FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

(Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 for the period ended March 31, 1999

[ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934

Commission file number: 0-27478

BALLY TOTAL FITNESS HOLDING CORPORATION
(Exact name of registrant as specified in its charter)

Delaware 36-3228107
(State or other jurisdiction of (I.R.S. Employer
incorporation) Identification No.)

8700 West Bryn Mawr Avenue, Chicago, Illinois 60631
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (773) 380-3000

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of he 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:

As of April 30, 1999, 23,304,249 shares of the registrant's common stock were
outstanding.

BALLY TOTAL FITNESS HOLDING CORPORATION

INDEX

PAGE
NUMBER
------

PART I. FINANCIAL INFORMATION

Item 1. Financial statements:

Condensed consolidated balance sheets (unaudited)
March 31, 1999 and December 31, 1998.......................... 1

Consolidated statements of operations (unaudited)
Three months ended March 31, 1999 and 1998.................... 2

Consolidated statement of stockholders' equity (unaudited)
Three months ended March 31, 1999............................. 3

Consolidated statements of cash flows (unaudited)
Three months ended March 31, 1999 and 1998.................... 4

Notes to condensed consolidated financial statements
(unaudited)................................................... 6

Item 2. Management's discussion and analysis of financial
condition and results of operations.................... 9

PART II. OTHER INFORMATION

Item 6. Exhibits and reports on Form 8-K.......................... 12

SIGNATURE PAGE....................................................... 13

BALLY TOTAL FITNESS HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

MARCH 31 DECEMBER 31
1999 1998
------------ -----------

ASSETS

Current assets:
Cash and equivalents............................. $ 50,688 $ 64,382
Installment contracts receivable, net............ 210,659 199,979
Other current assets............................. 32,606 34,212
------------ -----------
Total current assets........................... 293,953 298,573

Installment contracts receivable, net.............. 236,413 222,147
Property and equipment, less accumulated
depreciation and amortization of $351,157
and $340,702..................................... 380,738 361,300
Intangible assets, less accumulated
amortization of $60,052 and $58,844 104,248 101,815
Deferred income taxes.............................. 21,191 17,430
Deferred membership origination costs.............. 100,977 97,901
Other assets....................................... 32,466 29,679
------------ -----------
$ 1,169,986 $ 1,128,845
============ ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable................................. $ 38,763 $ 40,957
Income taxes payable............................. 2,752 2,608
Deferred income taxes............................ 22,679 18,919
Accrued liabilities.............................. 61,347 48,596
Current maturities of long-term debt............. 6,916 5,799
Deferred revenues................................ 291,460 282,806
------------ -----------
Total current liabilities...................... 423,917 399,685

Long-term debt, less current maturities............ 485,569 482,199
Other liabilities.................................. 6,177 6,226
Deferred revenues.................................. 85,454 78,952

Stockholders' equity............................... 168,869 161,783
------------ -----------
$ 1,169,986 $ 1,128,845
============ ===========

<FN>
See accompanying notes
</FN>

BALLY TOTAL FITNESS HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

THREE MONTHS
ENDED MARCH 31
-----------------------
1999 1998
---------- ----------

Net revenues:
Membership revenues --
Initial membership fees on financed
memberships originated........................... $ 126,730 $ 113,188
Initial membership fees on paid-in-full
memberships originated.......................... 6,670 9,858
Dues collected.................................... 59,968 51,573
Change in deferred revenues....................... (13,437) (10,147)
---------- ----------
179,931 164,472

Finance charges earned............................... 13,983 11,147
Fees and other....................................... 14,281 8,869
---------- ----------
208,195 184,488
Operating costs and expenses:
Fitness center operations............................ 112,989 103,122
Member processing and collection centers............. 10,127 10,591
Advertising.......................................... 13,773 13,500
General and administrative........................... 6,688 6,305
Provision for doubtful receivables................... 36,815 32,392
Depreciation and amortization........................ 12,395 12,743
Change in deferred membership origination costs...... (2,889) (6,092)
---------- ----------
189,898 172,561
---------- ----------
Operating income....................................... 18,297 11,927
Interest income........................................ 861 551
Interest expense....................................... (12,297) (10,206)
---------- ----------
Income before income taxes and cumulative
effect of a change in accounting principle........... 6,861 2,272
Income tax provision .................................. (150) (200)
---------- ----------
Income before cumulative effect of a change in
accounting principle................................. 6,711 2,072
Cumulative effect of a change in accounting principle,
net of income tax.................................... (262)
---------- ----------
Net income ............................................ $ 6,449 $ 2,072
========== ==========
Earnings per common share:
Income before cumulative effect of a change
in accounting principle............................ $ .29 $ .10
Cumulative effect of a change in accounting
principle.......................................... (.01)
---------- ----------
Net income per common share.......................... $ .28 $ .10
========== ==========
Earnings per common share --assuming dilution:
Income before cumulative effect of a change in
accounting principle............................... $ .25 $ .09
Cumulative effect of a change in accounting
principle.......................................... (.01)
---------- ----------
Net income per common share--assuming dilution....... $ .24 $ .09
========== ==========

<FN>
See accompanying notes
</FN>

BALLY TOTAL FITNESS HOLDING CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(In thousands, except share data)
(Unaudited)

COMMON STOCK UNEARNED
------------------- COMPENSATION COMMON TOTAL
NUMBER PAR CONTRIBUTED ACCUMULATED (RESTRICTED STOCK IN STOCKHOLDERS'
OF SHARES VALUE CAPITAL DEFICIT STOCK) TREASURY EQUITY
---------- ----- ----------- ----------- ------------ -------- -------------

Balance at December 31, 1998....... 23,373,393 $ 239 $ 488,046 $ (309,306) $ (7,978) $ (9,218) $ 161,783

Net income......................... 6,449 6,449

Issuance of common stock under
stock purchase and option plans.. 76,277 1 636 637
---------- ----- --------- ---------- -------- -------- ---------

Balance at March 31, 1999.......... 23,449,670 $ 240 $ 488,682 $ (302,857) $ (7,978) $ (9,218) $ 168,869
========== ===== ========= ========== ======== ======== =========

<FN>
See accompanying notes
</FN>

BALLY TOTAL FITNESS HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

THREE MONTHS
ENDED MARCH 31
-----------------------
1999 1998
---------- ----------

OPERATING:
Income before cumulative effect of a change
in accounting principle............................ $ 6,711 $ 2,072
Adjustments to reconcile to cash provided--
Depreciation and amortization, including
amortization included in interest expense........ 13,122 13,284
Provision for doubtful receivables................. 36,815 32,392
Change in operating assets and
liabilities...................................... (40,340) (47,670)
---------- ----------
Cash provided by operating activities............ 16,308 78

INVESTING:
Purchases and construction of property
and equipment...................................... (24,964) (13,423)
Acquisitions of businesses........................... (819)
Other, net........................................... (3,000)
---------- ----------
Cash used in investing activities ............... (28,783) (13,423)

FINANCING:
Debt transactions --
Redemption of 13% Senior Subordinated
notes due 2003................................... (24,021)
Repayments of other long-term debt................. (1,856) (1,939)
---------- ----------
Cash used in debt transactions................... (1,856) (25,960)

Equity transactions --
Proceeds from issuance of common stock under
stock purchase and option plans.................. 637 269
---------- ----------
Cash used in financing activities................ (1,219) (25,691)
---------- ----------
Decrease in cash and equivalents....................... (13,694) (39,036)
Cash and equivalents, beginning of period.............. 64,382 61,679
---------- ----------
Cash and equivalents, end of period.................... $ 50,688 $ 22,643
========== ==========

<FN>
(continued)
</FN>

BALLY TOTAL FITNESS HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS - (CONTINUED)
(In thousands)
(Unaudited)

THREE MONTHS
ENDED MARCH 31
-----------------------
1999 1998
---------- ----------

SUPPLEMENTAL CASH FLOWS INFORMATION:

Changes in operating assets and liabilities,
were as follows --
Increase in installment contracts
receivable..................................... $ (61,761) $ (60,846)
(Increase) decrease in other current and
other assets................................... 877 (1,464)
Increase in deferred membership
origination costs.............................. (2,889) (6,092)
Increase (decrease) in accounts payable.......... (2,194) 4,293
Increase in income taxes payable................. 144 280
Increase in accrued and other
liabilities.................................... 12,046 6,012
Increase in deferred revenues.................... 13,437 10,147
---------- ----------
$ (40,340) $ (47,670)
========== ==========

Cash payments for interest and income taxes
were as follows --
Interest paid.................................... $ 4,540 $ 5,604
Interest capitalized............................. (276) (170)
Income taxes (refunded) paid, net................ 6 (80)

Investing and financing activities exclude the
following non-cash transactions --
Acquisition of property and equipment
through capital leases/borrowings.............. 2,882 1,933
Debt, including assumed debt, related to
acquisitions of businesses..................... 3,417

<FN>
See accompanying notes.
</FN>

BALLY TOTAL FITNESS HOLDING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All dollar amounts in thousands)
(Unaudited)

BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements include the
accounts of Bally Total Fitness Holding Corporation (the "Company") and the
subsidiaries which it controls. The Company through its subsidiaries, is a
nationwide commercial operator of fitness centers with approximately 335
facilities concentrated in 27 states and Canada. The Company operated in one
industry segment, and all significant revenues arise from the commercial
operation of fitness centers, primarily in major metropolitan markets in the
United States. Unless otherwise specified in the text, references to the Company
include the Company and its subsidiaries. These condensed consolidated financial
statements should be read in conjunction with the consolidated financial
statements included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1998.

All adjustments have been recorded which are, in the opinion of
management, necessary for a fair presentation of the condensed consolidated
balance sheets of the Company at March 31, 1999, its consolidated statements of
operations and cash flows for the three months ended March 31, 1999 and 1998,
and its consolidated statement of stockholders' equity for the three months
ended March 31, 1999. All such adjustments were of a normal recurring nature.

The accompanying condensed consolidated financial statements have been
prepared in conformity with generally accepted accounting principles which
require the Company's management to make estimates and assumptions that affect
the amounts reported therein. Actual results could vary from such estimates. In
addition, certain reclassifications have been made to prior period financial
statements to conform with the 1999 presentation.

SEASONAL FACTORS

The Company's operations are subject to seasonal factors and, therefore,
the results of operations for the three months ended March 31, 1999 and 1998 are
not necessarily indicative of the results of operations for the full year.

ACQUISITIONS

During the first quarter of 1999, the Company acquired five fitness
centers; four located in the Seattle area and one in the San Francisco area. The
total purchase price of the five centers was $4,236.

BALLY TOTAL FITNESS HOLDING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All dollar amounts in thousands)
(Unaudited)

INSTALLMENT CONTRACTS RECEIVABLE

MARCH 31 DECEMBER 31
1999 1998
---------- -----------

Current:
Installment contracts receivable................. $ 318,319 $ 294,880
Unearned finance charges....................... (40,323) (35,792)
Allowance for doubtful receivables
and cancellations............................ (67,337) (59,109)
---------- ----------
$ 210,659 $ 199,979
========== ==========

Long-term:
Installment contracts receivable................. $ 310,580 $ 287,443
Unearned finance charges....................... (20,395) (18,104)
Allowance for doubtful receivables
and cancellations............................ (53,772) (47,192)
---------- ----------
$ 236,413 $ 222,147
========== ==========

ALLOWANCE FOR DOUBTFUL RECEIVABLES AND CANCELLATIONS

A summary of the allowance for doubtful receivables and cancellations activity
is as follows:

QUARTER ENDED
MARCH 31
--------------------
1999 1998
-------- --------

Balance at beginning of period........................... $106,301 $ 80,531
Contract cancellations and
write-offs of uncollectible
amounts, net of recoveries............................. (63,807) (54,767)
Provision for cancellations
(classified as a direct
reduction of revenues)................................ 41,800 37,315
Provision for doubtful
receivables............................................ 36,815 32,392
-------- --------

Balance at end of period................................. $121,109 $ 95,471
======== ========

BALLY TOTAL FITNESS HOLDING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All dollar amounts in thousands)
(Unaudited)

EARNINGS PER COMMON SHARE

Basic earnings per common share for each period is computed based on the
weighted average number of shares of common stock outstanding of 23,202,709 in
1999 and 20,579,571 in 1998. Diluted earnings per common share for each period
includes the addition of common stock equivalents of 3,589,750 and 3,685,457 in
1999 and 1998, respectively. Common stock equivalents represent the dilutive
effect of the assumed exercise of outstanding warrants and stock options.

CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE

In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position ("SOP") 98-5, Reporting the Costs of Start-up
Activities. The SOP is effective beginning on January 1, 1999, and requires that
start-up costs including organization costs capitalized prior to January 1, 1999
be written-off and any future start-up costs be expensed as incurred. The
Company's unamortized start-up costs at January 1, 1999 were written off and
reported as a cumulative effect of a change in accounting principle, net of tax,
in accordance with APB Opinion No. 20.

SUBSEQUENT EVENT

In April 1999, the Company amended its $160,000 securitization facility
extending the initial maturity to July 2001. The interest rate on the $145,500
of fixed rate accounts receivable trust certificates remained unchanged at
8.43%. The interest rate on the $14,500 of floating rate accounts receivable
trust certificates is 3.01% above the London Interbank Offer Rate with the
interest capped at 8.99% pursuant to an interest rate cap agreement. The
remaining features of the securitization facility remained substantially
unchanged.

BALLY TOTAL FITNESS HOLDING CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998

Net revenues for the first quarter of 1999 was $208.2 million compared to
$184.5 million in 1998, an increase of $23.7 million (13%). Net revenues from
comparable fitness centers increased 9%. This significant increase in net
revenues resulted from the following:

- Total new membership units sold increased 5% and the weighted average
selling price of membership contracts sold increased 6% over the prior
year quarter. As a result, initial membership fees originated increased
$10.4 million (8%), consisting of a $13.6 million(12%) increase in
financed memberships originated offset, in part, by a planned $3.2
million (32%) decrease in paid-in-full memberships originated. The
increase in new membership units sold was almost entirely attributable
to the sale of higher margin multi-club membership plans.

- Dues collected increased $8.4 million (16%) from the 1998 quarter,
reflecting both continued improvements in member retention and
previously implemented pricing strategies.

- Finance charges earned during the first quarter of 1999 increased $2.8
million (25%) compared to the 1998 quarter, due to the growth in size
and quality of the receivables portfolio. The average interest rate for
finance charges to members was substantially unchanged between the
periods. The percentage of accounts current with all contractual
payments as of March 31, 1999, was 88% compared to 87% as of March 31,
1998. The amount of receivables written off in the 1999 period, 11% of
average receivables, was unchanged from the first quarter of 1998.

- Fees and other revenues increased $5.4 million (61%) over the 1998
quarter, primarily reflecting the increase sales of personal training
services and nutritional and other retail products.

The weighted average number of fitness centers increased to 329 in the
first quarter of 1999 from 313 in the first quarter of 1998, including an
increase to 15 from five operating under three upscale brands: Bally Sports
Club, Pinnacle Fitness and Gorilla Sports.

Operating income for the first quarter of 1999 was $18.3 million compared
to $11.9 million in 1998. The increase of $6.4 million (54%) was due to the
increase in revenues of $23.7 million (13%) partially offset by a $17.3 million
(10%) increase in operating costs and expenses. Excluding the provision for
doubtful receivables and the effect of deferral accounting, operating costs and
expenses increased $9.7 million (7%) from 1998. Fitness center operating
expenses increased $9.9 million (10%) due principally to costs supporting the
growth of new service and product offerings, incremental costs of operating new
fitness centers and additional commissions from the growth in initial membership
fees originated. A substantial portion of the commission expense is deferred
through deferral accounting. Member processing and collection center expenses
decreased 5%, while general and administrative expenses and advertising expenses
increased an average of 3% quarter over quarter.

The provision for doubtful receivables, included in operating costs and
expenses, for the first quarter of 1999 was $36.8 million compared to $32.4
million in 1998, an increase of $4.4 million due to the increase in initial
membership fees on financed memberships originated. The total provision rate,
inclusive of provision for cancellations, which is reflected in the financial
statements as a direct reduction of initial membership fees on financed
memberships originated, was 41% of gross financed originations during each of
the periods.

BALLY TOTAL FITNESS HOLDING CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - CONTINUED

Deferral accounting reduced earnings by $6.5 million for 1999 compared to
1998. This decrease reflects the combined impact of a decrease in revenues of
$3.3 million and an increase in expenses of $3.2 million.

Interest expense was $12.3 million for the first quarter of 1999
compared to $10.2 million in 1998. The $2.1 million increase was due to higher
levels of debt incurred.

The income tax provisions for the first quarter of 1999 and 1998 reflect
state income taxes only. The federal provisions were offset by the utilization
of prior years' net operating losses.

LIQUIDITY AND CAPITAL RESOURCES

Cash provided by operating activities for the first quarter of 1999 was
$16.3 million compared to $.1 million in 1998. The quarter over quarter
improvement of $16.2 million principally reflects the continued growth in
overall collections from installment contracts receivable and monthly dues. Net
installment contracts receivable grew $24.9 million during the quarter compared
to $28.5 million in 1998. Excluding the growth in receivables, operating
activities for the 1999 quarter provided cash of $41.2 million compared to $28.6
million for 1998.

We have no scheduled principal payments under our $300.0 million
subordinated debt until October 2007. In April 1999, we extended the initial
maturity of our $160.0 million securitization facility to July 2001.
Accordingly, our debt service requirements, including interest, for the next 12
months are approximately $53.0 million. We believe that we will be able to
satisfy our annual debt service requirements, capital expenditures and stock
repurchases, if any, out of available cash balances, cash flow from operations
and, if necessary, borrowings on the revolving credit facility.

Our revolving credit facility provides up to $100.0 million of credit
through November 2000. The maximum amount currently available under this credit
facility is $90.0 million. The amount available under the credit line is reduced
by any outstanding letters of credit, which cannot exceed $30.0 million. At
March 31, 1999, the credit line was unused except for outstanding letters of
credit totaling $3.7 million.

We are authorized to repurchase up to 1,500,000 shares of our common stock
on the open market from time to time. As of May 10, 1999, we have repurchased
554,800 shares at an average price of $17 per share. No purchases have been made
since September 1998.

We invest approximately $10.0 million to $15.0 million annually to
maintain and make minor upgrades to our existing facilities. In addition, during
the first quarter of 1999, we invested approximately $21.0 million in the
development of new fitness centers and to refurbish and make major upgrades,
including new equipment, to our existing fitness centers. Six new facilities
were opened during the first quarter of 1999. This is consistent with our plan
to invest approximately $30.0 million to $35.0 million in the development of new
fitness centers and open approximately 20 new fitness centers during 1999. We
also acquired five fitness centers during the first quarter of 1999; four in the
Seattle area and one in the San Francisco area.

BALLY TOTAL FITNESS HOLDING CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - CONTINUED

YEAR 2000

We have completed an assessment of whether our systems and those of third
parties which could have a material impact on our business will function
properly with respect to dates in 2000 and thereafter. We have determined that
our payroll applications require modification. The remaining modifications are
expected to be completed in mid-1999 at an aggregate cost of less then $.1
million. We believe the only third parties that could have a material impact on
our business are the major financial institutions that process our collections
of installment receivables and monthly dues by electronic payment methods. We
believe these financial institutions are currently working on modifications to
their internal systems to insure those systems will function properly with
respect to dates in 2000 and thereafter and expect these modifications will be
completed in 1999. We do not anticipate that noncompliance, if any, with Year
2000 of any of our non-information technology systems, such as embedded
microcontrollers, will materially or adversely affect our business. We are
currently undertaking an analysis of worst-case scenarios and developing
contingency plans to deal with these scenarios.

FORWARD-LOOKING STATEMENTS

Forward-looking statements in this Form 10-Q including, without
limitation, statements relating to our plans, strategies, objectives,
expectations, intentions and adequacy of resources, are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve known and unknown risks, uncertainties,
and other factors that may cause our actual results, performance or achievements
to be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. These factors include,
among others, the following: general economic and business conditions;
competition; success of operating initiatives, advertising and promotional
efforts; existence of adverse publicity or litigation; acceptance of new product
offerings; changes in business strategy or plans; quality of management;
availability, terms, and development of capital; business abilities and judgment
of personnel; changes in, or the failure to comply with, government regulations;
regional weather conditions; failure of entities that provide goods and services
to us to be year 2000 compliant; and other factors described in this Form 10-Q
or in other of our filings with the Securities and Exchange Commission. We are
under no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

BALLY TOTAL FITNESS HOLDING CORPORATION

PART II. OTHER INFORMATION

Item 6. Exhibits and reports on Form 8-K

(a) Exhibits:

10.1 Employment Agreement effective as of September 1, 1998 between
the Company and William Fanelli.

10.2 First Amendment to the Series 1996-1 Supplement to Amended and
Restated Pooling and Servicing Agreement dated as of April 27,
1999 among H&T Receivable Funding Corporation, as Transferor,
Bally Total Fitness Corporation, as Servicer, and Texas Commerce
Bank National Association, as Trustee.

27 Financial Data Schedule for March 31, 1999 (filed electronically
only).

(b) Reports on Form 8-K:

None.

SIGNATURE PAGE

Pursuant to the requirements 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.

BALLY TOTAL FITNESS HOLDING CORPORATION
---------------------------------------------------------------
Registrant

/s/ John W. Dwyer
---------------------------------------------------------------
John W. Dwyer
Executive Vice President, Chief Financial Officer and Treasurer
(principal financial officer)

Dated: May 17, 1999