U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended December 31, 1999

                                       OR

             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

         From the transition period from _____________ to_______________

                         Commission File Number 0-19899

                             U.S. HOME & GARDEN INC.
                          (Exact name of registrant as
                            specified in its charter)

         Delaware                                           77-0262908
(State or other jurisdiction                                IRS Employer
of incorporation or organization)                      (Identification Number)
                                -


                              655 Montgomery Street
                         San Francisco, California 94111
                    (Address of Principal Executive Offices)

                                  (415)616-8111
              (Registrant's Telephone Number, Including Area Code)

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

As of  February  3, 2000 there were  18,823,381  shares of the  issuer's  common
stock, par value $.001 per share, outstanding.



<PAGE>

Part I. - Financial Information

Item 1. - Consolidated Financial Statements

Consolidated balance sheet as of June 30, 1999
and December 31, 1999 (Unaudited)                                           1-2

Consolidated statements of income for the three months and
six months Ended December 31, 1998 and 1999 (Unaudited)                       3

Consolidated statements of cash flows for the six months
Ended December 31, 1998 and 1999 (Unaudited)                                4-5

Notes to consolidated financial statements                                  6-8

Item 2. - Management's Discussion and Analysis of Financial
          Condition and Results of Operations.                             9-16

Item 3. - Quantitative and Qualitative Disclosures About Market Risk         16


Part II. - Other Information

Item 1. - Legal Proceedings                                                  17

Item 2. - Changes in Securities                                              17

Item 6. - Exhibits and Reports on Form 8-K                                   17

Signatures                                                                   18



<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                                      Consolidated Balance Sheet

================================================================================

<TABLE>
<CAPTION>
                                                                June 30, 1999    December 31, 1999
                                                                -------------    -----------------
                                                                                    (Unaudited)
<S>                                                              <C>               <C>
Assets

Current
     Cash and cash equivalents                                   $  2,936,000      $    807,000
     Restricted cash                                                1,000,000         1,000,000
     Accounts receivable, less allowance for doubtful accounts
       and sales returns of $991,000 and $574,000                  20,242,000        11,769,000
     Inventories                                                   16,986,000        18,792,000
     Prepaid expenses and other current assets                      1,137,000           988,000
     Deferred tax asset                                               500,000         3,029,000
-----------------------------------------------------------------------------------------------

Total Current Assets                                               42,801,000        36,385,000

Property and Equipment, net                                        11,634,000        12,723,000

Intangible Assets
     Excess of cost over net assets acquired, net                  75,573,000        74,263,000
     Deferred financing costs, net of accumulated
       amortization of $167,000 and $291,000                        3,524,000         3,462,000
     Product rights, patents and trademarks, net of
       accumulated amortization of $271,000 and $31,000               571,000           556,000
     Non-compete agreement, net of accumulated
      amortization of $77,000 and $92,000                           1,433,000         1,418,000
     Package design, net of accumulated amortization of
       $533,000 and $705,000                                        1,096,000         1,293,000

Officer Receivables                                                   725,000           718,000

Other Assets                                                          107,000           340,000
-----------------------------------------------------------------------------------------------

                                                                 $137,464,000      $131,158,000
-----------------------------------------------------------------------------------------------
</TABLE>
                    See accompanying notes to consolidated financial statements.

                                                                               1

<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                                      Consolidated Balance Sheet

================================================================================
<TABLE>
<CAPTION>
                                                                    June 30, 1999  December 31, 1999
                                                                    -------------  -----------------
                                                                                      (Unaudited)
<S>                                                                 <C>              <C>
Liabilities and Stockholders' Equity

Current
     Working capital line of credit                                 $        --      $     500,000
     Accounts payable                                                   4,432,000        6,056,000
     Accrued expenses                                                   2,314,000        2,080,000
     Accrued co-op advertising                                          1,499,000          325,000
     Accrued commissions                                                1,682,000          540,000
--------------------------------------------------------------------------------------------------

Total Current Liabilities                                               9,927,000        9,501,000

Deferred Tax Liability                                                  1,600,000        2,000,000

Other Liabilities                                                         703,000          602,000

Acquisition Line of Credit                                             15,500,000       15,000,000

Company Obligated Mandatorily Redeemable
     Preferred Securities of Subsidiary Trust
     Holding Solely Junior Subordinated Debentures                     63,250,000       63,250,000
--------------------------------------------------------------------------------------------------

Total Liabilities                                                      90,980,000       90,353,000
--------------------------------------------------------------------------------------------------

Stockholders' Equity
     Preferred stock, $.001 par value - shares authorized,
       1,000,000; no shares outstanding                                      --               --
     Common stock, $0.001 par value-shares authorized,
       75,000,000; 21,219,000 and 22,050,000 shares
       issued at June 30, 1999 and December 31, 1999                       21,000           22,000
     Additional paid-in capital                                        50,542,000       50,595,000
     Retained earnings                                                  4,703,000          758,000
--------------------------------------------------------------------------------------------------

                                                                       55,266,000       51,375,000
Less: Treasury Stock, 1,805,000 and 2,509,000 shares
     at cost at June 30, 1999 and December 31, 1999                    (8,782,000)     (10,570,000)
--------------------------------------------------------------------------------------------------

Total Stockholders' Equity                                             46,484,000       40,805,000
--------------------------------------------------------------------------------------------------

                                                                    $ 137,464,000    $ 131,158,000
--------------------------------------------------------------------------------------------------
</TABLE>
                    See accompanying notes to consolidated financial statements.

                                                                               2

<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                               Consolidated Statements of Income

================================================================================

<TABLE>
<CAPTION>
                                                                Three Months Ended                         Six Months Ended
                                                                   December 31,                              December 31,
                                                        ---------------------------------         ---------------------------------
                                                             1998                1999                 1998                  1999
-----------------------------------------------------------------------------------------------------------------------------------
                                                                    Unaudited                                 Unaudited
                                                        ---------------------------------         ---------------------------------

<S>                                                     <C>                  <C>                  <C>                  <C>
Net Sales                                               $ 15,985,000         $ 14,145,000         $ 26,753,000         $ 27,130,000

Cost of Sales                                              7,751,000            7,420,000           13,063,000           14,596,000
------------------------------------------------------------------------------------------------------------------------------------

Gross Profit                                               8,234,000            6,725,000           13,690,000           12,534,000
------------------------------------------------------------------------------------------------------------------------------------

Operating Expenses
   Selling and shipping                                    3,724,000            3,904,000            6,945,000            7,372,000
   General and administrative                              2,861,000            3,206,000            5,241,000            6,174,000
   Depreciation                                              379,000              400,000              590,000              783,000
   Goodwill amortization                                     672,000              731,000            1,231,000            1,452,000
   Other amortization                                         94,000              105,000              162,000              209,000
------------------------------------------------------------------------------------------------------------------------------------

                                                           7,730,000            8,346,000           14,169,000           15,990,000
------------------------------------------------------------------------------------------------------------------------------------

Income (Loss) from Operations                                504,000           (1,621,000)            (479,000)          (3,456,000)

Other Income (Expense)
   Investment income                                         116,000               59,000              497,000              162,000
   Interest expense                                       (1,798,000)          (2,003,000)          (3,339,000)          (3,851,000)
------------------------------------------------------------------------------------------------------------------------------------

Loss before Income Taxes                                  (1,178,000)          (3,565,000)          (3,321,000)          (7,145,000)

Income tax benefit                                           510,000            1,600,000            1,430,000            3,200,000
------------------------------------------------------------------------------------------------------------------------------------

Net Loss                                                $   (668,000)        $ (1,965,000)        $ (1,891,000)        $ (3,945,000)
====================================================================================================================================

Basic and Diluted Loss per
   Common Share                                         $       (.03)        $       (.10)        $       (.09)        $       (.20)
====================================================================================================================================

Weighted Average Common and
   Common Equivalent Shares
   Outstanding                                            19,837,000           19,213,000           19,926,000           19,290,000
====================================================================================================================================
                                                                        See accompanying notes to consolidated financial statements.
</TABLE>

                                                                              3

<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                           Consolidated Statements of Cash Flows

================================================================================

Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>
Six months ended December 31,                                    1998             1999
-----------------------------------------------------------------------------------------
                                                                     (Unaudited)
                                                            -----------------------------
<S>                                                         <C>             <C>

Cash Flows from Operating Activities
  Net loss                                                  $ (1,891,000)   $ (3,945,000)
  Adjustments to reconcile net loss to net cash
    (used in) or provided by operating activities:
    Depreciation and amortization                              1,988,000       2,444,000
    Proceeds from disposal of assets                                --             8,000
    Loss on disposal of assets                                      --            12,000
    Amortization of deferred financing costs                      50,000         124,000
    Changes in operating assets and liabilities,
      net of assets acquired and liabilities assumed:
    Accounts receivable                                        3,740,000       8,473,000
    Inventories                                               (6,494,000)     (1,806,000)
    Prepaid expenses and other current assets                   (179,000)        149,000
    Accounts payable and accrued expenses                     (4,262,000)       (978,000)
    Other assets                                                 288,000        (233,000)
    Deferred tax asset                                           138,000      (2,129,000)
----------------------------------------------------------------------------------------

Net Cash (Used in) Provided by Operating Activities           (6,622,000)      2,119,000
----------------------------------------------------------------------------------------

Cash Flows from Investing Activities
   Payment for purchase of business, net of cash acquired    (26,202,000)       (150,000)
   Purchase of noncompete agreement                           (1,000,000)           --
   Decrease (increase) in officer receivables                      3,000           7,000
   Purchase of furniture, fixtures and equipment              (1,040,000)     (1,940,000)
   Purchase of package design                                   (521,000)       (369,000)
----------------------------------------------------------------------------------------

Net Cash Used in Investing Activities                        (28,760,000)     (2,452,000)
----------------------------------------------------------------------------------------
</TABLE>

                                                                               4

<PAGE>


                                        U.S. Home & Garden Inc. and Subsidiaries

                                           Consolidated Statements of Cash Flows

================================================================================

<TABLE>
<CAPTION>
Six months ended December 31,                                      1998            1999
-------------------------------------------------------------------------------------------
                                                                         (Unaudited)
                                                               ----------------------------
<S>                                                            <C>             <C>

Cash Flows from Financing Activities
   Proceeds from issuances of stock                            $    137,000    $     54,000
   Repurchase of common stock for treasury                       (5,970,000)     (1,788,000)
   Repurchase of unit purchase options                              (79,000)           --
   Payment of acquisition line of credit                               --          (500,000)
   Acquisition finance cost                                        (397,000)        (62,000)
   Proceeds from working capital line of credit                  18,000,000         500,000
-------------------------------------------------------------------------------------------

Net Cash Provided by (Used in) Financing Activities              11,691,000      (1,796,000)
-------------------------------------------------------------------------------------------

Net decrease in cash and cash equivalents                       (23,691,000)     (2,129,000)

Cash and Cash Equivalents, beginning of period                   27,130,000       2,936,000
                                                                               ------------

Cash and Cash Equivalents, end of period                       $  3,439,000    $    807,000
===========================================================================================


Supplemental Disclosure of Cash Flow Information
  Cash paid for interest, including deferred financing costs
     and extraordinary expense                                 $  3,498,000    $  3,491,000
   Cash paid for taxes / (refund of taxes)                     $     18,000    ($ 1,093,000)
===========================================================================================
</TABLE>
                    See accompanying notes to consolidated financial statements.

                                                                               5

<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                      Notes to Consolidated Financial Statements

================================================================================

1.   The accompanying consolidated financial statements at December 31, 1999 and
     for the six months ended December 31, 1998 and 1999 are unaudited,  but, in
     the opinion of  management,  include all  adjustments  necessary for a fair
     presentation of consolidated  financial  position and results of operations
     for the periods  presented.  The results for the six months ended  December
     31, 1999 are not necessarily  indicative of the results of operations for a
     full year.

2.   Refer to the audited  consolidated  financial statements for the year ended
     June 30, 1999, for details of accounting policies and detailed notes to the
     consolidated financial statements.

3.   Inventories consist of:

                                   June 30, 1999              December 31, 1999
     ---------------------------------------------------------------------------
                                            (000)                          (000)

     Raw materials                        10,103                         10,504
     Finished goods                        6,883                          8,288
     ---------------------------------------------------------------------------

                                          16,986                         18,792
     ---------------------------------------------------------------------------

4.   On October  16,  1998,  the  Company  completed  the  acquisition  of Ampro
     Industries Inc., a lawn and garden company, for approximately $24.6 million
     with additional  purchase price payments over the next two years based upon
     its future  operating  cash flow.  An  additional $1 million was paid for a
     non-compete agreement.

     The  acquisition  was  accounted for as a purchase  and,  accordingly,  the
     results of operations have been included in the consolidated  statements of
     income since the acquisition  date. The value of intangibles  purchased and
     the excess of the  purchase  price  over the fair value of assets  acquired
     totaled  approximately $18 million and will be amortized on a straight-line
     basis over the estimated useful life of thirty years.

     The following unaudited pro forma summary combines the consolidated results
     of  operations  of  the  Company  and  Ampro  Industries,  Inc.  as if  the
     acquisitions  had occurred at the  beginning  of fiscal 1999,  after giving
     effect to certain  adjustments,  including the amortization of excess costs
     over assets  acquired,  increased  interest  expense and the elimination of
     certain  expenses  incurred  by  Ampro  Industries,  Inc.  related  to  the
     acquisitions.  This pro forma  summary  does not  necessarily  reflect  the
     results of  operations,  as they would have been if the  Company  and Ampro
     Industries,  Inc. had constituted a single entity during such period and is
     not necessarily indicative of results, which may be obtained in the future.

                                                                               6

<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                      Notes to Consolidated Financial Statements

================================================================================

     Six months ended December 31,                                         1998
     --------------------------------------------------------------------------
                                                                           (000)

     Net sales                                                           27,903
     Net loss                                                            (3,111)
     Diluted net loss per common share                                    (0.16)
     --------------------------------------------------------------------------

5.   The Company completed a financing  agreement with Bank of America N.A. (the
     "Bank") on October 13, 1998 (the "Credit Agreement").  The Credit Agreement
     provides  for a $25  million  revolving  acquisition  line of credit  ("the
     Acquisition  Facility") to finance  acquisitions  and a $20 million working
     capital  revolving  line  of  credit  ("the  Working  Capital   Facility").
     Borrowings  under such credit  facilities  bear interest at variable annual
     rates  chosen by the  Company  based on  either  (i) the  London  Interbank
     Offered Rate ("LIBOR") plus an applicable marginal rate, or (ii) the higher
     of 0.5% above the then current Federal Funds Rate or the Prime Rate of Bank
     of America, in each case, plus an applicable marginal rate. The Acquisition
     Facility  terminates  at October  15, 2001 and the  outstanding  balance is
     payable in quarterly  payments  starting  with December 31, 2001 and ending
     with December 31, 2004. The Working  Capital  Facility  terminates with the
     balance due on October 15, 2001. The Company is required to maintain a zero
     balance,  under the Working Capital  Facility,  for at least 30 consecutive
     days during the period from July 1 to December 1 of each year.  However, if
     the  Company  elects  to  terminate  the  Credit  Agreement  prior  to  the
     expiration  date, the outstanding  balance must be prepaid  together with a
     premium of 1% to 0.5% of the total facility.

     The Company's  obligations under the Credit Agreement are guaranteed by its
     subsidiaries  and  secured by a security  interest  in favor of the Bank in
     substantially all of the assets of the Company and substantially all of its
     subsidiaries.  Upon the occurrence of an event of default  specified in the
     Credit  Agreement,  the  maturity  of loans  outstanding  under the  Credit
     Agreement  may be  accelerated  by the Bank,  which may also  foreclose its
     security interest on the assets of the Company and its subsidiaries.

     Under the Credit Agreement,  the Company and its subsidiaries are required,
     among other  things,  to comply with (a) certain  limitations  on incurring
     additional indebtedness,  liens and guaranties,  on dispositions of assets,
     payment  of  cash  dividends  and  cash   redemption  and   repurchases  of
     securities, and (b) certain limitations on merger, liquidations, changes in
     business,  investments,  loans and  advances,  affiliate  transactions  and
     certain  acquisitions.  In  addition,  the Company must comply with certain
     financial  tests  and  ratios.  A  violation  of  any  of  these  covenants
     constitutes an event of default under the Credit Agreement. The Company did
     not meet one of its financial covenants at December 31, 1999. However,  the
     Bank has waived this violation.

                                                                               7

<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                      Notes to Consolidated Financial Statements

================================================================================

6.   In December  1999,  the Company  commenced a tender offer to purchase up to
     700,000 of the  outstanding  9.4%  Cumulative  Trust  Preferred  Securities
     issued by its  subsidiary,  U.S. Home & Garden Trust I, at $15.00 per Trust
     Preferred  Security.  The tender offer expired on January 14, 2000. A total
     of 183,281 Trust Preferred  Securities were purchased by the Company. As of
     February 1, 2000,  approximately  2,327,900 Trust Preferred Securities were
     outstanding.


                                                                               8

<PAGE>

Item 2.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


"Safe Harbor  Statement under the Private  Securities  Litigation  Reform Act of
1995:

     Certain information  included in this item 2 and elsewhere in the Form 10-Q
that are not historical facts contain forward looking  statements that involve a
number of known and unknown  risks,  uncertainties  and other factors that could
cause the actual  results,  performance  or  achievements  of the  Company to be
materially  different  from  any  future  results,  performance  or  achievement
expressed  or  implied  by such  forward  looking  statements.  These  risks and
uncertainties  include,  but are not limited to, the Company's  growth strategy,
the  effect  of  recent  acquisitions,   customer   concentration,   outstanding
indebtedness, dependence on weather conditions, seasonality, expansion and other
activities of competitors,  changes in federal or state  environmental  laws and
the administration of such laws,  protection of trademarks and other proprietary
rights,  the general  condition  of the economy and other risks  detailed in the
Company's Securities and Exchange Commission filings.  Readers are cautioned not
to place undue reliance on these forward looking  statements which speak only as
of the date the statement was made."

General

     U.S. Home & Garden Inc., ("the Company"),  manufactures and markets a broad
range of brand-name  consumer lawn and garden products  through its wholly owned
subsidiaries,  E-Garden, Inc., Ampro Industries,  Inc. ("Ampro"), Easy Gardener,
Inc. ("Easy Gardener"), and Golden West Agri-Products, Inc., and Easy Gardener's
wholly owned  subsidiaries,  Weatherly  Consumer  Products Group,  Inc. and Weed
Wizard Acquisition Corp. Since 1992, the Company consummated ten acquisitions of
complementary  lawn and garden  companies  and  product  lines for an  aggregate
consideration  of over $107 million in cash, notes and equity  securities.  As a
result of such  acquisitions,  the Company  recognized a  significant  amount of
goodwill,  which, in the aggregate,  was approximately $83.1 million at December
31,  1999.  The  Company  is  currently   amortizing  such  goodwill  using  the
straight-line method over various time periods ranging from 20 to 30 years.

                                                                               9

<PAGE>

Results of Operations

     The following table sets forth, for the periods indicated, certain selected
financial data as a percentage of net sales:

                                     Three Months Ended       Six Months Ended
                                     ------------------      ------------------
                                         December 31,           December 31,
                                      -----------------      -----------------
                                       1998        1999       1998        1999

Net Sales                             100.0%      100.0%     100.0%      100.0%
Cost of sales                          48.5        52.5       48.8        53.8
                                      -----       -----      -----       -----
Gross profit                           51.5        47.5       51.2        46.2
Selling and shipping expenses          23.3        27.6       26.0        27.2
General and administrative expenses    17.9        22.7       19.6        22.8
Depreciation and amortization           7.2         8.7        7.4         9.0
                                      -----------------      -----------------
Income/ (loss) from operations          3.1       (11.5)      (1.8)      (12.8)
Interest expense, net                 (10.5)      (13.7)     (10.6)      (13.6)
Income tax benefit                      3.2        11.3        5.3        11.8
                                      -----------------      -----------------
Net Loss                               (4.2)%     (13.9)%     (7.1)%     (14.6)%
                                      -----------------      -----------------

Three Months Ended December 31, 1999 Compared to Three Months Ended December 31,
1998

     Net sales. Net sales decreased by $1.8 million,  or 11.5%, to $14.1 million
during the three months ended  December 31, 1999 from $16.0  million  during the
comparable  period in 1998.  The decrease in net sales was  primarily due to the
discontinuation  of certain lower margin  products as part of the Company's plan
to focus on strategic long term product mix.

     Gross profit.  Gross profit  decreased by $1.5 million,  or 18.3%,  to $6.7
million for the three  months ended  December 31, 1999 from $8.2 million  during
the comparable  period in 1998.  This decrease was due primarily to the decrease
in net sales.  Gross  profit as a  percentage  of net sales  decreased  to 47.5%
during the three months ended December 31, 1999 from 51.5% during the comparable
period in 1998.  The decrease in gross  profit as a percentage  of net sales was
primarily attributable to an increase in net sales of lower-margin products when
compared to the  December  31, 1998 period.  The  Company's  decision to adopt a
strategy of just in time  inventory  resulted in $2.8 million less  inventory in
the  December  31, 1999 period when  compared to the  December  31, 1998 period.
Therefore,  the lower  inventory  available  to allocate  fixed  overhead  costs
decreased the gross profit percentage during the three months ended December 31,
1999 when compared to the comparable period in 1998.

     Selling and  shipping  expenses.  Selling and shipping  expenses  increased
$180,000,  or 4.8% to $3.9 million  during the three  months ended  December 31,
1999 from $3.7  million  during  the  comparable  period  in 1998.  Selling  and
shipping  expenses as a  percentage  of net sales  increased to 27.6% during the
three months ended December 31, 1999 from 23.3% during the comparable  period in
1998. This increase was primarily as a result of increased  pricing for shipping
inventory to customers. In addition, there were start-up selling and

                                                                              10

<PAGE>

development  costs for E*Garden,  Inc., which the Company acquired in June 1999,
included in this period. Due to the lower inventory and decrease in sales, there
was an under absorption of fixed overhead costs.

     General and administrative  expenses.  General and administrative  expenses
increased  $345,000 or 12.1%,  to $3.2  million  during the three  months  ended
December 31, 1999 from $2.9 million during the comparable  period in 1998.  This
increase is  primarily  due to start-up  and  development  expenses  relating to
E*Garden,  Inc., which the Company acquired in June 1999. As a percentage of net
sales,  general and administrative  expenses increased to 22.7% during the three
months ended December 31, 1999 from 17.9% during the comparable period in 1998.

     Depreciation  and  amortization.  Depreciation  and  amortization  expenses
increased  by $91,000 or 7.9% to $1.2  million  during  the three  months  ended
December 31, 1999 from $1.1 million during the comparable  period in 1998.  This
increase is primarily as a result of the acquisition of Ampro  Industries,  Inc.
in October  1998. As a percentage of net sales,  depreciation  and  amortization
expenses  increased to 8.7% during the three months ended December 31, 1999 from
7.2% during the comparable period in 1998.

     Loss from  operations.  During the three months ended December 31, 1999 the
Company recorded losses from operations of $1.6 million compared to, income from
operations  of  $504,000  during the  comparable  period in 1998.  The loss from
operations in actual  dollars was  primarily  due to the seasonal  nature of the
Company's  business.  Furthermore,  the loss for the 1999  period was  primarily
attributable to a full quarter of operating losses from Ampro Industries,  Inc.,
and E*Garden,  Inc., which were not included in the comparable  quarter in 1998.
As a percentage of net sales,  loss from  operations  increased to 11.5% for the
three months ended December 31, 1999 from income from  operations of 3.1% during
the comparable period in 1998.

     Interest  expense.  Interest expense increased  $205,000,  or 11.4% to $2.0
million  during the three  months ended  December  31,  1999,  from $1.8 million
during the  comparable  period in 1998.  The  increase  in  interest  expense is
primarily  related to the  interest  associated  with the  increase in debt as a
result of financing the Company's  acquisitions  of Ampro  Industries,  Inc. and
E*Garden, Inc.

     Income taxes. Income tax benefit increased to $1.6 million during the three
months ended  December 31, 1999 from $510,000  during the  comparable  period in
1998, primarily due to the increase in the net loss before taxes. The income tax
benefit or expense for each interim period is based upon the Company's estimated
effective income tax rate for the year.

     Net loss.  Net loss increased by $1.3 million,  or 194.2%,  to $2.0 million
during  the three  months  ended  December  31,  1999 from  $668,000  during the
comparable period in 1998.  Diluted net loss per common share increased $0.07 to
$0.10 per share for the three  months  ended  December  31,  1999 from $0.03 per
share  during the  comparable  period in 1998.  The increase in diluted loss per
common  share is primarily  attributable  to the increase in the net loss in the
three months ended  December 31, 1999 compared to the  comparable  period in the
prior year.

                                                                              11

<PAGE>

Six Months  Ended  December 31, 1999  Compared to Six Months Ended  December 31,
1998

     Net sales.  Net sales  increased by  $377,000,  or 1.4%,  to $27.1  million
during the six months  ended  December  31, 1999 from $26.8  million  during the
comparable  period in 1998.  The increase in net sales was primarily a result of
the October 1998  acquisition of Ampro  Industries,  Inc. and internal growth of
the Company's pre-existing product lines.

Gross profit.  Gross profit decreased by $1.2 million, or 8.4%, to $12.5 million
for the six  months  ended  December  31,  1999 from  $13.7  million  during the
comparable  period in 1998.  This  decrease was due primarily to the increase in
sales of  lower-margin  products.  Gross  profit  as a  percentage  of net sales
decreased  to 46.2%  during the six months  ended  December  31, 1999 from 51.2%
during  the  comparable  period  in 1998.  The  decrease  in gross  profit  as a
percentage  of net sales was primarily  attributable  to an increase in sales of
lower-margin  products  when  compared  to the  December  31, 1998  period.  The
Company's  decision  to adopt a strategy of just in time  inventory  resulted in
$2.8 million less inventory in the December 31, 1999 period when compared to the
December 31, 1998 period.  Therefore,  the lower inventory available to allocate
fixed overhead costs decreased the gross profit percentage during the six months
ended December 31, 1999 when compared to the comparable period in 1998.

     Selling and  shipping  expenses.  Selling and shipping  expenses  increased
$427,000, or 6.1%, to $7.4 million during the six months ended December 31, 1999
from $6.9  million  during the  comparable  period in 1998.  This  increase  was
primarily the result of an increase in the amount of products shipped, which was
a consequence of the internal growth of the Company's pre-existing product lines
combined with the  acquisition of Ampro  Industries,  Inc.  Selling and shipping
expenses as a percentage  of net sales  increased to 27.2% during the six months
ended  December  31, 1999 from 26% during the  comparable  period in 1998.  This
increase was primarily as a result of increased  pricing for shipping  inventory
to customers. In addition, there were start-up selling and development costs for
E*Garden,  Inc., which the Company acquired in June 1999,  during the six months
ended December 31, 1999. Due to lower inventory and decrease in sales, there was
an under absorption of fixed overhead costs.

     General and administrative  expenses.  General and administrative  expenses
increased  $934,000  or 17.8%,  to $6.2  million  during  the six  months  ended
December 31, 1999 from $5.2 million  during the  comparable  period in 1998. The
increase is due to start-up  selling and development  costs for E*Garden,  Inc.,
which the Company  acquired in June 1999,  included in this the six months ended
December 31,  1999.  As a percentage  of net sales,  general and  administrative
expenses  increased to 22.8% during the six months ended  December 31, 1999 from
19.6% during the comparable period in 1998.

     Depreciation  and  amortization.  Depreciation  and  amortization  expenses
increased  by  $461,000  or 23.2% to $2.4  million  during the six months  ended
December 31, 1999 from $2.0 million during the comparable  period in 1998.  This
increase is primarily  due to the  acquisition  of Ampro  Industries,  Inc. As a
percentage of net sales,  depreciation  and amortization  expenses  increased to
9.0%  during  the six  months  ended  December  31,  1999 from 7.4%  during  the
comparable period in 1998.

                                                                              12

<PAGE>

     Loss from operations.  Loss from operations  increased by $3.0 million,  or
621.7%,  to $3.5  million  during the six months  ended  December  31, 1999 from
$479,000  during the  comparable  period in 1998.  The loss from  operations  in
actual  dollars  was  primarily  due to the  seasonal  nature  of the  Company's
business.   The  increase  in  the  loss  for  the  1999  period  was  primarily
attributable to the increased  general and  administrative  costs resulting from
increased  amortization  of goodwill.  As a percentage  of net sales,  loss from
operations  increased to 12.8% for the six months  ended  December 31, 1999 from
1.8% during the comparable period in 1998.

     Interest expense. Interest expense increased by $847,000, or 29.8%, to $3.7
million during the six months ended December 31, 1999,  from $2.8 million during
the  comparable  period in 1998.  The increase in interest  expense is primarily
related  to the  interest  associated  with  the  increase  in  Company  debt in
borrowings  under the Company's  credit  facility to finance the  acquisition of
Ampro Industries, Inc. and E*Garden, Inc.

     Income taxes.  Income tax benefit  increased to $3.2 million during the six
months ended December 31, 1999 from $1.4 million during the comparable period in
1998,  primarily  due to the increase in net loss before  taxes.  The income tax
benefit or expense for each interim period is based upon the Company's estimated
effective income tax rate for the year.

     Net loss.  Net loss increased by $2.0 million,  or 108.7%,  to $3.9 million
during the six months  ended  December  31,  1999 from $1.9  million  during the
comparable  period in 1998.  Diluted net loss per common share increased $.11 to
$.20 per share for the six months  ended  December  31, 1999 from $.09 per share
during the comparable  period in 1998. The increase in diluted loss per share is
primarily  attributable  to the increase in net loss and less  weighted  average
common and common equivalent shares outstanding in the six months ended December
31, 1999 compared to the comparable period in 1998.

Seasonality

     The  Company's  sales are seasonal due to the nature of the lawn and garden
business,  in parallel with the annual growing  season.  The Company's sales and
shipping  are most  active  from late  December  through  May when home lawn and
garden  customers are purchasing  supplies for spring planting and retail stores
are increasing  their  inventory of lawn and garden  products.  Sales  typically
decline by early to mid-summer.

     Sales of the  Company's  agricultural  products,  which  were not  material
during the six months ended December 31, 1999, are also seasonal. Most shipments
occur during the agricultural cultivation period from March through October.

Liquidity and Capital Resources

     Since inception,  the Company has financed its operations primarily through
cash generated by operations; net proceeds from the Company's private placements
and public sales of securities and borrowings from lending institutions.

                                                                              13

<PAGE>

     At December  31, 1999,  the Company had  consolidated  cash and  short-term
investments  totaling $807,000 and working capital of $25.9 million. At June 30,
1999, the Company had consolidated cash and short-term investments totaling $2.9
million and working capital of $31.9 million. The decrease in working capital is
in line with the seasonal nature of the Company's  business.  In addition,  $1.8
million was used for the repurchase of common stock for treasury  during the six
months ended December 31, 1999.

     Net cash  provided  by  operating  activities  during the six months  ended
December  31,  1999 was $2.1  million  consisting  primarily  of a  decrease  in
accounts  receivable and depreciation  and amortization  expense for the period,
partially offset by the increase in inventory,  deferred tax assets and net loss
for the six months ended December 31, 1999.

     Net cash used in investing  activities during the six months ended December
31, 1999 was $2.5 million, consisting primarily of cash used for the purchase of
property and equipment and package design.

     Net cash used in financing  activities during the six months ended December
31,  1999  was  $1.8  million,   consisting   primarily  of  the  repurchase  of
approximately 704,000 shares of common stock for treasury.

     On October 13,  1998,  the Company  entered  into a credit  agreement  (the
"Credit Agreement") with Bank of America N.A. (the "Bank"). The Credit Agreement
provides  for a  revolving  credit  facility of up to $25 million to finance the
cost of acquisitions by the Company (the "Acquisition Facility") and a revolving
credit  facility of up to $20 million to finance the Company's  working  capital
requirements  (the "Working Capital  Facility").  Both of such credit facilities
expire on October  15,  2001,  at which time  borrowings  under the  Acquisition
Facility are payable on a term loan basis in quarterly  installments  commencing
December 31, 2001,  with the final  installment  maturing on September  30, 2004
and, unless refinanced,  borrowings under the Working Capital Facility mature on
such expiration date. In addition, borrowings under the Acquisition Facility are
subject to mandatory prepayment from the net proceeds of certain dispositions of
assets,  and certain losses or  condemnation  of property,  from excess cash (as
defined in the Credit  Agreement)  generated by the Company and its subsidiaries
and 50% of the net proceeds of any new issuance's of the Company's capital stock
after such expiration date.  Mandatory  prepayments by the Company prior to such
expiration  have  the  effect  of  reducing  the  Acquisition  Facility  by  the
prepayment  amount.  In addition,  during a period of 30 consecutive days during
the period July 1 to December 1 in each year, no borrowings  can be  outstanding
under the Working Capital  Facility.  The Company has the right under the Credit
Agreement to terminate or permanently  reduce the Bank's  commitments under such
credit  facilities in the minimum  amount of $1.0 million and multiples  thereof
subject  to the  payment  to the Bank of  "reduction  fees" of 1% of the  amount
terminated  or reduced on or prior to December  31, 1999 and 0.5% of the amounts
terminated or reduced  thereafter.  Borrowings under such credit facilities bear
interest  at  variable  annual  rates  selected  by the  Company  based on LIBOR
("London  Interbank Offered Rate"), or the higher of 0.5% above the then current
Federal  Funds Rate or the Bank's prime rate plus,  in each case,  an applicable
marginal rate of interest.

     The Company's  obligations under the Credit Agreement are guaranteed by its
subsidiaries  and  secured  by a  security  interest  in  favor  of the  Bank in
substantially  all of the

                                                                              14

<PAGE>

assets  of the  Company  and  substantially  all of its  subsidiaries.  Upon the
occurrence  of an  event of  default  specified  in the  Credit  Agreement,  the
maturity of loans  outstanding  under the Credit Agreement may be accelerated by
the Bank,  which may also  foreclose its security  interest on the assets of the
Company and its subsidiaries.

     Under the Credit Agreement,  the Company and its subsidiaries are required,
among  other  things,  to  comply  with (a)  certain  limitations  on  incurring
additional  indebtedness,  liens and  guaranties,  on  dispositions  of  assets,
payment of cash dividends and cash redemption and repurchases of securities, and
(b)  certain   limitations  on  merger,   liquidations,   changes  in  business,
investments,   loans  and   advances,   affiliate   transactions   and   certain
acquisitions.  In addition, the Company must comply with certain financial tests
and  ratios.  A  violation  of any of these  covenants  constitutes  an event of
default  under  the  Credit  Agreement.  The  Company  did not  meet  one of its
financial  covenants  at December 31,  1999.  However,  the Bank has waived this
violation.

     The Company believes that its operations will generate sufficient cash flow
to service the  outstanding  debt  incurred.  However,  if such cash flow is not
sufficient to service such debt, the Company will be required to seek additional
financing which may not be available on commercially acceptable terms or at all.

     As of December  31, 1999,  the Company has a net deferred tax  liability of
$2.0 million  primarily  relating to tax depreciation and amortization in excess
of the book amount.  The  deferred tax asset of $3.0 million  relates to the net
operating loss carryforwards,  the allowance for accounts  receivable,  vacation
accrual and certain other balance sheet reserves.

     In December  1999,  the Company  commenced a tender offer to purchase up to
700,000 of the outstanding 9.4% Cumulative Trust Preferred  Securities issued by
its  subsidiary,  U.S.  Home & Garden  Trust I, at $15.00  per  Trust  Preferred
Security. The tender offer expired on January 14, 2000. A total of 183,281 Trust
Preferred  Securities  were  purchased by the  Company.  As of February 1, 2000,
approximately 2,327,900 Trust Preferred Securities were outstanding.

Inflation

     Inflation  has  historically  not had a  material  effect on the  Company's
operations.

Year 2000

     The Company's  internal  business systems have experienced no material Year
2000 compliance related problems.  In addition,  the Company is not aware of any
Year 2000 compliance  related  problems that have been experienced by any of its
customers,   suppliers  or  other  third  parties  with  whom  it  has  business
relationships.  Although the Company does not expect any  significant  financial
statement or  operational  impact due to Year 2000  related  issues its business
could be  adversely  affected if material  customers,  suppliers  or other third
parties with whom it conducts business experience any material Year 2000 related
problems in the future.


                                                                              15

<PAGE>


Item 3. Quantitative and Qualitative Disclosures About Market Risk

     As a result of its  variable  rate  revolving  credit  line the  Company is
exposed to the risk of rising interest rates. To minimize this risk, the Company
holds a derivative  instrument  in the form of an interest  rate swap,  which is
viewed as a risk  management  tool and is not used for  trading  or  speculative
purposes.  The  intent  of the  interest  rate  swap is to  effectively  fix the
interest rate on part of the borrowings on the Company's variable rate revolving
credit agreement.

     The following  table provides  information on the Company's  fixed maturity
investments  as of December  31, 1999 that are  sensitive to changes in interest
rates.  The table also  presents the  corresponding  interest  rate swap on this
debt.  Since the interest rate swap  effectively  fixes the interest rate on the
notional amount of debt, changes in interest rates have no current effect on the
interest  expense  recorded by the Company on the portion of the debt covered by
the interest rate swap.

The Acquisition Line of Credit had an                               $20 million
interest rate ranging from 6.58% to 8.25% for
the six months ended December 31, 1999

Interest Rate Swaps
Notional amount                                                     $15 million
Pay fixed/Receive variable - 6.47625%
Pay fixed  interest rate - 6.15%

This swap agreement expires November 1, 2000,
and reverts to a variable interest rate loan.


                                                                              16

<PAGE>

     PART II - OTHER INFORMATION

Item 1. Legal Proceedings

     On or about October 29, 1999 the Company  filed its answer and  affirmative
     defenses as well as certain  counter-claims  against the  plaintiffs in the
     action  commenced  in the State of  Michigan  Circuit  Court by the  former
     stockholders of Ampro Industries, Inc. against the Company and Ampro, which
     action is referenced  in Item 3 of the  Company's  Form 10-K for the fiscal
     year ended June 30, 1999.

Item 2. Changes in Securities

          (c)  During the quarter  ended  December 31, 1999 the Company  granted
               options to purchase an aggregate of 612,500  shares of its common
               stock at prices  ranging  from  $2.125 to $4.125 per share (or an
               average exercise price of $2.32 per share) to certain  employees,
               consultants  and advisors.  The options  expire  between 5 and 10
               years from the grant  dates.  The options were granted in private
               transactions   pursuant  to  the  exemptions  from   registration
               provided by  Sections  2(a)(3) or 4(2) of the  Securities  Act of
               1933.

Item 6. Exhibits and Reports on Form 8-K

          (a)  Exhibits:

               10.1 Third  Amendment  dated  December  17, 1999  to  the  Credit
                    Agreement  dated  October 13, 1998  between the Company  and
                    Bank of America, N.A. (incorporated by reference  to Exhibit
                    (b)(4) to Amendment  No. 1 to the Company's  Schedule  13E-4
                    dated January 25, 2000.)

               27.1 Financial Data Schedule (For SEC use only)

          (b)  No  reports  on Form 8-K were  filed  during  the  quarter  ended
               December 31, 1999.


                                                                              17

<PAGE>

                                   SIGNATURES

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

Dated February 11, 2000

                                            U.S. Home & Garden Inc.
                                                  (Registrant)


                                            /s/ Robert Kassel
                                            ------------------------------------
                                            President, Chief Executive Officer



                                            /s/ Lynda Gustafson
                                            ------------------------------------
                                            Vice President of Finance (Principal
                                            Accounting Officer)

                                                                              18