It's out with the old and in with the new for Bally Total Fitness (NYSE:BFT). The fitness center chain has stated and restated past financials and has put itself up on the auction block by announcing that it will explore "strategic alternatives" through JP Morgan (NYSE:JPM).

The company's restated financials paint a grim picture for 2002 and 2003. Bally wound up losing $3.14 a share in 2002 and $3.24 a share in 2003. In 2004, the company narrowed the loss to $0.92 a share, and it has even managed to produce a small profit through the first nine months of 2005.

Despite the recent improvement, the company -- and its enviable empire of nearly 3.7 million members working out at the company's 440 gym facilities -- is taking this opportunity to find a sugar daddy with rock-hard abs. And by abs, I mean Another Balance Sheet. The company's debt was the one thing holding Bally back, and it will now be up to JP Morgan to gauge outsider interest in swallowing up the company.

It will likely be a private equity firm making a play for the company. That's because Bally's rivals are smaller and privately held concerns such as Gold's Gym and 24 Hour Fitness. Life Time Fitness (NYSE:LTM) is publicly traded, and its stock has performed exceptionally well over the past year, but it is too small to make a serious run at Bally.

This is the time of year when investors start thinking about stocks in the fitness and weight-loss world. We're only weeks away, after all, from new year's resolutions, when way too many of us will critically look into the mirror and agree to shed some pounds for 2006. That doesn't mean companies such as Weight Watchers (NYSE:WTW), eDiets (NASDAQ:DIET), and NutriSystem (NASDAQ:NTRI) will perform well over the next few months. However, if you can pick out the well-positioned companies destined to take advantage of the next wave of resolutions, you'll be in pretty good shape.

Bally tried. It even went to a "pay-as-you-go" model to encourage signups from those who were averse to signing long-term contracts, but as expected, the retention rate on that flexible lot has been lower than among its traditional signups.

The company's brand and its core base of established fitness centers and marketable audience of members will serve Bally well if it does indeed consider any potential offers. Let's hope, for its sake, that this workout works out.

Longtime Fool contributor Rick Munarriz is pretty sure that installing all-you-can-eat buffets inside the gyms is a bad idea, but he'll propose it anyway. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.