVALENTS, end of period                                   $ 1,826       $ 2,298
                                                                           =======       =======
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>


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

(1)      BASIS OF PRESENTATION:

         The accompanying unaudited condensed consolidated financial statements
         have been prepared in accordance with generally accepted accounting
         principles for interim financial information and with the instructions
         to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
         include all of the information and footnotes required by generally
         accepted accounting principles for complete financial statements. The
         condensed consolidated balance sheet at December 31, 2004 has been
         derived from the audited financial statements at that date. In the
         opinion of management, all adjustments (consisting of normal recurring
         adjustments) considered necessary for a fair presentation have been
         included. Operating results for the three and six months ended June 30,
         2005 are not necessarily indicative of the results that may be expected
         for any other interim period or for the year ending December 31, 2005.
         For further information, refer to the consolidated financial statements
         and footnotes thereto included in the CD&L, Inc. (the "Company" or
         "CD&L") Form 10-K for the year ended December 31, 2004.

(2)      STOCK-BASED COMPENSATION

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

         The Company applies Accounting Principles Board Opinion No. 25,
         "Accounting for Stock Issued to Employees" and related interpretations
         in accounting for its stock option plans. The Company's stock options
         have all been issued with their exercise price at market value at the
         date of grant. Accordingly, no compensation expense has been recognized
         for its stock-based compensation plans. Pro forma information regarding
         net income and net income per share is required under the provisions of
         SFAS 123, and has been determined as if the Company had accounted for
         its stock options under the fair value method. The Company will be
         adopting SFAS No. 123(R), "Share-Based Payment" ("SFAS 123(R)") during
         the first quarter of 2006. At that time, compensation expense related
         to the Company's stock-based employee compensation plans will be
         recorded over the service period in the financial statements, as
         required by SFAS 123(R).

         The fair value for these options was estimated at the date of grant
         using the Black-Scholes option-pricing model with the following
         assumptions for the three and six months ended June 30, 2005 and 2004:


<TABLE>
<CAPTION>
                                         For the Three Months             For the Six Months Ended
                                            Ended June 30,                       June 30,
                                      -----------------------------      -----------------------------
                                         2005              2004             2005             2004
                                      ------------     -------------     ------------     ------------

<S>                                 <C>              <C>               <C>              <C>
         Risk-free interest rate          3.8%             3.3%              3.5%             3.3%
         Volatility factor                 38%             140%               47%             115%
         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 (loss) and net income
         (loss) 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,
                                                   -----------------------------      -----------------------------
                                                      2005              2004             2005             2004
                                                   ------------     -------------     ------------     ------------
<S>                                                <C>              <C>              <C>              <C>
         Net income, as reported                         $626               $8            $1,054           $177
         Stock-based employee compensation
           expense determined under fair value
           based method for all awards, net of
           related tax effects
                                                         (146)            (330)             (265)          (334)
                                                   ------------     -------------     ------------     ------------
         Pro forma net income (loss)                     $480            ($322)             $789          ($157)
                                                   ============     =============     ============     ============

         Net income (loss) per share:
            Basic, as reported                            $.07             $.00              $.11          $.02
            Diluted, as reported                          $.04             $.00              $.06          $.01
            Basic, pro forma                              $.05            ($.04)             $.08         ($.02)
            Diluted, pro forma                            $.03            ($.04)             $.05         ($.02)
</TABLE>


(3)      SHORT-TERM BORROWINGS:

         Short-term borrowings totaled $3,494,000 and $4,809,000 as of June 30,
         2005 and December 31, 2004, respectively. At December 31, 2004,
         short-term borrowings consisted of a line of credit balance of
         $4,190,000 and $619,000 of outstanding borrowings related to the
         insurance financing arrangements entered into in 2004. There were no
         balances related to the insurance financing arrangements at June 30,
         2005.

         As of June 27, 2002, CD&L and Summit Business Capital Corporation,
         doing business as Fleet Capital - Business Finance Division ("Summit"),
         entered into an agreement establishing a revolving credit facility (the
         "Fleet Facility") of $15,000,000. The Fleet Facility, which was due to
         expire on June 27, 2005 but was extended through December 31, 2005,
         provides CD&L with standby letters of credit, prime rate based loans at
         the bank's prime rate, as defined, plus 25 basis points and LIBOR based
         loans at the bank's LIBOR, as defined, plus 225 basis point. The
         Company is currently negotiating a replacement of the Fleet Facility.
         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. As of June 30,
         2005, the maximum borrowings outstanding under the Fleet Facility were
         $4,786,000 and the outstanding borrowings as of June 30, 2005 were
         $3,494,000. As of June 30, 2005, the Company had total cash on hand and
         borrowing availability of $6,848,000 under the Fleet Facility, after
         adjusting for restrictions related to outstanding standby letters of
         credit of $5,748,000 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, 2005.

(4)      LONG-TERM DEBT:

         On January 29, 1999, the Company completed a $15,000,000 private
         placement of senior subordinated notes and warrants (the "Senior
         Notes") with three financial institutions. The Senior Notes originally
         bore interest at 12.0% per annum and were subordinate to all senior
         debt including the Company's Fleet Facility. For a description of the
         Fleet Facility, see "Liquidity and Capital Resources". Under the terms
         of the Senior Notes, as amended, the Company was required to maintain
         certain financial ratios and comply with other financial conditions
         contained in the Senior Notes agreement.

                                       7
<PAGE>

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

         (a)      The Original Noteholders exchanged Senior Notes in the
                  aggregate principal amount of $4,000,000 for shares of the
                  Series A Convertible Redeemable Preferred Stock of the
                  Company, par value $.001 per share ("Preferred Stock"), with a
                  liquidation preference of $4,000,000. The Preferred Stock is
                  convertible into 3,937,008 shares of Common Stock, does not
                  pay dividends (unless dividends are declared and paid on the
                  Common Stock) and is redeemable by the Company for the
                  liquidation value. The conversion price is $1.016 per share
                  which was equal to the average closing price for the Company's
                  common stock for the 5 days prior to the closing. Holders of
                  the Preferred Stock have the right to elect two directors.

         (b)      The Original Noteholders and the Company amended the terms of
                  the remaining $7,000,000 principal balance of the Senior
                  Notes, and then exchanged the amended notes for the new notes,
                  which consist of two series of convertible notes, the Series A
                  Convertible Subordinated Notes (the "Series A Convertible
                  Notes") in the principal amount of $3,000,000 and the Series B
                  Convertible Subordinated Notes ("Series B Convertible Notes")
                  in the principal amount of $4,000,000 (collectively, the
                  "Convertible Notes"). The loan agreement that governed the
                  Senior Notes was amended and restated to reflect the terms of
                  the substituted Series A Convertible Notes and the Series B
                  Convertible Notes, including the elimination of most financial
                  covenants. The principal amount of the Convertible Notes is
                  due in a balloon payment at the maturity date of April 14,
                  2011. The Convertible Notes bear interest at a rate of 9% for
                  the first two years of the term, 10.5% for the next two years
                  and 12% for the final three years of the term and will be paid
                  quarterly. The terms of the two series of Convertible Notes
                  are identical except for the conversion price ($1.016 for the
                  Series A Convertible Notes, the average closing price for the
                  Company's common stock for the 5 days prior to the closing,
                  and $2.032 for the Series B Convertible Notes).

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

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

         (e)      The Investors, the Original Note holders and the Company
                  entered into a Registration Rights Agreement pursuant to which
                  the shares of the Company's common stock issuable upon
                  conversion of the Preferred Stock and the Convertible Notes
                  may be registered for resale with the Securities and Exchange
                  Commission (the "SEC"). Subsequently, on August 2, 2005, the
                  Company filed a registration statement to register 15,527,579
                  shares for resale on Form S-3 with the SEC. The registration
                  statement was declared effective on August 11, 2005.

         The Company cannot be compelled to redeem the Preferred Stock for cash
         at any time. As the interest on the Convertible Notes increases over
         the term of the Convertible Notes, the Company records the associated
         interest expense on a straight-line basis, giving rise to accrued
         interest over the early term of the Convertible Notes.

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

                                       8
<PAGE>

                  Costs incurred relative to the aforementioned transactions
         amounted to approximately $592,000. Of this amount, $420,000 has been
         accounted for as deferred financing costs and is being amortized over
         the term of the new financing agreements. The remaining $172,000 has
         been accounted for as a reduction 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,
                                                                 2005                 2004
                                                            ------------------   -----------------
<S>                                                         <C>                 <C>
Series A Convertible Subordinated Notes                                $4,000              $4,000
Series B Convertible Subordinated Notes                                 4,000               4,000
Capital lease obligations due through July 2007 with
    interest at rates ranging from 8.0% to 11.5% and
    collateralized by the related property.                                 4                   5
Seller-financed debt on acquisitions, payable in monthly
    installments through May 2009.  Interest is payable at
    rates ranging between 7.0% and 9.0%.

                                                                        2,057               2,294
                                                            ------------------   -----------------

                                                                       10,061              10,299

Less - Current maturities                                               (505)                (487)
                                                            ------------------   -----------------

                                                                       $9,556              $9,812
                                                            ==================   =================
</TABLE>


 (5)     LITIGATION:

         The Company is, from time to time, a party to litigation arising in the
         normal course of its business, including claims for uninsured personal
         injury and property damage incurred in connection with its same-day
         delivery operations. In connection therewith, the Company has recorded
         reserves of $774,000 as of June 30, 2005 and December 31, 2004.

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

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

(6)      NET INCOME PER SHARE:

         Basic net income per share represents net income divided by the
         weighted average shares outstanding. Diluted net income per share
         represents net income divided by the weighted average shares
         outstanding adjusted for the incremental dilution of potentially
         dilutive common shares. A reconciliation of weighted average common
         shares outstanding to weighted average common shares outstanding
         assuming dilution follows (in thousands)-


                                       9
<PAGE>

<TABLE>
<CAPTION>
                                                                       THREE MONTHS                    SIX MONTHS
                                                                           ENDED                         ENDED
                                                                          JUNE 30,                      JUNE 30,
                                                                 --------------------------    ---------------------------
                                                                    2005           2004           2005            2004
                                                                 ------------    ----------    ------------    -----------
<S>                                                              <C>            <C>            <C>             <C>
         Basic weighted average
          common shares outstanding                                  9,356          7,659          9,356           7,659
         Effect of dilutive securities:
             Stock options and warrants                              1,049             974         1,052             777
             Convertible preferred stock                             3,937           3,937         3,937           1,968
             Subordinated convertible debentures                     5,906               -         5,906               -
                                                                 ------------    ----------    ------------    -----------

         Diluted weighted average common shares
           outstanding                                                 20,248       12,570           20,251       10,404
                                                                 ============    ==========    ============    ===========
</TABLE>


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


<TABLE>
<CAPTION>
                                                                       THREE MONTHS                    SIX MONTHS
                                                                           ENDED                         ENDED
                                                                          JUNE 30,                      JUNE 30,
                                                                 --------------------------    ---------------------------
                                                                    2005           2004           2005            2004
                                                                 ------------    ----------    ------------    -----------

<S>                                                              <C>            <C>          <C>            <C>
         Net income, as reported                                         $626           $8           $1,054         $177
         Effect of dilutive securities:
             Interest on subordinated convertible debentures
                                                                          129            -           257               -
                                                                 ------------    ----------    ------------    -----------

         Net income, as adjusted for the effect of
            dilutive securities                                          $755           $8           $1,311         $177
                                                                 ============    ==========    ============    ===========
</TABLE>



         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,
                                                     -------------------------------    -----------------------------
                                                         2005              2004            2005             2004
                                                     --------------     ------------    ------------     ------------
<S>                                                         <C>               <C>              <C>              <C>
         Stock options and warrants                         1,135             1,760            1,135            1,762
         Seller financed convertible notes                    175               213              180              220
         Subordinated convertible debentures
                                                                -             5,905                -            2,953
</TABLE>



                                       10
<PAGE>




(7)      NEW ACCOUNTING PRONOUNCEMENT:

         The Financial Accounting Standards Board has issued Statement of
         Financial Accounting Standards No. 154, Accounting Changes and Error
         Corrections ("SFAS 154"). This new standard replaces APB Opinion No.
         20, Accounting Changes, and FASB Statement No. 3, Reporting Accounting
         Changes in Interim Financial Statements. Among other changes, SFAS 154
         requires that a voluntary change in accounting principle be applied
         retrospectively with all prior period financial statements presented
         based on the new accounting principle, unless it is impracticable to do
         so. SFAS 154 also provides that (1) a change in method of depreciating
         or amortizing a long-lived nonfinancial asset be accounted for as a
         change in estimate (prospectively) that was effected by a change in
         accounting principle, and (2) correction of errors in previously issued
         financial statements should be termed a "restatement." The new standard
         is effective for accounting changes and correction of errors made in
         fiscal years beginning after December 15, 2005.




                                       11
<PAGE>




ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

         DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

         The Company is provided a "safe harbor" for forward-looking statements
         contained in this report by the Private Securities Litigation Reform
         Act of 1995. The Company may discuss forward-looking information in
         this report such as its expectations for future performance, growth and
         acquisition strategies, liquidity and capital needs and its future
         prospects. Actual results may not necessarily develop as the Company
         anticipates due to many factors including, but not limited to, the
         timing of certain transactions, unexpected expenses encountered, the
         effect of economic and market conditions, the impact of competition and
         the factors listed in the Company's 2004 Report on Form 10-K and other
         SEC filings. Because of these and other reasons, the Company's actual
         results may vary materially from management's current expectations.

         OVERVIEW

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

         CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         The Company's discussion and analysis of financial condition and
         results of operations are based upon the Company's consolidated
         financial statements, which have been prepared in accordance with
         accounting principles generally accepted in the United States of
         America. The preparation of these financial statements requires the
         Company to make estimates and judgments that affect the reported
         amounts of assets, liabilities, revenues and expenses, and related
         disclosure of contingent assets and liabilities. On an ongoing basis,
         the Company evaluates its estimates, including those related to
         accounts receivable, intangible assets, insurance reserves, income
         taxes and contingencies. The Company bases its estimates on historical
         experience and on various other assumptions that are believed to be
         reasonable under the circumstances, the results of which form the basis
         for making judgments about the carrying values of assets and
         liabilities that are not readily apparent from other sources. Actual
         results may differ from these estimates under different assumptions or
         conditions. For a discussion of the Company's critical accounting
         policies, see the Company's Annual Report on Form 10-K for 2004.



                                       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,
                                               ----------------------------------    -------------------------------
                                                    2005               2004              2005             2004
                                               ----------------    --------------    -------------    --------------
<S>                                            <C>                 <C>              <C>              <C>
         Revenue                                    100.0%              100.0%           100.0%           100.0%

         Gross profit                                20.0%               19.0%            19.9%            18.8%

         Selling, general and
            administrative expenses                  16.7%               16.2%            16.9%            16.2%

         Depreciation and amortization                0.5%                0.6%             0.5%             0.5%

         Other (income) expense, net                  0.0%                1.3%             0.0%             0.7%

         Interest expense                             0.7%                0.9%             0.7%             1.1%

         Income before provision for income
           taxes                                      2.1%                0.0%             1.8%             0.3%

         Net income                                   1.2%                0.0%             1.0%             0.2%
</TABLE>


         SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO THE SIX MONTHS
         ENDED JUNE 30, 2004

         Revenue for the six months ended June 30, 2005 increased by
         $10,823,000, or 11.3%, to $106,562,000 from $95,739,000 for the six
         months ended June 30, 2004. The increase was due to an increase in
         volume from new and existing customers. The revenue growth reflects the
         success of the Company's nationwide business development program and
         expansion into new markets with its existing customer base.

         Cost of revenue increased by $7,635,000, or 9.8%, to $85,414,000 for
         the six months ended June 30, 2005 from $77,779,000 for the six months
         ended June 30, 2004. Cost of revenue for the six months ended June 30,
         2005 represented 80.2% of revenues as compared to 81.2% for the same
         period in 2004. The improved margin was due primarily to increased
         route optimization, as new revenue provided higher density in existing
         route structures. The increase in margin was offset partially by a
         $384,000 increase in claims as compared to the same period in 2004.

         Selling, general and administrative expenses ("SG&A") increased by
         $2,433,000, or 15.7%, to $17,968,000 for the six months ended June 30,
         2005 from $15,535,000 for the same period in 2004. Stated as a
         percentage of revenue, SG&A was 16.9% as of June 30, 2005 and 16.2% as
         of June 30, 2004. The increase in SG&A was primarily due to a
         $1,622,000 increase in compensation expense as a result of increased
         business development staffing and higher incentive compensation and a
         $456,000 increase in rent expense as a result of additional properties
         leased in the first half of 2005 as compared to the same period last
         year. All other increases including travel and entertainment, repairs
         and maintenance, costs of employee benefits and professional and
         consulting fees totaled $1,050,000, partially offset by a decrease of
         $695,000 in bad debt expense, resulting primarily from more effective
         receivable management.

         Depreciation and amortization was $550,000 as of June 30, 2005 as
         compared to $494,000 for the same period in 2004. This increase
         resulted from higher capital expenditures in 2005 and in the latter
         part of 2004.



                                       13
<PAGE>

         The Company experienced $9,000 of other income for the six months ended
         June 30, 2005 compared with $612,000 of other expenses for the same
         period in 2004, an improvement of $621,000. The 2004 expense of
         $612,000 was due to the write-off of deferred financing costs and
         original issue discount related to the original Senior Debt which was
         restructured on April 14, 2004. Refer to the 2004 Form 10-K for further
         discussion.

         Interest expense decreased by $268,000 to $756,000 for the six months
         ended June 30, 2005 from $1,024,000 for the same period in 2004. This
         was primarily due to the debt restructuring in April 2004. See Note 4
         in Notes to Condensed Consolidated Financial Statements.

         As a result of the factors discussed above, income before provision for
         income taxes increased by $1,588,000 to $1,883,000 for the six months
         ended June 30, 2005 from $295,000 for the six months ended June 30,
         2004.

         Provision for income taxes increased by $711,000 to $829,000 for the
         six months ended June 30, 2005 as compared to $118,000 for the same
         period in 2004. This was due to the increase in income before provision
         for income taxes discussed above. The effective tax rate for the six
         months ended June 30, 2005 was 44% as compared to 40% as of June 30,
         2004. The increase was a result of higher state income taxes.

         Net income increased by $877,000 to $1,054,000 for the six months ended
         June 30, 2005 as compared to $177,000 for the same period in 2004. This
         was due to the factors discussed above.

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

         Revenue for the three months ended June 30, 2005 increased by
         $4,950,000, or 10.1%, to $54,207,000 from $49,257,000 for the three
         months ended June 30, 2004. The increase was due to an increase in
         volume from new and existing customers. The revenue growth reflects the
         success of the Company's nationwide business development program and
         expansion into new markets with its existing customer base.

         Cost of revenue increased by $3,473,000, or 8.7%, to $43,367,000 for
         the three months ended June 30, 2005 from $39,894,000 for the three
         months ended June 30, 2004. Cost of revenue for the three months ended
         June 30, 2005 represented 80.0% of revenue as compared to 81.0% for the
         same period in 2004. The decrease in cost of revenue as a percent of
         revenue was due primarily to increased route optimization, as new
         revenue provided higher density in existing route structures. The
         increase in margin was offset partially by a $206,000 increase in
         claims as compared to the same period in 2004.

         SG&A increased by $1,088,000, or 13.6%, to $9,088,000 for the three
         months ended June 30, 2005 from $8,000,000 for the same period in 2004.
         The increase in SG&A was primarily due to a $766,000 increase in
         compensation expense as a result of additional business development
         staffing and higher incentive compensation. All other increases,
         primarily for rent, travel and entertainment, consulting fees and cost
         of employee benefits totaled $912,000. The net increases were partially
         offset by a $590,000 reduction in bad debt expense, resulting primarily
         from more effective receivable management. Stated as a percentage of
         revenue, SG&A increased by 0.5% to 16.7% for the three months ended
         June 30, 2005 as compared to 16.2% for the same period in 2004.

         Depreciation and amortization increased by $3,000, or 1.1%, to $277,000
         for the three months ended June 30, 2005 from $274,000 for the same
         period last year.

         The Company experienced other income of $9,000 in the three months
         ended June 30, 2005 compared with other expenses of $623,000 for the
         same period in 2004, an improvement of $632,000. The 2004 other expense
         resulted primarily from the $628,000 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 in Notes to
         Condensed Consolidated Financial Statements.

                                       14
<PAGE>

         Interest expense decreased by $87,000 to $366,000 for the three months
         ended June 30, 2005 as compared to $453,000 for the same period last
         year primarily as a result of the April 14, 2004 debt restructuring.

         As a result of the factors discussed above, income before provision for
         income taxes increased by $1,105,000 to $1,118,000, for the three
         months ended June 30, 2005, as compared to $13,000 for the same period
         in 2004.

         Provision for income taxes increased by $487,000 to $492,000 for the
         three months ended June 30, 2005, as compared to $5,000 for the same
         period in 2004. This was due to the increase in income before provision
         for income taxes discussed above. The effective tax rate for the three
         months ended June 30, 2005 was 44% as compared to 40% as of June 30,
         2004. The increase was a result of higher state income taxes.

         Net income increased by $618,000 to $626,000 for the three months ended
         June 30, 2005 as compared to net income of $8,000 for the same period
         in 2004. This was due to the factors discussed above.

         LIQUIDITY AND CAPITAL RESOURCES

         At March 31, 2004, the Company was indebted to the Original Noteholders
         in the sum of $11.0 million pursuant to a subordinated note bearing
         interest at 12% per annum (see Senior Notes in Note 4). On April 14,
         2004, an agreement was reached between the Company, the Original
         Noteholders and the Investors as to the financial restructuring of the
         Senior Notes. The Original Noteholders agreed to convert a portion of
         the existing debt due from CD&L into equity and to modify the terms of
         the Senior Notes if the Investors purchased a portion of the Senior
         Notes and accepted similar modifications. The loan agreement that
         governed the Senior Notes was amended and restated to reflect the terms
         of the substituted Series A Convertible Notes and the Series B
         Convertible Notes, including the elimination of most financial
         covenants. At June 30, 2005, long-term debt included $4,000,000 of
         Series A Convertible Notes and $4,000,000 of Series B Convertible
         Notes. The principal amount of the Convertible Notes is due in a
         balloon payment at the maturity date of April 14, 2011. The Convertible
         Notes bear interest at a rate of 9% for the first two years of the
         term, 10.5% for the next two years and 12% for the final three years of
         the term, and interest is paid quarterly.

         The Company's working capital increased by $659,000 from $8,063,000 as
         of December 31, 2004 to $8,722,000 as of June 30, 2005. Cash and cash
         equivalents increased by $1,209,000 to $1,826,000 as of June 30, 2005.
         Cash of $3,183,000 was provided by operations, while $421,000 was used
         in net investing activities and $1,553,000 was used in net financing
         activities. Capital expenditures amounted to $443,000 and $211,000 for
         the six months ended June 30, 2005 and 2004, respectively.

         As of June 27, 2002, CD&L and Summit entered into an agreement
         establishing the Fleet Facility. The Fleet Facility was due to expire
         on June 27, 2005 but was extended through December 31, 2005. The
         Company is in negotiations for an extension or replacement of the Fleet
         Facility on a long-term basis. The Company believes the terms and
         conditions will be at least as favorable as the current facility. It
         provides CD&L with standby letters of credit, prime rate based loans at
         the bank's prime rate, as defined, plus 25 basis points (6.5% at June
         30, 2005) and LIBOR based loans at the bank's LIBOR, as defined plus
         225 basis points. Credit availability is based on eligible amounts of
         accounts receivable, as defined, up to a maximum amount of $15,000,000
         and is collateralized by substantially all of the assets, including
         certain cash balances, accounts receivable, equipment, leasehold
         improvements and general intangibles of the Company and its
         subsidiaries. During the six months ended June 30, 2005, the maximum
         borrowings outstanding under the Fleet Facility were approximately
         $4,786,000 and the outstanding borrowings as of June 30, 2005 were
         approximately $3,494,000. As of June 30, 2005, the Company had total
         cash on hand and borrowing availability of $6,848,000 under the Fleet
         Facility, after adjusting for restrictions related to outstanding
         standby letters of credit of $5,748,000 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 of June 30, 2005.

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

         The Company had an accumulated deficit of ($4,509,000) as of June 30,
         2005. On numerous occasions, the Company has had to amend and obtain
         waivers of the terms of its credit facilities and senior debt as a
         result of covenant violations or for other reasons. On April 14, 2004,
         the Company restructured its senior debt and related covenants. The
         restructuring included an agreement among the Company, its lenders and
         certain members of CD&L management and others which improved the
         Company's short-term liquidity and reduced interest expense. The
         restructuring eased the financial covenants to which the Company was
         subject. However, if the Company were to fail to meet such covenants in
         the future, there can be no assurances that the Company's lenders would
         agree to waive any future covenant violations, renegotiate and modify
         the terms of their loans, or further extend the maturity date, should
         it become necessary to do so. Further, there can be no assurances that
         the Company will be able to meet its revenue, cost or income
         projections, upon which the debt covenants are based.

         Management believes that cash flows from operations and its borrowing
         capacity are sufficient to support the Company's operations and general
         business and capital requirements through at least June 30, 2006. Such
         conclusions are predicated upon sufficient cash flows from operations
         and the continued availability of a revolving credit facility. The
         risks associated with cash flows from operations are mitigated by the
         Company's low gross profit margin. Unless extraordinary, decreases in
         revenue should be accompanied by corresponding decreases in costs,
         resulting in minimal impact to liquidity. The risks associated with the
         revolving credit facility are as discussed above.

         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, 2005, the Company's debt consisted of approximately
         $10,060,000 of fixed rate debt with a weighted average interest rate of
         8.59% and $3,494,000 of variable rate debt with a weighted average
         interest rate of 5.93%. The variable rate debt consists of borrowings
         of revolving line of credit debt at the bank's prime rate plus 25 basis
         points (6.5% at June 30, 2005). If interest rates on variable rate debt
         were to increase by 59 basis points (one-tenth of the weighted average
         interest rate at June 30, 2005), the net impact to the Company's
         results of operations and cash flows for the six months ended June 30,
         2005 would be a decrease of income before provision for income taxes
         and cash flows from operating activities of approximately $10,000.
         Maximum borrowings of revolving line of credit debt during the six
         months ended June 30, 2005 were $4,786,000.

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 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 4 - Submission of Matters to a Vote of Security Holders

         On June 1, 2005, 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 II
             Jon F. Hanson                8,348,704             95,812
             Michael Brooks               8,234,516             97,747
             Matthew J. Morahan           8,348,704             95,812


2. Approval of the Amended and
Restated 2002 Stock Option Plan
for Independent
Directors.

             Votes For:                   2,303,796
             Votes Against:                 378,664
             Abstentions:                     7,595
             Broker Non-Votes:            5,754,461


ITEM 6 - Exhibits

         (a)      Exhibits

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

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

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

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




                                       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 15, 2005                         CD&L, INC.




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



                                       19