Source Interlink, the parent of Alliance Entertainment, reported a $36.6 million loss, or 70 cents per diluted share on sales of $591.7 million in the three-month period ended Oct. 31. That compares with a $4.5 million loss, or nine cents per share, on sales of $639.1 million in the corresponding fiscal quarter last year.

But if only income from continuing operations are monitored, the company generated $9.7 million in net income, or 19 cents per share, on sales of $592.6 million in the third quarter this year.

“The concerted effort by our management team allowed us to execute on accelerating critically needed consolidations of our distribution and sales operation, streamlining our publishing business and re-engineering certain functions within our shared services organization: all of which will yield significant cost savings and better position Source to take advantage of future opportunities in the months and years ahead,” Source Interlink chairman and CEO Greg Mays said in a statement.

During the quarter, DVD sales increased 3.7% to $127 million, driven by a more than doubling of Blu-Ray shipments, Source Interlink CFO Marc Fierman told Wall Street analysts during a conference call on the company’s earnings. He also reported that CD revenue decreased 21.2% to $107 million.

For the nine-month period, the company posted a $333.3 million loss, or $6.37 per share on sales of $1.8 billion. But adjusted, the company produced net income of $24.7 million, or 47 cents per share, on sales of $1.8 million.

On that same basis, the company has produced $133 million in earnings before interest, taxes, depreciation and amortization, while it has paid $88 million in interest.

The company reported $1.4 billion in long-term debt, including $50.3 million drawn down from the company’s revolving credit

The company said it had cut 300 full-time employees and 100 part-time employees during the fiscal third-quarter and into early fourth quarter, which should result in significant savings for the entire quarter.