Exhibit 99.1

RECONDITIONED SYSTEMS, INC.                 NEWS RELEASE
444 WEST FAIRMONT
TEMPE, AZ 85282                             CONTACT:
(602)968-1772 (TELEPHONE)                   INVESTOR RELATIONS
(602)894-1907 (FAX)

                                            FOR IMMEDIATE RELEASE
                                            NASDAQ: RESY

MERGER AGREEMENT TERMINATED

TEMPE,  ARIZONA,  FEBRUARY 17, 1999 - As previously announced by Chairman of the
Board,  Scott W. Ryan,  the Board of Directors of  Reconditioned  Systems,  Inc.
("RSI" or "the Company"),  received  formal notice from Cort  Investment  Group,
Inc.  ("CNI"),  RSI's merger partner,  that CNI believes RSI is in breach of the
representations  and warranties set forth in the Merger  Agreement dated October
30, 1998.  The specific  concerns  related to a corporate  tax election  made in
RSI's  1995  income  tax  return for the  fiscal  year  ending  March 31,  1996.
Consequently,  the  merger  did not close  into  escrow on  February  5, 1999 as
planned.

RSI has determined  that the entire net operating loss for the year ending March
31, 1996, in the approximate amount of $2.9 million, could potentially be deemed
invalid by the  Internal  Revenue  Service  ("IRS")  due to the  omission  of an
election  in the  filing.  RSI has  engaged  experts  to file with the IRS for a
private  letter  ruling to validate  the loss.  Due to the fact that the IRS has
repeatedly  granted  relief to taxpayers in similar  circumstances,  the experts
believe it is very likely that the IRS will approve the private  letter  ruling,
thereby validating the net operating loss deduction taken to date.  However,  no
assurance can be given that RSI will receive a favorable  ruling,  and it is not
likely  that the  Company  will  receive  any  ruling  prior to March 31,  1999.
Accordingly,  CNI has  terminated  the Merger  Agreement.  Because  RSI has been
advised that it is very likely that the IRS will grant relief in this case,  the
Company is not  restating its financial  results at this time.  However,  if RSI
does not receive a favorable ruling,  the Company will need to restate financial
results for all periods  subsequent to March 31, 1995. Further details regarding
the Company's net  operating  losses are contained in the Company's  Form 10-QSB
for the quarter ended December 31, 1998.

The statements contained in this press release that are not historical facts may
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended,  and Section 21E of the Securities  Exchange
Act of 1934, as amended,  and are subject to the safe harbors  created  thereby.
These forward-looking statements involve risks and uncertainties, including, but
not  limited  to,  the risk that the  Company  will not obtain a  favorable  IRS
private  letter  ruling  regarding its net operating  losses.  In addition,  the
Company's   business,   operations  and  financial   condition  are  subject  to
substantial  risks that are  described in the Company's  reports and  statements
filed  from time to time with the  Securities  and  Exchange  Commission.  These
reports and  statements  include the Company's  Annual Report on Form 10-KSB for
the fiscal year ended March 31,  1998 and  Quarterly  Reports on Form 10-QSB for
the quarters ended June 30, 1998, September 30, 1998 and December 31, 1998.