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, 2001

(   )TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITES
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 Identification No.)
 incorporation  or organization)

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  X    No

Aggregate market value of voting stock held by non-affiliates of the
registrant at August 29, 2001: $2,075,593

Number of shares of common stock outstanding at August 29, 2001:
Common Stock - 3,205,276

Documents incorporated by reference:  Company's Notice and Proxy Statement
for its annual meeting of stockholders to be held on Tuesday, November 20,
2001.


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, 2001, the Company operated a fleet of 777 tractors
and 1,654 trailers, and employed 1,022 people, none of whom is represented by
a collective bargaining agreement. Revenues from truckload operations
accounted for approximately 95% of total revenues for the year ended June 30,
2001.

The Company also provides logistics services utilizing equipment and services
provided by unrelated third parties in the transportation industry.  Revenues
from logistics services represented approximately 5% of total revenues
realized for the year ended June 30, 2001.


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 by salespersons domiciled in strategic locations and 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, 2001, Wal-Mart Stores, Inc. ("Wal-
Mart") accounted for 15.4% and International Paper, Inc. accounted for 9.4%
of the Company's operating revenue.  During the fiscal years ended June 30,
2000 and 1999, Wal-Mart accounted for 17.9% and 28.9%, respectively, and
International Paper accounted for 9.4% and 13.1%,  respectively, of operating
revenue.  In March of 1998 the Company made a decision not to continue some
of the freight movements at the rates then being offered by Wal-Mart.
Management of the Company believes that its longer-term interests will be
best served by diversifying its customer base. 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 on-board
computers and a satellite link. This link 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 and 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 Company has purchased new computer software for its business.  This
decision was made primarily due to the increased cost and inefficiency of
maintaining the Company's own software. The new software required that the
Company also purchase new computer hardware. Management believes that the new
system will enable the Company to better manage its business and to utilize
new technologies as they are developed. The Company converted its systems
during the second half of calendar year 1999.


Drivers and Other Employees

As of June 30, 2001,  the Company employed 797 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. Effective
January 1, 2000, the Company implemented an increase in drivers' starting
base pay ranging from 2 to 4 cents per mile and discontinued paying its
drivers a quarterly performance bonus.  The Company has targeted its pay
increase and its recruiting efforts toward drivers with 3 or more years
driving experience. Company drivers who qualify are also paid an annual
safety bonus.  Company drivers were awarded approximately $201,000 in safety
bonuses during fiscal 2001 as compared with approximately $238,000 awarded
during fiscal 2000.

Like other truckload carriers, the Company experiences significant driver
turnover.  The Company experienced a shortage of qualified drivers during
fiscal 2001.  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.

In an effort to improve its operating results, the Company implemented a new
program during fiscal 2000 in which owner-operators may qualify to
lease/purchase a truck and be paid a percentage of the Company's revenue to
operate the truck under a contract with the Company to haul freight for its
customers.  This program is intended to provide benefits to the Company
during the term of the lease approximately equal to the current employee
driver program.  The program is an option for drivers which the Company
believes may improve driver retention.  Since the owner/operator is
responsible for certain of the costs borne by the company for employee
drivers, the Company's income statement will reflect a shift between
individual cost categories.

The Company's cost for owner/operators is reflected in the income statement
as part of "Rents and purchased transportation."  The Company has incurred a
significant reduction in its costs for Salaries, wages and fringe benefits,
Operating supplies and expense, Operating taxes and licenses, and
Depreciation and amortization.  The increase in "Rents and purchased
transportation" approximately equals the decreases in the other categories,
therefore, having no significant impact on profit margin.


The Company's lease program is structured in such a way that the
owner/operator may elect to purchase the equipment for its fair market value
at the end of the lease.  Alternatively, the owner/operator may elect not to
purchase the equipment.  In the event that an operator does not purchase the
equipment, the Company anticipates that it may realize a benefit at the end
of the lease term when trucks are sold as a result of a higher trade-in or
re-sale value due to better care and maintenance by the owner/operator.

The Company employed:
                                                              June 30,
                                                           2001     2000
Drivers and Driver Trainees (including Owner-Operators)     797       714
Management                                                   16        16
Operations, Marketing and Administration                    163       144
Maintenance and Repair                                       46        61
Total                                                     1,022       935

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, 2001, the fleet consisted of 777 tractors and 1,654 trailers,
compared to 775 tractors and 2,280 trailers at June 30, 2000. During the
fiscal year ended June 30, 2001,  2 tractors were sold and 4 new tractors
were added to the fleet. In addition, the Company sold 626  trailers during
the fiscal year ended June 30, 2001.

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,
2001, substantially all of the Company's tractors were manufactured by
International, while trailers were manufactured by Pines and Great Dane. The
Company has negotiated extended warranties on many of its tractors and
intends to trade-in such tractors on approximately a three-year cycle.
However, due to depressed values for used trucks, the Company may elect to
increase the trade time.  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, 2001:
            MODEL           OVER-the-ROAD    48-FOOT      53-FOOT
             YEAR             TRACTORS       TRAILERS     TRAILERS
            2001                 59              -          100
            2000                611              -          100
            1999                100              -            -
            1998                  -              -          596
            1997                  -              -          296
            1996                  2            296            -
            1995 thru 1983        5            266            -
                                777            562        1,092

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.  During fiscal 2001, the Company's average cost
per gallon was approximately 18 cents higher than in fiscal 2000.  During the
4th quarter of fiscal 2001, the Company's average price per gallon was
approximately the same as in the same period of the previous year.
Historically, increases in fuel costs 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.  Although the Company has
currently implemented fuel surcharges for its customers, there is no
assurance that any future increases in fuel costs can be passed through to
the Company's customers.  The current cost or future cost increases or
shortages of fuel could affect the Company's future profitability.

Governmental Regulation
The Company is a motor common and contract carrier previously regulated by
the Department of Transportation ("DOT") and various state agencies. 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. Canadian business activities represent less than 1% of
total company operations.

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 cargo loss and damage insurance and collision coverage
on owned and leased equipment.  In addition, with the assistance of its
third-party administrator, workers' compensation claims are self-insured up
to $300,000.   The Company also has excess general liability coverage in
amounts substantially exceeding minimum legal requirements and believed to be
sufficient to protect the Company against material loss.  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
1383, 1457 & 1457A E. Robinson in Springdale, Arkansas.

The office facility is located on a 4.85 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. Management believes that adverse results in
one or more of these cases would not have a material adverse effect on the
Company's financial position. Additionally, a decision has been rendered
against the Company by the Equal Employment Opportunity Commission ("EEOC")
for unlawful hiring practices regarding pre-employment questions about
medical issues. The Company believed it was required by Department of
Transportation regulations to ask these questions. The Company has entered
into a settlement agreement with the EEOC which requires the Company to pay
certain individuals who may have been discriminated against a fee and/or be
offered employment with the Company.  The Company has accrued $250,000 for
these payments and associated legal fees during fiscal year 2001.  Management
believes that settlement of this charge will not have a material adverse
effect on the financial position of the Company.

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 3, 1998, the Company's common stock was traded on the
     NASDAQ National Market System under the symbol CANX.

     On March 3, 1998, the Company transferred its listing from the NASDAQ
     National Market System  to the American Stock Exchange under the symbol
     AB.

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

                                             COMMON STOCK
                                            HIGH       LOW

     YEAR ENDED JUNE 30, 2001:
     First Quarter                       $ 2  1/2   $ 1  3/4
     Second Quarter                        1  13/16      3/4
     Third Quarter                         1  7/8        7/8
     Fourth Quarter                        2  5/8        7/8

     YEAR ENDED JUNE 30, 2000:
     First Quarter                       $ 3  7/16  $ 2  3/4
     Second Quarter                        3  5/8     2
     Third Quarter                         2  3/4     1  5/8
     Fourth Quarter                        2  5/8     1  3/8

(b)  The approximate number of holders of common stock as of August 31, 2001,
     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,
                              2001      2000      1999      1998       1997
                                    (in thousands except per share data)

Operating Revenue           $85,795   $91,779   $95,213   $109,245   $106,136

Income (loss)                (7,303)      520      (487)     1,815      1,432


Basic and diluted
 earnings (loss)
 per share(1,2 & 3):          (2.28)      .16      (.15)       .57        .45


Total assets                $75,529  $103,889   $75,968    $80,886    $81,188


Long term debt,
 less current portion       $38,840   $56,648   $25,999    $29,768    $35,393














(1)  Earnings per share have been restated to give effect to the stock
     recapitalization effected on April 10, 1996.


(2)  Basic and diluted earnings per share is computed based on the weighted
     average number of shares outstanding during the year.


(3)  The calculation for fiscal 2001 and 2000 does not include effect of
     certain out of market options as they are anti-dilutive.  (See Note 1 of
     the Notes to Consolidated Financial Statements).



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,

                                             2001         2000        1999
Operating revenue                           100.0%       100.0%      100.0%

Operating expenses and costs:
  Salaries, wages and fringe benefits        29.6%        28.1%       37.9%
  Operating supplies and expenses            25.1         24.1        31.5
  Operating taxes and licenses                4.5          4.5         5.8
  Insurance and claims                        4.0          5.2         4.5
  Depreciation and amortization              10.0          4.4        10.4
  Rents and purchased transportation         28.8         28.8         5.5
  Other                                       2.8          3.0         2.4
    Total operating expenses                104.8         98.1        98.0
Operating income (loss)                      (4.8)         1.9         2.0
Other income (expense):
  Interest and dividend income                0.4          0.5         0.4
  Gain (loss) on marketable securities       (0.0)        (0.1)       (0.0)
  Interest expense                           (5.4)        (4.2)       (3.2)
Income (loss) before income taxes            (9.8)        (1.9)       (0.8)
Income taxes                                 (1.3)        (2.5)       (0.3)
Net income (loss)                            (8.5)%        0.6%       (0.5)%

RESULTS OF OPERATIONS:

Fiscal year ended June 30, 2001 compared to Fiscal year ended June 30, 2000

Operating revenue for fiscal 2001 decreased 6.5% or $5,983,371 to
$85,795,395.  Logistics and intermodal revenue decreased by $2,174,097, or
30.5%, during fiscal 2001 over the comparable period in fiscal 2000.  The
Company's revenue continued to be negatively impacted by a shortage of
qualified drivers to operate its trucks in fiscal 2001.  Additionally, the
Company was affected by an industry-wide shortage of freight during fiscal
2001.

The Company experienced significant turnover in its lease program during
fiscal 2001.  Economic conditions were not favorable to small companies who
did not have financial resources to survive.  Consequently, 159 trucks which
were lease trucks on June 30, 2000, were converted to Company trucks.
Salaries, wages and fringe benefits decreased 1.7% or $427,893 to $25,392,576
in fiscal 2001 due to fewer miles driven.  Rents and purchased transportation
decreased 6.5% or $1,715,435 to $24,795,672 in fiscal 2001 primarily due to
the decrease in the Company's owner operators and to decreased logistics
activities.


Operating supplies and expenses decreased 2.7% or $587,946 to $21,501,052 in
fiscal 2001. Fuel costs for the fiscal year ended June 30, 2001, averaged 18
cents per gallon higher than in the comparable period of fiscal 2000, which
together with a decrease in total miles driven of 3,168,074 and the purchase
of fuel by owner operators, increased operating expense by approximately
$830,000 during the 12 month period. Maintenance and tire costs decreased by
approximately $2,062,000 due to fewer repairs and tires on new equipment.

Operating taxes and licenses decreased 6.5% or $264,950 to $3,826,877 in
fiscal 2001 primarily due to lower fuel taxes as the result of fewer miles
driven.

Insurance and claims decreased 27.9% or $1,337,478 to $3,452,596 in fiscal
2001 due to favorable claims experience.

Depreciation and amortization increased 114.1% or $4,570,094 to $8,577,086 in
fiscal 2001. This increase is primarily due to a smaller gain on sale of
equipment of $1,205,952, which was realized in fiscal 2001 as compared to a
gain of $5,163,933 in fiscal 2000 as gains are netted against depreciation
and amortization.

The Company's operating ratio increased to 104.8% for fiscal 2001 from 98.1%
for the prior year.

Interest expense increased 21.3% or $819,577 in fiscal 2001 due to the
increase in debt payments associated with the purchase of new equipment.

Beginning in 1999 and continuing through 2001, the Company recognized a
previously unrealized tax benefit resulting from a sale/leaseback transaction
entered into during fiscal year 1995.  The Company took a position on its
1995 and later tax returns, which the Company believed might be challenged by
the Internal Revenue Service (the Service).  The Company initially did not
recognize any tax benefit for financial reporting purposes.  The Company is
currently undergoing an audit by the Service for its fiscal 1997 tax period.
Although the service has not made a final determination with regard to the
lease transaction and its tax consequences, the Company believes that the
Service will ultimately determine that its previous tax deductions were
appropriate, and the Company will then recognize all benefits accrued through
the most current reporting period.  Consequently, the Company recognized an
income tax credit of approximately $1million during fiscal 2001.

Net loss for fiscal year ended June 30, 2001 was ($7,303,442) ($2.28 loss per
diluted share) compared to net income of $520,501 ($.16 earnings per diluted
share) during fiscal 2000, a decrease of $7,823,943 or 1503.2%.

Fiscal year ended June 30, 2000 compared to Fiscal year ended June 30, 1999

Operating revenue for fiscal 2000 decreased 3.6% or $3,434,142 to
$91,778,766.  The Company's revenue continued to be negatively impacted by a
shortage of qualified drivers to operate its trucks in fiscal 2000.
Logistics and intermodal revenue during fiscal 2000 increased by $1,875,820,
or 35.7%, over the comparable period in fiscal 1999.  Management intends to
continue to increase its activities in the logistics area as additional
opportunities arise.


Salaries, wages and fringe benefits decreased 28.4% or $10,262,802 to
$25,820,469 in fiscal 2000.  This decrease was largely due to the Company's
smaller fleet and to the Company's implementation of its lease program for
owner operators.

Operating supplies and expenses decreased 26.2% or $7,858,124 to $22,088,998
in fiscal 2000. Fuel costs for the fiscal year ended June 30, 2000 averaged
30 cents per gallon higher than in the comparable period of fiscal 1999,
which together with a decrease in total miles driven of 8,225,126 and the
purchase of fuel by owner operators, decreased operating expense by
approximately $2,560,000 during the 12 month period. Maintenance and tire
costs also decreased by approximately $4,580,000 due to the increase in owner
operators, who are responsible for these costs.

Operating taxes and licenses decreased 26.1% or $1,446,785 to $4,091,827 in
fiscal 2000 primarily due to lower fuel taxes as the result of fewer miles
driven and to the increase in owner operators.

Insurance and claims increased 12.4% or $527,042 to $4,790,074 in fiscal
2000. The major portion of this increase was due to workers' compensation
reserves which the Company anticipates will be paid out to an ex-driver who
was seriously injured in a one-vehicle accident.  The Company's claims costs
also increased slightly due to accident settlements which were in excess of
reserve amounts.

Depreciation and amortization decreased 59.4% or $5,859,622 to $4,006,992 in
fiscal 2000. This decrease is primarily due to a gain on sale of equipment of
$5,163,933 which was realized in fiscal 2000 as compared to a gain of
$3,211,610 in fiscal 1999 as gains are netted against depreciation and
amortization.

Rents and purchased transportation increased 409.6% or $21,308,726 to
$26,511,107 in fiscal 2000 primarily due to payments made to the Company's
owner operators and to increased logistics activities.

The Company's operating ratio increased to 98.1% for fiscal 2000 from 98.0%
for the prior year, reflecting a decline of 0.1% for the period.

Interest expense increased 27.8% or $833,937 in fiscal 2000 due to the
increase in debt associated with the purchase of new equipment.

The Company recognized a previously unrealized tax benefit, the result of a
revenue equipment leasing transaction entered into during  fiscal year 1995.
Consequently, the Company recognized a current income tax credit of
$1,660,000 during fiscal year 2000.

Net income for fiscal year ended June 30, 2000 was $520,501 ($.16 earnings
per diluted share) compared to net loss of $(487,384) ($.15 loss per diluted
share) during fiscal 1999, an increase of $1,007,885 or 206.8%.


Liquidity and Capital Resources

Cash flows from Operations - Operating activities provided cash of $5.9
million and $2.5 million in fiscal 2001 and 2000, respectively.  Net cash
flows from operations in fiscal 2001 were primarily the result of $7.3
million net loss, $9.8 million in depreciation offset by $1.2 million from
gain on disposal of assets, $3.2 million decrease in net investment in direct
financing leases, and a $1.4 million decrease in accounts receivable and
other assets.

Cash flows from Investing Activities - Investing activities provided net cash
of $3.7 million in fiscal 2001 and used net cash of $9.9 million in  fiscal
2000.  Proceeds from equipment sales totaling $4.1 million was offset by $.4
million in purchases of new equipment and other investing activities for
2000.  Purchases of new equipment totaling $32.1 million was offset by $22.2
million in equipment sales and other investing activities for 2000.

Cash flows from Financing Activities - Financing activities used net cash of
$14.9 million in fiscal 2001 and provided  net cash of $6.0 million in fiscal
2000.

Working capital needs have been met primarily from cash generated from
operations.  During the fiscal year ended June 30, 2001, cash provided by
operating activities was $5,879,118, up from $2,528,822 for the prior fiscal
year ended June 30, 2000. The current ratio decreased from 1.64 at June 30,
2000 to .74 at June 30, 2001. Working capital decreased by $20.4 million to a
deficit of  $6.7 million, including $16 million in current maturities of
long-term debt, at June 30, 2001 from a surplus of $13.7 million at June 30,
2000.  Approximately $3.9 million of this decrease is due to the decrease in
the net investment in direct financing leases resulting from the owner-
operator program. Historically, working capital needs have been met from cash
generated from operations.  Management believes that the Company's working
capital will be sufficient for its short-term needs.  However, the Company is
also in the process of obtaining a $6 million working capital line of credit
that would be collateralized by qualifying accounts receivable.

During the fiscal year ended June 30, 2001,  2 tractors were sold and 4 new
tractors were added to the fleet. The Company also sold 626 trailers during
the fiscal year ended June 30, 2001.

Future Operations

The financial statements of the Company have been prepared on the basis of
accounting principles applicable to a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the normal
course of business.  As shown in the financial statements, the Company has
experienced increasing net losses before income taxes of approximately $8.4
million, $1.8 million and $800,000 for the years ended June 30, 2001, 2000
and 1999, respectively.  In addition, the Company has experienced significant
declines in operating revenues and cash reserves over the past few years. The
Company also has a working capital deficit of approximately $6.7 million,
which includes approximately $16 million in current debt obligations coming
due in fiscal year 2002.


These factors, among others, raise substantial doubt about the ability of the
Company to continue as a going concern. The financial statements do not
include any adjustments relating to the recoverability and classification of
asset carrying amounts or the amount and classification of liabilities that
might result should the Company be unable to continue as a going concern.
The ability of the Company to continue as a going concern is dependant upon
its ability to significantly improve its operating ratios, its ability to
generate sufficient cash flow to meet its obligations on a timely basis, the
support of its stockholders and its ability to obtain additional financing or
refinancing as may be required.

The Company is currently implementing a plan, which management believes will
significantly improve its operating efficiencies over the next fiscal year.
The Company has retained the services of an outside consultant, having
significant experience in the transportation industry, both from an
operational as well as a marketing strategy standpoint throughout the United
States, Mexico and Canada.  The Company has identified numerous cost-cutting
measures to eliminate unnecessary overhead, including eliminating a
maintenance shift, expected to save the Company at least $500,000 annually.
The Company is further focusing on the reduction of deadhead miles by
concentrating on lane optimization.

The Company is also being more selective in its acceptance of new customers,
making a concerted effort to improve the rate per mile realized on each load.
In addition, the risk of further increases in fuel costs, which played a
significant role in the current year net loss, is being mitigated through
efforts to include fuel surcharges on new contracts.

The Company has also identified selected assets for possible disposition.
Management believes sale of these assets would increase cash flow and pre-tax
earnings by approximately $4.5 million and $2.0 million, respectively.  These
assets include 400 trailers and an airplane.

Finally, management believes the Company has an excellent relationship with
its lenders and that they will be able, if necessary, to refinance any
existing debt on revenue equipment.  The Company is also in process of
obtaining a $6 million working capital line of credit that would be
collateralized by qualifying accounts receivable.  Management further expects
interest costs to decline as interest rates continue to decrease and the
Company's debt includes floating interest rates.

There is no assurance that the Company will be able to improve its operating
ratios or that the Company will be successful in securing capital resources
to fund maturities of debt and other obligations as they become due in fiscal
2002 or to support the Company until such time that the Company is able to
consistently generate results sufficient to support its operations.

Inflation
Inflation continues to have a minimal impact on operations.

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


Forward-Looking Statements

This report contains forward-looking statements that are based on assumptions
made by management from information currently available to management.  These
statements address future plans, expectations and events or conditions
concerning various matters such as the results of the Company's sales efforts
as set forth in the discussion of results of operations, capital
expenditures, litigation and capital resources and accounting matters.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, actual results could differ
materially from those currently reported.

Item 7a.  Quantitative and Qualitative Disclosure about Market Risk

The Company is exposed to cash flow and interest rate risks due to changes in
interest rates with respect to its long-term debt. See Note 2 of the Notes to
Consolidated Financial Statements for details on the Company's long-term
debt.

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      60        President and Chairman of the Board
     Rose Marie Cannon   60        Secretary, Treasurer and Director
     Larry L. Patrick    56        Vice President
     Duane Wormington    44        Vice President of Finance

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.


Duane Wormington has been Vice-President of Finance of Cannon Express Corp.
from 1987 to the present.  Mr. Wormington is a graduate of Southwest Baptist
University in Bolivar, Missouri and is a Certified Public Accountant.

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 2001 fiscal year, all filing requirements
were complied with as they apply to its officers, directors and greater than
10% beneficial owners.  The remainder of 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 20, 2001.

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 20, 2001.

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 20, 2001.

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 20, 2001.

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)  On June 11, 1998, the Company filed a Form 8-K reporting Item 4 -
       Change in Registrant's Certifying Accountant.

  (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 28th
day of September, 2001.

                                        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/ Sam F. Fiser
     Rose Marie Cannon                       Sam F. Fiser
     Director, Secretary                     Director
     and Treasurer


By:  /s/ Glenn E. Kelley
     Glenn E. Kelley
     Director



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


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

  Report of Independent Public Accountants.

  Consolidated Balance Sheets as of June 30, 2001 and 2000.

  Consolidated Statements of Operations for the years ended June 30, 2001,
  2000 and 1999.

  Consolidated Statements of Changes in Stockholders' Equity for the years
  ended June 30, 2001, 2000 and 1999.

  Consolidated Statements of Cash Flows for the years ended June 30, 2001,
  2000 and 1999.

  Notes to Consolidated Financial Statements as of June 30, 2001 and 2000.

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

  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.



Report of Independent Public Accountants


To the Board of Directors and Stockholders
of Cannon Express, Inc. and Subsidiaries:

We have audited the accompanying consolidated balance sheets of Cannon
Express, Inc. and subsidiaries (a Delaware corporation) as of June 30, 2001
and 2000, and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for each of the three years in the period
ended June 30, 2001.  These financial statements and the schedule referred to
below are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and schedule based on
our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. 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 financial statements referred to above present fairly, in
all material respects, the financial position of Cannon Express, Inc. and
subsidiaries as of June 30, 2001 and 2000, and the results of its operations
and its cash flows for each of the three years in the period ended June 30,
2001, in conformity with accounting principles generally accepted in the
United States.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses from
operations and has a deficit working capital at June 30, 2001, which, among
other things, raises substantial doubt about its ability to continue as a
going concern.  Management's plans in regard to these matters are also
described in Note 1.  The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole.  The Valuation and Qualifying Accounts
schedule is presented for purposes of additional analysis and is not a
required part of the basic financial statements.  This information has been
subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.



                                     ARTHUR ANDERSEN LLP

Fayetteville, Arkansas
August 3, 2001




Cannon Express, Inc. and Subsidiaries

Consolidated Balance Sheets


                                                               June 30,
                                                           2001        2000




Assets
Current assets:
 Cash and cash equivalents                              $2,958,450   $8,351,582
 Receivables, less allowance for doubtful accounts
  (2001--$542,618; 2000--$267,405):
   Trade                                                10,348,355   11,987,372
   Other                                                   837,987    1,837,256
 Current portion of net investment in
  direct financing leases                                2,678,000    6,575,400
 Prepaid expenses and supplies                           1,703,016    1,623,267
 Deferred income taxes                                           -    4,919,000
Total current assets                                    18,525,808   35,293,877

Property and equipment:
 Land, buildings and improvements                        1,368,273    1,257,335
 Revenue equipment                                      74,067,666   75,340,802
 Service, office and other equipment                     2,982,769    2,932,135
                                                        78,418,708   79,530,272
 Less allowance for depreciation                        27,003,925   24,460,235
                                                        51,414,783   55,070,037
Other assets:
 Receivable from stockholders                               23,406       23,406
 Restricted cash                                         2,417,686    2,406,916
 Marketable securities                                     342,550      346,970
 Net investment in direct financing
  leases, less current portion                           2,693,838   10,636,780
 Other                                                     111,182      111,182
                                                         5,588,662   13,525,254



                                                       $75,529,253 $103,889,168






See accompanying notes.


Cannon Express, Inc. and Subsidiaries

Consolidated Balance Sheets (Continued)


                                                               June 30,
                                                           2001         2000


Liabilities and Stockholders' Equity
Current liabilities:
 Trade accounts payable                                 $1,435,153   $1,529,639
 Accrued expenses:
   Insurance reserves                                    3,539,724    3,666,103
   Other                                                 2,064,307    1,865,089
 Federal and state income taxes payable                  2,175,579    1,414,652
 Current portion of long-term debt                      15,969,109   13,098,351
Total current liabilities                               25,183,872   21,573,834

Long-term debt, less current portion                    38,839,680   56,648,009
Deferred income taxes                                            -    6,849,000
Other liabilities                                                -       12,531

Stockholders' equity:
 Common stock: $.01 par value; authorized
  10,000,000 shares; issued 3,265,401 shares;
  outstanding 3,205,276 shares in 2001 and 2000             32,654       32,654
 Additional paid-in capital                              3,747,575    3,747,575
 Retained earnings                                       7,926,689   15,230,131
 Accumulated other comprehensive income,
  net of income taxes (credit) of $(2,097)
  and $72,262 in 2001 and 2000, respectively                  (953)      (4,302)
                                                        11,705,965   19,006,058
 Less treasury stock, at cost (60,125 shares
   in 2001 and 2000)                                       200,264      200,264
                                                        11,505,701   18,805,794

                                                       $75,529,253 $103,889,168








See accompanying notes.


Cannon Express, Inc. and Subsidiaries

Consolidated Statements of Operations



                                                Years ended June 30,
                                           2001         2000          1999

Operating revenue                      $85,795,395   $91,778,766   $95,212,908

Operating expenses and costs:
 Salaries, wages and fringe benefits    25,392,576    25,820,469    36,083,271
 Rents and purchased transportation     24,795,672    26,511,107     5,202,381
 Operating supplies and expenses        21,501,052    22,088,998    29,947,122
 Operating taxes and licenses            3,826,877     4,091,827     5,538,612
 Insurance and claims                    3,452,596     4,790,074     4,263,032
 Depreciation and amortization           8,577,086     4,006,992     9,866,614
 Other                                   2,384,620     2,755,118     2,394,860
                                        89,930,479    90,064,585    93,295,892

Operating income (loss)                 (4,135,084)    1,714,181     1,917,016
Other income (expense):
 Interest expense                       (4,658,484)   (3,838,907)   (3,004,970)
 Interest and dividend income              353,259       469,942       361,460
 Loss on marketable equity securities       (5,104)      (99,715)      (27,890)
                                        (4,310,329)   (3,468,680)   (2,671,400)

Income (loss) before income taxes       (8,445,413)   (1,754,499)     (754,384)
Federal and state income taxes:
 Current (Credit)                       (1,141,971)   (1,303,000)     (292,000)
 Deferred (Credit)                               -      (972,000)       25,000
                                        (1,141,971)   (2,275,000)     (267,000)

Net income (loss)                      $(7,303,442)  $   520,501   $  (487,384)

Basic earnings (loss) per share        $     (2.28)  $      0.16   $     (0.15)
Average shares and share
 equivalents outstanding                 3,205,276     3,207,172     3,197,896

Diluted earnings (loss) per share      $     (2.28)  $      0.16   $     (0.15)
Diluted shares and share
 equivalents outstanding                 3,205,276     3,207,172     3,197,896




See accompanying notes.


Cannon Express, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders' Equity


                                            Accumulated
                      Additional               Other
               Common   Paid-In    Retained Comprehensive  Treasury
                Stock   Capital    Earnings    Income       Stock     Total

Balances at
 July 1, 1998 $32,530  $3,720,988 $15,197,014 $      -   $(200,264) $18,750,268

Comprehensive income
 Net loss           -           -    (487,384)       -           -     (487,384)
 Accumulated other comprehensive income:
 Unrealized depreciation
  on marketable
  securities        -           -           - (147,624)          -     (147,624)
 Realized loss
  on marketable
  securities        -           -           -   27,890           -       27,890
Total comprehensive income                                             (607,118)
Stock issued:
 Exercise of
  options         124      26,587           -        -           -       26,711
Balances at
 June 30, 1999 32,654   3,747,575  14,709,630 (119,734)   (200,264)  18,169,861

Comprehensive income
 Net income         -           -     520,501        -           -      520,501
 Accumulated other comprehensive income:
 Unrealized appreciation
  on marketable
  securities        -           -           -   54,107           -       54,107
 Realized loss
  on marketable
  securities        -           -           -   61,325           -       61,325
Total comprehensive income                                              635,933
Balances at
 June 30, 2000 32,654   3,747,575  15,230,131   (4,302)   (200,264)  18,805,794

Comprehensive income
 Net loss           -           -  (7,303,442)       -           -   (7,303,442)
 Accumulated other comprehensive income:
 Unrealized appreciation
  on marketable
  securities        -           -           -      210           -          210
 Realized loss
  on marketable
  securities        -           -           -    3,139           -        3,139
Total comprehensive income                                           (7,300,093)
Balances at
 June 30,2001 $32,654  $3,747,575  $7,926,689  $  (953)  $(200,264) $11,505,701

See accompanying notes.


Cannon Express, Inc. and Subsidiaries
Consolidated Statements of Cash Flows

                                                   Years ended June 30,
                                             2001          2000         1999
Operating activities
Net income (loss)                        $(7,303,442)  $  520,501  $  (487,384)
Adjustments to reconcile net income to net
cash provided by operating activities:
 Depreciation and amortization             9,783,036    9,173,125   13,077,769
 Provision for losses
  on accounts receivable                     270,639       75,000       60,000
 Provision (credit) for
  deferred income taxes                   (1,930,000)  (2,632,000)      25,000
 Gain on disposal of equipment            (1,205,951)  (5,163,933)  (3,211,610)
 Loss on sale of marketable securities         5,104       99,715       27,890
 Changes in operating assets and liabilities:
   Receivables                             2,367,647   (3,039,879)     136,560
   Prepaid expenses and supplies             (79,749)     (92,924)    (205,319)
   Accounts payable, accrued expenses,
    income taxes payable, and
    other liabilities                        737,182      (36,884)   1,454,297
   Net investment in direct
    financing leases                       3,234,652    3,651,121            -
   Other assets                                    -      (25,020)           -
Net cash provided by oper. activities      5,879,118    2,528,822   10,877,203

Investing activities
Purchases of property and equipment         (433,106) (32,112,256)  (7,174,194)
Net decrease(increase) in restricted cash    (10,770)     (25,832)       5,748
Investment in outside driver training facility     -      (37,550)    (280,000)
Proceeds from sales of marketable securities   4,762      371,669       48,633
Proceeds from equipment sales              4,104,434   21,921,095    8,063,555
Net cash provided by (used in)
 investing activities                      3,665,320   (9,882,874)     663,742

Financing activities
Proceeds from long-term borrowings           246,437   31,227,405   12,506,871
Principal payments on long-term debt and
 capital lease obligations               (15,184,007) (25,205,565) (18,208,238)
Proceeds from exercise of stock options            -            -       26,711
Net cash provided by (used in)
 financing activities                    (14,937,570)   6,021,840   (5,674,656)

Increase(decrease) in cash and
 cash equivalents                         (5,393,132)  (1,332,212)   5,866,289
Cash and cash equivalents
 at beginning of year                      8,351,582    9,683,794    3,817,505

Cash and cash equivalents at end of year  $2,958,450   $8,351,582   $9,683,794


See accompanying notes.


Cannon Express, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2001 and 2000

1. Nature of Operations and Summary of Significant Accounting Policies

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.

Future Operations - The financial statements of the Company have been
prepared on the basis of accounting principles applicable to a going concern,
which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business.  As shown in the financial
statements, the Company has experienced increasing net losses before income
taxes of approximately $8.4 million, $1.8 million and $800,000 for the years
ended June 30, 2001, 2000 and 1999, respectively.  In addition, the Company
has experienced significant declines in operating revenues and cash reserves
over the past few years. The Company also has a working capital deficit of
approximately $6.7 million, which includes approximately $16 million in
current debt obligations coming due in fiscal year 2002.

These factors, among others, raise substantial doubt about the ability of the
Company to continue as a going concern.  The financial statements do not
include any adjustments relating to the recoverability and classification of
asset carrying amounts or the amount and classification of liabilities that
might result should the Company be unable to continue as a going concern.
The ability of the Company to continue as a going concern is dependant upon
its ability to significantly improve its operating ratios, its ability to
generate sufficient cash flow to meet its obligations on a timely basis, the
support of its stockholders and its ability to obtain additional financing or
refinancing as may be required.

The Company is currently implementing a plan, which management believes will
significantly improve its operating efficiencies over the next fiscal year.
The Company has retained the services of an outside consultant, having
significant experience in the transportation industry, both from an operational
as well as a marketing strategy standpoint throughout the United States, Mexico
and Canada.  The Company has identified numerous cost-cutting measures to
eliminate unnecessary overhead, including eliminating a maintenance shift,
expected to save the Company at least $500,000 annually.  The Company is
further focusing on the reduction of deadhead miles by concentrating on lane
optimization.

The Company is also being more selective in its acceptance of new customers,
making a concerted effort to improve the rate per mile realized on each load.
In addition, the risk of further increases in fuel costs, which played a
significant role in the current year net loss, is being mitigated through
efforts to include fuel surcharges on new contracts.

The Company has also identified selected assets for possible disposition.
Management believes sale of these assets would increase cash flow and pre-tax
earnings by approximately $4.5 million and $2.0 million, respectively.  These
assets include 400 trailers and an airplane.


Cannon Express, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

1. Nature of Operations and Summary of Significant Accounting Policies
(continued)

Finally, management believes the Company has an excellent relationship with
its lenders and that they will be able, if necessary, to refinance any
existing debt on revenue equipment.  The Company is also in the process of
obtaining a $6 million working capital line of credit that would be
collateralized by qualifying accounts receivable.  Management further expects
interest costs to decline as interest rates continue to decrease and the
Company's debt includes floating interest rates.

There is no assurance that the Company will be able to improve its operating
ratios or that the Company will be successful in securing capital resources
to fund maturities of debt and other obligations as they become due in fiscal
2002 or to support the Company until such time that the Company is able to
consistently generate results sufficient to support its operations.

Property and Equipment - Property and equipment are recorded at cost. For
financial reporting purposes, the cost of such property is depreciated using
the straight-line method.  For tax reporting purposes, accelerated cost
recovery methods are used.  Gains on sales of revenue equipment are
recognized in the period realized as a reduction to depreciation expense.
Gains on sales of revenue equipment recorded in fiscal 2001, 2000 and 1999
were $1,205,951, $5,163,933 and $3,211,610, respectively. 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.
The estimated useful life of revenue equipment is 3 to 7 years, and the
estimated useful life of service, office and other equipment is 5 to 7 years.

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.

Comprehensive Income - The Company accounts for comprehensive income under
Statement of Financial Accounting Standards (SFAS) No. 130, Reporting
Comprehensive Income.  This statement establishes standards for reporting and
display of comprehensive income and its components.

Earnings Per Share - The Company adopted Statement of Financial Accounting
Standards (SFAS) No. 128, Earnings Per Share, effective June 30, 1998, and
all earnings per share amounts disclosed herein have been calculated under
the provisions of SFAS No. 128.  Basic earnings per share is computed based
on the weighted average number of shares outstanding during the year, while
diluted earnings per share is based on the weighted average number of shares
adjusted to include common stock equivalents attributable to dilutive
warrants and stock options.


Cannon Express, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

1. Nature of Operations and Summary of Significant Accounting Policies
(continued)

The Company accounts for earnings (loss) per share in accordance with the
provisions of Statement of Financial Accounting Standards (SFAS) No. 128,
Earnings per Share.  In computing diluted earnings per share, only potential
common shares that are dilutive_ those that reduce earnings per share or
increase loss per share_ are included.  Exercise of options and warrants or
conversion of convertible securities is not assumed if the result would be
antidilutive, such as when a loss from continuing operations is reported or
the exercise price of the convertible securities exceeds the market price. As
the exercise price of all potentially dilutive financial instruments was less
than the market price at June 30, 2001, and the Company incurred a loss from
continuing operations for the year ended June 30, 2001, basic earnings per
share and diluted earnings per share were computed in the same manner.
Although such financial instruments were not included due to being
antidilutive, the Company does have 84,861 shares of potentially dilutive
financial instruments in the form of warrants and options at June 30, 2001.

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
claims 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's insurance activities are secured by $2,651,500 in letters of
credit.  Restricted cash of $2,417,686 and $2,406,916 at June 30, 2001 and
2000, respectively, represents certificates of deposit held as collateral for
these letters of credit.

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 - Noncurrent marketable equity securities for
which the Company has no immediate plan to sell are classified as available-
for-sale and are 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,
                                                  2001         2000

   Cost                                       $ 344,099      $ 353,965
   Unrealized losses                             (1,549)        (6,995)

   Fair value                                 $ 342,550      $ 346,970


Cannon Express, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

1. Nature of Operations and Summary of Significant Accounting Policies
(continued)

Proceeds from sales of available-for-sale equity securities were $4,762,
$371,669 and $48,633 for 2001, 2000 and 1999, respectively.  Resultant gross
losses of $(5,104), $(99,715) and $(27,890) were recognized and included in
net income for 2001, 2000 and 1999, respectively.  The Company's available-
for-sale equity securities were recorded at their market value as of June 30,
2001, 2000 and 1999.

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 $(2,097), $72,262 and $(74,955) for
2001, 2000 and 1999, respectively.

Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States 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 2000 and
1999 financial statements to conform to the 2001 financial statement
presentation.  These reclassifications had no effect on net income.




Cannon Express, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

2. Long-term Debt

                                                     June 30,
                                                2001          2000
Equipment notes (1)                        $ 20,843,065   $ 27,477,650
Capital lease obligations (2)                33,965,724     42,268,710
                                             54,808,789     69,746,360
Less current portion                         15,969,109     13,098,351
                                           $ 38,839,680   $ 56,648,009

(1)Represents loans on revenue equipment, payable in various installments
through 2004 with a weighted average interest rate of 7.1%.  Revenue
equipment, having a book value of approximately $18,090,000 at June 30, 2001,
is pledged as collateral.  The carrying amount of equipment notes payable
approximates fair value at June 30, 2001.

(2)Capital lease obligations are for revenue equipment with an aggregate
net book value of approximately $29,260,000 at June 30, 2001.  The leases
have a weighted average interest rate of 6.7%. 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.

Revenue equipment having an original cost of approximately $19 million and
leased to owner operators per direct financing leases described in Note 5 are
pledged as collateral in part against both the equipment notes and capital
lease obligations.

Annual maturities of long-term debt, excluding capital lease obligations
(Note 6) at June 30, 2001, are:

                          2002       $ 9,408,024
                          2003         8,916,457
                          2004         2,518,584
                                     $20,843,065

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,
                                         2001          2000           1999
Income taxes at the statutory
 federal rate of 34%                $(2,871,000)   $  (596,000)    $(256,000)
Federal income tax effects of:
  Equipment leasing transactions     (1,074,000)    (1,660,000)            -
  Other                                  69,029         50,000        19,000
Increase in valuation allowance       3,087,000              -             -
State income taxes                     (353,000)       (69,000)      (30,000)
                                    $(1,141,971)   $(2,275,000)    $(267,000)


Cannon Express, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

3. Federal and State Income Taxes (continued)

The tax effects of temporary differences related to deferred taxes shown on
the balance sheets were:

                                                  June 30,
                                             2001        2000
Deferred tax assets:
  Revenue equipment leases                  $13,005,000    $16,185,000
  Self-insurance accruals                     1,355,000      1,404,000
  Net operating loss carryforwards            7,558,000        874,000
  Allowance/valuation reserves                  414,000        254,000
  Revenue recognition                            28,000         56,000
    Total deferred income tax assets         22,360,000     18,773,000

Deferred tax liabilities:
  Depreciation                               16,998,000     13,973,000
  Net investment in direct financing leases   2,057,000      6,590,000
  Prepaids and other                            218,000        140,000
    Total deferred income tax liabilities    19,273,000     20,703,000

Net deferred tax asset (liability)            3,087,000     (1,930,000)
Valuation allowance for deferred tax assets  (3,087,000)             -

Net deferred taxes                          $         -    $(1,930,000)


SFAS 109, "Accounting for Income Taxes,"  requires deferred tax assets to be
reduced by a valuation allowance if it is more likely than not that some
portion or all of the deferred tax assets will not be realized. As the
Company has generated net operating losses for the last few years and there
is no assurance of future income, a valuation allowance of $3,087,000 has
been established at June 30, 2001, to recognize its deferred tax assets only
to the extent of its deferred tax liabilities.  The Company will continue to
evaluate the need for such valuation allowance in the future.

On June 30, 2001, the Company had Federal and State NOL tax carryforwards,
which expire as follows:

      2003                              $  874,000
      2006                                 742,000
      2013                                 703,000
      2019                                 705,000
      2020                                 255,000
      2021                               4,279,000
       Total                            $7,558,000


Cannon Express, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

3.  Federal and State Income Taxes (Continued)

The Company, in fiscal 1995, entered into a leasing transaction, which was
accounted for on a consolidated financial reporting basis as a sale/leaseback
transaction.  For income tax reporting purposes, the Company recognized a
benefit in fiscal 1995, 1996, 1997, 1998 and 1999.  This benefit is being
recognized in the Company's consolidated financial statements as a reduction
in current provision for income taxes upon the expiration of the statutory
period. Approximately $1.5 million and $1.7 million of this benefit was
recognized in the Company's consolidated financial statements for the years
ended June 30, 2001 and 2000, respectively.

The Company is awaiting a final determination from the Internal Revenue
Service (IRS) relating to the accounting for the sale/leaseback transactions
described in Note 3.  If it is determined that these transactions were not
deductible for tax purposes, the Company could be subject to an assessment by
the IRS.

4. Common Stock

Treasury Stock - In March 1990, the Board of Directors approved the purchase
in open market transactions of up to 150,000 shares of common stock.  As of
June 30, 2001, 60,125 shares at an average price of $3.33 per share are
included as treasury stock on the balance sheets.  No purchases were made in
fiscal years 2001, 2000 and 1999.

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, 2001, there were 9,932
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 (SFAS No. 123).  Accordingly, no compensation cost has been
recognized for the stock option plan.  There were no options granted during
fiscal year 2001, 2000 and 1999. 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.


Cannon Express, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

4. Common Stock (continued)

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

                                 2001              2000               1999
                                    Wt Avg            Wt Avg             Wt Avg
                                   Exercise          Exercise          Exercise
                          Options   Price    Options  Price     Options   Price

Outstanding at July 1     104,504   $6.27    139,197   $5.47    175,612   $5.33
Granted                         -      -           -       -          -       -
Exercised                       -      -           -       -    (12,415)   2.15
Canceled                   (7,000)  7.00     (34,693)   3.04    (24,000)   6.17
Outstanding at June 30     97,504  $6.22     104,504   $6.27    139,197   $5.47

Weighted average remaining life 1.70 years

Exercisable at June 30     84,861             84,647            111,180

Weighted average price      $6.17              $6.18              $5.23

Price range at June 30      $5.33 to $7.59     $5.33 to $7.59     $2.12 to $7.59



Earnings Per Share

                                                       June 30,
                                              2001       2000        1999

Average shares outstanding                 3,205,276   3,207,172   3,197,896
Net effect of dilutive stock options               -           -           -
Diluted shares outstanding                 3,205,276   3,207,172   3,197,896

Net income (loss) for the period        $ (7,303,442) $  520,501  $ (487,384)

Basic earnings (loss) per share         $      (2.28) $     0.16  $    (0.15)

Diluted earnings (loss) per share       $      (2.28) $     0.16  $    (0.15)


Cannon Express, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

5. Net Investment in Direct Financing Leases

The Company's net investment in direct financing leases consists of the
leasing of transportation equipment acquired by a subsidiary of the Company to
drivers.  Terms of the direct financing leases range from 156 to 182 weeks
with weekly lease payments of $450 to $550.  There were 110 and 269 direct
financing leases in effect as of June 30, 2001 and 2000, respectively.
Revenue equipment that relates to leases that had been cancelled during the
year were transferred to fixed assets.  The following lists the components of
the net investment in direct financing leases:
                                                             June 30,
                                                        2001           2000
Total minimum lease payments to be received         $ 6,151,061    $19,689,301
Less unearned revenue                                   779,223      2,477,121
Net investment in direct financing leases           $ 5,371,838    $17,212,180
Less current portion                                  2,678,000      6,575,400
Net investment in direct financing leases,
 less current portion                               $ 2,693,838    $10,636,780


The future minimum lease payments under direct financing leases at June 30,
2001, consisted of the following:

   2002                                                    $2,678,000
   2003                                                     2,462,996
   2004                                                     1,010,065
   Total minimum lease payments                            $6,151,061


6. Leases and Commitments

The future minimum payments under capital leases at June 30, 2001,
consisted of the following:

   2002                                                   $ 8,543,121
   2003                                                    10,977,552
   2004                                                    11,865,813
   2005                                                     4,345,978
   2006                                                     2,779,645
   Thereafter                                                       -
   Total minimum lease payments                            38,512,109
   Amounts representing interest                            4,546,385
   Present value of net minimum lease payments
    included in long-term debt
    ($6,561,085 due in 2002) (Note 2)                     $33,965,724


Cannon Express, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

6. Leases and Commitments (continued)

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

                                                      June 30,
                                                2001           2000
Revenue equipment                           $39,115,760    $38,942,567
Accumulated depreciation                      9,855,984      7,702,411
                                            $29,259,776    $31,240,156

The Company incurred no capital lease obligations during 2001. During 2000
and 1999, the Company incurred capital lease obligations totaling
approximately $32,611,000 and $5,500,000, respectively.

The capital lease obligation incurred during fiscal 1999 was the result of a
sale/leaseback transaction for certain trucks which had been purchased for
cash during the quarter ended December 31, 1996. The lease contained an early
purchase option which was exercised during the fiscal year ended June 30,
2000.

Capital lease amortization is included in depreciation expense.

7. 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. Management believes that adverse results in
one or more of these cases would not have a material adverse effect on the
Company's financial position. Additionally, a decision has been rendered
against the Company by the Equal Employment Opportunity Commission ("EEOC")
for unlawful hiring practices regarding pre-employment questions about
medical issues. The Company believed it was required by Department of
Transportation regulations to ask these questions. The Company has entered
into a settlement agreement with the EEOC which requires the Company to pay
certain individuals who may have been discriminated against a fee and/or be
offered employment with the Company.  The Company has accrued $250,000 for
these payments and associated legal fees during fiscal year 2001.  Management
believes that settlement of this charge will not have a material adverse
effect on the financial position of the Company.


8. Related Party Transactions

The Company leases a facility from the majority stockholders of the Company.
The lease provides for monthly rental payments of $6,000.  Rent totaled
$63,000, $36,000 and $36,000 for fiscal years 2001, 2000 and 1999,
respectively.  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.


Cannon Express, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

9. Concentration of Business and Credit Risk

The Company provides services to customers throughout the United States,
Mexico 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
 15%, 18% and 29% of revenue for fiscal 2001, 2000 and 1999, respectively.
Accounts receivable as of June 30 for this customer totaled approximately
$1,235,000 and $1,522,000 for 2001 and 2000, respectively.  A second
unaffiliated major customer accounted for approximately  9%, 9% and 13% of
revenue in 2001, 2000 and 1999, respectively. Accounts receivable as of June
30 for this customer totaled approximately $1,109,000 and $1,665,000 for 2001
and 2000, respectively.


10. 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 to
participants during the plan year.  Participant interests are 100% vested
after completion of three years of service.  No contributions were made to
the plan in 2001, 2000 or 1999.


11. Supplemental Disclosures of Cash Flow Information

                                                        June 30,
                                               2001       2000        1999

Interest paid                               4,601,000   1,683,000   2,916,000

Income taxes paid                              29,000      63,000      94,000

Non-cash investing and financing activities:
  Decrease in direct financing leases       8,312,017           -           -

  Debt incurred due to investment
   in direct financing leases                       -  20,863,301           -



Cannon Express, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

12. Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141, Business Combinations (SFAS 141), and
No. 142, Goodwill and Other Intangible Assets (SFAS 142), to be adopted as of
January 1, 2002.  SFAS 141 changes the accounting rules governing business
combinations and eliminates the flexibility to account for some mergers and
acquisitions as pooling of interests.  Under SFAS 142, goodwill is no longer
subject to amortization over its estimated useful life.  Instead, it will be
subject to at least an annual assessment for impairment by applying a fair-
value-based test.  In addition, acquired intangible assets should be
separately recognized if the benefit of the intangible asset is obtained
through contractual or other legal rights, or if the intangible asset can be
sold, transferred, licensed, rented or exchanged, regardless of the
acquirer's intent to do so.  Management believes the impact of SFAS 141 and
SFAS 142 will not be significant to the financial statements as reported.


In August 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 143, Accounting for Asset Retirement
Obligations (SFAS 143), to be adopted for financial statements issued for
fiscal years beginning after June 15, 2002.  SFAS 143 addresses financial
accounting and reporting for obligations associated with the retirement of
tangible long-lived assets and the associated assets retirement costs.
Management believes the impact of SFAS 143 will not be significant to the
financial statements as reported.


Cannon Express, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

13. Quarterly Results of Operations (Unaudited)

                                                Fiscal 2001
                           September 30  December 31    March 31     June 30

Operating revenue           $22,615,464  $20,460,341  $20,850,239  $21,869,351
Operating expenses and costs 23,645,889   22,013,073   21,741,888   22,529,629
Operating loss               (1,030,425)  (1,552,732)    (891,649)    (660,278)
Other income (expense), net     105,079      118,242       80,500       44,334
Interest expense              1,275,992    1,229,753    1,106,128    1,046,611
Loss before income taxes     (2,201,338)  (2,664,243)  (1,917,277)  (1,662,555)
Income taxes                 (1,134,500)  (1,409,500)  (1,121,500)   2,523,529

Net loss                    $(1,066,838) $(1,254,743) $  (795,777) $(4,186,084)

Basic earnings
 (loss) per share               $ (0.33) $     (0.39) $     (0.25) $     (1.31)
Average shares and share
 equivalents outstanding      3,205,276    3,205,276    3,205,276    3,205,276

Diluted earnings
 (loss) per share               $ (0.33) $     (0.39) $     (0.25) $     (1.31)
Diluted shares and share
  equivalents outstanding     3,205,276    3,205,276    3,205,276    3,205,276

                                                Fiscal 2000
                           September 30  December 31    March 31      June 30

Operating revenue           $22,915,433  $21,290,792  $22,522,951  $25,049,590
Operating expenses and costs 22,231,016   21,727,416   21,450,857   24,655,296
Operating income (loss)         684,417     (436,624)   1,072,094      394,294
Other income (expense), net     106,155       76,526      208,909      (21,363)
Interest expense                651,469      843,903    1,158,421    1,185,114
Income(loss) before
 income taxes                   139,103   (1,204,001)     122,582     (812,183)
Income taxes                   (362,000)    (878,000)    (368,000)    (667,000)

Net income (loss)           $   501,103  $  (326,001) $   490,582  $  (145,183)

Basic earnings
 (loss) per share           $      0.16  $     (0.10) $      0.15  $     (0.05)
Average shares and share
 equivalents outstanding      3,205,276    3,205,276    3,205,276    3,205,276

Diluted earnings
 (loss) per share           $      0.16  $     (0.10) $      0.15  $     (0.05)
Diluted shares and share
 equivalents outstanding      3,210,614    3,205,276    3,205,276    3,205,276


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 Accounts  Deductions-      End of
Description      Period     Expenses     Describe      Describe        Period


Year ended June 30, 2001:
 Deducted from asset accounts:
  Reserve for doubtful trade
  receivables $  267,405    $275,213           -     $      -(A)     $ 542,618

 Insurance
 reserves     $3,666,103    $161,612           -     $287,991(B)     $3,539,724


Year ended June 30, 2000:
 Deducted from asset accounts:
  Reserve for doubtful trade
  receivables $  199,579    $ 75,000           -     $  7,174(A)     $  267,405

 Insurance
 reserves     $3,295,528    $949,996           -     $579,421(B)     $3,666,103



Year ended June 30, 1999:
 Deducted from asset accounts:
  Reserve for doubtful trade
  receivables $  158,656    $ 60,000           -     $ 19,077(A)     $  199,579

 Insurance
 reserves     $3,144,259    $687,435           -     $536,166(B)     $3,295,528



(A) Uncollectible accounts written off, net of recoveries
(B) Actual claims paid, net of refunds



Shareholder Information

Form 10-K Availability

A copy of the 2001 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

American Stock Exchange
Symbol:
     AB


Independent Auditors

Arthur Andersen  LLP
Fayetteville, Arkansas


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.