<PAGE>

                                  EXHIBIT 99.1

                              CAUTIONARY STATEMENTS

         From time to time, Hines Horticulture, Inc. may publish, verbally or in
written form, forward-looking statements relating to such matters as anticipated
financial or operational performance, business prospects and similar matters. In
fact, this Form 10-Q (or any other periodic reporting documents required by the
Exchange Act) may contain forward-looking statements reflecting our current
views concerning potential future events or developments. Our actual results
could differ materially from those discussed in these statements. Factors that
could contribute to these differences include those discussed below and
elsewhere in this Form 10-Q. The cautionary statements made in this Form 10-Q
should be read as being applicable to all forward-looking statements wherever
they appear. Our operations are subject to a variety of risks and uncertainties
and the following risk factors are not to be considered a definitive list of all
risks associated with our operations and should be read in conjunction with the
risks and uncertainties contained in our other filings with the Securities and
Exchange Commission. The Private Securities Litigation Reform Act of 1995
provides a "safe harbor" for forward-looking statements. These Cautionary
Statements are being made pursuant to the provisions of the Private Securities
Litigation Reform Act and with the intention of obtaining the benefits of the
"safe harbor" provisions of the Act. We caution investors that any
forward-looking statements made by us are not guarantees of future performance
and that a variety of factors, including those discussed below, could cause our
actual results and experience to differ materially from the anticipated results
or other expectations expressed in our forward-looking statements. The risks and
uncertainties which may affect the operations, performance and results of our
business are described in more detail below. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date the statement was made.

OUR PRODUCTION OF PLANTS MAY BE ADVERSELY AFFECTED BY A NUMBER OF AGRICULTURAL
FACTORS BEYOND OUR CONTROL.

         Our production of plants may be adversely affected by a number of
agricultural risks, including disease, pests, freezing conditions, snow, drought
or other inclement weather, and improper use of pesticides or herbicides. These
factors could cause production difficulties which could damage or reduce our
inventory, resulting in sales, profit and operating cash flow declines, which
could be material.

INCREASES IN WATER PRICES OR INSUFFICIENT AVAILABILITY OF WATER COULD ADVERSELY
AFFECT OUR PLANT PRODUCTION, RESULTING IN REDUCED SALES AND PROFITABILITY.

         Plant production depends upon the availability of water. Our nurseries
receive their water from a variety of sources, including on-site wells, creeks,
reservoirs and holding ponds, municipal water districts and irrigation water
supplied to local districts by facilities owned and operated by the United


                                        1
<PAGE>

States acting through the Department of Interior Bureau of Reclamation. The loss
or reduction of access to water at any of our nurseries could have a material
adverse effect on our business, results from operations and operating cash
flows. In addition, increases in our costs for water could adversely impact our
profitability and operating cash flows.

         Our nursery in Arizona receives its water from on-site wells. Under
Arizona's Groundwater Management Act, these wells have been issued
"grandfathered non-irrigation water" permits which limit the amount of
groundwater we can use. The availability of water depends on the groundwater
aquifer, which at this time, we believe is adequate to supply our needs for this
nursery as it is currently operated.

         Our northern California and Oregon nurseries rely primarily on surface
water supplies and, therefore, may experience fluctuations in available water
supplies and serious reductions in their supplies of surface water in the event
of prolonged droughts. If such reductions occur, those nurseries would have to
rely on backup water supplies which are more costly than surface water supplies.

         The use and price of water supplied by facilities owned and operated by
the Bureau of Reclamation, including availability of subsidized water rates, is
governed by federal reclamation laws and regulations. Such water is used at our
Northern California nursery and is the source of a substantial majority of the
water for our Oregon nursery. While we believe we are in material compliance
with applicable regulations and maintain a compliance program, there can be no
assurance that changes in law will not reduce availability or increase the price
of reclamation water to us. Any such change could have a material adverse effect
on our business, results of operations and operating cash flows.

         The reclamation regulations govern who may hold an interest in
irrigation lands. Under the reclamation regulations, persons having a direct or
indirect beneficial economic interest in us will be treated as "indirect
holders" of irrigation land owned by us in proportion to their beneficial
interest in us. If any holder of our common stock (whether directly or
indirectly through a broker-dealer or otherwise) is ineligible under applicable
reclamation regulations to hold an indirect interest in our irrigation land, we
may not be eligible to receive reclamation water on this land. Generally, the
eligibility requirement of the reclamation regulations would be satisfied by a
person:

         o    who is a citizen of the United States or an entity established
              under federal or state law or a person who is a citizen of or an
              entity established under the laws of certain foreign countries
              (including Canada and Mexico and members of the Organization for
              Economic Cooperation and Development); and

         o    whose ownership, direct and indirect, of other land which is
              qualified to receive water from a reclamation project, when added
              to such person's attributed indirect ownership of irrigation land
              owned by us, does not exceed certain maximum acreage limitations
              (generally, 960 acres for individuals and 640 acres for entities).

                                       2
<PAGE>

         While our restated certificate of incorporation contains provisions
intended to prohibit ineligible holders of irrigation land from owning our
common stock, such provisions may not be effective in protecting our right to
continue to use reclamation water.


WE FACE RISKS ASSOCIATED WITH SUDDEN OAK DEATH.

         Our California nurseries use soil media containing redwood sawdust.
Redwood trees have been found susceptible to a disease called Sudden Oak Death
(SOD) that has affected several species of trees and shrubs in California and
Oregon. The U.S. Department of Agriculture and the California Department of
Forest & Agriculture have enacted regulations relating to sudden oak death and,
although they have not regulated soil media, they may regulate soil media in the
future. Under current regulations, we are unable to ship products we grow in our
Northern California facilities, Vacaville and Winters, to Canada. If these
regulatory authorities enact restrictive regulations on soil media containing
redwood sawdust, we may be required to modify our growing procedures and may be
required to develop alternatives to the soil media we use. We may not be able to
successfully develop cost effective alternatives to using Redwood sawdust in the
soil media we use, or if we do develop such alternatives, implement the use of
the alternatives in a manner, which does not disrupt our growing process or our
sales.

         SOD can infect the leaves and branches of a number of plants grown by
us. Rhododendron and camellias are current plants that we grow that are on the
SOD host list. If the soil media we use or a significant number of our products
become infected with SOD, our products could be subject to quarantine by
regulatory authorities, which would result in significant lost sales and would
have a material adverse effect on our business, results from operations and
operating cash flows. Additional or more stringent regulations concerning SOD
could have a material adverse effect on us.

BECAUSE OUR BUSINESS IS HIGHLY SEASONAL, OUR REVENUES, CASH FLOWS FROM
OPERATIONS AND OPERATING RESULTS MAY FLUCTUATE ON A SEASONAL AND QUARTERLY
BASIS.

         Our business is highly seasonal. The seasonal nature of our operations
results in a significant increase in our working capital during the growing and
selling cycles. As a result, operating activities during the first and fourth
quarters use significant amounts of cash, and in contrast, operating activities
for the second and third quarters generate substantial cash as we ship inventory
and collect accounts receivable. We have experienced, and expect to continue to
experience, significant variability in net sales, operating cash flows and net
income on a quarterly basis. The principal factor contributing to this
variability is weather, particularly on weekends during the peak gardening
season in the second quarter. Unfavorable weather conditions during the peak
gardening season could have a material adverse effect on our net sales, cash
flows from operations and operating income.

                                       3
<PAGE>

Other factors that may contribute to this variability include:


         o    shifts in demand for live plant products;

         o    changes in product mix, service levels and pricing by us and our
              competitors;

         o    period-to-period changes in holidays;

         o    the economic stability of our retail customers; and

         o    our relationship with each of our retail customers.


BECAUSE WE DEPEND ON A CORE GROUP OF SIGNIFICANT CUSTOMERS, OUR SALES, CASH
FLOWS FROM OPERATIONS AND RESULTS OF OPERATIONS MAY BE NEGATIVELY AFFECTED IF
OUR KEY CUSTOMERS REDUCE THE AMOUNT OF PRODUCTS THEY PURCHASE FROM US.

         Our top ten customers together accounted for approximately 78% of our
net sales in 2002. Our largest customer, The Home Depot, accounted for
approximately 47% of our 2002 net sales. We expect that a small number of
customers will continue to account for a substantial portion of our net sales
for the foreseeable future. We do not have long-term contracts with any of our
retail customers, and they may not continue to purchase our products.

         The loss of, or a significant adverse change in, our relationship with
The Home Depot or any other major customer could have a material adverse effect
on us. The loss of, or a reduction in orders from, any significant retail
customers, losses arising from retail customers' disputes regarding shipments,
fees, merchandise condition or related matters, or our inability to collect
accounts receivable from any major retail customer could have a material adverse
effect on us. In addition, revenue from customers that have accounted for
significant revenue in past periods, individually or as a group, may not
continue, or if continued, may not reach or exceed historical levels in any
period.

OUR BUSINESS AND OPERATIONS COULD BE ADVERSELY AFFECTED BY DECLINING SALES TO
KMART.

         Kmart, one of our largest customers in terms of sales in 2002, filed
for bankruptcy relief under Chapter 11 of the bankruptcy code in January 2002
and emerged from the Chapter 11 reorganization process in May 2003. During the
year ended December 31, 2002, our net sales to Kmart were approximately $8.0
million, a decrease of $8.6 million from 2001. During the first nine months of
2003, our net sales to Kmart have been $1.9 million less than the comparable
period in 2002 and we currently believe sales to Kmart during 2003 will be less
than our sales to Kmart in 2002. Our results of operations and operating cash
flows could be adversely impacted if we are not able to replace the sales
formerly made to Kmart.

                                       4
<PAGE>

WE FACE INTENSE COMPETITION, AND OUR INABILITY TO COMPETE EFFECTIVELY FOR ANY
REASON COULD ADVERSELY AFFECT OUR BUSINESS.

         Our competition varies by region, each of which is highly competitive.
Although many of our largest customers are national retailers, buying decisions
are generally made locally by our customers. We compete primarily on the basis
of breadth of product mix, consistency of product quality, product availability,
customer service and price. We generally face competition from several local
companies and usually from one or two regional companies in each of our current
markets. Competition in our existing markets may also increase considerably in
the future. Some of our competitors may have greater market share in a
particular region or market, less debt, greater pricing flexibility or superior
marketing or financial resources. Increased competition could result in lower
profit margins, substantial pricing pressure, reduced market share and lower
operating cash flows. Price competition, together with other forms of
competition, could have a material adverse effect on our business, result of
operations and operating cash flows.

OUR NURSERY FACILITY IN IRVINE, CALIFORNIA IS ENTIRELY ON LEASED LAND AND WE DO
NOT EXPECT THE LEASES TO BE EXTENDED BEYOND THEIR CURRENT TERMS.

         Our 542-acre nursery facility and headquarters in Irvine, California
are entirely on leased land. We recently entered into an amended lease agreement
for this facility in which 63 new acres were added and the lease expiration
schedule was changed. Under the amended lease agreement, the lease on 114 acres
expires on June 30, 2006, the lease on 140 acres expires on December 31, 2006,
and the lease on the remaining 288 acres expires on December 31, 2010. We do not
expect these leases to be extended beyond their current terms. For the 254 acres
that will expire in 2006, we are developing plans to transition a majority of
the production to our Allendale, California facility and the remaining
production to the parcel recently added to our facility in Irvine. For the 288
acres that will expire at the end of 2010, we will be required to establish new
production facilities or transition production to existing facilities. We may
incur substantial costs in connection with the establishment of these new
production or the transition of production to existing facilities.

         We may not be successful in executing our transition plan or
establishing suitable replacement production facilities. If we are unsuccessful
in these efforts, our net sales, cash flows and operating income could be
materially adversely affected. In addition, when we vacate 254 acres in 2006, we
currently estimate that we will incur approximately $300,000 of removal and
remediation costs. We may incur significant expenses beyond what we have
forecasted if additional remedial action is required. Significant costs in
excess of our estimates could have a material adverse effect on us.

                                       5
<PAGE>

WE ARE SUBJECT TO VARIOUS ENVIRONMENTAL LAWS AND REGULATIONS THAT GOVERN, AND
IMPOSE LIABILITY, FOR OUR ACTIVITIES AND OPERATIONS. IF WE DO NOT COMPLY WITH
THESE LAWS AND REGULATIONS, OUR BUSINESS COULD BE MATERIALLY AND ADVERSELY
AFFECTED.

         We are subject to federal, state and local laws and regulations that
govern, and impose liability for, our activities and operations which may have
adverse environmental effects, such as discharges to air and water, as well as
handling and disposal practices for hazardous substances and other wastes. Some
of our nursery operations are conducted near residential developments, which
could increase our exposure to liability for the environmental effects of our
operations. Our operations have resulted, or may result, in noncompliance with
or liability for cleanup under these laws. In addition, the presence of
hazardous substances on our properties, or the failure to properly remediate any
resulting contamination may adversely affect our ability to sell, lease or
operate our properties or to borrow using them as collateral. In some cases, our
liability may not be limited to the value of the property or its improvements.
We cannot assure you that these matters, or any similar matters that may arise
in the future, will not have a material adverse effect on us.

         Certain of our operations and activities, such as water runoff from our
production facilities and the use of certain pesticides, are subject to
regulation by the United States Environmental Protection Agency and similar
state and local agencies. These agencies may regulate or prohibit the use of
such products, procedures or operations, thereby affecting our operations and
profitability. In addition, we must comply with a broad range of environmental
laws and regulations. Additional or more stringent environmental laws and
regulations may be enacted in the future and such changes could have a material
adverse effect on us.

CHANGES IN LOCAL ZONING LAWS MAY ADVERSELY AFFECT OUR BUSINESS.

         We are subject to local zoning laws regulating the use of our owned and
leased property. Some of our facilities are located in areas experiencing rapid
development and growth, which typically are characterized by changes in existing
zoning. Changes in local zoning laws could require us to establish new
production facilities or transition production to other facilities, which could
have a material adverse effect on our cash flows and results of operations.

COMPLIANCE WITH, AND CHANGES TO LABOR LAWS, PARTICULARLY THOSE CONCERNING
SEASONAL WORKERS, COULD SIGNIFICANTLY INCREASE OUR COSTS.

         The production of our plants is labor intensive. We are subject to the
Fair Labor Standards Act as well as various federal, state and local regulations
that govern matters such as minimum wage requirements, overtime and working
conditions, including, but not limited to, federal and state health and worker
safety rules and regulations. A large number of our seasonal employees are paid
at or slightly above the applicable minimum wage level and, accordingly, changes
in minimum wage laws could materially increase our costs. Non-U.S. nationals
comprise a large portion of our seasonal employee workforce and changes to U.S.


                                       6
<PAGE>

immigration policies that restrict the ability of immigrant workers to obtain
employment in the United States and which contribute to shortages of available
seasonal labor could increase our costs. Non-compliance with applicable
regulations or modifications to existing regulations may increase costs of
compliance, require a termination of certain activities, result in fines or loss
of a portion of our labor force or otherwise have a material adverse impact on
our business and results of operations.

OUR TRANSPORTATION COSTS ARE SIGNIFICANT AND WE DEPEND ON INDEPENDENT
CONTRACTORS FOR TRUCKING SERVICES TO SHIP LARGE QUANTITIES OF OUR PRODUCTS AND
INCREASES IN TRANSPORTATION COSTS, CHANGES IN AVAILABLE TRUCKING CAPACITY AND
OTHER CHANGES AFFECTING SUCH CARRIERS, AS WELL AS INTERRUPTIONS IN SERVICE OR
WORK STOPPAGES, COULD ADVERSELY IMPACT OUR RESULTS OF OPERATIONS.

         We rely extensively on the services of agents and independent
contractors to provide trucking services to us. Transportation costs accounted
for approximately 21% of our net sales in 2002. Our ability to ship our
products, particularly during our peak shipping seasons, could be adversely
impacted by shortages in available trucking capacity, changes by carriers and
transportation companies in policies and practices, such as scheduling, pricing,
payment terms and frequency of service, or increases in the cost of fuel, taxes
and labor, and other factors not within our control. We compete with other
companies who ship perishable goods for available trucking capacity and,
accordingly, reductions in capacity or shortages of the agents and independent
contractors who provide trucking services to us could potentially adversely
impact our sales. Significant increases in transportation costs could have a
material adverse effect on our business, particularly if we are not able to pass
on such price increases to our customers in the form of higher prices for our
products. Material interruptions in service or stoppages in transportation,
whether caused by strike or otherwise, could adversely impact our business,
results of operations, financial condition and operating cash flows.

WE ARE CURRENTLY IMPLEMENTING A NEW ENTERPRISE RESOURCE PLANNING SOFTWARE
PROGRAM, AND UNEXPECTED DELAYS, EXPENSES OR DISRUPTIONS IN THE IMPLEMENTATION OF
SUCH SOFTWARE PROGRAM COULD DISRUPT OUR BUSINESS OR IMPAIR OUR ABILITY TO
MONITOR OUR OPERATIONS, RESULTING IN A NEGATIVE IMPACT ON OUR OPERATIONS,
FINANCIAL CONDITION AND OPERATING CASH FLOWS.

         In two of our nurseries we have implemented a new enterprise resource
planning software program which we utilize for production planning and inventory
purposes. Over time, we intend to continue the implementation of this software
program to our other nursery facilities. Our distribution and sales order
system, however, remains on our prior computer information systems. We may
experience delays, disruptions and unanticipated expenses in implementing,


                                       7
<PAGE>

integrating and operating our management information and reporting systems,
which could disrupt our operations or otherwise impair our ability to monitor
our operations and have a negative impact on our business, results of
operations, financial condition and operating cash flows.

OUR RESEARCH AND DEVELOPMENT EFFORTS MAY NOT BE SUCCESSFUL.

         Our success is based, in part, upon our ability to discover and develop
new products that customers will want. As a result, we continue to invest in
research and development in order to enable us to identify and develop new
products to meet consumer demands. Despite investments in this area, our
research and development may not result in the discovery or successful
development of new products which will be accepted by our customers.

OUR CURRENT PRINCIPAL STOCKHOLDERS HAVE SIGNIFICANT INFLUENCE OVER OUR BUSINESS
AND COULD DELAY, DETER OR PREVENT A CHANGE OF CONTROL OR OTHER BUSINESS
COMBINATION.

         Investment partnerships controlled by Madison Dearborn Partners, Inc.
beneficially own approximately 54% of the outstanding common stock of Hines
Horticulture and have sufficient voting power to control, or at the least
significantly influence, the election of directors and the approval of other
actions requiring the approval of our shareholders. In addition, Madison
Dearborn Partners has two of its designees on Hines Horticulture's six-member
board of directors. Madison Dearborn Capital Partners, L.P., was a guarantor of
the $30 million seasonal revolver under Hines Nurseries' prior Credit Facility,
but is not a guarantor of the new Senior Credit Facility or the new Senior
Notes. The interest of Madison Dearborn Partners may conflict with your
interests as a holder of the Senior Notes.

OUR BUSINESS WILL SUFFER IF CERTAIN SENIOR EXECUTIVES DISCONTINUE EMPLOYMENT
WITH US OR IF WE ARE UNABLE TO RECRUIT AND RETAIN HIGHLY SKILLED STAFF.

         Our success is largely dependent on the skills, experience and efforts
of our senior management, including Robert A. Ferguson (Acting Chief Executive
Officer and President and Chief Operating Officer) and Claudia M. Pieropan
(Chief Financial Officer, Secretary and Treasurer). The loss of services of one
or more members of our senior management could have a material adverse effect on
us. We do not maintain key-man life insurance policies on any members of
management. No members of senior management are bound by non-compete agreements,
and if any such members were to depart and subsequently compete with us, such
competition could have a material adverse effect on us. Our business also
depends on our ability to continue to recruit, train and retain skilled
employees, particularly skilled growers and sales personnel. The loss of the
services of any key personnel, or our inability to hire new personnel with the
requisite skills, could impair our ability to develop new products or enhance
existing products, sell products to our customers or manage our business
effectively.

                                       8
<PAGE>

WE COULD BE REQUIRED TO RECORD A MATERIAL NON-CASH CHARGE TO INCOME IF OUR
RECORDED GOODWILL IS IMPAIRED.

         On January 1, 2002, we adopted Statement of Financial Accounting
Standards No. 142 "Goodwill and Other Intangible Assets." SFAS 142 requires that
goodwill and certain other intangible assets be tested for impairment at least
annually or whenever evidence of potential impairment exists. Under SFAS 142, we
are required to recognize an impairment charge for the write-down of our
goodwill if the fair values of our net assets are less than their current
recorded book values. As a result of this impairment analysis, we recorded a
goodwill impairment charge effective as of January 1, 2002 of $55.1 million, net
of tax. As required, we also tested goodwill for impairment as of December 31,
2002, and we determined that there was no potential impairment of goodwill as of
December 31, 2002.

         As of September 30, 2003, we had $43.0 million of goodwill. The market
price of our common stock is considered a factor for purposes of determining
whether our goodwill has been impaired. The market price for our common stock
has declined significantly since December 31, 2002. If our net book value
exceeds our market capitalization, this could indicate a potential impairment to
goodwill. Should we determine that our fair value is less than our book value,
we could be required to record a non-cash impairment charge to earnings in the
period in which our goodwill becomes impaired. The amount of this non-cash
charge could substantially exceed the difference between our book value and fair
value. Accordingly, a goodwill impairment charge could have a material adverse
effect on our earnings and stockholders' equity in the period in which it is
taken.

PRICE INCREASES OF CERTAIN RAW MATERIALS COULD ADVERSELY AFFECT OUR BUSINESS.

         We and our competitors are vulnerable to price increases for raw
materials. For 2002, raw material costs accounted for approximately 19% of net
sales. We do not have long-term contracts with the majority of our raw material
suppliers. Increases in the cost of raw materials essential to our operations,
including seed, plastic, chemicals and fertilizer, would increase our costs of
production. Significant increases in the price of petrochemicals or a scarcity
of raw materials essential to plant propagation could have a material adverse
effect on our business. We may not be able to pass such price increases on to
our customers in the form of higher prices for our products, which could
materially adversely affect our results of operations and operating cash flows.

IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, OUR BUSINESS AND
PROSPECTS MAY BE HARMED.

         Our success depends in part on proprietary techniques and plant
designs. Although we attempt to protect our proprietary property and processes
through a combination of patents, trade secrets and non-disclosure agreements,
these may be insufficient. Litigation may be necessary to protect our
intellectual property and determine the validity and scope of the proprietary


                                       9
<PAGE>

rights of competitors. Intellectual property litigation could result in
substantial costs and diversion of our management and other resources. If we are
unable to successfully protect our intellectual property rights, our competitors
could be able to market products that compete with our proprietary products
without obtaining a license from us.

                                       10