CHICAGO — After filing its long-awaited financials in late November, Bally Total Fitness may be on the road to recovery or a possible sale.

The fitness operator is working with JPMorgan Securities Inc. and the Blackstone Group to investigate options including a possible sale or merger. Bally hired Blackstone 10 months ago to assist in its turnaround strategy and retained JPMorgan in late November to explore strategic initiatives. Bally CEO Paul Toback said he hasn't received any formal offers for the company, and he's not prepared to set a timetable for a future sale of Bally.

While the company may be looking for a buyer, the health-club chain still has more than $743 million in debt and is under an ongoing Securities and Exchange Commission investigation, said Matt Messinger, Bally spokesperson. Consultant Michael Scott Scudder, president of Fit Focus, said Bally may be turning itself around, but it still faces a lot of road blocks.

Consultant Michael Scott Scudder, the president of Fit Focus, said he carefully evaluated Bally's recently released financial statements and listened to the investor conference call. He said while he's still perplexed by their financial situation, he said it appears the company may be turning itself around. But he said the company still has 1.4 times as much debt as assets and marginal profits.

“I think it will take them 24 months or more to pull it off, but they may not be able to stay in the game long enough because of lack of cash,” he said. “And they are banking on one terribly important intangible that all of us in the business face every day: can they get, train and systematize employees to deliver on the promise?”

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