<PAGE>

                            UNITED STATES OF AMERICA
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20509

                                    FORM 10-Q

(Mark One)
[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934 
       For the quarterly period ended March 31, 1999.

                                       OR
                                       --

[ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934
       For the transition period from .............. to ..............

       Commission file number 0-26568
                              -------

                              USA Detergents, Inc.
                              --------------------
             (Exact name of registrant as specified in its charter)

             Delaware                                     11-2935430
             --------                                     ----------
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)

              1735 Jersey Avenue, North Brunswick, New Jersey 08902
              -----------------------------------------------------
               (Address of principal executive offices - Zip code)

                                 (732) 828-1800
                                 --------------
              (Registrant's telephone number, including area code)


                       -----------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

     Class of Stock         No. of Shares Outstanding              Date
     --------------         -------------------------              ----
         Common                     13,825,602                  May 5, 1999

<PAGE>

                      USA DETERGENTS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

                                     ASSETS

<TABLE>
<CAPTION>
                                                                       March 31,   December 31,
                                                                         1999          1998
                                                                         ----          ----
<S>                                                                    <C>          <C>      
Current assets:
Cash                                                                   $   2,055    $      --
Restricted funds                                                           2,002           --
Accounts receivable, net of customer allowances and doubtful
   accounts of $1,064 and $1,111 at March 31, 1999 and
   December 31, 1998, respectively                                        20,038       19,683
Inventories                                                               14,982       14,668
Refundable income taxes                                                    3,216        3,221
Prepaid expenses and other current assets                                  4,435        4,591
                                                                       ---------    ---------
      Total current assets                                                46,728       42,163

Property and equipment - net                                              44,888       45,245
Restricted funds                                                           2,000          -
Deferred financing costs                                                   1,551        1,376
Other non-current assets                                                   2,001        2,145
                                                                       ---------    ---------
      Total assets                                                     $  97,168    $  90,929
                                                                       =========    =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Current portion of long-term debt                                      $   5,534    $   3,334
Cash overdraft                                                                --          476
Accounts payable                                                          19,643       22,670
Accrued expenses                                                          14,100       12,457
Other current liabilities                                                    559          730
                                                                       ---------    ---------
      Total current liabilities                                           39,836       39,667

Long-term debt - net of current portion                                   37,992       32,969
Other non-current liabilities                                                 90           90
Deferred rent payable                                                        834          889
                                                                       ---------    ---------
      Total liabilities                                                   78,752       73,615
                                                                       ---------    ---------
Commitments and Contingencies
Stockholders' equity:
Preferred stock-no par value; authorized 1,000,000
   shares, none issued                                                        --           --
Common stock - $.01 par value; authorized 30,000,000 shares, issued
   and outstanding 13,825,602 shares at March 31, 1999 and
   December 31, 1998                                                         138          138
Additional paid-in capital                                                29,200       29,200
Deficit                                                                  (10,747)     (11,849)
Note receivable from shareholder                                            (175)        (175)
                                                                       ---------    ---------
      Total stockholders' equity                                          18,416       17,314
                                                                       ---------    ---------
      Total liabilities and stockholders' equity                       $  97,168    $  90,929
                                                                       =========    =========
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                        2

<PAGE>

                      USA DETERGENTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
             (IN THOUSANDS, EXCEPT NET INCOME PER SHARE INFORMATION)

<TABLE>
<CAPTION>
                                                             Three months
                                                            ended March 31,
                                                        ----------------------
                                                          1999          1998
                                                        --------      --------
<S>                                                     <C>           <C>     
Net sales                                               $ 59,390      $ 56,678

Cost of goods sold                                        39,041        39,977
                                                        --------      --------
Gross profit                                              20,349        16,701

Selling, general and administrative                       18,039        14,434
                                                        --------      --------
Income from operations                                     2,310         2,267

Interest and amortization of deferred
  financing costs - net                                    1,086           903
                                                        --------      --------
Income before provision for income taxes                   1,224         1,364
Provision for income taxes                                    58            21
                                                        --------      --------
Income before extraordinary charge                         1,166         1,343
Extraordinary charge                                          64            --
                                                        --------      --------
Net income                                              $  1,102      $  1,343
                                                        ========      ========

Basic income per share before extraordinary charge      $    .08      $    .10
Extraordinary charge                                          --            --
                                                        --------      --------
Basic net income per share                              $    .08      $    .10
                                                        ========      ========
Weighted average shares outstanding                       13,826        13,814
                                                        ========      ========
Diluted income per share before extraordinary charge    $    .08      $    .10
Extraordinary charge                                          --            --
                                                        --------      --------
Diluted net income per share                            $    .08      $    .10
                                                        ========      ========
Weighted average shares outstanding and common share
  equivalents                                             13,862        14,060
                                                        ========      ========
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                        3

<PAGE>

                      USA DETERGENTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   THREE MONTHS ENDED MARCH 31,1999, AND 1998
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                     1999         1998
                                                                   --------     --------
<S>                                                                <C>          <C>     
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                      $  1,102     $  1,343
   Adjustments to reconcile net income to net
      cash provided by operating activities:
   Depreciation                                                       1,436        1,228
   Amortization of deferred financing costs                             228          121
   Amortization of slotting                                             678        1,264
   Other amortization                                                   149          157
   Change in the provision for customer allowances
     and doubtful accounts                                              (47)         124
   Change in deferred rent                                              (39)         (16)
Changes in operating assets and liabilities:
   Increase in accounts receivable                                     (308)        (181)
   (Increase)/decrease in inventories                                  (314)       1,994
   Increase in prepaid expenses and other current assets               (522)      (1,027)
   (Increase)/decrease in other non-current assets                      (22)           5
   Decrease in cash overdraft                                          (476)          --
   Decrease in accounts payable and accrued expenses                 (1,385)      (1,717)
   Decrease in refundable income taxes                                    5           59
                                                                   --------     --------
      Net cash provided by operating activities                         485        3,354
                                                                   --------     --------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                                (1,079)        (591)
                                                                   --------     --------
      Net cash used in investing activities                          (1,079)        (591)
                                                                   --------     --------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net repayments of current portion of long-term debt                   --          (77)
   Net proceeds from/(repayments to) credit facilities                7,223       (5,000)
   Increase in restricted funds                                      (4,002)          --
   Increase in note payable                                              --        4,000
   Decrease in other current liabilities                               (186)          --
   Repayments of Oracle purchase obligation                              --         (420)
   Increase in deferred financing costs                                (386)        (303)
   Net proceeds from exercise of options                                 --          110
                                                                   --------     --------
      Net cash provided by/(used in) financing activities             2,649       (1,690)
                                                                   --------     --------
Net increase in cash                                                  2,055        1,073

Cash at beginning of period                                               0        1,848
                                                                   --------     --------
Cash at March 31,                                                  $  2,055     $  2,921
                                                                   ========     ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS FOR OPERATING ACTIVITIES:
   Interest paid                                                   $    823     $    735
                                                                   ========     ========
   Income taxes paid                                               $    128     $     21
                                                                   ========     ========
   Income tax refunds received                                     $     83     $     60
                                                                   ========     ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS FOR FINANCING ACTIVITIES:
   Value of warrants issued in connection with bank and
     related party financings                                      $     --     $    750
                                                                   ========     ========
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                        4

<PAGE>

                      USA DETERGENTS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                    FOR THE THREE MONTHS ENDED MARCH 31, 1999

NOTE 1 - BASIS OF PRESENTATION

    The accompanying unaudited consolidated financial statements have been
prepared by the Company pursuant to the rules of the Securities and Exchange
Commission ("SEC") and in the opinion of management, include all adjustments,
(consisting of normal recurring accruals) necessary for the fair presentation of
the Company's financial position, results of operations and cash flows. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such SEC rules. The Company believes the
disclosures made are adequate to make such financial statements not misleading.
The results for the interim periods presented are not necessarily indicative of
the results to be expected for the full year. These financial statements should
be read in conjunction with the Company's December 31, 1998 Form 10-K.

    Reclassification - Certain reclassifications have been made to prior period
amounts to conform with the presentation for the current period.

NOTE 2 - DEBT

    On February 26, 1999, the Company refinanced its existing indebtedness with
FINOVA Capital Corporation to provide for an additional $14.5 million of
financing. The $14.5 million of additional financing is to be repaid in monthly
installments based upon a ten-year amortization schedule at prime plus 1.0%. The
increased amount is due, along with all amounts outstanding under the previously
existing FINOVA credit facility, in September 2003. The Company used $10.1
million of the additional proceeds to pay off its remaining indebtedness to PNC
Bank, N.A. An additional $4.0 million of the proceeds was set aside for the
repayment of the Company's indebtedness to 101 Realty Associates, LLC ("101
Realty") over the following year, provided the Company meets certain working
capital criteria and achieves specified profitability levels for fiscal 1998 and
1999. As a result of meeting the requirements for fiscal 1998, in May 1999 $2.0
million of the 101 Realty debt was repaid to 101 Realty from the $4.0 million
set aside. The Company's agreement with FINOVA provides for the remaining
reserved funds to be applied to the repayment of amounts owed to FINOVA, to the
extent that the conditions for fiscal 1999 are not met for the repayment of the
101 Realty debt. The increase in availability under the refinanced FINOVA credit
facility required the granting of a first mortgage security interest to FINOVA
and the other participating lenders on the Company's real property located in
New Jersey and Missouri.

    The Company requires the availability of sufficient cash flow and borrowing
capacity to finance its operations, meet its debt service obligations and fund
future capital expenditure requirements. With the successful replacement of the
Company's previous credit facility with PNC Bank with permanent financing
facilities from FINOVA, management believes the Company's present credit
facility will more adequately support ongoing operations, debt service and
capital expenditure requirements. The Company's operating plan for 1999 includes
continuing its cost control programs. Such programs have included controlling
temporary labor, additional automation of manufacturing facilities, further
production rationalization, increased use of high speed fillers and cartoners
and improved production planning and control.

                                       5

<PAGE>

NOTE 3 - LEGAL PROCEEDINGS

    In connection with the quarterly and annual results of operations originally
reported by the Company for certain fiscal quarters in 1996 and 1997 and the
fiscal year ended December 31, 1996, the Company has received a formal request
from the Securities and Exchange Commission (the "SEC") for the production of
various documents and the testimony of certain current and former employees. The
Company has been providing documentation and other materials to the SEC in
response to the request, and the testimony of certain persons has been taken.

    On September 12, 1997, the Company became aware of a claim by North
Brunswick Water, LLC and North Brunswick Township (collectively "NBWC") covering
among other things, unpaid water and sewer charges. The initial amount of this
claim was $5,000,000. NBWC also claimed that the Company was precluded under
local ordinances from using wells on its site to draw water for production
purposes. On October 20, 1997, the Company commenced an action in the Superior
Court of New Jersey, Chancery Division, Middlesex County, challenging NBWC's
claim and seeking injunctive relief to prevent NBWC from taking any steps to
discontinue water and sewer service pending resolution of the claim. As a result
of the institution of the litigation, the Company and NBWC entered into a
Consent Order to prevent discontinuation of water and sewer service. Pursuant to
the terms of this Consent Order, the Company has paid approximately $860,000 to
NBWC since October 1997, subject to refund.

    On March 10, 1998, the Court entered an Order granting the Company's motion
for partial summary judgment. The Court ruled that local ordinances did not
preclude use of the wells for manufacturing purposes. This ruling was appealed
to the Appellate Division of Superior Court by the defendants.

    Since commencement of the litigation, the parties have engaged in
substantive and detailed settlement discussions. On January 11, 1999, the
parties agreed in principle upon a settlement, under which the Company will pay
$40,000 to NBWC, which represents certain unpaid, contested sewer charges for
1998. In addition, the Company agreed to pay a total of $600,000 over three
years plus simple interest at a rate of 5% in return for NBWC granting the
Company a perpetual license at no additional costs to use the wells up to the
full extent ultimately permitted by the New Jersey Department of Environmental
Protection (NJDEP). The parties are currently in the process of finalizing the
terms of a settlement agreement to reflect this arrangement.

    The Company is also involved in various routine legal proceedings of a
nature it deems to be customary to a company its size. The Company believes the
ultimate disposition of these actions will not have a material adverse effect on
its business, financial condition or results of operations.

NOTE 4 - NET INCOME PER SHARE

    Basic net income per share is based on the weighted average number of shares
outstanding during the periods presented. Diluted net income per share also
includes Common Stock equivalents that are dilutive. Common Stock equivalents
have been included in the computation of diluted net income per share since the
impact is dilutive.

                                       6

<PAGE>

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

THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998

    Net sales for the three months ended March 31, 1999 increased 4.8% to $59.4
million from $56.7 million for the three months ended March 31, 1998. The
increase was primarily the result of an increase in unit sales of liquid laundry
products.

    Gross profit for the three months ended March 31, 1999 increased 21.8% to
$20.3 million from $16.7 million for the three months ended March 31, 1998.
Gross profit as a percentage of net sales increased to 34.3% for the three
months ended March 31, 1999 from 29.5% for the same period in 1998. The increase
in gross profit as a percentage of net sales was primarily attributable to a
decrease of 3.5% in materials costs due to more favorable pricing and
manufacturing efficiencies, a decrease of 1.0% in manufacturing overhead and a
decrease of 1.0% in distribution overhead, offset in part by an increase as a
percentage of net sales of 0.6% in direct labor and facilities overhead costs.

    Selling, general and administrative expenses increased 25.0% to $18.0
million in the three months ended March 31, 1999 from $14.4 million for the
three months ended March 31, 1998. As a percentage of net sales, these expenses
increased to 30.4% for the three months ended March 31, 1999 from 25.5% for the
same period in 1998. The increase as a percentage of net sales was primarily due
to an increase of 3.5% in marketing funds (co-op advertising, promotional
allowances and slotting amortization), an increase in salaries of 1.3%, an
increase in consulting fees of 0.4% and an increase in commissions of 0.3%.
These increases were offset in part by a decrease as a percentage of net sales
of 0.4% in bad debt expenses.

    Interest and amortization of deferred financing costs (net) increased to
$1.1 million for the three months ended March 31, 1999 from $0.9 million for the
three months ended March 31, 1998, primarily as a result of higher average
outstanding borrowings and the amortization of warrant and bank closing costs
related to the Company's existing credit facility with FINOVA Capital
Corporation.

    Provision for income taxes for the three month periods ended March 31, 1999
and March 31, 1998 are based on actual tax computations for each of the periods.
The difference between the effective rates and the statutory rate relates
primarily to the Company's net operating loss carry forward, for which the
Company has not provided a tax benefit.

    The extraordinary charge of approximately $64,000 relates to the write-off
of deferred financing costs related to the early extinguishment of the Company's
prior credit facility with PNC Bank, N.A., now replaced by the Company's credit
facility with FINOVA Capital Corporation.

                                       7

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

    As of March 31, 1999, the Company's working capital was $6.9 million
compared to working capital of $2.5 million at December 31, 1998.

    Net cash provided by operating activities for the three months ended March
31, 1999 was $0.5 million, compared to $3.4 million in the prior period. The
cash provided by operating activities in the three months ended March 31, 1999
resulted primarily from depreciation and amortization of $2.5 million and net
income of $1.1 million, offset in part by a decrease in accounts payable and
accrued expenses of $1.4 million, a decrease in cash overdrafts of $0.5 million,
an increase in prepaid expenses and other current assets of $0.5 million, and
increases of $0.3 million in each of accounts receivable and inventory.

    Net cash used in investing activities for the three months ended March 31,
1999 was $1.1 million relating to the acquisition and upgrades of production
equipment and information systems. The Company anticipates that capital
expenditures for the remaining nine months of fiscal 1999 will be approximately
$3.9 million, which includes expenditures for continued enhancements to the
Company's manufacturing, distribution and information systems.

    Net cash provided by financing activities for the three months ended March
31, 1999 was $2.6 million, which resulted primarily from proceeds from bank
lenders of $7.2 million, offset in part by an increase in restricted funds of
$4.0 million, an increase in deferred financing costs of $0.4 million, and a
decrease in other current liabilities of $0.2 million.

    On February 26, 1999, the Company refinanced its existing indebtedness with
FINOVA Capital Corporation to provide for an additional $14.5 million of
financing. The $14.5 million of additional financing is to be repaid in monthly
installments based upon a ten-year amortization schedule at prime plus 1.0%. The
increased amount is due, along with all amounts outstanding under the previously
existing FINOVA credit facility, in September 2003. The Company used $10.1
million of the additional proceeds to pay off its remaining indebtedness to PNC
Bank. An additional $4.0 million of the proceeds was set aside for the repayment
of the Company's indebtedness to 101 Realty Associates, LLC ("101 Realty") over
the following year, provided the Company meets certain working capital criteria
and achieves specified profitability levels for fiscal 1998 and 1999. As a
result of meeting the requirements for fiscal 1998, in May 1999 $2.0 million of
the 101 Realty debt was repaid to 101 Realty from the $4.0 million set aside.
The Company's agreement with FINOVA provides for the remaining reserved funds to
be applied to the repayment of amounts owed to FINOVA, to the extent that the
conditions for fiscal 1999 are not met for the repayment of the 101 Realty debt.
The increase in availability under the refinanced FINOVA credit facility
required the granting of a first mortgage security interest to FINOVA and the
other participating lenders on the Company's real property located in New Jersey
and Missouri.

                                       8

<PAGE>

    The Company requires the availability of sufficient cash flow and borrowing
capacity to finance its operations, meet its debt service obligations and fund
future capital expenditure requirements. With the successful replacement of the
Company's previous credit facility with PNC Bank with permanent financing
facilities from FINOVA, management believes the Company's present credit
facility will more adequately support ongoing operations, debt service and
capital expenditure requirements. The Company's operating plan for 1999 includes
continuing its cost control programs. Such programs have included controlling
temporary labor, additional automation of manufacturing facilities, further
production rationalization, increased use of high speed fillers and cartoners
and improved production planning and control.

IMPACT OF INFLATION

    The Company believes that the relatively moderate rates of inflation
recently experienced in the United States have not had a significant effect on
net sales or profitability.

YEAR 2000 COMPLIANCE

    The inability of computers, software and other equipment using
microprocessors to recognize and properly process data fields containing a two
digit year is commonly referred to as the Year 2000 problem. As the Year 2000
approaches, such systems may be unable to accurately process certain date-based
information. This section discusses the processes currently being implemented
with respect to issues relating to the Year 2000.

Readiness

    The Company initiated its Year 2000 project in late 1996 with a complete
review of all products, manufacturing facilities, information systems and the
impact on the Company from customers and suppliers that may fail to deal with
the issue. The Year 2000 issues that needed to be addressed within the
organization pertain to the Company's internal information systems that date
stamp transactions. The conversion of all current applications, operating
systems, databases, and EDI transactions with Year 2000 issues was completed by
the end of the first quarter of 1999.

Products

    The Year 2000 issue with respect to the Company's product line is minimal
since its products are not date sensitive and require no internal or external
date tracking.

Manufacturing Facilities

    All existing pieces of machinery and equipment have been reviewed and
examined and management believes that any Year 2000 issues with respect to this
machinery and equipment will not affect production or delivery of the Company's
products since the equipment is not date reliant and the movement of products is
a manual process.

                                       9

<PAGE>

Information Systems

    Year 2000 issues with respect to information systems, have been addressed in
six major areas:

I.    Operating Systems
II.   Databases
III.  Business Systems
IV.   Support Systems
V.    Backup Systems
VI.   Hardware Platforms

    The following discusses the status of each area:

Operating System

    The Company has been advised by its software vendors that all existing
operating systems it uses, Novell 3.12, Windows NT, Unit 4.0D, and Windows 95,
currently are Year 2000 compliant.

Databases

    The Company has been advised by its software vendors that all databases used
by the Company's current systems and anticipated new systems are Year 2000
compliant.

Business Systems

    By the end of the first quarter of 1999 the Company believes that all 
existing business systems were Year 2000 compliant.

Support Systems

    Support systems include all desktop applications. These applications have
been upgraded to be Year 2000 compliant.

Backup Systems

    The Company has been advised by its software vendors that all applications
currently used by the Company to backup business applications and databases are
Year 2000 compliant.

Hardware Platforms

    The Company has been advised by its hardware vendors that all platforms
running the systems and databases mentioned above are Year 2000 compliant.

                                       10

<PAGE>

Customers

    The Company has responded to all customers who have requested Year 2000
compliance information, plans, and due dates.

Suppliers

    The Company has contacted its major suppliers and has asked them to respond
to questions concerning their ability to be Year 2000 compliant on a timely
basis. The Company plans to monitor the information received in response to
these inquiries on a continuous basis into the Year 2000. 

Cost of Year 2000 Readiness

    Based on management's assessment of systems, the cost of addressing Year
2000 issues is not expected to have a material adverse impact on the Company's
financial condition. To date, the Year 2000 conversion costs incurred are
approximately $80,000, and should not exceed $100,000. The amounts will be
financed through working capital. (Conversion costs do not include funds spent
by the Company on the purchase of its Oracle system, which would have been
acquired irrespective of any Year 2000 issues).

Risk of the Company's Year 2000 Issues

    Achieving Year 2000 compliance is dependent on many factors, some of which
are not completely within the Company's control. There can be no assurance that
the Company has, or will be able to identify, all aspects of its business that
are subject to Year 2000 problems of its customers or suppliers. There also can
be no assurance that the Company's software vendors are correct in their
assertions that the software is Year 2000 compliant, or that the Company's
estimate of the costs of systems preparation for the Year 2000 will prove to be
accurate. Should either the Company's internal systems or internal systems of
one or more significant suppliers or customers fail to achieve Year 2000
compliance, or the Company's estimate of the costs of becoming Year 2000
compliant prove to be materially inaccurate, the Company's business and results
of operations could be adversely affected.

                                       11

<PAGE>

MISCELLANEOUS

    The Company's quarterly and annual operating results are affected by a wide
variety of factors that could materially and adversely affect revenues and
profitability, including competition from other suppliers of laundry and
household cleaning products; changes in consumer preferences and spending
habits; the inability to successfully manage growth; seasonality; the ability to
introduce and the timing of the introduction of new products; the inability to
obtain adequate supplies or materials at acceptable prices; the inability to
reduce expenses to a level commensurate with revenues; and the inability to
negotiate acceptable credit terms with the current or prospective lenders. As a
result of these and other factors, the Company may experience material
fluctuations in future operating results on a quarterly or annual basis, which
could materially and adversely affect its business, financial condition,
operating results, and stock price. Furthermore, this document and other
documents filed by the Company with the Securities and Exchange Commission (the
"SEC") contain certain forward looking statements with respect to the business
of the Company, including prospective financing arrangements. These
forward-looking statements are subject to certain risks and uncertainties,
including those mentioned above, which may cause actual results to differ
significantly from these forward-looking statements. The Company undertakes no
obligation to publicly release the results of any revisions to these
forward-looking statements which may be to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events. An
investment in the Company involves various risks, including those mentioned
above and those which are detailed from time to time in the Company's SEC
filings.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

    The Company's carrying value of cash, restricted funds, trade accounts 
receivable, FINOVA's revolving line of credit facility, Term Loan A, Term Loan
B, Term Loan C and 101 Realty Note Payable is a reasonable approximation of
their fair value.

    The Company has not entered into, and does not expect to enter into,
financial instruments for trading or hedging purposes.

    The Company is currently exposed to material future earnings or cash flow
exposures from changes in interest rates on long-term debt obligations since the
majority of the Company's long-term debt obligations are at variable rates. The
Company does not currently anticipate entering into interest rate swaps and/or
similar instruments.

    The Company's carrying value of cash and cash equivalents, accounts payable,
accrued expenses and taxes payable is a reasonable approximation of their fair
value.

                                       12

<PAGE>

        PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS:

    In connection with the quarterly and annual results of operations originally
reported by the Company for certain fiscal quarters in 1996 and 1997 and the
fiscal year ended December 31, 1996, the Company has received a formal request
from the Securities and Exchange Commission (the "SEC") for the production of
various documents and the testimony of certain current and former employees. The
Company has been providing documentation and other materials to the SEC in
response to the request, and the testimony of certain persons has been taken.

    On September 12, 1997, the Company became aware of a claim by North
Brunswick Water, LLC and North Brunswick Township (collectively "NBWC") covering
among other things, unpaid water and sewer charges. The initial amount of this
claim was $5,000,000. NBWC also claimed that the Company was precluded under
local ordinances from using wells on its site to draw water for production
purposes. On October 20, 1997, the Company commenced an action in the Superior
Court of New Jersey, Chancery Division, Middlesex County, challenging NBWC's
claim and seeking injunctive relief to prevent NBWC from taking any steps to
discontinue water and sewer service pending resolution of the claim. As a result
of the institution of the litigation, the Company and NBWC entered into a
Consent Order to prevent discontinuation of water and sewer service. Pursuant to
the terms of this Consent Order, the Company has paid approximately $860,000 to
NBWC since October 1997, subject to refund.

    On March 10, 1998, the Court entered an Order granting the Company's motion
for partial summary judgment. The Court ruled that local ordinances did not
preclude use of the wells for manufacturing purposes. This ruling was appealed
to the Appellate Division of Superior Court by the defendants.

    Since commencement of the litigation, the parties have engaged in
substantive and detailed settlement discussions. On January 11, 1999, the
parties agreed in principle upon a settlement, under which the Company will pay
$40,000 to NBWC, which represents certain unpaid, contested sewer charges for
1998. In addition, the Company agreed to pay a total of $600,000 over three
years plus simple interest at a rate of 5% in return for NBWC granting the
Company a perpetual license at no additional costs to use the wells up to the
full extent ultimately permitted by the NJDEP. The parties are currently in the
process of finalizing the terms of a settlement agreement to reflect this
arrangement.

    The Company is also involved in various routine legal proceedings of a
nature it deems to be customary to a company its size. The Company believes the
ultimate disposition of these actions will not have a material adverse effect on
its business, financial condition or results of operations.

ITEM 2. CHANGES IN SECURITIES:

        None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES:

        None.

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<PAGE>

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

        None.

ITEM 5. OTHER INFORMATION:

        None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:

        (a)    Exhibits

        10.31  Amended and Restated Loan and Security Agreement, dated 
               February 25, 1999, between the Company and FINOVA Capital
               Corporation, First Source Financial LLP and LaSalle Business
               Credit, Inc.

        10.32  Amended and Restated Revolving Note Loan, dated February 25,
               1999, issued by the Company to FINOVA Capital Corporation.

        10.33  Amended and Restated Term Loan A Note, dated February 25, 1999,
               issued by the Company to FINOVA Capital Corporation.

        10.34  Amended and Restated Term Loan B Note, dated February 25, 1999,
               issued by the Company to FINOVA Capital Corporation.

        10.35  Amended and Restated Agency Agreement, dated February 25, 1999,
               between the Company and FINOVA Capital Corporation, First Source
               Financial LLP and LaSalle Business Credit.

        10.36  Term Loan C Note, dated February 25, 1999, issued by the Company
               to FINOVA Capital Corporation.

        27     Financial Data Schedule

        (b)    Reports on Form 8-K

               None.

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<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                       USA DETERGENTS, INC.


May 13, 1999                           By: /s/ Uri Evan                 
                                           -------------------------------
                                           Uri Evan
                                           Chairman of the Board &
                                           Chief Executive Officer


May 13, 1999                               /s/ Richard D. Coslow
                                           -------------------------------
                                           Richard D. Coslow
                                           Executive Vice President
                                           & Chief Financial Officer

                                       15