The Urethane Blog

OUTLOOK ’20: Europe’s polyurethane markets face a winter chill

Author: Fergus Jensen

2020/01/09

LONDON (ICIS)–Saturated supply and slow demand are anticipated to prevail in Europe’s polyurethanes (PUs) feedstocks into the early months of 2020, with only thin signals to indicate a break from external pressures that hammered the petrochemicals industry in 2019.

Like other petrochemicals, prices of isocyanates and polyols have crumbled in the face of slipping macroeconomic factors and the ongoing trade tensions between the US and China that have overshadowed global markets throughout 2019.

–
Near the end of the fourth quarter, prices of crude methylene diphenyl diisocyanate (MDI), a feedstock for rigid PU foam used in construction and insulation, were a notch above the lowest prices ICIS has on record since beginning coverage in 2002.

–
Its isocyanate twin, pure MDI – a feedstock for PU foam used in footwear among other applications – has fared slightly better, although prices have been on a consistent downtrend since October 2018 and are at two-and-a-half-year low.

–
Equally bad, cousin toluene diisocyanate (TDI), which is used in flexible foams for bedding and furniture, has seen prices tumble to less than half what they were in May 2018 when they hit a 14-year low.

–
In the meantime, their partners – polyols – the compounds that react with isocyanates to produce and determine the properties of PU polymers, were at a more-than-three-year low.

“I’ve never seen such big reductions on a monthly basis,” one reseller said, referring to the discounts on crude MDI prices in November.

NOT BUYING
The current depressed levels of isocyanates and polyols prices could spur buying interest, but several market participants interviewed by ICIS said they did not expect demand to improve in the near term.

“People are not buying things. Watching Trump and China and upheaval all over the world, people are withholding purchases of consumer goods,” a Europe-based reseller said.

Buyers were holding out for further discounts on feedstocks and had postponed orders for 2020 that would normally begin in Q4, another producer added.

Prices for MDI used in rigid foams and CASE applications – coatings polyurethanes, adhesives, sealants and encapsulants – have declined as a result of increased competition and slower demand from the automotive sector, which has been falling since the second half of 2018.

“The CASE industry is oversupplied – approached by everybody. The manufacturers – the major suppliers are ruining the market, offering cheaper product,” a Europe-based distributor said.

“People spend less on everything: cars, consumable products. It will keep [going] like this,” he added.

Crude MDI found some support in the construction sector in the second half of 2019, although demand had begun to drop off seasonally by November.

SOFTER
Demand for mattresses, a major outlet for TDI used to make flexible foams, has softened along with gloomy macroeconomic conditions. Earlier this month, the European Commission, for example, cut its GDP growth forecast for the eurozone to a lacklustre 1.1% for 2020.

Overall demand for TDI is stable but is not expected to improve into early 2020, as many foam producers have reduced their intake of raw materials.

There was some support earlier this year in the TDI market surrounding a turnaround at BASF’s flagship Ludwigshafen plant, but that outage appeared to cause no reduction to supply.

There were unconfirmed reports of imported material being used to supplement any reduction in output from the plant.

Ludwigshafen’s autumn 2019 turnaround was the latest in a string of closures. The facility was taken offline originally in November 2016, due to a damaged reactor, before it was brought back online in May 2017. However, further work was carried out in 2018 and this year.

GLOBAL GLUT
This phenomenon is, however, not limited to Europe. According to ICIS aromatics consultant Rob Peacock, investments into new facilities over the past few years, coupled with weak isocyanates demand in 2019 have left the isocyanates industry in a position of some structural oversupply, particularly in TDI.

“For TDI, although no further significant expansions are planned post 2020, we still expect the market to be structurally long for the next few years, without any rationalisation,” Peacock said.

Globally, there are now nearly 3.4m tonnes/year of TDI capacity, outweighing demand by almost 1m tonnes, he said, referring to data from ICIS analytics.

Faster growth has been seen in the MDI markets than in the TDI markets in recent years, but weak demand in late 2018 and 2019 resulted in oversupply following recent expansions.

“If softer than expected demand continues further into 2020, then we expect that some previously announced expansions will be delayed,” he added.

Average operating rates are expected to be higher for MDI than for TDI in the next couple of years, when MDI capacity is forecast to hit 9m tonnes/year in 2020, outweighing demand by around 2m tonnes.

Front page picture source: Malcolm Schuyl/Flpa/imageBROKER/Shutterstock

https://www.icis.com/explore/resources/news/2020/01/09/10458207/outlook-20-europe-s-polyurethane-markets-face-a-winter-chill

OUTLOOK ’20: Europe’s polyurethane markets face a winter chill

Author: Fergus Jensen

2020/01/09

LONDON (ICIS)–Saturated supply and slow demand are anticipated to prevail in Europe’s polyurethanes (PUs) feedstocks into the early months of 2020, with only thin signals to indicate a break from external pressures that hammered the petrochemicals industry in 2019.

Like other petrochemicals, prices of isocyanates and polyols have crumbled in the face of slipping macroeconomic factors and the ongoing trade tensions between the US and China that have overshadowed global markets throughout 2019.

–
Near the end of the fourth quarter, prices of crude methylene diphenyl diisocyanate (MDI), a feedstock for rigid PU foam used in construction and insulation, were a notch above the lowest prices ICIS has on record since beginning coverage in 2002.

–
Its isocyanate twin, pure MDI – a feedstock for PU foam used in footwear among other applications – has fared slightly better, although prices have been on a consistent downtrend since October 2018 and are at two-and-a-half-year low.

–
Equally bad, cousin toluene diisocyanate (TDI), which is used in flexible foams for bedding and furniture, has seen prices tumble to less than half what they were in May 2018 when they hit a 14-year low.

–
In the meantime, their partners – polyols – the compounds that react with isocyanates to produce and determine the properties of PU polymers, were at a more-than-three-year low.

“I’ve never seen such big reductions on a monthly basis,” one reseller said, referring to the discounts on crude MDI prices in November.

NOT BUYING
The current depressed levels of isocyanates and polyols prices could spur buying interest, but several market participants interviewed by ICIS said they did not expect demand to improve in the near term.

“People are not buying things. Watching Trump and China and upheaval all over the world, people are withholding purchases of consumer goods,” a Europe-based reseller said.

Buyers were holding out for further discounts on feedstocks and had postponed orders for 2020 that would normally begin in Q4, another producer added.

Prices for MDI used in rigid foams and CASE applications – coatings polyurethanes, adhesives, sealants and encapsulants – have declined as a result of increased competition and slower demand from the automotive sector, which has been falling since the second half of 2018.

“The CASE industry is oversupplied – approached by everybody. The manufacturers – the major suppliers are ruining the market, offering cheaper product,” a Europe-based distributor said.

“People spend less on everything: cars, consumable products. It will keep [going] like this,” he added.

Crude MDI found some support in the construction sector in the second half of 2019, although demand had begun to drop off seasonally by November.

SOFTER
Demand for mattresses, a major outlet for TDI used to make flexible foams, has softened along with gloomy macroeconomic conditions. Earlier this month, the European Commission, for example, cut its GDP growth forecast for the eurozone to a lacklustre 1.1% for 2020.

Overall demand for TDI is stable but is not expected to improve into early 2020, as many foam producers have reduced their intake of raw materials.

There was some support earlier this year in the TDI market surrounding a turnaround at BASF’s flagship Ludwigshafen plant, but that outage appeared to cause no reduction to supply.

There were unconfirmed reports of imported material being used to supplement any reduction in output from the plant.

Ludwigshafen’s autumn 2019 turnaround was the latest in a string of closures. The facility was taken offline originally in November 2016, due to a damaged reactor, before it was brought back online in May 2017. However, further work was carried out in 2018 and this year.

GLOBAL GLUT
This phenomenon is, however, not limited to Europe. According to ICIS aromatics consultant Rob Peacock, investments into new facilities over the past few years, coupled with weak isocyanates demand in 2019 have left the isocyanates industry in a position of some structural oversupply, particularly in TDI.

“For TDI, although no further significant expansions are planned post 2020, we still expect the market to be structurally long for the next few years, without any rationalisation,” Peacock said.

Globally, there are now nearly 3.4m tonnes/year of TDI capacity, outweighing demand by almost 1m tonnes, he said, referring to data from ICIS analytics.

Faster growth has been seen in the MDI markets than in the TDI markets in recent years, but weak demand in late 2018 and 2019 resulted in oversupply following recent expansions.

“If softer than expected demand continues further into 2020, then we expect that some previously announced expansions will be delayed,” he added.

Average operating rates are expected to be higher for MDI than for TDI in the next couple of years, when MDI capacity is forecast to hit 9m tonnes/year in 2020, outweighing demand by around 2m tonnes.

Front page picture source: Malcolm Schuyl/Flpa/imageBROKER/Shutterstock

https://www.icis.com/explore/resources/news/2020/01/09/10458207/outlook-20-europe-s-polyurethane-markets-face-a-winter-chill

January 29, 2020

Dow Posts Results

Dow reports fourth quarter 2019 results

|Business Wire|About: DOW

MIDLAND, Mich.–(BUSINESS WIRE)– Dow (NYSE: DOW):

FINANCIAL HIGHLIGHTS

  • GAAP loss per share from continuing operations was $3.14; Operating EPS¹ was $0.78. Operating EPS excludes significant items in the quarter, totaling $3.92 per share, primarily related to: the impairment of the remaining Coatings & Performance Monomers acquisition-related goodwill and charges related to Sadara; integration and separation costs; and a tax gain associated with Swiss tax reform.
  • Net sales were $10.2 billion, down 15% versus pro forma results in the year-ago period, primarily driven by lower local prices in all operating segments due to a decline in global energy prices.
  • Volume declined 2% versus pro forma results in the year-ago period, primarily due to lower hydrocarbon co-product sales as a result of planned turnaround activity. Excluding the Hydrocarbons & Energy business, volume rose 2%, driven by demand growth in packaging and construction chemicals applications.
  • Local price declined 12% versus pro forma results in the year-ago period. The largest declines were in Packaging & Specialty Plastics, driven by decreases in polyethylene and hydrocarbon co-products, and in Industrial Intermediates & Infrastructure, primarily due to polyurethane intermediates. Currency decreased sales by 1%.
  • Equity losses were $21 million versus pro forma equity earnings of $26 million in the year-ago period. The reduction was primarily due to lower results at the Kuwait joint ventures, driven by margin compression in monoethylene glycol (MEG) and polyethylene.
  • GAAP loss from continuing operations, net of tax, was $2.3 billion. Operating EBIT1 was $1.0 billion, down from pro forma results of $1.3 billion in the year-ago period, reflecting margin compression in Packaging & Specialty Plastics and Industrial Intermediates & Infrastructure. These factors were partly offset by margin expansion in Performance Materials & Coatings, savings from stranded cost removal, and the contribution from new polyethylene capacity on the U.S. Gulf Coast.
  • Stranded cost removal in the quarter was more than $35 million, raising the full-year, cumulative stranded cost savings to more than $160 million.
  • Cash provided by operating activities – continuing operations was $1.9 billion, up $531 million versus the year-ago period. Capital expenditures in the quarter were $577 million and free cash flow2 was $1.3 billion.
  • Returns to shareholders totaled $611 million in the quarter, including $517 million in dividends and $94 million in share repurchases. The Company achieved its full-year share repurchase target of $500 million.

SUMMARY FINANCIAL RESULTS

  Three Months Ended December 31 Three Months Ended September 30
In millions, except per share amounts 4Q19

As Reported

4Q183

Pro Forma

vs. SQLY

[B / (W)]

3Q19

As Reported

vs. PQ

[B / (W)]

Net Sales $10,204 $12,008 $(1,804) $10,764 $(560)
GAAP Income (Loss) from Continuing Ops, Net of Tax $(2,310) $531 $(2,841) $347 $(2,657)
Operating EBIT¹ $1,033 $1,289 $(256) $1,117 $(84)
Operating EBIT Margin¹ 10.1% 10.7% (60) bps 10.4% (30) bps
Operating EBITDA¹ $1,746 $2,015 $(269) $1,856 $(110)
GAAP EPS $(3.14) $0.68 $(3.82) $0.45 $(3.59)
Operating EPS¹ $0.78 $1.07 $(0.29) $0.91 $(0.13)
Cash Provided by Operating Activities – Continuing Ops $1,920 $1,389 $531 $1,790 $130
1.   Op. EPS, Op. EBIT, Op. EBIT Margin and Op. EBITDA are non-GAAP measures. See page 13 for further discussion.
2.   Free cash flow is defined as cash flows from operating activities – continuing operations, excluding the impact of ASU 2016-15, less capital expenditures.
3.   Financial information for the three months ended December 31, 2018 was prepared on a pro forma basis and determined in accordance with Article 11 of Regulation S-X.

CEO QUOTE

Jim Fitterling, chief executive officer, commented on the quarter:

“We experienced similar economic headwinds in the quarter as we have seen all year – especially in the industrial sector – which included price and margin compression, in part driven by additional industry supply and uncertain macros. Yet once again, the Dow team navigated these factors by leveraging our core strengths – feedstock flexibility, a lean cost structure, and leading positions in consumer-driven end-markets. Together, these enabled us to capture demand growth, excluding our Hydrocarbons & Energy business, while also delivering another year-over-year improvement in cash from operations.

“We also deployed capital to strengthen our financial flexibility and to reward our owners, reducing debt by more than $1 billion and returning more than $600 million to shareholders. We enter 2020 in a stronger competitive and financial position, poised to continue to deliver value for our customers and shareholders.”

SEGMENT HIGHLIGHTS

 

Industrial Intermediates & Infrastructure

  Three Months Ended December 31 Three Months Ended September 30
In millions, except margin percentages 4Q19

As Reported

4Q18

Pro Forma

vs. SQLY

[B / (W)]

3Q19

As Reported

vs. PQ

[B / (W)]

Net Sales $3,253 $3,777 $(524) $3,365 $(112)
Operating EBIT $221 $339 $(118) $193 $28
Operating EBIT Margin 6.8% 9.0% (220) bps 5.7% 110 bps
Equity Losses $(45) $(15) $(30) $(70) $25

Industrial Intermediates & Infrastructure net sales were $3.3 billion, down 14% versus pro forma results in the year-ago period. Volume was flat, local price declined 13%, and currency decreased net sales by 1%.

Polyurethanes & Construction Chemicals reported a net sales decline as modest volume growth was more than offset by local price declines which included lower prices for polyurethane intermediates. The business reported volume growth in all geographic regions except the U.S. & Canada.

Industrial Solutions reported lower net sales, primarily driven by price declines in performance intermediates, including ethyleneamines and glycol ethers. The business reported a modest decline in volume, primarily in ethylene glycols, which more than offset growth in heat transfer fluids and pharmaceutical applications.

Equity losses for the segment were $45 million, down from pro forma equity losses of $15 million in the year-ago period, primarily due to margin compression in MEG at the Kuwait joint ventures.

Operating EBIT was $221 million, down from pro forma results of $339 million in the year-ago period, primarily due to margin compression in both businesses and lower equity earnings, partially offset by lower planned maintenance turnaround costs.

OUTLOOK

“Building on the consistent execution of our operational playbook in 2019, we are well-positioned to navigate the market dynamics that have carried into 2020 by focusing on the actions in our control,” said Fitterling. “We will continue to advance our pipeline of higher-return, lower-risk investments, particularly in sectors closer to the consumer where demand conditions remain favorable. By taking advantage of our unique feedstock capabilities, we will maintain our competitive cost positions. We expect to further reduce our cost structure over the course of the year as we complete the stranded cost removal. And, we plan to direct our free cash flow toward a balance of debt reduction and returns to shareholders. Taken together, these actions will give us the ability to continue to advance our strategic and financial priorities, outperform the competition and drive value for all our stakeholders.”

 

https://seekingalpha.com/pr/17762235-dow-reports-fourth-quarter-2019-results

January 29, 2020

Dow Posts Results

Dow reports fourth quarter 2019 results

|Business Wire|About: DOW

MIDLAND, Mich.–(BUSINESS WIRE)– Dow (NYSE: DOW):

FINANCIAL HIGHLIGHTS

  • GAAP loss per share from continuing operations was $3.14; Operating EPS¹ was $0.78. Operating EPS excludes significant items in the quarter, totaling $3.92 per share, primarily related to: the impairment of the remaining Coatings & Performance Monomers acquisition-related goodwill and charges related to Sadara; integration and separation costs; and a tax gain associated with Swiss tax reform.
  • Net sales were $10.2 billion, down 15% versus pro forma results in the year-ago period, primarily driven by lower local prices in all operating segments due to a decline in global energy prices.
  • Volume declined 2% versus pro forma results in the year-ago period, primarily due to lower hydrocarbon co-product sales as a result of planned turnaround activity. Excluding the Hydrocarbons & Energy business, volume rose 2%, driven by demand growth in packaging and construction chemicals applications.
  • Local price declined 12% versus pro forma results in the year-ago period. The largest declines were in Packaging & Specialty Plastics, driven by decreases in polyethylene and hydrocarbon co-products, and in Industrial Intermediates & Infrastructure, primarily due to polyurethane intermediates. Currency decreased sales by 1%.
  • Equity losses were $21 million versus pro forma equity earnings of $26 million in the year-ago period. The reduction was primarily due to lower results at the Kuwait joint ventures, driven by margin compression in monoethylene glycol (MEG) and polyethylene.
  • GAAP loss from continuing operations, net of tax, was $2.3 billion. Operating EBIT1 was $1.0 billion, down from pro forma results of $1.3 billion in the year-ago period, reflecting margin compression in Packaging & Specialty Plastics and Industrial Intermediates & Infrastructure. These factors were partly offset by margin expansion in Performance Materials & Coatings, savings from stranded cost removal, and the contribution from new polyethylene capacity on the U.S. Gulf Coast.
  • Stranded cost removal in the quarter was more than $35 million, raising the full-year, cumulative stranded cost savings to more than $160 million.
  • Cash provided by operating activities – continuing operations was $1.9 billion, up $531 million versus the year-ago period. Capital expenditures in the quarter were $577 million and free cash flow2 was $1.3 billion.
  • Returns to shareholders totaled $611 million in the quarter, including $517 million in dividends and $94 million in share repurchases. The Company achieved its full-year share repurchase target of $500 million.

SUMMARY FINANCIAL RESULTS

  Three Months Ended December 31 Three Months Ended September 30
In millions, except per share amounts 4Q19

As Reported

4Q183

Pro Forma

vs. SQLY

[B / (W)]

3Q19

As Reported

vs. PQ

[B / (W)]

Net Sales $10,204 $12,008 $(1,804) $10,764 $(560)
GAAP Income (Loss) from Continuing Ops, Net of Tax $(2,310) $531 $(2,841) $347 $(2,657)
Operating EBIT¹ $1,033 $1,289 $(256) $1,117 $(84)
Operating EBIT Margin¹ 10.1% 10.7% (60) bps 10.4% (30) bps
Operating EBITDA¹ $1,746 $2,015 $(269) $1,856 $(110)
GAAP EPS $(3.14) $0.68 $(3.82) $0.45 $(3.59)
Operating EPS¹ $0.78 $1.07 $(0.29) $0.91 $(0.13)
Cash Provided by Operating Activities – Continuing Ops $1,920 $1,389 $531 $1,790 $130
1.   Op. EPS, Op. EBIT, Op. EBIT Margin and Op. EBITDA are non-GAAP measures. See page 13 for further discussion.
2.   Free cash flow is defined as cash flows from operating activities – continuing operations, excluding the impact of ASU 2016-15, less capital expenditures.
3.   Financial information for the three months ended December 31, 2018 was prepared on a pro forma basis and determined in accordance with Article 11 of Regulation S-X.

CEO QUOTE

Jim Fitterling, chief executive officer, commented on the quarter:

“We experienced similar economic headwinds in the quarter as we have seen all year – especially in the industrial sector – which included price and margin compression, in part driven by additional industry supply and uncertain macros. Yet once again, the Dow team navigated these factors by leveraging our core strengths – feedstock flexibility, a lean cost structure, and leading positions in consumer-driven end-markets. Together, these enabled us to capture demand growth, excluding our Hydrocarbons & Energy business, while also delivering another year-over-year improvement in cash from operations.

“We also deployed capital to strengthen our financial flexibility and to reward our owners, reducing debt by more than $1 billion and returning more than $600 million to shareholders. We enter 2020 in a stronger competitive and financial position, poised to continue to deliver value for our customers and shareholders.”

SEGMENT HIGHLIGHTS

 

Industrial Intermediates & Infrastructure

  Three Months Ended December 31 Three Months Ended September 30
In millions, except margin percentages 4Q19

As Reported

4Q18

Pro Forma

vs. SQLY

[B / (W)]

3Q19

As Reported

vs. PQ

[B / (W)]

Net Sales $3,253 $3,777 $(524) $3,365 $(112)
Operating EBIT $221 $339 $(118) $193 $28
Operating EBIT Margin 6.8% 9.0% (220) bps 5.7% 110 bps
Equity Losses $(45) $(15) $(30) $(70) $25

Industrial Intermediates & Infrastructure net sales were $3.3 billion, down 14% versus pro forma results in the year-ago period. Volume was flat, local price declined 13%, and currency decreased net sales by 1%.

Polyurethanes & Construction Chemicals reported a net sales decline as modest volume growth was more than offset by local price declines which included lower prices for polyurethane intermediates. The business reported volume growth in all geographic regions except the U.S. & Canada.

Industrial Solutions reported lower net sales, primarily driven by price declines in performance intermediates, including ethyleneamines and glycol ethers. The business reported a modest decline in volume, primarily in ethylene glycols, which more than offset growth in heat transfer fluids and pharmaceutical applications.

Equity losses for the segment were $45 million, down from pro forma equity losses of $15 million in the year-ago period, primarily due to margin compression in MEG at the Kuwait joint ventures.

Operating EBIT was $221 million, down from pro forma results of $339 million in the year-ago period, primarily due to margin compression in both businesses and lower equity earnings, partially offset by lower planned maintenance turnaround costs.

OUTLOOK

“Building on the consistent execution of our operational playbook in 2019, we are well-positioned to navigate the market dynamics that have carried into 2020 by focusing on the actions in our control,” said Fitterling. “We will continue to advance our pipeline of higher-return, lower-risk investments, particularly in sectors closer to the consumer where demand conditions remain favorable. By taking advantage of our unique feedstock capabilities, we will maintain our competitive cost positions. We expect to further reduce our cost structure over the course of the year as we complete the stranded cost removal. And, we plan to direct our free cash flow toward a balance of debt reduction and returns to shareholders. Taken together, these actions will give us the ability to continue to advance our strategic and financial priorities, outperform the competition and drive value for all our stakeholders.”

 

https://seekingalpha.com/pr/17762235-dow-reports-fourth-quarter-2019-results

January 28, 2020

Casper IPO Update

Casper Sleep IPO slipping over fact it doesn’t make its own mattresses

Casper Sleep is facing uncomfortable questions as it prepares to go public — including the fact that it doesn’t make its own mattresses.

The six-year-old startup slashed its expected valuation to less than $750 million on Monday — well short of the $1.1 billion valuation it got in a private funding round last spring — as it looks to raise up to $158.6 million in an initial public offering.

Sources said the money-losing company’s IPO is slated to price Feb. 5. A roadshow is slated to kick off Tuesday in Boston, with plans to take it to New York Wednesday and Thursday. But events could get awkward as the company faces increasing scrutiny over its business model, according to insiders close to the process.

Casper — whose clever cartoon ads have long been ubiquitous on New York subways — has billed itself the “Nike of sleep.” But unlike Nike, which for years has tightly controlled its manufacturing costs, Casper is beholden to a small coterie of powerful US manufacturers.

When Casper was founded in 2014, it hired Atlanta-based manufacturer Elite Foam to crank out the foam mattresses it designed. Casper later added a Boston-based manufacturer to accelerate growth.

Last year in January, Elite got sold for $1.25 billion to Leggett & Platt, a Missouri-based bed-parts behemoth with $4.65 billion in revenue. Leggett also makes bed parts for several Casper competitors, including bed-in-a-box mattresses for Leesa, a privately owned mattress startup, and Serta Simmons’ Tuft & Needle, according to sources.

Leggett also makes springs for Sealy, Serta and Simmons — all of which are far bigger clients, a mattress industry source noted.

“It’s kind of funny that is their chief supplier,” the source said of Casper’s reliance on Leggett. “It would increase the risk for me that their supplier has divided loyalties.”

There are other manufacturers that make foam: Carpenter, Future Foam and Innocor Foam Technologies. Still, the relatively small pool is a sign that Casper may struggle to cut its manufacturing costs in the future, sources said.

In its IPO prospectus, Casper said it is pursuing a strategy to vertically integrate, meaning that it would control its manufacturing, but that it may not be successful.

That could be bad news for Casper, as the other key area for cost-cutting would be marketing — an area that becomes doubly difficult as the mattress space becomes increasingly crowded with deep-pocketed competitors like Walmart, Amazon and Ikea.

Casper lost $67 million during the first nine months of last year on $312 million in revenue, and was on track to lose more for the full year than in 2018, according to Casper’s public filing.

“The most successful specialty retailers have proprietary product or can create a voice by bringing together groups of products,” NYU Marketing Professor Scott Galloway told The Post. “Casper has neither.”

“The notion this firm is trying to go public is evidence we are in a frothy market, due for rationalization.”

A Casper spokesperson didn’t deny that the company relies on Leggett, which isn’t mentioned in its IPO prospectus. The company noted that it holds numerous design patents that couple layers of latex with foam, making its beds unique, no matter where they’re made.

“No one is getting a bed that is made of the same construction,” Casper CEO and co-founder Phil Krim told The Post in a 2015 interview. “Even if our manufacturers are making others’ beds, ours [that combine latex and foam] are different.”

Casper admits in its IPO prospectus, however, that “competitors have attempted and will likely continue to attempt to imitate our products and technology” — a risk that it “may not be able to prevent.”

Even if Casper keeps its designs proprietary, it’s doubtful whether it can build the kind of loyalty that’s enjoyed in other niches like clothing and electronics, says Craig Fruchtman of New York-based mattress retailer Craig’s Beds.

“They built their own brand, but people aren’t brand loyal in mattresses,” Fruchtman said. “I don’t get customers coming in saying ‘I’m a Sealy guy, my grandmother was a Sealy guy.’ ”

Additional reporting by Lisa Fickenscher and Thornton McEnery

https://nypost.com/2020/01/27/casper-sleep-ipo-slipping-over-fact-it-doesnt-make-its-own-mattresses/