##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 
 FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 Commission File No. 000-25064
 
 
 
 HEALTH FITNESS CORPORATION
 (Exact name of registrant as specified in its charter)
 Minnesota
    
    No. 41-1580506(State or Other Jurisdiction of
    
    (IRS EmployerIncorporation or Organization)
    
    Identification No.)
 1650 West 82nd Street, Bloomington, MN 55431
(Address of Principal Executive Offices)
 Registrants telephone number (952) 831-6830
 
 þ o
  Large accelerated filer o   
    Accelerated filer
o
    Non-accelerated filer o
    Smaller reporting company
þ(Do not check if a smaller reporting company)
 o þ




---



##### 



Health Fitness Corporation
Consolidated Financial Statements
Table of Contents
 PAGEPART I. FINANCIAL INFORMATIONITEM 1. Consolidated Financial Statements (unaudited)Consolidated Balance Sheets as of September 30, 2008 and
December 31, 2007
    
    
    3Consolidated Statements of Operations for the three
and nine months ended September 30, 2008 and 2007
    
    
    4Consolidated Statements of Cash Flows for the three
and nine months ended September 30, 2008 and 2007
    
    
    5Notes to Consolidated Financial Statements
    
    
    6ITEM 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    14ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    20ITEM 4. Controls and Procedures
    
    
    20PART II. OTHER INFORMATION
    
    
    21ITEM 1. Legal Proceedings
    
    
    21ITEM 1A. Risk Factors
    
    
    21ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    21ITEM 3. Defaults Upon Senior Securities
    
    
    21ITEM 4. Submission of Matters to a Vote of Security Holders
    
    
    21ITEM 5. Other Information
    
    
    22ITEM 6. Exhibits
    
    
    22Signatures
    
    
    23Exhibit Index
    
    
    24EX-11.0EX-31.1EX-31.2EX-32.1EX-32.2
  2




---



##### Table of Contents



PART I.  FINANCIAL INFORMATION
 
 ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 HEALTH FITNESS CORPORATION
 
 CONSOLIDATED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 30, 2008 AND DECEMBER 31, 2007
 September 30,
    
    
    December 31,2008
    
    
    2007ASSETSCURRENT ASSETSCash
    
    $
    452,719
    
    
    $
    1,946,028Trade and other accounts receivable, less allowances of $241,900 and $243,300
    
    
    13,437,875
    
    
    
    14,686,879Inventory
    
    
    521,794
    
    
    
    569,458Prepaid expenses and other
    
    
    476,943
    
    
    
    226,891Deferred tax assets
    
    
    325,748
    
    
    
    406,367Total current assets
    
    
    15,215,079
    
    
    
    17,835,623PROPERTY AND EQUIPMENT, net
    
    
    1,215,042
    
    
    
    1,400,570OTHER ASSETSGoodwill
    
    
    14,546,250
    
    
    
    14,546,250Software, less accumulated amortization of $1,164,700 and $795,100
    
    
    1,916,976
    
    
    
    1,734,920Trademark, less accumulated amortization of $420,000 and $345,500
    
    
    73,124
    
    
    
    147,561Other intangible assets, less accumulated amortization of $295,600 and $241,700
    
    
    233,459
    
    
    
    287,334Other
    
    
    
    
    
    
    9,807$
    33,199,930
    
    
    $
    35,962,065LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESTrade accounts payable
    
    $
    1,372,933
    
    
    $
    2,121,154Accrued salaries, wages, and payroll taxes
    
    
    3,008,169
    
    
    
    4,011,580Other accrued liabilities
    
    
    551,666
    
    
    
    1,187,045Accrued self funded insurance
    
    
    278,050
    
    
    
    333,724Deferred revenue
    
    
    1,106,371
    
    
    
    1,722,254Total current liabilities
    
    
    6,317,189
    
    
    
    9,375,757DEFERRED TAX LIABILITY
    
    
    261,327
    
    
    
    108,623LONG-TERM OBLIGATIONS
    
    
    
    
    
    
    COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    STOCKHOLDERS EQUITYCommon stock, $0.01 par value; 25,000,000 shares authorized; 9,639,039 and
9,964,295 shares issued and outstanding at September 30, 2008 and December 31,
2007, respectively
    
    
    96,390
    
    
    
    99,642Additional paid-in capital
    
    
    28,076,859
    
    
    
    29,449,854Accumulated comprehensive loss from foreign currency translation
    
    
    (65,199
    )
    
    
    (56,413
    )Accumulated deficit
    
    
    (1,486,636
    )
    
    
    (3,015,398
    )26,621,414
    
    
    
    26,477,685$
    33,199,930
    
    
    $
    35,962,065
  3




---



##### Table of Contents



HEALTH FITNESS CORPORATION
 
 CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007REVENUE
    
    $
    18,497,423
    
    
    $
    17,153,058
    
    
    $
    56,015,548
    
    
    $
    50,722,258COSTS OF REVENUE
    
    
    12,510,045
    
    
    
    12,268,332
    
    
    
    39,149,412
    
    
    
    36,272,205GROSS PROFIT
    
    
    5,987,378
    
    
    
    4,884,726
    
    
    
    16,866,136
    
    
    
    14,450,053OPERATING EXPENSESSalaries
    
    
    2,950,618
    
    
    
    2,775,532
    
    
    
    8,949,305
    
    
    
    7,819,407Other selling, general and administrative
    
    
    1,485,206
    
    
    
    1,835,136
    
    
    
    5,080,973
    
    
    
    5,008,770Amortization of acquired intangible assets
    
    
    42,771
    
    
    
    42,771
    
    
    
    128,311
    
    
    
    128,311Total operating expenses
    
    
    4,478,595
    
    
    
    4,653,439
    
    
    
    14,158,589
    
    
    
    12,956,488OPERATING INCOME
    
    
    1,508,783
    
    
    
    231,287
    
    
    
    2,707,547
    
    
    
    1,493,565OTHER INCOME (EXPENSE)Interest expense
    
    
    (16,252
    )
    
    
    (16,681
    )
    
    
    (20,383
    )
    
    
    (23,371
    )Other, net
    
    
    (662
    )
    
    
    (4,432
    )
    
    
    412
    
    
    
    (1,856
    )EARNINGS BEFORE INCOME TAXES
    
    
    1,491,869
    
    
    
    210,174
    
    
    
    2,687,576
    
    
    
    1,468,338INCOME TAX EXPENSE
    
    
    650,519
    
    
    
    193,151
    
    
    
    1,158,814
    
    
    
    766,644NET EARNINGS
    
    $
    841,350
    
    
    $
    17,023
    
    
    $
    1,528,762
    
    
    $
    701,694NET EARNINGS PER SHARE:Basic
    
    $
    0.09
    
    
    $
    
    
    
    $
    0.16
    
    
    $
    0.07Diluted
    
    
    0.09
    
    
    
    
    
    
    
    0.15
    
    
    
    0.07WEIGHTED AVERAGE COMMON SHARES:Basic
    
    
    9,610,238
    
    
    
    9,917,429
    
    
    
    9,837,994
    
    
    
    9,809,111Diluted
    
    
    9,688,941
    
    
    
    10,433,468
    
    
    
    9,982,990
    
    
    
    10,288,673
  4




---



##### Table of Contents



HEALTH FITNESS CORPORATION
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 Nine Months EndedSeptember 30,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net earnings
    
    $
    1,528,762
    
    
    $
    701,694Adjustments to reconcile net earnings to net cash used in operating activities:Stock-based compensation
    
    
    592,115
    
    
    
    683,036Depreciation and amortization
    
    
    844,052
    
    
    
    702,866Deferred taxes
    
    
    233,323
    
    
    
    Change in assets and liabilities, net of assets acquired:Trade and other accounts receivable
    
    
    1,249,004
    
    
    
    (106,675
    )Inventory
    
    
    47,664
    
    
    
    (350,415
    )Prepaid expenses and other
    
    
    (250,052
    )
    
    
    (323,881
    )Other assets
    
    
    9,807
    
    
    
    10,587Trade accounts payable
    
    
    (757,007
    )
    
    
    (681,928
    )Accrued liabilities and other
    
    
    (1,694,654
    )
    
    
    (433,607
    )Deferred revenue
    
    
    (615,883
    )
    
    
    (482,869
    )Net cash provided by (used in) operating activities
    
    
    1,187,131
    
    
    
    (281,192
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (160,686
    )
    
    
    (653,442
    )Capitalized software development costs
    
    
    (551,582
    )
    
    
    (184,401
    )Business acquisition, net of cash acquired
    
    
    
    
    
    
    (32,914
    )Net cash payment made for acquisition
    
    
    
    
    
    
    (737,500
    )Net cash used in investing activities
    
    
    (712,268
    )
    
    
    (1,608,257
    )CASH FLOWS FROM FINANCING ACTIVITIES:Borrowings under line of credit
    
    
    13,549,495
    
    
    
    17,416,233Repayments under line of credit
    
    
    (13,549,495
    )
    
    
    (16,567,773
    )Costs from issuance of preferred stock
    
    
    
    
    
    
    (17,415
    )Repurchase of common stock
    
    
    (2,354,923
    )
    
    
    Proceeds from the issuance of common stock
    
    
    189,322
    
    
    
    190,329Proceeds from the exercise of stock options
    
    
    197,429
    
    
    
    132,370Net cash (used in) provided by financing activities
    
    
    (1,968,172
    )
    
    
    1,153,744NET DECREASE IN CASH
    
    
    (1,493,309
    )
    
    
    (735,705
    )CASH AT BEGINNING OF PERIOD
    
    
    1,946,028
    
    
    
    987,465CASH AT END OF PERIOD
    
    $
    452,719
    
    
    $
    251,760SUPPLEMENTAL CASH FLOW DISCLOSURESSupplemental cash flow information:Cash paid for interest
    
    $
    13,667
    
    
    $
    19,835Cash paid for taxes
    
    
    719,735
    
    
    
    143,750Noncash investing and financing activities affecting cash flows:Common stock issued for acquisition earnout
    
    
    
    
    
    
    737,500
  5




---



##### Table of Contents



HEALTH FITNESS CORPORATION
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
    nd www.hfit.com.
     Consolidation
 Cash
 6




---



##### Table of Contents



Trade and Other Accounts Receivable
 Inventories 
 Property and Equipment
 Software Development Costs
   Goodwill
 Intangible Assets
 7




---



##### Table of Contents



Revenue Recognition 
    Net Earnings Per Common Share
 Stock-Based Compensation
 Fair Values of Financial Instruments 
 Income Taxes
 8




---



##### Table of Contents



Use of Estimates
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,Segment Data:
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007REVENUE:Fitness ManagementStaffing Services
    
    $
    9,702,089
    
    
    $
    10,042,463
    
    
    $
    29,245,435
    
    
    $
    29,843,968Program Services
    
    
    618,839
    
    
    
    579,607
    
    
    
    1,888,318
    
    
    
    1,901,55310,320,928
    
    
    
    10,622,070
    
    
    
    31,133,753
    
    
    
    31,745,521Health ManagementStaffing Services
    
    
    4,552,417
    
    
    
    4,017,025
    
    
    
    13,417,216
    
    
    
    11,617,304Program Services
    
    
    3,624,078
    
    
    
    2,513,963
    
    
    
    11,464,579
    
    
    
    7,359,4338,176,495
    
    
    
    6,530,988
    
    
    
    24,881,795
    
    
    
    18,976,737Total RevenueStaffing Services
    
    
    14,254,506
    
    
    
    14,059,488
    
    
    
    42,662,651
    
    
    
    41,461,272Program Services
    
    
    4,242,917
    
    
    
    3,093,570
    
    
    
    13,352,897
    
    
    
    9,260,986$
    18,497,423
    
    
    $
    17,153,058
    
    
    $
    56,015,548
    
    
    $
    50,722,258GROSS PROFIT:Fitness ManagementStaffing Services
    
    $
    2,356,310
    
    
    $
    2,176,722
    
    
    $
    6,822,420
    
    
    $
    6,278,653Program Services
    
    
    209,267
    
    
    
    294,052
    
    
    
    681,973
    
    
    
    877,9022,565,577
    
    
    
    2,470,774
    
    
    
    7,504,393
    
    
    
    7,156,555Health ManagementStaffing Services
    
    
    1,279,853
    
    
    
    1,036,109
    
    
    
    3,456,656
    
    
    
    2,958,681Program Services
    
    
    2,141,948
    
    
    
    1,377,843
    
    
    
    5,905,087
    
    
    
    4,334,8173,421,801
    
    
    
    2,413,952
    
    
    
    9,361,743
    
    
    
    7,293,498Total Gross ProfitStaffing Services
    
    
    3,636,163
    
    
    
    3,212,831
    
    
    
    10,279,076
    
    
    
    9,237,334Program Services
    
    
    2,351,215
    
    
    
    1,671,895
    
    
    
    6,587,060
    
    
    
    5,212,719$
    5,987,378
    
    
    $
    4,884,726
    
    
    $
    16,866,136
    
    
    $
    14,450,053
 9




---



##### Table of Contents



Business Combinations
 Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51
 Disclosures
about Derivative Instruments and Hedging Activities  an amendment of FASB Statement No. 133 (SFAS
133).
 The Hierarchy of
Generally Accepted Accounting Principles
 Determination of the Useful
Life of Intangible Assets Goodwill and Other Intangible Assets
 10




---



##### Table of Contents



.
 Stock Options
    Options Outstanding
    
    Options ExercisableWeighted Average
    
    Weighted
    
    
    
    WeightedRemaining
    
    Average
    
    
    
    AverageRange of
    
    Number
    
    Contractual Life
    
    Exercise
    
    Number
    
    ExerciseExercise Prices
    
    Outstanding
    
    In Years
    
    Price
    
    Exercisable
    
    Price$0.60   $0.78
    
    
    30,250
    
    
    
    0.87
    
    
    $
    0.78
    
    
    
    30,250
    
    
    $
    0.780.94     1.38
    
    
    47,500
    
    
    
    2.27
    
    
    
    1.07
    
    
    
    47,500
    
    
    
    1.071.90     2.50
    
    
    87,000
    
    
    
    1.94
    
    
    
    2.39
    
    
    
    83,250
    
    
    
    2.412.52     4.54
    
    
    240,550
    
    
    
    4.47
    
    
    
    3.82
    
    
    
    222,425
    
    
    
    3.814.56  6.10
    
    
    662,125
    
    
    
    4.71
    
    
    
    5.38
    
    
    
    260,938
    
    
    
    5.441,067,425
    
    
    
    4.21
    
    
    $
    4.46
    
    
    
    644,363
    
    
    $
    3.94
  Three Months EndedSeptember 30,2008
    
    2007Risk-free interest rate
    
    
    2.99
    %
    
    
    4.28
    %Expected volatility
    
    
    37.9
    %
    
    
    39.2
    %Expected life (in years)
    
    
    3.53
    
    
    
    3.0Dividend yield
    
    
    
    
    
    
    
 11




---



##### Table of Contents



Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    Aggregate
    
    
    AverageExercise
    
    
    Intrinsic
    
    
    RemainingOptions
    
    
    Price
    
    
    Value
    
    
    TermOutstanding at December 31, 2007
    
    
    1,169,150
    
    
    $
    3.92Granted
    
    
    255,000
    
    
    
    4.88Exercised
    
    
    (186,100
    )
    
    
    1.14Canceled/Forfeited
    
    
    (170,625
    )
    
    
    4.96Outstanding at September 30, 2008
    
    
    1,067,425
    
    
    $
    4.46
    
    
    $
    208,765
    
    
    
    3.71Exercisable at September 30, 2008
    
    
    644,363
    
    
    $
    3.94
    
    
    $
    204,790
    
    
    
    3.10
 Restricted Stock
  Employee Stock Purchase Plan
 Equity Incentive Plan
 12




---



##### Table of Contents



Accrued Acquisition Earnout
 Common Stock Repurchase Plan
 Reverse Stock Split
  Additional
    
    
    Accumulated
    
    
    
    
    
    
    TotalCommon Stock
    
    
    Paid-in
    
    
    Comprehensive
    
    
    Accumulated
    
    
    Stockholders
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Income
    
    
    Deficit
    
    
    Equity
    
    
    IncomeBALANCE AT DECEMBER 31, 2007
    
    
    9,964,294
    
    
    $
    99,642
    
    
    $
    29,449,854
    
    
    
    ($56,413
    )
    
    
    ($3,015,398
    )
    
    $
    26,477,685Issuance of common stock through
stock purchase plan
    
    
    46,709
    
    
    
    467
    
    
    
    188,855
    
    
    
    
    
    
    
    
    
    
    
    189,322Redemption of common stock for
option exercises
    
    
    (3,291
    )
    
    
    (33
    )
    
    
    (16,276
    )
    
    
    
    
    
    
    
    
    
    
    (16,309
    )Issuance of common stock for option
exercises
    
    
    186,100
    
    
    
    1,861
    
    
    
    211,697
    
    
    
    
    
    
    
    
    
    
    
    213,558Issuance of common stock for
executive compensation
    
    
    18,991
    
    
    
    190
    
    
    
    67,362
    
    
    
    
    
    
    
    
    
    
    
    67,552Redemption of common stock for
executive compensation
    
    
    (2,940
    )
    
    
    (29
    )
    
    
    (14,672
    )
    
    
    
    
    
    
    
    
    
    
    (14,701
    )Repurchase of common stock through
common stock repurchase plan
    
    
    (570,680
    )
    
    
    (5,707
    )
    
    
    (2,349,215
    )
    
    
    
    
    
    
    
    
    
    
    (2,354,922
    )Reverse stock split payout of
fractional shares
    
    
    (144
    )
    
    
    (1
    )
    
    
    (189
    )
    
    
    
    
    
    
    
    
    
    
    (190
    )Executive equity compensation program
    
    
    
    
    
    
    
    
    
    
    205,041
    
    
    
    
    
    
    
    
    
    
    
    205,041Stock option compensation
    
    
    
    
    
    
    
    
    
    
    334,402
    
    
    
    
    
    
    
    
    
    
    
    334,402Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,528,762
    
    
    
    1,528,762
    
    
    $
    1,528,762Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,786
    )
    
    
    
    
    
    
    (8,786
    )
    
    
    (8,786
    )Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,519,976BALANCE AT SEPTEMBER 30,2008
    
    
    9,639,039
    
    
    $
    96,390
    
    
    $
    28,076,859
    
    
    $
    (65,199
    )
    
    $
    (1,486,636
    )
    
    $
    26,621,414
 13




---



##### Table of Contents



.
 Legal Proceedings
 Liquidated Damages
 Patent Matter
 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 You should read the following discussion and analysis of our financial condition and results of
operations together with our financial statements and the related notes appearing under Item 1 of
Part 1. Some of the information contained in this discussion and analysis or set forth elsewhere in
this quarterly report, including information with respect to our plans and strategy for our
business and expected financial results, includes forward-looking statements that involve risks and
uncertainties. You should review the Risk Factors under Item 1A of the Companys Annual Report on
Form 10-K for the fiscal year ended December 31, 2007 for a discussion of important factors that
could cause actual results to differ materially from the results described in or implied by the
forward-looking statements contained in the following discussion and analysis.
 CRITICAL ACCOUNTING POLICIES
 31, 2007.
 14




---



##### Table of Contents



BUSINESS DESCRIPTION
   RESULTS OF OPERATIONS
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007REVENUE
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %COSTS OF REVENUE
    
    
    67.6
    %
    
    
    71.5
    %
    
    
    69.9
    %
    
    
    71.5
    %GROSS PROFIT
    
    
    32.4
    %
    
    
    28.5
    %
    
    
    30.1
    %
    
    
    28.5
    %OPERATING EXPENSESSalaries
    
    
    16.0
    %
    
    
    16.2
    %
    
    
    16.0
    %
    
    
    15.4
    %Other selling, general and administrative
    
    
    8.0
    %
    
    
    10.7
    %
    
    
    9.1
    %
    
    
    9.9
    %Amortization of acquired intangible assets
    
    
    0.2
    %
    
    
    0.3
    %
    
    
    0.2
    %
    
    
    0.2
    %Total operating expenses
    
    
    24.2
    %
    
    
    27.2
    %
    
    
    25.3
    %
    
    
    25.5
    %OPERATING INCOME
    
    
    8.2
    %
    
    
    1.3
    %
    
    
    4.8
    %
    
    
    3.0
    %OTHER INCOME (EXPENSE)
    
    
    (0.1
    %)
    
    
    (0.1
    %)
    
    
    (0.0
    %)
    
    
    (0.1
    %)EARNINGS BEFORE INCOME TAXES
    
    
    8.1
    %
    
    
    1.2
    %
    
    
    4.8
    %
    
    
    2.9
    %INCOME TAX EXPENSE
    
    
    3.5
    %
    
    
    1.1
    %
    
    
    2.1
    %
    
    
    1.5
    %NET EARNINGS
    
    
    4.6
    %
    
    
    0.1
    %
    
    
    2.7
    %
    
    
    1.4
    %
 Results of Operations for the quarter ended September 30, 2008 compared to the quarter ended
September 30, 2007.
 Revenue.
   15




---



##### Table of Contents



Gross Profit.
   Operating Expenses and Operating Income.
   Other Income and Expense.
 Income Taxes.
  16




---



##### Table of Contents



Net Earnings.
 Results of Operations for the nine months ended September 30, 2008 compared to the nine months
ended September 30, 2007.
 Revenue.
 .
   Gross Profit.
   17




---



##### Table of Contents



Operating Expenses and Operating Income.
   Other Income and Expense.
 Income Taxes.
  Net Earnings.
 18




---



##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
    INFLATION
  OFF-BALANCE SHEET ARRANGEMENTS
  PRIVATE SECURITIES LITIGATION REFORM ACT
   19




---



##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 30, 2008.
  
 ITEM 4. CONTROLS AND PROCEDURES
   20




---



##### Table of Contents



PART II.  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  Economic conditions may adversely affect our business
 
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  21




---



##### Table of Contents



ITEM 5. OTHER INFORMATION
 None
 
 ITEM 6. EXHIBITS
  22




---



##### Table of Contents



SIGNATURES
  Dated:  November 13, 2008
    
    HEALTH FITNESS CORPORATIONBy
    /s/ Gregg O. LehmanGregg O. LehmanPresident and Chief Executive Officer
(Principal Executive Officer)By
    /s/ Wesley W. WinnekinsWesley W. WinnekinsChief Financial Officer and Treasurer

(Principal Financial and Accounting Officer) 23




---



##### Table of Contents



Exhibit No.
    
    Description**11.0
    
    Statement re: Computation of Earnings per Share**31.1
    
    Certification of President and Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**31.2
    
    Certification of Chief Financial Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002**32.1
    
    Certification of President and Chief Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**32.2
    
    Certification of Chief Financial Officer Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
 
 **
    
    Filed herewith 24