/NOT FOR DISTRIBUTION IN THE UNITED STATES/
VANCOUVER, BC, June 11, 2020 /CNW/ - Pinnacle Renewable Energy Inc. ("Pinnacle" or the "Company") (TSX: PL) today announced that it has re-filed its financial statements for the 13-week period ended March 27, 2020 ("Q1 2020") as well as its corresponding management discussion and analysis ("MD&A") relating to the period. The refiling of the Q1 2020 financial statements and MD&A result from an error in recording the unrealized (non-cash) impacts of the change in fair value of two interest rate swap contracts for the period, whose market values declined as a result of a significant decline in interest rates. The interest rate swaps effectively convert the Company's floating interest rate interest payments into fixed interest rates and are marked-to-market for financial reporting purposes at each reporting period end reflecting fluctuations in fair values of the swap contracts caused by fluctuations in market interest rates. Unrealized gains or losses are recorded on the Consolidated Statements of Income/(Loss) as an impact on finance charges. The Q1 2020 financial statements and MD&A have been amended to record a mark-to-market pre-tax loss of $3.4 million in respect of the interest rate swaps, as opposed to a mark-to-market pre-tax gain of $3.4 million previously recorded.
This amendment corrects an accounting error in respect of a non-cash item and does not affect the Company's earnings before interest, tax, depreciation, and amortization ("EBITDA"), cash position or covenants on its lending facility. The change has no impact on the Company's operations or financial position.
Management has determined that the error occurred and was not immediately detected due to a material weakness in the design of its internal controls over financial reporting. The amended MD&A also includes disclosure with respect to the weakness and the Company's plans to remediate the cause of the weakness.
Concurrently with the refiling of the Q1 2020 financial statements and MD&A, the Company has filed amended interim CEO and CFO certifications of disclosure in accordance with National Instrument 52-109, which are all available on SEDAR at www.sedar.com.
Pinnacle is a growing industrial wood pellet manufacturer and distributor and the third largest producer in the world. The Company produces sustainable fuel for renewable electricity generation in the form of industrial wood pellets. This fuel is used by large-scale thermal power generators as a greener alternative to produce reliable baseload renewable power. Pinnacle is a trusted supplier to its customers, who require reliable, high-quality fuel supply to maximize utilization of their facilities. Pinnacle takes pride in its industry leading safety practices. The Company operates eight industrial wood pellet production facilities in western Canada and one in Alabama, with two additional facilities under construction in Alberta and Alabama. The Company also owns a port terminal in Prince Rupert, B.C. Pinnacle has entered into long-term take-or-pay contracts with utilities in the U.K., Europe and Asia that represent an average of 99% of its production capacity through 2026.
SOURCE Pinnacle Renewable Energy Inc.