Middleby (MIDD 2.11%) reported second quarter results following the market close on Wednesday, Aug. 6, and the kitchen equipment manufacturer didn't disappoint. Let's take a deeper look into this quarter's results. 

Second quarter highlights 
Net sales for the quarter (including acquisitions) increased 16.8% year over year to $424.8 million, with organic growth increasing 11% year over year.

Middleby's Commercial Foodservice Equipment Group saw strong growth, with total segment sales increasing 18.3% year over year to $263.9 million. Middleby acquired Market Forge -- a leading manufacturer of steam cooking equipment and technology -- in January. Excluding the impact of this acquisition, in addition to the Wunder-Bar and Celfrost acquisitions completed in 2013, Middleby's commercial equipment segment grew organic sales 10.2%.

Next is Middleby's Food Processing Equipment Group, which grew total sales 9.8% year over year to $89.9 million. Excluding acquisitions, segment sales increased 6.2%. 

Finally, Middleby's burgeoning Residential Kitchen Equipment Group -- driven by the Viking brand -- increased sales 20.6% year over year to $70.9 million. CEO Selim Bassoul, easily one of the favorite CEOs in Fooldom, explains that Middleby will be focusing heavily on the "marketing of our new lineup of residential products and training of the dealer sales organization" in the remainder of 2014. In other words, Middleby is emphasizing the promotion of Viking's growing line of residential cooking equipment. "We expect to make significant investments in the second half to promote the display of these new products on dealer showroom floors," says Bassoul, "and anticipate that we will be well positioned moving into 2015." 

Gross profit increased 21.7% year over year to $166.2 million, pushing Middleby's gross margin to 39.1% as compared to 37.5% in the second quarter of 2013. 

Solid top-line growth translated to strong earnings growth, with net income increasing 30.3% to $48.4 million ($0.85 per share) compared to $37.2 million ($0.67 per share) in the second quarter of 2013.

Operating cash flow grew to $72.5 million for the quarter, a major boost from the $10.5 million of operating cash flow produced in the second quarter of 2013. Bassoul anticipates strong operating cash flow production in the remaining two quarters of 2014. 

Thanks to this strong cash flow production, Middleby reduced its debt load by $62.7 million quarter over quarter to $592.7 million. 

Where Middleby is going from here 
Much of Middleby's focus is on its relatively small but quickly growing residential segment. Starting in 2013, Middleby starting acquiring independent distributors in the U.S., Canada, and Mexico in order to establish a company-owned distribution network backed by a national sales and service organization. This network will support Viking's growing residential segment. "Through this initiative we will continue to enhance critical aspects of the sales, marketing and customer support processes for the Viking brand," says Bassoul. 

"We're largely complete with these initiatives and are now focused in the promotion of our new lineup of products," Bassoul explained on the conference call, "including investments made to distribute these products in dealer showrooms and training of our dealer sales representatives." These efforts are expected to continue through the remainder of 2014 and early 2015, but Bassoul anticipates these investments will start boosting growth in 2015.

In addition to developing this distributor network, Middleby is gradually rolling out its residential cooking platform in the coming months to bolster the line of products available through the Viking brand. This includes a new refrigeration line scheduled for a September launch, new cooktops to be released in October, and other new projects in the pipeline. 

Middleby's Kitchen of the Future concept continues to gain ground, with nearly 300 Kitchen of the Future installations taking place in 2014 thus far. The early adopters of Kitchen of the Future are predominantly smaller chains -- those with 20-50 locations, gradually shifting to those with 100-200 locations -- leading to a promising start for this fledgling concept. Larger chains (those with more than 1,000 stores) are still going through a testing phase with Kitchen of the Future, but Bassoul says the tests have proven to be very positive. Revamping kitchens in more than 1,000 locations will be a significant capital expenditure for any business and require thorough convincing and testing on Middleby's part, so this will be a slower process (albeit with much promise and very encouraging results so far). 

Of course, there is much more going on at Middleby than Kitchen of the Future and rolling out the Viking brand. The company is allocating significant (multimillion dollar) investments into the development and roll-outs of a new combi oven, steamer, wood oven and more. This expansion is aimed not only at the U.S., but at international markets as well. 

The opportunity for Middleby extends even further now that the company is venturing into the residential space. Bassoul explains that Baby Boomers are looking for a kitchen offering "easy, clean, quick heat." The younger generation, on the other hand, is looking for a connected kitchen -- one where smaller appliances can be controlled by smartphones and other mobile devices. In short, Middleby's innovative opportunities and market potential -- both in the commercial and residential markets -- remain strong as ever. Ever the Rule Breaker at heart, Bassoul is constantly on the prowl for opportunities to disrupt and innovate commercial and residential kitchens. 

Foolish bottom line 
Selim Bassoul and company persist in their steady long-term focus to integrate, innovate, and expand Middleby's commercial and residential foodservice brands worldwide. As Middleby continues to invest in future growth -- primarily through its residential segment as well as ongoing acquisitions and product development – the company appears poised to continue delivering market-beating results to patient investors over the long haul. 

For more coverage of innovative companies like Middleby, join us in Rule Breakers.