SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

( X )ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JUNE 30, 1997
      

(    )TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM           
  TO                                

Commission File No. 0-16386

CANNON EXPRESS, INC.
(Exact name of registrant as specified in its charter)

Delaware                                71-0650141
(State  or other jurisdiction of     (I.R.S. Employer
incorporation or organization)      Identification No.)

1457  E. Robinson                         72764
P. O. Box 364                          (Zip Code)
Springdale, Arkansas
(Address of principal executive offices)

Registrant's telephone number, including Area Code:  (501) 751-9209

Securities Registered Pursuant to Section 12(b) of the Act:

None

Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value

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 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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K  Yes      No  X

Aggregate market value of voting stock held by non-affiliates of the
registrant at September 22, 1997: $5,921,820.

Number of shares of common stock outstanding at September 22, 1997:
Common Stock - 3,145,652

Documents incorporated by reference:  Company's Notice and Proxy Statement
for its annual meeting of stockholders to be held on Tuesday, November 18,
1997.


Part I

Item 1.  Business

Cannon Express, Inc. (the "Company" or "Registrant") is an irregular route,
truckload carrier with headquarters in Springdale, Arkansas, transporting a
wide range of general commodities in the United States pursuant to
nationwide operating authorities granted by the Department of
Transportation ("DOT"), and in Canada through operating authorities granted
by the Canadian provinces.  At June 30, 1997, the Company operated a fleet
of 908 tractors and 2,119 trailers, and employed 1,156 people, none of whom
is represented by  a collective bargaining agreement.

Marketing and Customers

The Company's marketing strategy is to be one of a select group of carriers
serving financially sound customers who provide shipments to and from
locations within the Company's operating area.  The Company's sales effort
is carried out primarily by its telemarketing staff consisting of
salespersons who solicit new customers and customer coordinators who
arrange shipments for existing customers.

The Company publishes its own freight rates instead of using rates
published for a group of carriers by freight rate publishing bureaus.  This
practice permits pricing that is responsive to changing market conditions
as well as to a particular customer's needs.  Most arrangements for
transportation are made in the form of contracts with customers. 

During the fiscal year ended June 30, 1997, Wal-Mart Stores, Inc. ("Wal-
Mart") accounted for 51.0% and International Paper, Inc. accounted for
15.8% of the Company's operating revenue.  During the fiscal years ended
June 30, 1996 and 1995, Wal-Mart accounted for 49.5% and 41.3%,
respectively, and International Paper accounted for 10.2% and 17.5%, 
respectively, of operating revenue.  The Company does not have long-term
contracts with its customers, and, accordingly, there is no assurance that
the current volume of business from these major customers will continue. 
Management believes that the sudden loss of a significant customer could
have a material adverse effect on revenue, equipment utilization and
operating efficiencies.

The principal types of freight transported by the Company include: retail
and wholesale goods primarily for discount merchandisers, paper goods,
automotive supplies and parts, and non-perishable food products.

Operations

A customer's initial contact with the Company is through one of the
Company's salespersons.  This initial contact will involve computerized
collection of information regarding the customer's financial condition and
its payment history together with information on its loads, including the
volume of freight to be delivered, the origins and destinations of
shipments, the schedule in which such shipments are to be made and any
special needs.  Once this information has been collected, the Company and
the shipper will negotiate and agree upon the shipment rates.

One or more of the Company's customer coordinators is then assigned to the
shipper's account.  Customer coordinators are assigned to a specific region
of the United States and are responsible for matching a shipper's load with
a truck located within the customer coordinator's assigned region.  The
customer coordinator then assigns a shipment to a dispatcher.

Dispatchers are responsible for conveying shipment information to assigned
drivers.  Dispatchers and drivers communicate with one another either by
telephone as the driver makes routine stops in transit, or, through the use
of a special credit card, by means of an inter-computer linkage between the
Company and a fuel billing network.  This linkage also enables the
dispatcher to monitor the progress of a particular shipment. At the
shipment's origin, the driver notifies the dispatcher when the shipment has
been loaded and then proceeds to the shipment's destination.  When the
shipment has reached its destination, the driver is assigned another
shipment by the dispatcher.

Once documents (such as driver's log, bill of lading, fuel tickets) have
been received by the Company, they are examined by the fuel and safety
departments and then by the billing department, which verifies shipment and
billing information previously entered into the computer by operations
personnel.  Computer-generated bills are typically sent to the customer on
the same day shipment documents are received.  The Company transmits
freight bills and shipment status information electronically through "EDI"
("Electronic Data Interchange") for certain customers.

Through the use of its computer system, complimentary software and inter-
computer linkage with a fuel billing network, the Company monitors and
coordinates routes and shipments.  This system also enables dispatchers and
customer coordinators to instantaneously send and receive shipment
information.  The computer system is also used for payroll, billing and
bookkeeping.  The complimentary software used with the computer system for
the above purpose was designed and implemented by Company management.

Drivers and Other Employees

As of June 30, 1997,  the Company employed 924 drivers and driver trainees. 
All drivers are selected in accordance with Company guidelines relating
primarily to safety record, driving experience and personal evaluation. 
The Company requires all drivers to meet experience requirements or to
satisfactorily complete a training program, which pairs a trainee with one
of the Company's proven driver trainers. Trainees sharpen the skills
necessary for success and are evaluated daily by their trainer.  Once
selected, a driver or driver trainee is instructed in all phases of 
Company  policies and operations as well as safety techniques and fuel
efficient operation of the equipment.

The Company's drivers are compensated on the basis of miles driven,
loading, unloading and delivery stops, plus bonuses.  Base pay per mile
increases with a driver's completion of a specified number of miles safely
driven.  During fiscal 1997,  drivers who met Company performance and
safety standards  received an additional five cents per mile in
compensation paid quarterly in the form of a bonus. Driver bonuses earned
during the fiscal year ended June 30, 1997,  approximated $2,576,000. 
Effective July 1, 1997, the Company increased its  mileage pay scale by a
minimum of 3 cents per mile and implemented a graduated scale for newly
hired drivers based on their past experience.  Those drivers who qualify
will receive a 2 cent per mile performance bonus paid quarterly.
  
Like other truckload carriers, the Company experiences significant driver
turnover.  The Company has also experienced shortages of qualified drivers
from time to time.  Management anticipates that competition for qualified
drivers will intensify.  The Company seeks to attract drivers by
advertising job openings, encouraging referrals from existing employees and
providing a training program for applicants whose experience does not meet
the Company's minimum requirements, however,  no assurance can be made that
the Company will not experience a shortage of drivers in the future.

As of June 30, 1997, the Company employed:
                                                1997    1996
     Drivers and Driver Trainees                 924     941
     Management                                   15      15
     Operations, Marketing, and Administration   139     125
     Maintenance and Repair                       78      79
     Total                                     1,156   1,160

Management considers relations with its employees to be satisfactory and
has not experienced collective bargaining efforts in the past, nor does it
anticipate any collective bargaining by employees in the future. The
Company has a 401(K) plan for its drivers and other employees. Company
contributions, if any, are determined annually by its Board of Directors.

Tractors and Trailers

At  June 30, 1997, the fleet consisted of 908 tractors and 2,119 trailers,
compared to 909 tractors and 1,939 trailers at June 30, 1996.  As of June
30, 1997, total new tractors  purchased or leased for the fiscal year were
200 with 201 older model tractors being traded in or sold.  In addition, 
the Company added 300 new trailers and sold 120 trailers for a net addition
to its fleet of 180 trailers during the fiscal year ended June 30, 1997.
Tractors are acquired primarily with driver comfort, fuel efficiency and
overall economy in mind.  All tractors operated by the Company are
conventionals, rather than cab-overs.  Management believes that this type
of tractor will provide the driver greater comfort and will require less
overall maintenance because of the tractor's easier ride on the road.  As
of June 30, 1997, substantially all of the Company's tractors were
manufactured by International, while trailers were manufactured by various
trailer manufacturers.  The Company has negotiated extended warranties on
many of its tractors and intends to trade-in  such tractors on
approximately  a four-year cycle.  Manufacturers of tractors are required
to certify to the Company that new tractors meet federal emissions
standards.  All trailers in the fleet measure 48 or 53  feet in length by
102 inches in width. 

The Company has a comprehensive preventive maintenance program for its
tractors and trailers.  Inspections and different levels of repair or
maintenance are performed at regular intervals.  At each inspection,
diagnostic tests are performed to ensure proper operation of equipment.

The following table shows the type and age of equipment operated by the
Company at June 30, 1997:

            MODEL       OVER-the-ROAD   48-FOOT      53-FOOT
             YEAR        TRACTORS       TRAILERS    TRAILERS
            1997            225             -          300
            1996            327           299            -
            1995            345           688            -
            1994             -            200            -
            1993             -            253            -
            1992             -            194            -
            1991             1             49            -
            1990             1             93            -
            1989 thru 1983   9             43            -
                           908          1,819          300

Fuel

The Company, and the motor carrier industry as a whole, is dependent upon
the availability and cost of diesel fuel.  Both the availability and the
cost of diesel fuel are influenced by economic and political events not
within the Company's control.  The Company does not presently participate
in any program to insure price stability. Fuel costs during fiscal 1997
were significantly higher than during fiscal year 1996. Historically, most
increases have been passed through to the Company's customers, either in
the form of fuel surcharges, or if deemed permanent in nature, through
increased rates.  Future shortages or significant increased costs which
could not be passed through to its customers could have a material adverse
impact on the Company's profitability.

Governmental Regulation

The Company is a motor common and contract carrier previously regulated by
both the Interstate Commerce Commission ("ICC") and various state agencies.
Although the "ICC Termination Act of 1995"  effectively eliminated the ICC
as of January 1, 1996, most functions of the ICC were transferred to the
Department of Transportation ("DOT"). These regulatory authorities have
broad powers generally governing matters such as authority to engage in
motor carrier operations, rates and charges, accounting systems, certain
mergers, consolidations and acquisitions and periodic financial reporting.
In addition, the Company's Canadian business activities are subject to
similar requirements imposed by  provincial and Canadian regulations.

The Company, like other motor carriers, is subject to certain safety
requirements governing interstate operations prescribed by the United
States Department of Transportation ("DOT") and by Canadian provincial
authorities.  In addition, vehicle weight and dimensions are subject to
federal, state, and provincial regulations.  Management believes that the
Company is in compliance in all material respects with applicable
regulatory requirements relating to its operations.  The failure of the
Company to comply with regulations of the  DOT, state or provincial
agencies could result in substantial fines or revocation of operating
authorities.  Federal, state and local environmental laws and regulations
impose requirements relating to, among other things, contingency planning
for spills of petroleum products, disposal of waste oil and maintenance and
testing of underground storage tanks.  Management believes that future
compliance with such laws and regulations will not have a material effect
upon the Company's capital expenditures, earnings, or competitive position. 

Competition

The trucking industry as a whole is highly competitive.  The Company
competes primarily with other irregular route, truckload carriers. To a
lesser degree, railroads, less-than-truckload carriers and contract
carriers also provide competition.  Competition from any one of these
sources, however, may be significant in one geographic area or at any one
time.  Competition for freight is based primarily on service and efficiency
and, to a lesser degree, upon freight rates.  A number of other irregular
route, truckload carriers have substantially greater financial resources,
own more equipment or carry a larger volume of freight than the Company.

Safety and Insurance

The Company is self insured up to certain limits for workers' compensation,
cargo loss and damage, and certain property damage and liability claims. 
Provision has been made for the estimated liabilities for such claims as
incurred, including liabilities for claims incurred but not reported.  The
amount of actual losses incurred could differ materially from the estimates
reflected in these financial statements.

The Company maintains comprehensive liability insurance coverage up to $10
million per claim. The Company also maintains $250,000 of cargo loss and
damage insurance per claim and collision coverage on owned or leased
equipment.  In addition, with the assistance of its third-party
administrator, workers' compensation claims are self-insured up to
$300,000. Management believes that current insurance coverage adequately
protects the Company from liability arising from normal operations. 
Although coverage is currently available from multiple sources, a material
decrease in availability, or a substantial increase in costs, could have a
material adverse effect on the Company's profitability.

Item 2.  Properties

The Company's executive offices and its maintenance facility are located at
1457 & 1457A E. Robinson, respectively, in Springdale, Arkansas.

The office facility is located on a 3.6 acre tract of land.  It is leased
from Dean G. Cannon and Rose Marie Cannon, President and Secretary/Treasurer
of the Company, respectively.

The Company's maintenance facility, purchased in 1987, is located on a 17-
acre tract of land adjacent to the office facility.  The 13,000 square foot
facility contains 7 drive through bays and other improvements, and is used
by the Company for equipment maintenance, repairs, and refueling.

The Company owns approximately 31 acres of  land adjacent to the above
locations to be used for future expansion.

Item 3.  Legal Proceedings

The Company is a party to routine litigation incidental to its business,
primarily involving claims for personal injuries and property damage
incurred in the transportation of freight.  In May of 1996, a Company
tractor and trailer were involved in an unavoidable fatal traffic accident
which was the result of a heart attack suffered by the Company's driver who
also died in the accident. The Company is a defendant in a lawsuit
(originally three lawsuits, but now a combined action) in which plaintiffs
seek an aggregate of $20,000,000 related to this accident.  Jury selection
is scheduled for June 1998, with a trial date to be set at that time.The
Company is also aware of other parties who may have claims related to this
accident.  

The Company believes it has a meritorious defense in this action and
expects to vigorously defend its interests, however, an adverse outcome in
this action could be expected to have a significant negative impact on the
Company's profitability and liquidity.  The Company maintained liability
insurance with a limit of $1 million per occurrence until July 1, 1996.

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

None.


Part II

Item 5.  Market for Registrant's Common Equity and Related Stockholder
Matters

(a)  Prior to March 31, 1996 the Company's common stock was traded on the
     NASDAQ National Market System under the symbols CANXA and CANXB. 
     Subsequent to a third quarter stock recapitalization plan, the
     Company's two classes of common stock were reclassified into a new,
     single class of common  stock traded on the NASDAQ National Market
     System under the symbol CANX.

     The range of high and low sales prices for the last eight fiscal
     quarters is as follows:

                              CLASS A COMMON STOCK     CLASS B COMMON STOCK
                                HIGH      LOW             HIGH      LOW
     YEAR ENDED JUNE 30, 1996:

     First Quarter               $14      $11  1/2      $13 3/4  $  7 3/8
     Second Quarter               12 1/4    8  3/4        9 3/4     6 45/64  
     Third Quarter                10 1/4    8  3/4        7 7/8     6 1/4 

                                 COMMON STOCK     
                                HIGH      LOW

     Fourth Quarter              $11 1/2  $ 8  3/4

     YEAR ENDED JUNE 30, 1997:

     First Quarter               $11      $ 9  7/8
     Second Quarter               10        8 
     Third Quarter                 8  3/4   6  3/4                  
     Fourth Quarter                7  1/4   5  1/2


(b)  The approximate number of holders of common stock as of September 15,
     1997 was 1600.

(c)  The Company has not paid any dividends on its Common Stock.  The
     present policy of the Company is to retain cash earnings to provide
     funds for operations and expansion of the Company's business.

Item 6.  Selected Financial Data

The following table provides a summary of selected financial data for
Cannon Express, Inc.

FISCAL YEAR ENDED JUNE 30,
                              1997      1996      1995     1994      1993
                                 (in thousands except per share data)

Operating Revenue          $106,136   $89,991   $79,030   $59,177   $43,256

Income before cumulative
  effect of change
  in accounting
  principle(1)                1,432     2,159     6,016     3,808     2,028

Pro forma income
  before cumulative
  effect of change
  in accounting
  principle(1)                1,432     2,159     6,016     3,808     2,028

Earnings per share(2):

Income before
  cumulative effect
  of change in
  accounting principle(1)       .44       .67      1.84      1.17       .64

Pro forma income
before cumulative
effect of change in
accounting principle(1)         .44       .67      1.84      1.17       .64

Total assets                $81,188   $84,358   $77,263   $44,931   $40,743

Long term debt,
 less current portion       $35,393   $43,964   $35,353   $12,954   $17,759

(1)  Effective June 30, 1994, the Company adopted FAS Statement No. 115,
     Accounting for Certain Investments in Debt and Equity Securities, and
     classified certain marketable equity securities as "available-for-
     sale" securities.  This change resulted in increased earnings of
     $426,244, ($.10 per share), included in fiscal 1994 net income as the
     cumulative effect of a change in accounting principle.  As specified
     by FAS Statement No. 115, no pro forma effect is presented for this
     change.

(2)  Earnings per share have been restated to give effect to the stock
     recapitalizations effected on January 26, 1993 and April 10, 1996.


Item 7.  Management's Discussion and Analysis of Financial Condition and
Results of Operation

The following table sets forth the percentage relationship of certain
revenue and expense items for the fiscal years indicated.

                                              Percentages of
                                            Operating Revenue
                                            Year Ended June 30,
                                         1997      1996      1995
Operating revenue                       100.0%    100.0%    100.0%

Operating expenses and costs:
 Salaries, wages and fringe benefits     34.0%     34.4%     31.5%
 Operating supplies and expenses         31.0      29.5      28.1
 Operating taxes and licenses             5.9       6.3       5.7
 Insurance and claims                     5.3       5.6       3.9
 Depreciation and amortization           11.3      11.8       9.3
 Rents and purchased transportation       6.0       4.2       5.0
 Other                                    1.6       1.7       1.6
   Total operating expenses              95.1      93.5      85.1
Operating income                          4.9       6.5      14.9
Other income (expense):
 Interest and dividend income             0.3       0.1       0.2
 Gain on marketable securities            0.0       0.1       0.1
 Interest expense                        (3.6)     (4.1)     (2.8)
Income before income taxes                1.6       3.9      12.4
Income taxes                              0.3       1.5       4.8
Net income                                1.3%      2.4%      7.6%

RESULTS OF OPERATIONS:

Fiscal year ended June 30, 1997 compared to Fiscal year ended June 30, 1996

Operating revenue for fiscal 1997 increased 17.9% or $16,145,194 to
$106,136,268.  The increase was primarily attributable to the increased
number of shipments transported by the Company's larger fleet of tractors
and trailers.  The Company operated an average of 906 tractors during
fiscal 1997, compared to an average of 815 tractors in fiscal 1996.
Additionally, the Company's revenue from intermodal activities increased to
$4,638,665 from $2,433,681, or 90.6%, for fiscal 1997.  The Company's
intermodal activities generally involve interline agreements between
Company trucks and railroads.  The Company plans to continue to expand its
intermodal operations in certain areas where pickup and delivery times are
not critical.  The Company also experienced a shortage of drivers during
the period.  As a result, the increase in operating costs related to the
fleet expansion was not offset by increased revenue. 

Salaries, wages and fringe benefits increased 16.8% or $5,181,575 to
$36,107,009 in fiscal 1997. This increase is attributable to additional
wages paid to drivers and support personnel due to the Company's expanded
fleet.

Operating supplies and expenses increased 23.8% or $6,314,569 to
$32,850,698 in fiscal 1997,  also a result of the Company's expanded fleet. 
Fuel costs for the fiscal year ended June 30, 1997 averaged 7 cents per
gallon higher than in the comparable period of fiscal 1996, adding
approximately $1,285,000 in additional expense for the fleet during the 12
month period.  Maintenance costs increased 19.0%, approximating the
percentage increase in operating revenue. 

Operating taxes and licenses increased 11.0% or $625,361 to $6,303,495 in
fiscal 1997 due to the Company's larger average fleet.

Insurance and claims increased 11.5% or $584,310 to $5,652,229 in fiscal
1997 due to increased costs associated with the Company's larger fleet of
revenue equipment.

Depreciation and amortization increased 14.7% or $1,531,759 to $11,944,877
in fiscal 1997. This increase is  due to new equipment additions.

Rents and purchased transportation increased 68.3% or $2,580,632 to
$6,359,400 in fiscal 1997 due primarily to increased intermodal activities.

The Company's operating ratio increased to 95.1% for fiscal 1997 from 93.3%
for the prior year, reflecting a decline of 1.8% during the period. 

Interest expense increased 2.9% or $108,616 in fiscal 1997 due to the
financing of new revenue equipment associated with the expansion of the
Company's fleet in 1997 and 1996.

The Company's effective income tax rate decreased to 14.8% of income before
income taxes in fiscal 1997 as a result of certain equipment leasing
transactions consummated during the year.  The income tax consequences of
these transactions have been recorded in the financial statements in
reliance on opinion of tax counsel.

Net income decreased 33.7% or $727,077 in fiscal 1997 to $1,431,861  or
$.44 per share from $2,158,938 or $.67 per share in fiscal 1996.

Fiscal year ended June 30, 1996 compared to Fiscal year ended June 30, 1995

Operating revenue for fiscal 1996 increased 13.9% or $10,960,857 to
$89,991,074.  The increase was primarily attributable to the increased
number of shipments transported by the Company's larger fleet of tractors
and trailers.  The Company operated an average of 815 tractors during
fiscal 1996, compared to an average of 630 tractors in fiscal 1995.
Average revenue per mile decreased to $1.08 in fiscal 1996 from $1.18 in
the comparable period of fiscal 1995. The decline in revenue per mile can
be attributed to excess capacity in the truckload industry, which led to
downward pressure on rates per mile. The Company also experienced a
shortage of drivers during the period.  As a result, the increase in
operating costs related to the fleet expansion was not offset by increased
revenue. Continuing excess capacity in the market could have an adverse
effect on the Company's profitability.

Salaries, wages and fringe benefits increased 24.2% or $6,020,148 to
$30,925,434 in fiscal 1996. This increase is attributable to additional
wages paid to drivers and support personnel due to the Company's expanded
fleet.

Operating supplies and expenses increased 19.4% or $4,318,231 to
$26,536,129 in fiscal 1996,  also a result of the Company's expanded fleet. 
The price paid for fuel was relatively stable during fiscal 1995 and for
the first two quarters of fiscal 1996. The national average of diesel fuel
rose from $1.13 on January 1, 1996 to a peak of $1.31 on April 16, 1996. 
Maintenance costs decreased as a percentage of revenue due to decreased
maintenance costs of new equipment.

Operating taxes and licenses increased 25.8% or $1,163,031 to $5,678,134 in
fiscal 1996 due to the timing of new equipment additions during the fiscal
period.

Insurance and claims increased 65.6% or $2,007,889 to $5,067,919 in fiscal
1996 due to increased costs associated with the Company's larger fleet of
revenue equipment.

Depreciation and amortization increased 41.0% or $3,028,100 to $10,413,118
in fiscal 1996. This increase is  due to new equipment additions.

Rents and purchased transportation decreased 3.8% or $150,616 to $3,778,768
in fiscal 1996 due primarily to a proportionate decrease in revenue from
intermodal activities.

The Company's operating ratio increased to 93.4% for fiscal 1996 from 85.2%
for the prior year, reflecting a decline of 8.2% during the period.  The
increase was primarily attributable to: 1- additional fixed costs
associated with adding new equipment, 2 - competition for freight resulted
in decreased margins and; and 3 - a shortage of qualified drivers led to
idle equipment.

Interest expense increased 68.4% or $1,497,128 in fiscal 1996 due to the
financing of new revenue equipment associated with the expansion of the
Company's fleet in 1996 and 1995.

Net income decreased 64.1% or $3,857,204 in fiscal 1996 to $2,158,938  or
$.67 per share from $6,016,142 or $1.84 per share in fiscal 1995.

Liquidity and Capital Resources

Cash flows from Operations - Operating activities provided cash of $19.5
million and $10.7 million in fiscal 1997 and 1996, respectively.  Net cash
flows from operations in fiscal 1997 were primarily the result of $1.4
million provided from results of operations, $11.9 million in depreciation,
a $4.6 million decrease in accounts receivable and other assets, and  a
$1.6 million increase in accounts payable and other liabilities.

Cash flows from Investing Activities - Investing activities used net cash
of $15.5 million and $8.1 million in fiscal 1997and 1996, respectively. 
Purchases of new equipment totaling $21.0 million was offset by $5.5
million in equipment and marketable security sales for 1997.  Purchases of
new equipment and marketable securities totaling $15.9 million was offset
by $7.8 million in equipment and marketable security sales for 1996. 

Cash flows from Financing Activities - Financing activities used net cash
of $4.2 and $10.7 million in fiscal 1997 and 1996, respectively.  In fiscal
1996, the stock recapitalization plan required $11.2 million.

Working capital needs have been met primarily from cash generated from
operations.  During the fiscal year ended June 30, 1997, cash provided by
operating activities was $19,546,134, up from $10,650,390 for the prior
fiscal year ended June 30, 1996. The current ratio declined from 1.08 at
June 30, 1996 to 0.67 at June 30, 1997. Working capital decreased by $10.1
million to a deficit of $8.6 million at June 30, 1997 from a surplus of
$1.5 million at June 30, 1996.  The deficit at June 30, 1997 was due to the
company's decision to purchase equipment for cash in the quarter ended
December 31, 1996.  The Company has commitments from various lenders to
finance these acquisitions in the future if it is determined that the
Company has the need for additional working capital.  Management has
deviated from its past policy of maintaining large cash balances in an
effort to reduce interest expense.  Management believes that it is unlikely
that the cost and availability of financing will be adversely affected by
this working capital deficit in the near future. 

Management of the Company intends, in the long-term, to continue to grow,
through expansion of its fleet, increased  intermodal activities, and
through brokerage of freight.  At June 30, 1997, the Company did not have
any agreements to purchase trucks or trailers, although it anticipates that
its 1995 model trucks  and some older trailers may be traded in during
fiscal 1998.  Management believes that revenue generated from expanded
operations will be sufficent to amortize obligations related to such
expansion.  However, to the extent that such revenue is insufficient for
this purpose, the Company may be required to rely on additional borrowings
or equity offerings to meet its working capital needs.

Inflation

Inflation continues to have a minimal impact on operations.  

Seasonality

In the trucking industry generally, results of operations show a seasonal
pattern because customers reduce shipments during the winter.  The
Company's operating efficiency historically decreases during the winter
months due to increased maintenance costs, reduced fuel efficiency, detours
and delays for weather.

Item 8.  Financial Statements and Supplementary Data

The response to this Item is presented in a separate section of this
report.

Item 9.  Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure

None.


Part III

Item 10.  Directors and Executive Officers of Registrant

Certain information about directors and executive officers of the Company
is set forth below:

     Name                                            Age                    
                     Position
     Dean G. Cannon      56        President and Chairman of the Board
     Rose Marie Cannon   56        Secretary, Treasurer and Director
     Larry L. Patrick    52        Vice President
     Ted W. Easley       57        Director of Operations
     Roy E. Stanley      53        Director
     Uvalde R. Lindsey   57        Director
     Alice L. Walton     47        Director

Dean G. Cannon has been the President and a Director of Cannon Express
Corp., the wholly-owned operating subsidiary of the Company, from 1981 to
the present and has served as President and as Director of the Company
since its inception.  Dean G. Cannon is the husband of Rose Marie Cannon.

Rose Marie Cannon has been the Secretary, Treasurer and a Director of
Cannon Express Corp., from 1981 to the present and has served as Secretary,
Treasurer and Director of the Company since its inception.  Rose Marie
Cannon is the wife of Dean G. Cannon.

Larry L. Patrick has been Vice-President of Cannon Express Corp. from 1991
to the present.  Prior to his employment with Cannon Express Corp., Mr.
Patrick was employed by Wal-Mart Stores, Inc. in Bentonville, Arkansas.

Ted W. Easley has been the Director of Operations of Cannon Express Corp.
since 1982.  Prior to his employment with Cannon Express Corp., Mr. Easley
was a co-owner of Scheduled Truckways in Rogers, Arkansas.

Roy E. Stanley holds Bachelor of Science and Master of Arts degrees from
Memphis State University and received the degree of Juris Doctor, with
honors, in 1978 from the University of Arkansas School of Law at
Fayetteville.  After engaging in the private practice of law in Springdale,
Arkansas for sixteen years, in 1994 Mr. Stanley became president of Lindsey
Management Company, Inc., a real estate management company with its main
offices in Fayetteville, Arkansas.

Uvalde R. Lindsey is an economic development consultant and Director of the
Northwest Arkansas Council, a regional organization dedicated to the
economic enhancement of Northwest Arkansas.  After graduating from the
University of Arkansas, Mr. Lindsey owned and operated a chain of
automotive parts stores in Arkansas, Missouri and Oklahoma.  After selling
his businesses in 1983, Mr. Lindsey  served as Budget Officer to the
Governor of the State of Arkansas and as Executive Director of the
Northwest Arkansas Economic Development District.

Alice L.Walton is Chairman and general partner of Llama Company,  a
nationally-recognized investment banking firm established in 1988. She
previously served as Vice Chairman and head of all investment-related
activities for the Arvest Bank Group in addition to managing bank and trust
investments.  Ms. Walton has a B.A. in Economics and Finance from Trinity
University in San Antonio, Texas and has also completed graduate work at
Tulane University Business School in New Orleans, Louisiana.  In addition,
she has received an Honorary Doctorate of Business Administration from
Southwest Baptist University in Bolivar, Missouri, an Honorary Doctorate
from The Philippine Women's University, and an Honorary Doctorate of Human
Letters from Audrey Cohen College.  She has been active on the Board of the
University of Arkansas for Medical Sciences at Little Rock, the Board of
Advisors for the University of Arkansas Graduate School of Business at
Fayetteville,  Arkansas, served the State of Arkansas on the Governor's
Aerospace Task Force in 1992, and was an international judge for Students
in Free Enterprise.  Ms. Walton currently serves on the Pace Industries
Board of Directors, the Advisory Board for the Arkansas Community
Foundation, the Arkansas State University-Beebe Charitable Foundation Board
of Trustees, the Asia Society Board of Trustees and Finance, Budget and
Investment Committee, Northwest Arkansas Big Brothers/Big Sisters Advisory
Board, and serves as Chairman-Emeritus for the Northwest Arkansas Council.

Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of a registered class
of the Company's equity  securities, to file with the Securities and
Exchange Commission reports of ownership and changes in ownership of common
stock and other equity securities of the Company.  Officers, directors and
greater than 10% shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.

Based solely upon a review of the copies of such reports furnished to the
Company, or written representations from certain reporting persons, the
Company believes that, during the 1997 fiscal year, all filing requirements
were complied with as they apply to its officers, directors and greater
than 10% beneficial owners, with the exception of Mr. Roy Stanley, who
failed to timely file one report covering an option grant transaction which
occurred in March, 1997.

Item 11.  Executive Compensation

This item is incorporated by reference from the Company's Notice and Proxy
Statement for its annual meeting of stockholders to be held on Tuesday,
November 18, 1997.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

This item is incorporated by reference from the Company's Notice and Proxy
Statement for its annual meeting of stockholders to be held on Tuesday,
November 18, 1997.

Item 13.  Certain Relationships and Related Transactions

This item is incorporated by reference from the Company's Notice and Proxy
Statement for its annual meeting of stockholders to be held on Tuesday,
November 18, 1997.


Part IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)  (1)  and
     (2)  The response to this portion of Item 14 is submitted as a
          separate section of this report.
     (3)  The exhibits as listed in the Exhibit Index, are submitted as
          a separate section of this report.  In accordance with
          SEC Rules, the following is a list of all Compensatory
                 Plans or Arrangements of the Company:
                    Cannon Express 401(k)
                    Cannon Express, Inc. Incentive Stock Option Plan

(b)  No reports on Form 8-K were filed during the year ended June 30, 1997.

(c)  See Item 14(a)(3) above.

(d)  The response to this portion of Item 14 is submitted as a separate
     section of this report.

INDEX TO EXHIBITS
3.(a)     Certificate of Incorporation(1)
3.(b)     Certificate of Amendment of Certificate of Incorporation(1)
3.(c)     Bylaws of the Company(1)
3.(d)     Amended Bylaws(1)
10.(a)    Lease between the Company and Dean G. Cannon and Rose Marie Cannon(2)
10.(b)    Incentive Stock Option Plan(2)

(1)  Incorporated by reference from the Registrant's Registration Statement
     on Form S-18, dated February 26, 1987.
(2)  Incorporated by reference from Registrant's Annual Report on Form 10-K
     for the fiscal year ended June 30, 1988.  


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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
this 26th day of September, 1997.

                                   Cannon Express, Inc.

                                   By:  /s/  Dean G. Cannon                 
                                        Dean G. Cannon,
                                        Chairman, Chief Executive Officer
                                        (Principal Executive Officer and
                                        Chief Accounting Officer)


Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


By:  /s/ Rose Marie Cannon                   By:     /s/ Roy E. Stanley    
     Rose Marie Cannon                               Roy E. Stanley
     Director, Secretary and Treasurer               Director


By:  /s/ Uvalde R. Lindsey                   By:     /s/ Alice L. Walton   
     Uvalde R. Lindsey                               Alice L. Walton
     Director                                        Director



FORM 10-K_ITEM 8, ITEM 14(a)(1) AND (2)
CANNON EXPRESS, INC., AND SUBSIDIARIES
LIST OF FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES


The following consolidated financial statements of Cannon Express, Inc.,
and Subsidiaries are included in Item 8:

     Independent Accountants' Report

     Consolidated Balance Sheets as of June 30, 1997 and 1996.

     Consolidated Statements of Income for the years ended June 30, 1997,
     1996 and 1995.

     Consolidated Statements of Changes in Stockholders' Equity for the
     years ended June 30, 1997, 1996 and   1995.

     Consolidated Statements of Cash Flows for the years ended June 30,
     1997, 1996 and 1995.

     Notes to Consolidated Financial Statements_June 30, 1997.

The following consolidated financial statement schedule of Cannon Express,
Inc., and Subsidiaries is included in Item 14(d):

     Independent Accountants' Report

     Schedule II Valuation and Qualifying Accounts

              
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore
have been omitted.


Independent Accountants' Report


Board of Directors and Stockholders
Cannon Express, Inc. and Subsidiaries
Springdale, Arkansas

We have  audited the accompanying consolidated balance sheets of CANNON
EXPRESS, INC. AND SUBSIDIARIES  as of June 30, 1997 and 1996, and  the
related consolidated statements of income, changes in stockholders' equity,
and cash flows for each of  the three years in the period ended June 30,
1997.  These financial statements are the responsibility of the Companies'
management.  Our  responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our  audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the  accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that our  audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of  CANNON
EXPRESS, INC. AND SUBSIDIARIES as of June 30, 1997 and 1996, and the
results of its operations and its cash flows for each of the three years in
the period ended June 30, 1997, in conformity with generally accepted
accounting principles.

                                                                            
BAIRD, KURTZ & DOBSON

Fayetteville, Arkansas
August 20, 1997



Cannon Express, Inc. and Subsidiaries

Consolidated Balance Sheets



                                                    June 30          June 30
                                                      1997             1996
        

Assets
Current assets:
  Cash and cash equivalents                        $3,995,626      $4,169,919
  Receivables, less allowance for doubtful
  accounts (1997--$183,411; 1996--$171,175):
     Trade                                          9,845,402      14,103,923
     Other                                            158,839         227,289
  Prepaid expenses and supplies                     1,217,155       1,470,940
  Deferred income taxes                             1,793,000       1,237,000
Total current assets                               17,010,022      21,209,071

Property and equipment:
   Land, buildings and improvements                 1,176,563       1,148,563
   Revenue equipment                               82,802,562      74,450,678
   Service, office and other equipment              2,483,375       2,290,494
                                                   86,462,500      77,889,735
   Less allowance for depreciation                 26,085,500      19,662,206
                                                   60,377,000      58,227,529

Other assets:
   Receivable from stockholders                        23,406          23,406
   Restricted cash                                  2,210,026         770,026
   Marketable securities                              831,797       3,188,628
   Other                                              735,721         939,764
                                                    3,800,950       4,921,824


                                                  $81,187,972     $84,358,424



See accompanying notes.



                                                                         
                                                   June 30          June 30
                                                     1997             1996  
                                                                            
                        
Liabilities and Stockholders' Equity
Current liabilities:
   Trade accounts payable                         $ 1,043,333    $  1,120,828
   Accrued expenses:
     Insurance reserves                             3,489,814       2,553,205
     Other                                          2,167,473       2,141,206
   Federal and state income taxes payable           2,167,879       1,596,621
   Current portion of long-term debt               16,696,510      12,282,068
Total current liabilities                          25,565,009      19,693,928

Long-term debt, less current portion               35,393,134      43,963,848
Deferred income taxes                               3,799,000       4,171,000
Other liabilities                                     183,508         283,719

Stockholders' equity:
   Common stock: $.01 par value; authorized
     10,000,000 shares; issued 3,205,777
     shares in 1997 and 1996                           32,058          32,058
   Additional paid-in capital                       3,542,356       3,542,356
   Retained earnings                               13,382,427      11,950,566
   Unrealized appreciation (depreciation)
    on marketable securities, net of income
    taxes (credit) of $(318,802) and $567,694
    in 1997 and 1996,  respectively                  (509,256)        906,836
                                                   16,447,585      16,431,816
   Less treasury stock, at cost (60,125 shares
    in 1997 and 58,125 shares in 1996)                200,264         185,887
                                                   16,247,321      16,245,929

                                                  $81,187,972     $84,358,424

Cannon Express, Inc. and Subsidiaries

Consolidated Statements of Income
                                                                           
                                                   Years ended June 30
                                             1997          1996         1995
Operating revenue                       $106,136,268  $89,991,074  $79,030,217
Operating expenses and costs:
  Salaries, wages and fringe benefits     36,107,009   30,925,434   24,905,286
  Operating supplies and expenses         32,850,698   26,536,129   22,217,898
  Operating taxes and licenses             6,303,495    5,678,134    4,515,103
  Insurance and claims                     5,652,229    5,067,919    3,060,030
  Depreciation and amortization           11,944,877   10,413,118    7,385,018
  Rents and purchased transportation       6,359,400    3,778,768    3,929,384
  Other                                    1,695,537    1,522,439    1,308,294
                                         100,913,245   83,921,941   67,321,013

Operating income                           5,223,023    6,069,133   11,709,204

Other income (expense):
  Interest expense                        (3,793,219)  (3,684,603)  (2,187,475)
  Interest and dividend income               290,495      500,439      166,028
  Gain (loss) on marketable
    equity securities                        (40,438)     625,969       94,385
                                          (3,543,162)  (2,558,195)  (1,927,062)

Income before income taxes                 1,679,861    3,510,938    9,782,142
Federal and state income taxes:                                             
  Current                                    289,000    2,268,000    4,278,816
  Deferred (Credit)                          (41,000)    (916,000)    (512,816)
                                             248,000    1,352,000    3,766,000

Net income                               $ 1,431,861  $ 2,158,938  $ 6,016,142

Earnings per share:
  Net income per share                        $ 0.44       $ 0.67       $ 1.84
  Average shares and share
    equivalents outstanding                3,233,063    3,246,397    3,269,183


See accompanying notes.



Cannon Express, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders' Equity

                                                   Unrealized Appreciation
                                    Additional         (Depreciation)
                    Common Stock     Paid-In   Retained On Marketable  Treasury
                  Class A  Class B   Capital   Earnings   Securities     Stock

Balances at
 July 1, 1994     $22,145  $22,145 $3,511,376 $15,164,892  $(426,244) $(371,775)
                             
Net income              -        -          -   6,016,142          -          -
Unrealized appreciation on
 marketable securities  -        -          -           -  1,447,849          -
Realized gain on marketable
 securities             -        -          -           -    (94,385)         -
Stock issued:
 Exercise of options   50      100     30,980           -          -          -
Balances at
 June 30,1995      22,195   22,245  3,542,356  21,181,034    927,220   (371,775)

Net income              -        -          -   2,158,938          -          -
Unrealized appreciation on
 marketable securities  -        -          -           -    605,585          -
Realized gain on marketable
 securities             -        -          -           -   (625,969)         -
Stock recapitalization
 plan               9,863  (22,245)         - (11,389,406)         -    185,888
Balances at
 June 30, 1996     32,058        0  3,542,356  11,950,566    906,836   (185,887)
  
Net income              -        -          -   1,431,861          -          -
Unrealized depreciation on
 marketable securities  -        -          -           - (1,456,530)         -
Realized loss on marketable
 securities             -        -          -           -     40,438          -
Purchase of treasury
 stock                  -        -          -           -          -    (14,377)
Balances at
 June 30, 1997    $32,058   $    0 $3,542,356 $13,382,427  $(509,256) $(200,264)
 
 
See accompanying notes.


Cannon Express, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

                                                                         
                                                    Years ended June 30
                                               1997       1996         1995
Operating activities
Net income                               $ 1,431,861 $ 2,158,938   $ 6,016,142
Adjustments to reconcile net income to
 net cash provided by operating activities:
   Depreciation and amortization          12,071,467  10,574,311     7,424,316
   Provision for losses on
     accounts receivable                      12,236           -             -
   Credit for deferred income taxes          (41,000)   (916,000)     (512,816)
   Gain on disposal of equipment            (126,590)   (161,193)      (39,298)
   Loss (gain) on sale of
     marketable securities                    40,438    (625,969)      (94,385)
   Changes in operating assets and liab.:
      Receivables                          4,314,735  (4,584,733)   (2,992,551)
      Prepaid expenses and supplies          253,784     209,508      (472,178)
      Accounts payable, accrued expenses,
         income taxes payable, and
         other liabilities                 1,451,874    4,014,724    1,450,634
      Other assets                           137,329      (19,196)    (357,629)
  Net cash provided by operating
    activities                            19,546,134   10,650,390   10,422,235

Investing activities
Purchases of property and equipment      (19,456,822) (15,618,199) (19,803,149)
Net increase(decrease) in restricted cash (1,440,000)      43,645      (12,096)
Proceeds from maturities of
  restricted investments                           -            -      100,000
Purchases of marketable securities           (89,509)    (307,635)           -
Proceeds from sales of marketable sec.       103,313    1,205,020      405,792
Proceeds from equipment sales              5,333,239    6,551,567   20,040,432

  Net cash provided by (used in)
    investing activities                 (15,549,779)  (8,125,602)     730,979

Financing activities
Proceeds from long-term borrowings        16,358,829   15,907,421    3,047,611
Principal payments on long-term debt
 and capital lease obligations           (20,515,100) (15,370,784) (10,305,848)
Proceeds from exercise of stock options            -            -       31,130
Net effect stock recapitalization plan             -  (11,215,900)           -
Purchase of treasury stock                   (14,377)           -            -
  Net cash used in financing activities   (4,170,648) (10,679,263)  (7,227,107)

Increase (decrease) in cash and
  cash equivalents                          (174,293)   8,154,475    3,926,107
Cash and cash equivalents at
  beginning of year                        4,169,919   12,324,394    8,398,287
Cash and cash equivalents at end of year  $3,995,626   $4,169,919  $12,324,394

See accompanying notes.

Cannon Express, Inc. and Subsidiaries

Notes to Consolidated Financial Statements
                                    
June 30, 1997

1. Nature of Operations and Summary of Significant Accounting Policies<PAGE>

Consolidation and Business - The consolidated financial statements include
the accounts of Cannon Express, Inc. (The "Company"), and its subsidiaries. 
All intercompany accounts and transactions have been eliminated.

The Company operates as an irregular route, truckload carrier.

Property and Equipment - Property and equipment are recorded at cost.  For
financial reporting purposes, the cost of such property is depreciated by
the straight-line method.  For tax reporting purposes, accelerated cost
recovery methods are used.  Gains on exchanges of revenue equipment are used
to reduce the basis of the replacement equipment.  Tires purchased with
revenue equipment have been capitalized as a part of the cost of such
equipment, however, replacement tires are expensed when placed in service.

Income Taxes - Deferred tax liabilities and assets are recognized for the
tax effects of differences between the financial statement and tax bases of 
assets and liabilities.  A valuation allowance is established to reduce
deferred tax assets if it is more likely than not that a deferred tax asset
will not be realized.

Revenue Recognition - The Company recognizes revenue and related direct
expenses when freight is delivered.
                     
Earnings per Share - Net income per share is computed based on the weighted
average number of shares outstanding during the year, adjusted to include
common stock equivalents attributable to dilutive warrants and stock
options. Earnings per share amounts for prior periods, as well as average
shares outstanding, have been restated to give effect to a 1996 stock
recapitalization plan, as more fully described in Note 4.

Insurance -The Company is self insured up to certain limits for workers'
compensation, cargo loss and damage, and certain property damage and
liability claims. Provision has been made for the estimated liabilities
for such claims as incurred, including liabilities for claims incurred
but not reported.  Subsequent to year end, the Company increased its reserves
for property damage and liability claims by $600,000 based on a review of all
open claims.  The Company determined that certain of these claims might
ultimately be settled at amounts exceeding previously estimated reserves.
The amount of actual losses incurred could differ materially from the
estimates reflected in these financial statements.
                        
Restricted cash of $2,210,026 and $770,026 at June 30, 1997 and 1996,
respectively, represents certificates of deposit held as collateral for the
Company's insurance activities.

In May of 1996, a Company tractor and trailer were involved in an
unavoidable fatal traffic accident which was the result of a heart attack
suffered by the Company's driver who also died in the accident.  The Company
is a defendant in a lawsuit (originally three lawsuits, but now a combined
action) in which plaintiffs seek an aggregate of $20,000,000 related to this
accident.  Jury selection is scheduled for June 1998, with a trial date to
be set at that time. The Company is also aware of other parties who may have
claims related to this accident.

The Company believes it has a meritorious defense in this action and expects
to vigorously defend its interests, however, an adverse outcome in this
action could have a significant negative impact on the Company's profitability
and/or liquidity.  The Company maintained liability insurance with a limit
of $1 million per occurrence at the time.

Cash Equivalents - The Company considers all highly liquid investments, with
a maturity of three months or less when purchased, to be cash equivalents.

Marketable Equity Securities - Non-current marketable equity securities for
which the Company has no immediate plan to sell are classified as available-
for-sale and carried at fair value.  Unrealized gains and losses are
recorded, net of related income tax effects, in stockholders'equity.

Realized gains and losses, based on the specifically identified cost of the
security, are included in net income.

The amortized cost and approximate fair values of noncurrent marketable
equity securities classified as available-for-sale are as follows:


                                         June 30
                                    1997           1996

   Cost                        $1,659,855     $1,714,098
   Unrealized gains                     -      1,474,530
   Unrealized losses             (828,058)             -


       Fair value              $  831,797     $3,188,628



A single equity security accounted for approximately 90% and 95% of the fair
value of marketable equity securities at June 30, 1997 and June 30, 1996,
respectively.

Proceeds from sales of available-for-sale equity securities were $103,313,
$1,205,020 and $405,792 for 1997, 1996 and 1995, respectively.  Resultant
gross gains (losses) of $(40,438), $625,969 and $94,385 were realized and
included in net income for 1997, 1996 and 1995, respectively.

Deferred income taxes (Note 3) related to the net change in unrealized
appreciation (depreciation) on available-for-sale securities, shown in
stockholders' equity, were approximately ($886,000), ($12,000) and $577,000
for 1997, 1996 and 1995, respectively.

Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period.  Actual results could differ from
those estimates.

Reclassification - Certain reclassifications have been made to the 1996 and
1995 financial statements to conform to the 1997 financial statement
presentation.  These reclassifications had no effect on net earnings.


2. Long-term Debt

                                                June 30
                                           1997         1996
Equipment notes (1)                   $23,195,615   $18,529,638
Capitalized lease obligations (2)      28,894,029    37,716,278
                                       52,089,644    56,245,916
Less current portion                   16,696,510    12,282,068

                                     $ 35,393,134   $43,963,848

(1)Represents loans on revenue equipment, payable in various installments
through 2002 with a  weighted average interest rate of 6.9%.  Revenue
equipment having a book value of approximately $24,076,000 at June 30, 1997
is pledged as collateral.  The carrying amount of equipment notes payable
approximates fair value at June 30, 1997.

(2)Capitalized lease obligations are for revenue equipment with an aggregate
net book value of approximately $29,624,000 at June 30, 1997.  The leases
have a weighted average interest rate of 6.1%.  The leases extend from three
to seven years and contain renewal or fixed price purchase options.  The
lease agreements require the Company to pay property taxes, maintenance and
operating expenses.

Annual maturities of long-term debt, excluding capitalized lease obligations
(Note 5) at June 30, 1997, are:


                          1998       $ 6,549,766
                          1999         7,437,461
                          2000         4,726,070
                          2001         2,568,287
                          2002         1,914,031
                                     $23,195,615


Interest paid was approximately $3,737,000, $3,643,000 and $2,188,000 during
1997, 1996 and 1995,  respectively.


3. Federal and State Income Taxes 

A reconciliation between the effective income tax rate and the statutory
federal income tax rate is presented in the following table:

                                     Years ended June 30

                                    1997       1996        1995
Income taxes at the statutory
  federal rate of 34%         $   571,000  $1,194,000   $3,325,929
Federal income tax effects of:
  State income taxes              (14,000)   (149,000)    (216,000)
  Equipment leasing transactions (376,000)          -            -
  Other                            39,000     (28,000)      20,071
Federal income taxes              220,000   1,017,000    3,130,000
State income taxes                 28,000     335,000      636,000
                              $   248,000  $1,352,000   $3,766,000

                                                June 30
                                           1997        1996
Total deferred tax assets              $ 2,480,000  $1,664,000
Total deferred tax liabilities          (4,486,000) (4,598,000)

The tax effects of temporary differences related to deferred taxes shown on
the balance sheets were:
                                        Tax Benefit (Payable)
                                                 June 30
                                             1997        1996
Temporary Differences
Self-insurance accruals                $ 1,336,000   $ 978,000
Allowance/valuation reserves               380,000     345,000
Revenue recognition                        141,000     169,000
Prepaids and other                         (64,000)   (255,000)
   Net current deferred income
     tax benefit                       $ 1,793,000   1,237,000
Depreciation                          $(15,181,000)$(1,463,000)
Treatment of revenue equipment leases   11,065,000  (2,143,000)
Valuation of available-for-sale
  securities                               317,000    (565,000)
  Net non-current deferred
    income tax liability            $   (3,799,000) (4,171,000)


The Company made income tax payments of approximately $209,000, $1,087,000
and $4,196,000 during 1997, 1996 and 1995, respectively.


4. Common Stock

Recapitalization - In November 1992, the shareholders approved an amendment
of the Certificate of Incorporation to (i) reclassify the existing common
stock as Class A Common Stock; (ii) authorize a new non-voting Class B Common
Stock, (iii) increase the authorized shares of common stock from 10 million
to 20 million, consisting of 10 million shares of Class A Common Stock and 10
million shares of Class B Common Stock; and (iv) establish the rights, powers
and limitations of the Class A Common Stock and the Class B Common Stock.


During 1996,  the Company's Board of Directors explored alternatives to
increase shareholder value, and ultimately determined to eliminate the dual
class common stock structure and to return to a single, publicly-traded class
of common stock. On January 29, 1996,  the Company announced that its Board
of Directors had approved a recapitalization plan which would take private
its Class B Common Stock and reclassify its two existing classes of common
stock into a new, single class of publicly traded common stock.  The
Company's Class A Common Stock and Class B Common Stock were traded on the
NASDAQ National Market System under the symbols CANXA and CANXB. The
Company's common stock is currently traded on the NASDAQ under the symbol
CANX.

The recapitalization plan effected a 1-for-500,000 reverse split of the
Company's non-voting Class B Common Stock and converted each whole share of
Class B Common Stock outstanding after the reverse stock split into 493,150
shares of voting Class A Common Stock.  All shareholders who owned fewer than
500,000 shares of Class B Common Stock on January 26, 1996,  were paid a cash
price of $9.00 per share.  The Company funded these payments with working
capital.


Treasury Stock - In March 1990, the Board of Directors approved the purchase
from time to time in open market transactions of up to 150,000 shares of
common stock.  As of June 30, 1997, 60,125 shares at an average price of
$3.33 per share are included as treasury stock on the balance sheet.  During
the year ended June 30, 1997, 2,000 shares of treasury stock were purchased
at an average price of $7.19 per share.  No purchases were made in fiscal
1996 and 1995. Class B Common Shares previously held as treasury shares were
canceled as a result of the recapitalization plan described above.


Stock Options - The Company has reserved 1,000,000 shares of Common Stock for
issuance under the Company's Incentive Stock Option Plan. Options are granted
for five to ten year terms and are exercisable in cumulative increments of 10
to 20% annually, commencing one year after the date of grant, except for
certain options which vest 100% after five years from the date of grant.

Additionally, from time to time, the Company issues stock options to non-
employee directors and a consultant.  At June 30, 1997, there were 29,347
Common Stock Options outstanding for non-employee directors. These options
have been included in the following summary information.

The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation.  Accordingly, no compensation cost has been recognized for the
stock option plan.  Had compensation cost for the Company's stock option plan
been determined based on the fair value at the grant date for awards in 1997
consistent with the provisions of SFAS No. 123, the effect on the Company's
net income and earnings per share would not be materially different from
amounts reported.

The fair value of each option granted is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 1997: dividend yield of 0%; expected
volatility of 50.6%; risk-free interest rate of 6.25% and expected lives
range from 7 to 10 years.

Option transactions are summarized as follows (adjusted for all stock
distributions, redemptions and splits):

                 1997                1996                       1995
                Common      Class A       Class B       Class A      Class B
                  Wt Avg        Wt Avg        Wt Avg        Wt Avg       Wt Avg
                Exercise      Exercise      Exercise      Exercise      Exercise
           Options Price Options Price Options Price Options Price Options Price

Outstanding at
 July 1    178,157 $4.34  81,250 $4.34  98,250 $4.34  86,250 $4.23  96,250 $3.57
Granted     56,500  6.47       -     -       -     -       -     -  12,000  8.50
Exercised        -     -       -     -       -     -  (5,000) 2.37 (10,000) 1.93
Canceled   (11,836) 8.50       -     -       -     -       -     -       -     -
Converted to
 A Shares        0     -  96,907  4.34 (98,250) 4.34       -     -       -     -
Outstanding at
 June 30   222,821 $4.66 178,157 $4.34       0 $   0  81,250 $4.34  98,250 $4.34
Weighted average
 remaining
 life      5.02 years

Exercisable at
 June 30   158,417       139,248             0        60,750        57,750

Weighted average
 price       $3.98

               1997                   1996                     1995
Price range at
 June 30  $1.93 to $7.00         $1.93 to $8.50           $1.93 to $8.50

5. Leases and Commitments

The future minimum payments under capitalized leases at June 30, 1997,
consisted of the following:

1998                                                  $11,757,746
1999                                                    9,301,511
2000                                                    7,765,790
2001                                                    1,119,027   
2002                                                    2,297,547
Total minimum lease payments                           32,241,621
Amounts representing interest                           3,347,592
Present value of net minimum lease
 payments included in long-term
 debt ($10,146,744 due in 1998) (Note 2)              $28,894,029

Assets held under capital leases are included in property, plant and equipment
as follows:

                                           1997          1996
Revenue equipment                     $46,212,586   $47,989,546
Accumulated depreciation               16,588,728    10,754,290
                                      $29,623,858   $37,235,256
                      
During 1996 and 1995, the Company incurred capital lease obligations totaling
approximately $11,629,000 and $31,004,000, respectively.  No capital lease
obligations were incurred in 1997. 

Capitalized lease amortization is included in depreciation expense.

6. Related Party Transactions

The Company leases a facility from the majority stockholders of the Company. 
The lease provides for monthly rental payments of $3,000.  Rent totaled
$30,000 for the year ended June 30, 1997 and $24,000 for each of the years
ended June 30, 1996 and 1995.  The Company pays all insurance, taxes and
maintenance costs with respect to the facility. The lease is cancelable by the
Company on 30 days notice.

In September 1996, the Company entered into a receivables purchase agreement
for up to $6 million of certain of its accounts receivable with CUSA, Inc., a
limited partnership which includes Alice L. Walton as one of its partners. 
Ms. Walton, who owns approximately 9% of the outstanding shares of the Company
and is on the Company's Board of Directors, is a 9.9% limited partner in CUSA,
Inc.

In 1996, the Company paid financial advisory fees totaling $600,000 to Llama
Company in return for services rendered to the Company and to a special
committee of its Board of Directors (See Note 4 Recapitalization).  Alice L.
Walton is the Chairman and General Partner of Llama.

7. Concentration of Business and Credit Risk

The Company provides services to customers throughout the United States and
Canada.  The Company performs ongoing credit evaluations of its customers and
generally does not require collateral.  Historically, credit losses have not
been significant.


One unaffiliated customer (Wal-Mart Stores, Inc.) accounted for approximately
51%, 50%, and 41% of  revenue for fiscal 1997, 1996 and 1995, respectively. 
Accounts receivable as of June 30 for this customer totaled approximately
$5,760,000 and $7,765,000 for 1997 and 1996, respectively.  A second
unaffiliated major customer accounted for approximately 16%, 10%, and 18% of
revenue in 1997, 1996 and 1995, respectively. Accounts receivable as of June
30 for this customer totaled approximately $2,420,000 and $1,311,000 for 1997
and 1996, respectively.


8. Profit-sharing Plan

The Company has a profit-sharing plan covering all employees who have been
employed a minimum of one year and attained the age of twenty-one.  The
Company's contributions to the plan are determined annually by the Board of
Directors.  Contributions are limited to 10% of total compensation paid
participants during the plan year.  Participant interests are 100% vested

after completion of three years of service.  No contributions to the Plan were
made in 1997, 1996 or 1995.

                             
9. Quarterly Results of Operations (Unaudited)

                                         Fiscal 1997
                         September 30  December 31   March 31     June 30

Operating revenue         $27,562,855  $26,356,862  $25,426,960  $26,789,591
Operating expenses
 and costs                 25,866,378   24,948,949   24,498,584   25,599,334
Operating income            1,696,477    1,407,913      928,376    1,190,257
Other income, net              76,369       57,686       53,373       62,629

Interest expense              936,315      937,439      943,973      975,492
Income before income
 taxes                        836,531      528,160       37,776      277,394
Income taxes                  322,000      203,000       15,000     (292,000)

Net income                 $  514,531  $   325,160   $   22,776   $  569,394

Net income per share            $0.16        $0.10        $0.01        $0.18

Average shares and share
 equivalents outstanding    3,249,993    3,239,597    3,231,692    3,210,968

                                         Fiscal 1996
                         September 30  December 31    March 31     June 30  

Operating revenue         $21,627,585  $22,205,240  $21,946,007  $24,212,242
Operating expenses
 and costs                 19,411,634   20,560,371   21,332,836   22,617,101
Operating income            2,215,951    1,644,869      613,171    1,595,141
Other income(expense),net      79,581      235,183      332,953      478,692

Interest expense              849,335      963,424      943,004      928,840
Income before income
 taxes                      1,446,197      916,628        3,120    1,144,993
Income taxes                  557,000      353,000        1,000      441,000

Net income                $   889,197   $  563,628   $    2,120  $   703,993

Net income per share            $0.27        $0.17        $0.00        $0.22

Average shares and share
 equivalents outstanding    3,260,274    3,239,463    3,234,519    3,251,332


Report of Independent Accountants on Financial Statement Schedule


Board of Directors and Stockholders
Cannon Express, Inc. and Subsidiaries
Springdale, Arkansas


In connection with our audit of the consolidated financial statements of 
CANNON EXPRESS, INC. AND SUBSIDIARIES for each of the three years in the
period ended June 30, 1997, we have also audited the following financial
statement schedule.  This financial statement schedule is the responsibility
of the Companies' management.  Our responsibility is to express an opinion on
this financial statement schedule based on our audits of the basic financial
statements.  The schedule is presented for purposes of complying with the
Securities and Exchange Commission's rules and regulations and is not a
required part of the consolidated financial statements.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.

                                                                              
BAIRD, KURTZ & DOBSON

Fayetteville, Arkansas
August 20, 1997



Cannon Express, Inc. and Subsidiaries

Schedule II
Valuation and Qualifying Accounts

Column A            Column B    Column C    Column D     Column E  Column F
                                       Additions
                                    (1)         (2)
                   Balance at   Charged to  Charged to             Balance at
                  Beginning of  Costs and   Other Accts  Deductions  end of
Description           Period     Expenses    Describe     Describe   Period

Year ended June 30, 1997:
Deducted from assets
 accounts:
Reserve for doubtful
 trade receivables   $ 171,175   $ 30,000         -     $ 17,764(A)  $ 183,411


Year ended June 30, 1996:
Deducted from assets
 accounts:
Reserve for doubtful
 trade receivables   $ 141,175   $ 30,000         -            -(A)  $ 171,175



Year ended June 30, 1995:
Deducted from assets
 accounts:
Reserve for doubtful
 trade receivables   $ 117,447   $ 30,000         -      $ 6,272(A)  $ 141,175





(A)Uncollectible accounts written off, net of recoveries.


Shareholder Information

Form 10-K Availability


A copy of the 1997 Form 10-K filed with the Securities and Exchange Commission
will be  forwarded, upon request, to any shareholder.  Requests should be
directed to:
  
Dean G. Cannon
Cannon Express, Inc.
P.O. Box 364
Springdale, Arkansas  72765


Transfer Agent and Registrar

Continental Stock Transfer
  and Trust Company
2 Broadway, 19th Floor
New York, New York   10004

Stock Listing

NASDAQ National Market System
Symbol:  CANX

Independent Auditors

Baird, Kurtz & Dobson

Communications Directory

Corporate Offices: Cannon Express, Inc., 1457 E. Robinson, Springdale,
Arkansas 72764.

Mailing Address: Post Office Box 364, Springdale, Arkansas 72765.
Telephone: (501) 751-9209.