<PAGE>   1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K
(Mark One)
  [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 [Fee Required]

                  For the fiscal year ended December 30, 1995

  [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) of the
              SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]

      For the transition period from              to                 .
                                     ------------    ----------------

                         Commission File No. 0-14810

                               MARK VII, INC.
           (Exact name of Registrant as specified in its charter)


                Missouri
        (State or other jurisdiction                   43-1074964
     of incorporation or organization)      (I.R.S. Employer Identification No.)

     965 Ridge Lake Boulevard, Suite 103
            Memphis, Tennessee                               38120
    (Address of principal executive offices)               (Zip Code)

      Registrant's telephone number, including area code:  (901) 767-4455
       Securities registered pursuant to Section 12(b) of the Act:  None
          Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.10 par value
                                (Title of Class)

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

Indicate by check mark 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.  [    ]

The aggregate market value of Common Stock, $.10 par value, held by
non-affiliates of the Registrant on March 19, 1996, based upon the last sale
price of such stock on that date was $72,404,735.  At March 20, 1996, 4,588,761
shares of Common Stock, $.10 par value, were outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE


Documents                                                 Form 10-K Reference
---------                                                 -------------------
Notice of 1996 Annual Meeting of                          Part III, Items 10,
 Shareholders and Proxy Statement                         11, 12 and 13
 to be filed within 120 days of December 30, 1995, 
 excluding therefrom the sections titled "Board 
 Compensation Committee Report on Executive
 Compensation" and "Performance Graph"


<PAGE>   2
 

                        MARK VII, INC. AND SUBSIDIARIES

                        1995 ANNUAL REPORT ON FORM 10-K

                               TABLE OF CONTENTS

                                     PART I


<TABLE>
<CAPTION>

                                                                         Page
                                                                         ----
<S>   <C>  <C>                                                             <C>
Item   1.  Business...................................................     2

Item   2.  Properties.................................................     5

Item   3.  Legal Proceedings..........................................     5

Item   4.  Submission of Matters to a Vote of Security Holders........     5
</TABLE>


                                    PART II


<TABLE>
<CAPTION>
<S>   <C>  <C> 
Item   5.  Market for Registrant's Common Equity and Related 
           Stockholder Matters.........................................    6

Item   6.  Selected Financial Data.....................................    7

Item   7.  Management's Discussion and Analysis of Financial 
           Condition and Results of Operations.........................    8

Item   8.  Financial Statements and Supplementary Data.................   10

Item   9.  Changes in and Disagreements with Accountants on 
           Accounting and Financial Disclosures........................   10
</TABLE>


                                    PART III


<TABLE>
Caption
 <S>   <C>  <C>                                                            <C>
 Item  10.  Directors and Executive Officers of the Registrant.........    10

 Item  11.  Executive Compensation.....................................    10

 Item  12.  Security Ownership of Certain Beneficial Owners 
            and Management.............................................    10

 Item  13.  Certain Relationships and Related Transactions.............    10
</TABLE>


                                    PART IV

<TABLE>
<CAPTION>
<S>         <C>                                                            <C>
Item 14.    Exhibits, Financial Statement Schedules, and 
            Reports on Form 8-K........................................    11

</TABLE>








                                      1



<PAGE>   3
 





                                     PART I

ITEM 1. BUSINESS

GENERAL

     Mark VII, Inc. (the "Company") is a holding company, the principal assets
of which are its transportation services subsidiary, Mark VII Transportation
Company, Inc. ("Mark VII'') and Mark VII's subsidiaries.  The Company was
organized as a Missouri corporation in 1976.  The Company is a service
organization that acts as a provider of transportation and logistics services.
As a provider of transportation services, the Company arranges for domestic and
international transportation, using a number of different transportation
modes, including rail, truck, ship and air.  As a logistics manager, the
Company provides its customers with value-added elements of the distribution
chain, such as private fleet management, warehousing and regional and local
distribution.

     The Company has established a network of transportation sales personnel
and logistics managers at its operating headquarters in Memphis, Tennessee and
97 branch sales offices in 32 states.  The majority of the Company's branch
offices are operated by independent commission agents responsible for the
client relationships, office expenses and billing.  The Company supports its
agency offices by providing expertise in multiple transportation modes, rate
negotiation and logistics design, as well as administrative and credit
services.

     The Company acts as a link between shippers and carriers.  Shippers use
transportation services companies to complement in-house transportation
departments.  The Company augments in-house shipping departments by providing
expertise in multiple modes of transportation, providing access to additional
transportation equipment, negotiating transportation rates and increasing the
productivity of in-house personnel.  The Company provides shippers with an
opportunity to outsource all or part of the transportation function, thereby
allowing them to devote assets and personnel to their primary business.  The
Company's services are also used by transportation carriers to supplement their
in-house sales departments and to improve equipment utilization.  The Company
maintains close relationships with major railroads, trucklines, shipping lines
and air freight carriers.

SERVICES PROVIDED

The Company's transportation services can be broadly classified into the
following categories:

     Transaction-Based Services.  "Transaction based services" are identified
with the traditional freight brokerage business where a shipper calls a
transportation services company to arrange for service on a
shipment-by-shipment basis.  The transportation services company then assumes
responsibility for the transportation carrier to perform in accordance with the
shipper's specifications.  Similarly, a carrier may call the transportation
services company when it needs freight to transport.  The transportation
services company arranges a match and adds a fee to the carrier's rate.

     Logistics Management Services.  "Logistics management services" include
both process-based and information/knowledge-based services.  Process-based
services involve the Company taking responsibility for all transactions of a
particular type for a shipper or carrier.  The Company's expertise in
intermodal service and trucking has led shippers and carriers to request the
Company to regularly arrange shipments for a pre-arranged fee.  Both shippers
and carriers avail themselves of this service, often realizing financial
savings due to the Company's volume and information base and its ability to
arrange shipments more efficiently.  The Company can help trucklines maintain
competitive positions, including allowing them to supplement their sales and
marketing efforts without incremental fixed costs.  Process based services
generally are a result of the full or partial outsourcing of internal traffic
department functions.  For example, the Company currently coordinates the
time-sensitive raw potato delivery for a number of processing plants of a major
potato chip manufacturer.  Other examples of process based services currently
executed by the Company are the procurement of truck and rail services for a
substantial portion of a customer's shipments from a particular location,
procurement of backhaul shipments for private fleets, freight consolidation and
forwarding for a customer with complex logistical needs, and utilization
management of an equipment owner's fleet and operation of small dedicated
fleets to serve several logistics customers.

     "Information/knowledge based services" involve management and consultation
on any and all aspects of transportation for a shipper or carrier, including
dedicated fleet, warehousing and risk management.  The Company utilizes
its sales network to design transportation and distribution programs for
customers with complex logistical needs.  For example, ERX Logistics, a joint
venture between the Company and a warehousing firm, provides a major household
appliance

                                      2

<PAGE>   4
 

manufacturer with warehousing and time-sensitive delivery of its appliances to
its dealers and building contractor customers.  As part of its  private fleet
management services, the Company offers risk management and single source
leasing.  The risk management group provides consultation services, driver
recruiting, safety program design, regulatory compliance and claims handling. 
These services are being marketed by the Company to transportation companies and
may be used separately or combined with the overall logistics management
function.  Under the Company's single source leasing program, the Company will
arrange the lease of a fully licensed and insured tractor, trailer and driver on
behalf of the fleet operator.

TRANSPORTATION MODES

     Transportation modes used by the Company have been organized into product
lines.  Each product line has one or more managers to provide marketing and
operational support to the Company's network of sales people and logistics
professionals.

     Rail Services.  Intermodal services involve arranging for the pick up and
delivery of shipments by trucks, and the shipments' transport by railroads, in
a coordinated manner.  Other rail services involve rail transport by boxcar or
flatcar for shippers' heavy or bulky freight.  Related services may include
load stabilization, load expediting and equipment selection.

     Truck Services.  Truck services involve arranging for the pick up and
delivery of shipments that will move over the road using trucks.  In addition
to locating appropriate equipment to meet shippers' needs, trucklines actively
solicit shipments from the Company's sales offices.  Although the Company owns
or leases only a limited equipment base, it has access to an abundant supply of
truckload units provided by trucklines meeting the Company's safety and service
criteria.

     NVOCC Brokerage.  Ocean freight brokerage involves acting as agents for
shippers and importers under non-vessel operating common carrier authority
(NVOCC), issued by the Federal Maritime Commission, to arrange for the services
of ocean carriers.

     Other Services.  Other services, such as air freight forwarding, local
truckload and heavy equipment transport, are important to the Company's
strategy because they respond to a customer's total transportation needs and
provide the Company's network of sales personnel and logistics managers a
complete range of services to sell.

AGENCY NETWORK AND OPERATIONS

     Mark VII's operations are decentralized and are conducted primarily in
branch offices.  Of the 97 branch offices, 16 are operated by Mark VII and 81
are operated under agency agreements.  Contracts with agents have a duration of
ten years and are terminable by either party on each anniversary of the
agreement by giving 30 days' notice.  Although the Company's contracts with its
agents are non-exclusive, the Company's agents generally do not provide
services on behalf of other transportation services companies.  Agency offices
operate as independent businesses, responsible for all costs associated with
sales, operations, billing and any related overhead for these items and are
compensated by a percentage of fees associated with transportation arranged.
Each of the agency branches is responsible for obtaining its own office
facilities.  Offices operated by employees, rather than agents, are structured
as stand-alone business units.  Most offices have one to four operations
people, who are responsible for controlling all aspects of executing the
shipment, including (i) taking the order from the customer, (ii) arranging for
transportation services, (iii) monitoring progress of the shipment and
reporting back to the customer and (iv) billing the customer on the Company's
invoices.  To foster the growth of its agency network, the Company provides new
agents with advances to cover start-up and initial operating costs, which
advances are typically repaid over 24 months.

     Typically, a sales person identifies a potential customer and determines
its transportation requirements.  The sales person then prepares a rate
proposal from pricing data negotiated by the Company with representatives of
the carriers and the providers of other services that may be required.  Before
any freight is handled for a customer, credit approval must be obtained from
the Company's corporate credit department.  Upon customer acceptance of a rate
proposal, the operations unit in the branch office assumes responsibility for
executing individual shipment orders for that customer.

        The Company provides administrative support, such as computer systems,
sales support, credit services, collection services and accounts payable
services, to its branch office operations on a centralized basis.  Specialty
operations such as risk management, design and management of dedicated trucking
operations and truck brokerage are available to the logistics management
services operations. The Company utilizes a Data General model MV9600 computer
and customized software which integrates shipment tracking, customer records and
billing, accounts payable and general accounting.  This system can also access
the computer systems of railroads to maintain up-to-date information on all
shipments.  The Company also utilizes 


                                       3



<PAGE>   5
 
its electronic data interchange capabilities with a number of carriers and
shippers so that customers may follow the movement of their shipments and
receive electronic billing.

     Results of operations in the transportation industry generally show a
seasonal pattern, as customers reduce shipments during and after the winter
holiday season.  In recent years, the Company's operating income and earnings
have been higher in the second and third quarters than in the first and fourth
quarters.

COMPETITION

     The transportation services industry is highly competitive.  The Company
competes against other integrated logistics companies, as well as
transportation companies.  The Company also competes against carriers' internal
sales forces.  This competition is based primarily on freight rates, quality of
service, (such as damage free shipments, on-time delivery and consistent
transit times), reliable pickup and delivery and scope of operations.  Other
logistics companies and transportation services companies and numerous carriers
have substantially greater financial and other resources than the Company.  The
Company also competes with transportation services companies for the services
of independent commission agents.

GOVERNMENT REGULATION

     The Company is licensed by the  United States Department of Transportation
("DOT") to engage in operations as a broker in arranging for the
transportation, by motor vehicle, of general commodities between points in the
United States.  The DOT prescribes qualifications for acting in this capacity,
including certain surety bonding requirements.  The Company also acts as a
common and contract motor carrier regulated by the DOT.  Interstate motor
carrier operations are subject to safety requirements prescribed by the DOT.
Matters such as weight and dimensions of equipment are also subject to federal
regulations.  Before it was abolished on January 1, 1996, the Interstate
Commerce Commission ("ICC") regulated the Company's transportation services
operations.  Congress has transferred some of the ICC's functions to the DOT.
The Company does not anticipate that the abolition of the ICC will have any
effect on the Company's transportation services operations.

     In its ocean freight forwarding business, the Company is licensed as an
ocean freight forwarder and as a non-vessel operating common carrier by the
Federal Maritime Commission (the "FMC").  The FMC prescribes qualifications for
acting as a shipping agent, including the filing of tariffs and surety bonding
requirements.

     The Company's air freight forwarding business is subject to regulation, as
an indirect air cargo carrier, under the Federal Aviation Act by the DOT.  The
DOT's Economic Aviation Regulations exempt domestic air freight forwarders from
most, but not all, of such act's requirements.  The major provisions of the act
that remain applicable to the Company forbid solicitation of certain rebates,
require the carrier to provide safe service, equipment and facilities, prohibit
discrimination with respect to foreign air cargo transportation, prohibit
unfair or deceptive practices and authorize the DOT to inquire into the
carrier's management for certain purposes.

     In certain foreign markets in which the Company operates, the air freight
forwarding business is subject to rate schedules and other restrictions which
in the first instance are agreed to by the International Air Transport
Association and subsequently approved by the governments concerned.  The
Company also is subject to certain foreign regulations.

     Management does not believe that current regulations of its activities
imposes significant economic restraints upon its operations or upon the entry
of new competitors into the industry in general or into the markets that are
served by the Company in particular.

                                      4


<PAGE>   6
 

EMPLOYEES

     The Company employed 354 individuals at March 8, 1996.  The employees were
not represented by a collective bargaining unit.  Management considers
relations with its employees to be good.

ITEM 2.    PROPERTIES

     All of the Company's operations at the 16 company locations are conducted
in office space under leases with terms of less than four years.  The Company's
principal administrative offices are located in leased space in Memphis,
Tennessee, Kansas City, Missouri and Indianapolis, Indiana.  Each of the 81
agency branches is responsible for obtaining its own office facilities.

     The Company also owns, and is holding for sale or lease, office,
maintenance and fuel facilities in St. Joseph, Missouri and Joplin, Missouri
and a four acre tract in Los Angeles, California.  The Los Angeles lot has been
leased through December 2000.

ITEM 3.    LEGAL PROCEEDINGS

     The Company is engaged in an arbitration proceeding filed by Roger Crouch,
the Company's former Vice Chairman of the Board, as a result of the Company's
termination of his employment agreement with the Company for cause.  The
arbitration is being conducted by the American Arbitration Association.  Under
the terms of the employment agreement, if Mr. Crouch prevails in the
arbitration he is entitled to payment of his annual salary of $225,000 per year
for the remaining seven years of the agreement.  Mr. Crouch also contends he is
entitled to certain bonus payments.  The Company intends to vigorously defend
the arbitration.  Selection of the arbitrators is in process, but no date has
been set for the hearing.

     The Company is involved in various other legal proceedings generally
incidental to its business.  While the result of any litigation contains an
element of uncertainty, the Company presently believes that the outcome of any
known pending or threatened legal proceedings or claims, or all of them
combined, will not have a material adverse effect on its results of operations
or consolidated financial position.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of security holders of the Company
during the three months ended December 30, 1995.














                                       5



<PAGE>   7
 

                                    PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

PRICE RANGE OF COMMON STOCK

     The Company's common stock trades on the Nasdaq Stock Market's National
Market System under the symbol: MVII.  The following table sets forth the high
and low sale prices per share of the common stock for the periods indicated, as
reported by the Nasdaq Stock Market:

<TABLE>
<CAPTION>

                                                      High     Low
                                                    --------  --------
         <S>                                         <C>       <C>
         1994
         ----
         First Quarter ...........................   $15 1/4   $11 5/8
         Second Quarter ..........................    14 7/8    11 7/8
         Third Quarter ...........................    14         9 1/8
         Fourth Quarter ..........................    11 5/8     9 1/4

         1995
         ----
         First Quarter ...........................   $18 1/2   $11 1/8
         Second Quarter ..........................    17 7/8    16 1/8
         Third Quarter ...........................    20 1/2    16 3/8
         Fourth Quarter ..........................    20 5/8    15 1/2

         1996
         ----
         First Quarter (through March 15, 1996) ..   $17 7/8   $16
</TABLE>


     On March 15, 1996, the last sale price per share of the common stock was
$17 5/8.  At March 15, 1996, there were 215 holders of record, representing an
estimated 1,500 individual holders of the Company's common stock.

DIVIDENDS

     The Company has never paid a cash dividend on its common stock.  It is the
intention of the Board of Directors to continue to retain earnings to finance
the growth of the Company's business rather than to pay cash dividends.  Future
payments of cash dividends will depend upon the financial condition, results of
operations and capital commitments of the Company, as well as other factors
deemed relevant by the Board of Directors.  The Company and its subsidiaries
are currently subject to a line of credit which requires approval of the lender
before paying dividends.


                                      6


<PAGE>   8
 
ITEM 6.    SELECTED FINANCIAL DATA

     The following selected consolidated financial data as of and for each of
the years in the five-year period ended December 30, 1995 are derived from the
Company's consolidated financial statements which have been audited by Arthur
Andersen LLP, independent public accountants.  The following selected
consolidated financial data should be read in conjunction with the Consolidated
Financial Statements of the Company and Notes thereto, and Report of
Independent Public Accountants thereon, for the most recent three years,
included elsewhere in this Annual Report.


<TABLE>
<CAPTION>
                                                                    FISCAL YEAR (1)
                                          ---------------------------------------------------------------
                                            1991        1992          1993          1994          1995
                                          --------    --------       -------      -------       ------
                                                      (in thousands, except per share data)
<S>                                       <C>         <C>            <C>           <C>           <C>      
STATEMENTS OF INCOME INFORMATION:                                                                         
Operating revenues .....................  $195,246    $264,881       $341,532      $428,772      $459,160 
Transportation costs ...................   171,196     230,100        296,656       370,232       391,845 
                                          --------    --------       --------      --------      -------- 
Net revenues ...........................    24,050      34,781         44,876        58,540        67,315 
                                                                                                          
Operating income .......................     1,257       3,645          4,457         6,847         8,489 
                                                                                                          
Income from continuing operations                                                                         
  before income taxes ..................       655       3,035          4,199         6,267         8,024 
                                                                                                          
Income from continuing operations ......       393       1,791          2,490         3,667         4,734 
Income (loss) from and on discontinued                                                                    
  operations (2) .......................     1,268      (2,427)       (13,754)       (1,286)           -
                                          --------    --------       --------      --------      -------- 
Net income (loss) ......................  $  1,661    $   (636)      $(11,264)     $  2,381      $  4,734 
                                          ========    ========       ========      ========      ======== 
                                                                                                          
Earnings (loss) per share:                                                                                
 Income from continuing operations        $    .08    $    .38       $    .51      $    .75      $    .95 
 Income (loss) from and on discontinued                                                                    
  operations (2) .......................       .27        (.51)         (2.84)         (.26)            - 
                                          --------    --------       --------      --------      -------- 
 Net income (loss) .....................  $    .35    $   (.13)      $  (2.33)     $    .49      $    .95 
                                          ========    ========       ========      ========      ======== 
                                                                                                          
Average common shares and equivalents                                                                     
  outstanding ..........................     4,722       4,743          4,841         4,901         4,995 
                                                                                                          
                                                                                                          
BALANCE SHEET DATA:                                                                                       
Total assets of continuing operations ..  $ 24,775    $ 37,479       $ 53,585      $ 70,205      $ 74,144 
Total debt of continuing operations ....     4,207       5,940         11,337        10,787         1,588 
Shareholders' investment ...............    32,696      32,230         21,047        23,473        25,888 
</TABLE>


(1)  The Company's fiscal year ends on the Saturday nearest December 31.
     Fiscal years 1991, 1993, 1994 and 1995 included 52 weeks and fiscal year
     1992 included 53 weeks.

(2)  The historical operations of the Company's former truckload business have
     been classified as a discontinued operation.



                                      7



<PAGE>   9
 
ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
           RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Fiscal Years 1995 Compared to 1994 and 1994 Compared to 1993


     The following table sets forth the percentage relationship of the
Company's revenue and expense items to operating revenues for the periods
indicated:
                                                         FISCAL YEAR
                                                   ----------------------
                                                    1995    1994    1993
                                                   ------  ------  ------
<TABLE>
<CAPTION>
       <S>                                          <C>     <C>     <C>
       Operating revenues .......................   100.0%  100.0%  100.0%
       Transportation costs .....................    85.3    86.3    86.9
                                                   ------  ------  ------
       Net revenues .............................    14.7    13.7    13.1

       Operating expenses:
           Salaries, wages and related costs ....     3.5     3.2     3.2
           Selling, general and administrative ..     7.9     7.6     7.5
           Equipment rents ......................     1.2      .9      .8
           Depreciation and amortization ........      .3      .3      .3
                                                   ------  ------  ------
               Total operating expense ..........    12.9    12.0    11.8
                                                   ------  ------  ------

       Operating income .........................     1.8     1.7     1.3

       Interest and other expenses ..............      .1      .2      .1
                                                   ------  ------  ------

       Income from continuing operations
           before income taxes ..................     1.7%    1.5%    1.2%
                                                   ======  ======  ======
</TABLE>



     General - The transportation services operation contracts with carriers
for the transportation of freight by rail, truck, ocean or air for shippers.
Operating revenues include the carriers' charges for carrying shipments plus
commissions and fees, as well as revenues from fixed fee arrangements on the
Company's integrated logistics projects.  The carriers with whom the Company
contracts provide transportation equipment, the charge for which is included in
transportation costs.  As a result, the primary operating cost in the
transportation services operation is for purchased transportation.  Net
revenues include only the commissions and fees.

     Selling, general and administrative expenses include the percentage of the
net revenue paid to agencies as consideration for providing sales and
marketing, arranging for movement of shipments, entering billing and accounts
payable information on shipments and maintaining customer relations, as well as
other operating expenses.  The logistics management operations incur a greater
portion of their costs in equipment rents, salaries and related costs, and
selling, general and administrative costs than do the Company's transportation
services operations.  Lease payments for tractors, trailers and domestic
containers are included in equipment rents.

     Revenue - The Company's total number of shipments were 414,000, 368,000
and 276,000 in 1995, 1994 and 1993, respectively.  Increases in shipments of
13% and 33% in 1995 and 1994, respectively, were the result of expanded
services to both new and existing customers.  The active sales force
responsible for generating these sales increases, including agents, was 253,
226 and 171 at the end of 1995, 1994 and 1993, respectively.

     Although there has been a softness in the transportation market since
early 1995, the Company has been able to maintain volume and margin growth.
While operating revenues increased only 7% in 1995, transportation costs have
decreased as a percentage of operating revenues, resulting in net revenue
growth of 15% in 1995.  Because of the slow economic growth in 1995, the
Company has been able to purchase transportation at reduced costs, resulting in
both lower operating revenues and lower transportation costs on a per shipment
basis.  Consequently, net revenues were not significantly impacted by the
slower economy in 1995.

                                      8


<PAGE>   10
 
     The Company also has continued to increase its logistics management
operations through the addition of several large projects and the expansion of
existing projects in both 1995 and 1994.   The increase in these operations has
resulted in increased net revenues as a percentage of operating revenues as a
greater portion of their costs are included in equipment rents, salaries and
related costs, and selling, general and administrative costs compared to the
Company's transportation services operations.  Management expects these
operations to continue to grow and, as a result, net revenue to continue to
increase as a percentage of operating revenues.

     Revenues from the Company's temperature-controlled freight operations have
continued to decline as a result of management's decision during the fourth
quarter of 1994 to limit this service to a core group of customers.  Revenues
from these operations were $14,996,000 in 1995, $23,324,000 in 1994 and
$28,847,000 in 1993.  The net revenues from these operations were $2,864,000 in
1995, $6,242,000 in 1994 and $7,943,000 in 1993.

     Operating Expenses - As discussed above in revenues, the growth in
logistics management operations has resulted in increased operating expenses as
a percentage of operating revenues.  In both 1994 and 1995 the Company added
several logistics management projects, which in their initial stages have
relatively higher fixed costs compared to operating revenues than more mature
projects.   Future operating expenses will continue to be affected by the level
of logistics contract startup activity as these projects generally do not
become profitable until twelve to eighteen months after startup.

     In connection with certain logistics management projects, the Company
provides dedicated trucking services.  The purchase and leasing of
transportation equipment to support these operations resulted in increased
equipment rents and depreciation and amortization in 1995 and 1994.

     Interest and Other Expense, Net - Interest and other expenses decreased
20% in 1995 due to increased cash flow from operations.  Interest and other
expenses increased 124% in 1994 from 1993 as a result of increased borrowings
under the line of credit and increases in short-term borrowing rates.

     Provision for Income Taxes - The Company's effective tax rates were 41%,
41.5% and 40.7% in 1995, 1994 and 1993, respectively.  The Company had a net
deferred tax asset as of December 30, 1995 of $99,000, for which no allowance
has been recorded.  The Company believes it will have sufficient future taxable
income to utilize its deferred tax assets.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's working capital needs have been met through cash flow from
operations and a line of credit from a bank.  Mark VII maintains a $20 million
line of credit.  This line bears interest at 1/2% over the bank's prime rate
and expires in July 1997.  The Company pays a fee of 1.5% on outstanding
letters of credit and a commitment fee of .38% on the average daily unused
portion of the line.  The line is secured by accounts receivable and other
assets of Mark VII and is guaranteed by the Company.  At December 30, 1995,
$690,000 was outstanding on the line of credit and letters of credit totaling
$7,629,000 had been issued on Mark VII's behalf to secure insurance deductibles
and purchases of operating services, resulting in a remaining balance available
to borrow of $11,681,000.

     Among other restrictions, the terms of the line of credit require that the
Company earn $2,000,000 in consolidated income from continuing operations
annually and maintain consolidated tangible net worth of $19,000,000 in 1995,
$21,000,000 in 1996 and $23,000,000 thereafter and obtain approval of the
lender before paying dividends.  The line of credit agreement allows for
adjustments to these amounts under certain circumstances, one of which is the
repurchase of the Company's stock.  After adjustment for the 1995 stock
repurchase of $3,436,000, the consolidated tangible net worth required to be
maintained for 1995 is $15,564,000.

     At December 30, 1995, the Company had a ratio of current assets to current
liabilities of approximately 1.30 to 1.  Management believes that the Company
will have sufficient cash flow from operations and borrowing capacity to cover
its operating needs and capital requirements for the foreseeable future.

OTHER INFORMATION

     Results of operations in the transportation industry generally show a
seasonal pattern, as customers reduce shipments during and after the winter
holiday season.  In recent years, the Company's operating income and earnings
have been higher in the second and third quarters than in the first and fourth
quarters.


                                      9



<PAGE>   11
     A new accounting pronouncement, Statement of Financial Accounting Standard
(SFAS) No. 121 "Accounting for Impairment of Long-Lived Assets and For
Long-Lived Assets to be Disposed Of" was issued in March, 1995 and is effective
for fiscal years beginning after December 15, 1995.  The Company does not
believe the adoption of this accounting standard will have a material adverse
effect on its results of operations or consolidated financial position.  SFAS
No. 123 "Accounting for Stock-Based Compensation" was issued in October, 1995
for fiscal years beginning after December 15, 1995.  At this time, the Company
does not plan to adopt the new method of accounting, but will instead continue
to apply the accounting provisions of Accounting Principles Board Opinion, No.
25 "Accounting for Stock Issued to Employees" and related Interpretations in
accounting for its employee stock options.  The Company will, however, comply
with the disclosure requirements of the new standard, beginning with the annual
financial statements issued for the year ending December 29, 1996.


ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The financial statements required under this item and set forth elsewhere
in this Form 10-K as indicated in the following index are incorporated herein
by reference.

                  Index to Consolidated Financial Statements

<TABLE>
<CAPTION>

                                                                           Page
                                                                           ----
<S>                                                                         <C>
     Consolidated Balance Sheets........................................... 15
     Consolidated Statements of Income..................................... 16
     Consolidated Statements of Shareholders' Investment................... 17
     Consolidated Statements of Cash Flows................................. 18
     Notes to Consolidated Financial Statements............................ 19
     Report of Independent Public Accountants.............................. 26
</TABLE>

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
           FINANCIAL DISCLOSURES

         None.


                                    PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

     The sections entitled "Election of Directors" and "Executive Officers and
Key Employees" of the Company's Notice of 1996 Annual Meeting of Shareholders
and Proxy Statement which will be filed within 120 days of December 30, 1995
are incorporated herein by reference.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

     The information required hereunder is incorporated by reference from the
section entitled "Compliance with Section 16(a) of the Securities Exchange Act
of 1934" of the Company's Notice of 1996 Annual Meeting of Shareholders and
Proxy Statement which will be filed within 120 days of December 30, 1995.

ITEM 11, 12, AND 13.  EXECUTIVE COMPENSATION, SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT, AND CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS

     The information required under these items is incorporated by reference
from the Company's Notice of 1996 Annual Meeting of Shareholders and Proxy
Statement which will be filed within 120 days of December 30, 1995.


                                      10

<PAGE>   12
 
                                    PART IV

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

         (a)(1)  Financial Statements

                 All financial statements of the Registrant as set forth under 
                 Item 8 of this Annual Report on Form 10-K.

            (2)  Financial Statement Schedules


<TABLE>
<CAPTION>

         Schedule
         Number              Description                       Page of 1995 10-K
         ------              -----------                       -----------------
         <S>           <C>                                     <C>
           II          Valuation and Qualifying Accounts                27
</TABLE>


     The report of the Registrant's independent public accountants with respect
to the above-listed financial statements and financial statement schedule
appears on page 26 of this Annual Report on Form 10-K.

     All other financial schedules not listed above have been omitted since the
required information is included in the consolidated financial statements or
the notes thereto, or is not applicable or required.


            (3)  Exhibits

<TABLE>
<CAPTION>

Exhibit                                                                   Page Number or Incorporation                
 Number             Description                                             by Reference to                           
-------             -----------                                           ---------------------------- 
   <S>              <C>                                                   <C>                                         
   3(a)             Restated Articles of Incorporation                    Exhibit 3(a) to Registration                
                                                                          Statement on Form S-1 (SEC File             
                                                                          No. 33-6550)                                
                                                                                                                      
   3(b)             Amendment No. 1 to the Restated Articles of           Exhibit 4.2 to Registration                 
                    Incorporation of the Company                          Statement on Form S-8 (SEC File             
                                                                          No. 33-86174)                               
                                                                                                                      
   3(c)             Amended and Restated By-Laws                          Exhibit 3(b) to 1993 Annual                 
                                                                          Report on Form 10-K                         
                                                                                                                      
   4(a)             Specimen Common Stock Certificate                     Exhibit 4.4 to Registration                 
                                                                          Statement on Form S-8 (SEC File             
                                                                          No. 33-86174)                               
                                                                                                                      
   10.1          *  MNX Incorporated Amended and Restated 1986            Exhibit 10(g) to 1990 Annual                
                    Incentive Stock Option Plan                           Report on Form 10-K                         
                                                                                                                      
   10.2          *  Amendment No. 5 to the MNX Incorporated               Exhibit 10(g) to 1991 Annual                
                    Amended and Restated 1986 Incentive Stock             Report on Form 10-K                         
                    Option Plan                                                                                       
                                                                                                                      
   10.3          *  MNX Incorporated 1992 Non-Qualified Stock             Exhibit 10(s) to 1991 Annual                
                    Option Plan                                           Report on Form 10-K                         
                                                                                                                      
   10.4          *  MNX Incorporated Stock Appreciation Rights            Exhibit 10(o) to 1992 Annual                
                    Program, dated April 24, 1990                         Report on Form 10-K                         
                                                                                                                      
   10.5          *  Employment and Noncompete Agreement between           Exhibit 3 to Current Report on Form         
                    R.C. Matney and the Registrant dated as of            8-K dated May 9, 1995                       
                    April 1, 1992.  Revised Addendum to Employment                                                    
                    and Noncompete Agreement dated as of July 1, 1994
</TABLE>


                                      11
                                      

<PAGE>   13
 

<TABLE>
<CAPTION>
Exhibit                                                                   Page Number or Incorporation            
 Number          Description                                               by Reference to                        
-------          -----------                                              ----------------------------
  <S>            <C>                                                      <C>                                           
   10.6          *  Employment and Noncompete Agreement between           Exhibit 4 to Current Report on Form     
                    J. Michael Head and the Registrant dated as of        8-K dated May 9, 1995                   
                    August 1, 1992.  Addendum to Employment and                                                   
                    Noncompete Agreement between J. Michael Head                         
                    and the Registrant dated as of February 1, 1995                      
                                                                         
   10.7          *  Employment and Noncompete Agreement between           Exhibit 5 to Current Report on Form            
                    David H. Wedaman and the Registrant dated             8-K dated May 9, 1995                          
                    as of January 1, 1992                                                                                
                                                                                                                         
   10.8          *  Employment and Noncompete Agreement between           Exhibit 6 to Current Report on Form            
                    Robert E. Liss and Jupiter Transportation, Inc.,      8-K dated May 9, 1995                          
                    an indirect wholly owned subsidiary of the           
                    Registrant, dated as of July 1, 1994                 
                                                                                                                         
   10.9          *  Employment and Noncompete Agreement between           Exhibit 7 to Current Report on Form            
                    James T. Graves and the Registrant dated as of        8-K dated May 9, 1995                          
                    August 1, 1992                                                                                       
                                                                                                                         
  10.10          *  Employment and Noncompete Agreement between           Filed herewith                                 
                    Michael J. Musacchio and Mark VII Logistics, a                                                       
                    Division of Mark VII Transportation Co., Inc., a                                                     
                    wholly owned subsidiary of the Registrant dated                                                      
                    as of June 1, 1995.  Addendum to Employment and                                                      
                    Noncompete Agreement between Michael J.                                                              
                    Musacchio and Mark VII Logistics dated as of                                                         
                    September 1, 1995.                                                                                   
                                                                                                                         
  10.11             Amended and Restated Loan and Security Agreement      Exhibit 10.1 to Quarterly Report               
                    Schedule and Promissory Note, dated August 10, 1994,  on Form 10-Q for the period ended              
                    by and among Missouri-Nebraska Express, Inc., Mark    July 2, 1994                                   
                    VII Transportation Company, Inc., TemStar, Inc. and                                                  
                    Marine Midland Business Loans, Inc.                                                                  
                                                                                                                         
  10.12             Amended and Restated Guaranty, Surety Agreement       Exhibit 10.2 to Quarterly Report               
                    and Security Agreement, dated August 10, 1994 by      on Form 10-Q for the period ending             
                    Mark VII, Inc. in favor of Marine Midland Business    July 2, 1994                                   
                    Loans, Inc.                                                                                          
                                                                                                                         
  10.13             Guaranty, Surety Agreement and Security Agreement,    Exhibit 10.3 to Quarterly Report               
                    dated August 10, 1994 by MNX Carriers, Inc. in        of Form 10-Q for the period ending             
                    favor of Marine Midland Business Loans, Inc.          July 2, 1994                                   
                                                                                                                         
  10.14             Amendment No. 1 to the Amended and Restated           Exhibit 10.1 to Quarterly Report               
                    Loan and Security Agreement, Schedule and             on Form 10-Q for the period ended              
                    Promissory Note, dated October 28, 1994, by and       October 1, 1994                                
                    among Missouri-Nebraska Express, Inc., Mark VII                                                      
                    Transportation Company, Inc., TemStar, Inc. and                                                      
                    Marine Midland Business Loans, Inc.                                                                  
                                                                                                                         
  10.15             Letter Agreement dated October 28, 1994 by and        Exhibit 10.2 to Quarterly Report               
                    among Missouri-Nebraska Express, Inc., Mark VII       on Form 10-Q for the period ended              
                    Transportation Company, Inc., MNX Carriers, Inc.,     October 1, 1994                                
                    TemStar, Inc., Mark VII, Inc. and Marine Midland                                                     
                    Business Loans, Inc.

  10.16          *  Amendment Number 1 to the Mark VII, Inc. 1992         Exhibit 99.1 to Registration               
                    Non-Qualified Stock Option Plan (formerly the MNX     Statement on Form S-8 (SEC File            
                    Incorporated 1992 Non-Qualified Stock Option Plan)    No. 33-86174)                              
                    dated September 22, 1994                                                                         
                                                                                                                     
</TABLE> 

                                      12



<PAGE>   14
 

<TABLE>
<CAPTION>


Exhibit                                                                   Page Number or Incorporation
Number           Description                                               by Reference to                         
-------          -----------                                              -----------------------------
  <S>            <C>                                                      <C>                                            
  10.17          Asset Purchase Agreement dated June 17, 1994 by          Appendix B to Proxy Statement for           
                 and among Swift Transportation Co., Inc. (Nevada),       1994 Annual Meeting of Shareholders         
                 Swift Transportation Co., Inc. (Arizona), Mark VII,                                                  
                 Inc., MNX Carriers, Inc., and Missouri-Nebraska                                                      
                 Express, Inc.                                                                                        
                                                                                                                      
  10.18          Amendment No. 1 to Asset Purchase Agreement              Exhibit 10.14 to 1994 Annual                
                 dated September 30, 1994 by and among Swift              Report on Form 10-K                         
                 Transportation Co., Inc. (Nevada), Swift                                                             
                 Transportation Co., Inc. (Arizona), Mark VII,                                                        
                 Inc., MNX Carriers, Inc., and Missouri-Nebraska                                                      
                 Express, Inc.                                                                                        
                                                                                                                      
  10.19          Mark VII, Inc. 1995 Omnibus Stock Incentive              Appendix A to Proxy Statement for           
                 Plan                                                     1995 Annual Meeting of Shareholders         
                                                                                                                      
     11          Statement re: Computation of Earnings per Share          Filed herewith                              
                                                                                                                      
     21          Subsidiaries of Registrant                               Filed herewith                              
                                                                                                                      
     23          Consent of Independent Public Accountants                Filed herewith                              
                                                                                                                      
     27          Financial Data Schedule (for SEC use only)               Filed herewith                              
------------

</TABLE>                                                           
                 *  Management contracts or compensatory plans


(b)    Reports on Form 8-K

       None


                                      13

<PAGE>   15


                                   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.

                                           MARK VII, INC. 


                                           By: /s/ R. C. Matney
                                              -----------------------------
                                              R. C. Matney        
                                              Chairman of the Board, President
                                              and Chief Executive Officer 

Date: March 27, 1996

     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.



<TABLE>
<CAPTION>
SIGNATURE                                  TITLE                                  DATE          
<S>                          <C>                                              <C>               
/s/ R. C. Matney             Chairman of the Board, President,                March 27, 1996    
--------------------------   Chief Executive Officer and Director                         
R. C. Matney                                                      
                                                                                                
                                                                                                
/s/ J. Michael Head          
                             Executive Vice President-Finance, Chief          March 27, 1996    
--------------------------   Financial Officer and Director                                            
J. Michael Head              (Principal Financial and Accounting Officer)                       
                                                                                                
                                                                                                
                                                                                                
/s/ James T. Graves           Vice Chairman, Secretary, General Counsel       March 27, 1996    
--------------------------    and Director                                                          
James T. Graves                                                                                 
                                                                                                
                                                                                                
/s/ David H. Wedaman          Executive Vice President, Chief Operating       March 27, 1996   
--------------------------    Officer and Director                                                   
David H. Wedaman                                                                                
                                                                                                
                                                                                                
/s/ Douglass Wm. List         Director                                        March 27, 1996    
--------------------------                                                                           
Douglass Wm. List                                                                               
                                                                                                
                                                                                                
/s/ William E. Greenwood      Director                                        March 27, 1996    
--------------------------                                                                        
William E. Greenwood                                                                            
                                                                                                
                                                                                                
/s/ Dr. Jay U. Sterling       Director                                        March 27, 1996    
--------------------------                                                                        
Dr. Jay U. Sterling                                                                             
                                                                                                
                                                                                                
/s/ Thomas J. Fitzgerald      Director                                        March 27, 1996    
--------------------------                                                                        
Thomas J. Fitzgerald

</TABLE>


                                      14

<PAGE>   16
 

                        MARK VII, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                  (Dollars in thousands, except share amounts)


<TABLE>
<CAPTION>

                                                                   DECEMBER 30,        DECEMBER 31,
                             ASSETS                                   1995                1994
                                                                   ------------        -----------
<S>                                                                  <C>                   <C>       
Current Assets:                                                                                      
 Cash and cash equivalents ......................................... $   272               $ 1,246   
 Accounts receivable, less allowances of $1,336 and                                                  
   $1,285 in 1995 and 1994, respectively ...........................  55,778                51,188   
 Notes and other receivables, less allowances of $2,038                                              
   and $517 in 1995 and 1994, respectively .........................   6,789                 5,740   
 Deferred income taxes .............................................       -                 1,732   
 Other current assets ..............................................   1,415                   551   
                                                                     -------               -------   
   Total current assets ............................................  64,254                60,457   
                                                                     -------               -------   
                                                                                                     
Deferred Income Taxes ..............................................   1,385                 1,110   
                                                                     -------               -------   
                                                                                                     
Property and Equipment, at cost:                                                                     
 Transportation equipment ..........................................   5,100                 5,269   
 Computer equipment, furniture and other ...........................   3,292                 2,936   
                                                                     -------               -------   
                                                                       8,392                 8,205   
 Less:  Accumulated depreciation ...................................   3,993                 3,127   
                                                                     -------               -------   
   Net property and equipment ......................................   4,399                 5,078   
                                                                     -------               -------   
                                                                                                     
Net Assets of Discontinued Operations ..............................   2,008                   632   
                                                                     -------               -------   
                                                                                                     
Intangible and Other Assets ........................................   4,106                 3,560   
                                                                     -------               -------   
                                                                     $76,152               $70,837   
                                                                     =======               =======   
                                                                                                     
                  LIABILITIES AND SHAREHOLDERS' INVESTMENT                                           

Current Liabilities:                                                                                 
 Accrued  transportation charges ................................... $43,246               $33,646   
 Deferred income taxes .............................................   1,286                     -        
 Other current and accrued liabilities .............................   4,330                 3,256   
 Borrowings under line of credit ...................................     690                 8,546   
                                                                     -------               -------   
   Total current liabilities .......................................  49,552                45,448   
                                                                     -------               -------   
                                                                                                     
Long-Term Obligations ..............................................     712                 1,916   
                                                                     -------               -------   
                                                                                                     
Contingencies and Commitments (Note 6)                                                               
                                                                                                     
Shareholders' Investment:                                                                            
 Common stock, $.10 par value, authorized 10,000,000 shares; issued                                  
   4,888,761 shares in 1995 and 4,781,234 shares in 1994 ...........     489                   478   
 Paid-in capital ...................................................  27,875                26,769   
 Retained earnings (deficit) .......................................     960                (3,774)   
                                                                     -------               -------   
                                                                      29,324                23,473   
 Less:  Treasury stock, at cost, 200,000 shares ....................  (3,436)                    -   
                                                                     -------               -------   
   Total shareholders' investment ..................................  25,888                23,473   
                                                                     -------               -------   
                                                                     $76,152               $70,837   
                                                                     =======               =======   
</TABLE>

      The accompanying notes are an integral part of these balance sheets.



                                      15



<PAGE>   17
 


                        MARK VII, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
                (Dollars in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                                              FOR THE YEARS ENDED
                                                                 --------------------------------------------
                                                                 DECEMBER 30,     DECEMBER 31,     JANUARY 1,
                                                                    1995              1994            1994
                                                                 ------------     ------------     ----------
<S>                                                              <C>               <C>             <C>
Operating Revenues ...........................................   $  459,160        $ 428,772       $  341,532
Transportation Costs .........................................      391,845          370,232          296,656
                                                                 ----------          -------       ----------
Net Revenues .................................................       67,315           58,540           44,876
                                                                                                    
Operating Expenses:                                                                                 
  Salaries and related costs .................................       16,170           13,926           10,946
  Selling, general and administrative ........................       36,089           32,493           25,652
  Equipment rents ............................................        5,413            4,006            2,849
  Depreciation and amortization ..............................        1,154            1,268              971
                                                                 ----------          -------       ----------
   Total Operating Expenses ..................................       58,826           51,693           40,418
                                                                 ----------          -------       ----------
Operating Income .............................................        8,489            6,847            4,458
                                                                                                    
Other Expense (Income):                                                                             
  Interest expense ...........................................          494              685              473
  Interest income ............................................         (193)            (270)            (382)
  Other ......................................................          164              165              168
                                                                 ----------          -------       ----------
   Total Other Expense, Net ..................................          465              580              259
                                                                 ----------          -------       ----------
                                                                                                    
Income From Continuing Operations Before Income Taxes ........        8,024            6,267            4,199
                                                                                                    
Provision For Income Taxes ...................................        3,290            2,600            1,709
                                                                 ----------          -------       ----------
                                                                                                    
Income From Continuing Operations ............................        4,734            3,667            2,490
                                                                                   
Loss From Discontinued Operations (less income tax benefit of                      
  $4,579 in 1993) ............................................            -                -          (10,606)
                                                                                   
Loss On Discontinued Operations (less income tax benefit of                        
  $1,160 and $1,047 in 1994 and 1993, respectively) ..........            -           (1,286)          (3,148)
                                                                 ----------       ----------       ----------
                                                                                                   
Net Income (Loss) ............................................   $    4,734       $    2,381       $  (11,264)
                                                                 ==========       ==========       ==========
                                                                                                   
Earnings (Loss) Per Share:                                                                         
   Income from continuing operations .........................   $      .95       $      .75       $      .51
   Loss from discontinued operations .........................            -                -            (2.19)
   Loss on discontinued operations ...........................            -             (.26)            (.65)
                                                                 ----------       ----------       ----------
   Net income (loss) .........................................   $      .95       $      .49       $    (2.33)
                                                                 ==========       ==========       ==========
Average Common Shares and Equivalents Outstanding ............    4,995,000        4,901,000        4,841,000

</TABLE>

       The accompanying notes are an integral part of these statements.


                                      16


<PAGE>   18





                       MARK VII, INC. AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
                                (In thousands)



<TABLE>

                                       COMMON STOCK        
                                     ----------------      PAID-IN      RETAINED    TREASURY
                                      SHARES   AMOUNT      CAPITAL      EARNINGS     STOCK     TOTAL
                                     -------- --------    --------     ----------   -------   -------

<S>                                   <C>       <C>        <C>          <C>         <C>       <C>       
Balance, January 2, 1993 ............  4,766    $476       $26,645      $  5,109    $     -   $32,230
 Net loss ...........................      -       -             -       (11,264)         -   (11,264)
 Issuance of common stock under
   stock-based compensation plans ...     10       1            79         -              -        80
                                      ------    ----       -------      --------    -------   -------

Balance, January 1, 1994 ............  4,776     477        26,724        (6,155)         -    21,046
 Net income .........................      -       -             -         2,381          -     2,381
 Issuance of common stock under
   stock-based compensation plans ...      5       1            45             -          -        46
                                      ------    ----       -------      --------    -------   -------

Balance, December 31, 1994 ..........  4,781     478        26,769        (3,774)         -    23,473
 Net income .........................      -       -             -         4,734          -     4,734
 Issuance of common stock under
   stock-based compensation plans ...    107      11         1,106             -          -     1,117  
 Purchase of treasury stock (200,000
   shares) ..........................      -       -             -             -     (3,436)   (3,436)
                                      ------    ----       -------      --------    -------   -------

Balance, December 30, 1995 ..........  4,888    $489       $27,875      $    960    $(3,436)  $25,888
                                      ======    ====       =======      ========    =======   =======
</TABLE>




       The accompanying notes are an integral part of these statements.


                                      17





<PAGE>   19
 




                        MARK VII, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)

<TABLE>
<CAPTION>

                                                                                    FOR THE YEARS ENDED
                                                                        ------------------------------------------
                                                                        DECEMBER 30,    DECEMBER 31,    JANUARY 1,   
                                                                            1995           1994             1994     
                                                                        ------------    ------------    ----------   
<S>                                                                      <C>             <C>             <C>          
Operating Activities:                                                                                                
  Net income (loss) ...........................................          $  4,734        $  2,381        $(11,264)   
  Adjustments to reconcile net income (loss) to                                                                      
   net cash provided by operating activities:                                                                        
    Loss from and on discontinued operations ..................                 -           1,286          13,754    
    Depreciation and amortization .............................             1,154           1,268             971    
    Other amortization ........................................               330             361             358    
    Provision for doubtful accounts and notes receivable ......             2,102             972           1,025    
    Provision for deferred income taxes .......................             2,139             652            (984)   
    Changes in assets and liabilities:                                                                               
      Accounts receivable .....................................            (5,171)        (12,614)        (11,407)   
      Accrued transportation charges ..........................             9,599           7,510           7,148    
      Accrued income taxes ....................................               604             197           1,177    
      Other ...................................................            (2,955)         (1,415)         (3,240)   
                                                                         --------        --------        --------    
  Net cash provided by (used for) operating activities ........            12,536             598          (2,462)   
                                                                         --------        --------        --------    
Investing Activities:                                                                                                
  Additions to property and equipment .........................              (767)         (1,852)         (1,049)   
  Retirements of property and equipment .......................               524             532             123    
                                                                         --------        --------        --------    
  Net cash used for investing activities ......................              (243)         (1,320)           (926)   
                                                                         --------        --------        --------

Financing Activities:                                                       
  Exercise of stock options ...................................               769              46              80    
  Repayments of long-term obligations .........................            (1,419)           (479)            (93)   
  Net borrowings (repayments) under lines of credit ...........            (7,856)         (2,530)          5,136    
  Purchase of treasury stock ..................................            (3,436)              -               -    
  Other .......................................................                 -            (244)           (183)   
                                                                         --------        --------        --------    
  Net cash provided by (used for) financing activities ........           (11,942)         (3,207)          4,940    
                                                                         --------        --------        --------    
Net cash provided by (used in) continuing operations ..........               351          (3,929)          1,552    
                                                                                                                     
Net cash provided by (used in) discontinued operations ........            (1,325)          4,884          (1,819)   
                                                                         ---------        -------        --------    
Net increase (decrease) in cash and cash equivalents ..........              (974)            955            (267)   
                                                                                                                     
Cash and cash equivalents:                                             
                                                                                                                     
  Beginning of year ...........................................             1,246             291             558    
                                                                         --------        --------        --------    
                                                                                                                     
  End of year .................................................          $    272        $  1,246        $    291    
                                                                         --------        --------        --------    
                                                                       
Supplemental Disclosure of Cash Flow Information:                      
                                                                       
  Cash paid during the year for:                                       
   Interest ...................................................          $    361        $    685        $    473    
   Income taxes, net of refunds received ......................             1,180             852             267    
                                                                                                                     
Supplemental Schedule of Non-cash Financing Activities:                                                              
                                                                                                                     
  Direct financings under debt and capital lease obligations ..          $     77        $  2,459        $    199    
</TABLE>                                                               

        The accompanying notes are an integral part of these statements.



                                      18


<PAGE>   20
 

                       MARK VII, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(1)    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REPORTING ENTITY AND PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include Mark VII, Inc., a Missouri
corporation, and its wholly owned subsidiaries, collectively referred to herein
as the "Company."  The Company is a sales, marketing and service organization
that acts as a provider of transportation services and a transportation
logistics manager.  The Company has a network of transportation sales personnel
that provides services throughout the United States, as well as Mexico and
Canada.  The principal operations of the Company are conducted by its
transportation services subsidiary, Mark VII Transportation Company, Inc.
("Mark VII").  As a result of the sale of substantially all of the assets of
the Company's truckload subsidiaries completed on October 3, 1994 (the "Asset
Sale"), the operations of MNX Carriers, Inc., ("Carriers"), and its
subsidiaries (Missouri-Nebraska Express, Inc. ("Mo-Neb"), MNX Trucking, Inc.
and MNX Transport, Inc.) are reported as a discontinued operation in these
consolidated financial statements.

USE OF ESTIMATES

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

REVENUE

Revenues earned as a third party agent include the carriers' charges for
carrying the shipment plus commissions and fees, as well as revenues from fixed
fee arrangements on the Company's integrated logistics projects.  Revenues and
related expenses are recognized on completion of the Company's service
obligation.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost.  Depreciation and amortization of
property and equipment are provided using the straight-line method based on the
estimated useful lives of the respective assets as follows:


<TABLE>
<CAPTION>
    <S>                                            <C>         
    Transportation equipment                       3 to 7 years
    Computer equipment, furniture and other        3 to 5 years
</TABLE>


INCOME TAXES

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109, Accounting for Income Taxes.

CASH AND CASH EQUIVALENTS

The Company considers cash on hand, deposits in banks, certificates of deposit
and short-term marketable securities with maturities of 90 days or less when
purchased, as cash and cash equivalents.

The Company utilizes a cash management system under which cash overdrafts exist
in the book balances of its primary disbursing accounts.  These overdrafts
represent the uncleared checks in the disbursing accounts.  The cash amounts
presented in the consolidated financial statements represent balances on
deposit at other locations, prior to their transfer to the primary disbursing
accounts.  Uncleared checks of $7,059,000 are included in accrued
transportation charges at December 30, 1995.



                                      19



<PAGE>   21
 

INTANGIBLE ASSETS

Goodwill and other intangible assets are being amortized on the straight-line
basis over 10 to 20 years.  Goodwill and other intangible assets consisted of
the following:


<TABLE>
<CAPTION>
                                                           1995     1994 
                                                          -------  ------- 
                                                          (in thousands)   
                                                                           
   <S>                                                    <C>      <C>     
   Goodwill and other intangible assets ..............    $3,321   $3,321 
   Less accumulated amortization .....................     1,222    1,013 
                                                          ------   ------ 
                                                          $2,099   $2,308 
                                                          ======   ====== 
</TABLE>


FISCAL YEAR

The Company's fiscal year ends on the Saturday nearest December 31.  Operations
in 1993, 1994 and 1995 included 52 weeks.

EARNINGS (LOSS) PER SHARE

Earnings (loss) per share are computed by dividing income by the average common
shares outstanding plus the dilutive effect of common stock equivalents
outstanding, using the treasury stock method based on the average market price
of the Company's common stock.  Fully diluted earnings (loss) per share are not
materially different from primary earnings (loss) per share.

NEW ACCOUNTING PRONOUNCEMENTS

A new accounting pronouncement, Statement of Financial Accounting Standard
(SFAS) No. 121 "Accounting for Impairment of Long-Lived Assets and For
Long-Lived Assets to be Disposed Of" was issued in March, 1995 and is effective
for fiscal years beginning after December 15, 1995.  The Company does not
believe the adoption of this accounting standard will have a material adverse
effect on its results of operations or consolidated financial position.  SFAS
No. 123 "Accounting for Stock-Based Compensation" was issued in October, 1995
for fiscal years beginning after December 15, 1995.  At this time, the Company
does not plan to adopt the new method of accounting, but will instead continue
to apply the accounting provisions of Accounting Principles Board Opinion, No.
25 "Accounting for Stock Issued to Employees" and related Interpretations in
accounting for its employee stock options.  The Company will, however, comply
with the disclosure requirements of the new standard, beginning with the annual
financial statements issued for the year ending December 29, 1996.

RECLASSIFICATIONS

Certain reclassifications have been made to the 1993 and 1994 financial
statements to conform to the 1995 presentation.

(2) DISCONTINUED OPERATIONS

On December 1, 1993, the Board of Directors authorized management to proceed
with the separation of the Company into two publicly-held corporations, one
owning the transportation services operation and the other owning the truckload
operation (the "Distribution").  On June 3, 1994, the Company's shareholders
approved the Distribution.  On June 17, 1994, the Board determined not to
effect the Distribution as previously scheduled and the Company entered into an
agreement (the "Agreement") for the sale of substantially all of the assets
(the "Asset Sale") of its truckload subsidiaries to Swift Transportation Co.,
Inc. ("Swift").  On September 22, 1994, the Company's shareholders approved the
Asset Sale and the transaction was completed on October 3, 1994.  The planned
Distribution, and subsequently the Asset Sale, have been recorded as a
discontinuation of the truckload subsidiaries.


                                      20


<PAGE>   22
 

Losses on discontinued operations were recorded in 1994 and 1993 as follows:
<TABLE>
<CAPTION>

                                                                                  1994               1993
                                                                                  ----               ----
                                                                                       (in millions)
  <S>                                                                             <C>                <C>
  Costs associated with the Distribution and Asset Sale ........................  $2.0               $1.3
  Carriers' loss from December 1, 1993 through the disposition date, including                      
    loss on assets not acquired by Swift and obligations not assumed by Swift ..   1.4                2.9
  Gain on assets sold to Swift .................................................  (3.3)                -
  Severance and outplacement ...................................................   2.4                 -
                                                                                  ----               ----
                                                                                   2.5                4.2
  Less applicable income tax benefits ..........................................   1.2                1.1
                                                                                  ----               ----
  Loss on discontinued operations ..............................................  $1.3               $3.1
                                                                                  ====               ====
</TABLE>


The costs associated with the previously proposed Distribution and the Asset
Sale consisted primarily of financial consulting, legal, accounting and
administrative costs.  H.B. Oppenheimer & Company Incorporated ("HBOC"), an
investment banking firm controlled by one of the Company's former outside
directors, H.B. Oppenheimer, received $282,000, $712,000 and $109,000 in 1995,
1994 and 1993, respectively, for financial consulting services provided to the
Company in connection with the Distribution and Asset Sale and the related
refinancing of the Company's lines of credit and equipment leases.

The remaining net assets of discontinued operations include management's best
estimates of the remaining liabilities of the discontinued operations and the
net realizable value of property held for sale.  Due to uncertainties inherent
in the estimation process, it is at least reasonably possible that the
Company's estimates of these amounts could change in the near term.

(3)    CREDIT FACILITY

Mark VII has a $20 million line of credit agreement.  This line bears interest
at 1/2% over the bank's prime rate and expires in July 1997.  The Company pays
a fee of 1.5% on outstanding letters of credit and a commitment fee of .38% on
the average daily unused portion of the line.  The line is secured by accounts
receivable and other assets of Mark VII and is guaranteed by the Company.  The
available line of credit at December 30, 1995 was $11,681,000.  Letters of
credit totaling $7,629,000 have been issued on the Company's behalf to secure
insurance deductibles and purchases of operating services.

The following is a summary of data on the line of credit:
<TABLE>
<CAPTION>

                                                              1995       1994       1993
                                                            --------   --------   --------
                                                                (dollars in thousands)
 <S>                                                          <C>       <C>       <C>
 Balance outstanding at end of period ....................    $  690    $ 8,546   $11,076
 Average amount outstanding ..............................     1,596      5,465     5,413
 Maximum month end balance outstanding ...................     9,310     14,853    11,294
 Interest rate at year end ...............................       9.0%       9.0%      6.5%
 Weighted average interest rate ..........................       9.3%       8.8%      6.5%
</TABLE>


Among other restrictions, the terms of the line of credit require that the
Company earn $2,000,000 in consolidated income from continuing operations
annually and maintain consolidated tangible net worth of $19,000,000 in 1995,
$21,000,000 in 1996 and $23,000,000 thereafter and obtain approval of the
lender before paying dividends.  The agreement allows for adjustments to these
amounts under certain circumstances, one of which is the repurchase of the
Company's stock.  After adjustment for the 1995 stock repurchase of $3,436,000,
the consolidated tangible net worth required to be maintained for 1995 is
$15,564,000.

                                      21


<PAGE>   23
 

(4) INCOME TAXES

The Company files a consolidated income tax return with its subsidiaries and,
as agreed, the consolidated income tax provision is allocated among the members
of the consolidated group based on their respective contributions to
consolidated income before income taxes.


Components of the provision for income taxes consisted of the following:
<TABLE>
<CAPTION>
                                                                         1995         1994       1993    
                                                                        ------       ------     ------   
                                                                                (in thousands)           
    <S>                                                                 <C>          <C>        <C>         
    Federal -                                                                                                 
       Currently payable .............................................  $  709       $1,002     $  370      
       Deferred ......................................................   1,910          794       (873)     
                                                                        ------       ------     ------    
          Total federal ..............................................   2,619        1,796       (503)    
    State -                                                                                                   
       Currently payable .............................................     442          415        361    
       Deferred ......................................................     229         (142)      (111)    
                                                                        ------       ------     ------    
          Total state ................................................     671          273        250    
                                                                                                              
    Taxes paid under tax sharing agreement for tax benefits                                                   
       generated by other members of the consolidated group ..........       -          531      1,962    
                                                                        ------       ------     ------    
                                                                        $3,290       $2,600     $1,709    
                                                                        ======       ======     ======    
</TABLE>


A reconciliation between the provision for income taxes and the expected taxes
using the federal statutory income tax rate of 34% follows:

<TABLE>
<CAPTION>
                                                                                     1995      1994     1993
                                                                                    ------    ------   ------
                                                                                          (in thousands)

   <S>                                                                               <C>       <C>      <C>
   Tax at statutory rate ........................................................... $2,729    $2,131   $1,428
   Increase from-
     State income taxes, net........................................................    443       267      178
     Other..........................................................................    118       202      103
                                                                                     ------    ------   ------
                                                                                     $3,290    $2,600   $1,709


Deferred tax assets (liabilities) are comprised of the following:

                                                                                        1995         1994
                                                                                       ------       ------
                                                                                         (in thousands)
   Deferred Tax Assets:
     Claims and other reserves .....................................................    $2,829      $2,115
     Basis difference on property and equipment ....................................     1,374         927
     Other .........................................................................        12         274
                                                                                        ------      ------
      Total deferred tax assets ....................................................     4,215       3,316
                                                                                        ------      ------
                                                                                                   
   Deferred Tax Liabilities:                                                                       
     Prepaid expenses ..............................................................      (258)       (104)
     Deferred revenue ..............................................................    (3,858)       (370)
                                                                                        ------       -----
      Total deferred tax liabilities ...............................................    (4,116)       (474)
                                                                                        ------      ------
                                                                                                   
      Net deferred tax assets ......................................................    $   99      $2,842
                                                                                        ======      ======
</TABLE>


                                                                               
                                      22



<PAGE>   24
(5)    LONG-TERM OBLIGATIONS AND OPERATING LEASES

Long-term obligations included the following:


<TABLE>
<CAPTION>
                                                                                               1995         1994
                                                                                              ------       ------
                                                                                                (in thousands)
        <S>                                                                                  <C>           <C>
        Capital lease obligations for transportation equipment,
         9% to 11.9%, payable through 2002 ................................................  $  864        $2,171
        Notes payable, 7.7%, payable through 1996 .........................................      34            70
                                                                                             ------        ------
                                                                                                898         2,241
        Less - Current maturities .........................................................     186           325
                                                                                             ------        ------
                                                                                             $  712        $1,916
                                                                                             ======        ======

</TABLE>


Property and equipment included the following amounts related to capital
lease obligations:
<TABLE>
<CAPTION>

                                                                                              1995          1994
                                                                                             ------        ------
                                                                                               (in thousands)

        <S>                                                                                  <C>           <C>
        Transportation equipment ..........................................................  $1,010        $2,954
        Less - Accumulated depreciation ...................................................     180           268
                                                                                             ------        ------
                                                                                             $  830        $2,686
                                                                                             ======        ======
</TABLE>



Scheduled annual payments on the Company's long-term obligations and
commitments for operating leases are as follows:




<TABLE>
<CAPTION>
                                               Capital Leases                                      
                                       --------------------------------                            
                                        Future    Interest   Principal     Other      Operating    
                                       Payments   Portion     Portion      Debt         Leases     
                                       --------   --------   ---------    -----       ----------   
                                                             (in thousands)                                          
                                                                                                   
<S>                                     <C>         <C>        <C>          <C>        <C>        
1996 ............................       $  225      $ 73       $152         $34        $  518      
1997 ............................          174        60        114           -           402      
1998 ............................          164        49        115           -           201      
1999 ............................          165        39        126           -             -      
2000 ............................          164        27        137           -             -      
Thereafter ......................          235        15        220           -             -      
                                        ------      ----       ----         ---        ------      
                                        $1,127      $263       $864         $34        $1,121      
                                        ======      ====       ====         ===        ======      
</TABLE>


Excluded from the operating lease commitments above are scheduled rentals on
tractors, trailers and containers with lease terms of one to seven years which
have annual cancellation provisions.  If these leases are not canceled, the
additional future lease payments would be approximately $2,729,000, $1,905,000,
$1,286,000, $1,211,000, $1,148,000 and $539,000 in 1996, 1997, 1998, 1999, 2000
and thereafter, respectively.  The accompanying financial statements include
rent expense of $6,220,000, $4,795,000 and $3,560,000 in 1995, 1994 and 1993,
respectively.

(6)    CONTINGENCIES AND COMMITMENTS

The Company is engaged in an arbitration proceeding filed by Roger Crouch, the
Company's former Vice Chairman of the Board, as a result of the Company's
termination of his employment agreement with the Company for cause.  The
arbitration is being conducted by the American Arbitration Association.  Under
the terms of the employment agreement, if Mr. Crouch prevails in the
arbitration he is entitled to payment of his annual salary of $225,000 per year
for the remaining seven years of the agreement.  Mr. Crouch also contends he is
entitled to certain bonus payments.  The Company intends to vigorously defend
the arbitration.  Selection of the arbitrators is in process, but no date has
been set for the hearing.

                                      23


<PAGE>   25
The Company is involved in various other legal proceedings generally incidental
to its business.  While the result of any litigation contains an element of
uncertainty, the Company presently believes that the outcome of any known
pending or threatened legal proceedings or claims, or all of them combined,
will not have a material adverse effect on its results of operations or
consolidated financial position.

(7)    STOCK INCENTIVE PLANS

At December 30, 1995, the Company has three stock-based compensation plans:
The 1995 Omnibus Stock Incentive Plan (the "1995 Plan"), the 1992 Non-qualified
Stock Option Plan (the "1992 Plan") and the Amended and Restated 1986 Incentive
Stock Option Plan (the "1986 Plan").  As a result of the adoption of the 1995
Plan on May 17, 1995, shares are no longer available for future grants under
the 1992 and 1986 plans.  The Company applies Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees," and related
Interpretations in accounting for its plans.  Accordingly, no compensation cost
has been recognized for its fixed stock option plans.

The 1995 Plan provides for the granting of incentive stock options and
non-qualified options to officers, key employees and non-employee directors at
a price not less than 85% of the fair market value of the common stock on the
date of grant.  The 1995 Plan also provides for grants of restrictive stock
awards and other stock awards to employees and stock awards to non-employee
directors. The 1992 Plan provided for the granting of non-qualified options to
officers, key employees and non-employee directors.  The 1986 Plan provided for
the granting of incentive stock options to key employees.  At December 30,
1995, 1,179,524 shares were reserved for issuance under the three plans.
Options are generally exercisable for ten years from the date of grant.


The following table is a summary of data regarding stock options:


<TABLE>
<CAPTION>
                                                                           1995         1994          1993
                                                                         -------      --------      -------
<S>                                                                      <C>          <C>           <C>      
For the year:                                                                                                
  Shares reserved for grant                                              600,000      275,000             -  
  Options granted                                                         49,000      309,500         7,000  
  Options cancelled                                                        2,699       19,800        15,750  
  Options exercised                                                      106,702        5,700        10,000  
  Weighted average per share exercise price of options exercised           $7.20        $8.00         $8.00  
As of year end:                                                                                              
  Options outstanding                                                    622,349      682,750       398,750  
  Options exercisable                                                    290,799      314,160       258,961  
  Shares available for grant                                             557,175      331,441       346,141  
</TABLE>


The per share exercise prices of options outstanding as of December 30, 1995,
ranged from $4.25 to $17.50 per share.  The weighted average per share exercise
price of options granted and cancelled during the year ended December 30, 1995
was $15.88 and $4.25, respectively.  The weighted average per share exercise
price of options exercisable at December 30, 1995, was $8.58.

In 1990, the Company granted stock appreciation rights for 52,000 shares of the
Company's common stock at a base price of $4.25 per share to key employees of
the Company.  Stock appreciation rights for 14,000 shares were outstanding at
December 30, 1995.  The rights provide for cash payments to holders of the
rights for increases in the market price of the Company's common stock as of
April 1 of each year until and including April 1, 2000.  The base price is
adjusted each April 1 if the market closing price on that date is greater than
the previous base price.  The adjusted base prices as of April 1, 1995, 1994
and 1993 were $17.25, $14.75 and $8.75 per share, respectively.  Compensation
of $47,000, $85,000 and $85,000 was expensed under this plan in 1995, 1994 and
1993, respectively.  As of December 30, 1995, no additional compensation has
been accrued based on the closing market price of $16.13 per share on that
date.

(8)    JOINT VENTURE

In 1991, Mark VII entered into a general partnership with a warehousing and
distribution company to provide contract management services for a number of
regional distribution centers for one of Mark VII's largest customers.  The
partnership, ERX Logistics ("ERX"), employs management, administrative  
personnel, drivers and warehousemen to operate the warehouses, tractors and
trailers owned by the customer.  Effective January 1, 1996, the partnership was
dissolved and Mark VII and its former partner entered into a new operating
agreement.  Pursuant to this agreement, a new Michigan limited  liability
company was formed, ERX Logistics, L.L.C.  The provisions of the operating
agreement remained essentially the same as the former partnership agreement,
with Mark VII maintaining a 50% interest in the venture.


                                      24



<PAGE>   26
 


The Company has guaranteed $1 million of a $5 million line of credit to provide
working capital for ERX.  This line is secured by accounts receivable of ERX.
Borrowings under this line averaged $1,271,000 in 1995.  The maximum month end
borrowing was $2,411,000.  The balance outstanding on this line was $1,019,000
at December 30, 1995.

(9)    RELATED PARTY TRANSACTIONS

Mark VII and Carriers routinely engaged in intercompany transactions as
Carriers hauled freight for Mark VII's customers and as Mark VII brokered
shipments for Carriers' customers.  Transportation costs on Mark VII's
shipments hauled by Carriers was $5,179,000 and $10,977,000 in 1994 and 1993,
respectively.  The Company's net revenue on Carriers' shipments brokered to
Mark VII was $248,000 and $442,000 in 1994 and 1993, respectively.  Due to the
treatment of Carriers as a discontinued operation, these revenues and costs
have not been eliminated in the accompanying financial statements


QUARTERLY FINANCIAL DATA (in thousands, except per share data) (Unaudited):

The results of operations for each of the four quarters of 1995 and 1994 are
summarized below.  The amounts below are unaudited, but, in the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of such periods have been made.


<TABLE>
<CAPTION>

                                                          FIRST         SECOND        THIRD       FOURTH  
                                                         QUARTER        QUARTER      QUARTER     QUARTER  
                                                         -------        -------      -------     -------  
<S>                                                       <C>           <C>         <C>          <C>      
1995                                                                                                      
----                                                                                                      
Operating revenues .....................................  $105,457      $112,031    $114,852     $126,820 
Operating income .......................................     1,441         2,496       2,460        2,092 
Income before income taxes .............................     1,336         2,290       2,357        2,041 
Net income .............................................       780         1,360       1,378        1,216 
                                                                                                          
Earnings per share .....................................  $    .16      $    .27    $    .27     $    .24 
                                                                                                          
1994                                                                                                      
----
Operating revenues .....................................  $ 93,096      $109,712    $111,386     $114,578 
Operating income .......................................       925         2,049       2,291        1,582 
Income from continuing operations before income taxes ..       817         1,935       2,136        1,379 
Income from continuing operations ......................       462         1,137       1,257          811 
Loss on discontinued operations ........................         -        (1,286)          -            - 
Net income (loss) ......................................       462          (149)      1,257          811 
                                                                                                          
Earnings (loss) per share:                                                                                
 Income from continuing operations .....................  $    .09      $    .23    $    .26     $    .17 
 Loss on discontinued operations .......................         -          (.26)          -            - 
 Net income (loss) .....................................       .09          (.03)        .26          .17 
</TABLE>





                                      25




<PAGE>   27
 


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders of Mark VII, Inc.:

     We have audited the accompanying consolidated balance sheets of MARK VII,
INC. (a Missouri corporation) AND SUBSIDIARIES as of December 30, 1995 and
December 31, 1994, and the related consolidated statements of income,
shareholders' investment and cash flows for each of the three years in the
period ended December 30, 1995.  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 the
schedule based on our audits.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Mark VII, Inc. and
Subsidiaries as of December 30, 1995 and December 31, 1994, and the results of
their operations and their cash flows for each of the three years in the period
ended December 30, 1995, in conformity with generally accepted accounting
principles.

     Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole.  Schedule II is presented for purposes
of complying with the Securities and Exchange Commission's rules and is not a
required part of the basic financial statements.  This schedule 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.


                                             /s/ Arthur Andersen LLP



Kansas City, Missouri,
February 13, 1996.




















                                      26


<PAGE>   28
 

                                                                SCHEDULE II


                        MARK VII, INC. AND SUBSIDIARIES

                 SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS


<TABLE>
<CAPTION>

                                                BALANCE AT    ADDITIONS                                        
                                                BEGINNING     CHARGED TO                                 BALANCE AT       
                                                OF YEAR       EXPENSE       DEDUCTIONS     OTHER         END OF YEAR   
                                                ----------    ----------    ----------     -----         -----------
<S>                                              <C>          <C>             <C>          <C>             <C>            
Allowance for doubtful accounts                                                                                           
  (deducted from accounts receivable):                                                                                    
                                                                                                                          
  1993 .......................................   $  558       $  887          $393         $  -            $1,052         
  1994 .......................................    1,052          590           357            -             1,285         
  1995 .......................................    1,285          581           530            -             1,336         
                                                                                                                          
Allowance for uncollectible notes                                                                                         
  (deducted from notes and other receivables):                                                                            
                                                                                                                          
  1993 .......................................   $   62       $  138          $ 88         $  -            $  112         
  1994 .......................................      112          381            65           89               517         
  1995 .......................................      517        1,521             -            -             2,038         
</TABLE>                                                

















                                      27



<PAGE>   29
 
                                 EXHIBIT INDEX



Exhibit
Number                       Description
-------       -------------------------------------------------
<TABLE>
<CAPTION>
<S>           <C>


10.10         Employment and Noncompete Agreement between
              Michael J. Musacchio and Mark VII Logistics, a
              Division of Mark VII Transportation Co., Inc., a
              wholly owned subsidiary of the Registrant, dated
              as of June 1, 1995.  Addendum to Employment and
              Noncompete Agreement between Michael J.
              Musacchio and Mark VII Logistics, dated as of
              September 1, 1995.

   11         Statement re:  Computation of Earnings per Share  

   21         Subsidiaries of Registrant                        

   23         Consent of Independent Public Accountants         

   27         Financial Data Schedule (SEC Use Only)                          
</TABLE>













                                      28